Asbury Automotive Group Announces 2018 Fourth Quarter And Full-Year Financial Results
DULUTH, Ga., Feb. 6, 2019 /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 fourth quarter 2018 of $40.4 million ($2.06 per diluted share) compared to $42.5 million ($2.03 per diluted share) in the prior year quarter. It also reported adjusted net income (a non-GAAP measure) for the fourth quarter 2018 of $43.2 million ($2.20 per diluted share) compared to $37.8 million ($1.81 per diluted share) in the prior year quarter, a 22% increase in adjusted earnings per share.
Net income for the fourth quarter 2018 was adjusted for a $3.7 million pre-tax charge for franchise rights impairments ($0.14 per diluted share). Net income for the fourth quarter 2017 was adjusted for a $5.1 million pre-tax charge for franchise rights impairments ($0.15 per diluted share) and a $7.9 million benefit ($0.37 per diluted share) related to adjustments to deferred tax balances as a result of changes to the tax law.
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 fourth quarter was to increase net income by $1.2 million or $0.06 per diluted share.
"We closed out 2018 with a strong performance delivering 22% adjusted EPS growth in the quarter," said David Hult, Asbury's President and Chief Executive Officer. "During 2018, we acquired three dealerships, repurchased approximately $105 million of our shares, and further developed our omni-channel capabilities. In a relatively flat SAAR environment we maintained our industry leading operating margins and grew adjusted EPS 31%. This performance is a direct result of our team's hard work, dedication, and commitment to continuous improvement. Going forward, we will continue to execute our two-part strategy: drive operational excellence and deploy capital to its highest returns."
Fourth Quarter 2018 Operational Summary
All stores:
-- Revenue increased 7%; gross profit increased 5%
-- New vehicle revenue increased 6%; gross profit decreased 6%
-- Used vehicle retail revenue increased 10%; gross profit increased 10%
-- Finance and insurance revenue and gross profit increased 6%
-- Parts and service revenue increased 7%; gross profit increased 7%
-- SG&A as a percentage of gross profit increased 90 basis points to 68.2%
-- Adjusted income from operations as a percentage of revenue was 4.5%
-- Adjusted EPS from continuing operations increased 22%
Same store:
-- Revenue increased 4%; gross profit increased 2%
-- New vehicle revenue increased 3%; gross profit decreased 7%
-- Used vehicle retail revenue increased 7%; gross profit increased 7%
-- Finance and insurance revenue and gross profit increased 3%
-- Parts and service revenue increased 5%; gross profit increased 5%
Strategic Highlights:
-- In Q4 2018, we repurchased $48 million of common stock
-- Signed an agreement to acquire four stores in the Indianapolis market
that we expect to close in Q1 2019, subject to customary closing
conditions. We expect these dealerships will generate approximately $250
million in annualized revenue.
-- Omni-channel initiatives helped drive results, reduce costs, and improve
efficiencies
For the full year 2018, the Company reported net income of $168.0 million ($8.28 per diluted share) compared to $139.1 million ($6.62 per diluted share) in the prior year period. Adjusted net income (a non-GAAP measure) for 2018 was $170.8 million ($8.41 per diluted share) compared to $135.1 million ($6.43 per diluted share) in the prior year period, a 31% increase in adjusted EPS.
Additional commentary regarding the fourth quarter and full-year results will be provided during the earnings conference call on February 6, 2019 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 (323) 994-2131 (domestic), or (800) 347-6311 (international); passcode - 1070155. 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 - 1070155.
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 Increase %
Ended December 31, (Decrease) Change
2018 2017
REVENUE:
New vehicle $
1,022.4 $
964.1 $
58.3 6
%
Used vehicle:
Retail 427.9 389.6 38.3 10
%
Wholesale 45.5 47.9 (2.4) (5)
%
Total used vehicle 473.4 437.5 35.9 8
%
Parts and service 211.1 196.6 14.5 7
%
Finance and insurance, net 77.3 72.7 4.6 6
%
TOTAL REVENUE 1,784.2 1,670.9 113.3 7
%
GROSS PROFIT:
New vehicle 43.9 46.6 (2.7) (6)
%
Used vehicle:
Retail 29.3 26.7 2.6 10
%
Wholesale - (0.2) 0.2 100
%
Total used vehicle 29.3 26.5 2.8 11
%
Parts and service 131.3 122.6 8.7 7
%
Finance and insurance, net 77.3 72.7 4.6 6
%
TOTAL GROSS PROFIT 281.8 268.4 13.4 5
%
OPERATING EXPENSES:
Selling, general and administrative 192.2 180.5 11.7 6
%
Depreciation and amortization 8.5 8.1 0.4 5
%
Franchise rights impairment 3.7 5.1 (1.4) (27)
%
Other operating (income) expenses, net 0.1 0.6 (0.5) (83)
%
INCOME FROM OPERATIONS 77.3 74.1 3.2 4
%
OTHER EXPENSES:
Floor plan interest expense 9.5 5.5 4.0 73
%
Other interest expense, net 13.7 13.8 (0.1) (1)
%
Swap interest expense - 0.4 (0.4) (100)
%
Total other expenses, net 23.2 19.7 3.5 18
%
INCOME BEFORE INCOME TAXES 54.1 54.4 (0.3) (1)
%
Income tax expense 13.7 11.9 1.8 15
%
NET INCOME $
40.4 $
42.5 $
(2.1) (5)
%
EARNINGS PER COMMON SHARE:
Basic-
Net income $
2.09 $
2.06 $
0.03 1
%
Diluted-
Net income $
2.06 $
2.03 $
0.03 1
%
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
Basic 19.3 20.6 (1.3) (6)
%
Restricted stock 0.1 0.1
%
Performance share units 0.2 0.2
%
Diluted 19.6 20.9 (1.3) (6)
%
ASBURY AUTOMOTIVE GROUP, INC.
KEY OPERATING HIGHLIGHTS (In millions, except per unit data)
(Unaudited)
For the Three Months Increase %
Ended December 31, (Decrease) Change
2018 2017
Unit sales
---
New vehicle:
Luxury 6,452 6,408 44 1
%
Import 16,394 15,181 1,213 8
%
Domestic 4,951 4,602 349 8
%
Total new vehicle 27,797 26,191 1,606 6
%
Used vehicle retail 19,298 17,822 1,476 8
%
Used to new ratio 69.4 68.0
% % 140 bps
Average selling price
---
New vehicle $
36,781 $
36,810 $
(29) %
Used vehicle retail 22,173 21,861 312 1
%
Average gross profit per unit
---
New vehicle:
Luxury $
3,487 $
3,777 $
(290) (8)
%
Import 830 922 (92) (10)
%
Domestic 1,575 1,825 (250) (14)
%
Total new vehicle 1,579 1,779 (200) (11)
%
Used vehicle retail 1,518 1,498 20 1
%
Finance and insurance, net 1,641 1,652 (11) (1)
%
Front end yield (1) 3,196 3,317 (121) (4)
%
Gross margin
---
New vehicle:
Luxury 6.4
% 7.0
% (60) bps
Import 2.9
% 3.2
% (30) bps
Domestic 3.9
% 4.6
% (70) bps
Total new vehicle 4.3
% 4.8
% (50) bps
Used vehicle retail 6.8
% 6.9
% (10) bps
Parts and service 62.2 62.4
% % (20) bps
Total gross profit margin 15.8 16.1
% % (30) bps
SG&A metrics
---
Rent expense $
6.5 $
6.5
$ %
Total SG&A as a percentage of gross profit 68.2 67.3
% % 90 bps
SG&A, excluding rent expense as a percentage of gross 65.9 64.8
profit % % 110 bps
Operating metrics
---
Income from operations as a percentage of revenue 4.3
% 4.4
% (10) bps
Income from operations as a percentage of gross profit 27.4 27.6
% % (20) bps
Adjusted income from operations as a percentage of 4.5
% 4.7
revenue % (20) bps
Adjusted income from operations as a percentage of 28.7 29.5
gross profit % % (80) bps
Revenue mix
---
New vehicle 57.3 57.7
% %
Used vehicle retail 24.0 23.2
% %
Used vehicle wholesale 2.6
% 2.9
%
Parts and service 11.8 11.8
% %
Finance and insurance 4.3
% 4.4
%
Total revenue 100.0 100.0
% %
Gross profit mix
---
New vehicle 15.6 17.4
% %
Used vehicle retail 10.4 9.9
% %
Used vehicle wholesale - % (0.1)
%
Parts and service 46.6 45.7
% %
Finance and insurance 27.4 27.1
% %
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 Increase %
Ended December 31, (Decrease) Change
2018 2017
Revenue
---
New vehicle:
Luxury $
351.5 $
347.9 $
3.6 1
%
Import 447.4 431.5 15.9 4
%
Domestic 193.6 184.6 9.0 5
%
Total new vehicle 992.5 964.0 28.5 3
%
Used Vehicle:
Retail 415.8 389.6 26.2 7
%
Wholesale 44.8 47.9 (3.1) (6)
%
Total used vehicle 460.6 437.5 23.1 5
%
Parts and service 205.9 196.6 9.3 5
%
Finance and insurance 74.8 72.8 2.0 3
%
Total revenue $
1,733.8 $
1,670.9 $
62.9 4
%
Gross profit
---
New vehicle:
Luxury $
22.5 $
24.2 $
(1.7) (7)
%
Import 12.9 13.9 (1.0) (7)
%
Domestic 7.7 8.4 (0.7) (8)
%
Total new vehicle 43.1 46.5 (3.4) (7)
%
Used Vehicle:
Retail 28.7 26.7 2.0 7
%
Wholesale - (0.1) 0.1 100
%
Total used vehicle 28.7 26.6 2.1 8
%
Parts and service:
Customer pay 72.4 68.6 3.8 6
%
Warranty 19.9 20.0 (0.1) (1)
%
Wholesale parts 5.8 5.4 0.4 7
%
Parts and service, excluding reconditioning and preparation 98.1 94.0 4.1 4
%
Reconditioning and preparation 30.1 28.6 1.5 5
%
Total parts and service 128.2 122.6 5.6 5
%
Finance and insurance 74.8 72.8 2.0 3
%
Total gross profit $
274.8 $
268.5 $
6.3 2
%
SG&A expense $
187.0 $
180.4 $
6.6 4
%
SG&A expense as a percentage of gross profit 68.0 67.2
% % 80 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 Increase %
Ended December 31, (Decrease) Change
2018 2017
Unit sales
---
New vehicle:
Luxury 6,452 6,408 44 1
%
Import 15,572 15,181 391 3
%
Domestic 4,753 4,602 151 3
%
Total new vehicle 26,777 26,191 586 2
%
Used vehicle retail 18,624 17,822 802 5
%
Used to new ratio 69.6 68.0
% % 160 bps
Average selling price
---
New vehicle $
37,065 $
36,807 $
258 1
%
Used vehicle retail 22,326 21,861 465 2
%
Average gross profit per unit
---
New vehicle:
Luxury $
3,487 $
3,777 $
(290) (8)
%
Import 828 916 (88) (10)
%
Domestic 1,620 1,825 (205) (11)
%
Total new vehicle 1,610 1,775 (165) (9)
%
Used vehicle retail 1,541 1,498 43 3
%
Finance and insurance, net 1,648 1,654 (6) %
Front end yield (1) 3,229 3,317 (88) (3)
%
Gross margin
---
New vehicle:
Luxury 6.4
% 7.0
% (60) bps
Import 2.9
% 3.2
% (30) bps
Domestic 4.0
% 4.6
% (60) bps
Total new vehicle 4.3
% 4.8
% (50) bps
Used vehicle retail 6.9
% 6.9
% -bps
Parts and service:
Parts and service, excluding reconditioning and 47.6 47.8
preparation % % (20) bps
Parts and service, including reconditioning and 62.3 62.4
preparation % % (10) bps
Total gross profit margin 15.8 16.1
% % (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 Twelve Months Increase %
Ended December 31, (Decrease) Change
2018 2017
REVENUE:
New vehicle $
3,788.7 $
3,561.1 $
227.6 6
%
Used vehicle:
Retail 1,783.3 1,635.3 148.0 9
%
Wholesale 189.1 198.8 (9.7) (5)
%
Total used vehicle 1,972.4 1,834.1 138.3 8
%
Parts and service 821.0 786.1 34.9 4
%
Finance and insurance, net 292.3 275.2 17.1 6
%
TOTAL REVENUE 6,874.4 6,456.5 417.9 6
%
GROSS PROFIT:
New vehicle 165.2 169.0 (3.8) (2)
%
Used vehicle:
Retail 127.8 121.1 6.7 6
%
Wholesale 1.9 0.8 1.1 138
%
Total used vehicle 129.7 121.9 7.8 6
%
Parts and service 515.8 489.8 26.0 5
%
Finance and insurance, net 292.3 275.2 17.1 6
%
TOTAL GROSS PROFIT 1,103.0 1,055.9 47.1 4
%
OPERATING EXPENSES:
Selling, general and administrative 755.8 729.7 26.1 4
%
Depreciation and amortization 33.7 32.1 1.6 5
%
Franchise rights impairment 3.7 5.1 (1.4) (27)
%
Other operating (income) expenses, net (1.1) 1.3 (2.4) (185)
%
INCOME FROM OPERATIONS 310.9 287.7 23.2 8
%
OTHER EXPENSES:
Floor plan interest expense 32.5 22.7 9.8 43
%
Other interest expense, net 53.1 53.9 (0.8) (1)
%
Swap interest expense 0.5 2.0 (1.5) (75)
%
Total other expenses, net 86.1 78.6 7.5 10
%
INCOME BEFORE INCOME TAXES 224.8 209.1 15.7 8
%
Income tax expense 56.8 70.0 (13.2) (19)
%
NET INCOME $
168.0 $
139.1 $
28.9 21
%
EARNINGS PER COMMON SHARE:
Basic-
Net income $
8.36 $
6.69 $
1.67 25
%
Diluted-
Net income $
8.28 $
6.62 $
1.66 25
%
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
Basic 20.1 20.8 (0.7) (3)
%
Restricted stock 0.1 0.1 %
Performance share units 0.1 0.1 %
Diluted 20.3 21.0 (0.7) (3)
%
ASBURY AUTOMOTIVE GROUP, INC.
KEY OPERATING HIGHLIGHTS (In millions, except per unit data)
(Unaudited)
For the Twelve Months Increase %
Ended December 31, (Decrease) Change
2018 2017
Unit sales
---
New vehicle:
Luxury 22,979 22,525 454 2
%
Import 62,939 58,685 4,254 7
%
Domestic 19,357 18,765 592 3
%
Total new vehicle 105,275 99,975 5,300 5
%
Used vehicle retail 82,377 76,929 5,448 7
%
Used to new ratio 78.2 76.9
% % 130 bps
Average selling price
---
New vehicle $
35,989 $
35,620 $
369 1
%
Used vehicle retail 21,648 21,257 391 2
%
Average gross profit per unit
---
New vehicle:
Luxury $
3,481 $
3,503 $
(22) (1)
%
Import 836 968 (132) (14)
%
Domestic 1,684 1,775 (91) (5)
%
Total new vehicle 1,569 1,690 (121) (7)
%
Used vehicle retail 1,551 1,574 (23) (1)
%
Finance and insurance, net 1,558 1,556 2 %
Front end yield (1) 3,119 3,196 (77) (2)
%
Gross margin
---
New vehicle:
Luxury 6.5
% 6.6
% (10) bps
Import 2.9
% 3.5
% (60) bps
Domestic 4.3
% 4.6
% (30) bps
Total new vehicle 4.4
% 4.7
% (30) bps
Used vehicle retail 7.2
% 7.4
% (20) bps
Parts and service 62.8 62.3
% % 50 bps
Total gross profit margin 16.0 16.4
% % (40) bps
SG&A metrics
---
Rent expense $
25.6 $
26.7 $
(1.1) (4)
%
Total SG&A as a percentage of gross profit 68.5 69.1
% % (60) bps
SG&A, excluding rent expense as a percentage of gross 66.2 66.6
profit % % (40) bps
Operating metrics
---
Income from operations as a percentage of revenue 4.5
% 4.5
% -bps
Income from operations as a percentage of gross profit 28.2 27.2
% % 100 bps
Adjusted income from operations as a percentage of 4.6
% 4.6
revenue % -bps
Adjusted income from operations as a percentage of 28.5 27.8
gross profit % % 70 bps
Revenue mix
---
New vehicle 55.1 55.2
% %
Used vehicle retail 25.9 25.2
% %
Used vehicle wholesale 2.8
% 3.1
%
Parts and service 11.9 12.2
% %
Finance and insurance 4.3
% 4.3
%
Total revenue 100.0 100.0
% %
Gross profit mix
---
New vehicle 15.0 16.0
% %
Used vehicle retail 11.5 11.4
% %
Used vehicle wholesale 0.2
% 0.1
%
Parts and service 46.8 46.4
% %
Finance and insurance 26.5 26.1
% %
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 Twelve Months Increase %
Ended December 31, (Decrease) Change
2018 2017
Revenue
---
New vehicle:
Luxury $
1,235.3 $
1,200.2 $
35.1 3
%
Import 1,706.7 1,636.2 70.5 4
%
Domestic 740.3 722.2 18.1 3
%
Total new vehicle 3,682.3 3,558.6 123.7 3
%
Used Vehicle:
Retail 1,737.2 1,625.0 112.2 7
%
Wholesale 185.8 197.7 (11.9) (6)
%
Total used vehicle 1,923.0 1,822.7 100.3 6
%
Parts and service 804.1 785.6 18.5 2
%
Finance and insurance, net 284.9 274.3 10.6 4
%
Total revenue $
6,694.3 $
6,441.2 $
253.1 4
%
Gross profit
---
New vehicle:
Luxury $
80.0 $
78.9 $
1.1 1
%
Import 49.7 56.7 (7.0) (12)
%
Domestic 31.7 33.2 (1.5) (5)
%
Total new vehicle 161.4 168.8 (7.4) (4)
%
Used Vehicle:
Retail 124.5 120.4 4.1 3
%
Wholesale 2.1 1.2 0.9 75
%
Total used vehicle 126.6 121.6 5.0 4
%
Parts and service:
Customer pay 286.2 272.1 14.1 5
%
Warranty 75.5 81.7 (6.2) (8)
%
Wholesale parts 22.3 21.1 1.2 6
%
Parts and service, excluding reconditioning and preparation 384.0 374.9 9.1 2
%
Reconditioning and preparation 121.1 114.3 6.8 6
%
Total parts and service 505.1 489.2 15.9 3
%
Finance and insurance 284.9 274.3 10.6 4
%
Total gross profit $
1,078.0 $
1,053.9 $
24.1 2
%
SG&A expense $
737.7 $
726.5 $
11.2 2
%
SG&A expense as a percentage of gross profit 68.4 68.9
% % (50) 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 Twelve Months Increase %
Ended December 31, (Decrease) Change
2018 2017
Unit sales
---
New vehicle:
Luxury 22,979 22,525 454 2
%
Import 60,010 58,648 1,362 2
%
Domestic 18,676 18,727 (51) %
Total new vehicle 101,665 99,900 1,765 2
%
Used vehicle retail 79,789 76,285 3,504 5
%
Used to new ratio 78.5 76.4
% % 210 bps
Average selling price
---
New vehicle $
36,220 $
35,622 $
598 2
%
Used vehicle retail 21,772 21,302 470 2
%
Average gross profit per unit
---
New vehicle:
Luxury $
3,481 $
3,503 $
(22) (1)
%
Import 828 967 (139) (14)
%
Domestic 1,697 1,773 (76) (4)
%
Total new vehicle 1,588 1,690 (102) (6)
%
Used vehicle retail 1,560 1,578 (18) (1)
%
Finance and insurance, net 1,570 1,557 13 1
%
Front end yield (1) 3,146 3,198 (52) (2)
%
Gross margin
---
New vehicle:
Luxury 6.5
% 6.6
% (10) bps
Import 2.9
% 3.5
% (60) bps
Domestic 4.3
% 4.6
% (30) bps
Total new vehicle 4.4
% 4.7
% (30) bps
Used vehicle retail 7.2
% 7.4
% (20) bps
Parts and service:
Parts and service, excluding reconditioning and 47.8 47.7
preparation % % 10 bps
Parts and service, including reconditioning and 62.8 62.3
preparation % % 50 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.
Additional Disclosures (In millions)
(Unaudited)
December 31, December 31, Increase % Change
2018 2017 (Decrease)
---
SELECTED BALANCE SHEET DATA
Cash and cash equivalents $
8.3 $
4.7 $
3.6 77
%
New vehicle inventory 866.2 646.5 219.7 34
%
Used vehicle inventory 158.9 135.9 23.0 17
%
Parts inventory 41.5 43.6 (2.1) (5)
%
Total current assets 1,552.0 1,302.1 249.9 19
%
Floor plan notes payable 965.1 732.1 233.0 32
%
Total current liabilities 1,277.1 1,058.2 218.9 21
%
CAPITALIZATION:
Long-term debt (including current portion) $
905.3 $
875.5 $
29.8 3
%
Shareholders' equity 473.2 394.2 79.0 20
%
Total $
1,378.5 $
1,269.7 $
108.8 9
%
December 31, December 31,
2018 2017
DAYS SUPPLY
New vehicle inventory 67 53
Used vehicle inventory 34 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 Twelve Months
Ended December 31,
2018 2017
---
Luxury:
Mercedes-Benz 6 7
% %
Lexus 7 7
% %
BMW 5 6
% %
Acura 4 4
% %
Infiniti 3 3
% %
Other luxury 8 7
% %
---
Total luxury 33 34
% %
Imports:
Honda 19 18
% %
Nissan 11 12
% %
Toyota 12 11
% %
Other imports 5 5
% %
---
Total imports 47 46
% %
Domestic:
Ford 10 11
% %
Chevrolet 5 4
% %
Dodge 3 3
% %
Other domestics 2 2
% %
---
Total domestic 20 20
% %
Total New Vehicle 100 100
Revenue
% %
===
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
December 31, September 30,
2018 2018
---
(Dollars in millions)
Adjusted leverage ratio:
---
Long-term debt (including current portion) $
905.3 $
865.2
Calculation of earnings before interest, taxes, depreciation and amortization ("EBITDA"):
Net Income $
168.0 $
170.1
Add:
Depreciation and amortization 33.7 33.4
Income tax expense 56.8 54.9
Swap and other interest expense 53.6 54.1
Earnings before interest, taxes, depreciation and amortization ("EBITDA") $
312.1 $
312.5
Non-core items - expense (income):
Franchise rights impairment $
3.7 $
5.1
Legal settlements (0.7) (0.7)
Total non-core items 3.0 4.4
Adjusted EBITDA $
315.1 $
316.9
Adjusted leverage ratio 2.9 2.7
For the Three Months
Ended December 31,
2018 2017
---
(In millions, except per share
data)
Adjusted income from operations:
---
Income from operations $
77.3 $
74.1
Franchise Right Impairment 3.7 5.1
Adjusted income from operations $
81.0 $
79.2
Adjusted net income:
---
Net income $
40.4 $
42.5
Non-core items - (income) expense:
Franchise rights impairment 3.7 5.1
Income tax expense (benefit) on non-core items above (0.9) (1.9)
2017 Tax Act related adjustments - (7.9)
Total non-core items 2.8 (4.7)
Adjusted net income $
43.2 $
37.8
Adjusted diluted earnings per share (EPS):
---
Diluted EPS $
2.06 $
2.03
Total non-core items 0.14 (0.22)
Adjusted diluted EPS $
2.20 $
1.81
Weighted average common shares outstanding - diluted 19.6 20.9
For the Twelve Months
Ended December 31,
2018 2017
---
(In millions, except per share
data)
Adjusted income from operations:
---
Income from operations $
310.9 $
287.7
Franchise Right Impairment 3.7 5.1
Real estate-related charges - 2.9
Investment income - (0.8)
Legal settlements (0.7) (0.9)
Adjusted income from operations $
313.9 $
294.0
Adjusted net income:
---
Net income $
168.0 $
139.1
Non-core items - (income) expense:
Franchise rights impairment 3.7 5.1
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 (0.8) (2.4)
2017 Tax Act related adjustments 0.6 (7.9)
Total non-core items 2.8 (4.0)
Adjusted net income $
170.8 $
135.1
Adjusted diluted earnings per share (EPS):
---
Diluted EPS $
8.28 $
6.62
Total non-core items 0.13 (0.19)
Adjusted diluted EPS $
8.41 $
6.43
Weighted average common shares outstanding - diluted 20.3 21.0
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SOURCE Asbury Automotive Group, Inc.
