NEW YORK - United Auto Group lost $10.1 million in 1997, compared with a profit of $3 million in 1996.
Because of acquisitions, revenue grew 60.3 percent to $2.1 billion. United Auto, which went public in October 1996, acquired 10 dealer groups in 1997.
The company announced earlier that it took a one-time hit of $31.7 million in the fourth quarter, when it dropped some unprofitable franchises in the New Jersey-based DiFeo Group, and closed three stand-alone used-car facilities in Arkansas.
Interest expense also climbed sharply as the chain has borrowed money to finance acquisitions.
In 1997, United Auto sold 50,985 new and 31,253 used vehicles - an increase of 38.5 percent in new vehicles and 70.4 percent in used. Chairman Marshall Cogan has said United's strategy is to emphasize higher-margin business, such as used cars, finance and insurance and parts and service.
Finance and insurance has been a disappointment so far. UnitedAuto Finance, the group's captive finance company, had a pretax loss of $3.7 million in 1997 after a loss of $1.5 million in 1996. The company said part of the added loss is because the finance company is spending on infrastructure, to get ready for an increase in volume.
But UnitedAuto Finance also raised its loan-loss estimates, and the parent attributed $1 million of the fourth-quarter charge to the captive finance company.