Market Overview

Asbury Automotive Group Announces 2017 Fourth Quarter And Full-Year Financial Results

Share:

Fourth quarter EPS of $2.03 per diluted share and full year EPS of $6.62 per diluted share

Record fourth quarter adjusted EPS of $1.81 per diluted share (a non-GAAP measure), up 16% over adjusted prior year EPS

Record full year 2017 adjusted EPS of $6.43 per diluted share (a non-GAAP measure), up 6% over adjusted prior year EPS

DULUTH, Ga., Feb. 6, 2018 /PRNewswire/ -- Asbury Automotive Group, Inc. (NYSE: ABG), one of the largest automotive retail and service companies in the U.S., reported net income for the fourth quarter 2017 of $42.5 million ($2.03 per diluted share) compared to $67.1 million  ($3.08 per diluted share) in the prior year quarter. It also reported adjusted net income (a non-GAAP measure) for the fourth quarter 2017 of $37.8 million ($1.81 per diluted share) compared to $34.0 million ($1.56 per diluted share) in the prior year quarter, a 16% increase in adjusted earnings per share.

Net income for the fourth quarter 2017 was adjusted for a $5.1 million pre-tax loss for franchise rights impairments ($0.15 per diluted share) and a $7.9 million benefit ($0.37 per diluted share) related to adjustments to deferred tax balances as a result of recent changes to the tax law. Net income for the fourth quarter 2016 was adjusted for a $45.5 million pre-tax gain on divestitures ($1.30 per diluted share); $6.6 million pre-tax legal settlements benefit ($0.19 per diluted share); $0.5 million pre-tax real estate related impairment charges ($0.01 per diluted share); and $0.9 million benefit from discrete tax items ($0.04 per diluted share).

As a result of recent changes to the tax law, we expect our effective tax rate to be between 25% and 26% in 2018, which is down from our prior guidance of approximately 38%.

"We closed out 2017 with a strong performance delivering 16% adjusted EPS growth in the quarter," said David Hult, Asbury's President and Chief Executive Officer. "During 2017, in a declining SAAR environment, we expanded our dealership footprint, returned approximately $35 million of capital to our shareholders, maintained our industry leading operating margins, and grew adjusted EPS 6%.  This performance is a direct result of our team's hard work, dedication, and commitment to continuous improvement. Going forward, we will continue to execute our two-part strategy: drive operational excellence and deploy capital to its highest returns."

Fourth Quarter 2017 Operational Summary

Same store (a non-GAAP measure):

  • Total revenue flat; gross profit increased 2%
  • New vehicle revenue increased 2%; gross profit decreased 3%
  • Used vehicle retail revenue decreased 6%; gross profit decreased 10%
  • Finance and insurance revenue and gross profit increased 6%
  • Parts and service revenue increased 3%; gross profit increased 2%

Total store:

  • SG&A as a percentage of gross profit decreased 200 basis points to 67.3%
  • Adjusted income from operations (a non-GAAP measure) as a percentage of revenue was 4.7%
  • Adjusted diluted EPS (a non-GAAP measure) increased 16%

     Acquisition Update:

  • In January 2018, we acquired a Honda franchise in Indianapolis, Indiana

For the full year 2017, the Company reported net income of $139.1 million ($6.62 per diluted share) compared to $167.2 million ($7.40 per diluted share) in the prior year period. Adjusted net income (a non-GAAP measure) for 2017 was $135.1 million ($6.43 per diluted share) compared to $137.3 million ($6.08 per diluted share) in the prior year period, a 6% increase in adjusted EPS.

Additional commentary regarding the fourth quarter and full-year results will be provided during the earnings conference call on February 6, 2018 at 10:00 a.m.  The conference call will be simulcast live on the internet and can be accessed at 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 (800) 239-9838 (domestic), or (323) 794-2551 (international); passcode - 2155173.  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 - 2155173.

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 81 dealerships, consisting of 95 franchises, representing 29 domestic and foreign brands of vehicles.  Asbury also operates 24 collision repair centers.  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


2017


2016

REVENUE:








New vehicle

$

964.1


$

935.6


$

28.5


3%

Used vehicle:








Retail

389.6


420.3


(30.7)


(7)%

Wholesale

47.9


48.6


(0.7)


(1)%

     Total used vehicle

437.5


468.9


(31.4)


(7)%

Parts and service

196.6


193.6


3.0


2%

Finance and insurance, net

72.7


68.4


4.3


6%

TOTAL REVENUE

1,670.9


1,666.5


4.4


—%

GROSS PROFIT:








New vehicle

46.6


47.4


(0.8)


(2)%

Used vehicle:








Retail

26.7


29.6


(2.9)


(10)%

Wholesale

(0.2)


(2.1)


1.9


90%

     Total used vehicle

26.5


27.5


(1.0)


(4)%

Parts and service

122.6


121.3


1.3


1%

Finance and insurance, net

72.7


68.4


4.3


6%

TOTAL GROSS PROFIT

268.4


264.6


3.8


1%

OPERATING EXPENSES:








Selling, general and administrative

180.5


183.3


(2.8)


(2)%

Depreciation and amortization

8.1


7.7


0.4


5%

Franchise rights impairment

5.1



5.1


—%

Other operating expense (income), net

0.6


(6.5)


7.1


109%

INCOME FROM OPERATIONS

74.1


80.1


(6.0)


(7)%

OTHER EXPENSES (INCOME):








Floor plan interest expense

5.5


4.9


0.6


12%

Other interest expense, net

13.8


13.1


0.7


5%

Swap interest expense

0.4


0.7


(0.3)


(43)%

Gain on divestitures


(45.5)


45.5


100%

Total other expenses (income), net

19.7


(26.8)


46.5


174%

INCOME BEFORE INCOME TAXES

54.4


106.9


(52.5)


(49)%

Income tax expense

11.9


39.8


(27.9)


(70)%

NET INCOME

$

42.5


$

67.1


$

(24.6)


(37)%

EARNINGS PER COMMON SHARE:









Basic—








Net income

$

2.06


$

3.11


$

(1.05)


(34)%

Diluted—








Net income

$

2.03


$

3.08


$

(1.05)


(34)%

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:








Basic

20.6


21.6


(1.0)


(5)%

Restricted stock

0.1


0.1



—%

Performance share units

0.2


0.1


0.1


100%

Diluted

20.9


21.8


(0.9)


(4)%

 

 

ASBURY AUTOMOTIVE GROUP, INC.

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

(Unaudited)



For the Three Months Ended
December 31,


Increase
(Decrease)


%
Change


2017


2016



Unit sales








New vehicle:








Luxury

6,408


6,406


2



—%

Import

15,181


14,652


529



4%

Domestic

4,602


4,693


(91)



(2)%

     Total new vehicle

26,191


25,751


440



2%

Used vehicle retail

17,822


19,881


(2,059)



(10)%

Used to new ratio

68.0%


77.2%


(920) bps




Average selling price









New vehicle

$

36,810


$

36,333


$

477



1%

Used vehicle retail

21,861


21,141


720



3%

Average gross profit per unit










New vehicle:









Luxury

$

3,777


$

3,590


$

187



5%

Import

922


1,099


(177)



(16)%

Domestic

1,825


1,769


56



3%

Total new vehicle

1,779


1,841


(62)



(3)%

Used vehicle

1,498


1,489


9



1%

Finance and insurance, net

1,652


1,499


153



10%

Front end yield (1)

3,317


3,186


131



4%

Gross margin









New vehicle:










Luxury

7.0%


6.7%


30 bps




Import

3.2%


3.9%


(70) bps




Domestic

4.6%


4.6%


0 bps




Total new vehicle

4.8%


5.1%


(30) bps




Used vehicle retail

6.9%


7.0%


(10) bps




Parts and service

62.4%


62.7%


(30) bps




Total gross profit margin

16.1%


15.9%


20 bps




SG&A metrics









Rent expense

$

6.5


$

7.0%


$

(0.5)



(7)%

Total SG&A as a percentage of gross profit

67.3%


69.3%


(200) bps



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

64.8%


66.6%


(180) bps



Operating metrics








Income from operations as a percentage of revenue

4.4%


4.8%


(40) bps



Income from operations as a percentage of gross profit

27.6%


30.3%


(270) bps



Adjusted income from operations as a percentage of revenue

4.7%


4.4%


30 bps



Adjusted income from operations as a percentage of gross profit

29.5%


28.0%


150 bps



Revenue mix








New vehicle

57.7%


56.1%





Used vehicle retail

23.2%


25.3%





Used vehicle wholesale

2.9%


2.9%





Parts and service

11.8%


11.6%





Finance and insurance

4.4%


4.1%





     Total revenue

100.0%


100.0%





Gross profit mix








New vehicle

17.4%


17.9%





Used vehicle retail

9.9%


11.2%





Used vehicle wholesale

(0.1)%


(0.8)%





Parts and service

45.7%


45.8%





Finance and insurance

27.1%


25.9%





     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)


%
C
hange


2017


2016



Revenue








New vehicle:








Luxury

$

347.9


$

336.6


$

11.3


3%

Import

423.5


403.1


20.4


5%

Domestic

165.0


174.3


(9.3)


(5)%

     Total new vehicle

936.4


914.0


22.4


2%

Used Vehicle:








Retail

376.4


400.9


(24.5)


(6)%

Wholesale

45.7


47.1


(1.4)


(3)%

     Total used vehicle

422.1


448.0


(25.9)


(6)%

Parts and service

193.1


187.7


5.4


3%

Finance and insurance

70.7


66.6


4.1


6%

Total revenue

$

1,622.3


$

1,616.3


$

6.0


—%









Gross profit








New vehicle:








Luxury

$

24.2


$

22.5


$

1.7


8%

Import

13.8


15.8


(2.0)


(13)%

Domestic

7.1


8.0


(0.9)


(11)%

     Total new vehicle

45.1


46.3


(1.2)


(3)%

Used Vehicle:








Retail

25.4


28.3


(2.9)


(10)%

Wholesale

(0.1)


(1.5)


1.4


93%

     Total used vehicle

25.3


26.8


(1.5)


(6)%

Parts and service:








Customer pay

67.3


64.8


2.5


4%

Warranty

19.7


19.0


0.7


4%

Wholesale parts

5.4


4.9


0.5


10%

     Parts and service, excluding reconditioning and preparation

92.4


88.7


3.7


4%

Reconditioning and preparation

27.9


29.1


(1.2)


(4)%

Total parts and service

120.3


117.8


2.5


2%

Finance and insurance

70.7


66.6


4.1


6%

Total gross profit

$

261.4


$

257.5


$

3.9


2%









SG&A expense

$

175.9


$

175.7


$

0.2


—%

SG&A expense as a percentage of gross profit

67.3%


68.2%


(90) 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
December 31,


Increase
(Decrease)


%
Change


2017


2016



Unit sales








New vehicle:








Luxury

6,408


6,322


86


1%

Import

14,922


14,381


541


4%

Domestic

4,054


4,460


(406)


(9)%

     Total new vehicle

25,384


25,163


221


1%

Used vehicle retail

17,149


18,816


(1,667)


(9)%

Used to new ratio

67.6%


74.8%


(720) bps











Average selling price








New vehicle

$

36,889


$

36,323


$

566


2%

Used vehicle retail

21,949


21,306


643


3%









Average gross profit per unit








New vehicle:








Luxury

$

3,777


$

3,559


$

218


6%

Import

925


1,099


(174)


(16)%

Domestic

1,751


1,794


(43)


(2)%

Total new vehicle

1,777


1,840


(63)


(3)%

Used vehicle retail

1,481


1,504


(23)


(2)%

Finance and insurance, net

1,662


1,514


148


10%

Front end yield (1)

3,320


3,211


109


3%









Gross margin








New vehicle:








Luxury

7.0%


6.7%


30 bps



Import

3.3%


3.9%


(60) bps



Domestic

4.3%


4.6%


(30) bps



Total new vehicle

4.8%


5.1%


(30) bps



Used vehicle retail

6.7%


7.1%


(40) bps



Parts and service:








Parts and service, excluding reconditioning and preparation

47.9%


47.3%


60 bps



Parts and service, including reconditioning and preparation

62.3%


62.8%


(50) bps



Total gross profit margin

16.1%


15.9%


20 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


2017


2016



REVENUE:








New vehicle

$

3,561.1


$

3,611.9


$

(50.8)


(1)%

Used vehicle:








Retail

1,635.3


1,675.0


(39.7)


(2)%

Wholesale

198.8


201.4


(2.6)


(1)%

     Total used vehicle

1,834.1


1,876.4


(42.3)


(2)%

Parts and service

786.1


778.5


7.6


1%

Finance and insurance, net

275.2


261.0


14.2


5%

TOTAL REVENUE

6,456.5


6,527.8


(71.3)


(1)%

GROSS PROFIT:








New vehicle

169.0


187.1


(18.1)


(10)%

Used vehicle:








Retail

121.1


131.0


(9.9)


(8)%

Wholesale

0.8


(3.7)


4.5


122%

     Total used vehicle

121.9


127.3


(5.4)


(4)%

Parts and service

489.8


483.3


6.5


1%

Finance and insurance, net

275.2


261.0


14.2


5%

TOTAL GROSS PROFIT

1,055.9


1,058.7


(2.8)


—%

OPERATING EXPENSES:








Selling, general and administrative

729.7


732.5


(2.8)


—%

Depreciation and amortization

32.1


30.7


1.4


5%

Franchise rights impairment

5.1



5.1


—%

Other operating expense (income), net

1.3


(2.3)


3.6


157%

INCOME FROM OPERATIONS

287.7


297.8


(10.1)


(3)%

OTHER EXPENSES (INCOME):









Floor plan interest expense

22.7


19.3


3.4


18%

Other interest expense, net

53.9


53.1


0.8


2%

Swap interest expense

2.0


3.1


(1.1)


(35)%

Gain on divestitures


(45.5)


45.5


100%

Total other expenses (income), net

78.6


30.0


48.6


162%

INCOME BEFORE INCOME TAXES

209.1


267.8


(58.7)


(22)%

Income tax expense

70.0


100.6


(30.6)


(30)%

NET INCOME

$

139.1


$

167.2


$

(28.1)


(17)%

EARNINGS PER COMMON SHARE:








Basic—








Net income

$

6.69


$

7.43


$

(0.74)


(10)%

Diluted—








Net income

$

6.62


$

7.40


$

(0.78)


(11)%

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:









Basic

20.8


22.5


(1.7)


(8)%

Restricted stock

0.1



0.1


—%

Performance share units

0.1


0.1



—%

Diluted

21.0


22.6


(1.6)


(7)%

 

 

ASBURY AUTOMOTIVE GROUP, INC.

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

(Unaudited)



For the Twelve Months
Ended December 31,


Increase
(Decrease)


%
Change


2017


2016



Unit sales








New vehicle:








Luxury

22,525


23,875


(1,350)


(6)%

Import

58,685


58,466


219


—%

Domestic

18,765


20,019


(1,254)


(6)%

     Total new vehicle

99,975


102,360


(2,385)


(2)%

Used vehicle retail

76,929


79,259


(2,330)


(3)%

Used to new ratio

76.9%


77.4%


(50) bps



Average selling price








New vehicle

$

35,620


$

35,286


$

334


1%

Used vehicle retail

21,257


21,133


124


1%

Average gross profit per unit








New vehicle:








Luxury

$

3,503


$

3,535


$

(32)


(1)%

Import

968


1,178


(210)


(18)%

Domestic

1,775


1,688


87


5%

Total new vehicle

1,690


1,828


(138)


(8)%

Used vehicle

1,574


1,653


(79)


(5)%

Finance and insurance, net

1,556


1,437


119


8%

Front end yield (1)

3,196


3,189


7


—%

Gross margin








New vehicle:








Luxury

6.6%


6.7%


(10) bps



Import

3.5%


4.3%


(80) bps



Domestic

4.6%


4.6%


0 bps



Total new vehicle

4.7%


5.2%


(50) bps



Used vehicle retail

7.4%


7.8%


(40) bps



Parts and service

62.3%


62.1%


20 bps



Total gross profit margin

16.4%


16.2%


20 bps



SG&A metrics








Rent expense

$

26.7


$

29.9


$

(3.2)


(11)%

Total SG&A as a percentage of gross profit

69.1%


69.2%


(10) bps



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

66.6%


66.4%


20 bps



Operating metrics








Income from operations as a percentage of revenue

4.5%


4.6%


(10) bps



Income from operations as a percentage of gross profit

27.2%


28.1%


(90) bps



Adjusted income from operations as a percentage of revenue

4.6%


4.5%


10 bps



Adjusted income from operations as a percentage of gross profit

27.8%


28.0%


(20) bps



Revenue mix








New vehicle

55.2%


55.3%





Used vehicle retail

25.2%


25.7%





Used vehicle wholesale

3.1%


3.1%





Parts and service

12.2%


11.9%





Finance and insurance

4.3%


4.0%





     Total revenue

100.0%


100.0%






Gross profit mix








New vehicle

16.0%


17.7%





Used vehicle retail

11.4%


12.2%





Used vehicle wholesale

0.1%


(0.3)%





Parts and service

46.4%


45.7%





Finance and insurance

26.1%


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 Twelve Months
Ended December 31,


Increase
(
Decrease)


%
Change


2017


2016



Revenue








New vehicle:








Luxury

$

1,200.2


$

1,226.5


$

(26.3)


(2)%

Import

1,610.3


1,557.8


52.5


3%

Domestic

652.2


698.4


(46.2)


(7)%

     Total new vehicle

3,462.7


3,482.7


(20.0)


(1)%

Used Vehicle:








Retail

1,577.3


1,571.4


5.9


—%

Wholesale

190.5


192.3


(1.8)


(1)%

     Total used vehicle

1,767.8


1,763.7


4.1


—%

Parts and service

772.7


743.8


28.9


4%

Finance and insurance

266.9


249.1


17.8


7%

Total revenue

$

6,270.1


$

6,239.3


$

30.8


—%









Gross profit








New vehicle:








Luxury

$

79.0


$

82.4


$

(3.4)


(4)%

Import

56.3


67.0


(10.7)


(16)%

Domestic

28.7


31.9


(3.2)


(10)%

     Total new vehicle

164.0


181.3


(17.3)


(10)%

Used Vehicle:








Retail

115.4


123.0


(7.6)


(6)%

Wholesale

1.1


(2.9)


4.0


NM

     Total used vehicle

116.5


120.1


(3.6)


(3)%

Parts and service:








Customer pay

267.2


257.3


9.9


4%

Warranty

80.5


71.4


9.1


13%

Wholesale parts

21.0


19.4


1.6


8%

     Parts and service, excluding reconditioning and preparation

368.7


348.1


20.6


6%

Reconditioning and preparation

112.0


114.7


(2.7)


(2)%

Total parts and service

480.7


462.8


17.9


4%

Finance and insurance

266.9


249.1


17.8


7%

Total gross profit

$

1,028.1


$

1,013.3


$

14.8


1%









SG&A expense

$

709.1


$

696.7


$

12.4


2%

SG&A expense as a percentage of gross profit

69.0%


68.8%


20 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.


NMNot Meaningful

 

 

ASBURY AUTOMOTIVE GROUP, INC.

SAME STORE OPERATING HIGHLIGHTS (Continued)

(Unaudited)



For the Twelve Months
Ended December 31,


Increase
(Decrease)


%
Change


2017


2016



Unit sales








New vehicle:








Luxury

22,525


23,424


(899)


(4)%

Import

57,813


56,430


1,383


2%

Domestic

16,731


18,716


(1,985)


(11)%

     Total new vehicle

97,069


98,570


(1,501)


(2)%

Used vehicle retail

73,772


73,490


282


—%

Used to new ratio

76.0%


74.6%


140 bps











Average selling price








New vehicle

$

35,673


$

35,332


$

341


1%

Used vehicle retail

21,381


21,383


(2)


—%









Average gross profit per unit








New vehicle:








Luxury

$

3,507


$

3,518


$

(11)


—%

Import

974


1,187


(213)


(18)%

Domestic

1,715


1,704


11


1%

Total new vehicle

1,690


1,839


(149)


(8)%

Used vehicle retail

1,564


1,674


(110)


(7)%

Finance and insurance, net

1,562


1,448


114


8%

Front end yield (1)

3,198


3,216


(18)


(1)%









Gross margin








New vehicle:








Luxury

6.6%


6.7%


(10) bps



Import

3.5%


4.3%


(80) bps



Domestic

4.4%


4.6%


(20) bps



Total new vehicle

4.7%


5.2%


(50) bps



Used vehicle retail

7.3%


7.8%


(50) bps



Parts and service:








Parts and service, excluding reconditioning and preparation

47.7%


46.8%


90 bps



Parts and service, including reconditioning and preparation

62.2%


62.2%


0 bps



Total gross profit margin

16.4%


16.2%


20 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,
2017


December 31,
2016


Increase
(Decrease)


% Change

SELECTED BALANCE SHEET DATA








Cash and cash equivalents

$

4.7


$

3.4


$

1.3


38%

New vehicle inventory

646.5


720.6


(74.1)


(10)%

Used vehicle inventory

135.9


132.7


3.2


2%

Parts inventory

43.6


41.6


2.0


5%

Total current assets

1,302.1


1,332.4


(30.3)


(2)%

Floor plan notes payable

732.1


781.8


(49.7)


(6)%

Total current liabilities

1,058.2


1,104.9


(46.7)


(4)%









CAPITALIZATION:








Long-term debt (including current portion)

$

875.5


$

926.7


$

(51.2)


(6)%

Shareholders' equity

394.2


279.7


114.5


41%

Total

$

1,269.7


$

1,206.4


$

63.3


5%

 

 


December 31, 2017


December 31, 2016

DAYS SUPPLY




New vehicle inventory

53


61

Used vehicle inventory

31


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 Twelve Months
Ended December 31,


2017


2016

Luxury:




Mercedes-Benz

7%


7%

Lexus

7%


7%

BMW

6%


6%

Acura

4%


4%

Infiniti

3%


3%

Other luxury

7%


7%

Total luxury

34%


34%

Imports:




Honda

18%


17%

Nissan

12%


11%

Toyota

11%


12%

Other imports

5%


5%

Total imports

46%


45%

Domestic:




Ford

11%


13%

Chevrolet

4%


3%

Dodge

3%


3%

Other domestics

2%


2%

Total domestic

20%


21%

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," " Adjusted operating margins," and "Adjusted diluted earnings per share ("EPS")." 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, 2017


September 30, 2017


(Dollars in millions)

Adjusted leverage ratio:




Long-term debt (including current portion)

$

875.5


$

915.7





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




Net Income

$

139.1


$

163.7





Add:




Depreciation and amortization

32.1


31.7

Income tax expense

70.0


97.8

Swap and other interest expense

55.9


55.8

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

$

297.1


$

349.0





Non-core items - (income) expense:




Franchise rights impairment

$

5.1


$

Real estate-related charges

2.9


3.4

Investment income

(0.8)


(0.8)

Legal settlements

(0.9)


(7.5)

Gain on divestitures


(45.5)

  Total non-core items

6.3


(50.4)





Adjusted EBITDA

$

303.4


$

298.6





Adjusted leverage ratio

2.9


3.1

 

 


For the Three Months Ended
December 31,


2017


2016


(In millions, except per share data)

Adjusted income from operations:




Income from operations

$

74.1


$

80.1

Franchise  Right Impairment

5.1


Real estate-related charges


0.5

Legal settlements


(6.6)

Adjusted income from operations

$

79.2


$

74.0





Adjusted net income:




Net income

$

42.5


$

67.1





Non-core items - (income) expense:




Franchise rights impairment

5.1


Legal settlements


(6.6)

Real estate-related charges


0.5

Gain on divestitures


(45.5)

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

(1.9)


19.4

Discrete Tax Items

(7.9)


(0.9)

Total non-core items

(4.7)


(33.1)

Adjusted net income

$

37.8


$

34.0





Adjusted diluted earnings per share (EPS):




Diluted EPS

$

2.03


$

3.08





Total non-core items

(0.22)


(1.52)

Adjusted diluted EPS

$

1.81


$

1.56





Weighted average common shares outstanding - diluted

20.9


21.8

 

 


For the Twelve Months Ended
December 31,


2017


2016


(In millions, except per share data)

Adjusted income from operations:




Income from operations

$

287.7


$

297.8

Franchise  Right Impairment

5.1


Real estate-related charges

2.9


5.7

Investment income

(0.8)


Legal settlements

(0.9)


(6.6)

Adjusted income from operations

$

294.0


$

296.9





Adjusted net income:




Net income

$

139.1


$

167.2





Non-core items - (income) expense:




Franchise rights impairment

5.1


Real estate-related charges

2.9


5.7

Investment income

(0.8)


Legal settlements

(0.9)


(6.6)

Gain on Divestitures


(45.5)

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

(2.4)


17.4

Discrete Tax Items

(7.9)


(0.9)

Total non-core items

(4.0)


(29.9)

Adjusted net income

$

135.1


$

137.3





Adjusted diluted earnings per share (EPS):




Diluted EPS

$

6.62


$

7.40





Total non-core items

(0.19)


(1.32)

Adjusted diluted EPS

$

6.43


$

6.08





Weighted average common shares outstanding - diluted

21.0


22.6

 

 

Cision View original content:http://www.prnewswire.com/news-releases/asbury-automotive-group-announces-2017-fourth-quarter-and-full-year-financial-results-300593840.html

SOURCE Asbury Automotive Group, Inc.

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