UGLY DUCKLING CORP
8-K, 1999-03-16
PERSONAL CREDIT INSTITUTIONS
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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)
<PAGE>   2



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"
</TABLE>















                                       2
<PAGE>   3
                                   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
<PAGE>   4
                                  EXHIBIT INDEX

<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"
</TABLE>














































<PAGE>   1
                                  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

                                    - more -

<PAGE>


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.
                                       ###


Udc.ic.99-3-16




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