EX-99.1 2 exhibit1.htm EX-99.1 EX-99.1
         
Contact:
  Bob O’Shaughnessy   Tony Pordon
 
        
 
   Senior VP – Finance
248-648-2800 		  Senior VP – Investor Relations
248-648-2540
 
        
 
   boshaughnessy@unitedauto.com   tpordon@unitedauto.com

UNITEDAUTO REPORTS RECORD THIRD QUARTER RESULTS
____________________________________________________________

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
____________________________________________________________

BLOOMFIELD HILLS, MI, October 24, 2006 – 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.”

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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.

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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  
 
                

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  
 
                

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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  
 
                

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  

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UNITED AUTO GROUP, INC.
Selected Data (Continued)

                                 
    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  

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