Ugly Duckling Corporation Announces Second Quarter 1999 Results and Appointment of Sullivan to CEO
PHOENIX--(BUSINESS WIRE)--July 28, 1999--Ugly Duckling
Corporation (Nasdaq NM: UGLY) today reported results from operations
for the three and six months ended June 30, 1999.
For the quarter, earnings from continuing operations totaled $1.5
million, or $0.10 per diluted share, compared with $2.9 million, or
$0.16 per diluted share, for the second quarter of 1998. Second
quarter 1998 results included $3.7 million in pre-tax earnings, or
$0.12 per diluted share, from the gain on sale of loans; no such gain
was recorded in the second quarter of 1999. Total revenues for the
quarter increased 42% to $125.7 million over the $88.7 million
reported for the same period a year ago.
For the six-month period ended June 30, 1999, earnings from
continuing operations were $1.9 million, or $0.12 per diluted share,
compared with $6.7 million, or $0.35 per diluted share, for the same
six-month period of 1998. The six-month results for 1998 include $8.3
million in pre-tax earnings, or $0.26 per diluted share, from the
gains on sales of loans. No gains on the sales of loans were recorded
in the comparable period in 1999. Total revenues for the period
increased 45% to $255.9 million over the $176.4 million for the same
period a year ago.
Operating results from discontinued operations were break-even
for both the three and six-month periods ended June 30, 1999 and the
three-month period ended June 30, 1998. Losses from discontinued
operations for the six months ended June 30, 1998 totaled $5.6
million, or ($.29) per diluted share.
Ugly Duckling also announced that Greg Sullivan, President and
Chief Operating Officer of the Company since 1996, has been appointed
Chief Executive Officer by the Board of Directors. Mr. Sullivan
replaces Ernie Garcia, who will remain as Chairman of the Board and
the Company's largest stockholder with over 32% of the Company's
stock.
"Greg has done an excellent job running the operations of the
Company the past few years," said Mr. Garcia. "We have made tremendous
strides over this time and a lot of this is due to Greg's leadership
and direction. I am very confident that the Company will continue to
make progress with Greg as CEO."
Mr. Garcia went on to say, "Ugly Duckling remains my most
significant investment. My stepping down is a reflection of my
confidence in Greg and the Company. While I expect to continue to be
very involved with Ugly Duckling as Chairman, I believe that Greg has
proven his effectiveness in managing the day to day operations of the
Company and with this responsibility should come the CEO position."
Mr. Sullivan said, "We have developed a very strong management
team focused on operating and growing our Ugly Duckling Car Sales and
Finance operations. As our second quarter results demonstrate, we are
making good progress in our operational results. Our business is an
excellent one. We are the largest of our kind in what is a very large
industry. We are excited about our prospects and look forward to
producing solid returns for our stockholders."
The Company also announced that it had completed Y2K software
remediation and testing of its significant software based systems and
believes they are Y2K compliant. It also announced that it has rolled
out significant enhancements to its Internet web-site
(www.uglyduckling.com) and has established an Internet based marketing
capability. For the second quarter the Company received over 2,000
applications over the Internet leading to the sale of 180 units or
approximately $1.5 million in additional revenues. The Company expects
to more aggressively market the Internet capability and incorporate
this capability in its future-marketing initiatives.
Headquartered in Phoenix, Arizona, Ugly Duckling Corporation is a
used car sales and finance company that operates the nation's largest
chain of used car dealerships focused exclusively on the sub-prime
market. The Company underwrites, finances and services sub-prime
contracts generated at its 60 Ugly Duckling dealerships. Cygnet Dealer
Finance provides operating lines of credit and other financing
arrangements for non-affiliated used car dealers. The Company also
services sub-prime auto loans for third parties.
This press release may include statements that constitute
forward-looking statements, usually containing the words "believe,"
"estimate," "project," "expects" or similar expressions. These
statements are made pursuant to the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995. Forward-looking
statements inherently involve risks and uncertainties that could cause
actual results to differ materially from the forward-looking
statements. Specifically, the statements in the press release relating
to the Company's expectations regarding Y2K compliance are forward
looking in nature and involve risks and uncertainties. Factors that
could cause or contribute to material differences, include, but are
not limited to: (1) the Company may find in actual operation that its
significant software based systems are wholly or partially
noncompliant, or that its remediation efforts created yet unknown
problems with these systems; (2) there is no assurance that the
Company's significant suppliers, vendors and business partners will be
Y2K compliant on time which, if it happened, could have a material
adverse effect on the Company; and (3) the ultimate cost to identify
and implement solutions to Y2K problems may exceed the Company's
estimates. Other factors that could cause or contribute to such
differences include factors detailed in the sections entitled
"Management's Discussion and Analysis of Financial Condition and
Results of Operations -- Risks Factors," "Factors That May Affect
Future Results and Financial Condition" and "Factors That May Affect
Future Stock Performance" in Ugly Duckling Corporation's most recent
reports on Form 10-K and Form 10-Q (including Exhibit 99 to any such
Form 10-Q), 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.
*T
("Consolidated Results of Operations" #reply-10693320)
CONTACT:
Ugly Duckling Corporation
Steven T. Darak, 602/852-6600
Investor Relations
Investor-relations@uglyduckling.com
BW0011 JUL 28,1999
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