Asbury Automotive Group Reports First Quarter Financial Results
Total Revenues up 17% over the prior period SG&A as a percentage of gross profit improved 370 basis points over the prior year period Diluted EPS from continuing operations of $0.27, compared to $0.08 in the prior year period
DULUTH, Ga., April 29, 2010 -- Asbury Automotive Group, Inc. , one of the largest automotive retail and service companies in the U.S., today reported income from continuing operations for the first quarter, 2010 of $8.9 million, or $0.27 per diluted share, versus income from continuing operations of $2.6 million, or $0.08 per diluted share, in the corresponding period last year. The increase was primarily the result of double digit growth in revenue and gross profit from new and used vehicle sales, as well as finance and insurance; combined with Asbury's significantly improved cost structure. Net income for the first quarter of 2010 totaled $7.4 million, or $0.22 per diluted share, compared with $0.3 million, or $0.01 per diluted share, a year ago.
2010 first quarter revenues totaled $960 million, an increase of 17% compared to the prior year period. This improvement was driven by increases of 22% in new vehicle revenue, 21% in used vehicle revenue, and 27% in finance and insurance revenues. Total gross profit increased 12%, and was up in all major categories of the business.
"Pent-up demand combined with the return of aggressive manufacturer incentives delivered a blow-out March," said Charles R. Oglesby, Asbury's President and CEO. "Our improved operating leverage from the cost reduction initiatives we have implemented has positioned Asbury to capture more profit from the rising tide of consumer demand."
Craig T. Monaghan, Asbury's Senior Vice President and Chief Financial Officer, stated, "With over $200 million of liquidity, we have strengthened our financial position and enhanced our financial flexibility for the future."
Mr. Oglesby concluded, "While we are pleased with delivering a strong quarter, our challenge is to retain as much of our lean cost structure as possible, while remaining focused on the incremental sales opportunities the strengthening marketplace is providing."
Asbury will host a conference call to discuss its first 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 on to http://www.asburyauto.com/ or http://www.ccbn.com/. In addition, live audio of the call will be accessible to the public by calling (800) 227-9428 (domestic), or (785) 830-1925 (international); passcode - 5343645. Callers should dial in approximately 5 to 10 minutes before the call begins.
About Asbury Automotive Group
Asbury Automotive Group, Inc. ("Asbury"), headquartered in Duluth, Georgia, a suburb of Atlanta, 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 80 retail auto stores, encompassing 107 franchises for the sale and servicing of 38 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" 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, the benefits of its restructuring program 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 financial stability of, vehicle manufacturers and other suppliers, risks associated with Asbury's indebtedness (including available borrowing capacity and compliance with its financial covenants), Asbury's relationship 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 and Asbury's ability to capitalize on its restructuring programs and other operational strategies, Asbury's ability to leverage gains from its dealership portfolio, 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 Securities and Exchange Commission from time to time, including its most recent annual report on Form 10-K. 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
March 31,
---------
2010 2009
---- ----
REVENUES:
New vehicle $528.8 $432.6
Used vehicle 252.4 208.2
Parts and service 152.8 158.8
Finance and insurance, net 26.0 20.5
---- ----
Total revenues 960.0 820.1
COST OF SALES:
New vehicle 493.0 405.4
Used vehicle 229.8 188.5
Parts and service 74.3 80.8
---- ----
Total cost of sales 797.1 674.7
----- -----
GROSS PROFIT 162.9 145.4
OPERATING EXPENSES:
Selling, general and administrative 129.1 120.7
Depreciation and amortization 5.7 5.9
Other operating income, net (0.4) (0.4)
---- ----
Income from operations 28.5 19.2
OTHER EXPENSE:
Floor plan interest expense (4.1) (4.9)
Other interest expense (9.5) (9.8)
Convertible debt discount
amortization (0.4) (0.5)
---- ----
Total other expense, net (14.0) (15.2)
----- -----
Income before income taxes 14.5 4.0
INCOME TAX EXPENSE 5.6 1.4
--- ---
INCOME FROM CONTINUING OPERATIONS 8.9 2.6
DISCONTINUED OPERATIONS, net of tax (1.5) (2.3)
---- ----
NET INCOME $7.4 $0.3
==== ====
EARNINGS PER COMMON SHARE:
BASIC -
Continuing operations $0.28 $0.08
Discontinued operations (0.05) (0.07)
----- -----
Net income $0.23 $0.01
===== =====
DILUTED -
Continuing operations $0.27 $0.08
Discontinued operations (0.05) (0.07)
----- -----
Net income $0.22 $0.01
===== =====
WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING:
Basic 32.2 32.1
==== ====
Diluted 33.3 32.4
==== ====
New Vehicle --
For the Three Months
Ended Increase %
March 31, (Decrease) Change
--------- ---------- ------
2010 2009
---- ----
(In millions)
Revenue:
New vehicle
revenue-same
store(1)
Luxury $179.2 $142.5 $36.7 26%
Mid-line
import 227.9 189.8 38.1 20%
Mid-line
domestic 67.4 59.2 8.2 14%
Value 6.4 4.6 1.8 39%
--- ---
Total new
light
vehicle
revenue-same
store(1) 480.9 396.1 84.8 21%
Heavy truck 47.9 36.5 11.4 31%
---- ----
Total new
vehicle
revenue-same
store(1) 528.8 432.6 96.2 22%
New vehicle
revenue-acquisitions - -
--- ---
Total new
vehicle
revenue, as
reported $528.8 $432.6 $96.2 22%
====== ======
Gross profit:
New vehicle
gross
profit-same
store(1)
Luxury $15.0 $9.8 $5.2 53%
Mid-line
import 13.9 11.3 2.6 23%
Mid-line
domestic 5.0 4.2 0.8 19%
Value 0.2 0.3 (0.1) (33)%
--- ---
Total new
light
vehicle
gross
profit-same
store(1) 34.1 25.6 8.5 33%
Heavy truck 1.7 1.6 0.1 6%
--- ---
Total new
vehicle
gross
profit-same
store(1) 35.8 27.2 8.6 32%
New vehicle
gross
profit-acquisitions - -
--- ---
Total new
vehicle
gross
profit, as
reported $35.8 $27.2 $8.6 32%
===== =====
For the Three
Months Ended Increase %
March 31, (Decrease) Change
---------- ------
2010 2009
---- ----
New vehicle units:
New vehicle retail
units-same store(1)
Luxury 3,715 3,076 639 21%
Mid-line import 9,059 7,690 1,369 18%
Mid-line domestic 1,792 1,763 29 2%
Value 304 204 100 49%
--- ---
Total new light
vehicle retail
units-same store(1) 14,870 12,733 2,137 17%
Fleet vehicles 486 459 27 6%
--- ---
Total new light
vehicle units-same
store(1) 15,356 13,192 2,164 16%
Heavy truck 1,059 584 475 81%
----- ---
Total new vehicle
units-same store(1) 16,415 13,776 2,639 19%
Total new vehicle
units-acquisitions - -
--- ---
New vehicle
units-actual 16,415 13,776 2,639 19%
====== ======
Total new light
vehicle units-same
store(1) 15,356 13,192 2,164 16%
Total new light
vehicle
units-acquisitions - -
--- ---
Total new light
vehicle units 15,356 13,192 2,164 16%
====== ======
New Vehicle Metrics-
For the Three
Months Ended Increase %
March 31, (Decrease) Change
--------- ---------- ------
2010 2009
---- ----
Revenue per new light vehicle
sold-same store(1) $31,317 $30,026 $1,291 4%
======= =======
Revenue per new heavy truck sold $45,231 $62,500 $(17,269) (28)%
======= =======
Revenue per new vehicle sold-same
store(1) $32,214 $31,402 $812 3%
======= =======
Gross profit per new light vehicle
sold-same store(1) $2,221 $1,941 $280 14%
====== ======
Gross profit per new heavy truck
sold $1,605 $2,740 $(1,135) (41)%
====== ======
Gross profit per new vehicle
sold-same store(1) $2,181 $1,974 $207 10%
====== ======
New light vehicle gross
margin-same store(1) 7.1% 6.5% 0.6% 9%
=== ===
New heavy truck gross margin 3.5% 4.4% (0.9)% (20)%
=== ===
New vehicle gross margin-same
store(1) 6.8% 6.3% 0.5% 8%
=== ===
(1) Same store information consists of amounts from dealerships for
the identical months of each period presented in the comparison,
commencing with the first full month in which the dealership was
owned by us.
Used Vehicle-
For the Three Months
Ended Increase %
March 31, (Decrease) Change
--------- ---------- ------
2010 2009
---- ----
(Dollars in millions, except for per
vehicle data)
Revenue:
Used vehicle
retail
revenues-same
store(1)
Light vehicles $204.9 $169.2 $35.7 21%
Heavy trucks 1.4 1.9 (0.5) (26)%
--- ---
Total used vehicle
retail
revenues-same
store(1) 206.3 171.1 35.2 21%
Used vehicle
retail
revenues-acquisitions - -
--- ---
Total used vehicle
retail revenues 206.3 171.1 35.2 21%
Used vehicle
wholesale
revenues-same
store(1)
Light vehicles 45.2 36.3 8.9 25%
Heavy trucks 0.9 0.8 0.1 13%
--- ---
Total used vehicle
wholesale
revenues-same
store(1) 46.1 37.1 9.0 24%
Used vehicle
wholesale
revenues-acquisitions - -
--- ---
Total used vehicle
wholesale
revenues 46.1 37.1 9.0 24%
---- ----
Used vehicle
revenue, as
reported $252.4 $208.2 $44.2 21%
====== ======
Gross profit:
Used vehicle
retail gross
profit-same
store(1)
Light vehicles $22.7 $19.5 $3.2 16%
Heavy trucks - (0.1) 0.1 100%
--- ----
Total used vehicle
retail gross
profit-same
store(1) 22.7 19.4 3.3 17%
Used vehicle
retail gross
profit-acquisitions - -
--- ---
Total used vehicle
retail gross
profit 22.7 19.4 3.3 17%
Used vehicle
wholesale gross
profit-same
store(1)
Light vehicles 0.3 0.7 (0.4) (57)%
Heavy trucks (0.4) (0.4) - -%
---- ----
Total used vehicle
wholesale gross
profit-same
store(1) (0.1) 0.3 (0.4) (133)%
Used vehicle
wholesale gross
profit-acquisitions - -
--- ---
Total used vehicle
wholesale gross
profit (0.1) 0.3 (0.4) (133)%
---- ---
Used vehicle gross
profit, as
reported $22.6 $19.7 $2.9 15%
===== =====
Used vehicle
retail units:
Used vehicle
retail units-same
store(1)
Light vehicles 10,897 9,542 1,355 14%
Heavy trucks 69 60 9 15%
--- ---
Total used vehicle
retail units-same
store(1) 10,966 9,602 1,364 14%
Used vehicle
retail
units-acquisitions - -
--- ---
Used vehicle
retail
units-actual 10,966 9,602 1,364 14%
====== =====
Used Vehicle Metrics-
For the Three Months
Ended Increase %
March 31, (Decrease) Change
--------- ---------- ------
2010 2009
---- ----
Revenue per used light vehicle
retailed-same store(1) $18,803 $17,732 $1,071 6%
======= =======
Revenue per used heavy truck
retailed $20,290 $31,667 $(11,377) (36)%
======= =======
Revenue per used vehicle
retailed-same store(1) $18,813 $17,819 $994 6%
======= =======
Gross profit per used light
vehicle retailed-same store(1) $2,083 $2,044 $39 2%
====== ======
Gross profit per used heavy truck
retailed $- $(1,667) $1,667 100%
=== =======
Gross profit per used vehicle
retailed-same store(1) $2,070 $2,020 $50 2%
====== ======
Used light vehicle retail gross
margin-same store(1) 11.1% 11.5% (0.4)% (3)%
==== ====
Used heavy truck retail gross
margin -% (5.3)% 5.3% 100%
=== =====
Used vehicle retail gross
margin-same store(1) 11.0% 11.3% (0.3)% (3)%
==== ====
(1) Same store information consists of amounts from dealerships for
the identical months of each period presented in the comparison,
commencing with the first full month in which the dealership was
owned by us.
Parts and Service-
For the Three
Months Ended Increase %
March 31, (Decrease) Change
--------- ---------- ------
2010 2009
---- ----
(Dollars in millions)
Revenue:
Parts and service
revenues-same
store(1)
Light vehicles $136.2 $143.2 $(7.0) (5)%
Heavy trucks 16.6 15.6 1.0 6%
---- ----
Total parts and
service
revenue-same
store(1) 152.8 158.8 (6.0) (4)%
Parts and service
revenues-acquisitions - -
--- ---
Parts and service
revenue, as
reported $152.8 $158.8 $(6.0) (4)%
====== ======
Gross profit:
Parts and service
gross
profit-same
store(1)
Light vehicles $73.5 $73.1 $0.4 1%
Heavy trucks 5.0 4.9 0.1 2%
--- ---
Total parts and
service gross
profit-same
store(1) 78.5 78.0 0.5 1%
Parts and service
gross
profit-acquisitions - -
--- ---
Parts and service
gross profit, as
reported $78.5 $78.0 $0.5 1%
===== =====
Light vehicle
parts and
service gross
margin-same
store(1) 54.0% 51.0% 3.0% 6%
==== ====
Heavy truck parts
and service
gross margin 30.1% 31.4% (1.3)% (4)%
==== ====
Parts and service
gross
margin-same
store(1) 51.4% 49.1% 2.3% 5%
==== ====
(1) Same store information consists of amounts from dealerships for
the identical months of each period presented in the comparison,
commencing with the first full month in which the dealership was
owned by us.
Finance and Insurance, net-
For the Three
Months Increase %
Ended March 31, (Decrease) Change
--------------- ---------- ------
2010 2009
---- ----
(In millions, except for per
vehicle data)
Dealership generated F&I,
net-same store(1)
Light vehicles $25.4 $20.0 $5.4 27%
Heavy trucks - 0.1 (0.1) (100)%
--- ---
Dealership generated
F&I-same store(1) 25.4 20.1 5.3 26%
Dealership generated
F&I-acquisitions - -
--- ---
Dealership generated F&I,
net 25.4 20.1 5.3 26%
Corporate generated F&I 0.6 0.4 0.2 50%
--- ---
Finance and insurance, net
as reported $26.0 $20.5 $5.5 27%
===== =====
Dealership generated light
vehicle F&I per vehicle
sold-same store(1) (2) $968 $880 $88 10%
==== ====
Dealership generated F&I
per vehicle sold- same
store(1) (2) $928 $860 $68 8%
==== ====
Light vehicle F&I per
vehicle sold-same store(1) $990 $897 $93 10%
==== ====
Heavy truck F&I per vehicle
sold - $155 $(155) (100)%
=== ====
F&I per vehicle sold-same
store(1) $950 $877 $73 8%
==== ====
(1) Same store information consists of amounts from dealerships for
the identical months of each period presented in the comparison,
commencing with the first full month in which the dealership was
owned by us.
(2) Dealership generated F&I per vehicle sold excludes Corporate
generated F&I.
For the Three Months
Ended
March 31,
---------
2010 2009
---- ----
REVENUE MIX PERCENTAGES:
New light vehicles 50.1% 48.3%
New heavy trucks 5.0% 4.5%
Used retail light vehicles 21.3% 20.6%
Used retail heavy trucks 0.2% 0.2%
Used wholesale light vehicles 4.7% 4.4%
Used wholesale heavy trucks 0.1% 0.1%
Parts and service light vehicles 14.2% 17.5%
Parts and service heavy trucks 1.7% 1.9%
Finance and insurance, net -light
vehicles 2.7% 2.5%
--- ---
Total revenue 100.0% 100.0%
===== =====
GROSS PROFIT MIX PERCENTAGES:
New light vehicles 20.9% 17.6%
New heavy trucks 1.0% 1.1%
Used retail light vehicles 14.0% 13.4%
Used retail heavy trucks -% (0.1)%
Used wholesale light vehicles 0.2% 0.5%
Used wholesale heavy trucks (0.3)% (0.3)%
Parts and service light vehicles 45.1% 50.3%
Parts and service heavy trucks 3.1% 3.4%
Finance and insurance, net -light
vehicles 16.0% 14.0%
Finance and insurance, net -heavy
trucks -% 0.1%
--- ---
Total gross profit 100.0% 100.0%
===== =====
SG&A EXPENSES AS A PERCENTAGE OF
GROSS PROFIT 79.3% 83.0%
ASBURY AUTOMOTIVE GROUP, INC.
Selected Balance Sheet Data
(In millions)
(Unaudited)
December
March 31, 31, Increase % Change
2010 2009 (Decrease) --------
---- ---- ----------
SELECTED BALANCE SHEET DATA
Cash and cash equivalents $29.4 $84.7 $(55.3) (65)%
New vehicle inventory 381.9 394.2 (12.3) (3)%
Used vehicle inventory 74.8 64.1 10.7 17%
Parts inventory 41.6 41.4 0.2 -%
Total current assets 778.2 815.6 (37.4) (5)%
Floor plan notes payable 384.7 434.7 (50.0) (12)%
Total current liabilities 534.5 598.8 (64.3) (11)%
CAPITALIZATION:
Long-term debt (including
current portion) $536.3 $537.8 $(1.5) -%
Shareholders' equity 252.5 243.6 8.9 4%
----- -----
Total $788.8 $781.4 $7.4 1%
Brand Mix -New Light Vehicle Revenue by Brand
For the Three
Months
Ended March 31,
---------------
2010 2009
---- ----
Luxury
BMW 9% 9%
Mercedes-Benz 8% 8%
Lexus 6% 5%
Acura 4% 4%
Infiniti 5% 4%
Other luxury 5% 6%
--- ---
Total luxury 37% 36%
Mid-Line Imports:
Honda 22% 25%
Toyota 10% 11%
Nissan 14% 10%
Other imports 2% 2%
--- ---
Total imports 48% 48%
Mid-Line Domestic:
Ford 9% 9%
General Motors 3% 3%
Chrysler 2% 3%
--- ---
Total domestic 14% 15%
Value 1% 1%
--- ---
Total New Light
Vehicle Revenue 100% 100%
=== ===
Asbury Automotive Group, Inc.
Supplemental Disclosures
(Dollars in millions, except per share data)
(Unaudited)
Our operations during 2009 were impacted by certain items that are not core dealership operating items, which we believe are important to highlight when reviewing our results and should not be considered when forecasting our future results.
The non-core items shown in the table below include (i) restructuring costs consisting primarily of severance and retention expenses related to the relocation of our corporate headquarters, (ii) implementation costs associated with transitioning our dealerships to the Arkona dealer management system, and, (iii) a legal settlements benefit related to legal claims arising in, and before, the year 2003.
For the Three Months
Ended March 31,
2010 2009
---- ----
Non-core items - expense (income):
Restructuring costs - $1.3
Dealer management system
implementation costs - 0.2
Legal settlements benefit - (1.5)
--- ----
Total non-core items $- $-
=== ===
Non-core items per dilutive share $- $-
=== ===
Weighted average common shares
outstanding (diluted) 33.3 32.4
==== ====
Asbury Automotive Group, Inc.
Summary of Debt Covenants
As of and for the Period Ended March 31, 2010
(Dollars in millions, except per vehicle data)
(Unaudited)
Wachovia Credit
Mortgages Facilities
(1) (2)
---------- -----------
Senior Leverage Ratio must be < 3.00: 1.00
SECURED DEBT (numerator)
+ Mortgage notes payable (including mortgages
associated with assets held for sale) $167.7
+ Borrowings under revolving credit facility -
+ Capital lease obligations -
+ Interest rate obligations -
+ Other indebtedness 0.2
= TOTAL SECURED DEBT (ex floorplan) $167.9
EBITDA (denominator)
+ Net Income - trailing 12 months ("T12") $30.5
+ Add back Losses from discontinued
operations - T12 39.6
+ Add back Total interest expense (excluding
floorplan interest) -T12 18.6
+ Add back Income tax expense - T12 23.3
+ Add back Depreciation and amortization - T12 -
+ Add back Other non-cash charges - T12* 3.8
= CONSOLIDATED EBITDA 115.8
+ Add back Pro forma acquisitions EBITDA
(as defined) -
+ Add back Pro forma rent savings (as defined) -
- Less Gain on debt extinguishment (0.1)
= CONSOLIDATED PRO FORMA EBITDA $115.7
SENIOR LEVERAGE RATIO 1.45
*Includes impairment expenses, stock-based compensation expense, deferred
finance fee amortization and swap amortization.
(1) The "Wachovia Mortgages" are the Company's mortgage notes with
Wachovia Bank, National Association and Wachovia Financial Services, Inc.
(2) The "Credit Facilities" are the Company's revolving credit facility
with Bank of America, as administrative agent, and the Company's used
vehicle floor plan facility with J.P. Morgan Chase Bank, N.A. and Bank of
America, N.A.
Fixed Charge Coverage Ratio must be > 1.20: 1:00
EBITDAR (numerator)
+ Net Income - trailing 12 months ("T12") $30.5 $30.5
+ Add back Losses from discontinued operations - T12 39.6 39.6
+ Add back Total interest expense (ex floorplan) - T12 18.6 18.6
+ Add back Income tax expense - T12 23.3 23.3
+ Add back Other non-cash charges - T12 (as defined)* 10.8 3.8
- Less Gain on debt extinguishment - (0.1)
+ Add back Non-recurring items - T12 (as defined)** 4.8 -
--- ---
= CONSOLIDATED EBITDA 127.6 115.7
+ PLUS Required principal payments - T12 (Rent) 41.7 41.7
- LESS Capital expenditures (as defined) (16.0) (12.0)
------ -----
= TOTAL EARNINGS AVAILABLE FOR FIXED CHARGES $153.3 $145.4
====== ======
FIXED CHARGES (denominator)
+ Total interest expense (ex Floorplan Interest) - T12 39.6 39.6
- LESS Interest associated with convertible notes - T12 (1.7) (1.7)
+ PLUS Required principal payments - T12 8.7 8.7
+ PLUS Rental expense - T12 41.7 41.7
---- ----
= TOTAL FIXED CHARGES $88.3 $88.3
===== =====
FIXED CHARGE COVERAGE RATIO 1.74 1.65
Current Ratio must be > 1.20: 1:00
Total current assets (numerator)
+ Total current assets $778.2 $778.2
PLUS Available unused commitments under revolving
+ credit facility 125.0 136.7
----- -----
= TOTAL CURRENT ASSETS $903.2 $914.9
====== ======
Total current liabilities (denominator)
+ Total current liabilities $534.5 $534.5
------ ------
= TOTAL CURRENT LIABILITIES $534.5 $534.5
====== ======
CURRENT RATIO 1.69 1.71
Adjusted Net Worth must be > $350 million
Stockholders' equity $252.5
LESS 50% of net income subsequent to March 31, 2008
- (to the extent net income is positive) -
LESS Proceeds from stock option exercises subsequent
- to March 31, 2008 (1.6)
+ ADD Impairment expenses, net of tax 383.0
-----
= ADJUSTED NET WORTH $633.9
* Includes impairment expenses, stock-based compensation expense,
deferred finance fee amortization and swap amortization.
** Includes restructuring costs and dealer management system
transition costs.