United Auto Group, Inc., an automotive
specialty retailer, announced record results for fourth quarter
2002 including double-digit growth in revenues, income and earnings
per share, before one time items.
According to the company, the record results were driven by increases in same store service
and parts and finance and insurance revenues of 7.6 percent and 8.4 percent,
respectively.
Fourth quarter revenues increased 24 percent to a record $1.9 billion.
Excluding one time items, income and earnings per share from
continuing operations increased 25 percent and 10 percent to $13.9 million and
$0.34, respectively. Including the impact of one time items and
discontinued operations, net income and earnings per share were $0.7
million and $0.02 per share, respectively. Earnings per share reflect
a 15 percent increase in weighted average shares outstanding.
For the twelve months ended December 31, 2002, revenues increased
27 percent to $7.4 billion. Excluding one time items, income and
earnings per share from continuing operations increased 70 percent and 41 percent to
$74.8 million and $1.82, respectively. Including the impact of one
time items and discontinued operations, net income and earnings per
share were $62.2 million and $1.51 per share, respectively. Earnings
per share reflect a 20 percent increase in weighted average shares
outstanding.
Chairman Roger Penske commented, "I am pleased UnitedAuto was able
to meet the challenges presented in the fourth quarter 2002. Compared
with the industry record 2001 fourth quarter, same store new retail
revenues declined by 1.6 percent versus an overall industry decrease of 10 percent,
and same store used retail revenues declined 5.3 percent. Despite these
modest declines, overall same store retail gross profit increased 3 percent
as a result of the outstanding performance of our service and parts
and finance and insurance operations. The capacity expansion provided
by our facility investment program contributed to the 7.6 percent increase in
same store service and parts revenues. I believe we will see continued
expansion of this portion of our business in the future. In addition,
our margin on the service and parts business continued its steady
growth, increasing 2.3 percentage points during the fourth quarter to
47.6 percent. As we move into 2003, we expect to earn $1.96-$2.06 per share,
with first quarter earnings of $0.35-$0.40 per share. Our estimates
are based upon 41.2 million weighted average shares outstanding and
same store retail revenue growth of 2 percent to 4 percent."
President Sam DiFeo stated, "Our business exhibited its resiliency
during the fourth quarter. We demonstrated that our diverse revenue
streams provide protection against declines in the retail sales of new
and used vehicles. I continue to believe that our focus on customer
satisfaction will drive growth in all elements of our business as we
strive to continue increasing market share in all of our markets."
During the fourth quarter of 2002, UnitedAuto settled certain
long-term contracts in conjunction with a streamlining of its western
regional structure. These contracts were related to acquisitions made
in 1996. The company says it also determined that a non-compete agreement with
a former member of management has no future value. Accordingly, the
company recorded a $13.6 million ($0.33 per share) after-tax charge
relating to these contracts.
The company also announced the signing of a definitive agreement
to acquire the INSKIP Autocenter in Warwick, Rhode Island. INSKIP
represents nine brands, including Acura, Audi, Bentley, BMW, Infiniti,
Lexus, Mercedes-Benz, Porsche and Volvo, with estimated annualized
revenues of $300 million. The transaction is subject to customary
conditions and is expected to close early second quarter 2003.
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.
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