Market Overview

Asbury Automotive Group Announces Record 2016 Fourth Quarter And Full-Year Financial Results

Share:

Fourth quarter EPS from continuing operations of $3.08 per diluted share and full year EPS from continuing operations of $7.40 per diluted share

Record fourth quarter adjusted EPS from continuing operations of $1.56 per diluted share (a non-GAAP measure), up 19% over adjusted prior year quarter

Record full year 2016 adjusted EPS from continuing operations of $6.08 per diluted share (a non-GAAP measure), up 9% over adjusted prior year

DULUTH, Ga., Feb. 7, 2017 /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 fourth quarter 2016 of $67.1 million, or $3.08 per diluted share, compared to $41.1 million, or $1.64 per diluted share in the prior year quarter. It also reported adjusted income from continuing operations (a non-GAAP measure) for the fourth quarter 2016 of $34.0 million, or $1.56 per diluted share, compared to $32.8 million, or $1.31 per diluted share, in the prior year quarter, a 19% increase in adjusted earnings per share.

Income from continuing operations for the fourth quarter 2016 was adjusted for a $45.5 million pre-tax gain on divestitures, $6.6 million pre-tax legal settlements benefit, $0.5 million pre-tax real estate related impairment charges, and $0.9 million benefit from discrete tax items.  In total, these adjustments increased our earnings per share by $1.52 for the fourth quarter of 2016.  Income from continuing operations for the fourth quarter 2015 was adjusted for a $13.5 million pre-tax gain on divestitures, or $0.34 per diluted share. See attached reconciliation for reported adjustments related to both of these periods.

Total revenue for the fourth quarter was $1.7 billion, up 2% from the prior year period; total revenue on a same-store basis (a non-GAAP measure) was up 5% from the prior year period.

Fourth Quarter 2016 Operational Summary

Same store:

  • Total revenues increased 5%; gross profit increased 5%
  • New vehicle revenue increased 3%; gross profit down 5%
  • Used vehicle retail revenue up 7%; gross profit up 1%
  • Finance and insurance revenue up 8%
  • Parts and service revenue up 8%; gross profit up 9%

All store:

  • SG&A as a percentage of gross profit improved 120 basis points to 69.3%
  • Total company adjusted income from operations (a non-GAAP measure) as a percentage of revenue was 4.4%, up 20 basis points
  • Adjusted EPS from continuing operations up 19%

Strategic Highlights:

  • Repurchased $50 million of common stock during Q4 and $212 million for the full year 2016
  • Exited the Arkansas market; sold four stores representing five franchises in Q4 2016
  • Acquired a Chevy franchise and an Isuzu truck franchise in Indianapolis, Indiana in Q1 2017

"We closed 2016 with a strong performance, delivering 19% adjusted EPS growth in the fourth quarter," said Craig Monaghan, Asbury's President and Chief Executive Officer. "We continue to execute our two-part strategy: driving operational excellence and deploying capital to its highest returns.  In 2016, in a flat SAAR environment, we strengthened our dealership portfolio, repatriated over $200 million of capital to our shareholders, and grew adjusted EPS 9%."

"We continue to grow our parts and service business, delivering same store parts and service gross profit growth of 9% for the quarter," said Asbury's Executive Vice President and Chief Operating Officer, David Hult. "In addition, we were able to grow our F&I per vehicle to approximately $1,500 and deliver 120 basis points improvement in SG&A as a percentage of gross profit. This was a direct result of our team's hard work and commitment to continuous improvement."

For the full year 2016, the Company reported net income of $167.2 million, or $7.40 per diluted share, compared to net income of $169.2 million, or $6.41 per diluted share in the prior year period.  Adjusted income from continuing operations (a non-GAAP measure) for 2016 was $137.3 million, or $6.08 per diluted share, compared to $147.0 million, or $5.57 per diluted share in the prior year, a 9% increase in adjusted earnings per share.

Total revenue for the full year 2016 was $6.5 billion, down 1% 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 2% from the prior year period.

The conference call will be simulcast live on the Internet and 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) 325-4812 (domestic), or (877) 857-6176 (international); passcode - 2230163.  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 - 2230163.

About Asbury Automotive Group, Inc.

Asbury Automotive Group, Inc. ("Asbury"), a Fortune 500 company headquartered in Duluth, GA, is one of the largest automotive retailers in the U.S.  Asbury currently operates 79 dealerships, consisting of 95 franchises, representing 29 domestic and foreign brands of vehicles.  Asbury also operates 24 collision repair centers and 2 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 December 31,


Increase
(Decrease)


%
Change


2016


2015



REVENUE:








New vehicle

$

935.6



$

931.8



$

3.8



%

Used vehicle:








Retail

420.3



407.7



12.6



3

%

Wholesale

48.6



50.0



(1.4)



(3)

%

     Total used vehicle

468.9



457.7



11.2



2

%

Parts and service

193.6



185.2



8.4



5

%

Finance and insurance, net

68.4



65.8



2.6



4

%

TOTAL REVENUE

1,666.5



1,640.5



26.0



2

%

GROSS PROFIT:








New vehicle

47.4



50.5



(3.1)



(6)

%

Used vehicle:








Retail

29.6



30.5



(0.9)



(3)

%

Wholesale

(2.1)



(1.1)



(1.0)



(91)

%

     Total used vehicle

27.5



29.4



(1.9)



(6)

%

Parts and service

121.3



114.7



6.6



6

%

Finance and insurance, net

68.4



65.8



2.6



4

%

TOTAL GROSS PROFIT

264.6



260.4



4.2



2

%

OPERATING EXPENSES (INCOME):








Selling, general and administrative

183.3



183.5



(0.2)



%

Depreciation and amortization

7.7



7.5



0.2



3

%

Other operating income, net

(6.5)



(0.3)



(6.2)



NM


INCOME FROM OPERATIONS

80.1



69.7



10.4



15

%

OTHER (INCOME) EXPENSES:








Floor plan interest expense

4.9



4.1



0.8



20

%

Other interest expense, net

13.1



12.5



0.6



5

%

Swap interest expense

0.7



1.0



(0.3)



(30)

%

Gain on divestitures

(45.5)



(13.5)



(32.0)



NM


Total other (income) expenses, net

(26.8)



4.1



(30.9)



NM


INCOME FROM CONTINUING OPERATIONS                  
BEFORE INCOME TAXES

106.9



65.6



41.3



63

%

Income tax expense

39.8



24.4



15.4



63

%

INCOME FROM CONTINUING OPERATIONS

67.1



41.2



25.9



63

%

Discontinued operations, net of tax



(0.1)



0.1



(100)

%

NET INCOME

$

67.1



$

41.1



$

26.0



63

%

EARNINGS PER COMMON SHARE:








Basic—








Continuing operations

$

3.11



$

1.65



$

1.46



88

%

Discontinued operations







%

Net income

$

3.11



$

1.65



$

1.46



88

%

Diluted—








Continuing operations

$

3.08



$

1.65



$

1.43



87

%

Discontinued operations



(0.01)



0.01



%

Net income

$

3.08



$

1.64



$

1.44



88

%

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:








Basic

21.6



24.9



(3.3)



(13)

%

Restricted stock

0.1





0.1



%

Performance share units

0.1



0.1





%

Diluted

21.8



25.0



(3.2)



(13)

%







































NMNot Meaningful













 

 


ASBURY AUTOMOTIVE GROUP, INC.






KEY OPERATING HIGHLIGHTS (In millions, except per unit data)





(Unaudited)













For the Three Months
Ended December 31,


Increase
(Decrease)


%
Change


2016


2015



Unit sales








New vehicle:








Luxury

6,406



6,809



(403)



(6)

%

Import

14,652



14,581



71



%

Domestic

4,693



4,770



(77)



(2)

%

     Total new vehicle

25,751



26,160



(409)



(2)

%

Used vehicle retail

19,881



19,425



456



2

%

Used to new ratio

77.2

%


74.3

%


290

bps



Average selling price








New vehicle

$

36,333



$

35,619



$

714



2

%

Used vehicle retail

21,141



20,988



153



1

%

Average gross profit per unit








New vehicle:








Luxury

$

3,590



$

3,466



$

124



4

%

Import

1,099



1,228



(129)



(11)

%

Domestic

1,769



1,887



(118)



(6)

%

Total new vehicle

1,841



1,930



(89)



(5)

%

Used vehicle

1,489



1,570



(81)



(5)

%

Finance and insurance, net

1,499



1,443



56



4

%

Front end yield (1)

3,186



3,220



(34)



(1)

%

Gross margin








New vehicle:








Luxury

6.7

%


6.7

%


bps



Import

3.9

%


4.5

%


(60)

 bps



Domestic

4.6

%


5.1

%


(50)

 bps



Total new vehicle

5.1

%


5.4

%


(30)

 bps



Used vehicle retail

7.0

%


7.5

%


(50)

 bps



Parts and service

62.7

%


61.9

%


80

bps



Total gross profit margin

15.9

%


15.9

%


bps



SG&A metrics








Rent expense

$

7.0



$

7.8



$

(0.8)



(10)

%

Total SG&A as a percentage of gross profit

69.3

%


70.5

%


(120)

 bps



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

66.6

%


67.5

%


(90)

 bps



Operating metrics








Income from operations as a percentage of revenue

4.8

%


4.2

%


60

bps



Income from operations as a percentage of gross profit

30.3

%


26.8

%


350

bps



Adjusted income from operations as a percentage of revenue

4.4

%


4.2

%


20

bps



Adjusted income from operations as a percentage of gross profit

28.0

%


26.8

%


120

bps



Revenue mix








New vehicle

56.1

%


56.8

%





Used vehicle retail

25.3

%


24.9

%





Used vehicle wholesale

2.9

%


3.0

%





Parts and service

11.6

%


11.3

%





Finance and insurance

4.1

%


4.0

%





     Total revenue

100.0

%


100.0

%





Gross profit mix








New vehicle

17.9

%


19.4

%





Used vehicle retail

11.2

%


11.7

%





Used vehicle wholesale

(0.8)

%


(0.4)

%





Parts and service

45.8

%


44.0

%





Finance and insurance

25.9

%


25.3

%





     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
December 31,


Increase
(Decrease)


%
Change


2016


2015



Revenue








New vehicle:








Luxury

$

336.6



$

345.6



$

(9.0)



(3)

%

Import

403.0



375.0



28.0



7

%

Domestic

174.3



165.6



8.7



5

%

     Total new vehicle

913.9



886.2



27.7



3

%

Used Vehicle:








Retail

405.3



379.4



25.9



7

%

Wholesale

47.1



47.2



(0.1)



%

     Total used vehicle

452.4



426.6



25.8



6

%

Parts and service

187.8



174.0



13.8



8

%

Finance and insurance

66.9



61.9



5.0



8

%

Total revenue

$

1,621.0



$

1,548.7



$

72.3



5

%









Gross profit








New vehicle:








Luxury

$

22.5



$

22.9



$

(0.4)



(2)

%

Import

15.6



17.0



(1.4)



(8)

%

Domestic

8.0



8.4



(0.4)



(5)

%

     Total new vehicle

46.1



48.3



(2.2)



(5)

%

Used Vehicle:








Retail

28.7



28.5



0.2



1

%

Wholesale

(1.7)



(0.8)



(0.9)



NM


     Total used vehicle

27.0



27.7



(0.7)



(3)

%

Parts and service:








Customer pay

64.8



59.3



5.5



9

%

Warranty

19.0



16.9



2.1



12

%

Wholesale parts

4.9



4.8



0.1



2

%

     Parts and service, excluding reconditioning and preparation

88.7



81.0



7.7



10

%

Reconditioning and preparation

29.3



27.0



2.3



9

%

Total parts and service

118.0



108.0



10.0



9

%

Finance and insurance

66.9



61.9



5.0



8

%

Total gross profit

$

258.0



$

245.9



$

12.1



5

%









SG&A expense

$

176.6



$

171.8



$

4.8



3

%

SG&A expense as a percentage of gross profit

68.4

%


69.9

%


(150)

bps



























NM—Not 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 Three Months Ended
December 31,


Increase
(Decrease)


%
Change


2016


2015



Unit sales








New vehicle:








Luxury

6,322



6,664



(342)



(5)

%

Import

14,381



13,641



740



5

%

Domestic

4,460



4,476



(16)



%

     Total new vehicle

25,163



24,781



382



2

%

Used vehicle retail

19,084



17,857



1,227



7

%

Used to new ratio

75.8

%


72.1

%


370

bps











Average selling price








New vehicle

$

36,319



$

35,761



$

558



2

%

Used vehicle retail

21,238



21,247



(9)



%









Average gross profit per unit








New vehicle:








Luxury

$

3,559



$

3,436



$

123



4

%

Import

1,085



1,246



(161)



(13)

%

Domestic

1,794



1,877



(83)



(4)

%

Total new vehicle

1,832



1,949



(117)



(6)

%

Used vehicle retail

1,504



1,596



(92)



(6)

%

Finance and insurance, net

1,512



1,452



60



4

%

Front end yield (1)

3,202



3,253



(51)



(2)

%









Gross margin








New vehicle:








Luxury

6.7

%


6.6

%


10

bps



Import

3.9

%


4.5

%


(60)

 bps



Domestic

4.6

%


5.1

%


(50)

 bps



Total new vehicle

5.0

%


5.5

%


(50)

 bps



Used vehicle retail

7.1

%


7.5

%


(40)

 bps



Parts and service:








Parts and service, excluding reconditioning and preparation

47.2

%


46.6

%


60

bps



Parts and service, including reconditioning and preparation

62.8

%


62.1

%


70

bps



Total gross profit margin

15.9

%


15.9

%


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 Twelve Months
Ended December 31,


Increase
(Decrease)


%
Change


2016


2015



REVENUE:








New vehicle

$

3,611.9



$

3,652.5



$

(40.6)



(1)

%

Used vehicle:








Retail

1,675.0



1,717.5



(42.5)



(2)

%

Wholesale

201.4



214.2



(12.8)



(6)

%

     Total used vehicle

1,876.4



1,931.7



(55.3)



(3)

%

Parts and service

778.5



740.7



37.8



5

%

Finance and insurance, net

261.0



263.4



(2.4)



(1)

%

TOTAL REVENUE

6,527.8



6,588.3



(60.5)



(1)

%

GROSS PROFIT:








New vehicle

187.1



203.0



(15.9)



(8)

%

Used vehicle:








Retail

131.0



136.1



(5.1)



(4)

%

Wholesale

(3.7)



(4.3)



0.6



14

%

     Total used vehicle

127.3



131.8



(4.5)



(3)

%

Parts and service

483.3



462.6



20.7



4

%

Finance and insurance, net

261.0



263.4



(2.4)



(1)

%

TOTAL GROSS PROFIT

1,058.7



1,060.8



(2.1)



%

OPERATING EXPENSES (INCOME):








Selling, general and administrative

732.5



729.9



2.6



%

Depreciation and amortization

30.7



29.5



1.2



4

%

Other operating income, net

(2.3)



(0.2)



(2.1)



NM

INCOME FROM OPERATIONS

297.8



301.6



(3.8)



(1)

%

OTHER EXPENSES (INCOME):








Floor plan interest expense

19.3



16.1



3.2



20

%

Other interest expense, net

53.1



44.0



9.1



21

%

Swap interest expense

3.1



3.0



0.1



3

%

Gain on divestitures

(45.5)



(34.9)



(10.6)



(30)

%

Total other expenses (income), net

30.0



28.2



1.8



6

%

INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES

267.8



273.4



(5.6)



(2)

%

Income tax expense

100.6



104.0



(3.4)



(3)

%

INCOME FROM CONTINUING OPERATIONS

167.2



169.4



(2.2)



(1)

%

Discontinued operations, net of tax



(0.2)



0.2



100

%

NET INCOME

$

167.2



$

169.2



$

(2.0)



(1)

%

EARNINGS PER COMMON SHARE:








Basic—








Continuing operations

$

7.43



$

6.44



$

0.99



15

%

Discontinued operations



(0.01)



0.01



%

Net income

$

7.43



$

6.43



$

1.00



16

%

Diluted—








Continuing operations

$

7.40



$

6.42



$

0.98



15

%

Discontinued operations



(0.01)



0.01



100

%

Net income

$

7.40



$

6.41



$

0.99



15

%

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:








Basic

22.5



26.3



(3.8)



(14)

%

Restricted stock







%

Performance share units

0.1



0.1





%

Diluted

22.6



26.4



(3.8)



(14)

%







































NMNot Meaningful













 

 


ASBURY AUTOMOTIVE GROUP, INC.

KEY OPERATING HIGHLIGHTS (In millions, except per unit data)

(Unaudited)








For the Twelve Months Ended
December 31,


Increase
(Decrease)


%
Change


2016


2015



Unit sales








New vehicle:








Luxury

23,875



25,441



(1,566)



(6)

%

Import

58,466



61,633



(3,167)



(5)

%

Domestic

20,019



18,907



1,112



6

%

     Total new vehicle

102,360



105,981



(3,621)



(3)

%

Used vehicle retail

79,259



82,589



(3,330)



(4)

%

Used to new ratio

77.4

%


77.9

%


(50)

 bps



Average selling price








New vehicle

$

35,286



$

34,464



$

822



2

%

Used vehicle retail

21,133



20,796



337



2

%

Average gross profit per unit








New vehicle:








Luxury

$

3,535



$

3,428



$

107



3

%

Import

1,178



1,254



(76)



(6)

%

Domestic

1,688



2,036



(348)



(17)

%

Total new vehicle

1,828



1,915



(87)



(5)

%

Used vehicle

1,653



1,648



5



%

Finance and insurance, net

1,437



1,397



40



3

%

Front end yield (1)

3,189



3,195



(6)



%

Gross margin








New vehicle:








Luxury

6.7

%


6.7

%


bps



Import

4.3

%


4.6

%


(30)

bps



Domestic

4.6

%


5.6

%


(100)

bps



Total new vehicle

5.2

%


5.6

%


(40)

bps



Used vehicle retail

7.8

%


7.9

%


(10)

bps



Parts and service

62.1

%


62.5

%


(40)

bps



Total gross profit margin

16.2

%


16.1

%


10

bps



SG&A metrics








Rent expense

$

29.9



$

31.3



$

(1.4)



(4)

%

Total SG&A as a percentage of gross profit

69.2

%


68.8

%


40

bps



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

66.4

%


65.9

%


50

bps



Operating metrics








Income from operations as a percentage of revenue

4.6

%


4.6

%


bps



Income from operations as a percentage of gross profit

28.1

%


28.4

%


(30)

bps



Adjusted income from operations as a percentage of revenue

4.5

%


4.6

%


(10)

bps



Adjusted income from operations as a percentage of gross profit

28.0

%


28.4

%


(40)

bps



Revenue mix








New vehicle

55.3

%


55.4

%





Used vehicle retail

25.7

%


26.1

%





Used vehicle wholesale

3.1

%


3.3

%





Parts and service

11.9

%


11.2

%





Finance and insurance

4.0

%


4.0

%





     Total revenue

100.0

%


100.0

%





Gross profit mix








New vehicle

17.7

%


19.1

%





Used vehicle retail

12.3

%


12.9

%





Used vehicle wholesale

(0.3)

%


(0.4)

%





Parts and service

45.6

%


43.6

%





Finance and insurance

24.7

%


24.8

%





     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 Twelve Months
Ended December 31,


Increase
(Decrease)


%
Change


2016


2015



Revenue








New vehicle:








Luxury

$

1,226.5



$

1,253.5



$

(27.0)



(2)

%

Import

1,544.6



1,514.4



30.2



2

%

Domestic

667.8



639.7



28.1



4

%

     Total new vehicle

3,438.9



3,407.6



31.3



1

%

Used Vehicle:








Retail

1,578.0



1,561.3



16.7



1

%

Wholesale

191.9



198.2



(6.3)



(3)

%

     Total used vehicle

1,769.9



1,759.5



10.4



1

%

Parts and service

736.1



683.4



52.7



8

%

Finance and insurance

247.6



243.3



4.3



2

%

Total revenue

$

6,192.5



$

6,093.8



$

98.7



2

%









Gross profit








New vehicle:








Luxury

$

82.4



$

83.7



$

(1.3)



(2)

%

Import

66.4



71.2



(4.8)



(7)

%

Domestic

29.8



36.0



(6.2)



(17)

%

     Total new vehicle

178.6



190.9



(12.3)



(6)

%

Used Vehicle:








Retail

123.6



125.1



(1.5)



(1)

%

Wholesale

(3.2)



(3.1)



(0.1)



(3)

%

     Total used vehicle

120.4



122.0



(1.6)



(1)

%

Parts and service:








Customer pay

255.1



234.6



20.5



9

%

Warranty

70.3



65.4



4.9



7

%

Wholesale parts

19.2



18.9



0.3



2

%

     Parts and service, excluding reconditioning and preparation

344.6



318.9



25.7



8

%

Reconditioning and preparation

114.3



109.4



4.9



4

%

Total parts and service

458.9



428.3



30.6



7

%

Finance and insurance

247.6



243.3



4.3



2

%

Total gross profit

$

1,005.5



$

984.5



$

21.0



2

%









SG&A expense

$

693.4



$

672.9



$

20.5



3

%

SG&A expense as a percentage of gross profit

69.0

%


68.3

%


70

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 Twelve Months Ended
December 31,


Increase
(Decrease)


%
Change


2016


2015



Unit sales








New vehicle:








Luxury

23,424



24,539



(1,115)



(5)

%

Import

55,960



56,224



(264)



%

Domestic

17,804



17,669



135



1

%

     Total new vehicle

97,188



98,432



(1,244)



(1)

%

Used vehicle retail

74,027



74,312



(285)



%

Used to new ratio

76.2

%


75.5

%


70

bps











Average selling price








New vehicle

$

35,384



$

34,619



$

765



2

%

Used vehicle retail

21,317



21,010



307



1

%









Average gross profit per unit








New vehicle:








Luxury

$

3,518



$

3,411



$

107



3

%

Import

1,187



1,266



(79)



(6)

%

Domestic

1,674



2,037



(363)



(18)

%

Total new vehicle

1,838



1,939



(101)



(5)

%

Used vehicle retail

1,670



1,683



(13)



(1)

%

Finance and insurance, net

1,446



1,408



38



3

%

Front end yield (1)

3,211



3,238



(27)



(1)

%









Gross margin








New vehicle:








Luxury

6.7

%


6.7

%


bps



Import

4.3

%


4.7

%


(40)

bps



Domestic

4.5

%


5.6

%


(110)

bps



Total new vehicle

5.2

%


5.6

%


(40)

bps



Used vehicle retail

7.8

%


8.0

%


(20)

bps



Parts and service:








Parts and service, excluding reconditioning and preparation

46.8

%


46.7

%


10

bps



Parts and service, including reconditioning and preparation

62.3

%


62.7

%


(40)

bps



Total gross profit margin

16.2

%


16.2

%


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)










December 31, 2016


December 31, 2015


Increase

(Decrease)


% Change

SELECTED BALANCE SHEET DATA








Cash and cash equivalents

$

3.4



$

2.8



$

0.6



21

%

New vehicle inventory

720.6



739.2



(18.6)



(3)

%

Used vehicle inventory

132.7



134.1



(1.4)



(1)

%

Parts inventory

41.6



43.9



(2.3)



(5)

%

Total current assets

1,332.4



1,331.2



1.2



%

Floor plan notes payable

781.8



712.2



69.6



10

%

Total current liabilities

1,104.3



1,007.8



96.5



10

%









CAPITALIZATION:








Long-term debt (including current portion)

$

926.7



$

954.3



$

(27.6)



(3)

%

Shareholders' equity

279.7



314.5



(34.8)



(11)

%

Total

$

1,206.4



$

1,268.8



$

(62.4)



(5)

%









December 31, 2016


December 31, 2015

DAYS SUPPLY






New vehicle inventory



61


62


Used vehicle inventory



30


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 Year Ended
December 31,


2016


2015

Luxury:




Mercedes-Benz

7

%


7

%

Lexus

7

%


7

%

BMW

6

%


8

%

Acura

4

%


5

%

Infiniti

3

%


3

%

Other luxury

7

%


6

%

Total luxury

34

%


36

%

Imports:




Honda

17

%


16

%

Toyota

12

%


12

%

Nissan

11

%


12

%

Other imports

5

%


6

%

Total imports

45

%


46

%

Domestic:




Ford

13

%


11

%

Dodge

3

%


2

%

Chevrolet

3

%


3

%

Other domestics

2

%


2

%

Total domestic

21

%


18

%

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 income from continuing operations," 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


December 31, 2016


September 30, 2016


(Dollars in millions)

Adjusted leverage ratio:




Long-term debt (including current portion)

$

926.7



$

930.2






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




Income from continuing operations

$

167.2



$

141.3






Add:




Depreciation and amortization

30.7



30.5


Income tax expense

100.6



85.1


Swap and other interest expense

56.2



56.0


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

$

354.7



$

312.9






Non-core items - (income) expense:




Real estate-related charges

$

5.7



$

5.2


Legal settlements

(6.6)




Gain on divestitures

(45.5)



(13.5)


  Total non-core items

(46.4)



(8.3)






Adjusted EBITDA

$

308.3



$

304.6






Adjusted leverage ratio

3.0



3.1






For the Three Months Ended
December 31,


2016


2015


(In millions, except per share data)

Adjusted income from operations:




Income from operations

$

80.1



$

69.7


Real estate-related charges

0.5




Legal settlements

(6.6)




Adjusted income from operations

$

74.0



$

69.7






Adjusted income from continuing operations:




Income from continuing operations

$

67.1



$

41.2






Non-core items - (income) expense:




Real estate-related charges

0.5




Legal settlements

(6.6)




Gain on divestitures

(45.5)



(13.5)


Income tax expense on non-core items above

19.4



5.1


Income tax benefit

(0.9)




Total non-core items

(33.1)



(8.4)


Adjusted income from continuing operations

$

34.0



$

32.8






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




Net income

$

3.08



$

1.64


Discontinued operations, net of tax



0.01


Income from continuing operations

$

3.08



$

1.65






Total non-core items

(1.52)



(0.34)


Adjusted diluted EPS from continuing operations

$

1.56



$

1.31






Weighted average common shares outstanding - diluted

21.8



25.0






For the Twelve Months
Ended December 31,


2016


2015


(In millions, except per share data)

Adjusted income from operations:




Income from operations

$

297.8



$

301.6


Real estate-related charges

5.7




Legal settlements

(6.6)




Adjusted income from operations

$

296.9



$

301.6






Adjusted income from continuing operations:




Income from continuing operations

$

167.2



$

169.4






Non-core items - (income) expense:




Real estate-related charges

5.7




Legal settlements

(6.6)




Gain on divestitures

(45.5)



(34.9)


Income tax expense on non-core items above

17.4



13.3


Income tax benefit

(0.9)



(0.8)


Total non-core items

(29.9)



(22.4)


Adjusted income from continuing operations

$

137.3



$

147.0






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




Net income

$

7.40



$

6.41


Discontinued operations, net of tax



0.01


Income from continuing operations

$

7.40



$

6.42






Total non-core items

(1.32)



(0.85)


Adjusted diluted EPS from continuing operations

$

6.08



$

5.57






Weighted average common shares outstanding - diluted

22.6



26.4


 

 

 

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/asbury-automotive-group-announces-record-2016-fourth-quarter-and-full-year-financial-results-300403045.html

SOURCE Asbury Automotive Group, Inc.

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