Asbury Automotive Group Announces 2018 Second Quarter Financial Results
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 Increase %
June 30, (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 Increase %
June 30, (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 Increase %
June 30, (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 Increase %
June 30, (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 Increase %
June 30, (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, December 31, Increase % Change
2018 2017
(Decrease)
---
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 $303.6 $297.1
("EBITDA")
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
==== ====
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.
