PHOENIX--(BUSINESS WIRE)--April 21, 1999--Ugly Duckling
Corporation (Nasdaq NM: UGLY) today announced results of operations
for the first quarter ended March 31, 1999.
Net Earnings for the first quarter of 1999 totaled $420 thousand,
or $0.03 per diluted share compared to a Net Loss for the first
quarter of 1998 of $(1.9) million, or $(0.10) per diluted share. The
Net Loss for the first quarter of 1998 included a net charge of $5.6
million, or $(0.30) per diluted share, which arose from the Company's
decision in the first quarter of 1998 to discontinue operations and
dispose of its branch network that purchased loans from third-party
dealers.
For the first quarter of 1999, Earnings from Continuing
Operations also totaled $420 thousand, or $0.03 per diluted share,
compared to $3.7 million, or $0.20 per diluted share, for the first
quarter of 1998. Earnings from Continuing Operations for the first
quarter of 1998 included a pre-tax gain on sale of $4.6 million, or
$0.15 per diluted share, on the securitization and sale of $86.9
million in loans. In November 1998, the company announced that it
would structure its future securitizations as financings and hold its
portfolio for investment and, accordingly, results of continuing
operations for the first quarter of 1999 include no gain on sale of
loans. Concurrent with the company's decision to structure its
securitizations as financings, it also increased its provision for
credit losses by charging current period operations with a provision
for credit losses of approximately 27% of loan originations compared
to approximately 21% of originations used in 1998. This increase in
the provision resulted in additions to the allowances for credit
losses of approximately $5.9 million in the first quarter of 1999 over
that which would have been provided had the company continued with the
policy employed in the first quarter of 1998.
Total revenues from continuing operations for the first three
months of 1999 increased almost 50 percent to $130.7 million, compared
with $87.8 million for the same period a year ago. The increase in
revenues arose primarily from a 47 percent increase in used car sales
to over $107.0 million for the first three months of 1999 compared to
$73.0 million in the first quarter of 1998 and a 126 percent increase
in interest income to $14.0 million for the first three months of 1999
compared to $6.2 million for the comparable period in 1998.
Commenting on the announcement, Gregory B. Sullivan, president
and chief operating officer of Ugly Duckling, said, "We are extremely
pleased with the progress our dealership operations continue to make.
By the end of the first quarter of 1999, our number of dealership
locations had grown to 58, compared with 46 locations at March 31,
1998. Also, with our decision late last year to no longer structure
our securitization transactions as loan sales, we set the stage for
the company to develop a significant loan portfolio on balance sheet
and a growing source of interest income to complement income from our
used car sales operations. We grew our on balance sheet loan portfolio
over $88 million in the first three months of 1999, bringing our
retained portfolio from dealership originations to $182 million at
March 31, 1999 and look forward to continued growth in our loan
portfolio and interest income."
The company also announced that during the quarter its dealership
operations had successfully completed the consolidation of all data
processing operations to one comprehensive accounting, dealership
management and loan servicing system, a consolidation process that
began in December 1997. Further, it also has successfully completed
Year 2000 (Y2K) remediation of this major system and expects all
systems to be substantially Y2K compliant by June 30, 1999.
Expenditures included in operating expenses related to Y2K activities
total approximately $600 thousand for the three-month period ended
March 31, 1999. There were no Y2K related expenditures in the
comparable three-month period in 1998.
The company announced that yesterday the Board of Directors had
authorized a new common stock repurchase program to purchase, subject
to certain conditions, up to 2.5 million shares of company stock on
the open market. During the first quarter of 1999 the company
completed its previously announced Common Stock Repurchase Program
acquiring an additional 928,000 common shares at an average repurchase
price of $5.64 per share. Common shares outstanding at March 31, 1999
totaled approximately 14.9 million. |
