exv99w1

EX-99.1 3 k76490exv99w1.htm PRESS RELEASE exv99w1

Exhibit 99.1


		Press Release

		UnitedAuto Group, Inc.
		2555 Telegraph Rd.
		Bloomfield Hills MI 48302-0954


Contact:	Roger Penske	Jim Davidson	Tony Pordon
	Chairman	Executive VP — Finance	Vice President — Investor Relations
	248-648-2400	201-325-3303	248-648-2540
		jdavidson@unitedauto.com	tony.pordon@unitedauto.com

UNITEDAUTO REPORTS RECORD FIRST QUARTER

Q1 Revenues Increase 25.5% to $2.0 Billion

Q1 Income from Continuing Operations Increases 8.6% to $16.8 Million

Q1 Earnings Per Share from Continuing Operations Increases 5.1% to $0.41 Per Share

Q1 Same Store Retail Revenues Increase 3.4% and Related Gross Profit Increases 3.9%

DETROIT, MI, APRIL 28, 2003 — United Auto Group, Inc. (NYSE: UAG), a FORTUNE 500 automotive specialty retailer, today announced results for first quarter 2003, including growth in revenues, gross profit and operating income. First quarter revenues increased 25.5% to a record $2.0 billion. Revenue growth was driven by increases in same store sales for new retail vehicles, used retail vehicles, service and parts, and finance and insurance of 2.4%, 4.2%, 6.2% and 11.6%, respectively.

Income and earnings per share from continuing operations increased 8.6% and 5.1% to a record $16.8 million and $0.41, respectively. Including the cumulative effect of a change in accounting principle, as required by recently defined accounting principles (EITF 02-16) relating to floor plan and advertising credits provided by automotive manufacturers, net income and earnings per share were $13.7 million and $0.34, respectively. Earnings per share reflect a 4.4% increase in weighted average shares outstanding.

Chairman Roger Penske commented, “UnitedAuto performed well despite the economic, political and weather related challenges in the first quarter. Although the U.S. market saw a 4.4% decline in new unit sales during the first quarter, our operating strategy and the strength of our brand mix resulted in a 2.4% increase in same store new retail revenue. I am also pleased that we grew our same store service and

parts revenue 6.2% in the quarter, as the additional capacity provided by our facility investment program continues to pay dividends. We expect to see continued expansion of this element of our business in the future. In addition, our margin on service and parts business continued its growth, increasing 1.8 percentage points during the first quarter to 47.8%. We reiterate our earnings projection of $1.96-$2.06 per share (excluding the cumulative effect of the change in accounting principle), with a second quarter estimate of $0.55-$0.60 per share. Our estimates are based upon 41.2 million weighted average shares outstanding and same store retail revenue growth of 2% to 4%.”

UnitedAuto, which has pursued a strategy based on internal growth from its existing dealerships, as well as from strategic acquisitions, operates 129 franchises in the United States and 71 franchises internationally, primarily in the United Kingdom. UnitedAuto dealerships sell new and used vehicles, and market a complete line of aftermarket automotive products and services.

UnitedAuto will host a conference call discussing financial results relating to first quarter 2003 on Monday, April 28, 2003 at 2 P.M. Eastern time. Advance registration is not required. Participants must call (800) 553-0351 (International, please call (612) 332-0530). Calls need to be made shortly before the call is to commence. The call will also be simultaneously broadcast live over the Internet through the UnitedAuto website at www.unitedauto.com.

Statements in this press release may involve forward-looking statements, including forward-looking statements regarding UnitedAuto’s future sales and earnings growth potential. 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 which could affect UnitedAuto’s future performance, which are contained in UnitedAuto’s Form 10-K for the year ended December 31, 2002 and its other filings with the Securities and Exchange Commission and which are incorporated into this press release by reference.

Media Contact:
Phillip M. Hartz
Senior VP — Corporate Communications
248-648-2610

UNITED AUTO GROUP, INC.
Consolidated Statements of Income (Unaudited)
(Amounts In Thousands, Except Per Share Data)


			First Quarter

			2003			2002

New Vehicles			$	1,116,662		$	946,309
Used Vehicles				445,666			299,917
Finance and Insurance				48,830			37,714
Service and Parts				214,681			162,538
Fleet				29,404			31,324
Wholesale				121,568			97,130

	Total Revenues			1,976,811			1,574,932
Cost of Sales				1,689,659			1,346,792

	Gross Profit			287,152			228,140
SG&A Expenses				239,310			185,683

	Operating Income			47,842			42,457
Floor Plan Interest Expense				(9,088	)		(8,299	)
Other Interest Expense				(10,350	)		(7,868	)

	Income from Continuing Operations Before Minority
		Interests and Income Tax Provision		28,404			26,290
Minority Interests				(393	)		(416	)
Income Tax Provision				(11,220	)		(10,416	)

	Income from Continuing Operations			16,791			15,458
Income from Discontinued Operations, Net of Tax				—			253

		Income Before Cumulative Effect of Accounting Change		16,791			15,711
Cumulative Effect of Accounting Change (a)				(3,058	)		—

	Net Income		$	13,733		$	15,711

Income from Continuing Operations Per Diluted Share			$	0.41		$	0.39

Cumulative Effect of Accounting Change on Diluted EPS				($0.07	)		—

Diluted EPS			$	0.34		$	0.40

Diluted Weighted Average Shares Outstanding				40,920			39,196

EBITDA (b)			$	46,115		$	38,557

(a) Represents a cumulative accounting change resulting from the adoption of EITF 02-16, “Accounting by a Customer (including a Reseller) for Certain Consideration Received from a Vendor”.

(b) EBITDA is defined as income from continuing operations before minority interests, income tax provision, other interest expense, depreciation and amortization. While EBITDA should not be construed as a substitute for income from continuing operations or as a better measure of liquidity than cash flows from operating activities, which are determined in accordance with U.S. GAAP, it is included in this press release to provide additional information regarding the amount of cash our business is generating. This measure may not be comparable to similarly titled measures reported by other companies. Following is a reconciliation of income from continuing operations before minority interests and income tax provision and EBITDA:


	First Quarter

	2003		2002

Income from continuing operations before minority interests and income tax provision	$	28.4	$	26.3
Other interest expense		10.4		7.9
Depreciation and amortization		7.3		4.4

EBITDA	$	46.1	$	38.6

UNITED AUTO GROUP, INC.
Consolidated Condensed Balance Sheets
(Amounts In Thousands)


		3/31/03		12/31/02

		(unaudited)
Assets
Cash and Cash Equivalents		$	11,468	$	8,069
Accounts Receivable, Net			324,791		319,625
Inventories			1,087,397		973,185
Other Current Assets			40,260		27,869

	Total Current Assets		1,463,916		1,328,748
Property and Equipment, Net			346,837		313,496
Goodwill			951,302		945,303
Other Intangibles, Net			36,025		36,025
Other Assets			77,873		66,742

	Total Assets	$	2,875,953	$	2,690,314

Liabilities and Stockholders’ Equity
Floor Plan Notes Payable			1,000,466	$	907,903
Accounts Payable and Accrued Expenses			294,246		276,593
Current Portion Long - Term Debt			5,115		14,979

	Total Current Liabilities		1,299,827		1,199,475
Long - Term Debt (a)			715,110		651,256
Other Long-Term Liabilities			148,689		135,141

	Total Liabilities		2,163,626		1,985,872
Stockholders’ Equity			712,327		704,442

	Total Liabilities and Stockholders’ Equity	$	2,875,953	$	2,690,314

(a) Undrawn capacity under the Company’s credit facilities amounted to approximately $344 million as of March 31, 2003.

UNITED AUTO GROUP, INC.
Selected Data


				First Quarter

				2003			2002

Units
	New Retail Units				38,958			34,689
	Used Retail Units				21,877			17,298

			Total Retail Units		60,835			51,987

Same Store Retail Revenue
	New Vehicles			$	901,262		$	880,553
	Used Vehicles				282,134			270,773
	Finance and Insurance				36,146			32,402
	Service and Parts				162,607			153,182

		Total Same Store Retail Revenue		$	1,382,149		$	1,336,910

Same Store Retail Revenue Growth
	New Vehicles				2.4	%		7.3	%
	Used Vehicles				4.2	%		2.3	%
	Finance and Insurance				11.6	%		12.4	%
	Service and Parts				6.2	%		7.7	%
Revenue Mix
	New Vehicles				56.5	%		60.1	%
	Used Vehicles				22.5	%		19.0	%
	Finance and Insurance				2.5	%		2.4	%
	Service and Parts				10.9	%		10.3	%
	Fleet				1.5	%		2.0	%
	Wholesale				6.1	%		6.2	%
Retail Gross Margin — by Product
	New Vehicles				8.4	%		8.6	%
	Used Vehicles				9.5	%		11.2	%
	Finance and Insurance				100.0	%		100.0	%
	Service and Parts				47.8	%		46.0	%
Gross Profit per Transaction
	New Vehicles			$	2,411		$	2,351
	Used Vehicles				1,932			1,936
	Finance and Insurance				803			725
Brand Mix:
	Toyota/Lexus				22	%		26	%
	BMW				14	%		8	%
	Honda/Acura				12	%		12	%
	General Motors				11	%		14	%
	Mercedes				9	%		7	%
	Chrysler				9	%		10	%
	Nissan/Infiniti				5	%		7	%
	Ford				4	%		6	%
	Other				14	%		10	%
Debt to Total Capital Ratio					50	%		47	%

(a)		Represents a cumulative accounting change resulting from the adoption of EITF 02-16, “Accounting by a Customer (including a Reseller) for Certain Consideration Received from a Vendor”.

(b)		EBITDA is defined as income from continuing operations before minority interests, income tax provision, other interest expense, depreciation and amortization. While EBITDA should not be construed as a substitute for income from continuing operations or as a better measure of liquidity than cash flows from operating activities, which are determined in accordance with U.S. GAAP, it is included in this press release to provide additional information regarding the amount of cash our business is generating. This measure may not be comparable to similarly titled measures reported by other companies. Following is a reconciliation of income from continuing operations before minority interests and income tax provision and EBITDA: