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UnitedAuto Reports Record Third Quarter Results

Category: Automotive
Posted Oct 26, 2006 16:53 (GMT +7)

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BLOOMFIELD HILLS, Mich.--(BUSINESS WIRE)--Oct. 24, 2006
Total Revenues Increase 15% Income From Continuing Operations Increases 8% to $36.4 Million Earnings Per Share From Continuing Operations Rise 8% to $0.39
United Auto Group, Inc. (NYSE: UAG), an international automotive retailer, today reported third quarter income from continuing operations of $36.4 million and related earnings per share of $0.39, representing increases of 7.8% and 8.3%, respectively, over the comparable period in 2005. Third quarter 2006 net income amounted to $33.9 million and related earnings per share was $0.36.
The Company''s revenue increased 15.2% to a record $3.1 billion during the third quarter. The revenue increase was driven by acquisitions and strong same-store growth from the Company''s used vehicle and service and parts operations. Commenting on the Company''s performance, Chairman Roger Penske said, ""The third quarter showcases the strength of UAG''s business model. Although new vehicle sales were challenging, used vehicle and service and parts sales were strong. Aggregate used vehicle revenues grew 28%, including same-store revenue increases of 6.8% in the U.S. and 12.2% in the United Kingdom. Additionally, our service and parts operations continue to expand, increasing from 10.4% to 10.7% of total revenue, due in part to a 5.7% same-store increase.""
For the nine months ended September 30, 2006, revenues increased 13.0% to $8.7 billion. Income from continuing operations for the nine months increased 10.7% to $98.6 million and related earnings per share increased 10.5% to $1.05 per share. Net income for the nine months increased 6.7% to $94.8 million, or $1.01 per share, from $88.9 million, or $0.95 per share, in the prior year.
The Company currently projects earnings from continuing operations in the fourth quarter in the range of $0.30 to $0.35 per share, which would result in earnings from continuing operations for the year in the range of $1.35 to $1.40 per share. Earnings per share projections are based on an average of 94.1 million estimated shares outstanding.
UnitedAuto will host a conference call discussing financial results relating to third quarter 2006 on Tuesday, October 24, 2006 at 2:00 p.m. EDT. To listen to the conference call, participants must dial (888) 781-3339 (International, please dial (703) 546-4240). The call will be simultaneously broadcast live over the Internet through the UnitedAuto website at www.unitedauto.com.
About UnitedAuto
United Auto Group, Inc., headquartered in Bloomfield Hills, Michigan, operates 319 retail automotive franchises, representing 42 different brands, and 27 collision repair centers. UnitedAuto, which sells new and previously owned vehicles, finance and insurance products and replacement parts, and offers maintenance and repair services on all brands it represents, has 170 franchises in 20 states and Puerto Rico and 149 franchises located outside the United States, primarily in the United Kingdom. UnitedAuto is a member of the Fortune 500 and Russell 1000 and has over 15,000 employees.
Statements in this press release involve forward-looking statements, including forward-looking statements regarding UnitedAuto''s future sales and earnings potential. Actual results may vary materially because of risks and uncertainties, including external factors such as interest rate fluctuations, changes in consumer spending, energy costs and other factors over which management has no control. These forward-looking statements should be evaluated together with additional information about UnitedAuto''s business, market conditions, and other uncertainties which could affect UnitedAuto''s future performance, which is contained in UnitedAuto''s Form 10-K for the year ended December 31, 2005, and its other filings with the Securities and Exchange Commission, and which is incorporated into this press release by reference. This press release speaks only as of its date and UnitedAuto disclaims any duty to update the information herein. -0- *T UNITED AUTO GROUP, INC. Consolidated Statements of Income (Amounts In Thousands, Except Per Share Data) (Unaudited) Third Quarter ---------------------- 2006 2005 ---------------------- Revenues: New Vehicle $1,732,275 $1,577,928 Used Vehicle 704,254 550,665 Finance and Insurance, Net 68,799 62,939 Service and Parts 329,322 277,040 Fleet and Wholesale Vehicle 245,954 206,717 ---------------------- Total Revenues 3,080,604 2,675,289 Cost of Sales: New Vehicle 1,584,517 1,443,278 Used Vehicle 645,135 500,925 Service and Parts 147,231 127,017 Fleet and Wholesale Vehicle 245,301 207,176 ---------------------- Total Cost of Sales 2,622,184 2,278,396 ---------------------- Gross Profit 458,420 396,893 SG&A Expenses 361,297 309,265 Depreciation and Amortization 11,722 9,772 ---------------------- Operating Income 85,401 77,856 Floor Plan Interest Expense (16,716) (11,865) Other Interest Expense (11,111) (12,222) ---------------------- Income from Continuing Operations Before Income Taxes and Minority Interests 57,574 53,769 Income Taxes (20,727) (19,552) Minority Interests (478) (486) ---------------------- Income from Continuing Operations 36,369 33,731 Loss from Discontinued Operations, Net of Tax (2,496) (967) ---------------------- Net Income $33,873 $32,764 ====================== Income from Continuing Operations Per Diluted Share $0.39 $0.36 ====================== Diluted EPS $0.36 $0.35 ====================== Diluted Weighted Average Shares Outstanding 94,288 94,248 ====================== *T -0- *T UNITED AUTO GROUP, INC. Consolidated Statements of Income (Amounts In Thousands, Except Per Share Data) (Unaudited) Nine Months ---------------------- 2006 2005 ---------------------- Revenues: New Vehicle $4,851,791 $4,445,052 Used Vehicle 1,935,739 1,626,516 Finance and Insurance, Net 195,636 175,464 Service and Parts 951,884 809,278 Fleet and Wholesale Vehicle 726,439 606,525 ---------------------- Total Revenues 8,661,489 7,662,835 Cost of Sales: New Vehicle 4,431,374 4,059,563 Used Vehicle 1,766,982 1,478,151 Service and Parts 427,464 369,563 Fleet and Wholesale Vehicle 721,906 605,617 ---------------------- Total Cost of Sales 7,347,726 6,512,894 ---------------------- Gross Profit 1,313,763 1,149,941 SG&A Expenses 1,039,317 905,171 Depreciation and Amortization 33,373 28,791 ---------------------- Operating Income 241,073 215,979 Floor Plan Interest Expense (49,097) (37,483) Other Interest Expense (34,559) (35,735) ---------------------- Income from Continuing Operations Before Income Taxes and Minority Interests 157,417 142,761 Income Taxes (57,254) (52,390) Minority Interests (1,536) (1,250) ---------------------- Income from Continuing Operations 98,627 89,121 Loss from Discontinued Operations, Net of Tax (3,825) (269) ---------------------- Net Income $94,802 $88,852 ====================== Income from Continuing Operations Per Diluted Share $1.05 $0.95 ====================== Diluted EPS $1.01 $0.95 ====================== Diluted Weighted Average Shares Outstanding 94,085 94,010 ====================== *T -0- *T UNITED AUTO GROUP, INC. Consolidated Condensed Balance Sheets (Amounts In Thousands) (Unaudited) 9/30/06 12/31/05 ---------------------- Assets Cash and Cash Equivalents $19,065 $8,957 Accounts Receivable, Net 464,287 413,431 Inventories, Net 1,455,910 1,219,735 Other Current Assets 91,197 50,865 Assets Held for Sale 137,442 189,373 ---------------------- Total Current Assets 2,167,901 1,882,361 Property and Equipment, Net 562,011 423,513 Intangibles 1,492,606 1,204,675 Other Assets 116,410 83,624 ---------------------- Total Assets $4,338,928 $3,594,173 ====================== Liabilities and Stockholders'' Equity Floor Plan Notes Payable $896,113 $841,911 Floor Plan Notes Payable - Non-Trade 360,548 331,009 Accounts Payable and Accrued Expenses 654,007 381,583 Current Portion Long-Term Debt 3,743 3,551 Liabilities Held for Sale 68,624 106,710 ---------------------- Total Current Liabilities 1,983,035 1,664,764 Long-Term Debt 862,535 576,690 Other Long-Term Liabilities 234,646 206,987 ---------------------- Total Liabilities 3,080,216 2,448,441 Stockholders'' Equity 1,258,712 1,145,732 ---------------------- Total Liabilities and Stockholders'' Equity $4,338,928 $3,594,173 ====================== *T -0- *T UNITED AUTO GROUP, INC. Selected Data Third Quarter Nine Months -------------------------------------------- 2006 2005 2006 2005 -------------------------------------------- Total Retail Units New Retail 52,234 49,076 145,697 136,415 Used Retail 25,255 21,522 70,007 62,638 -------------------------------------------- Total Retail 77,489 70,598 215,704 199,053 ============================================ Same-Store Retail Units New Same-Store Retail 47,054 48,777 131,165 133,414 Used Same-Store Retail 21,832 21,332 61,856 60,916 -------------------------------------------- Total Same-Store Retail 68,886 70,109 193,021 194,330 Same-Store Retail Revenue New Vehicles $1,545,196 $1,571,184 $4,375,476 $4,374,997 Used Vehicles 594,755 546,241 1,704,113 1,594,043 Finance and Insurance, Net 62,619 62,477 179,411 172,133 Service and Parts 291,904 276,044 854,817 798,702 -------------------------------------------- Total Same-Store Retail $2,494,474 $2,455,946 $7,113,817 $6,939,875 ============================================ Same-Store Retail Revenue Growth New Vehicles (1.7%) 8.2% - 5.4% Used Vehicles 8.9% 6.3% 6.9% 3.5% Finance and Insurance, Net 0.2% 17.0% 4.2% 13.1% Service and Parts 5.7% 8.7% 7.0% 8.1% Revenue Mix New Vehicles 56.2% 59.0% 56.0% 58.0% Used Vehicles 22.9% 20.6% 22.4% 21.2% Finance and Insurance, Net 2.2% 2.4% 2.3% 2.3% Service and Parts 10.7% 10.4% 11.0% 10.6% Fleet and Wholesale 8.0% 7.6% 8.3% 7.9% Average Retail Selling Price New Vehicles $33,164 $32,153 $33,301 $32,585 Used Vehicles $27,886 $25,586 $27,651 $25,967 Gross Margin 14.9% 14.8% 15.2% 15.0% Retail Gross Margin - by Product New Vehicle 8.5% 8.5% 8.7% 8.7% Used Vehicle 8.4% 9.0% 8.7% 9.1% Service and Parts 55.3% 54.2% 55.1% 54.3% Gross Profit per Retail Transaction New Vehicles $2,829 $2,744 $2,885 $2,826 Used Vehicles 2,341 2,311 2,411 2,369 Finance and Insurance 888 892 907 882 *T -0- *T Third Quarter Nine Months ------------------------------------------- 2006 2005 2006 2005 ------------------------------------------- Brand Mix: Toyota/Lexus 21% 22% 21% 22% BMW 18% 15% 16% 15% Honda/Acura 15% 15% 16% 15% DCX 11% 12% 11% 12% Ford 11% 10% 11% 10% Audi 7% 7% 7% 7% General Motors 5% 6% 5% 6% Porsche 3% 4% 4% 4% Nissan/Infiniti 3% 4% 3% 4% Other 6% 5% 6% 5% Debt to Total Capital Ratio 41% 34% 41% 34% Rent Expense $35,609 $28,184 $102,844 $83,839 *T
CONTACT: United Auto Group, Inc.
Bob O''Shaughnessy
Senior VP - Finance
248-648-2800
boshaughnessy@unitedauto.com
or
Tony Pordon
Senior VP - Investor Relations
248-648-2540
tpordon@unitedauto.com"

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