Asbury Automotive Group Reports Fourth Quarter and Full Year 2006 Financial Results
Fourth Quarter Income from Continuing Operations Increases 8%; Up 25% on an Adjusted Basis
SG&A on an Adjusted Basis Improves 160 Basis Points for the Fourth Quarter
Announces 1.3 Million Share Repurchase Program
NEW YORK, Feb. 15 -- 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, 2006.
Income from continuing operations for the fourth quarter increased 8% to $15.6 million, or $0.45 per diluted share, from $14.4 million, or $0.44 per diluted share, in last year's fourth quarter. On a comparable basis, adjusting for the non-operational items and stock-based compensation presented in the following table, income from continuing operations increased 25%:
For the Three Months Ended December 31,
2006 2005
($ millions, except per share $ EPS $ EPS % Change ($)
data)
Income from continuing
operations $15.6 $0.45 $14.4 $0.44 8%
Adjustments for
non-operational items,
net of tax:
Gain on the sale of
franchise (1.6) -
Other non-operational
items (refer to tables) 0.4 (2.1)
Income from continuing
operations adjusted for
non-operational items 14.4 $0.42 12.3 $0.37
Stock-based compensation, net
of tax 1.0 -
Adjusted income from
continuing operations $15.4 $0.45 $12.3 $0.37 25%
Net income for the fourth quarter of 2006 was $12.0 million, or $0.35 per diluted share, including a $0.10 per diluted share loss from discontinued operations. In the fourth quarter of 2005, net income was $20.5 million, or $0.62 per diluted share, including income from discontinued operations of $0.18 per diluted share, as a result of gains on the sale of certain of our dealerships in Oregon.
For the full year, income from continuing operations was $67.2 million, or $1.97 per diluted share, up 15% from $58.2 million, or $1.77 per diluted share, in 2005. On a comparable basis, adjusting for the non-operational items and stock-based compensation presented in the following table, income from continuing operations increased 18%:
For the Twelve Months Ended December 31,
2006 2005
($ millions, except per share $ EPS $ EPS % Change ($)
data)
Income from Continuing
Operations $67.2 $1.97 $58.2 $1.77 15%
Adjustments for
non-operational items,
net of tax:
Corporate generated F&I
gain (2.1) -
Gain on the sale of
franchise (1.6) -
Capital markets activity
(refer to tables) 1.8 -
Other non-operational
items (refer to tables) 1.0 0.5
Income from continuing
operations adjusted for
non-operational items 66.3 $1.95 58.7 $1.78
Stock-based compensation, net
of tax 3.1 -
Adjusted Income from Continuing
Operations $69.4 $2.04 $58.7 $1.78 18%
Net income for 2006 was $60.7 million, or $1.78 per diluted share, compared to $61.1 million, or $1.86 per diluted share, in 2005. Net income for 2006 includes a loss of $0.19 per diluted share from discontinued operations, compared with $0.09 per diluted share of income from discontinued operations in 2005.
Additional financial highlights for the fourth quarter of 2006, as compared to last year's fourth quarter, included:
-- Total revenue for the quarter was approximately $1.4 billion, a 5%
increase. Total gross profit was $215.1 million, up 6%.
-- Same-store retail revenue and gross profit (excluding fleet and
wholesale businesses) rose 5% and 6%, respectively.
-- New vehicle retail revenue increased 3% (total and same-store), and
unit sales were flat (total and same-store). New vehicle retail gross
profit rose 5% (total and same-store). New vehicle retail gross margin
percentage improved to 7.5%, up 20 basis points.
-- Used vehicle retail revenue (total and same-store) increased 10%, and
unit sales (total and same-store) were up 7%. Used vehicle retail
gross profit increased 13% (12% same-store). Used vehicle retail gross
margin percentage improved to 12.1%, up 30 basis points.
-- Parts, service and collision repair (fixed operations) revenue
increased 3% (total and same-store), and gross profit increased 5%
(total and same-store). Fixed operations gross margin percentage
improved to 51.2%, up 70 basis points.
-- Net finance and insurance (F&I) revenue was up 7% (total and
same-store), and dealership-generated F&I revenue rose 11% (total and
same-store). Dealership-generated F&I per vehicle retailed (PVR)
increased 8% to $975 (total and same-store).
-- Selling, general and administrative expenses (SG&A) were 77.0% of gross
profit for the quarter, a 160 basis point improvement, excluding
non-operating items and a stock-based compensation charge, compared to
78.6% a year ago.
President and CEO Kenneth B. Gilman said, "Asbury's strong financial results were achieved predominantly through strategic programs designed to accelerate the growth of our higher-margin businesses, used vehicles and fixed operations, as well as our ability to leverage our expense structure. The combination of these efforts delivered 25% growth in income from continuing operations, on an adjusted and comparable basis, for the fourth quarter and 18% for the full year. This performance, especially in light of the industry- wide decline in new vehicle sales in 2006, underscores the strength of our balanced retailing and services business model, as well as Asbury's exceptionally strong brand mix."
J. Gordon Smith, Senior Vice President and CFO, said, "In the fourth quarter of 2006 Asbury combined strong same-store gross profit growth with our ninth consecutive quarter of SG&A expense leverage improvement. On an adjusted basis, SG&A as a percentage of gross profit declined 160 and 170 basis points for the fourth quarter and the year, respectively. With our focused initiatives, opportunities to further leverage our expense structure remain available in 2007 and beyond."
Charles R. Oglesby, Senior Vice President and Chief Operating Officer, added, "Throughout 2006, we continued to move our dealership portfolio toward luxury and mid-line import brands, which now constitute 80% of our new light vehicle unit sales. Looking forward to 2007, I am confident that our portfolio of dealerships, coupled with our current momentum and focused operational initiatives, will continue to result in strong same-store sales gains."
Mr. Gilman concluded, "Our balance sheet is well-positioned for strategic acquisitions and we are excited about the prospects for organic growth in the year ahead. I am pleased to establish an initial earnings guidance range for 2007 of $2.05 to $2.15 per diluted share from continuing operations."
The Company also announced that its Board of Directors has authorized a 1.3 million share repurchase program with the objective of offsetting earnings per share dilution resulting from employee stock-based compensation programs.
Asbury will host a conference call to discuss its fourth quarter and 2006 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 http://www.asburyauto.com/ or http://www.ccbn.com/. In addition, a live audio of the call will be accessible to the public by calling 800-310-6649 (domestic), or 719-457-2693 (international); no access code is necessary. Callers should dial in approximately 5 to 10 minutes before the call begins.
About Asbury Automotive Group
Asbury Automotive Group, Inc. ("Asbury"), headquartered in New York City, is one of the largest automobile retailers in the U.S. Built through a combination of organic growth and a series of strategic acquisitions, Asbury currently operates 87 retail auto stores, encompassing 114 franchises for the sale and servicing of 33 different brands of American, European and Asian automobiles. 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" as that term is defined in the Private Securities Litigation Reform Act of 1995. The forward- looking statements include statements relating to goals, plans, projections and guidance regarding the Company's financial position, results of operations, market position, potential future acquisitions and business strategy. These statements are based on management's current expectations 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, the Company's relationships with vehicle manufacturers and other suppliers, risks associated with the Company's indebtedness, risks related to potential future acquisitions, risks related to competition in the automotive retail and service industries, general economic conditions both nationally and locally, governmental regulations, legislation and the Company's ability to execute certain operational strategies. There can be no guarantees that the Company's plans for future operations will be successfully implemented or that they will prove to be commercially successful or that the Company will be able to continue paying dividends in the future at the current rate or at all. These and other risk factors are discussed in the Company's annual report on Form 10-K and in its other filings with the Securities and Exchange Commission. We undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future events or otherwise.
Investors May Contact:
Stacey Yonkus
Director, Investor Relations
(212) 885-2512
investor@asburyauto.com
Reporters May Contact:
Stephanie Lowenthal
RF|Binder Partners
(212) 994-7619
Stephanie.Lowenthal@RFBinder.com
Asbury Automotive Group, Inc.
Consolidated Condensed Statements of Income
(In thousands, except per share data)
(Unaudited)
For the Three For the Twelve
Months Ended Months Ended
December 31, December 31,
2006 2005 2006 2005
REVENUES:
New vehicle $840,245 $809,677 $3,458,355 $3,305,671
Used vehicle 339,249 315,394 1,458,498 1,328,545
Parts, service and collision
repair 165,542 160,557 675,018 630,817
Finance and insurance, net 38,014 35,448 156,460 148,160
Total revenues 1,383,050 1,321,076 5,748,331 5,413,193
COST OF SALES:
New vehicle 779,202 752,059 3,213,764 3,077,095
Used vehicle 308,012 287,324 1,324,393 1,210,655
Parts, service and collision
repair 80,717 79,477 332,313 310,697
Total cost of sales 1,167,931 1,118,860 4,870,470 4,598,447
GROSS PROFIT 215,119 202,216 877,861 814,746
OPERATING EXPENSES:
Selling, general and
administrative 167,578 155,472 672,897 634,461
Depreciation and amortization 5,105 5,263 20,209 19,582
Income from operations 42,436 41,481 184,755 160,703
OTHER INCOME (EXPENSE):
Floor plan interest expense (10,987) (7,997) (41,054) (27,966)
Other interest expense (10,917) (10,658) (44,185) (40,841)
Interest income 1,841 368 5,112 966
Loss on extinguishment of
long-term debt, net (230) - (1,144) -
Other income (expense), net 2,993 (230) 4,216 223
Total other expense, net (17,300) (18,517) (77,055) (67,618)
Income before income taxes 25,136 22,964 107,700 93,085
INCOME TAX EXPENSE 9,584 8,556 40,546 34,852
INCOME FROM CONTINUING OPERATIONS 15,552 14,408 67,154 58,233
DISCONTINUED OPERATIONS,
net of tax (3,539) 6,094 (6,405) 2,848
NET INCOME $12,013 $20,502 $60,749 $61,081
BASIC EARNINGS PER COMMON SHARE:
Continuing operations $0.46 $0.44 $2.02 $1.78
Discontinued operations (0.10) 0.18 (0.19) 0.09
Net income $0.36 $0.62 $1.83 $1.87
DILUTED EARNINGS PER COMMON SHARE:
Continuing operations $0.45 $0.44 $1.97 $1.77
Discontinued operations (0.10) 0.18 (0.19) 0.09
Net income $0.35 $0.62 $1.78 $1.86
WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING:
Basic 33,486 32,832 33,187 32,691
Diluted 34,194 33,044 34,067 32,896
Asbury Automotive Group, Inc.
Selected Data
(Dollars in thousands, except per vehicle data)
(Unaudited)
As Reported for the
Three Months Ended December 31,
2006 2005
RETAIL VEHICLES SOLD:
New retail units 24,376 62.5% 24,314 64.0%
Used retail units 14,631 37.5% 13,669 36.0%
Total retail units 39,007 100.0% 37,983 100.0%
REVENUE:
New retail $804,414 58.2% $778,640 58.9%
Used retail 260,626 18.8% 237,571 18.0%
Parts, service and collision
repair 165,542 12.0% 160,557 12.2%
Finance and insurance, net 38,014 2.7% 35,448 2.7%
Total retail revenue 1,268,596 1,212,216
Fleet 35,831 2.6% 31,037 2.3%
Wholesale 78,623 5.7% 77,823 5.9%
Total revenue $1,383,050 100.0% $1,321,076 100.0%
GROSS PROFIT:
New retail $60,087 27.9% $57,031 28.2%
Used retail 31,471 14.6% 27,973 13.8%
Parts, service and collision
repair 84,825 39.4% 81,080 40.1%
Finance and insurance, net 38,014 17.7% 35,448 17.5%
Total retail gross profit 214,397 201,532
Fleet 956 0.5% 587 0.3%
Wholesale (234) (0.1)% 97 0.1%
Total gross profit $215,119 100.0% $202,216 100.0%
Adjusted SG&A expenses $165,654 $158,854
Adjusted SG&A expenses as a
percentage of gross profit 77.0% 78.6%
REVENUE PER VEHICLE RETAILED:
New retail $33,000 $32,024
Used retail 17,813 17,380
GROSS PROFIT PER VEHICLE RETAILED:
New retail $2,465 $2,346
Used retail 2,151 2,046
Finance and insurance, net 975 933
Dealership generated finance and
insurance, net 975 905
GROSS PROFIT MARGIN:
New retail 7.5% 7.3%
Used retail 12.1% 11.8%
Parts, service and collision
repair 51.2% 50.5%
Same Store for the
Three Months Ended December 31,
2006 2005
RETAIL VEHICLES SOLD:
New retail units 24,357 62.5% 24,314 64.0%
Used retail units 14,600 37.5% 13,669 36.0%
Total retail units 38,957 100.0% 37,983 100.0%
REVENUE:
New retail $803,972 58.2% $778,640 58.9%
Used retail 260,222 18.8% 237,571 18.0%
Parts, service and collision
repair 165,490 12.0% 160,557 12.2%
Finance and insurance, net 37,990 2.7% 35,448 2.7%
Total retail revenue 1,267,674 1,212,216
Fleet 35,831 2.6% 31,037 2.3%
Wholesale 78,473 5.7% 77,823 5.9%
Total revenue $1,381,978 100.0% $1,321,076 100.0%
GROSS PROFIT:
New retail $60,072 27.9% $57,031 28.2%
Used retail 31,413 14.6% 27,973 13.8%
Parts, service and collision
repair 84,777 39.4% 81,080 40.1%
Finance and insurance, net 37,990 17.7% 35,448 17.5%
Total retail gross profit 214,252 201,532
Fleet 956 0.5% 587 0.3%
Wholesale (178) (0.1)% 97 0.1%
Total gross profit $215,030 100.0% $202,216 100.0%
Adjusted SG&A expenses $165,460 $158,854
Adjusted SG&A expenses as a
percentage of gross profit 76.9% 78.6%
REVENUE PER VEHICLE RETAILED:
New retail $33,008 $32,024
Used retail 17,823 17,380
GROSS PROFIT PER VEHICLE RETAILED:
New retail $2,466 $2,346
Used retail 2,152 2,046
Finance and insurance, net 975 933
Dealership generated finance and
insurance, net 975 905
GROSS PROFIT MARGIN:
New retail 7.5% 7.3%
Used retail 12.1% 11.8%
Parts, service and collision
repair 51.2% 50.5%
Asbury Automotive Group, Inc.
Selected Data
(Dollars in thousands, except per vehicle data)
(Unaudited)
As Reported for the
Twelve Months Ended December 31,
2006 2005
RETAIL VEHICLES SOLD:
New retail units 104,066 62.3% 102,463 63.4%
Used retail units 62,987 37.7% 59,272 36.6%
Total retail units 167,053 100.0% 161,735 100.0%
REVENUE:
New retail $3,303,616 57.5% $3,164,722 58.5%
Used retail 1,120,141 19.5% 1,004,858 18.6%
Parts, service and collision
repair 675,018 11.7% 630,817 11.6%
Finance and insurance, net 156,460 2.7% 148,160 2.7%
Total retail revenue 5,255,235 4,948,557
Fleet 154,739 2.7% 140,949 2.6%
Wholesale 338,357 5.9% 323,687 6.0%
Total revenue $5,748,331 100.0% $5,413,193 100.0%
GROSS PROFIT:
New retail $240,543 27.4% $225,889 27.7%
Used retail 135,364 15.4% 117,422 14.4%
Parts, service and collision
repair 342,705 39.0% 320,120 39.3%
Finance and insurance, net 156,460 17.8% 148,160 18.2%
Total retail gross profit 875,072 811,591
Fleet 4,048 0.5% 2,687 0.3%
Wholesale (1,259) (0.1)% 468 0.1%
Total gross profit $877,861 100.0% $814,746 100.0%
Adjusted gross profit $874,461 $814,746
Adjusted SG&A expenses $665,211 $633,686
Adjusted SG&A expenses as a
percentage of adjusted
gross profit 76.1% 77.8%
REVENUE PER VEHICLE RETAILED:
New retail $31,745 $30,866
Used retail 17,784 16,953
GROSS PROFIT PER VEHICLE RETAILED:
New retail $2,311 $2,205
Used retail 2,149 1,981
Finance and insurance, net 937 916
Dealership generated finance and
insurance, net 906 886
GROSS PROFIT MARGIN:
New retail 7.3% 7.1%
Used retail 12.1% 11.7%
Parts, service and collision
repair 50.8% 50.7%
Same Store for the
Twelve Months Ended December 31,
2006 2005
RETAIL VEHICLES SOLD:
New retail units 102,784 62.1% 102,463 63.4%
Used retail units 62,722 37.9% 59,272 36.6%
Total retail units 165,506 100.0% 161,735 100.0%
REVENUE:
New retail $3,267,558 57.3% $3,164,722 58.5%
Used retail 1,116,160 19.6% 1,004,858 18.6%
Parts, service and collision
repair 670,729 11.8% 630,817 11.6%
Finance and insurance, net 155,101 2.7% 148,160 2.7%
Total retail revenue 5,209,548 4,948,557
Fleet 153,802 2.7% 140,949 2.6%
Wholesale 337,299 5.9% 323,687 6.0%
Total revenue $5,700,649 100.0% $5,413,193 100.0%
GROSS PROFIT:
New retail $238,201 27.3% $225,889 27.7%
Used retail 134,803 15.5% 117,422 14.4%
Parts, service and collision
repair 340,469 39.1% 320,120 39.3%
Finance and insurance, net 155,101 17.8% 148,160 18.2%
Total retail gross profit 868,574 811,591
Fleet 4,027 0.4% 2,687 0.3%
Wholesale (1,242) (0.1)% 468 0.1%
Total gross profit $871,359 100.0% $814,746 100.0%
Adjusted gross profit $867,959 $814,746
Adjusted SG&A expenses $661,561 $633,686
Adjusted SG&A expenses as a
percentage of adjusted
gross profit 76.2% 77.8%
REVENUE PER VEHICLE RETAILED:
New retail $31,791 $30,886
Used retail 17,795 16,953
GROSS PROFIT PER VEHICLE RETAILED:
New retail $2,317 $2,205
Used retail 2,149 1,981
Finance and insurance, net 937 916
Dealership generated finance and
insurance, net 906 886
GROSS PROFIT MARGIN:
New retail 7.3% 7.1%
Used retail 12.1% 11.7%
Parts, service and collision
repair 50.8% 50.7%
Asbury Automotive Group, Inc.
Selected Data
(In thousands)
(Unaudited)
As of As of
December December
31, 2006 31, 2005
BALANCE SHEET HIGHLIGHTS:
Cash and cash equivalents $129,170 $57,194
Inventories 775,313 709,791
Total current assets 1,297,004 1,185,180
Floor plan notes payable 700,777 614,382
Total current liabilities 881,055 838,226
CAPITALIZATION:
Long-term debt (including current portion) $477,154 $496,949
Stockholders' equity 611,833 547,766
Total $1,088,987 $1,044,715
ASBURY AUTOMOTIVE GROUP, INC.
SUPPLEMENTAL DISCLOSURES REGARDING NON-GAAP FINANCIAL INFORMATION
(In thousands, except vehicle and per vehicle data)
(Unaudited)
The Company evaluates F&I gross profit performance on a per vehicle retailed ("PVR") basis by dividing total F&I 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 in 2006 and 2005 that was not attributable to retail vehicles sold during 2006 and 2005 (referred to as "corporate generated F&I gross profit"). During the second quarter of 2006, the Company decided to sell its remaining interest in the pool of extended service contracts which had been the source of its corporate generated F&I gross profit, which resulted in the recognition of a $3.4 million gain on the sale ("corporate generated F&I gain"). The Company believes that dealership generated F&I PVR, which excludes the additional amounts 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 F&I gross profit to dealership generated F&I gross profit, and provides the necessary components to calculate dealership generated F&I gross profit PVR.
As Reported for Same Store for
the Three the Three
Months Ended Months Ended
December 31, December 31,
2006 2005 2006 2005
RECONCILIATION OF FINANCE AND
INSURANCE GROSS PROFIT TO DEALERSHIP
GENERATED FINANCE AND
INSURANCE GROSS PROFIT:
F&I gross profit $38,014 $35,448 $37,990 $35,448
Less: corporate generated F&I
gross profit - (1,068) - (1,068)
Dealership generated F&I
gross profit $38,014 $34,380 $37,990 $34,380
RETAIL VEHICLES SOLD:
New retail units 24,376 24,314 24,357 24,314
Used retail units 14,631 13,669 14,600 13,669
Total retail units 39,007 37,983 38,957 37,983
F&I gross profit PVR $975 $933 $975 $933
Dealership generated F&I gross
profit PVR $975 $905 $975 $905
As Reported for Same Store for
the Twelve the Twelve
Months Ended Months Ended
December 31, December 31,
2006 2005 2006 2005
RECONCILIATION OF FINANCE AND
INSURANCE GROSS PROFIT TO DEALERSHIP
GENERATED FINANCE AND
INSURANCE GROSS PROFIT:
F&I gross profit $156,460 $148,160 $155,101 $148,160
Less: corporate generated F&I
gross profit (1,685) (4,822) (1,685) (4,822)
Less: corporate generated F&I gain (3,400) - (3,400) -
Dealership generated F&I
gross profit $151,375 $143,338 $150,016 $143,338
RETAIL VEHICLES SOLD:
New retail units 104,066 102,463 102,784 102,463
Used retail units 62,987 59,272 62,722 59,272
Total retail units 167,053 161,735 165,506 161,735
F&I gross profit PVR $937 $916 $937 $916
Dealership generated F&I gross
profit PVR $906 $886 $906 $886
The Company's income from continuing operations was impacted by (i) the adoption of Statement of Financial Accounting Standards No. 123R ("SFAS 123R"), (ii) its decision to issue restricted stock units instead of stock options, (iii) the sale of its remaining interest in a pool of extended service contracts, (iv) expenses related to two secondary stock offerings, (v) its decision to abandon certain strategic projects, (vi) expenses related to the extinguishment of long-term debt and (vii) a gain recognized on the sale of a franchise in which the dealership facility was retained during the twelve months ended December 31, 2006; and expenses and a one-time benefit associated with our regional reorganization during the three and twelve months ended December 31, 2005. Effective January 1, 2006, the Company has adopted SFAS 123R under the modified prospective transition method and therefore has recorded stock compensation expense under the fair value method for the three and twelve months ended December 31, 2006. Prior to January 1, 2006, stock compensation expense was recorded under the intrinsic value method. We believe that a more accurate comparison of income from continuing operations can be made by adjusting for these items.
RECONCILIATION OF ADJUSTED SG&A As Reported for the
EXPENSES AS A Three Months Ended Increase %
PERCENTAGE OF GROSS PROFIT December 31, (Decrease) Change
2006 2005
SG&A expenses $167,578 $155,472 $12,106 8%
Reorganization benefit - 3,382
Secondary stock offering
expenses (227) -
Stock compensation expense (1,697) -
Adjusted SG&A expenses $165,654 $158,854 $6,800 4%
Gross profit $215,119 $202,216 $12,903 6%
Adjusted SG&A expenses as a
percentage of gross profit 77.0% 78.6%
RECONCILIATION OF ADJUSTED SG&A Same Store for the
EXPENSES AS A Three Months Ended Increase %
PERCENTAGE OF GROSS PROFIT December 31, (Decrease) Change
2006 2005
SG&A expenses $167,384 $155,472 $11,912 8%
Reorganization benefit - 3,382
Secondary stock offering
expenses (227) -
Stock compensation expense (1,697) -
Adjusted SG&A expenses $165,460 $158,854 $6,606 4%
Gross profit $215,030 $202,216 $12,814 6%
Adjusted SG&A expenses as a
percentage of gross profit 76.9% 78.6%
RECONCILIATION OF ADJUSTED SG&A
EXPENSES AS A As Reported for the
PERCENTAGE OF ADJUSTED GROSS Twelve Months Ended Increase %
PROFIT December 31, (Decrease) Change
2006 2005
SG&A expenses $672,897 $634,461 $38,436 6%
Reorganization benefit - 3,382
Reorganization expenses - (4,157)
Abandoned strategic project
expenses (1,658) -
Secondary stock offering
expenses (1,073) -
Stock compensation expense (4,955) -
Adjusted SG&A expenses $665,211 $633,686 $31,525 5%
Gross profit $877,861 $814,746 $63,115 8%
Corporate generated F&I gain (3,400) -
Adjusted gross profit $874,461 $814,746 $59,715 7%
Adjusted SG&A expenses as a
percentage of adjusted gross
profit 76.1% 77.8%
RECONCILIATION OF ADJUSTED SG&A
EXPENSES AS A Same Store for the
PERCENTAGE OF ADJUSTED GROSS Twelve Months Ended Increase %
PROFIT December 31, (Decrease) Change
2006 2005
SG&A expenses $669,247 $634,461 $34,786 5%
Reorganization benefit - 3,382
Reorganization expenses - (4,157)
Abandoned strategic project
expenses (1,658) -
Secondary stock offering
expenses (1,073) -
Stock compensation expense (4,955) -
Adjusted SG&A expenses $661,561 $633,686 $27,875 4%
Gross profit $871,359 $814,746 $56,613 7%
Corporate generated F&I gain (3,400) -
Adjusted gross profit $867,959 $814,746 $53,213 7%
Adjusted SG&A expenses as a
percentage of adjusted gross
profit 76.2% 77.8%
As Reported for the
RECONCILIATION OF ADJUSTED INCOME Three Months Ended Increase %
FROM CONTINUING OPERATIONS December 31, (Decrease) Change
2006 2005
Net income $12,013 $20,502 $(8,489) (41)%
Discontinued operations, net of
tax 3,539 (6,094)
Income from continuing operations 15,552 14,408 1,144 8%
Adjusting items:
Gain on sale of
franchise, net of tax (1,565) -
Secondary stock offering
expenses* 227 -
Loss on extinguishment of
long-term debt, net of tax 144 -
Reorganization benefit, net of tax - (2,114)
Income from continuing operations
adjusted for non-operational items 14,358 12,294 2,064 17%
Stock compensation expense,
net of tax 1,064 -
Adjusted income from continuing
operations $15,422 $12,294 $3,128 25%
Net income $0.35 $0.62 $(0.27) (44)%
Discontinued operations, net of
tax 0.10 (0.18)
Income from continuing operations 0.45 0.44 0.01 2%
Adjusting items (0.03) (0.07)
Income from continuing operations
adjusted for non-operational items 0.42 0.37 0.05 14%
Stock compensation expense,
net of tax 0.03 -
Adjusted income from continuing
operations $0.45 $0.37 $0.08 22%
Weighted average common shares
outstanding (diluted): 34,194 33,044
*Secondary offering expenses are not deductible for tax purposes; therefore, no tax benefit has been reflected.
As Reported for the
RECONCILIATION OF ADJUSTED INCOME Twelve Months Ended Increase %
FROM CONTINUING OPERATIONS December 31, (Decrease) Change
2006 2005
Net income $60,749 $61,081 $(332) (1)%
Discontinued operations, net of tax 6,405 (2,848)
Income from continuing operations 67,154 58,233 8,921 15%
Adjusting items:
Corporate generated F&I gain, net
of tax (2,130) -
Gain on sale of franchise, net of
tax (1,565) -
Secondary stock offering expenses* 1,073 -
Abandoned strategic project
expenses, net of tax 1,039 -
Loss on extinguishment of
long-term debt, net of tax 717 -
Reorganization expenses, net of
tax - 2,598
Reorganization benefit, net of tax - (2,114)
Income from continuing operations
adjusted for non-operational items 66,288 58,717 7,571 13%
Stock compensation expense,
net of tax 3,105 -
Adjusted income from continuing
operations $69,393 $58,717 $10,676 18%
Net income $1.78 $1.86 $(0.08) (4)%
Discontinued operations, net of
tax 0.19 (0.09)
Income from continuing operations 1.97 1.77 0.20 11%
Adjusting items (0.02) 0.01
Income from continuing operations
adjusted for non-operational items 1.95 1.78 0.17 10%
Stock compensation expense, net of
tax 0.09 -
Adjusted income from continuing
operations $2.04 $1.78 $0.26 15%
Weighted average common shares
outstanding (diluted): 34,067 32,896
*Secondary offering expenses are not deductible for tax purposes; therefore, no tax benefit has been reflected.