UGLY DUCKLING CORP
8-K, 2000-02-17
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 or 15(d) of the
                         Securities Exchange Act of 1934


       Date of Report (Date of earliest event reported): February 17, 2000


                            UGLY DUCKLING CORPORATION
                            -------------------------
             (Exact name of registrant as specified in its charter)

         Delaware                  000-20841               86-0721358
       ------------            ------------------     -------------------
 (State or other jurisdiction     (Commission            (IRS Employer
       of incorporation)          File Number)         Identification No.)




            2525 E. 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>


Item 5.           Other Events


         Attached   hereto  as  Exhibit   99.1  is  a  copy  of  Ugly   Duckling
Corporation's  press  release  dated  February  16, 2000 titled  "Ugly  Duckling
Reports Financial Results for 1999."

Item 7.  Financial Statements, Pro Forma Financial Information and Exhibits


         (c)      Exhibits

EXHIBIT
NUMBER   DESCRIPTION

99.1 Ugly Duckling  Corporation  Press  Release  dated  February 16, 2000 titled
     "Ugly Duckling Reports Financial Results for 1999."



<PAGE>


                                    SIGNATURE

         Pursuant to the  requirements  of the Securities  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


Date: February 17, 2000      By: \s\ Jon D. Ehlinger
                          -----------------------------
                          Vice President, Secretary and
                                 General Counsel




<PAGE>




                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   SCHEDULE TO
                          ISSUER TENDER OFFER STATEMENT
UNDER SECTION 14(d)(1) or Section 13(e)(1)OF THE SECURITIES EXCHANGE ACT OF 1934

                            UGLY DUCKLING CORPORATION
                                (NAME OF ISSUER)

                            UGLY DUCKLING CORPORATION
                      (NAME OF PERSON(S) FILING STATEMENT)

                                  COMMON STOCK
                                 $.001 PAR VALUE
                         (TITLE OF CLASS OF SECURITIES)

                                    903512101
                      (CUSIP NUMBER OF CLASS OF SECURITIES)

                               GREGORY B. SULLIVAN
                      CHIEF EXECUTIVE OFFICER AND PRESIDENT
                            UGLY DUCKLING CORPORATION
                       2525 EAST CAMELBACK ROAD, SUITE 500
                             PHOENIX, ARIZONA 85016
                                 (602) 852-6600
            (NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON AUTHORIZED
                 TO RECEIVE NOTICE AND COMMUNICATIONS ON BEHALF
                       OF THE PERSON(S) FILING STATEMENT)

                                    COPY TO:

                                STEVEN D. PIDGEON
                              SNELL & WILMER L.L.P.
                               ONE ARIZONA CENTER
                           PHOENIX, ARIZONA 85004-0001
                                 (602) 382-6252

                            CALCULATION OF FILING FEE

- ---------------------------------- ---------------------------------------------
      TRANSACTION VALUATION*            AMOUNT OF FILING FEE**

- ---------------------------------- ---------------------------------------------
- ---------------------------------- ---------------------------------------------
           $27,500,000                         $5,500.00
- ---------------------------------- ---------------------------------------------

* Assumes  purchase of 2,500,000  Shares of Common Stock at $11.00 per share.

**Calculated  based on the transaction  valuation  multiplied by one-fiftieth of
  one percent.


<PAGE>


[  ] Check  the  box if any  part of the fee is  offset  as  provided  by Rule
     0-11(a)(2)  and  identify  the  filing  with which the  offsetting  fee was
     previously  paid.  Identify the previous filing by  registration  statement
     number, or the Form or Schedule and the date of its filing.

Amount Previously Paid:             N/A              Filing Party:     N/A
Form or Registration No.:           N/A              Date Filed:       N/A

|X| Check the box if the filing  relates  solely to  preliminary  communications
made before the commencement of a tender offer.

         Check the  appropriate  boxes below to designate  any  transactions  to
which the statement relates:

[ ]      third-party tender offer subject to Rules 14d-1.
[ ]      issuer tender offer subject to Rule 13e-4.
[ ]      going-private transaction subject to Rule 13e-3.
[ ]      amendment to Schedule 13D under Rule 13d-2.

         Check the  following box if the filing is a final  amendment  reporting
the results of the tender offer: [ ]

         Attached hereto is a copy of Ugly Duckling  Corporation's press release
dated  February 16, 2000 titled "Ugly  Duckling  Reports  Financial  Results for
1999."



<PAGE>


                                    SIGNATURE

         After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and correct.

Dated:   February 16, 2000.

                             UGLY DUCKLING CORPORATION
                             A Delaware corporation


                          by: /S/ JON D. EHLINGER
                              -------------------
                              Jon D. Ehlinger
                              Secretary and
                              General Counsel







FOR IMMEDIATE RELEASE
February 16, 2000



                UGLY DUCKLING REPORTS FINANCIAL RESULTS FOR 1999

      Company Exits All Cygnet Operations to Focus on Dealership Operations

        Company Announces Common Stock Exchange Offer at $11.00 per Share


Fourth Quarter Highlights:

o    Net earnings totaled $3.2 million, or $0.21 per diluted share
o    Earnings per diluted share from continuing operations totaled $0.17
o    Revenues from  continuing  operations  increased 41% to $106.4 million from
     $75.6 million in year-ago quarter
o    On-balance sheet loan portfolio  principal  balance reached $358.8 million,
     representing  an 8%  sequential  increase  over  third  quarter  and a near
     four-fold rise over year-ago quarter
o    New loan originations  reached $80.9 million,  a 16% increase over year-ago
     quarter
o    Acquired  five  dealerships  in the  Richmond  market,  ending year with 72
     dealerships

Financial Highlights
(In 000's, except for per share numbers)
<TABLE>
<CAPTION>

<S>                                                      <C>                         <C>
- -------------------------------------------------------- --------------------------- ----------------------------
                                                             Three Months Ended              Year Ended
                                                         --------------------------- ----------------------------

                                                           12/31/99      12/31/98      12/31/99       12/31/98
- -------------------------------------------------------- ------------- ------------- -------------- -------------
Total revenues                                               $106,447     $ 75,637        $467,275  $332,553

Operating income (loss)                                       $ 4,643      $(8,405)       $ 14,911   $ 5,944
Earnings (loss) - continuing operations                       $ 2,619      $(5,064)        $ 8,687   $ 3,455
Diluted earnings per share - continuing operations            $ (0.30)     $  0.57        $   0.17   $  0.19
- -------------------------------------------------------- ------------- ------------- -------------- -------------
</TABLE>

PHOENIX -- February 16, 2000 - Ugly Duckling  Corporation (Nasdaq NM: UGLY), the
largest and fastest  growing used car sales company  focused  exclusively on the
sub-prime market, today reported  significant  improvement in its fourth quarter
and full year 1999 financial results.


<PAGE>




Ugly Duckling Corporation
Page 2 of 11


Strong Quarter over Quarter Results
For the three months ended December 31, 1999,  Ugly Duckling  achieved  earnings
from continuing  operations of $2,619,000,  or $0.17 per diluted share, compared
with a loss from  continuing  operations for the three months ended December 31,
1998 of $(5,064,000), or a loss of $(0.30) per diluted share.

The company  sold 9,731 cars in the fourth  quarter of 1999,  an increase of 11%
over the 8,766 cars sold in the year-ago  quarter.  The increased number of cars
sold,  together with growth in interest  income,  resulted in total  revenues of
$106,447,000  for the fourth quarter of 1999, an increase of over 41% from total
revenues of $75,637,000 in the fourth quarter of 1998.

Interest  income  for the  fourth  quarter  of 1999  increased  sequentially  to
$22,670,000  from  $19,775,000  in the third quarter of 1999, a gain of 15%, and
from $5,256,000 in the year-ago  period,  an increase of over 430%. The increase
in both  periods is  primarily  attributable  to rapid  growth of the  company's
on-balance sheet portfolio,  resulting from Ugly Duckling's change to on-balance
sheet financing transactions.

New loan  originations  for the  fourth  quarter  of 1999  reached  $80,900,000,
representing a 21% sequential  decrease from the $102,600,000  reported in third
quarter of 1999, and a 16% increase over the $69,500,000  reported in the fourth
quarter of 1998. The quarter over quarter increase is primarily the result of an
increased  number  of  Ugly  Duckling  dealerships.  The  company's  dealerships
increased in number to 72 in the fourth  quarter of 1999 from 56 in the year-ago
fourth quarter.  The decrease in new loan  originations in the fourth quarter of
1999 versus the third quarter 1999 is a function of  seasonality,  as the fourth
quarter is historically the company's weakest sales quarter of the year.

Operating expenses for the fourth quarter of 1999 reached $27,909,000, or 26% of
total revenues, compared with operating expenses of $25,941,000, or 34% of total
revenues,   for  the  year-ago  quarter.  The  stability  in  operating  expense
expenditures and the substantial  decline in operating  expenses as a percentage
of total  revenues,  is primarily the result of improved  efficiencies  from the
company's  new  computer  system,  and  dealership  growth in  existing  markets
requiring little additional indirect support services.

Loan Servicing
The  company  made good  progress in  lowering  delinquencies  during the fourth
quarter of 1999. "The fourth quarter is  traditionally  the toughest in terms of
servicing  sub-prime  loans,"  said  Gregory B.  Sullivan,  President  and Chief
Executive  Officer  of  Ugly  Duckling   Corporation.   "Nonetheless,   we  made
significant  progress  in  lowering  delinquencies  from 10.3% at the end of the
third quarter of 1999 to 9.0% at the end of the fourth quarter.  Net charge-offs
were higher than we would have liked but about where we would have thought based
on the third  quarter  delinquencies.  We  successfully  addressed the servicing
issue that led to the higher  delinquencies  and feel that those challenges have
been overcome.  As evidence of this, at the end of the third quarter I expressed
confidence that we would have delinquencies down to 8.0% by the end of the first
quarter of 2000. I'm pleased to report that we ended January with  delinquencies
at 7.6%."

<PAGE>


Substantial Gains in 1999
For the year ended  December  31,  1999,  the  company  reported  earnings  from
continuing  operations of $8,687,000,  or $0.57 per diluted share, compared with
earnings from continuing  operations of $3,455,000,  or $0.19 per diluted share,
for the year ended December 31, 1998. Results for 1998 included pre-tax earnings
of $12,093,000  ($7,135,460  net of income  taxes),  or $0.39 per diluted share,
from the gain on sale of loans.  No gains on the sale of loans were  recorded in
1999 as the company  restructured  its financing  transactions  which eliminated
gain-on-sale accounting treatment beginning in the fourth quarter of 1998.

Used car sales  totaled  $389,908,000  in 1999, an increase of 36% over sales of
$287,618,000  in 1998.  The company sold 46,120 cars in 1999, an increase of 28%
over the 35,964 sold in 1998. The increased  number of cars sold,  together with
an increase in interest  income,  resulted in total revenues of $467,275,000 for
the year, an increase of 41% from total  revenues of  $332,553,000  in 1998. New
loan  originations for 1999 reached  $381,500,000,  representing a 38% gain over
the $277,300,000 originated in 1998.

Interest income for 1999 increased  four-fold to $68,574,000 from $17,287,000 in
1998, resulting from rapid growth of Ugly Duckling's  on-balance sheet portfolio
from a change  in  securitization  structure.  Operating  expenses  for the year
reached $112,936,000, or 24% of total revenues, compared with operating expenses
of $92,174,000, or 28% of total revenues, for the prior year.

"Ugly  Duckling's  record  results  and  substantial  gains in 1999  reflect the
growing  strength of our unique  business  model.  We are  beginning  to realize
additional increased operating efficiencies as we expand our nationwide chain of
`buy here-pay here' used car  dealerships,"  said Mr. Sullivan "Our results also
reflect a near 300%  increase  in  interest  income  resulting  from our rapidly
growing on-balance sheet loan portfolio.  Our new CLASS central computer system,
which united the four separate computer systems we operated a year ago into one,
also  contributed  substantially  to our control over  operations and our record
earnings," said Mr. Sullivan.

Ugly Duckling Continues Expansion of Dealerships:
Continuing its pace to add new dealerships, Ugly Duckling closed the acquisition
of certain assets of a  Virginia-based  sub-prime  automobile  sales and finance
company  in the  fourth  quarter  of 1999.  The  assets  included  five used car
dealerships  operating  in the greater  Richmond  market area.  These  locations
commenced  operations  as  Ugly  Duckling  in  December  1999.  The  acquisition
represented Ugly Duckling's initial entry into the Virginia market while further
geographically diversifying its presence across the nation.

Including  acquisitions the company made in Florida in the third quarter of 1999
and the fourth  quarter 1999 Virginia  acquisitions,  Ugly Duckling has added 31
new  dealerships  over  the  past  two  years,  bringing  the  total  number  of
dealerships operated by the company at December 31, 1999 to 72.

 "We plan to continue with our  aggressive,  yet controlled  acquisition  and de
novo opening strategy. To that end, we have opened two dealerships this year and
four  more are  currently  under  development.  We are  operating  in a huge and
unconsolidated industry. With more than 58,000 independent dealers in operation,
our  opportunities  for expansion via acquisition or development are extensive,"
said Mr. Sullivan.


<PAGE>



Company Website-Based Applications and Sales Accelerate
Ugly Duckling's website, located at http://www.uglyduckling.com/,  is continuing
to generate a growing stream of new leads and sales. The site provides potential
customers  with instant  credit  applications  as well as maps to the  company's
dealerships nationwide. From customers initially applying for credit through its
website,  4,900  applications  were  received  in the  fourth  quarter  of  1999
generating $3.9 million in revenue with 415 used car sales. In the third quarter
of 1999 the company's  Internet activity generated revenues of over $2.6 million
with 316 cars being sold.

Common Stock Exchange Offer
Ugly Duckling today also announced that it expects to commence an exchange offer
beginning  February  22,  2000.  The company  plans to acquire up to 2.5 million
shares of its common stock in exchange for up to $27.5 million  principal amount
of its 11%  Subordinated  Debentures due 2007.  Under the exchange  offer,  Ugly
Duckling shareholders could exchange shares of common stock for $11.00 principal
amount of  debentures.  The  debentures  would  bear  interest  at 11% per year,
payable  semi-annually  each April 15 and October 15 starting on April 15, 2000.
The principal amount of the debentures  would be due on the seventh  anniversary
of their  issuance date,  subject to prepayment at the company's  option without
penalty  or  premium.  Issuance  of the  exchange  offer is  subject  to certain
conditions, including formal approval from company lenders.

All investors are advised to carefully  read the tender offer  statement when it
becomes  available because of the important  information it contains.  Effective
February 22, 2000 the tender offer statement and other filed reports,  proxy and
information  statements  may be obtained for free by accessing over the Internet
the  Security  and  Exchange   Commission's  site  on  the  World  Wide  Web  at
http://www.sec.gov.  Investors  may also  contact  Ugly  Duckling's  Information
Agent, Corporate Investor Communications, Inc., at 1-201-896-1900 to obtain free
copies of the  Offering  Circular  and related  documents  to be utilized in the
exchange offer.

Discontinued Operations
In the fourth  quarter of 1999 the company had three  separate  events which are
reported as discontinued operations.

In  December  1999 the  company  announced  that it had sold its  Cygnet  Dealer
subsidiary to an affiliated  entity.  Cygnet  Dealer  results from  discontinued
operations  are a $(449,000)  net operating  loss for the fourth quarter of 1999
and net  operating  earnings of $415,950  for the year.  The company  recorded a
$175,000 net gain on sale.

Effective  December  31, 1999 the  company  adopted a formal plan to abandon any
effort for Cygnet  Servicing to acquire loans or servicing  rights to additional
portfolios.  Accordingly,  the company's  Cygnet  Servicing  and the  associated
Cygnet  Corporate  segment  also are  reported  as  components  of  Discontinued
Operations.  The company plans to service to completion the portfolios currently
serviced.  For 1999 the Cygnet Servicing and Cygnet Corporate  segments incurred
net earnings of $2.3  million and $1.5  million for the fourth  quarter and year
ended December 1999, respectively.  No loss has been recorded on the disposal of
this segment as the company  anticipates that over the run-off period,  expected
to be approximately 30 months, it will ultimately realize a net gain.


<PAGE>



In February  1998 the  company  discontinued  its  Champion  Financial  Services
operations.  Loan losses and related  servicing  expenses have exceeded  amounts
provided  for such  activities  and in the fourth  quarter  of 1999 the  company
recorded an  additional  charge of $1.5  million  net of tax for the  additional
costs  and  loan  losses  associated  with  its  remaining  portfolio  servicing
activities.

Bright Growth Outlook
"Ugly  Duckling's  outstanding  operational  and financial  performance  in 1999
enhances   the   company's   position  as  the   largest  and  fastest   growing
`buy-here-pay-here'  used car dealership  chain in the United  States," said Mr.
Sullivan.  "For the first time since 1994, the company is focused exclusively on
its core  business of the sale and  financing of used cars to  sub-prime  credit
customers.  We are  excited  about  our  position  in  this  $60 - $100  billion
industry.  We are already the largest dealer in the country focused  exclusively
on this market. We have established a firm foundation based on our technological
systems, business practices and procedures,  and most importantly our people. We
have established that we can make money in this market, that we can grow in this
market,  and that we can make money as we grow. Our  profitability  for 1999 far
exceeded  our  expectations  going into the year.  Now that the  company is 100%
focused on this  business,  we look forward more than ever to growing and making
improvements  that  strengthen  our business and further  improve our  operating
results."

Ugly  Duckling  will be  holding an  investor  conference  call to  discuss  the
Company's  financial  and  operational  results  at  10:30 am  eastern  (8:30 am
Phoenix) on February 16, 2000.  Investors will have the opportunity to listen to
the conference call over the Internet through Vcall at http://www.vcall.com.  To
listen  to the live  call,  please go to the web site at least  fifteen  minutes
early to register, download, and install any necessary audio software. For those
who cannot  listen to the live  broadcast,  a replay will be  available  shortly
after  the  call  at  http://www.vcall.com  and  on  the  company's  website  at
http://www.uglyduckling.com.

Headquartered in Phoenix,  Arizona, Ugly Duckling Corporation is the largest and
fastest  growing  operator of used car  dealerships  focused  exclusively on the
sub-prime  market.  The company  underwrites,  finances and  services  sub-prime
contracts  generated  at  its  74  Ugly  Duckling  dealerships,  located  in  11
metropolitan areas in eight states.

(This  press  release  includes   statements  that  constitute   forward-looking
statements  within the meaning of the safe harbor  provisions of the Private and
Securities Litigation Reform Act of 1995.  Forward-looking  statements are often
characterized by the words  "believes,"  "estimates,"  "projects,"  "expects" or
similar  expressions.  Forward-looking  statements in this release relate, among
other matters, to: anticipated  financial results,  such as continuing growth in
financial  performance  and  improvements  in  delinquencies;  and growth in the
company's  dealerships  through  acquisitions  and de novo dealership  openings.
Factors that could cause or contribute to differences from these forward-looking
statements  include,  but are not limited to: any decline in consumer acceptance
of the company's car sales strategies or marketing  campaigns;  any inability of
the company to finance its  operations in light of a tight credit market for the
sub-prime  industry;  any  deterioration  in the used car  finance  industry  or
increased competition in the used car sales and finance industry;  any inability
of the company to monitor and improve its underwriting and collection processes;
any changes in estimates and  assumptions  in, and the ongoing  adequacy of, the
company's  allowance for credit losses; any inability of the company to continue
to reduce  operating  expenses as a percentage of sales;  and any new or revised
accounting,  tax or legal  guidance  that  adversely  affect  used car  sales or
financing.  Other  factors are detailed in the sections  entitled  "Management's
Discussion and Analysis of Financial Condition and Results of Operations -- Risk

<PAGE>


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),  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.  References to Ugly
Duckling  Corporation  as the largest and fastest  growing  operator of used car
dealerships  focused  exclusively on the sub-prime market is management's belief
based upon its  knowledge  of the  industry  and not on any current  independent
third party study.)

               For more information on Ugly Duckling, please dial
              1-800-PRO-INFO and enter company ticker symbol UGLY.

                            [Financial Tables Follow]


<PAGE>



                            UGLY DUCKLING CORPORATION
                         Consolidated Operating Results
                                   (Unaudited)
                      (In thousands, except per share data)
<TABLE>
<CAPTION>

                                                            Three Months Ended                      Year Ended
                                                               December 31,                        December 31,
                                                     ---------------------------------   ---------------------------------
                                                          1999              1998              1999              1998
                                                     ---------------   ---------------   ---------------   ---------------

<S>                                                  <C>               <C>               <C>               <C>
Cars Sold                                                    9,731             8,766            46,120            35,964
                                                     ======  ======    ==============    ====== =======    ====== ======

Total Revenues                                            $106,447          $ 75,637          $467,275          $332,553
                                                     =    =========    =    =========    =    =========    =    ========

Sales of Used Cars                                          $82,275          $ 71,542          $389,908          $287,618
Less:
Cost of Used Cars Sold                                       45,642            41,906           219,071           167,014
Provision for Credit Losses                                  21,842            20,264           102,955            65,318
                                                     ---------------   ---------------   ---------------   ---------------
                                                             14,791             9,372            67,882            55,286
                                                     ---------------   ---------------   ---------------   ---------------
Other Income (Expense):
Interest Income                                              22,670             5,256            68,574            17,287
Interest Expense                                            (6,412)           (1,187)          (17,402)           (2,883)
Gain on Sale of Finance Receivables                               -                 -                -             12,093
Servicing and Other Income                                    1,503             4,095             8,793            16,335
                                                     ---------------   ---------------   ---------------   ---------------
                                                             17,761             8,164            59,965            42,832
                                                     ---------------   ---------------   ---------------   ---------------
Income before Operating Expenses                             32,552            17,536           127,847            98,118
Operating Expenses:
Selling and Marketing                                         5,175             4,728            23,752            20,285
General and Administrative                                   20,823            19,835            82,236            66,977
Depreciation and Amortization                                 1,911             1,378             6,948             4,912
                                                     ---------------   ---------------   ---------------   ---------------
                                                             27,909            25,941           112,936            92,174
                                                     ---------------   ---------------   ---------------   ---------------
Operating Income                                              4,643           (8,405)            14,911             5,944
Interest Expense                                                224               138               224               138
                                                     ---------------   ---------------   ---------------   ---------------

Earnings before Income Taxes                                  4,419           (8,543)            14,687             5,806
Income Taxes  (Benefit)                                       1,800           (3,479)             6,000             2,351
                                                     ---------------   ---------------   ---------------   ---------------
Earnings (Loss)  from Continuing Operations                   2,619           (5,064)             8,687             3,455
Earnings (Loss) - Discontinued Operations, net                  575               386               580           (9,158)
                                                     ---------------   ---------------   ---------------   ---------------
Net Earnings (Loss)                                         $ 3,194         $ (4,678)           $ 9,267         $ (5,703)
                                                     ===============   ===============   ===============   ===============

Earnings (Loss) per Common Share from Continuing Operations:
Basic                                                      $  0.18         $  (0.30)           $  0.58           $  0.19
                                                           ========        ==========          ========          =======
Diluted                                                    $  0.17         $  (0.30)           $  0.57           $  0.19
                                                           ========        ==========          ========          =======
Net Earnings (Loss) per Common Share:
Basic                                                      $  0.21          $  (0.28)          $  0.61          $  (0.32)
                                                           ========         =========          ========         =========
Diluted                                                    $  0.21          $  (0.28)          $  0.60          $  (0.31)
                                                           ========         =========          ========         =========
Shares Used in Computation:
Basic                                                       14,889            16,633            15,093            18,082
                                                            =======           =======           =======           ======
Diluted                                                     15,167            16,633            15,329            18,405
                                                            =======           =======           =======           ======
</TABLE>

<PAGE>



                            UGLY DUCKLING CORPORATION
             Consolidated Operating Expenses and Related Information
                                   (Unaudited)
                                 (In thousands)

<TABLE>
<CAPTION>

                                                           Three Months ended                       Year ended
                                                              December 31,                         December 31,
                                                         1999              1998              1999               1998
                                                     --------------    --------------    --------------    ---------------
                                                     --------------    --------------    --------------    ---------------
<S>                                                  <C>               <C>               <C>               <C>
  Dealerships - Retail Operations
    Selling and Marketing                                  $ 5,175           $ 4,728          $ 23,752           $ 20,285
    General and Administrative                              11,170             8,867            44,289             32,383
    Depreciation and Amortization                            1,015               726             3,587              2,581
                                                     --------------    --------------    --------------    ---------------
       Dealerships - Retail Operations                      17,360            14,321            71,628             55,249
                                                     --------------    --------------    --------------    ---------------
  Loan Servicing - General and Admin.                        6,707             5,275            20,653             18,491
  Loan Servicing - Dep. and Amort.                             300               361             1,141              1,333
                                                     --------------    --------------    --------------    ---------------
       Loan Servicing                                        7,007             5,636            21,794             19,824
                                                     --------------    --------------    --------------    ---------------
  Corporate and Other - General and Admin.                   2,946             5,693            17,295             16,103
  Corporate and Other - Dep. and Amort.                        596               291             2,219                998
                                                     --------------    --------------    --------------    ---------------
       Corporate and Other                                   3,542             5,984            19,514             17,101
                                                     --------------    --------------    --------------    ---------------
Operating Expense                                         $ 27,909          $ 25,941         $ 112,936           $ 92,174
                                                     ==============    ==============    ==============    ===============

Total Operating Exp. - % of Total Revenues                   26.2%             34.3%             24.2%              27.7%
                                                     ==============    ==============    ==============    ===============


Other Information:
Dealerships Open - End of period                                72                56                72                 56
                                                     ==============    ==============    ==============    ===============
Used Cars Sold                                               9,731             8,766            46,120             35,964
                                                     ==============    ==============    ==============    ===============
Dealership Operating Expenses  - Per Car Sold:
    Selling and Marketing                                   $  532            $  539            $  515             $  564
    General and Administrative                               1,148             1,012               960                900
    Depreciation and Amortization                              104                83                78                 72
                                                     --------------    --------------    --------------    ---------------
  Dealerships - Retail Operations                          $ 1,784           $ 1,634           $ 1,553            $ 1,536
                                                     ==============    ==============    ==============    ===============

Loan Servicing Expenses - % of Portfolio Managed:
- -------------------------------------------------
Managed Principal Balances:
Dealership Originations                                   $424,480          $292,683          $424,480           $292,683
Serviced for Others                                         12,983            47,947            12,983             47,947
                                                     --------------    --------------    --------------    ---------------
                                                          $437,463          $324,669          $437,463           $324,669
                                                     ==============    ==============    ==============    ===============
Net Loan Servicing (Annualized) as % of Managed
Principal Balances                                            6.5%              6.6%              5.0%               5.9%
                                                     ==============    ==============    ==============    ===============

Corporate and Other  Expenses:
Per Car Sold                                                $  364            $  683            $  423             $  475
                                                     ==============    ==============    ==============    ===============
As % of Total Revenues - Dealership Operations                3.3%              7.9%              4.2%               5.1%
                                                     ==============    ==============    ==============    ===============
</TABLE>




<PAGE>


<TABLE>
<CAPTION>

                                             UGLY DUCKLING CORPORATION
                                       Segment Information - Operating Income
                                                    (Unaudited)
                                                   (In thousands)

                                                               Three Months Ended December 31, 1999
                                                                      Dealership Operations
                                              -----------------------------------------------------------------------
                                                                            Dealership                 Corporate
                                                 Dealerships               Receivables                 and Other
                                              -----------------          -----------------          -----------------
<S>                                           <C>                        <C>                        <C>
Sales of Used Cars.......................     $       82,275             $           --             $           --
Cost of Used Cars Sold...................           (45,642)                         --                         --
Provision for Credit Losses..............           (17,077)                     (4,765)                        --
                                              -----------------          -----------------          -----------------
                                                     19,556                      (4,765)                        --
                                              -----------------          -----------------          -----------------
Other Income:
Interest Income..........................                --                      22,562                        108
Interest Expense.........................                --                      (3,863)                    (2,549)
Servicing and Other......................                89                       1,345                         69
                                              -----------------          -----------------          -----------------
Income before Operating Expenses.........            19,645                      15,279                     (2,372)
                                              -----------------          -----------------          -----------------

Operating Expenses:
Selling and Marketing....................      (5,175)                               --                         --
General and Administration...............      (11,170)                          (6,707)                    (2,946)
Depreciation and Amortization............      (1,015)                             (300)                      (596)
                                              -----------------          -----------------          -----------------
                                                                                 (7,007)                    (3,542)
                                               (17,360)
                                              -----------------          -----------------          -----------------
Operating Income.........................     $        2,285             $        8,271             $       (5,914)
                                              =================          =================
                                                                                                    =================
Total Operating Income...................                                                           $        4,643
                                                                                                    =================


                                                                   Year Ended December 31, 1999
                                              -----------------------------------------------------------------------
                                                                      Dealership Operations
                                              -----------------------------------------------------------------------
                                                                            Dealership                 Corporate
                                                Dealerships                Receivables                 and Other
                                              -----------------          -----------------          -----------------
Sales of Used Cars.......................     $      389,908             $           --             $           --
Cost of Used Cars Sold...................           (219,071)                        --                         --
Provision for Credit Losses..............            (80,627)                   (22,327)                        --
                                              -----------------          -----------------          -----------------
                                                      90,210                    (22,327)                        --
                                              -----------------          -----------------          -----------------
Other Income:
Interest Income..........................                 --                     68,118                        456
Interest Expense.........................                 --                     (9,250)                    (8,152)
Servicing and Other......................                173                     8,317                        303
                                              -----------------          -----------------          -----------------
Income before Operating Expenses.........             90,383                     44,858                     (7,393)
                                              -----------------          -----------------          -----------------

Operating Expenses:......................
Selling and Marketing....................      (23,752)                              --                         --
General and Administration...............      (44,289)                         (20,653)                   (17,295)
Depreciation and Amortization............       (3,587)                          (1,141)                    (2,219)
                                              -----------------          -----------------          -----------------
                                               (71,628)                        (21,794)                   (19,514)
                                              -----------------          -----------------          -----------------
Operating Income.........................     $       18,755             $       23,063             $      (26,907)
                                              =================          =================
                                                                                                    =================
Total Operating Income...................                                                           $       14,911
                                                                                                    =================
</TABLE>


<PAGE>


<TABLE>
<CAPTION>

                            UGLY DUCKLING CORPORATION
                     Consolidated Balance Sheet Information
                                 (In thousands)


                                                                     December 31,
                                                             1999                    1998
                                                      --------------------    -------------------
                                                      -------------------------------------------
                      ASSETS                                         (Unaudited)
<S>                                                   <C>                     <C>
Cash and Cash Equivalents                                      $    3,683            $     2,544
Finance Receivables, Net                                          365,586                126,168
Notes Receivable, Net                                              12,013                    763
Inventory                                                          63,150                 44,145
Property and Equipment, Net                                        31,467                 28,631
Intangible Assets, Net                                             14,741                 14,433
Other Assets                                                       13,774                 14,625
Net Assets of Discontinued Operations                              33,536                106,997
                                                      --------------------    -------------------
                                                              $   537,950            $   338,306
                                                      ====================    ===================

       LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Accounts Payable                                               $    3,185             $    2,137
Accrued Expenses and Other Liabilities                             27,930                 16,766
Notes Payable                                                     311,932                117,895
Subordinated Notes Payable                                         29,217                 38,741
                                                      --------------------    -------------------
   Total Liabilities                                              372,264                175,539
                                                      --------------------    -------------------
Stockholders' Equity
Common Stock                                                           19                     19
Additional Paid in Capital                                        173,273                173,809
Retained Earnings                                                  12,715                  3,449
Treasury Stock                                                   (20,321)               (14,510)
                                                      --------------------    -------------------
   Total Stockholders' Equity                                     165,686                162,767
                                                      --------------------    -------------------
                                                              $   537,950            $   338,306
                                                      ====================    ===================

Net Assets of Discontinued Operations
(In Thousands)
                                                                     December 31,
                                                             1999                    1998
                                                      -------------------------------------------
                                                                     (Unaudited)
Finance Receivables, net                                       $   14,837             $   65,065
Residuals in Finance Receivables Sold                               3,742                 10,500
Investments Held in Trust                                           1,545                  3,665
Notes Receivable                                                    6,697                 27,495
FMAC Receivable                                                     6,125                     --
Other Assets, net of Accounts Payable and Accrued
Liabilities                                                           590                    272
                                                      --------------------    -------------------
Net Assets of Discontinued Operations                          $   33,536            $   106,997
                                                      ====================    ===================
</TABLE>



<PAGE>

<TABLE>
<CAPTION>


                            UGLY DUCKLING CORPORATION
         Finance Receivables and Allowance for Credit Losses Information
                                 (In thousands)

                                                                     December 31,
                                                              1999                   1998
                                                       ------------------------------------------
Company Dealerships:                                                  (Unaudited)
- --------------------
<S>                                                    <C>                    <C>                             <C>
Gross Installment Sales Contracts                             $   492,937            $   131,510
Unearned Finance Charges (1)                                    (134,119)               (37,574)
                                                       -------------------    -------------------
Principal Balances                                                358,818            $    93,936
Accrued Interest                                                    3,741                    877
Loan Origination Costs                                              5,079                  2,237
                                                       -------------------    -------------------
   Principal Balances, net                                        367,638                 97,050
Residuals in Finance Receivables                                   16,687                 33,331
Investments Held In Trust                                          56,716                 20,564
                                                       -------------------    -------------------
   Finance Receivables                                            441,041                150,945
Allowance for Credit Losses                                      (75,455)               (24,777)
                                                       -------------------    -------------------
Finance Receivables, net                                       $  365,586             $  126,168
                                                       ===================    ===================


Principal Balances: (2):                                         Retained        Securitized (3)                 Managed
- ------------------------                                         --------        ---------------                 -------
December 1999 (Unaudited)                                      $  358,818             $   65,662              $  424,480
December 1998                                                  $   93,936             $  198,747              $  292,683

Allowance as % of Remaining Principal                            Retained            Securitized                Managed
- -------------------------------------                            --------            -----------                -------
December 1999 (Unaudited)                                           21.0%                  10.3%                  19.5%
December 1998                                                       26.4%                  20.6%                  23.4%

Delinquencies, as Percent of Principal:                     30 to 60 Days           Over 60 Days           Over 30 Days
- ---------------------------------------                     -------------           ------------           ------------
December 31, 1999 (Unaudited)                                        5.9%                   3.1%                   9.0%
December 31, 1998                                                    4.6%                   1.9%                   6.5%


<FN>

(1)  Unearned Finance Charges (UFC) for December 31, 1999 are computed from the Company's loan servicing  system.  Amounts for other
     periods are computed amounts using the current ratio of UFC to current principal
(2)  Retained - Means loans  included on the Company's  balance  sheet,  includes  securitized  loan  accounted for as  collaterized
     borrowings and  non-securitized  loans
     Securitized - Means loans sold under  transactions  structured as to recognize "gain on sale"
     Managed - Means total of retained and securitized, excluding loans serviced for others
(3)  Securitized - Means loans sold under transactions structures as to recognize "Gain on Sale".
</FN>
</TABLE>



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