Asbury Automotive Group Reports Fourth Quarter and Full Year 2008 Financial Results
DULUTH, Ga., March 16, 2009: Asbury Automotive Group, Inc. , one of the largest automotive retail and service companies in the U.S., today reported financial results for the fourth quarter and year ended December 31, 2008.
The Company's loss from continuing operations for the fourth quarter of $353.5 million, or $11.15 per diluted share, includes $351.0 million, or $11.07 per diluted share, in after-tax non-core items detailed in the attached tables. The most significant of these items is an after-tax charge of $373.1 million primarily associated with the impairment of the Company's goodwill and manufacturer franchise rights. Income from continuing operations for the fourth quarter of 2007 was $11.0 million, or $0.34 per diluted share. The Company's net loss for the fourth quarter was $365.4 million, or $11.53 per diluted share; net income for the fourth quarter of 2007 was $11.0 million, or $0.34 per diluted share, including the non-core items detailed in the attached tables.
Commenting on the fourth quarter, Asbury's President and CEO Charles R. Oglesby said, "The fourth quarter presented Asbury with the most challenging retail environment in our history, as U.S. vehicle sales declined 35% nationwide. We faced this challenge head on, moving quickly to maintain our liquidity and enhance productivity."
Commenting on the accomplishments during the quarter, Mr. Oglesby continued, "During the quarter we repurchased $60 million of debt, reducing our outstanding debt balances by 10%, while maintaining consistent cash balances. We relocated our headquarters from New York to Duluth, Georgia, and reduced our corporate staffing levels by 25%. We reduced our national workforce by 10% in the fourth quarter, and by 14% since June. In total, we reduced our same store operating expenses by $27 million, or 17%, during the quarter. And, in the most recent step of our ongoing restructuring efforts, we are eliminating our regional management structure. In this regard, I am pleased to announce that Michael S. Kearney, former President and CEO of our East Region, is assuming the title of Senior Vice President and Chief Operating Officer, with responsibility for the oversight of our dealership operations."
The Company announced that it intends to file its 2008 Annual Report on Form 10-K with the U.S. Securities and Exchange Commission later today. In that document, the Company's independent public accounting firm, Deloitte & Touche LLP, included an explanatory paragraph in its audit report that indicated there is uncertainty that the Company will remain in compliance with certain covenants in its debt agreements, and that they believe this uncertainty raises substantial doubt about the Company's ability to continue as a going concern. The inclusion of this explanatory paragraph in the audit report constitutes a default under certain of the Company's borrowing facilities. The Company has received waivers from all of its associated lending partners with respect to these defaults, including 100% of the financial institutions that are party to our syndicated revolving credit facility. The Company was in compliance with all of its financial covenants as of December 31, 2008, and, as a result of the aforementioned waivers, was in compliance with all of its non-financial covenants.
Craig T. Monaghan, Asbury's Senior Vice President and Chief Financial Officer, commented, "It's during times such as these that strong partnerships become critically important, and we couldn't be more pleased with the overwhelming support we have received from our financial partners. With their assistance, we were able to arrange major new debt facilities in the third and fourth quarters and, on short notice, obtain unanimous agreement from 11 lenders to waive the defaults arising from our audit opinion."
Mr. Monaghan continued, "With $116 million in borrowing capacity under our credit facilities and $92 million in cash on hand at year-end, we have considerable liquidity. And, with no major debt maturities until 2012, we believe we have the financial flexibility to weather the current challenging environment."
Mr. Oglesby concluded, "We are rebuilding Asbury and structuring the company to deliver consistent cash flow and profitability, even during this period of unprecedented weakness in U.S. automotive sales."
For the full year, the loss from continuing operations was $323.1 million, or $10.19 per diluted share, compared with income from continuing operations of $51.7 million, or $1.55 per diluted share, in 2007. Non-core items, as detailed further in the attached tables, reduced earnings in 2008 by $354.1 million, or $11.15 per diluted share, and reduced earnings in 2007 by $15.3 million, or $0.46 per diluted share. The Company's net loss for 2008 was $338.0 million, or $10.66 per diluted share, compared with net income of $51.0 million, or $1.53 per diluted share, a year ago, including the non-core items discussed above.
Asbury will host a conference call to discuss its fourth quarter results this morning at 10:00 a.m. Eastern Time. The call will be simulcast live on the Internet and can be accessed by logging onto ASBURY or CCBN. In addition, a live audio of the call will be accessible to the public by calling (877) 857-6151 (domestic), or (719) 325-4786 (international); passcode - 3431066. Callers should dial in approximately 5 to 10 minutes before the call begins.