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UnitedAuto Reports Fourth Quarter Results

Category: Automotive
Posted Feb 16, 2007 13:42 (GMT +7)

"
BLOOMFIELD HILLS, Mich.--(BUSINESS WIRE)--Feb. 14, 2007
Total Revenues Increase 23% Same-Store Retail Revenues Increase 7% Excluding Prior Year Gain, Income from Continuing Operations Per Share Increases 18% to $0.33
United Auto Group, Inc. (NYSE: UAG), an international automotive retailer, today reported fourth quarter income from continuing operations of $31.1 million and related earnings per share of $0.33. Fourth quarter 2005 results included $5.2 million of after-tax earnings ($0.06 per share) attributable to the sale of all remaining variable profits relating to the pool of extended service contracts sold at the Company's dealerships from 2001 through 2005. Excluding the extended service contract gain from the prior year results, adjusted income from continuing operations and related earnings per share increased 16.1% and 17.9%, respectively, over the comparable period in 2005. Fourth quarter net income amounted to $29.9 million and related earnings per share was $0.32.
Revenues in the fourth quarter increased 22.8% to $2.9 billion, including a 7.1% increase in same-store retail revenues. The increase in same-store revenue was highlighted by 14.5% growth in used vehicle revenues and a 6.2% increase in service and parts revenues.
Commenting on the Company's results, Chairman Roger Penske said, ""Our business achieved solid same-store retail revenue growth during the fourth quarter, despite a difficult comparison to last year. I am pleased with the same-store results, especially in our service and parts operations which included 13.6% same-store growth in our international markets. These results highlight the benefit of our ongoing capital investment program."" Penske continued, ""Our used vehicle business was exceptionally strong in the quarter, with total used vehicle revenues growing nearly 44%. The increased level of this business, coupled with a challenging marketplace, contributed to an overall decrease in gross margin percentage during the fourth quarter.""
For the year ended December 31, 2006, revenues increased 16.4% to $11.2 billion. Full-year income from continuing operations amounted to $130.6 million and related earnings per share was $1.39. Excluding the extended service contract gain noted above from the prior year results, income from continuing operations and related earnings per share increased 14.7% and 14.9%, respectively, over the comparable period in 2005.
The Company currently estimates earnings from continuing operations to be in the range of $1.40 to $1.50 per share for the year ended December 31, 2007. This estimate includes an estimated $0.02 to $0.04 per share of costs associated with developing the distribution network for the smart product launch in the United States. First quarter 2007 earnings from continuing operations are estimated to be in the range of $0.26 to $0.30 per share. These estimates exclude a $12 million, or $0.13 per share, charge to be incurred in connection with the previously announced call of the Company's $300 million 9.625% Senior Subordinated Notes in March 2007. Earnings per share estimates are based on an estimated average of 94.6 million shares outstanding.
UnitedAuto will host a conference call discussing financial results relating to fourth quarter 2006 on Wednesday, February 14, 2007 at 2:00 p.m. EDT. To listen to the conference call, participants must dial (800) 553-5275 (International, please dial (612) 332-1210). The call will be simultaneously broadcast over the Internet through the UnitedAuto website at www.unitedauto.com.
About UnitedAuto
United Auto Group, Inc., headquartered in Bloomfield Hills, Michigan, operates 314 retail automotive franchises, representing 41 different brands, and 26 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 169 franchises in 19 states and Puerto Rico and 145 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 may involve forward-looking statements. Actual results may vary materially because of risks and uncertainties, including external factors such as interest rate fluctuations, changes in consumer spending and other factors over which management has no control. These forward-looking statements should be evaluated together with additional information about UnitedAuto's business, markets, conditions and other uncertainties that could affect UnitedAuto's future performance which are 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 are 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.
This release contains certain non-GAAP financial measures as defined under SEC rules, such as adjusted income from continuing operations and related earnings per share, which exclude certain items disclosed in the release. The Company has reconciled these measures to the most directly comparable GAAP measures in the release. The Company believes that these non-GAAP financial measures improve the transparency of the Company's disclosure and the period-to-period comparability of the Company's results from operations. -0- *T UNITED AUTO GROUP, INC. Consolidated Statements of Income (Amounts In Thousands, Except Per Share Data) (Unaudited) Fourth Quarter ----------------------- 2006 2005 ----------- ----------- Revenues: New Vehicle $1,587,023 $1,358,681 Used Vehicle 680,384 472,776 Finance and Insurance, Net 59,372 59,816 Service and Parts 327,644 265,625 Fleet and Wholesale Vehicle 226,594 189,432 ----------- ----------- Total Revenues 2,881,017 2,346,330 Cost of Sales: New Vehicle 1,446,815 1,236,207 Used Vehicle 625,889 432,099 Service and Parts 147,654 119,047 Fleet and Wholesale Vehicle 227,862 190,316 ----------- ----------- Total Cost of Sales 2,448,220 1,977,669 ----------- ----------- Gross Profit 432,797 368,661 SG&A Expenses 350,939 284,097 Depreciation and Amortization 12,476 9,697 ----------- ----------- Operating Income 69,382 74,867 Floor Plan Interest Expense (15,739) (12,460) Other Interest Expense (14,702) (13,260) Equity in Earnings of Affiliates 2,695 1,093 ----------- ----------- Income from Continuing Operations Before Income Taxes and Minority Interests 41,636 50,240 Income Taxes (9,930) (17,651) Minority Interests (636) (564) ----------- ----------- Income from Continuing Operations 31,070 32,025 Loss from Discontinued Operations, Net of Tax (1,171) (1,904) ----------- ----------- Net Income $29,899 $30,121 =========== =========== Income from Continuing Operations Per Diluted Share $0.33 $0.34 =========== =========== Diluted EPS $0.32 $0.32 =========== =========== Diluted Weighted Average Shares Outstanding 94,389 94,374 =========== =========== *T -0- *T UNITED AUTO GROUP, INC. Consolidated Statements of Income (Amounts In Thousands, Except Per Share Data) (Unaudited) Twelve Months ----------------------- 2006 2005 ----------- ----------- Revenues: New Vehicle $6,275,916 $5,601,187 Used Vehicle 2,546,009 2,025,532 Finance and Insurance, Net 249,581 229,575 Service and Parts 1,246,288 1,043,859 Fleet and Wholesale Vehicle 924,519 761,240 ----------- ----------- Total Revenues 11,242,313 9,661,393 Cost of Sales: New Vehicle 5,727,135 5,106,889 Used Vehicle 2,330,694 1,845,587 Service and Parts 559,305 474,563 Fleet and Wholesale Vehicle 920,710 760,903 ----------- ----------- Cost of Sales 9,537,844 8,187,942 ----------- ----------- Gross Profit 1,704,469 1,473,451 SG&A Expenses 1,356,452 1,154,220 Depreciation and Amortization 44,863 37,551 ----------- ----------- Operating Income 303,154 281,680 Floor Plan Interest Expense (61,565) (47,124) Other Interest Expense (49,173) (49,004) Equity in Earnings of Affiliates 8,201 4,271 ----------- ----------- Income from Continuing Operations Before Income Taxes and Minority Interests 200,617 189,823 Income Taxes (67,845) (68,870) Minority Interests (2,172) (1,814) ----------- ----------- Income from Continuing Operations 130,600 119,139 Loss from Discontinued Operations, Net of Tax (5,899) (166) ----------- ----------- Net Income $124,701 $118,973 =========== =========== Income from Continuing Operations Per Diluted Share $1.39 $1.27 =========== =========== Diluted EPS $1.32 $1.27 =========== =========== Diluted Weighted Average Shares Outstanding 94,178 93,932 =========== =========== *T -0- *T UNITED AUTO GROUP, INC. Consolidated Condensed Balance Sheets (Amounts In Thousands) (Unaudited) 12/31/06 12/31/05 ----------- ----------- Assets Cash and Cash Equivalents $13,147 $8,957 Accounts Receivable, Net 469,516 398,127 Inventories 1,519,506 1,144,584 Other Current Assets 71,490 50,209 Assets Held for Sale 213,030 310,467 ----------- ----------- Total Current Assets 2,286,689 1,912,344 Property and Equipment, Net 582,646 416,099 Intangibles 1,490,767 1,182,273 Other Assets 142,783 83,457 ----------- ----------- Total Assets $4,502,885 $3,594,173 =========== =========== Liabilities and Stockholders' Equity Floor Plan Notes Payable $874,326 $785,237 Floor Plan Notes Payable - Non-Trade 297,985 318,034 Accounts Payable and Accrued Expenses 515,111 368,874 Current Portion Long-Term Debt 3,057 3,551 Liabilities Held for Sale 52,150 189,239 ----------- ----------- Total Current Liabilities 1,742,629 1,664,935 Long-Term Debt 1,178,994 576,690 Other Long-Term Liabilities 285,609 206,816 ----------- ----------- Total Liabilities 3,207,232 2,448,441 Stockholders' Equity 1,295,653 1,145,732 ----------- ----------- Total Liabilities and Stockholders' Equity $4,502,885 $3,594,173 =========== =========== *T -0- *T UNITED AUTO GROUP, INC. Selected Data Fourth Quarter Twelve Months ----------------------------------------------- 2006 2005 2006 2005 ----------- ----------- ----------- ----------- Total Retail Units New Retail 43,463 38,899 183,370 167,956 Used Retail 22,529 17,109 88,723 75,348 ----------- ----------- ----------- ----------- Total Retail 65,992 56,008 272,093 243,304 =========== =========== =========== =========== Same-Store Retail Units New Same-Store Retail 39,120 38,592 163,253 163,233 Used Same-Store Retail 18,189 16,869 75,601 72,687 ----------- ----------- ----------- ----------- Total Same-Store Retail 57,309 55,461 238,854 235,920 =========== =========== =========== =========== Same-Store Retail Revenue New Vehicles $1,423,041 $1,349,041 $5,594,172 $5,472,566 Used Vehicles 534,728 467,101 2,154,969 1,973,780 Finance and Insurance, Net 53,733 59,412 226,399 224,594 Service and Parts 279,247 262,988 1,091,642 1,021,030 ----------- ----------- ----------- ----------- Total Same-Store Retail $2,290,749 $2,138,542 $9,067,182 $8,691,970 =========== =========== =========== =========== Same-Store Retail Revenue Growth New Vehicles 5.5% 4.5% 2.2% 5.8% Used Vehicles 14.5% 4.6% 9.2% 4.4% Finance and Insurance, Net (9.6%) (2.4%) 0.8% 9.7% Service and Parts 6.2% 6.6% 6.9% 7.6% Revenue Mix New Vehicles 55.1% 57.9% 55.8% 58.0% Used Vehicles 23.6% 20.2% 22.6% 21.0% Finance and Insurance, Net 2.1% 2.5% 2.2% 2.4% Service and Parts 11.4% 11.3% 11.1% 10.8% Fleet and Wholesale 7.8% 8.1% 8.3% 7.8% Average Retail Selling Price New Vehicles $36,514 $34,928 $34,225 $33,349 Used Vehicles $30,200 $27,633 $28,696 $26,882 Gross Margin 15.0% 15.7% 15.2% 15.3% Retail Gross Margin - by Product New Vehicle 8.8% 9.0% 8.7% 8.8% Used Vehicle 8.0% 8.6% 8.5% 8.9% Service and Parts 54.9% 55.2% 55.1% 54.5% Gross Profit per Retail Transaction New Vehicles $3,226 $3,149 $2,993 $2,943 Used Vehicles 2,419 2,378 2,427 2,388 Finance and Insurance 900 1,068 917 944 *T -0- *T UNITED AUTO GROUP, INC. Selected Data (Continued) Fourth Quarter Twelve Months ------------------------------------- 2006 2005 2006 2005 -------- -------- --------- --------- Brand Mix: BMW 21% 16% 18% 16% Toyota/Lexus 20% 22% 21% 23% Honda/Acura 14% 15% 16% 15% DCX 12% 12% 11% 12% Ford 9% 9% 10% 9% Audi 7% 7% 7% 7% General Motors 4% 5% 4% 5% Porsche 4% 4% 4% 4% Nissan/Infiniti 3% 3% 3% 3% Other 6% 7% 6% 6% -------- -------- --------- --------- 100% 100% 100% 100% Foreign / Premium 94% 93% 93% 92% Domestic Big 3 6% 7% 7% 8% -------- -------- --------- --------- 100% 100% 100% 100% Debt to Total Capital Ratio 48% 34% 48% 34% Rent Expense $36,254 $29,492 $135,253 $109,715 *T
CONTACT: United Auto Group, Inc.
Chief Financial Officer
Bob O'Shaughnessy, 248-648-2800
boshaughnessy@unitedauto.com
or
Senior Vice President
Tony Pordon, 248-648-2540
tpordon@unitedauto.com"

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