Market Overview

Asbury Automotive Group Announces Third Quarter 2016 Earnings

Share:

Third quarter EPS from continuing operations of $1.47 per diluted share compared to $1.96 per diluted share in the prior year quarter

Record third quarter adjusted EPS of $1.52 per diluted share (a non-GAAP measure) compared to adjusted EPS of $1.43 per diluted share in the prior year quarter, a 6% increase

DULUTH, Ga., Oct. 25, 2016 /PRNewswire/ -- Asbury Automotive Group, Inc. (NYSE: ABG), one of the largest automotive retail and service companies in the U.S., today reported net income for the third quarter 2016 of $32.4 million, or $1.47 per diluted share, compared to $51.1 million, or $1.96 per diluted share in the prior year quarter. Adjusted net income (a non-GAAP measure) for the third quarter 2016 was $33.5 million, or $1.52 per diluted share, compared to adjusted net income of $37.2 million, or $1.43 per diluted share in the prior year quarter, a 6% increase in adjusted earnings per share. Adjusted net income for the third quarter 2016 excluded $1.8 million in pre-tax real estate related charges, or $0.05 per diluted share.  Adjusted net income for the third quarter 2015 excluded $21.4 million in pre-tax gain on divestitures, or $0.50 per diluted share, and a $0.8 million benefit from a lower effective tax rate, or $0.03 per diluted share. See attached reconciliation for reported adjustments. Total revenue for the third quarter was $1.7 billion, down 2% from the prior year period principally attributable to strategic divestitures over the past year; total revenue on a same-store basis (a non-GAAP measure) was up 1% from the prior year period.

Third Quarter 2016 Operational Summary (compared to prior year period):

Same store:

  • Total revenues increased 1%; gross profit flat
  • New vehicle revenue was flat; gross profit down 7%
  • Used vehicle retail revenue down 1%; gross profit down 6%
  • Finance and insurance revenue down 3%
  • Parts and service revenue up 8%; gross profit up 7%
  • Parts and service customer pay gross profit up 7%

Total store:

  • SG&A as a percentage of gross profit was up 70 basis points to 69.9%
  • Total company adjusted income from operations (a non-GAAP measure) as a percentage of revenue was 4.3%

"Despite a very competitive market for vehicle sales and margins, our strong parts and service customer pay performance combined with capital deployment enabled us to deliver 6% EPS growth." said Craig Monaghan, Asbury's President and Chief Executive Officer.

"We continue to grow our parts and service business, with gross profit up 7% from last year on a same store basis," said Asbury's Executive Vice President and Chief Operating Officer, David Hult. "This was a direct result of our team's commitment to improve our high margin parts and service business. Their hard work helped offset the pressure in other areas of the business to deliver flat same store gross profit."

For the nine-month period ended September 30, 2016, the Company reported net income of $100.1 million, or $4.37 per diluted share, compared to net income of $128.1 million, or $4.76 per diluted share in the prior year period.  Adjusted net income for the nine-month period ended September 30, 2016 was $103.3 million, or $4.51 per diluted share, compared to $114.2 million, or $4.25 per diluted share in the prior year quarter, a 6% increase in adjusted earnings per share.

The conference call will be today at 10:00 a.m. Eastern Time and will also be simulcast live on the Internet.  The simulcast can be accessed by logging onto www.asburyauto.com or www.ccbn.com.  A replay will be available at these sites for 30 days.  In addition, a live audio of the call will be accessible to the public by calling (719) 325-2118 (domestic), or (800) 311-6662 (international); passcode - 2712732.  Callers should dial in approximately 5 to 10 minutes before the call begins. A conference call replay will be available two hours following the call for seven days, and can be accessed by calling (888) 203-1112 (domestic), or (719) 457-0820 (international); passcode - 2712732.

About Asbury Automotive Group, Inc.

Asbury Automotive Group, Inc. ("Asbury"), a Fortune 500 company headquartered in Duluth, Georgia, a suburb of Atlanta, is one of the largest automotive retailers in the U.S.  Built through a combination of organic growth and a series of strategic acquisitions, Asbury operated 81 dealership locations, encompassing 98 franchises for the sale and servicing of 28 domestic and foreign brands of new vehicles as of September 30, 2016.  Asbury also operated 25 collision repair centers and 4 stand-alone used vehicle stores. Asbury offers customers an extensive range of automotive products and services, including new and used vehicle sales and related financing and insurance, vehicle maintenance and repair services, replacement parts and service contracts.

Forward-Looking Statements

This press release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995.  Forward-looking statements are statements other than historical fact, and may include statements relating to goals, plans, market conditions and projections regarding Asbury's financial position, liquidity, results of operations, market position and dealership portfolio, and other initiatives and future business strategy.  These statements are based on management's current expectations and beliefs and involve significant risks and uncertainties that may cause results to differ materially from those set forth in the statements.  These risks and uncertainties include, among other things, market factors, Asbury's relationships with, and the financial and operational stability of, vehicle manufacturers and other suppliers, acts of God or other incidents which may adversely impact supply from vehicle manufacturers and/or present retail sales challenges, risks associated with Asbury's indebtedness (including available borrowing capacity, compliance with its financial covenants and ability to refinance or repay such indebtedness, on favorable terms), Asbury's relationships with, and the financial stability of, its lenders and lessors, risks related to competition in the automotive retail and service industries, general economic conditions both nationally and locally, governmental regulations, legislation, adverse results in litigation and other proceedings, and Asbury's ability to execute its IT initiatives and other operational strategies, Asbury's ability to leverage gains from its dealership portfolio, Asbury's ability to capitalize on opportunities to repurchase its debt and equity securities or purchase properties that it currently leases, and Asbury's ability to stay within its targeted range for capital expenditures.  There can be no guarantees that Asbury's plans for future operations will be successfully implemented or that they will prove to be commercially successful.

These and other risk factors that could cause actual results to differ materially from those expressed or implied in our forward-looking statements are and will be discussed in Asbury's filings with the U.S. Securities and Exchange Commission from time to time, including its most recent annual report on Form 10-K and any subsequently filed quarterly reports on Form 10-Q.  We undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future events or otherwise.

ASBURY AUTOMOTIVE GROUP, INC.
CONSOLIDATED STATEMENTS OF INCOME  (In millions, except per share data)
(Unaudited)



For the Three Months Ended
September 30,


Increase
(Decrease)


%
Change


2016


2015



REVENUE:








New vehicle

$

940.9



$

964.0



$

(23.1)



(2)

%

Used vehicle:








Retail

423.3



438.8



(15.5)



(4)

%

Wholesale

53.1



54.2



(1.1)



(2)

%

     Total used vehicle

476.4



493.0



(16.6)



(3)

%

Parts and service

200.4



190.6



9.8



5

%

Finance and insurance, net

65.4



68.8



(3.4)



(5)

%

TOTAL REVENUE

1,683.1



1,716.4



(33.3)



(2)

%

GROSS PROFIT:








New vehicle

47.5



52.3



(4.8)



(9)

%

Used vehicle:








Retail

31.9



35.2



(3.3)



(9)

%

Wholesale

(2.1)



(1.8)



(0.3)



(17)

%

     Total used vehicle

29.8



33.4



(3.6)



(11)

%

Parts and service

123.0



118.2



4.8



4

%

Finance and insurance, net

65.4



68.8



(3.4)



(5)

%

TOTAL GROSS PROFIT

265.7



272.7



(7.0)



(3)

%

OPERATING EXPENSES (INCOME):








Selling, general and administrative

185.7



188.8



(3.1)



(2)

%

Depreciation and amortization

7.8



7.5



0.3



4

%

Other operating expense (income), net

1.5



(0.2)



1.7



NM


INCOME FROM OPERATIONS

70.7



76.6



(5.9)



(8)

%

OTHER EXPENSES (INCOME):








Floor plan interest expense

5.0



4.1



0.9



22

%

Other interest expense, net

13.2



10.7



2.5



23

%

Swap interest expense

0.8



1.0



(0.2)



(20)

%

Gain on divestitures



(21.4)



21.4



100

%

Total other expenses, net

19.0



(5.6)



24.6



NM


INCOME FROM CONTINUING OPERATIONS 
BEFORE INCOME TAXES

51.7



82.2



(30.5)



(37)

%

Income tax expense

19.3



31.0



(11.7)



(38)

%

INCOME FROM CONTINUING OPERATIONS

32.4



51.2



(18.8)



(37)

%

Discontinued operations, net of tax



(0.1)



0.1



100

%

NET INCOME

$

32.4



$

51.1



$

(18.7)



(37)

%

EARNINGS PER COMMON SHARE:








Basic—








Continuing operations

$

1.47



$

1.98



$

(0.51)



(26)

%

Discontinued operations



(0.01)



0.01



100

%

Net income

$

1.47



$

1.97



$

(0.50)



(25)

%

Diluted—








Continuing operations

$

1.47



$

1.96



$

(0.49)



(25)

%

Discontinued operations







%

Net income

$

1.47



$

1.96



$

(0.49)



(25)

%

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:








Basic

22.0



25.9



(3.9)



(15)

%

Restricted stock



0.1



(0.1)



(100)

%

Performance share units

0.1



0.1





%

Diluted

22.1



26.1



(4.0)



(15)

%

______________________________
NMNot Meaningful


 

ASBURY AUTOMOTIVE GROUP, INC.
KEY OPERATING HIGHLIGHTS  (In millions, except per unit data)
(Unaudited)



For the Three Months Ended
September 30,


Increase
(Decrease)


%
Change


2016


2015



Unit sales








New vehicle:








Luxury

6,061



6,381



(320)



(5)

%

Import

15,522



16,501



(979)



(6)

%

Domestic

5,232



5,482



(250)



(5)

%

     Total new vehicle

26,815



28,364



(1,549)



(5)

%

Used vehicle retail

20,030



21,306



(1,276)



(6)

%

Used to new ratio

74.7

%


75.1

%


(40)

bps



Average selling price








New vehicle

$

35,089



$

33,987



$

1,102



3

%

Used vehicle retail

21,133



20,595



538



3

%

Average gross profit per unit








New vehicle:








Luxury

$

3,432



$

3,197



$

235



7

%

Import

1,179



1,242



(63)



(5)

%

Domestic

1,606



2,080



(474)



(23)

%

Total new vehicle

1,771



1,844



(73)



(4)

%

Used vehicle

1,593



1,652



(59)



(4)

%

Finance and insurance, net

1,396



1,385



11



1

%

Front end yield (1)

3,091



3,147



(56)



(2)

%

Gross margin








New vehicle:








Luxury

6.5

%


6.3

%


20

bps



Import

4.3

%


4.6

%


(30)

bps



Domestic

4.3

%


5.7

%


(140)

bps



Total new vehicle

5.0

%


5.4

%


(40)

bps



Used vehicle retail

7.5

%


8.0

%


(50)

bps



Parts and service

61.4

%


62.0

%


(60)

bps



Total gross profit margin

15.8

%


15.9

%


(10)

bps



SG&A metrics








Rent expense

$

7.6



$

8.0



$

(0.4)



(5)

%

Total SG&A as a percentage of gross profit

69.9

%


69.2

%


70

bps



SG&A, excluding rent expense as a percent of gross profit

67.0

%


66.3

%


70

bps



Operating metrics








Income from operations as a percentage of revenue

4.2

%


4.5

%


(30)

bps



Income from operations as a percentage of gross profit

26.6

%


28.1

%


(150)

bps



Adjusted income from operations as a percentage of revenue

4.3

%


4.5

%


(20)

bps



Adjusted income from operations as a percentage of gross profit

27.3

%


28.1

%


(80)

bps



Revenue mix








New vehicle

55.9

%


56.2

%





Used vehicle retail

25.1

%


25.5

%





Used vehicle wholesale

3.2

%


3.2

%





Parts and service

11.9

%


11.1

%





Finance and insurance

3.9

%


4.0

%





     Total revenue

100.0

%


100.0

%





Gross profit mix








New vehicle

17.9

%


19.2

%





Used vehicle retail

12.0

%


13.0

%





Used vehicle wholesale

(0.8)

%


(0.7)

%





Parts and service

46.3

%


43.3

%





Finance and insurance

24.6

%


25.2

%





     Total gross profit

100.0

%


100.0

%





_____________________________
(1)    Front end yield is calculated as gross profit from new vehicles, used retail vehicles and finance and insurance (net), divided by combined new and used retail unit sales.


 

ASBURY AUTOMOTIVE GROUP, INC.
SAME STORE OPERATING HIGHLIGHTS  (In millions)
(Unaudited)



For the Three Months Ended
September 30,


Increase
(Decrease)


%
Change


2016


2015



Revenue








New vehicle:








Luxury

$

318.2



$

321.8



$

(3.6)



(1)

%

Import

423.2



417.6



5.6



1

%

Domestic

195.5



199.2



(3.7)



(2)

%

     Total new vehicle

936.9



938.6



(1.7)



%

Used Vehicle:








Retail

419.6



422.0



(2.4)



(1)

%

Wholesale

52.7



52.3



0.4



1

%

     Total used vehicle

472.3



474.3



(2.0)



%

Parts and service

199.2



185.2



14.0



8

%

Finance and insurance

64.7



66.4



(1.7)



(3)

%

Total revenue

$

1,673.1



$

1,664.5



$

8.6



1

%









Gross profit








New vehicle:








Luxury

$

20.8



$

20.4



$

0.4



2

%

Import

18.2



19.4



(1.2)



(6)

%

Domestic

8.4



11.4



(3.0)



(26)

%

     Total new vehicle

47.4



51.2



(3.8)



(7)

%

Used Vehicle:








Retail

31.9



34.0



(2.1)



(6)

%

Wholesale

(2.0)



(1.6)



(0.4)



(25)

%

     Total used vehicle

29.9



32.4



(2.5)



(8)

%

Parts and service:








Customer pay

66.7



62.3



4.4



7

%

Warranty

19.8



17.8



2.0



11

%

Wholesale parts

5.0



5.0





%

     Parts and service, excluding reconditioning and preparation

91.5



85.1



6.4



8

%

Reconditioning and preparation

30.7



29.6



1.1



4

%

Total parts and service

122.2



114.7



7.5



7

%

Finance and insurance

64.7



66.4



(1.7)



(3)

%

Total gross profit

$

264.2



$

264.7



$

(0.5)



%









SG&A expense

$

184.0



$

182.0



$

2.0



1

%

SG&A expense as a percentage of gross profit

69.6

%


68.8

%


80

bps



_____________________________
Same store amounts consist of information from dealerships for identical months in each comparative period, commencing with the first month we owned the dealership. Additionally, amounts related to divested dealerships are excluded from each comparative period.

 

 

ASBURY AUTOMOTIVE GROUP, INC.
SAME STORE OPERATING HIGHLIGHTS  (Continued)
(Unaudited)



For the Three Months Ended September 30,


Increase
(Decrease)


%
Change


2016


2015



Unit sales








New vehicle:








Luxury

6,061



6,371



(310)



(5)

%

Import

15,363



15,563



(200)



(1)

%

Domestic

5,232



5,482



(250)



(5)

%

     Total new vehicle

26,656



27,416



(760)



(3)

%

Used vehicle retail

19,774



20,294



(520)



(3)

%

Used to new ratio

74.2

%


74.0

%


20

bps











Average selling price








New vehicle

$

35,148



$

34,235



$

913



3

%

Used vehicle retail

21,220



20,794



426



2

%









Average gross profit per unit








New vehicle:








Luxury

$

3,432



$

3,202



$

230



7

%

Import

1,185



1,247



(62)



(5)

%

Domestic

1,606



2,080



(474)



(23)

%

Total new vehicle

1,778



1,868



(90)



(5)

%

Used vehicle

1,613



1,675



(62)



(4)

%

Finance and insurance, net

1,393



1,392



1



%

Front end yield (1)

3,101



3,178



(77)



(2)

%









Gross margin








New vehicle:








Luxury

6.5

%


6.3

%


20

bps



Import

4.3

%


4.6

%


(30)

bps



Domestic

4.3

%


5.7

%


(140)

bps



Total new vehicle

5.1

%


5.5

%


(40)

bps



Used vehicle retail

7.6

%


8.1

%


(50)

bps



Parts and service:








Parts and service, excluding reconditioning and preparation

45.9

%


46.0

%


(10)

bps



Parts and service, including reconditioning and preparation

61.3

%


61.9

%


(60)

bps



Total gross profit margin

15.8

%


15.9

%


(10)

bps



_____________________________
Same store amounts consist of information from dealerships for identical months in each comparative period, commencing with the first month we owned the dealership. Additionally, amounts related to divested dealerships are excluded from each comparative period.

(1)   Front end yield is calculated as gross profit from new vehicles, used retail vehicles and finance and insurance (net), divided by combined new and used retail unit sales.


 

ASBURY AUTOMOTIVE GROUP, INC.
CONSOLIDATED STATEMENTS OF INCOME
(In millions, except per share data)
(Unaudited)



For the Nine Months Ended
September 30,


Increase
(Decrease)


%
Change


2016


2015



REVENUE:








New vehicle

$

2,676.3



$

2,720.7



$

(44.4)



(2)

%

Used vehicle:








Retail

1,254.7



1,309.8



(55.1)



(4)

%

Wholesale

152.8



164.2



(11.4)



(7)

%

     Total used vehicle

1,407.5



1,474.0



(66.5)



(5)

%

Parts and service

584.9



555.5



29.4



5

%

Finance and insurance, net

192.6



197.6



(5.0)



(3)

%

TOTAL REVENUE

4,861.3



4,947.8



(86.5)



(2)

%

GROSS PROFIT:








New vehicle

139.7



152.5



(12.8)



(8)

%

Used vehicle:








Retail

101.4



105.6



(4.2)



(4)

%

Wholesale

(1.6)



(3.2)



1.6



50

%

     Total used vehicle

99.8



102.4



(2.6)



(3)

%

Parts and service

362.0



347.9



14.1



4

%

Finance and insurance, net

192.6



197.6



(5.0)



(3)

%

TOTAL GROSS PROFIT

794.1



800.4



(6.3)



(1)

%

OPERATING EXPENSES:








Selling, general and administrative

549.2



546.4



2.8



1

%

Depreciation and amortization

23.0



22.0



1.0



5

%

Other operating expense, net

4.2



0.1



4.1



NM


INCOME FROM OPERATIONS

217.7



231.9



(14.2)



(6)

%

OTHER EXPENSES (INCOME):








Floor plan interest expense

14.4



12.0



2.4



20

%

Other interest expense, net

40.0



31.5



8.5



27

%

Swap interest expense

2.4



2.0



0.4



20

%

Gain on divestitures



(21.4)



21.4



100

%

Total other expenses, net

56.8



24.1



32.7



136

%

INCOME FROM CONTINUING OPERATIONS 
BEFORE INCOME TAXES

160.9



207.8



(46.9)



(23)

%

Income tax expense

60.8



79.6



(18.8)



(24)

%

INCOME FROM CONTINUING OPERATIONS

100.1



128.2



(28.1)



(22)

%

Discontinued operations, net of tax



(0.1)



0.1



100

%

NET INCOME

$

100.1



$

128.1



$

(28.0)



(22)

%

EARNINGS PER COMMON SHARE:








Basic—








Continuing operations

$

4.39



$

4.80



$

(0.41)



(9)

%

Discontinued operations







%

Net income

$

4.39



$

4.80



$

(0.41)



(9)

%

Diluted—








Continuing operations

$

4.37



$

4.77



$

(0.40)



(8)

%

Discontinued operations



(0.01)



0.01



100

%

Net income

$

4.37



$

4.76



$

(0.39)



(8)

%

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:








Basic

22.8



26.7



(3.9)



(15)

%

Restricted stock



0.1



(0.1)



(100)

%

Performance share units

0.1



0.1





%

Diluted

22.9



26.9



(4.0)



(15)

%

______________________________
NMNot Meaningful


 

ASBURY AUTOMOTIVE GROUP, INC.
KEY OPERATING HIGHLIGHTS  (In millions, except per unit data)
(Unaudited)



For the Nine Months Ended
September 30,


Increase
(Decrease)


%
Change


2016


2015



Unit sales








New vehicle:








Luxury

17,469



18,632



(1,163)



(6)

%

Import

43,814



47,052



(3,238)



(7)

%

Domestic

15,326



14,137



1,189



8

%

     Total new vehicle

76,609



79,821



(3,212)



(4)

%

Used vehicle retail

59,378



63,164



(3,786)



(6)

%

Used to new ratio

77.5

%


79.1

%


(160)

bps



Average selling price








New vehicle

$

34,935



$

34,085



$

850



2

%

Used vehicle retail

21,131



20,736



395



2

%

Average gross profit per unit








New vehicle:








Luxury

$

3,515



$

3,413



$

102



3

%

Import

1,207



1,262



(55)



(4)

%

Domestic

1,657



2,087



(430)



(21)

%

Total new vehicle

1,824



1,911



(87)



(5)

%

Used vehicle

1,708



1,672



36



2

%

Finance and insurance, net

1,416



1,382



34



2

%

Front end yield (1)

3,189



3,187



2



%

Gross margin








New vehicle:








Luxury

6.7

%


6.7

%


bps



Import

4.4

%


4.7

%


(30)

bps



Domestic

4.5

%


5.8

%


(130)

bps



Total new vehicle

5.2

%


5.6

%


(40)

bps



Used vehicle retail

8.1

%


8.1

%


bps



Parts and service

61.9

%


62.6

%


(70)

bps



Total gross profit margin

16.3

%


16.2

%


10

bps



SG&A metrics








Rent expense

$

23.0



$

23.5



$

(0.5)



(2)

%

Total SG&A as a percentage of gross profit

69.2

%


68.3

%


90

bps



SG&A, excluding rent expense as a percent of gross profit

66.3

%


65.3

%


100

bps



Operating metrics








Income from operations as a percentage of revenue

4.5

%


4.7

%


(20)

bps



Income from operations as a percentage of gross profit

27.4

%


29.0

%


(160)

bps



Adjusted income from operations as a percentage of revenue

4.6

%


4.7

%


(10)

bps



Adjusted income from operations as a percentage of gross profit

28.1

%


29.0

%


(90)

bps



Revenue mix








New vehicle

55.1

%


55.0

%





Used vehicle retail

25.8

%


26.5

%





Used vehicle wholesale

3.1

%


3.3

%





Parts and service

12.0

%


11.2

%





Finance and insurance

4.0

%


4.0

%





     Total revenue

100.0

%


100.0

%





Gross profit mix








New vehicle

17.6

%


19.1

%





Used vehicle retail

12.7

%


13.1

%





Used vehicle wholesale

(0.2)

%


(0.4)%






Parts and service

45.6

%


43.5

%





Finance and insurance

24.3

%


24.7

%





     Total gross profit

100.0

%


100.0

%





_____________________________
(1)  Front end yield is calculated as gross profit from new vehicles, used retail vehicles and finance and insurance (net), divided by combined new and used retail unit sales.


 

ASBURY AUTOMOTIVE GROUP, INC.
SAME STORE OPERATING HIGHLIGHTS  (In millions)
(Unaudited)



For the Nine Months Ended
September 30,


Increase
(Decrease)


%
Change


2016


2015



Revenue








New vehicle:








Luxury

$

909.7



$

928.1



$

(18.4)



(2)

%

Import

1,176.3



1,178.0



(1.7)



%

Domestic

530.0



506.5



23.5



5

%

     Total new vehicle

2,616.0



2,612.6



3.4



%

Used Vehicle:








Retail

1,227.5



1,243.2



(15.7)



(1)

%

Wholesale

150.4



156.3



(5.9)



(4)

%

     Total used vehicle

1,377.9



1,399.5



(21.6)



(2)

%

Parts and service

571.7



531.6



40.1



8

%

Finance and insurance

187.4



189.4



(2.0)



(1)

%

Total revenue

$

4,753.0



$

4,733.1



$

19.9



%









Gross profit








New vehicle:








Luxury

$

61.4



$

62.5



$

(1.1)



(2)

%

Import

51.9



55.5



(3.6)



(6)

%

Domestic

23.4



29.5



(6.1)



(21)

%

     Total new vehicle

136.7



147.5



(10.8)



(7)

%

Used Vehicle:








Retail

99.1



101.0



(1.9)



(2)

%

Wholesale

(1.4)



(2.7)



1.3



48

%

     Total used vehicle

97.7



98.3



(0.6)



(1)

%

Parts and service:








Customer pay

198.2



182.5



15.7



9

%

Warranty

52.7



49.9



2.8



6

%

Wholesale parts

15.0



14.9



0.1



1

%

     Parts and service, excluding reconditioning 
     and preparation

265.9



247.3



18.6



8

%

Reconditioning and preparation

88.4



86.0



2.4



3

%

Total parts and service

354.3



333.3



21.0



6

%

Finance and insurance

187.4



189.4



(2.0)



(1)

%

Total gross profit

$

776.1



$

768.5



$

7.6



1

%









SG&A expense

$

537.1



$

521.5



$

15.6



3

%

SG&A expense as a percentage of gross profit

69.2

%


67.9

%


130

bps



_____________________________
NMNot Meaningful

Same store amounts consist of information from dealerships for identical months in each comparative period, commencing with the first month we owned the dealership. Additionally, amounts related to divested dealerships are excluded from each comparative period.

 

ASBURY AUTOMOTIVE GROUP, INC.
SAME STORE OPERATING HIGHLIGHTS  (Continued)
(Unaudited)



For the Nine Months Ended
September 30,


Increase
(Decrease)


%
Change


2016


2015



Unit sales








New vehicle:








Luxury

17,469



18,254



(785)



(4)

%

Import

42,693



43,844



(1,151)



(3)

%

Domestic

14,414



14,137



277



2

%

     Total new vehicle

74,576



76,235



(1,659)



(2)

%

Used vehicle retail

57,756



59,595



(1,839)



(3)

%

Used to new ratio

77.4

%


78.2

%


(80)

bps











Average selling price








New vehicle

$

35,078



$

34,270



$

808



2

%

Used vehicle retail

21,253



20,861



392



2

%









Average gross profit per unit








New vehicle:








Luxury

$

3,515



$

3,424



$

91



3

%

Import

1,216



1,266



(50)



(4)

%

Domestic

1,623



2,087



(464)



(22)

%

Total new vehicle

1,833



1,935



(102)



(5)

%

Used vehicle

1,716



1,695



21



1

%

Finance and insurance, net

1,416



1,394



22



2

%

Front end yield (1)

3,198



3,224



(26)



(1)

%









Gross margin








New vehicle:








Luxury

6.7

%


6.7

%


bps



Import

4.4

%


4.7

%


(30)

bps



Domestic

4.4

%


5.8

%


(140)

bps



Total new vehicle

5.2

%


5.6

%


(40)

bps



Used vehicle retail

8.1

%


8.1

%


bps



Parts and service:








Parts and service, excluding reconditioning and preparation

46.5

%


46.5

%


bps



Parts and service, including reconditioning and preparation

62.0

%


62.7

%


(70)

bps



Total gross profit margin

16.3

%


16.2

%


10

bps



_____________________________
Same store amounts consist of information from dealerships for identical months in each comparative period, commencing with the first month we owned the dealership. Additionally, amounts related to divested dealerships are excluded from each comparative period.

(1)   Front end yield is calculated as gross profit from new vehicles, used retail vehicles and finance and insurance (net), divided by combined new and used retail unit sales.

 

ASBURY AUTOMOTIVE GROUP, INC.
Additional Disclosures (In millions)
(Unaudited)



September 30, 2016


December 31,
2015


Increase

(Decrease)


% Change

SELECTED BALANCE SHEET DATA








Cash and cash equivalents

$

3.7



$

2.8



$

0.9



32

%

New vehicle inventory

694.9



739.2



(44.3)



(6)

%

Used vehicle inventory

156.4



134.1



22.3



17

%

Parts inventory

41.1



43.9



(2.8)



(6)

%

Total current assets

1,337.1



1,343.0



(5.9)



%

Floor plan notes payable

769.5



712.2



57.3



8

%

Total current liabilities

1,099.8



1,007.8



92.0



9

%









CAPITALIZATION:








Long-term debt (including current portion)

$

930.2



$

954.3



$

(24.1)



(3)

%

Shareholders' equity

255.6



314.5



(58.9)



(19)

%

Total

$

1,185.8



$

1,268.8



$

(83.0)



(7)

%

 


September 30,
2016


December 31,
2015

DAYS SUPPLY




New vehicle inventory

72


62

Used vehicle inventory

40


30

_____________________________
Days supply of inventory is calculated based on new and used inventory levels at the end of each reporting period and a 30-day historical cost of sales

 

Brand Mix - New Vehicle Revenue by Brand-


For the Nine Months Ended
September 30,


2016


2015

Luxury:




BMW

6

%


8

%

Mercedes-Benz

7

%


7

%

Lexus

7

%


6

%

Acura

4

%


5

%

Infiniti

3

%


3

%

Other luxury

7

%


6

%

Total luxury

34

%


35

%

Imports:




Honda

17

%


16

%

Nissan

11

%


12

%

Toyota

13

%


12

%

Other imports

4

%


6

%

Total imports

45

%


46

%

Domestic:




Ford

13

%


11

%

Dodge

3

%


3

%

Chevrolet

3

%


3

%

Other domestics

2

%


2

%

Total domestic

21

%


19

%

Total New Vehicle Revenue

100

%


100

%

 

ASBURY AUTOMOTIVE GROUP INC.
Supplemental Disclosures
(Unaudited)

Non-GAAP Financial Disclosure and Reconciliation

In addition to evaluating the financial condition and results of our operations in accordance with GAAP, from time to time management evaluates and analyzes results and any impact on the Company of strategic decisions and actions relating to, among other things, cost reduction, growth, and profitability improvement initiatives, and other events outside of normal, or "core," business and operations, by considering certain alternative financial measures not prepared in accordance with GAAP. These measures include "Adjusted leverage ratio," "Adjusted income from operations," "Adjusted net income," and "Adjusted diluted earnings per share ("EPS") from continuing operations." Further, management assesses the organic growth of our revenue and gross profit on a same store basis. We believe that our assessment on a same store basis represents an important indicator of comparative financial performance and provides relevant information to assess our performance at our existing locations. Same store amounts consist of information from dealerships for identical months in each comparative period, commencing with the first month we owned the dealership. Additionally, amounts related to divested dealerships are excluded from each comparative period. Non-GAAP measures do not have definitions under GAAP and may be defined differently by and not be comparable to similarly titled measures used by other companies. As a result, any non-GAAP financial measures considered and evaluated by management are reviewed in conjunction with a review of the most directly comparable measures calculated in accordance with GAAP. Management cautions investors not to place undue reliance on such non-GAAP measures, but also to consider them with the most directly comparable GAAP measures. In their evaluation of results from time to time, management excludes items that do not arise directly from core operations, or are otherwise of an unusual or non-recurring nature. Because these non-core, unusual or non-recurring charges and gains materially affect Asbury's financial condition or results in the specific period in which they are recognized, management also evaluates, and makes resource allocation and performance evaluation decisions based on, the related non-GAAP measures excluding such items.  In addition to using such non-GAAP measures to evaluate results in a specific period, management believes that such measures may provide more complete and consistent comparisons of operational performance on a period-over-period historical basis and a better indication of expected future trends. Management discloses these non-GAAP measures, and the related reconciliations, because it believes investors use these metrics in evaluating longer-term period-over-period performance, and to allow investors to better understand and evaluate the information used by management to assess operating performance.

The following tables provide reconciliations for our non-GAAP metrics:


For the Twelve Months Ended


September 31, 2016


June 30, 2016


(Dollars in millions)

Adjusted leverage ratio:




Long-term debt (including current portion)

$

930.2



$

942.5






Calculation of earnings before interest, taxes, depreciation and amortization ("EBITDA"):




Income from continuing operations

$

141.3



$

160.1






Add:




Depreciation and amortization

30.5



30.1


Income tax expense

85.1



96.9


Swap and other interest expense

56.0



53.6


Earnings before interest, taxes, depreciation and amortization ("EBITDA")

$

312.9



$

340.7






Non-core items - (income) expense:




Real estate-related charges

$

5.2



$

3.4


Gain on divestitures

(13.5)



(34.9)


  Total non-core items

(8.3)



(31.5)






Adjusted EBITDA

$

304.6



$

309.2






Adjusted leverage ratio

3.1



3.0


 

 


For the Three Months Ended
September 30,


2016


2015


(In millions, except per share data)

Adjusted income from operations:




Income from operations

$

70.7



$

76.6


Real estate-related charges

1.8




Adjusted income from operations

$

72.5



$

76.6






Adjusted net income:




Net income

$

32.4



$

51.1






Non-core items - (income) expense:




Real estate-related charges

1.8




Gain on divestitures



(21.4)


Income tax (benefit) expense on non-core items above

(0.7)



8.3


Income tax benefit



(0.8)


Total non-core items

1.1



(13.9)


Adjusted net income

$

33.5



$

37.2






Adjusted diluted earnings per share (EPS) from continuing operations:




Net income

$

1.47



$

1.96


Discontinued operations, net of tax




Income from continuing operations

$

1.47



$

1.96






Total non-core items

0.05



(0.53)


Adjusted diluted EPS from continuing operations

$

1.52



$

1.43






Weighted average common shares outstanding - diluted

22.1



26.1


 

 


For the Nine Months Ended
September 30,


2016


2015


(In millions, except per share data)

Adjusted income from operations:




Income from operations

$

217.7



$

231.9


Real estate-related charges

5.2




Adjusted income from operations

$

222.9



$

231.9






Adjusted net income:




Net income

$

100.1



$

128.1






Non-core items - (income) expense:




Real estate-related charges

5.2




Gain on divestitures



(21.4)


Income tax (benefit) expense on non-core items above

(2.0)



8.3


Income tax benefit



(0.8)


Total non-core items

3.2



(13.9)


Adjusted net income

$

103.3



$

114.2






Adjusted diluted earnings per share (EPS) from continuing operations:




Net income

$

4.37



$

4.76


Discontinued operations, net of tax



0.01


Income from continuing operations

$

4.37



$

4.77






Total non-core items

0.14



(0.52)


Adjusted diluted EPS from continuing operations

$

4.51



$

4.25






Weighted average common shares outstanding - diluted

22.9



26.9


 

 

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/asbury-automotive-group-announces-third-quarter-2016-earnings-300350286.html

SOURCE Asbury Automotive Group, Inc.

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