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Asbury Automotive Group Announces 2018 Second Quarter Financial Results

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Asbury Automotive Group Announces 2018 Second Quarter Financial Results

Record second quarter EPS of $2.11 per diluted share, up 39% over prior year EPS

Record second quarter adjusted EPS of $2.08 per diluted share (a non-GAAP measure), up 32% over prior year adjusted EPS

PR Newswire

DULUTH, Ga., July 24, 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 second quarter 2018 of $43.2 million ($2.11 per diluted share) and adjusted net income (a non-GAAP measure) of $42.7 million ($2.08 per diluted share). This compares to net income of $31.9 million ($1.52 per diluted share) and adjusted net income of $33.2 million ($1.58 per diluted share) in the prior year quarter. Net income for the second quarter 2018 was adjusted for a $0.7 million pre-tax gain on legal settlements ($0.03 per diluted share); while net income for the second quarter 2017 was adjusted for $0.8 million pre-tax investment income ($0.02 per diluted share) and $2.9 million pre-tax real estate-related charges ($0.08 per diluted share).

On January 1, 2018, the company adopted ASC 606 for revenue recognition which impacted F&I and parts and service revenue and gross profit. The net impact of adopting ASC 606 in the second quarter was to reduce net income by $0.6 million or $0.03 per diluted share.

As a result of tax legislation passed in December 2017, the tax rate in the second quarter of 2018 was 26% compared to 38% in the second quarter of 2017.

"In a healthy SAAR environment, we grew revenue 6% despite continued margin pressure. We also improved our SG&A as a percentage of gross profit by 90 basis points and maintained our industry leading operating margins while further investing in our omni-channel capabilities," said David Hult, Asbury's President and Chief Executive Officer. "We continued with our balanced approach to capital allocation, repurchasing $20 million of our common stock and acquiring a Chevrolet dealership and a Toyota dealership in the Atlanta market."

Second Quarter 2018 Operational Summary (change from the prior year period)

Total company:

  • Total revenue increased 6%; gross profit increased 4%
  • SG&A as a percentage of gross profit decreased 90 basis points to 68.6%
  • Adjusted income from operations as a percentage of revenue was 4.6% up 10 basis points
  • Adjusted EPS from continuing operations increased 32%

Same store:

  • Total revenue increased 4%; gross profit increased 2%
  • New vehicle revenue increased 3%; gross profit decreased 3%
  • Used vehicle retail revenue increased 8%; gross profit increased 2%
  • Finance and insurance revenue and gross profit increased 5%
  • Parts and service revenue was flat; gross profit increased 2%

Strategic Highlights:

  • Completed the acquisition of a Chevrolet dealership and a Toyota dealership in the Atlanta market, which should generate approximately $120 million in annual revenue
  • Repurchased $20 million of common stock

The Company's revenue for the six-month period ended June 30, 2018 period totaled $3.33 billion, an increase of 5% compared to $3.18 billion in the prior year period.

For the six-month period ended June 30, 2018, the Company reported net income of $83.3 million, or $4.02 per diluted share, compared to reported net income of $65.9 million, or $3.12 per diluted share in the prior year period.  For the six-month period ended June 30, 2018 the Company reported adjusted net income of $82.8 million, or $4.00 per diluted share, compared to $66.6 million, or $3.16 per diluted share, for the prior year period.  See attached reconciliation for reported adjustments.

Additional commentary regarding the second quarter results will be provided during the earnings conference call on July 24, 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 (877) 260-1479 (domestic), or (334) 323-0522 (international); passcode - 3163021.  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 - 3163021.

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 83 dealerships, consisting of 97 franchises, representing 29 domestic and foreign brands of vehicles.  Asbury also operates 25 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
June 30,


Increase
(Decrease)


%
Change


2018


2017



REVENUE:








New vehicle

$

928.7



$

882.9



$

45.8



5

%

Used vehicle:








Retail

470.9



430.2



40.7



9

%

Wholesale

46.0



49.0



(3.0)



(6)

%

     Total used vehicle

516.9



479.2



37.7



8

%

Parts and service

204.5



200.8



3.7



2

%

Finance and insurance, net

73.5



68.9



4.6



7

%

TOTAL REVENUE

1,723.6



1,631.8



91.8



6

%

GROSS PROFIT:








New vehicle

40.6



41.0



(0.4)



(1)

%

Used vehicle:








Retail

33.6



32.5



1.1



3

%

Wholesale

0.5



0.2



0.3



150

%

     Total used vehicle

34.1



32.7



1.4



4

%

Parts and service

129.6



124.5



5.1



4

%

Finance and insurance, net

73.5



68.9



4.6



7

%

TOTAL GROSS PROFIT

277.8



267.1



10.7



4

%

OPERATING EXPENSES:








Selling, general and administrative

190.6



185.6



5.0



3

%

Depreciation and amortization

8.5



8.0



0.5



6

%

Other operating (income) expenses, net

(0.9)



1.9



(2.8)



(147)

%

INCOME FROM OPERATIONS

79.6



71.6



8.0



11

%

OTHER EXPENSES:








Floor plan interest expense

8.0



6.1



1.9



31

%

Other interest expense, net

13.2



13.4



(0.2)



(1)

%

Swap interest expense

0.2



0.6



(0.4)



(67)

%

Total other expenses, net

21.4



20.1



1.3



6

%

INCOME BEFORE INCOME TAXES

58.2



51.5



6.7



13

%

Income tax expense

15.0



19.6



(4.6)



(23)

%

NET INCOME

$

43.2



$

31.9



$

11.3



35

%

EARNINGS PER COMMON SHARE:








Basic—








Net income

$

2.13



$

1.53



$

0.60



39

%

Diluted—








Net income

$

2.11



$

1.52



$

0.59



39

%

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:








Basic

20.3



20.8



(0.5)



(2)

%

Restricted stock

0.1



0.1





%

Performance share units

0.1



0.1





%

Diluted

20.5



21.0



(0.5)



(2)

%

 

ASBURY AUTOMOTIVE GROUP, INC.

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

(Unaudited)



For the Three Months Ended June 30,


Increase
(Decrease)


%
Change


2018


2017



Unit sales








New vehicle:








Luxury

5,590



5,504



86



2

%

Import

15,478



14,833



645



4

%

Domestic

5,001



4,794



207



4

%

     Total new vehicle

26,069



25,131



938



4

%

Used vehicle retail

21,685



20,263



1,422



7

%

Used to new ratio

83.2

%


80.6

%


260 bps




Average selling price








New vehicle

$

35,625



$

35,132



$

493



1

%

Used vehicle retail

21,715



21,231



484



2

%

Average gross profit per unit








New vehicle:








Luxury

$

3,470



$

3,307



$

163



5

%

Import

808



944



(136)



(14)

%

Domestic

1,740



1,836



(96)



(5)

%

Total new vehicle

1,557



1,631



(74)



(5)

%

Used vehicle

1,549



1,604



(55)



(3)

%

Finance and insurance, net

1,539



1,518



21



1

%

Front end yield (1)

3,093



3,137



(44)



(1)

%

Gross margin








New vehicle:








Luxury

6.5

%


6.3

%


20 bps




Import

2.9

%


3.4

%


(50) bps




Domestic

4.5

%


4.9

%


(40) bps




Total new vehicle

4.4

%


4.6

%


(20) bps




Used vehicle retail

7.1

%


7.6

%


(50) bps




Parts and service

63.4

%


62.0

%


140 bps




Total gross profit margin

16.1

%


16.4

%


(30) bps




SG&A metrics









Rent expense

$

6.3



$

6.8



$

(0.5)



(7)

%

Total SG&A as a percentage of gross profit

68.6

%


69.5

%


(90) bps




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

66.3

%


66.9

%


(60) bps




Operating metrics









Income from operations as a percentage of revenue

4.6

%


4.4

%


20 bps




Income from operations as a percentage of gross profit

28.7

%


26.8

%


190 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

28.4

%


27.6

%


80 bps




Revenue mix








New vehicle

53.9

%


54.1

%





Used vehicle retail

27.2

%


26.4

%





Used vehicle wholesale

2.7

%


3.0

%





Parts and service

11.9

%


12.3

%





Finance and insurance

4.3

%


4.2

%





     Total revenue

100.0

%


100.0

%





Gross profit mix








New vehicle

14.6

%


15.4

%





Used vehicle retail

12.0

%


12.1

%





Used vehicle wholesale

0.2

%


0.1

%





Parts and service

46.7

%


46.6

%





Finance and insurance

26.5

%


25.8

%





     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 Three Months Ended
June 30,


Increase
(Decrease)


%
Change


2018


2017



Revenue








New vehicle:








Luxury

$

299.9



$

291.1



$

8.8



3

%

Import

417.2



410.9



6.3



2

%

Domestic

189.4



180.9



8.5



5

%

     Total new vehicle

906.5



882.9



23.6



3

%

Used Vehicle:








Retail

460.2



425.8



34.4



8

%

Wholesale

45.3



48.9



(3.6)



(7)

%

     Total used vehicle

505.5



474.7



30.8



6

%

Parts and service

200.6



200.7



(0.1)



%

Finance and insurance

71.9



68.5



3.4



5

%

Total revenue

$

1,684.5



$

1,626.8



$

57.7



4

%









Gross profit








New vehicle:








Luxury

$

19.4



$

18.2



$

1.2



7

%

Import

11.6



14.0



(2.4)



(17)

%

Domestic

8.6



8.8



(0.2)



(2)

%

     Total new vehicle

39.6



41.0



(1.4)



(3)

%

Used Vehicle:








Retail

33.0



32.2



0.8



2

%

Wholesale

0.4



0.3



0.1



33

%

     Total used vehicle

33.4



32.5



0.9



3

%

Parts and service:








Customer pay

72.8



69.3



3.5



5

%

Warranty

18.0



20.8



(2.8)



(13)

%

Wholesale parts

5.4



5.2



0.2



4

%

     Parts and service, excluding reconditioning and preparation

96.2



95.3



0.9



1

%

Reconditioning and preparation

30.8



29.0



1.8



6

%

Total parts and service

127.0



124.3



2.7



2

%

Finance and insurance

71.9



68.5



3.4



5

%

Total gross profit

$

271.9



$

266.3



$

5.6



2

%









SG&A expense

$

186.6



$

184.6



$

2.0



1

%

SG&A expense as a percentage of gross profit

68.6

%


69.3

%


(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 Three Months Ended June 30,


Increase
(Decrease)


%
Change


2018


2017



Unit sales








New vehicle:








Luxury

5,590



5,504



86



2

%

Import

14,813



14,833



(20)



%

Domestic

4,892



4,795



97



2

%

     Total new vehicle

25,295



25,132



163



1

%

Used vehicle retail

21,067



19,998



1,069



5

%

Used to new ratio

83.3

%


79.6

%


370 bps












Average selling price








New vehicle

$

35,837



$

35,131



$

706



2

%

Used vehicle retail

21,845



21,292



553



3

%









Average gross profit per unit








New vehicle:








Luxury

$

3,470



$

3,307



$

163



5

%

Import

783



944



(161)



(17)

%

Domestic

1,758



1,835



(77)



(4)

%

Total new vehicle

1,566



1,631



(65)



(4)

%

Used vehicle retail

1,566



1,610



(44)



(3)

%

Finance and insurance, net

1,551



1,518



33



2

%

Front end yield (1)

3,117



3,140



(23)



(1)

%









Gross margin








New vehicle:








Luxury

6.5

%


6.3

%


20 bps




Import

2.8

%


3.4

%


(60) bps




Domestic

4.5

%


4.9

%


(40) bps




Total new vehicle

4.4

%


4.6

%


(20) bps




Used vehicle retail

7.2

%


7.6

%


(40) bps




Parts and service:









Parts and service, excluding reconditioning and preparation

48.0

%


47.5

%


50 bps




Parts and service, including reconditioning and preparation

63.3

%


61.9

%


140 bps




Total gross profit margin

16.1

%


16.4

%


(30) 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 Six Months Ended
June 30,


Increase
(Decrease)


%
Change


2018


2017



REVENUE:








New vehicle

$

1,785.8



$

1,715.4



$

70.4



4

%

Used vehicle:








Retail

906.7



845.6



61.1



7

%

Wholesale

94.8



95.4



(0.6)



(1)

%

     Total used vehicle

1,001.5



941.0



60.5



6

%

Parts and service

403.8



392.3



11.5



3

%

Finance and insurance, net

141.7



134.8



6.9



5

%

TOTAL REVENUE

3,332.8



3,183.5



149.3



5

%

GROSS PROFIT:








New vehicle

79.2



81.4



(2.2)



(3)

%

Used vehicle:








Retail

65.8



65.5



0.3



%

Wholesale

1.8



1.1



0.7



64

%

     Total used vehicle

67.6



66.6



1.0



2

%

Parts and service

254.7



244.4



10.3



4

%

Finance and insurance, net

141.7



134.8



6.9



5

%

TOTAL GROSS PROFIT

543.2



527.2



16.0



3

%

OPERATING EXPENSES:








Selling, general and administrative

374.8



366.7



8.1



2

%

Depreciation and amortization

16.7



15.9



0.8



5

%

Other operating (income) expenses, net

(1.1)



0.7



(1.8)



NM


INCOME FROM OPERATIONS

152.8



143.9



8.9



6

%

OTHER EXPENSES:








Floor plan interest expense

14.6



11.3



3.3



29

%

Other interest expense, net

26.2



26.8



(0.6)



(2)

%

Swap interest expense

0.4



1.2



(0.8)



(67)

%

Total other expenses, net

41.2



39.3



1.9



5

%

INCOME BEFORE INCOME TAXES

111.6



104.6



7.0



7

%

Income tax expense

28.3



38.7



(10.4)



(27)

%

NET INCOME

$

83.3



$

65.9



$

17.4



26

%

EARNINGS PER COMMON SHARE:








Basic—








Net income

$

4.08



$

3.15



$

0.93



30

%

Diluted—








Net income

$

4.02



$

3.12



$

0.90



29

%

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:








Basic

20.4



20.9



(0.5)



(2)

%

Restricted stock

0.1



0.1





%

Performance share units

0.2



0.1



0.1



100

%

Diluted

20.7



21.1



(0.4)



(2)

%

_____________________________

NM Not Meaningful 

 

ASBURY AUTOMOTIVE GROUP, INC.

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

(Unaudited)



For the Six Months Ended
June 30,


Increase
(Decrease)


%
Change


2018


2017



Unit sales








New vehicle:








Luxury

10,842



10,618



224



2

%

Import

29,499



28,507



992



3

%

Domestic

9,387



9,472



(85)



(1)

%

     Total new vehicle

49,728



48,597



1,131



2

%

Used vehicle retail

42,255



40,330



1,925



5

%

Used to new ratio

85.0

%


83.0

%


200 bps




Average selling price








New vehicle

$

35,911



$

35,298



$

613



2

%

Used vehicle retail

21,458



20,967



491



2

%

Average gross profit per unit








New vehicle:








Luxury

$

3,588



$

3,419



$

169



5

%

Import

803



993



(190)



(19)

%

Domestic

1,768



1,774



(6)



%

Total new vehicle

1,593



1,675



(82)



(5)

%

Used vehicle

1,557



1,624



(67)



(4)

%

Finance and insurance, net

1,541



1,516



25



2

%

Front end yield (1)

3,117



3,168



(51)



(2)

%

Gross margin








New vehicle:








Luxury

6.6

%


6.4

%


20 bps




Import

2.8

%


3.6

%


(80) bps




Domestic

4.5

%


4.7

%


(20) bps




Total new vehicle

4.4

%


4.7

%


(30) bps




Used vehicle retail

7.3

%


7.7

%


(40) bps




Parts and service

63.1

%


62.3

%


80 bps




Total gross profit margin

16.3

%


16.6

%


(30) bps




SG&A metrics








Rent expense

$

12.6



$

13.7



$

(1.1)



(8)

%

Total SG&A as a percentage of gross profit

69.0

%


69.6

%


(60) bps




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

66.7

%


67.0

%


(30) bps




Operating metrics








Income from operations as a percentage of revenue

4.6

%


4.5

%


 10 bps




Income from operations as a percentage of gross profit

28.1

%


27.3

%


80 bps




Adjusted income from operations as a percentage of revenue

4.6

%


4.6

%


0 bps




Adjusted income from operations as a percentage of gross profit

28.0

%


27.5

%


50 bps




Revenue mix








New vehicle

53.6

%


53.9

%





Used vehicle retail

27.2

%


26.6

%





Used vehicle wholesale

2.8

%


3.0

%





Parts and service

12.1

%


12.3

%





Finance and insurance

4.3

%


4.2

%





     Total revenue

100.0

%


100.0

%





Gross profit mix








New vehicle

14.6

%


15.4

%





Used vehicle retail

12.1

%


12.4

%





Used vehicle wholesale

0.3

%


0.2

%





Parts and service

46.9

%


46.4

%





Finance and insurance

26.1

%


25.6

%





     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 Six Months Ended
June 30,


Increase
(Decrease)


%
Change


2018


2017



Revenue








New vehicle:








Luxury

$

586.0



$

564.0



$

22.0



4

%

Import

800.9



790.5



10.4



1

%

Domestic

355.4



358.5



(3.1)



(1)

%

     Total new vehicle

1,742.3



1,713.0



29.3



2

%

Used Vehicle:








Retail

885.4



836.4



49.0



6

%

Wholesale

92.9



94.6



(1.7)



(2)

%

     Total used vehicle

978.3



931.0



47.3



5

%

Parts and service

396.8



391.8



5.0



1

%

Finance and insurance, net

138.9



133.9



5.0



4

%

Total revenue

$

3,256.3



$

3,169.7



$

86.6



3

%









Gross profit








New vehicle:








Luxury

$

38.9



$

36.3



$

2.6



7

%

Import

22.4



28.2



(5.8)



(21)

%

Domestic

16.1



16.8



(0.7)



(4)

%

     Total new vehicle

77.4



81.3



(3.9)



(5)

%

Used Vehicle:








Retail

64.1



64.9



(0.8)



(1)

%

Wholesale

1.8



1.3



0.5



38

%

     Total used vehicle

65.9



66.2



(0.3)



%

Parts and service:








Customer pay

142.4



135.4



7.0



5

%

Warranty

36.7



41.0



(4.3)



(10)

%

Wholesale parts

11.1



10.5



0.6



6

%

     Parts and service, excluding reconditioning and preparation

190.2



186.9



3.3



2

%

Reconditioning and preparation

59.7



56.9



2.8



5

%

Total parts and service

249.9



243.8



6.1



3

%

Finance and insurance

138.9



133.9



5.0



4

%

Total gross profit

$

532.1



$

525.2



$

6.9



1

%

_____________________________








SG&A expense

$

367.0



$

364.1



$

2.9



1

%

SG&A expense as a percentage of gross profit

69.0

%


69.3

%


(30) 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 Six Months Ended June 30,


Increase
(Decrease)


%
Change


2018


2017



Unit sales








New vehicle:








Luxury

10,842



10,618



224



2

%

Import

28,324



28,470



(146)



(1)

%

Domestic

9,094



9,434



(340)



(4)

%

     Total new vehicle

48,260



48,522



(262)



(1)

%

Used vehicle retail

41,067



39,768



1,299



3

%

Used to new ratio


85.1

%



82.0

%


310 bps












Average selling price








New vehicle

$

36,102



$

35,304



$

798



2

%

Used vehicle retail

21,560



21,032



528



3

%









Average gross profit per unit








New vehicle:








Luxury

$

3,588



$

3,419



$

169



5

%

Import

791



991



(200)



(20)

%

Domestic

1,770



1,781



(11)



(1)

%

Total new vehicle

1,604



1,676



(72)



(4)

%

Used vehicle retail

1,561



1,632



(71)



(4)

%

Finance and insurance, net

1,555



1,517



38



3

%

Front end yield (1)

3,139



3,172



(33)



(1)

%









Gross margin








New vehicle:








Luxury

6.6

%


6.4

%


20 bps




Import

2.8

%


3.6

%


(80) bps




Domestic

4.5

%


4.7

%


(20) bps




Total new vehicle

4.4

%


4.7

%


(30) bps




Used vehicle retail

7.2

%


7.8

%


(60) bps




Parts and service:









Parts and service, excluding reconditioning and preparation

47.9

%


47.7

%


20 bps




Parts and service, including reconditioning and preparation

63.0

%


62.2

%


80 bps




Total gross profit margin

16.3

%


16.6

%


(30) 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)



June 30,
2018


December 31,
2017


Increase

(Decrease)


% Change

SELECTED BALANCE SHEET DATA








Cash and cash equivalents

$

2.5



$

4.7



$

(2.2)



(47)

%

New vehicle inventory

776.1



646.5



129.6



20

%

Used vehicle inventory

151.3



135.9



15.4



11

%

Parts inventory

40.0



43.6



(3.6)



(8)

%

Total current assets

1,386.0



1,302.1



83.9



6

%

Floor plan notes payable

872.6



732.1



140.5



19

%

Total current liabilities

1,169.0



1,058.2



110.8



10

%









CAPITALIZATION:








Long-term debt (including current portion)

$

868.7



$

875.5



$

(6.8)



(1)

%

Shareholders' equity

450.5



394.2



56.3



14

%

Total

$

1,319.2



$

1,269.7



$

49.5



4

%






















June 30, 2018


December 31, 2017

DAYS SUPPLY












     New vehicle inventory







72



53


     Used vehicle inventory







31



31



_____________________________

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 Six Months Ended June 30,


2018


2017

Luxury:




Mercedes-Benz

7

%


7

%

Lexus

6

%


6

%

BMW

5

%


5

%

Acura

4

%


4

%

Infiniti

3

%


3

%

Other luxury

8

%


8

%

Total luxury

33

%


33

%

Imports:




Honda

20

%


18

%

Nissan

11

%


12

%

Toyota

11

%


11

%

Other imports

5

%


5

%

Total imports

47

%


46

%

Domestic:




Ford

10

%


11

%

Chevrolet

5

%


4

%

Dodge

2

%


3

%

Other domestics

3

%


3

%

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


June 30, 2018


March 31, 2018


(Dollars in millions)

Adjusted leverage ratio:




Long-term debt (including current portion)

$

868.7



$

872.1






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




Net Income

$

156.5



$

145.2






Add:




Depreciation and amortization

32.9



32.5


Income tax expense

59.5



64.1


Swap and other interest expense

54.7



55.3


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

$

303.6



$

297.1






Non-core items - expense (income):




Franchise rights impairment

$

5.1



$

5.1


Real estate-related charges



2.9


Investment income



(0.8)


Legal settlements

(0.7)




  Total non-core items

4.4



7.2






Adjusted EBITDA

$

308.0



$

304.3






Adjusted leverage ratio

2.8



2.9


 


For the Three Months Ended
June 30,


2018


2017


(In millions, except per share data)

Adjusted income from operations:




Income from operations

$

79.6



$

71.6


Real estate-related charges



2.9


Investment income



(0.8)


Legal settlements

(0.7)




Adjusted income from operations

$

78.9



$

73.7










Adjusted net income:




Net income

$

43.2



$

31.9






Non-core items - (income) expense:




Legal settlements

(0.7)




Real estate-related charges



2.9


Investment income



(0.8)


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

0.2



(0.8)


Total non-core items

(0.5)



1.3


Adjusted net income

$

42.7



$

33.2






Adjusted diluted earnings per share (EPS):




Diluted EPS

$

2.11



$

1.52






Total non-core items

(0.03)



0.06


Adjusted diluted EPS

$

2.08



$

1.58






Weighted average common shares outstanding - diluted

20.5



21.0


 


For the Six Months Ended
June 30,


2018


2017


(In millions, except per share data)

Adjusted income from operations:




Income from operations

$

152.8



$

143.9


Real estate-related charges



2.9


Investment income



(0.8)


Legal settlements

(0.7)



(0.9)


Adjusted income from operations

$

152.1



$

145.1






Adjusted net income:




Net income

$

83.3



$

65.9






Non-core items - (income) expense:




Real estate-related charges



2.9


Investment income



(0.8)


Legal settlements

(0.7)



(0.9)


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

0.2



(0.5)


Total non-core items

(0.5)



0.7


Adjusted net income

$

82.8



$

66.6






Adjusted diluted earnings per share (EPS):




Diluted EPS

$

4.02



$

3.12






Total non-core items

(0.02)



0.04


Adjusted diluted EPS

$

4.00



$

3.16






Weighted average common shares outstanding - diluted

20.7



21.1


 

Cision View original content:http://www.prnewswire.com/news-releases/asbury-automotive-group-announces-2018-second-quarter-financial-results-300685211.html

SOURCE Asbury Automotive Group, Inc.

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