<PAGE>
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): November 20, 1997
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UNITED AUTO GROUP, INC.
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(Exact name of registrant as specified in its charter)
Delaware 1-12297 22-3086739
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(State or other jurisdiction (Commission File Number) (I.R.S. Employer
of incorporation) Identification No.)
375 Park Avenue, New York, New York 10152
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(Address of principal executive offices) (Zip Code)
(212) 223-3300
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(Registrant's telephone number, including area code)
N/A
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(Former name or former address, if changed since last report)
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ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial Statements of Businesses Acquired: N/A.
(b) Pro Forma Financial Information: Pro forma Condensed
Consolidated Statements of Operations for (i) the nine
months ended September 30, 1997 and (ii) the twelve
months ended December 31, 1996, with footnotes thereto.
(c) Exhibits: N/A.
-2-
<PAGE>
PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The following unaudited pro forma condensed consolidated statement of
operations for the year ended December 31, 1996 of United Auto Group Inc. (the
"Company") gives effect to the following: (i) the acquisitions of United Nissan
(GA) (May 1, 1996), Peachtree Nissan (July 1, 1996), Sun Automotive Group, the
Evans Group and United Nissan (TN) (October 28, 1996), Shannon Automotive
(d/b/a Crown Automotive) (March 1, 1997), Hanna Nissan (April 22, 1997), the
Staluppi Group (April 30, 1997), the Reed Group (May 30, 1997), Lance Landers
(June 9, 1997) and Stone Mountain Jeep/Eagle (August 22, 1997); (ii) the
acquisition of minority interests of certain dealerships during October 1996
(the "Minority Exchange"); (iii) the Company's initial public offering (the
"IPO") in October 1996; (iv) the commitment fees under the Company's Credit
Agreement, dated as of March 20, 1997 (as amended, the "Senior Credit Facility")
and the amortization of financing costs related thereto; (v) the sale of $150.0
million aggregate principal amount of 11% Senior Subordinated Notes due 2007
(the "Series A Notes") during July 1997 and (vi) the sale of $50.0 million
aggregate principal amount of 11% Senior Subordinated Notes due 2007, Series B
(the "Series B Notes"), during September 1997.
The following unaudited pro forma condensed consolidated statement of
operations for the nine months ended September 30, 1997 gives effect to the
following: (i) the acquisitions of Crown Automotive, Hanna Nissan, the Staluppi
Group, the Reed Group, Lance Landers and Stone Mountain Jeep/Eagle; (ii) the
commitment fees under the Senior Credit Facility and the amortization of
financing costs related thereto; (iii) the offering of the Series A Notes and
(iv) the offering of the Series B Notes.
The pro forma condensed consolidated statements of operations assume these
events occurred on January 1, 1996.
The pro forma condensed consolidated financial statements are not necessarily
indicative of operating results that would have been achieved had these events
been consummated on the dates indicated and should not be construed as
representative of future operating results.
These pro forma condensed consolidated financial statements should be read in
conjunction with the historical financial statements and related notes
thereto.
1
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UNITED AUTO GROUP, INC.
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
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NINE MONTHS ENDED SEPTEMBER 30, 1997
CROWN HANNA STALUPPI REED LANCE STONE PRO FORMA PRO
UAG AUTOMOTIVE (1) NISSAN (1) GROUP (1) GROUP (1) LANDERS (1) MOUNTAIN (1) ADJUSTMENTS FORMA
---------- -------------- ---------- --------- --------- ----------- ------------ ----------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
In thousands, except
per share amounts
AUTO DEALERSHIPS
Total revenues $1,541,133 $12,573 $19,826 $152,774 $56,239 $16,666 $24,462 $ -- $1,823,673
Cost of sales,
including floor
plan interest 1,344,730 10,507 16,802 136,649 47,151 15,621 21,807 -- 1,593,267
---------- -------------- ---------- --------- --------- ----------- ------------ ----------- ----------
Gross profit 196,403 2,066 3,024 16,125 9,088 1,045 2,655 -- 230,406
Selling, general
and
administrative
expenses 160,367 1,552 2,183 14,732 7,385 1,084 2,465 (110)(2) 189,130
200 (3)
(1,580)(4)
852 (5)
---------- -------------- ---------- --------- --------- ----------- ------------ ----------- ----------
Operating income
(loss) 36,036 514 841 1,393 1,703 (39) 190 638 41,276
Other interest
expense (7,249) -- -- (63) (204) -- -- (670)(6) (21,334)
(13,718)(7)
738 (8)
(168)(9)
Other income
(expense), net 297 -- -- 484 -- -- 8 -- 789
---------- -------------- ---------- --------- --------- ----------- ------------ ----------- ----------
Income before
income taxes
--Auto
Dealerships 29,084 514 841 1,814 1,499 (39) 198 (13,180) 20,731
AUTO FINANCE
Revenues 2,472 -- -- -- -- -- -- -- 2,472
Interest
expense (408) -- -- -- -- -- -- -- (408)
Operating and
other expenses (3,438) -- -- -- -- -- -- -- (3,438)
---------- -------------- ---------- --------- --------- ----------- ------------ ----------- ----------
Loss before
income taxes
--Auto Finance (1,374) -- -- -- -- -- -- -- (1,374)
---------- -------------- ---------- --------- --------- ----------- ------------ ----------- -----------
TOTAL COMPANY
Income before
minority
interests and
provision for
income taxes 27,710 514 841 1,814 1,499 (39) 198 (13,180) 19,357
Minority interests (118) -- -- -- -- -- -- -- (118)
Provision for
income taxes (11,106) -- -- -- -- -- -- 3,341 (10) (7,765)
---------- -------------- ---------- --------- --------- ----------- ------------ ----------- ----------
Net income $ 16,486 $ 514 $ 841 $ 1,814 $ 1,499 $ (39) $ 198 $ (9,839) $ 11,474
========== ============== ========== ========= ========= =========== ============ =========== ==========
Net income
per common
share $ 0.89 $ 0.60
========== ==========
Shares used in
computing net
income per
common share 18,481 729 19,210
========== =========== ==========
</TABLE>
2
<PAGE>
FOOTNOTES TO PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(1) Represents the results of operations of such entities prior to their
respective dates of acquisition by the Company.
(2) Represents reduction for management fees paid to owners or affiliated
entities of acquired dealerships.
(3) Represents net change in facility expenses at acquired dealerships
due to revised and terminated lease agreements upon acquisition.
(4) Represents reduction in compensation expense at acquired dealerships
related to former owners and employees to contractual amounts.
(5) Represents amortization of excess of cost over net assets acquired
for the acquired dealerships.
(6) Represents additional interest expense from the issuance of notes
payable to certain sellers as part of the acquisitions.
(7) Represents interest on the Series A Notes and Series B Notes and
amortization of related deferred financing costs. Deferred financing
costs are being amortized over a ten-year period. The pro forma
adjustment does not reflect a reduction of cost of sales related to
reduced interest expense on floor plan notes payable resulting from the
effective repayment of a portion of such floor plan notes payable with
a portion of the net proceeds from the Notes. If such reduction of
floor plan interest expense was reflected, pro forma net income (and
net income per common share) would have been $15.7 million ($0.82 per
share) for the nine months ended September 30, 1997.
(8) Represents the reduction of interest incurred under the Senior Credit
Facility, net of commitment fees relating thereto and amortization,
over the three-year term thereof, of related deferred financing
costs.
(9) Represents reduction in related party interest income at acquired
dealerships.
(10) Represents the tax impact of pro forma adjustments at the statutory
rate ($5.3 million) and the impact of the conversion of certain
acquired entities from an S corporation to a C corporation for tax
purposes ($1.9 million).
3
<PAGE>
UNITED AUTO GROUP, INC.
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
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YEAR ENDED DECEMBER 31, 1996
UNITED PEACHTREE SUN EVANS UNITED
NISSAN NISSAN AUTOMOTIVE GROUP NISSAN
UAG (GA)(1) (1) GROUP (1) (1) (TN)(1)
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<S> <C> <C> <C> <C> <C> <C>
In thousands, except per
share amounts
AUTO DEALERSHIPS
Total revenues $1,302,031 $19,892 $41,320 $160,132 $81,016 $56,704
Cost of sales, net of floor
plan interest 1,157,368 16,503 36,581 137,323 71,147 50,301
---------- ----------- --------- ---------- ------- -----------
Gross profit 144,663 3,389 4,739 22,809 9,869 6,403
Selling, general and
administrative expenses 124,244 2,481 4,072 17,385 8,428 5,233
---------- ----------- --------- ---------- ------- -----------
Operating income 20,419 908 667 5,424 1,441 1,170
Other interest expense (4,398) -- -- (430) -- --
Other income (expense), net 2,506 -- 19 (664) 139 336
---------- ----------- --------- ---------- ------- -----------
Income before income
taxes--Auto Dealerships 18,527 908 686 4,330 1,580 1,506
AUTO FINANCE
Revenues 1,798 -- -- -- -- --
Interest expense (421) -- -- -- -- --
Operating and other
expenses (2,867) -- -- -- -- --
---------- ----------- --------- ---------- ------- -----------
Loss before income
taxes-Auto Finance (1,490) -- -- -- -- --
---------- ----------- --------- ---------- ------- -----------
TOTAL COMPANY
Income before minority
interests, provision for
income taxes and
extraordinary item 17,037 908 686 4,330 1,580 1,506
Minority interests (3,306) -- -- -- -- --
Provision for income taxes (6,270) -- -- -- (709) (95)
---------- ----------- --------- ---------- ------- -----------
Income before extraordinary
item 7,461 908 686 4,330 871 1,411
Extraordinary item (net of
income tax benefit) (4,987) -- -- -- -- --
---------- ----------- --------- ---------- ------- -----------
Net income $ 2,474 $ 908 $ 686 $ 4,330 $ 871 $ 1,411
========== =========== ========= ========== ======= ===========
Income before extraordinary
item per common share $ 0.69
==========
Net income per common share $ 0.23
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Shares used in computing
net income per common
share 10,851
==========
</TABLE>
(RESTUBBED TABLE CONTINUED FROM ABOVE)
<TABLE>
<CAPTION>
CROWN HANNA STALUPPI REED LANCE STONE
AUTOMOTIVE NISSAN GROUP GROUP LANDERS MOUNTAIN PRO FORMA PRO
(1) (1) (1) (1) (1) (1) ADJUSTMENTS FORMA
------------ -------- -------- -------- --------- ---------- ------------ ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
In thousands, except per
share amounts
AUTO DEALERSHIPS
Total revenues $96,962 $67,504 $425,621 $138,040 $40,956 $39,292 $(61,869)(2) $2,407,601
Cost of sales, net of floor
plan interest 83,290 58,082 377,556 115,570 38,156 35,078 (53,492)(2) 2,122,986
(377)(3)
(100)(4)
------------ -------- -------- -------- --------- ---------- ------------ ----------
Gross profit 13,672 9,422 48,065 22,470 2,800 4,214 (7,900) 284,615
Selling, general and
administrative expenses 10,549 6,463 41,517 17,284 2,637 3,726 (8,607)(2) 231,086
(464)(4)
(675)(5)
659 (6)
(584)(7)
(7,850)(8)
4,588 (9)
------------ -------- -------- -------- --------- ---------- ------------ ----------
Operating income 3,123 2,959 6,548 5,186 163 488 5,033 53,529
Other interest expense -- -- (162) (455) -- -- (2,447)(10) (28,049)
4,534 (11)
(23,053)(12)
(1,167)(13)
(471)(14)
Other income (expense), net -- -- 663 -- 123 -- (2,506)(6) 616
------------ -------- -------- -------- --------- ---------- ------------ ----------
Income before income
taxes--Auto Dealerships 3,123 2,959 7,049 4,731 286 488 (20,077) 26,096
AUTO FINANCE
Revenues -- -- -- -- -- -- 1,798
Interest expense -- -- -- -- -- -- -- (421)
Operating and other
expenses -- -- -- -- -- -- -- (2,867)
------------ -------- -------- -------- --------- ---------- ------------ ----------
Loss before income
taxes-Auto Finance -- -- -- -- -- -- -- (1,490)
------------ -------- -------- -------- --------- ---------- ------------ ----------
TOTAL COMPANY
Income before minority
interests, provision for
income taxes and
extraordinary item 3,123 2,959 7,049 4,731 286 488 (20,077) 24,606
Minority interests -- -- -- -- -- -- 3,269 (6) (37)
Provision for income taxes -- -- -- -- -- -- (2,768)(15) (9,842)
------------ -------- -------- -------- --------- ---------- ------------ ----------
Income before extraordinary
item 3,123 2,959 7,049 4,731 286 488 (19,576) 14,727
Extraordinary item (net of
income tax benefit) -- -- -- -- -- -- 4,987 (16) --
------------ -------- -------- -------- --------- ---------- ------------ ----------
Net income $3,123 $2,959 $7,049 $4,731 $286 $488 $(14,589) $14,727
============ ======== ======== ======== ========= ========== ============ ==========
Income before extraordinary
item per common share $ 0.77
==========
Net income per common share $ 0.77
==========
Shares used in computing
net income per common
share 8,359 (17) 19,210
============ ==========
</TABLE>
4
<PAGE>
FOOTNOTES TO PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(1) Represents the results of operations of such entities prior to their
respective dates of acquisition by the Company.
(2) Represents adjustments to eliminate the results of operations of
dealerships not acquired (Saab and Jaguar) and of dealerships
transferred due to failure to obtain manufacturer approval (Saturn).
(3) Represents reduction in floor plan interest expense to reflect lower
floor plan interest rates available to the Company subsequent to the
date of acquisition of the Staluppi Group.
(4) Represents reduction for management fees paid to owners or affiliated
entities of acquired dealerships.
(5) Represents final costs related to the restructuring of the Company's
DiFeo division.
(6) Represents adjustments that give effect to the Minority Exchange. These
adjustments include amortization expense for the excess of cost over
net assets acquired, the elimination of related party interest income
on assets exchanged, the elimination of equity in operations of
assets exchanged and the elimination of minority interest in results
of operations acquired.
(7) Represents net change in facility expenses at acquired dealerships
due to revised and terminated lease agreements upon acquisition.
(8) Represents reduction in compensation expense at acquired dealerships
related to former owners and employees to contractual amounts.
(9) Represents amortization of excess of cost over net assets acquired
for the acquired dealerships.
(10) Represents additional interest expense from the issuance of notes
payable to certain sellers as part of the acquisitions.
(11) Represents reduction in historical interest expense due to the
repayment of the Company's Series A and B Senior Notes due 2003 with
a portion of the net proceeds of the IPO.
(12) Represents interest on the Series A Notes and Series B Notes and
amortization of related deferred financing costs. Deferred financing
costs are being amortized over a ten-year period. The pro forma
adjustment does not reflect a reduction of cost of sales related to
reduced interest expense on floor plan notes payable resulting from the
effective repayment of a portion of such floor plan notes payable with
a portion of the net proceeds from the IPO and the Notes. If such
reduction of floor plan interest expense was reflected, pro forma net
income (and net income per common share) would have been $22.1 million
($1.15 per share) for the year ended December 31, 1996.
(13) Represents commitment fees relating to the Senior Credit Facility and
amortization, over the three-year term thereof, of related deferred
financing costs.
(14) Represents reduction in related party interest income at acquired
dealerships.
(15) Represents the tax impact of pro forma adjustments at the statutory
rate adjusted for non-deductible items ($7.5 million) and the impact
of the conversion of certain acquired entities from an S corporation
to a C corporation for tax purposes ($10.3 million).
(16) Represents the elimination of the extraordinary item due to the early
extinguishment of the Company's Series A and B Senior Notes due 2003.
(17) Represents shares issued in connection with the IPO, the Minority
Exchange and certain acquisitions.
5
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SIGNATURES
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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 thereunto duly authorized.
UNITED AUTO GROUP, INC.
DATE: November 20, 1997 By: /s/ James R. Davidson
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Name: James R. Davidson
Title: Senior Vice President -
Finance
