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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OF 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
March 16, 1999 (Date of earliest event reported)
UGLY DUCKLING CORPORATION
(Exact Name of Registrant as Specified in its Charter)
DELAWARE 000-20841 86-0721358
(State or Other (Commission (IRS Employer
Jurisdiction File Number) Identification No.)
of Incorporation)
2525 East Camelback Road, Suite 500, Phoenix, Arizona 85016
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (602) 852-6600
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
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ITEM 5. OTHER EVENTS.
Attached hereto as Exhibit 99.1 is a copy of Ugly Duckling Corporation's
press release dated March 16, 1999 titled "Ugly Duckling Corporation Announces
Reclassification of Cygnet Dealer Into Continuing Operations and Anticipated
First Quarter Results."
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(c) Exhibits
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- -------- -----------
<S> <C>
99.1 Ugly Duckling Corporation Press Release Dated March 16, 1999
Titled "Ugly Duckling Corporation Announces Reclassification of
Cygnet Dealer Into Continuing Operations and Anticipated First
Quarter Results"
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2
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SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
UGLY DUCKLING CORPORATION
(Registrant)
By /s/ Ernest C. Garcia II
-----------------------------
(Signature)
Ernest C. Garcia II
Chief Executive Officer
Date March 16, 1999
3
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EXHIBIT INDEX
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<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- - ------ -----------
<S> <C>
99.1 Ugly Duckling Corporation Press Release Dated March 16, 1999
Titled "Ugly Duckling Corporation Announces Reclassification of
Cygnet Dealer Into Continuing Operations and Anticipated First
Quarter Results"
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EXHIBIT 99.1
[UGLY DUCKLING LOGO]
CONTACTS: Steven T. Darak
Senior Vice President & Chief Financial Officer
(602) 852-6600
FOR IMMEDIATE RELEASE
UGLY DUCKLING CORPORATION ANNOUNCES RECLASSIFICATION
OF CYGNET DEALER INTO CONTINUING OPERATIONS
AND ANTICIPATED FIRST QUARTER RESULTS
PHOENIX, Arizona (March 16, 1999) - Ugly Duckling Corporation (Nasdaq NM:
UGLY) today announced a reclassification of Cygnet Dealer into continuing
operations and anticipated first quarter results.
RECLASSIFICATION OF CYGNET DEALER INTO CONTINUING OPERATIONS:
The Board of Directors has determined at this time to cease efforts to
pursue strategic alternatives for the Company's Cygnet Dealer subsidiary due to
a lack of interest and other factors. As a consequence, Ugly Duckling announced
the reclassification of this non-dealership operation from discontinued to
continuing operations in its financial statements for 1998, 1997 and 1996. The
reclassification of Cygnet Dealer does not materially affect previously
announced results for 1998. Earlier this month, Ugly Duckling announced the
reclassification of certain other non-dealership operations consisting of its
Cygnet Financial Services. As a result of these two reclassification
announcements, only the Company's Champion Financial branch office network,
which was closed in February, 1998, remains in discontinued operations. The
Cygnet Dealer subsidiary provides various credit facilities to third party used
car dealers. Cygnet Financial Services purchases and services auto finance
portfolios.
EXPECTED FIRST QUARTER 1999 RESULTS:
The Company reported that it expects its actual results for the first
quarter 1999 to exceed analysts' consensus estimates. Analysts' estimates range
from $(.13) to $(.18) loss per share for the quarter. The Company estimates that
for the quarter it will be at or near break-even from its continuing operations.
Although the quarter is not over, Ugly Duckling believes that a few factors,
most notably a greater number of vehicles being sold, will lead to the better
than expected results for Q1. However, there can be no assurance that the
Company's expectation and estimates for first quarter 1999 will prove
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correct. Further, although the Company did not provide any guidance on annual
results for 1999, it did note that vehicle sales are typically strongest in its
first quarter, and thus, may not be reflective of annual results.
Headquartered in Phoenix, Arizona, Ugly Duckling Corporation is a used
car sales and finance company that operates the nation's largest chain of used
car dealerships focused exclusively on the sub-prime market. The Company
underwrites, finances and services sub-prime contracts generated at its 58 Ugly
Duckling Car Sales dealerships. Cygnet Financial Corporation, a wholly owned
subsidiary of Ugly Duckling Corporation, provides various financial services
primarily to the sub-prime segment of the automobile financing industry. Cygnet
Dealer and Cygnet Financial Services are subsidiaries of Cygnet Financial
Corporation.
This press release may include statements that constitute
forward-looking statements, usually containing the words "believe," "estimate,"
"project," "expects" or similar expressions. These statements are made pursuant
to the safe harbor provisions of the Private Securities Litigation Reform Act of
1995. Forward-looking statements inherently involve risks and uncertainties that
could cause actual results to differ materially from the forward-looking
statements. Specifically, the statements in this press release relating to the
Company's expectations and estimates regarding results of operations are
forward-looking in nature and involve risks and uncertainties. Factors that
could cause or contribute to material differences, include, but are not limited
to: (1) an unforeseen event impacting the Company or its business prior to the
first quarter of 1999 being over, and the Company closing its accounting books
and records; (2) a decrease in vehicle gross margins and/or unit sales due to
market, competitive or other considerations; (3) a deterioration in the credit
quality of the Company's finance receivables; (4) a change in estimate and/or
assumption in the Company's reserves for credit losses; and (5) a further
tightening of credit in the sub-prime industry. Other factors that could cause
or contribute to such differences include factors detailed in the sections
entitled "Management's Discussion and Analysis of Financial Condition and
Results of Operations -- Risks Factors," "Factors That May Affect Future Results
and Financial Condition" and "Factors That May Affect Future Stock Performance"
in Ugly Duckling Corporation's most recent reports on Form 10-K and Form 10-Q
(including Exhibit 99 to any such Form 10-Q), factors detailed in the section
"Risk Factors" in Ugly Duckling Corporation's definitive proxy statement dated
August 4, 1998, and elsewhere in Ugly Duckling Corporation's Securities and
Exchange Commission filings. By making these forward-looking statements, the
Company undertakes no obligation to update these statements for revisions or
changes after the date of this press release.
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