<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A
(AMENDMENT NO. 1)
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): March 6, 1997
UNITED AUTO GROUP, INC.
(Exact name of registrant as specified in its charter)
Delaware 1-12297 22-3086739
(State or other jurisdiction (Commission File Number) (I.R.S. Employer
of incorporation) Identification No.)
375 Park Avenue, New York, New York 10152
(Address of principal executive offices) (Zip Code)
(212) 223-3300
(Registrant's telephone number, including area code)
N/A
(Former name or former address, if changed since last report)
<PAGE>
On March 6, 1997, United Auto Group, Inc. ("UAG"), through two
wholly-owned subsidiaries, acquired 100% of the partnership interests in
Shannon Automotive, Ltd. ("Shannon"). Shannon operates two automobile
dealerships, Crown Dodge and Crown Jeep-Eagle Chrysler-Plymouth, located in
Houston, Texas. On March 21, 1997, UAG filed a current report on Form 8-K (the
"Original 8-K") disclosing such acquisition.
This Amendment No. 1 to the Original 8-K is being filed for the purpose of
filing the financial statements and pro forma financial information required to
be disclosed under Item 7.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial Statements of Businesses Acquired:
Balance Sheet as of December 31, 1996 and Statements of Income,
Statements of Changes in Partners' Capital, and Statements of Cash
Flow for the year ended December 31, 1996, with footnotes thereto.
(b) Pro Forma Financial Information:
Pro Forma Condensed Consolidated Balance Sheet as of December 31,
1996 and Pro Forma Condensed Consolidated Statements of Operations
for (i) the twelve months ended December 31, 1996, (ii) the nine
months ended September 30, 1996, (iii) the six months ended June 30,
1996, and (iv) the three months ended March 31, 1996, with footnotes
thereto.
(c) Exhibits:
None.
-2-
<PAGE>
SIGNATURES
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: April 30, 1997 By: /s/ Philip N. Smith, Jr
-------------------------
Name: Philip N. Smith, Jr.
Title: Vice President, Secretary
and General Counsel
-3-
<PAGE>
ITEM 7(a) FINANCIAL STATEMENTS OF BUSINESS ACQUIRED
SHANNON AUTOMOTIVE LTD.
(A TEXAS LIMITED PARTNERSHIP)
FINANCIAL STATEMENTS
WITH REPORT OF INDEPENDENT ACCOUNTANTS
FOR THE YEAR ENDED DECEMBER 31, 1996
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Partners of
Shannon Automotive Ltd.:
We have audited the accompanying balance sheets of Shannon Automotive Ltd. (a
Texas Limited Partnership) as of December 31, 1996, and the related
statements of income, changes in partners' capital, and cash flows for the
year then ended. These financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on
these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Shannon Automotive Ltd. as
of December 31, 1996, and the results of its operations and its cash flows
for the year then ended in conformity with generally accepted accounting
principles.
/s/ COOPERS & LYBRAND L.L.P.
Houston, Texas
March 25, 1997
<PAGE>
SHANNON AUTOMOTIVE LTD.
(A TEXAS LIMITED PARTNERSHIP)
BALANCE SHEETS
December 31, 1996
<TABLE>
<CAPTION>
ASSETS 1996
-------------
<S> <C>
Current assets:
Cash and cash equivalents $ 2,279,337
Contracts in transit 1,383,661
Accounts receivable:
Trade 376,536
Other 169,552
Finance income receivable 132,317
Inventories 8,335,102
Prepaid expenses 132,932
-------------
Total current assets 12,809,437
Property and equipment, net 285,209
Dealer rental vehicles --
Other assets 238,392
-------------
Total assets $13,333,038
=============
LIABILITIES AND PARTNERS' CAPITAL
Current liabilities:
Floor plan liability $ 8,017,741
Current maturities of long-term debt --
Accounts payable 553,026
Accrued expenses 390,768
-------------
Total current liabilities 8,961,535
Deferred rent 248,742
Other liabilities 1,909
-------------
Total liabilities 9,212,186
-------------
Commitments and contingencies
Partners' capital 4,120,852
-------------
Total liabilities and partners'
capital $13,333,038
=============
</TABLE>
The accompanying notes are an integral part of the financial statements.
2
<PAGE>
SHANNON AUTOMOTIVE LTD.
(A TEXAS LIMITED PARTNERSHIP)
STATEMENTS OF INCOME
for the year ended December 31, 1996
<TABLE>
<CAPTION>
1996
-------------
<S> <C>
Sales $96,962,172
Cost of sales 83,290,350
-------------
Gross profit 13,671,822
Selling, general and administrative 10,549,140
-------------
Net income $ 3,122,682
=============
</TABLE>
The accompanying notes are an integral part of the financial statements.
3
<PAGE>
SHANNON AUTOMOTIVE LTD.
(A Texas Limited Partnership)
Statements of Changes in Partners' Capital
for the year ended December 31, 1996
<TABLE>
<CAPTION>
GENERAL LIMITED LIMITED
PARTNER PARTNER PARTNER
CAPITAL CAPITAL CAPITAL TOTAL
(CROWN JEEP (CROWN JEEP (BERYLSON, PARTNERS'
EAGLE, INC.) EAGLE, INC.) INC.) CAPITAL
------------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Partners' capital, December 31, 1995 $ 1,449,136 $ 2,007,835 $ 4,390 $ 3,461,361
Liquidation of limited partner interest 2,007,835 (2,007,835) -- --
Distributions to partners (2,232,092) -- (231,099) (2,463,191)
Net income for the year 2,779,187 -- 343,495 3,122,682
------------- ------------- ----------- -------------
Partners' capital, December 31, 1996 $ 4,004,066 $ -- $ 116,786 $ 4,120,852
============= ============= =========== =============
</TABLE>
The accompanying notes are an integral part of the financial statements.
4
<PAGE>
SHANNON AUTOMOTIVE LTD.
(A TEXAS LIMITED PARTNERSHIP)
STATEMENTS OF CASH FLOWS
for the year ended December 31, 1996
<TABLE>
<CAPTION>
1996
-------------
<S> <C>
Cash flows from operating activities:
Net income $ 3,122,682
Adjustments to reconcile net income to net cash provided by operating
activities:
Gain on sale (45,018)
Depreciation 104,597
Deferred rent (24,588)
Changes in operating assets and liabilities:
Contracts in transit 2,068,162
Accounts receivable, trade 108,352
Accounts receivable, other 27,348
Finance income receivable 51,709
Inventories 694,298
Prepaid expenses (43,149)
Other assets 35,729
Floor plan liability (2,703,202)
Accounts payable (600,678)
Accrued expenses (278,380)
Other liabilities (268,037)
-------------
Net cash provided by operating activities 2,249,825
-------------
Cash flows from investing activities:
Proceeds from sale of dealer rental vehicles 282,621
Capital expenditures (153,938)
Dealer rental vehicles --
-------------
Net cash provided by investing activities 128,683
-------------
Cash flows from financing activities:
Principal payments on long-term debt (159,861)
Partner distributions (2,463,191)
-------------
Net cash used in financing activities (2,623,052)
-------------
Net (decrease) increase in cash and cash equivalents (244,544)
Cash and cash equivalents, beginning of year 2,523,881
-------------
Cash and cash equivalents, end of year $ 2,279,337
=============
Supplemental cash flow disclosure:
Interest paid $ 961,567
=============
</TABLE>
The accompanying notes are an integral part of the financial statements.
5
<PAGE>
SHANNON AUTOMOTIVE LTD.
(A Texas Limited Partnership)
Notes to Financial Statements
1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
ORGANIZATION
Shannon Automotive Ltd. (the "Partnership") is a Texas Limited
Partnership formed to acquire and operate two automobile dealerships
located in Houston, Texas. Operations include, but are not limited to,
selling, financing or leasing automobiles, and the servicing and
maintenance of automobiles.
The Partnership operates dealerships which hold franchise agreements
with a number of automotive manufacturers. In accordance with the
individual franchise agreement, each dealership is subject to certain
rights and restrictions typical of the industry. The ability of the
manufacturers to influence the operations of the dealerships or the
loss of a franchise agreement could have a negative impact on operating
results of the Partnership.
The Partnership sells and services new and used automobiles to a large
number of customers in the Houston and surrounding areas. The
Partnership performs ongoing credit evaluations of its customers and
generally does not require collateral on its trade receivables.
Reserves, if management considers necessary, are maintained for
potential credit losses and such losses have been within management's
estimates.
During 1995, Crown Jeep Eagle, Inc. (the "general partner") purchased
48% of the 49% limited partner's interest of Bryron Properties, Inc.
(the "limited partner") for a $4,012,000 note payable. The general
partner obtained a note of $3,600,000 from Chrysler Credit Corporation
which is collateralized by substantially all the assets of the
dealership. Simultaneously, Berylson, Inc. (the "new limited partner")
purchased the remaining 1% of the limited partner's interest for an
$80,000 note payable. The notes have been subsequently paid off.
Effective January 1, 1996, the new limited partner received an
additional 10% interest in the future profits of the Partnership. As
such, the terms of the Partnership Agreement were amended to provide
that profits and losses of the Partnership be allocated as follows:
LIMITED GENERAL
PARTNER PARTNER
--------- ---------
PROFITS AND LOSSES 11% 89%
6
<PAGE>
SHANNON AUTOMOTIVE LTD.
(A TEXAS LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS, CONTINUED
1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED:
The significant accounting policies of the Partnership are as follows:
CASH EQUIVALENTS
The Partnership considers all highly liquid investments purchased with
an original maturity date of three months or less to be cash
equivalents.
INVENTORIES
Inventories are stated at the lower of cost as determined by the
last-in, first-out (LIFO) method or market value.
PROPERTY AND EQUIPMENT
Property and equipment are stated at cost. Expenditures for normal
maintenance of property and equipment are charged against operations as
incurred. Upon disposition of assets, the cost and related accumulated
depreciation are removed from the accounts and the resulting gain or
loss is included in operations. Depreciation is provided over the
estimated useful lives of the depreciable assets using the
straight-line method.
REVENUE RECOGNITION
Revenue is recognized when vehicles are delivered or services are
provided. Contracts in transit represent delivered vehicles for which
drafts have not yet been presented for payment.
FLOOR PLAN INTEREST INCOME OR EXPENSE
Interest income or expense relating to floor plan financing is recorded
net of reimbursements and rebates provided by Chrysler Motors
Corporation.
DEALER TRADE INCOME
Dealer trade income represents amounts equal to the manufacturer
holdbacks on all units sold from the Partnership to other dealers.
FINANCE INCOME
Finance income arising from the sale of recourse and nonrecourse
installment contracts to financing institutions is recognized at the
time the contract is sold. The Partnership records an allowance for
uncollectible amounts which represents estimated repossession losses on
contracts sold with recourse.
FEDERAL INCOME TAX
In accordance with the provisions of the Internal Revenue Code, the
Partnership is not subject to federal income tax. Each partner includes
his proportionate share of the Partnership's taxable income or loss,
deductions or credits in his own federal income tax return.
7
<PAGE>
SHANNON AUTOMOTIVE LTD.
(A TEXAS LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS, CONTINUED
1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED:
DEFERRED RENT
The Partnership records rental expense related to certain facility
operating leases over the life of the lease using the straight-line
method, as required by generally accepted accounting principles.
CONCENTRATION OF CREDIT RISK
Financial instruments which potentially subject the Partnership to
concentrations of credit risk consist principally of temporary cash
investments. The Company invests its cash in deposit accounts with Bank
of America. The Company has not experienced any losses from this credit
risk. Cash equivalents at December 31, 1996, in the amount of $550,000,
were deposited. Management believes that the risk of loss is minimal. To
date, the Partnership has not incurred losses related to temporary cash
investments.
The Partnership maintains its cash in bank deposit accounts which, at
times, may exceed federally insured limits. The Partnership has not
experienced any losses in such accounts.
MANAGEMENT ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the
dates of the financial statements and the reported amounts of revenues
and expenses during the reporting periods. Ultimate actual results
could differ from those estimates.
The following estimated fair values of financial instruments have been
determined by the Company using available market information and
appropriate valuation methodologies.
The carrying amounts of cash and cash equivalents, receivables and
accounts payable approximate fair values due to the short-term
maturities of these instruments.
The carrying value of the Partnership's Automobile Flooring and
Security Agreement approximates fair value.
8
<PAGE>
SHANNON AUTOMOTIVE LTD.
(A TEXAS LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS, CONTINUED
2. INVENTORIES:
Inventories at December 31, 1996 consisted of the following:
<TABLE>
<CAPTION>
1996
------------
<S> <C>
New vehicles $6,669,013
Used vehicles 1,162,542
Parts and accessories 1,413,196
------------
9,244,751
Less LIFO reserve (909,649)
------------
Total inventories $8,335,102
============
</TABLE>
During fiscal year 1996, the Partnership experienced a LIFO inventory
pool decrement which resulted in a decrease of approximately $142,000 to
cost of goods sold.
3. PROPERTY AND EQUIPMENT:
Property and equipment at December 31, 1996 consisted of the following:
<TABLE>
<CAPTION>
1996
-----------
<S> <C>
Service equipment $ 225,882
Parts and accessories equipment 118,797
Service vehicles 161,075
Furniture and fixtures 257,125
Leasehold improvements 108,364
-----------
871,243
Less accumulated depreciation and amortization (586,034)
-----------
Total property and equipment, net $ 285,209
===========
</TABLE>
As of December 31, 1996, the Company utilized approximately $228,000 of fully
depreciated equipment in operations.
During 1996, the Partnership disposed of all of its dealer rental vehicles.
9
<PAGE>
SHANNON AUTOMOTIVE LTD.
(A TEXAS LIMITED PARTNERSHIP)
NOTES TO FINANCIAL STATEMENTS, CONTINUED
4. FLOOR PLAN LIABILITY:
The Partnership entered into financing agreements with a bank that
permits the Partnership to borrow at interest rates ranging from 7.00%
to 7.25% during 1996. Borrowings are collateralized by new and used
vehicle inventories, contracts in transit, accounts receivable,
property and equipment and substantially all other assets of the
Partnership, as well as the corporate guaranties of the general and
limited partners, and the personal guaranty of the shareholder of the
general partner. The financing agreements are contingent upon the
dealer maintaining a certain minimum tangible net worth cash flow ratio
and working capital ratio, for which the Partnership has complied.
5. COMMITMENTS AND CONTINGENCIES:
LITIGATION
There are certain claims pending against the Partnership which are
incidental to the ordinary course of business. In the opinion of
management, the Partnership has sufficient insurance coverage to cover
any losses and such claims should not result in any significant
liability.
OPERATING LEASES
The Partnership leases certain equipment, automobile dealership
facilities and office facilities under operating lease agreements which
expire in various years through 2001. Certain leases of the Partnership
contain renewal options and clauses for payments of real estate taxes,
maintenance and insurance expenses for the facilities. Rental expense
for the year ended December 31, 1996 was approximately $839,000.
The approximate minimum future annual rental payments for these
noncancelable operating leases are as follows for years ending
December 31:
<TABLE>
<CAPTION>
<S> <C>
1997 $1,056,360
1998 989,735
1999 970,148
2000 951,204
2001 328,488
</TABLE>
6. SUBSEQUENT EVENT:
Effective March 1, 1997, United Auto Group purchased all of the
Partnership interest from the partners.
10
<PAGE>
ITEM 7(b) PRO FORMA FINANCIAL INFORMATION
UNITED AUTO GROUP, INC.
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
AS OF DECEMBER 31, 1996
(DOLLARS IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
SHANNON PRO FORMA
UAG AUTOMOTIVE ADJUSTMENTS PRO FORMA
---------- ------------ ------------- -----------
<S> <C> <C> <C> <C>
ASSETS
AUTO DEALERSHIPS
Cash and cash equivalents $ 66,875 $ 2,279 $(7,000)(1) $ 62,154
Accounts receivable 52,018 2,062 54,080
Inventories 168,855 8,335 177,190
Other current assets 11,823 133 11,956
---------- ------------ ------------- -----------
Total current assets 299,571 12,809 (7,000) 305,380
Property and equipment, net 22,341 285 22,626
Intangible assets, net 177,194 10,729 (1) 187,923
Other assets 6,587 239 6,826
---------- ------------ ------------- -----------
TOTAL AUTO DEALERSHIP
ASSETS 505,693 13,333 3,729 522,755
---------- ------------ ------------- -----------
AUTO FINANCE
Cash and cash equivalents 2,688 2,688
Finance assets, net 9,723 9,723
Other assets 4,846 4,846
---------- ------------ ------------- -----------
TOTAL AUTO FINANCE ASSETS 17,257 0 0 17,257
---------- ------------ ------------- -----------
TOTAL ASSETS $522,950 $13,333 $ 3,729 $540,012
========== ============ ============= ===========
</TABLE>
<PAGE>
UNITED AUTO GROUP, INC.
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
AS OF DECEMBER 31, 1996
(DOLLARS IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
SHANNON PRO FORMA
UAG AUTOMOTIVE ADJUSTMENTS PRO FORMA
---------- ------------ ------------- -----------
<S> <C> <C> <C> <C>
LIABILITIES AND
STOCKHOLDER'S EQUITY
AUTO DEALERSHIPS
Floor plan notes payable $170,170 $ 8,018 $178,188
Short-term debt 6,069 6,069
Accounts payable 22,187 553 22,740
Accrued expenses 17,585 641 500 (1) 18,726
Current portion of long-term debt 5,444 5,444
---------- ------------ ------------- -----------
Total current liabilities 221,455 9,212 500 231,167
Long-term debt 11,121 11,121
Due to related party 1,334 1,334
Deferred income taxes 4,867 4,867
---------- ------------ ------------- -----------
TOTAL AUTO DEALERSHIP LIABILITIES 238,777 9,212 500 248,489
---------- ------------ ------------- -----------
AUTO FINANCE
Short-term debt 1,001 1,001
Accounts payable and other liabilities 1,704 1,704
---------- ------------ ------------- -----------
TOTAL AUTO FINANCE LIABILITIES 2,705 0 0 2,705
---------- ------------ ------------- -----------
STOCKHOLDERS' EQUITY
Voting Common Stock 2 2
Additional paid-in-capital 284,502 7,350 (1) 291,852
Retained earnings (accumulated deficit) (3,036) 4,121 (4,121)(1) (3,036)
---------- ------------ ------------- -----------
TOTAL STOCKHOLDERS' EQUITY 281,468 4,121 3,229 288,818
---------- ------------ ------------- -----------
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $522,950 $13,333 $ 3,729 $540,012
========== ============ ============= ===========
</TABLE>
<PAGE>
FOOTNOTES TO PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
(1) Represents the acquisition of Shannon Automotive for cash and common
stock, including expenses of $850 and the elimination of historical
equity accounts.
<PAGE>
UNITED AUTO GROUP, INC.
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE TWELVE MONTHS ENDED DECEMBER 31, 1996
(DOLLARS IN THOUSANDS EXCEPT PER SHARE DATA)
(UNAUDITED)
<TABLE>
<CAPTION>
SUN
STEVE RAYMAN HICKMAN AUTOMOTIVE EVANS
UAG NISSAN (1) NISSAN (1) GROUP (1) GROUP (1)
----------- -------------- ---------- ------------ ---------
<S> <C> <C> <C> <C> <C>
Auto Dealership
Total Revenue 1,302,031 19,892 41,320 160,132 81,016
Costs of Sales 1,157,368 16,503 36,581 137,323 71,147
----------- -------------- ---------- ------------ ---------
Gross Profit 144,663 3,389 4,739 22,809 9,869
Selling, General and
Administrative expenses 124,244 2,481 4,072 17,385 8,428
----------- -------------- ---------- ------------ ---------
Operating Income 20,419 908 667 5,424 1,441
Other income (expense) (1,818) 0 19 (1,094) 139
Equity in loss of uncombined
investee (74) 0 0 0 0
----------- -------------- ---------- ------------ ---------
Income Auto Dealerships 18,527 908 686 4,330 1,580
Financial Services (1,490) 0 0 0 0
----------- -------------- ---------- ------------ ---------
Income before income taxes 17,037 908 686 4,330 1,580
Minority interest (3,306) 0 0 0 0
Benefit/Provision for income
taxes (6,270) 0 0 0 (709)
----------- -------------- ---------- ------------ ---------
Income before extraordinary
loss 7,461 908 686 4,330 871
Extraordinary (loss) on debt
prepayments, net of tax (4,987)
----------- -------------- ---------- ------------ ---------
Net income 2,474 908 686 4,330 871
=========== ============== ========== ============ =========
Income before extraordinary
loss per common share $0.69
===========
Net income per common share
outstanding $0.23
===========
Weighted average common
shares outstanding 10,851
===========
</TABLE>
<PAGE>
(RESTUBBED TABLE CONTINUED FROM ABOVE)
<TABLE>
<CAPTION>
SHANNON
STANDEFER PRO FORMA SHANNON AUTO- PRO FORMA
NISSAN (1) ADJUSTMENTS AS REPORTED MOTIVE (1) ADJUSTMENTS TOTAL
----------- ----------- ----------- --------------- -------------- -----------
<S> <C> <C> <C> <C> <C> <C>
Auto Dealership
Total Revenue 56,704 (61,869)(3) 1,599,226 96,962 1,696,488
Costs of Sales 50,301 (53,492)(3) 1,415,731 83,290 1,499,021
----------- ---------- --------------- ---------- -----------
Gross Profit 6,403 183,495 13,672 197,467
Selling, General and
Administrative expenses 5,233 (675)(2) 149,633 10,549 160,346
(8,607)(3)
659 (4)
(1,136)(5)
(3,716)(6) (400)(6)
1,315 (7) 264 (7)
(200)(8)
150 (9)
----------- --------------- ---------- -----------
Operating Income 1,170 33,862 3,123 136 37,121
Other income (expense) 336 (2,580)(4) (969) (969)
(505)(10)
4,534 (11)
Equity in loss of uncombined
investee 0 74 (4) 0
----------- --------------- ---------- -----------
Income Auto Dealerships 1,506 32,893 3,123 136 36,152
Financial Services 0 (1,490) (1,490)
----------- --------------- ---------- -----------
Income before income taxes 1,506 0 31,403 3,123 136 34,662
Minority interest 0 3,269 (4) (37) (37)
Benefit/Provision for income
taxes (95) (5,450)(12) (12,524) (1,303)(13) (13,827)
----------- --------------- ---------- -----------
Income before extraordinary
loss 1,411 18,842 3,123 (1,167) 20,798
Extraordinary (loss) on debt
prepayments, net of tax 4,987 (14) 0
----------- --------------- ---------- -----------
Net income 1,411 18,842 3,123 (1,167) 20,798
=========== ========== =============== ========== ===========
Income before extraordinary
loss per common share
Net income per common share
outstanding $ 1.05 $ 1.14
========== ========== ===========
Weighted average common
shares outstanding 7,021 (15) 17,872 313 18,185
========== ========== ===========
</TABLE>
The 1996 pro forma operations data does not reflect a reduction of cost of
sales related to reduced interest on floor plan notes payable resulting from
the application of as yet unused proceeds from the Company's initial public
sale of Common Stock. If the reduction of the floor plan interest expense
were reflected, then pro forma income (and income per share) would have been
$5,460 ($0.30 per share) for the quarter ended and $22,776 ($1.25 per share)
for the twelve months ended December 31, 1996.
<PAGE>
UNITED AUTO GROUP, INC.
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 31, 1996
(DOLLARS IN THOUSANDS EXCEPT PER SHARE DATA)
(UNAUDITED)
<TABLE>
<CAPTION>
SUN
STEVE RAYMAN HICKMAN AUTOMOTIVE EVANS
UAG NISSAN (1) NISSAN (1) GROUP (1) GROUP (1)
--------- -------------- ---------- ------------ ---------
<S> <C> <C> <C> <C> <C>
Auto Dealership
Total Revenue 954,783 19,892 41,320 142,791 72,974
Costs of Sales 848,478 16,503 36,581 122,922 63,696
--------- -------------- ---------- ------------ ---------
Gross Profit 106,305 3,389 4,739 19,869 9,278
Selling, General and
Administrative expenses 90,040 2,481 4,072 14,480 7,052
--------- -------------- ---------- ------------ ---------
Operating Income 16,265 908 667 5,389 2,226
Other income (expense) (1,297) 0 19 (1,093) (8)
Equity in loss of uncombined
investee (27) 0 0 0 0
--------- -------------- ---------- ------------ ---------
Income Auto Dealerships 14,941 908 686 4,296 2,218
Financial Services (726) 0 0 0 0
--------- -------------- ---------- ------------ ---------
Income before income taxes 14,215 908 686 4,296 2,218
Minority interest (2,792) 0 0 0 0
Benefit/Provision for income
taxes (5,305) 0 0 0 (709)
--------- -------------- ---------- ------------ ---------
Net income 6,118 908 686 4,296 1,509
========= ============== ========== ============ =========
Net income per common share
outstanding $0.67
=========
Weighted average common
shares outstanding 9,087
=========
</TABLE>
<PAGE>
(RESTUBBED TABLE CONTINUED FROM ABOVE)
<TABLE>
<CAPTION>
SHANNON
STANDEFER PRO FORMA SHANNON AUTO- PRO FORMA
NISSAN (1) ADJUSTMENTS AS REPORTED MOTIVE (1) ADJUSTMENTS TOTAL
----------- ----------- ----------- --------------- -------------- -----------
<S> <C> <C> <C> <C> <C> <C>
Auto Dealership
Total Revenue 52,359 (57,584)(3) 1,226,535 79,326 1,306,086
0
Costs of Sales 46,865 (48,659)(3) 1,086,386 68,706 1,155,184
----------- ---------- --------------- ---------- -----------
Gross Profit 5,494 140,149 10,620 0 150,902
Selling, General and
Administrative expenses 2,727 (450)(2) 113,046 8,266 121,434
(8,009)(3)
725 (4)
(43)(5)
(1,203)(6) (208)(6)
1,023 (7) 198 (7)
150 (9)
----------- ---------- --------------- ---------- -----------
Operating Income 2,767 27,103 2,354 10 29,468
Other income (expense) 288 (2,322)(4) (1,055) (1,055)
790 (5)
(465)(10)
3,033 (11)
Equity in loss of uncombined
investee 0 27 (4) 0
----------- ---------- --------------- ---------- -----------
Income Auto Dealerships 3,055 26,048 2,354 10 28,413
Financial Services 0 (726) (726)
----------- ---------- --------------- ---------- -----------
Income before income taxes 3,055 25,322 2,354 10 27,687
Minority interest 0 2,792 (4) 0 0
Benefit/Provision for income
taxes (183) (4,692)(12) (10,889) (1,016)(13) (11,905)
----------- ---------- --------------- ---------- -----------
Net income 2,872 14,433 2,354 (1,006) 15,782
=========== ========== =============== ========== ===========
Net income per common share
outstanding $ 0.87
$ 0.81 ===========
Weighted average common ==========
shares outstanding 8,785 (15) 17,872 313 (15) 18,185
========== ===========
</TABLE>
The 1996 pro forma operations data does not reflect a reduction of cost of
sales related to reduced interest on floor plan notes payable resulting from
the application of as yet unused proceeds from the Company's initial public
sale of Common Stock. If the reduction of the floor plan interest expense
were reflected, then pro forma income (and income per share) would have been
$6,004 ($0.33 per share) for the quarter ended and $17,316 ($0.95 per share)
for the nine months ended September 30, 1996.
<PAGE>
UNITED AUTO GROUP, INC.
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1996
(DOLLARS IN THOUSANDS EXCEPT PER SHARE DATA)
(UNAUDITED)
<TABLE>
<CAPTION>
SUN
STEVE RAYMAN HICKMAN AUTOMOTIVE EVANS
UAG NISSAN (1) NISSAN (1) GROUP (1) GROUP (1)
--------- -------------- ---------- ------------ ---------
<S> <C> <C> <C> <C> <C>
Auto Dealership
Total Revenue 597,939 19,892 41,320 93,823 46,369
Costs of Sales 531,560 16,503 36,581 80,389 40,497
--------- -------------- ---------- ------------ ---------
Gross Profit 66,379 3,389 4,739 13,434 5,872
Selling, General and
Administrative expenses 56,975 2,481 4,072 9,661 4,664
--------- -------------- ---------- ------------ ---------
Operating Income 9,404 908 667 3,773 1,208
Other income (expense) (501) 0 19 (717) 13
Equity in loss of uncombined
investee 75 0 0 0 0
--------- -------------- ---------- ------------ ---------
Income Auto Dealerships 8,978 908 686 3,056 1,221
Financial Services (349) 0 0 0 0
--------- -------------- ---------- ------------ ---------
Income before income taxes 8,629 908 686 3,056 1,221
Minority interest (1,734) 0 0 0 0
Benefit/Provision for income
taxes (2,997) 0 0 0 (365)
--------- -------------- ---------- ------------ ---------
Net income 3,898 908 686 3,056 856
========= ============== ========== ============ =========
Net income per common share
outstanding $0.46
=========
Weighted average common
shares outstanding 8,500
=========
</TABLE>
<PAGE>
(RESTUBBED TABLE CONTINUED FROM ABOVE)
<TABLE>
<CAPTION>
SHANNON
STANDEFER PRO FORMA SHANNON AUTO- PRO FORMA
NISSAN (1) ADJUSTMENTS AS REPORTED MOTIVE (1) ADJUSTMENTS TOTAL
----------- ----------- ----------- --------------- ------------- ---------
<S> <C> <C> .<C> <C> <C> <C>
Auto Dealership
Total Revenue 34,994 (33,707)(3) 800,630 58,094 858,874
Costs of Sales 31,018 (28,268)(3) 708,280 50,931 759,257
----------- ----------- ---------- --------------- ------------ ---------
Gross Profit 3,976 92,350 7,163 0 99,617
Selling, General and
Administrative expenses 2,187 (450)(2) 75,096 5,510 80,688
(4,837)(3)
468 (4)
18 (5)
(1,195)(6) (154)(6)
764 (7) 132 (7)
288 (9)
----------- ---------- --------------- ------------ ---------
Operating Income 1,789 17,254 1,653 22 18,929
Other income (expense) 30 (1,548)(4) (744) (744)
(340)(10)
275 (12)
2,025 (11)
Equity in loss of uncombined
investee 0 (75)(4) 0
----------- ---------- --------------- ------------ ---------
Income Auto Dealerships 1,819 16,510 1,653 22 18,185
Financial Services 0 (349) (349)
----------- ---------- --------------- ------------ ---------
Income before income taxes 1,819 16,161 1,653 22 17,836
Minority interest 0 1,734 (4) 0 0
Benefit/Provision for income
taxes (133) (3,471)(12) (6,966) (720)(13) (7,686)
----------- ---------- --------------- ------------ ---------
Net income 1,686 9,195 1,653 (698) 10,150
=========== ========== =============== ============ =========
Net income per common share
outstanding $ 0.51 $ 0.56
========== ============ =========
Weighted average common
shares outstanding 4,372 (15) 17,872 313 (15) 18,185
============ =========
</TABLE>
The 1996 pro forma operations data does not reflect a reduction of cost of
sales related to reduced interest on floor plan notes payable resulting from
the application of as yet unused proceeds from the Company's initial public
sale of Common Stock. If the reduction of the floor plan interest expense
were reflected, then pro forma income (and income per share) would have been
$7,287 ($0.40 per share) for the quarter ended and $11,312 ($0.62 per share)
for the six months ended June 30, 1996.
<PAGE>
UNITED AUTO GROUP, INC.
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE QUARTER ENDED MARCH 31, 1996
(DOLLARS IN THOUSANDS EXCEPT PER SHARE DATA)
(UNAUDITED)
<TABLE>
<CAPTION>
SUN
STEVE RAYMAN HICKMAN AUTOMOTIVE EVANS
UAG NISSAN (1) NISSAN (1) GROUP (1) GROUP (1)
--------- -------------- ---------- ------------ ---------
<S> <C> <C> <C> <C> <C>
Auto Dealership
Total Revenue 261,719 14,655 19,907 45,484 20,858
Costs of Sales 232,502 11,962 17,288 39,184 18,256
--------- -------------- ---------- ------------ ---------
Gross Profit 29,217 2,693 2,619 6,300 2,602
Selling, General and
Administrative expenses 27,618 2,182 2,139 4,299 2,171
--------- -------------- ---------- ------------ ---------
Operating Income 1,599 511 480 2,001 431
Other income (expense) (140) 110 (348) (3)
Equity in loss of uncombined
investee 12 0 0 0 0
--------- -------------- ---------- ------------ ---------
Income Auto Dealerships 1,471 511 590 1,653 428
Financial Services (264) 0 0 0 0
--------- -------------- ---------- ------------ ---------
Income before income taxes 1,207 511 590 1,653 428
Minority interest (500) 0 0 0 0
Benefit/Provision for income
taxes (536) 0 0 0 (130)
--------- -------------- ---------- ------------ ---------
Net income 171 511 590 1,653 298
========= ============== ========== ============ =========
Net income per common share
outstanding $0.02
=========
Weighted average common
shares outstanding 7,449
=========
</TABLE>
<PAGE>
(RESTUBBED TABLE CONTINUED FROM ABOVE)
<TABLE>
<CAPTION>
SHANNON
STANDEFER PRO FORMA SHANNON AUTO- PRO FORMA
NISSAN (1) ADJUSTMENTS AS REPORTED MOTIVE (1) ADJUSTMENTS TOTAL
----------- ----------- ----------- --------------- ------------- ---------
<S> <C> <C> <C> <C> <C> <C>
Auto Dealership
Total Revenue 17,584 (15,760)(3) 364,447 29,750 394,272
Costs of Sales 15,632 (13,208)(3) 321,616 26,241 347,857
----------- ----------- ----------- --------------- ------------ ---------
Gross Profit 1,952 42,831 3,509 0 46,415
Selling, General and
Administrative expenses 905 (450)(2) 37,112 2,869 40,022
(2,388)(3)
219 (4)
243 (5)
(350)(6) (100)(6)
380 (7) 66 (7)
144 (9)
----------- ----------- --------------- ------------ ---------
Operating Income 1,047 5,719 640 34 6,393
Other income (expense) 15 (744)(4) (85) (85)
350 (5)
(45)(10)
750 (11)
Equity in loss of uncombined
investee 0 (12)(4) 0
----------- ----------- --------------- ------------ ---------
Income Auto Dealerships 1,062 5,634 640 34 6,308
Financial Services 0 (264) (264)
----------- ----------- --------------- ------------ ---------
Income before income taxes 1,062 5,370 640 34 6,044
Minority interest 0 500 (4) 0 0
Benefit/Provision for income
taxes (70) (1,573)(12) (2,309) (290)(13) (2,599)
----------- ----------- --------------- ------------ ---------
Net income 992 3,061 640 (256) 3,445
=========== =========== =============== ============ =========
Net income per common share
outstanding $ 0.17 $ 0.19
=========== ============ =========
Weighted average common
shares outstanding 10,423 (15) 17,872 313 (15) 18,185
=========== ============ =========
</TABLE>
The 1996 pro forma operations data does not reflect a reduction of cost of
sales related to reduced interest on floor plan notes payable resulting from
the application of as yet unused proceeds from the Company's initial public
sale of Common Stock. If the reduction of the floor plan interest expense
were reflected, then pro forma income (and income per share) would have been
$4,025 ($0.22 per share) for the quarter ended March 31, 1996.
<PAGE>
FOOTNOTES TO PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(1) Represents the results of operations of such entities prior to their
respective dates of acquisition by UAG.
(2) Represents final costs related to the 1995 DiFeo group restructuring.
(3) Represents adjustments to eliminate the results of operations of
dealerships not acquired (Saab and Jaguar) or dealerships transferred
due to failure to obtain Manufacturer approval (Saturn).
(4) Represents adjustments that give effect to the acquisition of the minority
interest in each of the DiFeo Group, Landers Auto and Atlanta Toyota in
exchange for Common Stock plus certain other consideration. These
adjustments include amortization expense for the excess of cost over net
assets acquired, the elimination of related party interest income on
assets to be exchanged, the elimination of equity in operations of assets
to be exchanged and the elimination of minority interest in results of
operations acquired.
(5) Represents change in facility expenses at acquired dealerships due to
revised or terminated lease agreements upon acquisition.
(6) Represents reduction in compensation expense at acquired dealerships
related to former owners and employees to contractual amounts.
(7) Represents amortization of excess of cost over net assets acquired for the
acquired dealerships.
(8) Represents reduction for management fees paid to owners of acquired
dealerships.
(9) Represents adjustment for increase in rental expense under amended leases
relating to facilities in the DiFeo Group.
(10) Represents additional interest expense from the issuance of notes payable
to sellers as part of the acquisitions.
(11) Represents reduction in historical interest expense due to the repayment
of the Senior Notes and loans under the Credit Agreement with a portion of
the net proceeds from the Offering.
(12) Represents net increase in interest expense at acquired dealerships due to
the increase in short-term debt offset in part by repayment of long-term
debt in connection with the acquisition of Sun Automotive Group.
(13) Represents tax impact of pro forma adjustments at the statutory rate
adjusted for non-deductible items, and the impact of the conversion of
certain acquired entities from an S corporation to a C corporation for tax
purposes.
(14) Represents the elimination of the extraordinary item due to the early
extinguishment of the Senior Notes and loans.
(15) Represents shares issued in connection with the Offering, the Minority
Exchange, the acquisition of Hickman Nissan and Shannon Automotive and the
Preferred Stock Conversion.
