Asbury Automotive Group Reports Fourth Quarter and 2004 Financial Results
- Fourth Quarter Same-Store Retail Revenue Grew 13%; Same-Store Retail Gross Profit Increased 15% -
- Full Year 2004 Total Revenue Increased 16% and Gross Profit Rose 14% -
NEW YORK, Feb. 24 -- 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, 2004.
Net income from continuing operations for the fourth quarter was $13.8 million, or $0.42 per diluted share. For the fourth quarter of 2003, the Company reported a net loss from continuing operations of $19.7 million, or $0.60 per diluted share, which includes certain items disclosed in the attached financial tables. Excluding those items, net income from continuing operations for the fourth quarter of 2004 was up 25 percent when compared to $11.0 million, or $0.34 per diluted share, in the prior year period.
The Company noted that it achieved double-digit same-store gross profit increases for the quarter in all four components of its business model -- new vehicles; used vehicles; parts and service; and finance and insurance. The Company cited a favorable retail market environment in all its geographic regions plus a recovery in its Florida markets, following the previous quarter's hurricanes, as positively impacting the quarter.
Financial highlights for the fourth quarter of 2004, as compared to the corresponding prior year period, included:
* Total revenue for the quarter was approximately $1.4 billion, up 23
percent. Total gross profit was $214.0 million, a 23 percent increase.
Excluding results at the Company's two Florida platforms, total revenue
and gross profit were both up 23 percent.
* Same-store retail revenue (excluding fleet and wholesale business)
increased 13 percent, while same-store retail gross profit rose 15
percent. Excluding results in Florida, same-store retail revenue and
gross profit were up 9 percent and 11 percent, respectively.
* New vehicle retail revenue rose 22 percent (12 percent same-store), and
unit sales increased 19 percent (8 percent same-store). New vehicle
retail gross profit increased 23 percent (12 percent same-store).
Excluding results in Florida, new vehicle same-store retail revenue and
gross profit were up 6 percent and 3 percent, respectively.
* Used vehicle retail revenue increased 25 percent (19 percent same-
store), and unit sales rose 19 percent (13 percent same-store). Used
vehicle retail gross profit increased 26 percent (20 percent same-
store). Excluding results in Florida, used vehicle same-store retail
revenue and gross profit were up 19 percent and 27 percent,
respectively.
* Parts and service revenue and gross profit both increased 20 percent (12
percent and 13 percent same-store, respectively). Excluding results in
Florida, parts and service same-store revenue and gross profit were both
up 10 percent.
* Net finance and insurance (F&I) revenue rose 29 percent (20 percent
same-store). F&I per vehicle retailed (PVR) increased 8 percent to
$902, and platform F&I PVR rose 10 percent to $875. Excluding results
in Florida, net F&I same-store revenue increased 17 percent, while F&I
PVR increased 10 percent and platform F&I PVR rose 13 percent.
* As a percentage of gross profit, selling, general and administrative
(SG&A) expenses for the quarter were 80.0 percent, matching the year-
earlier level:
- On a same-store basis, the ratio declined approximately 120 basis
points, as expense ratios improved at most platforms, particularly in
Florida.
- Excluding a 2004 sale-leaseback transaction that impacted the quarter
(resulting in increased rent expense while reducing interest and
depreciation expense), as a percent of gross profit, SG&A was down
100 basis points from the prior year period.
For the full year, Asbury's net income from continuing operations was $52.7 million, or $1.61 per diluted share, compared with $18.5 million, or $0.57 per diluted share, in 2003. Excluding the items highlighted in the attached financial tables, net income from continuing operations in 2003 was $49.2 million, or $1.50 per diluted share. Total revenue for 2004 was approximately $5.3 billion, up 16 percent compared to the prior year. Total gross profit was $813.7 million, a 14 percent increase from the prior year. Same-store retail revenue for the year increased 5 percent, while same-store retail gross profit increased 4 percent.
President and CEO, Kenneth B. Gilman, said, "Our business model turned in a strong, balanced performance in the fourth quarter, and for 2004 as a whole. While the services side of the business generated solid results all year, we were able to capitalize late in the year on the improved industry environment in terms of new and used vehicle sales. We also benefited in the fourth quarter from a bounce in our Florida markets. Of particular note, however, was the strength of our non-Florida operations and the positive impact they had on the quarter. Our continued focus on the basics of automotive retailing, along with a disciplined approach to expenses, allowed us to retain a substantial portion of our improved gross profit. In addition, several manufacturer-sponsored dealer incentive programs enhanced our profitability during the quarter."
J. Gordon Smith, Senior Vice President and CFO, said, "Our flat overall SG&A expense ratio for the fourth quarter includes the impact of start-up costs associated with new and acquired dealerships, as well as incremental expense associated with a large sale-leaseback transaction earlier in the year. Excluding the impact of our start-up operations and the sale-leaseback, our SG&A expense ratio was down 205 basis points in the fourth quarter. We expect to achieve additional savings in 2005, particularly as we implement the recently announced changes in our dealership management structure."
Last month, as previously announced, Asbury reorganized its nine platforms into principally four regions: Florida; West (California, Texas & Oregon); Mid-Atlantic (North Carolina, South Carolina & Virginia); and South (Georgia & Arkansas); with Mississippi and Missouri remaining as stand-alone platforms.
Mr. Smith continued, "While the underlying goal of this new structure is to improve productivity and management effectiveness, the financial benefit from the change will be tangible. We expect to incur a charge in the first quarter of 2005 of approximately $4 million for severance and other one-time costs, including the settlement of several multi-year contracts. Prospectively, we expect to realize annual savings of $4 to $5 million, reducing our SG&A expense ratio, as a percent of gross profit, by approximately 50 to 60 basis points. Specifically, we expect to realize approximately $3 million of these savings this year and the full effect in 2006. We anticipate that adopting this new structure will reduce earnings by approximately $0.02 to $0.04 per share this year and increase earnings by approximately $0.10 per share next year."
During 2004, Asbury acquired seven dealerships with projected annual revenues of approximately $350 million. The acquired dealerships include Mercedes-Benz, Honda, Nissan (2), Dodge and Hyundai (2) franchises, and five of the seven are in California. The Company's current objective in 2005 will again be to add between $300 million and $500 million in annualized revenues through acquisitions.
Mr. Gilman concluded, "Looking ahead, we remain well positioned to generate organic growth with our high-quality brand mix, strategic focus on higher-margin service businesses, and disciplined approach to expense management. In addition, we remain committed to our acquisitions approach - targeting specific brands in key geographical markets. Our continued focus on the fundamentals of the business, along with further efforts to seek additional operating efficiencies, should translate into added value for our shareholders."
Commenting on guidance for 2005, the Company noted that it remains comfortable with estimates for earnings per share from continuing operations between $1.70 and $1.78. This range does not reflect the potential net cost resulting from the regional reorganization. Additionally, not included in the above guidance is the anticipated third quarter adoption of Statement of Financial Accounting Standard 123(R). Based on existing stock options outstanding, the Company currently estimates that its stock option compensation expense will reduce 2005 earnings per share by approximately $0.08.
About Asbury Automotive Group
Asbury Automotive Group, Inc., headquartered in New York City, is one of the largest automobile retailers in the U.S., with 2004 revenue of approximately $5.3 billion. Built through a combination of organic growth and a series of strategic acquisitions, the Company currently operates 96 retail auto stores, encompassing 132 franchises for the sale and servicing of 33 different brands of American, European and Asian automobiles. Asbury believes that its product mix contains a higher proportion of the more desirable luxury and mid-line import brands than most public automotive retailers. The Company 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.
Asbury Automotive Group, Inc.
Consolidated Statements of Income
(In thousands, except per share data)
(Unaudited)
For the Three Months Ended For the Year Ended
December 31, December 31,
2004 2003 2004 2003
REVENUES:
New vehicle $858,210 $696,980 $3,261,709 $2,786,744
Used vehicle 324,957 259,211 1,286,361 1,142,824
Parts, service and
collision repair 159,253 133,217 605,315 517,904
Finance and
insurance, net 37,766 29,387 147,750 125,041
Total revenues 1,380,186 1,118,795 5,301,135 4,572,513
COST OF SALES
New vehicle 793,471 644,208 3,023,726 2,577,577
Used vehicle 297,195 237,613 1,176,255 1,040,563
Parts, service
and collision
repair 75,485 63,451 287,413 242,322
Total cost
of sales 1,166,151 945,272 4,487,394 3,860,462
GROSS PROFIT 214,035 173,523 813,741 712,051
OPERATING EXPENSES:
Selling, general
and administrative 171,271 138,704 650,152 557,478
Depreciation and
amortization 5,044 5,118 20,422 19,686
Impairment of
goodwill - 37,930 - 37,930
Income (loss)
from operations 37,720 (8,229) 143,167 96,957
OTHER INCOME (EXPENSE):
Floor plan interest
expense (6,224) (4,029) (21,248) (16,624)
Other interest
expense (10,070) (10,199) (39,256) (40,228)
Interest income 212 45 822 480
Other income
(expense) 495 (1,196) 623 (1,626)
Total other
expense, net (15,587) (15,379) (59,059) (57,998)
Income (loss)
from continuing
operations
before income
taxes 22,133 (23,608) 84,108 38,959
INCOME TAX EXPENSE 8,300 (3,925) 31,364 20,468
Income (loss)
from continuing
operations 13,833 (19,683) 52,744 18,491
DISCONTINUED OPERATIONS,
net of tax (988) (744) (2,671) (3,304)
Net income (loss) $12,845 $(20,427) $50,073 $15,187
BASIC EARNINGS PER
COMMON SHARE:
Continuing
operations $ 0.42 $ (0.61) $ 1.62 $ 0.57
Discontinued
operations (0.03) (0.02) (0.08) (0.10)
Net income (loss) $ 0.39 $ (0.63) $ 1.54 $ 0.47
DILUTED EARNINGS PER
COMMON SHARE:
Continuing
operations $0.42 $ (0.60) $ 1.61 $ 0.57
Discontinued
operations (0.03) (0.02) (0.08) (0.11)
Net income (loss) $0.39 $ (0.62) $ 1.53 $ 0.46
WEIGHTED AVERAGE SHARES
OUTSTANDING:
Basic 32,561 32,431 32,502 32,648
Diluted 32,672 32,686 32,674 32,715
Asbury Automotive Group, Inc.
Consolidated Statements of Income
(In thousands, except per share data)
(Unaudited)
For the Three Months Ended
December 31, 2004
Non-Florida Florida
Operations Operations* Total
REVENUES:
New vehicle $594,316 $263,894 $858,210
Used vehicle 213,328 111,629 324,957
Parts, service and collision repair 118,191 41,062 159,253
Finance and insurance, net 24,364 13,402 37,766
Total revenues 950,199 429,987 1,380,186
COST OF SALES
New vehicle 550,730 242,741 793,471
Used vehicle 196,659 100,536 297,195
Parts, service and collision repair 57,725 17,760 75,485
Total cost of sales 805,114 361,037 1,166,151
GROSS PROFIT 145,085 68,950 214,035
OPERATING EXPENSES:
Selling, general and administrative 121,718 49,553 171,271
Depreciation and amortization 4,029 1,015 5,044
Impairment of goodwill - - -
Income from operations 19,338 18,382 37,720
OTHER INCOME (EXPENSE):
Floor plan interest expense (4,580) (1,644) (6,224)
Other interest expense (9,878) (192) (10,070)
Interest income 180 32 212
Other income (expense) 459 36 495
Total other expense, net (13,819) (1,768) (15,587)
Income from continuing operations
before income taxes 5,519 16,614 22,133
INCOME TAX EXPENSE 1,799 6,501 8,300
Income from continuing operations 3,720 10,113 13,833
DISCONTINUED OPERATIONS, net of tax (1,141) 153 (988)
Net income $2,579 $10,266 $12,845
BASIC EARNINGS PER COMMON SHARE:
Continuing operations $0.11 $0.31 $0.42
Discontinued operations (0.03) - (0.03)
Net income $0.08 $0.31 $0.39
DILUTED EARNINGS PER COMMON SHARE:
Continuing operations $0.11 $0.31 $0.42
Discontinued operations (0.03) - (0.03)
Net income $0.08 $0.31 $0.39
WEIGHTED AVERAGE SHARES OUTSTANDING:
Basic 32,561 32,561 32,561
Diluted 32,672 32,672 32,672
Asbury Automotive Group, Inc.
Consolidated Statements of Income
(In thousands, except per share data)
(Unaudited)
(continued)
For the Three Months Ended
December 31, 2003
Non-Florida Florida
Operations Operations* Total
REVENUES:
New vehicle $485,330 $211,650 $696,980
Used vehicle 169,595 89,616 259,211
Parts, service and collision repair 98,506 34,711 133,217
Finance and insurance, net 18,652 10,735 29,387
Total revenues 772,083 346,712 1,118,795
COST OF SALES
New vehicle 448,496 195,712 644,208
Used vehicle 157,867 79,746 237,613
Parts, service and collision repair 47,993 15,458 63,451
Total cost of sales 654,356 290,916 945,272
GROSS PROFIT 117,727 55,796 173,523
OPERATING EXPENSES:
Selling, general and administrative 97,557 41,147 138,704
Depreciation and amortization 3,780 1,338 5,118
Impairment of goodwill 37,930 - 37,930
Income (loss) from operations (21,540) 13,311 (8,229)
OTHER INCOME (EXPENSE):
Floor plan interest expense (3,017) (1,012) (4,029)
Other interest expense (9,511) (688) (10,199)
Interest income 61 (16) 45
Other income (expense) (2,509) 1,313 (1,196)
Total other expense, net (14,976) (403) (15,379)
Income (loss) from continuing
operations before income taxes (36,516) 12,908 (23,608)
INCOME TAX EXPENSE (7,719) 3,794 (3,925)
Income (loss) from continuing
operations (28,797) 9,114 (19,683)
DISCONTINUED OPERATIONS, net of tax (1,074) 330 (744)
Net income (loss) ($29,871) $9,444 ($20,427)
BASIC EARNINGS PER COMMON SHARE:
Continuing operations ($0.89) $0.28 ($0.61)
Discontinued operations (0.03) 0.01 (0.02)
Net income (loss) ($0.92) $0.29 ($0.63)
DILUTED EARNINGS PER COMMON SHARE:
Continuing operations ($0.88) $0.28 ($0.60)
Discontinued operations (0.03) 0.01 (0.02)
Net income (loss) ($0.91) $0.29 ($0.62)
WEIGHTED AVERAGE SHARES OUTSTANDING:
Basic 32,431 32,431 32,431
Diluted 32,686 32,686 32,686
* The results of the Company's Florida operations do not include an
allocation of corporate overhead or interest expense related to the
Company's senior indebtedness. All such amounts are included in the
results of the Company's non-Florida operations.
Asbury Automotive Group, Inc.
Selected Data
(Dollars in thousands except per share data)
(Unaudited)
As Reported for the
Three Months Ended December 31,
2004 2003
RETAIL VEHICLES SOLD:
New units 26,861 64.2% 22,590 64.2%
Used units 15,002 35.8% 12,620 35.8%
Total units 41,863 100.0% 35,210 100.0%
REVENUE:
New retail $834,940 60.5% $686,876 61.4%
Used retail 242,101 17.6% 193,144 17.3%
Parts, service and collision
repair 159,253 11.5% 133,217 11.9%
Finance and insurance, net 37,766 2.7% 29,387 2.6%
Total retail revenue 1,274,060 1,042,624
Fleet 23,270 1.7% 10,104 0.9%
Wholesale 82,856 6.0% 66,067 5.9%
Total revenue $1,380,186 100.0% $1,118,795 100.0%
GROSS PROFIT
New retail $57,369 26.8% $46,817 27.0%
Used retail 28,384 13.3% 22,585 13.0%
Parts, service and collision
repair 83,768 39.2% 69,766 40.2%
Finance and insurance, net 37,766 17.6% 29,387 17.0%
Floor plan interest credits 6,717 3.1% 5,585 3.2%
Total retail gross profit 214,004 174,140
Fleet 653 0.3% 370 0.2%
Wholesale (622) (0.3)% (987) (0.6)%
Total gross profit $214,035 100.0% $173,523 100.0%
Sales, general and
administrative expense $171,271 $138,704
SG&A as a percent of gross
profit 80.0% 79.9%
GROSS PROFIT PER VEHICLE
RETAILED:
New retail (including floor plan
interest credits) $2,386 $2,320
Used retail 1,892 1,790
Finance and insurance, net 902 835
Platform finance and insurance,
net 875 795
Asbury Automotive Group, Inc.
Selected Data
(Dollars in thousands except per share data)
(Unaudited)
(continued)
Same Store for the
Three Months Ended December 31,
2004 2003
RETAIL VEHICLES SOLD:
New units 24,348 63.1% 22,590 64.2%
Used units 14,215 36.9% 12,620 35.8%
Total units 38,563 100.0% 35,210 100.0%
REVENUE:
New retail $767,139 60.0% $686,876 61.4%
Used retail 229,274 18.0% 193,144 17.3%
Parts, service and collision
repair 149,628 11.7% 133,217 11.9%
Finance and insurance, net 35,157 2.8% 29,387 2.6%
Total retail revenue 1,181,198 1,042,624
Fleet 20,805 1.6% 10,104 0.9%
Wholesale 75,685 5.9% 66,067 5.9%
Total revenue $1,277,688 100.0% $1,118,795 100.0%
GROSS PROFIT
New retail $52,375 26.2% $46,817 27.0%
Used retail 27,012 13.5% 22,585 13.0%
Parts, service and collision
repair 78,726 39.4% 69,766 40.2%
Finance and insurance, net 35,157 17.6% 29,387 17.0%
Floor plan interest credits 6,273 3.2% 5,585 3.2%
Total retail gross profit 199,543 174,140
Fleet 633 0.3% 370 0.2%
Wholesale (483) (0.2)% (987) (0.6)%
Total gross profit $199,693 100.0% $173,523 100.0%
Sales, general and
administrative expense $157,180 $138,704
SG&A as a percent of gross
profit 78.7% 79.9%
GROSS PROFIT PER VEHICLE
RETAILED:
New retail (including floor plan
interest credits) $2,409 $2,320
Used retail 1,900 1,790
Finance and insurance, net 912 835
Platform finance and insurance,
net 882 795
Asbury Automotive Group, Inc.
Selected Data
(Dollars in thousands except per share data)
(Unaudited)
As Reported for the
Year Ended December 31,
2004 2003
RETAIL VEHICLES SOLD:
New units 106,298 63.4% 94,527 62.3%
Used units 61,311 36.6% 57,090 37.7%
Total units 167,609 100.0% 151,617 100.0%
REVENUE:
New retail $3,192,575 60.3% $2,742,637 60.0%
Used retail 959,632 18.0% 872,071 19.1%
Parts, service and collision
repair 605,315 11.4% 517,904 11.2%
Finance and insurance, net 147,750 2.8% 125,041 2.8%
Total retail revenue 4,905,272 4,257,653
Fleet 69,134 1.3% 44,107 1.0%
Wholesale 326,729 6.2% 270,753 5.9%
Total revenue $5,301,135 100.0% $4,572,513 100.0%
GROSS PROFIT
New retail $210,282 25.9% $185,860 26.1%
Used retail 113,281 13.8% 103,885 14.6%
Parts, service and collision
repair 317,902 39.1% 275,582 38.7%
Finance and insurance, net 147,750 18.2% 125,041 17.5%
Floor plan interest credits 25,429 3.1% 22,091 3.1%
Total retail gross profit 814,644 712,459
Fleet 2,272 0.3% 1,216 0.2%
Wholesale (3,175) (0.4)% (1,624) (0.2)%
Total gross profit $813,741 100.0% $712,051 100.0%
Sales, general and
administrative expense $650,152 $557,478
SG&A as a percent of gross
profit 79.9% 78.3%
GROSS PROFIT PER VEHICLE
RETAILED:
New retail (including floor plan
interest credits) $2,217 $2,200
Used retail 1,848 1,820
Finance and insurance, net 882 825
Platform finance and insurance,
net 848 807
Asbury Automotive Group, Inc.
Selected Data
(Dollars in thousands except per share data)
(Unaudited)
(continued)
Same Store for the
Year Ended December 31,
2004 2003
RETAIL VEHICLES SOLD:
New units 95,802 62.8% 94,527 62.3%
Used units 56,789 37.2% 57,090 37.7%
Total units 152,591 100.0% 151,617 100.0%
REVENUE:
New retail $2,896,385 60.0% $2,742,637 60.0%
Used retail 878,922 18.1% 872,071 19.1%
Parts, service and collision
repair 553,174 11.5% 517,904 11.2%
Finance and insurance, net 136,930 2.9% 125,041 2.8%
Total retail revenue 4,465,411 4,257,653
Fleet 66,063 1.4% 44,107 1.0%
Wholesale 295,462 6.1% 270,753 5.9%
Total revenue $4,826,936 100.0% $4,572,513 100.0%
GROSS PROFIT
New retail $187,323 25.2% $185,860 26.1%
Used retail 104,654 14.0% 103,885 14.6%
Parts, service and collision
repair 291,656 39.3% 275,582 38.7%
Finance and insurance, net 136,930 18.4% 125,041 17.5%
Floor plan interest credits 23,765 3.2% 22,091 3.1%
Total retail gross profit 744,328 712,459
Fleet 2,249 0.3% 1,216 0.2%
Wholesale (2,706) (0.4)% (1,624) (0.2)%
Total gross profit $743,871 100.0% $712,051 100.0%
Sales, general and
administrative expense $589,567 $557,478
SG&A as a percent of gross
profit 79.3% 78.3%
GROSS PROFIT PER VEHICLE
RETAILED:
New retail (including floor plan
interest credits) $2,203 $2,200
Used retail 1,843 1,820
Finance and insurance, net 897 825
Platform finance and insurance,
net 860 807
Asbury Automotive Group, Inc.
Selected Data
(Dollars in thousands except per share data)
(Unaudited)
As Reported For the Three Months Ended December 31, 2004
Non-Florida Florida
Operations Operations* Total
RETAIL VEHICLES SOLD:
New units 17,955 65.9% 8,906 60.8% 26,861 64.2%
Used units 9,272 34.1% 5,730 39.2% 15,002 35.8%
Total units 27,227 100.0% 14,636 100.0% 41,863 100.0%
REVENUE:
New retail $578,039 60.8% $256,901 59.7% $834,940 60.5%
Used retail 158,458 16.7% 83,643 19.5% 242,101 17.6%
Parts, service
and collision
repair 118,191 12.4% 41,062 9.6% 159,253 11.5%
Finance and
insurance, net 24,364 2.6% 13,402 3.1% 37,766 2.7%
Total retail
revenue 879,052 395,008 1,247,060
Fleet 16,277 1.7% 6,993 1.6% 23,270 1.7%
Wholesale 54,870 5.8% 27,986 6.5% 82,856 6.0%
Total revenue $950,199 100.0% $ 429,987 100.0% $1,380,186 100.0%
GROSS PROFIT
New retail $39,052 26.9% $18,317 26.6% $57,369 26.8%
Used retail 17,358 12.0% 11,026 16.0% 28,384 13.3%
Parts, service
and collision
repair 60,466 41.7% 23,302 33.8% 83,768 39.2%
Finance and
insurance, net 24,364 16.8% 13,402 19.4% 37,766 17.6%
Floor plan interest
credits 4,407 3.0% 2,310 3.3% 6,717 3.1%
Total retail
gross profit 145,647 68,357 214,004
Fleet 127 0.1% 526 0.8% 653 0.3%
Wholesale (689) (0.5)% 67 0.1% (622)(0.3)%
Total gross
profit $145,085 100.0% $68,950 100.0% $214,035 100.0%
Sales, general and
administrative
expense $121,718 $49,553 $171,271
SG&A as a percent
of gross profit 83.9% 71.9% 80.0%
GROSS PROFIT PER
VEHICLE RETAILED:
New retail
(including floor plan
interest credits) $2,420 $2,316 $2,386
Used retail 1,872 1,924 1,892
Finance and insurance,
net 895 916 902
Platform finance and
insurance, net 853 916 875
* The results of the Company's Florida operations do not include an
allocation of corporate overhead or interest expense related to the
Company's senior indebtedness. All such amounts are included in the
results of the Company's non-Florida operations.
Asbury Automotive Group, Inc.
Selected Data
(Dollars in thousands except per share data)
(Unaudited)
As Reported For the Three Months Ended December 31, 2003
Non-Florida Florida
Operations Operations* Total
RETAIL VEHICLES SOLD:
New units 15,240 67.3% 7,350 58.5% 22,590 64.2%
Used units 7,416 32.7% 5,204 41.5% 12,620 35.8%
Total units 22,656 100.0% 12,554 100.0% 35,210 100.0%
REVENUE:
New retail $480,447 62.2% $206,429 59.5% $686,876 61.4%
Used retail 122,804 15.9% 70,340 20.3% 193,144 17.3%
Parts, service
and collision
repair 98,506 12.8% 34,711 10.0% 133,217 11.9%
Finance and
insurance, net 18,652 2.4% 10,735 3.1% 29,387 2.6%
Total retail
revenue 720,409 322,215 1,042,624
Fleet 4,883 0.6% 5,221 1.5% 10,104 0.9%
Wholesale 46,791 6.1% 19,276 5.6% 66,067 5.9%
Total revenue $772,083 100.0% $346,712 100.0% $1,118,795 100.0%
GROSS PROFIT
New retail $32,997 28.0% $13,820 24.8% $46,817 27.0%
Used retail 12,545 10.7% 10,040 18.0% 22,585 13.0%
Parts, service
and collision
repair 50,513 42.9% 19,253 34.5% 69,766 40.2%
Finance and
insurance, net 18,652 15.8% 10,735 19.2% 29,387 17.0%
Floor plan interest
credits 3,756 3.2% 1,829 3.3% 5,585 3.2%
Total retail
gross profit 118,463 55,677 174,140
Fleet 81 0.1% 289 0.5% 370 0.2%
Wholesale (817) (0.7)% (170) (0.3)% (987)(0.6)%
Total gross
profit $117,727 100.0% $55,796 100.0% $173,523 100.0%
Sales, general and
administrative
expense $97,557 $41,147 $138,704
SG&A as a percent
of gross profit 82.9% 73.7% 79.9%
GROSS PROFIT PER
VEHICLE RETAILED:
New retail
(including floor plan
interest credits) $2,412 $2,129 $2,320
Used retail 1,692 1,929 1,790
Finance and insurance,
net 823 855 835
Platform finance and
insurance, net 762 855 795
* The results of the Company's Florida operations do not include an
allocation of corporate overhead or interest expense related to the
Company's senior indebtedness. All such amounts are included in the
results of the Company's non-Florida operations.
Asbury Automotive Group, Inc.
Selected Data
(Dollars in thousands except per share data)
(Unaudited)
Same Store for the Three Months Ended December 31, 2004
Non-Florida Florida
Operations Operations* Total
RETAIL VEHICLES SOLD:
New units 15,442 64.5% 8,906 60.8% 24,348 63.1%
Used units 8,485 35.5% 5,730 39.2% 14,215 36.9%
Total units 23,927 100.0% 14,636 100.0% 38,563 100.0%
REVENUE:
New retail $510,238 60.2% $256,901 59.7% $767,139 60.0%
Used retail 145,631 17.2% 83,643 19.5% 229,274 18.0%
Parts, service
and collision
repair 108,566 12.8% 41,062 9.6% 149,628 11.7%
Finance and
insurance, net 21,755 2.6% 13,402 3.1% 35,157 2.8%
Total retail
revenue 786,190 395,008 1,181,198
Fleet 13,812 1.6% 6,993 1.6% 20,805 1.6%
Wholesale 47,699 5.6% 27,986 6.5% 75,685 5.9%
Total revenue $847,701 100.0% $429,987 100.0% $1,277,688 100.0%
GROSS PROFIT
New retail $34,058 26.1% $18,317 26.6% $52,375 26.2%
Used retail 15,986 12.2% 11,026 16.0% 27,012 13.5%
Parts, service and
collision repair 55,424 42.4% 23,302 33.8% 78,726 39.4%
Finance and
insurance, net 21,755 16.6% 13,402 19.4% 35,157 17.6%
Floor plan interest
credits 3,963 3.0% 2,310 3.3% 6,273 3.2%
Total retail
gross profit 131,186 68,357 199,543
Fleet 107 0.1% 526 0.8% 633 0.3%
Wholesale (550) (0.4)% 67 0.1% (483)(0.2)%
Total gross
profit $130,743 100.0% $68,950 100.0% $199,693 100.0%
Sales, general and
administrative
expense $107,627 $49,553 $157,180
SG&A as a percent
of gross profit 82.3% 71.9% 78.7%
GROSS PROFIT PER
VEHICLE RETAILED:
New retail
(including floor plan
interest credits) $2,462 $2,316 $2,409
Used retail 1,884 1,924 1,900
Finance and insurance,
net 909 916 912
Platform finance and
insurance, net 862 916 882
* The results of the Company's Florida operations do not include an
allocation of corporate overhead or interest expense related to the
Company's senior indebtedness. All such amounts are included in the
results of the Company's non-Florida operations.
Asbury Automotive Group, Inc.
Selected Data
(Dollars in thousands except per share data)
(Unaudited)
Same Store for the Three Months Ended December 31, 2003
Non-Florida Florida
Operations Operations* Total
RETAIL VEHICLES SOLD:
New units 15,240 67.3% 7,350 58.5% 22,590 64.2%
Used units 7,416 32.7% 5,204 41.5% 12,620 35.8%
Total units 22,656 100.0% 12,554 100.0% 35,210 100.0%
REVENUE:
New retail $480,447 62.2% $206,429 59.5% $686,876 61.4%
Used retail 122,804 15.9% 70,340 20.3% 193,144 17.3%
Parts, service
and collision
repair 98,506 12.8% 34,711 10.0% 133,217 11.9%
Finance and
insurance, net 18,652 2.4% 10,735 3.1% 29,387 2.6%
Total retail
revenue 720,409 322,215 1,042,624
Fleet 4,883 0.6% 5,221 1.5% 10,104 0.9%
Wholesale 46,791 6.1% 19,276 5.6% 66,067 5.9%
Total revenue $772,083 100.0% $346,712 100.0% $1,118,795 100.0%
GROSS PROFIT
New retail $32,997 28.0% $13,820 24.8% $46,817 27.0%
Used retail 12,545 10.7% 10,040 18.0% 22,585 13.0%
Parts, service
and collision
repair 50,513 42.9% 19,253 34.5% 69,766 40.2%
Finance and
insurance, net 18,652 15.8% 10,735 19.2% 29,387 17.0%
Floor plan
interest
credits 3,756 3.2% 1,829 3.3% 5,585 3.2%
Total retail
gross profit 118,463 55,677 174,140
Fleet 81 0.1% 289 0.5% 370 0.2%
Wholesale (817) (0.7)% (170) (0.3)% (987) (0.6)%
Total gross
profit $117,727 100.0% $55,796 100.0% $173,523 100.0%
Sales, general
and
administrative
expense $97,557 $41,147 $138,704
SG&A as a
percent of
gross profit 82.9% 73.7% 79.9%
GROSS PROFIT PER
VEHICLE RETAILED:
New retail
(including floor
plan interest
credits) $2,412 $2,129 $2,320
Used retail 1,692 1,929 1,790
Finance and
insurance, net 823 855 835
Platform finance
and insurance,
net 762 855 795
* The results of the Company's Florida operations do not include an
allocation of corporate overhead or interest expense related to the
Company's senior indebtedness. All such amounts are included in the
results of the Company's non-Florida operations.
As of As of
December 31, December 31,
2004 2003
BALANCE SHEET HIGHLIGHTS:
Cash and cash equivalents $28,093 $106,711
Inventories 761,557 650,397
Total current assets 1,143,506 1,041,542
Floor plan notes payable 650,948 602,167
Total current liabilities 847,510 781,758
CAPITALIZATION:
Long-term debt (including current portion) $529,152 $592,378
Stockholders' equity 480,023 433,707
Total $1,009,175 $1,026,085
ASBURY AUTOMOTIVE GROUP, INC.
SUPPLEMENTAL DISCLOSURES REGARDING NON-GAAP FINANCIAL INFORMATION
(In thousands, except vehicle data)
(Unaudited)
The Company evaluates finance and insurance gross profit performance on a per-vehicle retailed basis by dividing total finance and insurance gross profit by the number of retail vehicles sold. During 2003, the Company renegotiated a contract with a third party finance and insurance product provider, which resulted in the recognition of income that was not attributable to retail vehicles sold during the year. The Company believes that platform finance and insurance, which excludes the additional revenue derived from contracts negotiated by the corporate office, provides a more accurate measure of the Company's finance and insurance operating performance. The following table reconciles finance and insurance gross profit to platform finance and insurance gross profit, and provides necessary components to calculate platform finance and insurance gross profit per vehicle retailed.
As Reported For the Three Same Store For the Three
Months Ended December 31, Months Ended December 31,
2004 2003 2004 2003
RECONCILIATION OF
FINANCE AND INSURANCE
GROSS PROFIT TO PLATFORM
FINANCE AND INSURANCE:
Finance and insurance,
net $37,766 $29,387 $35,157 $29,387
Less: corporate
finance and
insurance (1,138) (1,393) (1,138) (1,393)
Platform finance and
insurance, net $36,628 $27,994 $34,019 $27,994
RETAIL VEHICLES SOLD:
New retail units 26,861 22,590 24,348 22,590
Used retail units 15,002 12,620 14,215 12,620
Total units 41,863 35,210 38,563 35,210
As Reported For the Year Same Store For the Year
Ended December 31, Ended December 31,
2004 2003 2004 2003
RECONCILIATION OF
FINANCE AND INSURANCE
GROSS PROFIT TO PLATFORM
FINANCE AND INSURANCE:
Finance and insurance,
net $147,750 $125,041 $136,930 $125,041
Less: corporate
finance and
insurance (5,695) (2,693) (5,695) (2,693)
Platform finance and
insurance, net $142,055 $122,348 $131,235 $122,348
RETAIL VEHICLES SOLD:
New retail units 106,298 94,527 95,802 94,527
Used retail units 61,311 57,090 56,789 57,090
Total units 167,609 151,617 152,591 151,617
The Company's operating income was largely impacted by incremental rent expense associated with a sale-leaseback transaction that was entered into in the third quarter of 2004. The Company believes that excluding the incremental rent expense from the selling, general and administrative expenses for the fourth quarter of 2004 provides a more meaningful basis to measure the results of the Company's operations compared to that of the prior year period. A reconciliation of the Company's adjusted selling, general and administrative expenses is presented below.
As Reported for the As Reported for the
Three Months Ended Three Months Ended
December 31, 2004 December 31, 2003 Variance
Selling, general and
administrative
expenses $171,271 $138,704 $32,567
Less: Incremental rent
expense associated
with sale-leaseback
transaction (2,290) - (2,290)
Adjusted selling,
general and
administrative
expenses $168,981 $138,704 $30,277
Same Store Results for Same Store Results for
the Three Months Ended the Three Months Ended
December 31, 2004 December 31, 2003 Variance
Selling, general and
administrative expenses $157,180 $138,704 $18,476
Less: Incremental rent
expense associated with
sale-leaseback
transaction (2,290) - (2,290)
Adjusted selling,
general and
administrative
expenses $154,890 $138,704 $16,186
The Company defines net income from continuing operations as net income less discontinued operations. We believe that excluding certain items from net income from continuing operations for the three months ended December 31, 2003, provides a more meaningful basis to measure the results of our operations. A reconciliation of our net income to adjusted net income from continuing operations is presented below.
GAAP Results for the
Three Months Ended
December 31,
2004 2003
RECONCILIATION OF NET INCOME
(LOSS) TO ADJUSTED NET INCOME
FROM CONTINUING OPERATIONS:
Net income (loss) $12,845 $(20,427)
Discontinued operations 988 744
Net income (loss) from continuing operations 13,833 (19,683)
Tax affected impairment of goodwill (a) - 29,180
Tax affected charge for Bob Baker (b) - 1,552
Adjusted net income from continuing operations $13,833 $11,049
RECONCILIATION OF NET INCOME
(LOSS) PER COMMON SHARE
(DILUTED) TO ADJUSTED NET
INCOME FROM CONTINUING
OPERATIONS PER COMMON
SHARE (DILUTED):
Net income (loss) $0.39 $(0.62)
Discontinued operations 0.03 0.02
Net income (loss) from continuing operations 0.42 (0.60)
Tax affected impairment of goodwill (a) - 0.89
Tax affected charge for Bob Baker (b) - 0.05
Adjusted net income from continuing operations $0.42 $0.34
Weighted average shares outstanding (diluted): 32,672 32,686
GAAP Results for the
Year Ended December 31,
2004 2003
RECONCILIATION OF NET INCOME TO ADJUSTED
NET INCOME FROM CONTINUING OPERATIONS:
Net income $50,073 $15,187
Discontinued operations 2,671 3,304
Net income from continuing operations 52,744 18,491
Tax affected impairment of goodwill (a) - 29,180
Tax affected charge for Bob Baker (b) - 1,552
Adjusted net income from continuing operations $52,744 $49,223
RECONCILIATION OF NET INCOME PER COMMON
SHARE (DILUTED) TO ADJUSTED NET INCOME
FROM CONTINUING OPERATIONS PER COMMON
SHARE (DILUTED):
Net income $1.53 $0.46
Discontinued operations 0.08 0.11
Net income from continuing operations 1.61 0.57
Tax affected impairment of goodwill (a) - 0.89
Tax affected charge for Bob Baker (b) - 0.04
Adjusted net income from continuing operations $1.61 $1.50
Weighted average shares outstanding (diluted): 32,674 32,715
(a) In connection with our annual impairment test of goodwill conducted
in the fourth quarter of 2003, we recorded a non-cash goodwill
impairment charge of $37,930 ($29,180 after tax) associated with our
Oregon platform.
(b) In connection with the proposed acquisition of the Bob Baker Auto
Group, we incurred $2,503 of costs ($1,552 after tax), including
certain costs capitalized in prior periods. In the fourth quarter of
2003, we determined that the acquisition was no longer probable and
wrote-off such expenses.