Asbury Automotive Group Announces 2019 Fourth Quarter And Full-Year Financial Results
DULUTH, Ga., Feb. 3, 2020 /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 2019 of $43.6 million ($2.26 per diluted share). This compares to net income of $40.4 million ($2.06 per diluted share) in the prior year quarter.
It also reported adjusted net income (a non-GAAP measure) for the fourth quarter 2019 of $48.9 million ($2.53 per diluted share) compared to $43.2 million ($2.20 per diluted share) in the prior year quarter, a 15% increase in adjusted earnings per share.
Net income for the fourth quarter 2019 was adjusted for a $7.1 million pre-tax charge for franchise rights impairments ($0.27 per diluted share), a $0.6 million pre-tax charge for real estate related charges ($0.03 per diluted share), and a $0.6 million pre-tax gain from a legal settlement ($0.03 per diluted 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).
"We delivered a very strong quarter. We grew revenue 6%, increased used unit sales 15%, delivered 8% parts and service gross profit growth, grew F&I gross profit by 8%, and grew adjusted EPS 15%," said David Hult, Asbury's President and Chief Executive Officer. "During the quarter, we signed an agreement to acquire 20 Park Place luxury franchises in the Dallas Fort Worth Market. This acquisition will transform our total portfolio to 50% luxury stores and add approximately $1.9 billion in expected annualized revenues. We believe these acquisitions coupled with our announced divestitures, will strategically make Asbury a stronger company."
Fourth Quarter 2019 Operational Summary
Total company:
-- Total revenue increased 6%; gross profit increased 7%
-- Gross margin increased 10 basis points to 15.9%
-- SG&A as a percentage of gross profit increased 10 basis points to 68.3%
-- Adjusted operating margin increased 10 basis point to 4.6%
-- Adjusted EPS increased 15%
Same store:
-- Total revenue increased 2%; gross profit increased 3%
-- Gross margin increased 20 basis points to 16.0%
-- New vehicle revenue decreased 3%; gross profit decreased 4%
-- Used vehicle retail revenue increased 10%; gross profit increased 1%
-- Finance and insurance revenue and gross profit increased 4%
-- Parts and service revenue increased 5%; gross profit increased 4%
Strategic Highlights:
-- Signed an agreement to acquire 20 Park Place luxury franchises that we
expect to close in March 2020, subject to customary closing conditions.
We expect these dealerships to generate approximately $1.9 billion in
annualized revenue.
-- Acquired a Chrysler Jeep Dodge Ram store in the Denver market in late
January 2020. We expect this store to generate approximately $124
million in annual revenues.
-- Signed an agreement to divest all five stores in the Mississippi market
that we expect to close in March 2020, subject to customary closing
conditions. These dealerships generated approximately $334 million in
annualized revenue.
-- Signed an agreement to divest our Nissan Atlanta store that we expect to
close in February 2020, subject to customary closing conditions. This
dealership generated approximately $77 million in annualized revenue.
For the full year 2019, the Company reported net income of $184.4 million ($9.55 per diluted share) compared to $168.0 million ($8.28 per diluted share) in the prior year period. Adjusted net income (a non-GAAP measure) for 2019 was $182.5 million ($9.46 per diluted share) compared to $170.8 million ($8.41 per diluted share) in the prior year period, a 12% increase in adjusted EPS.
Additional commentary regarding the fourth quarter results will be provided during the earnings conference call on February 3, 2020 at 10:00 a.m. The conference call will be simulcast live on the internet and can be accessed at www.asburyauto.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 (800) 353-6461 (domestic), or (334) 323-0501 (international); passcode - 5777116. 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 - 5777116.
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 89 dealerships, consisting of 110 franchises, representing 31 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, including its ability to complete and realize the expected benefits of the proposed acquisition of the Park Place family of dealerships. 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
2019 2018
REVENUE:
New vehicle $
1,039.4 $
1,022.4 $
17.0 2
%
Used vehicle:
Retail 491.5 427.9 63.6 15
%
Wholesale 49.7 45.5 4.2 9
%
Total used vehicle 541.2 473.4 67.8 14
%
Parts and service 229.7 211.1 18.6 9
%
Finance and insurance, net 83.7 77.3 6.4 8
%
TOTAL REVENUE 1,894.0 1,784.2 109.8 6
%
GROSS PROFIT:
New vehicle 44.7 43.9 0.8 2
%
Used vehicle:
Retail 30.9 29.3 1.6 5
%
Wholesale 0.4 0.4
%
Total used vehicle 31.3 29.3 2.0 7
%
Parts and service 141.9 131.3 10.6 8
%
Finance and insurance, net 83.7 77.3 6.4 8
%
TOTAL GROSS PROFIT 301.6 281.8 19.8 7
%
OPERATING EXPENSES:
Selling, general and administrative 206.1 192.2 13.9 7
%
Depreciation and amortization 9.5 8.5 1.0 12
%
Franchise rights impairment 7.1 3.7 3.4 92
%
Other operating (income) expenses, net (0.2) 0.1 (0.3) NM
INCOME FROM OPERATIONS 79.1 77.3 1.8 2
%
OTHER EXPENSES:
Floor plan interest expense 8.2 9.5 (1.3) (14)
%
Other interest expense, net 13.7 13.7
%
Total other expenses, net 21.9 23.2 (1.3) (6)
%
INCOME BEFORE INCOME TAXES 57.2 54.1 3.1 6
%
Income tax expense 13.6 13.7 (0.1) (1)
%
NET INCOME $
43.6 $
40.4 $
3.2 8
%
EARNINGS PER COMMON SHARE:
Basic-
Net income $
2.28 $
2.09 $
0.19 9
%
Diluted-
Net income $
2.26 $
2.06 $
0.20 10
%
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
Basic 19.1 19.3 (0.2) (1)
%
Restricted stock 0.1 0.1
%
Performance share units 0.1 0.2 (0.1) (50)
%
Diluted 19.3 19.6 (0.3) (2)
%
______________________________
NM-Not Meaningful
ASBURY AUTOMOTIVE GROUP, INC.
KEY OPERATING HIGHLIGHTS (In millions, except per unit data)
(Unaudited)
For the Three Months Increase %
Ended December 31, (Decrease) Change
2019 2018
Unit sales
---
New vehicle:
Luxury 7,055 6,452 603 9
%
Import 15,723 16,394 (671) (4)
%
Domestic 4,829 4,951 (122) (2)
%
Total new vehicle 27,607 27,797 (190) (1)
%
Used vehicle retail 22,272 19,298 2,974 15
%
Used to new ratio 80.7 69.4
% % 1130 bps
Average selling price
---
New vehicle $
37,650 $
36,781 $
869 2
%
Used vehicle retail 22,068 22,173 (105) %
Average gross profit per unit
---
New vehicle:
Luxury $
3,586 $
3,487 $
99 3
%
Import 674 830 (156) (19)
%
Domestic 1,822 1,575 247 16
%
Total new vehicle 1,619 1,579 40 3
%
Used vehicle retail 1,387 1,518 (131) (9)
%
Finance and insurance, net 1,678 1,641 37 2
%
Front end yield (1) 3,194 3,196 (2) %
Gross margin
---
New vehicle:
Luxury 6.5
% 6.4
% 10 bps
Import 2.3
% 2.9
% (60) bps
Domestic 4.4
% 3.9
% 50 bps
Total new vehicle 4.3
% 4.3
% 0 bps
Used vehicle retail 6.3
% 6.8
% (50) bps
Parts and service 61.8 62.2
% % (40) bps
Total gross profit margin 15.9 15.8
% % 10 bps
SG&A metrics
---
Rent expense $
6.8 $
6.5 $
0.3 5
%
Total SG&A as a percentage of gross profit 68.3 68.2
% % 10 bps
SG&A, excluding rent expense as a percentage of gross profit 66.1 65.9
% % 20 bps
Operating metrics
---
Income from operations as a percentage of revenue 4.2
% 4.3
% (10) bps
Income from operations as a percentage of gross profit 26.2 27.4
% % (120) 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 28.6 28.7
% % (10) bps
Revenue mix
---
New vehicle 54.9 57.3
% %
Used vehicle retail 26.0 24.0
% %
Used vehicle wholesale 2.6
% 2.6
%
Parts and service 12.1 11.8
% %
Finance and insurance 4.4
% 4.3
%
Total revenue 100.0 100.0
% %
Gross profit mix
---
New vehicle 14.8 15.6
% %
Used vehicle retail 10.3 10.4
% %
Used vehicle wholesale 0.1
% %
Parts and service 47.0 46.6
% %
Finance and insurance 27.8 27.4
% %
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
2019 2018
Revenue
---
New vehicle:
Luxury $
387.7 $
351.5 $
36.2 10
%
Import 426.9 460.8 (33.9) (7)
%
Domestic 169.0 200.0 (31.0) (16)
%
Total new vehicle 983.6 1,012.3 (28.7) (3)
%
Used Vehicle:
Retail 465.5 422.6 42.9 10
%
Wholesale 48.0 44.7 3.3 7
%
Total used vehicle 513.5 467.3 46.2 10
%
Parts and service 218.4 208.8 9.6 5
%
Finance and insurance 79.6 76.4 3.2 4
%
Total revenue $
1,795.1 $
1,764.8 $
30.3 2
%
Gross profit
---
New vehicle:
Luxury $
25.3 $
22.5 $
2.8 12
%
Import 9.3 13.3 (4.0) (30)
%
Domestic 7.3 7.8 (0.5) (6)
%
Total new vehicle 41.9 43.6 (1.7) (4)
%
Used Vehicle:
Retail 29.3 29.0 0.3 1
%
Wholesale 0.5 0.5 %
Total used vehicle 29.8 29.0 0.8 3
%
Parts and service:
Customer pay 76.5 73.4 3.1 4
%
Warranty 21.2 20.1 1.1 5
%
Wholesale parts 6.0 5.9 0.1 2
%
Parts and service, excluding reconditioning and preparation 103.7 99.4 4.3 4
%
Reconditioning and preparation 31.4 30.4 1.0 3
%
Total parts and service 135.1 129.8 5.3 4
%
Finance and insurance 79.6 76.4 3.2 4
%
Total gross profit $
286.4 $
278.8 $
7.6 3
%
SG&A expense $
196.6 $
189.6 $
7.0 4
%
SG&A expense as a percentage of gross profit 68.6 68.0
% % 60 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
2019 2018
Unit sales
---
New vehicle:
Luxury 7,028 6,452 576 9
%
Import 14,922 16,047 (1,125) (7)
%
Domestic 4,109 4,951 (842) (17)
%
Total new vehicle 26,059 27,450 (1,391) (5)
%
Used vehicle retail 20,905 19,050 1,855 10
%
Used to new ratio 80.2 69.4
% % 1080
bps
Average selling price
---
New vehicle $
37,745 $
36,878 $
867 2
%
Used vehicle retail 22,267 22,184 83 %
Average gross profit per unit
---
New vehicle:
Luxury $
3,600 $
3,487 $
113 3
%
Import 623 829 (206) (25)
%
Domestic 1,777 1,575 202 13
%
Total new vehicle 1,608 1,588 20 1
%
Used vehicle retail 1,402 1,522 (120) (8)
%
Finance and insurance, net 1,695 1,643 52 3
%
Front end yield (1) 3,211 3,204 7 %
Gross margin
---
New vehicle:
Luxury 6.5
% 6.4
% 10
bps
Import 2.2
% 2.9
% (70)
bps
Domestic 4.3
% 3.9
% 40
bps
Total new vehicle 4.3
% 4.3
% 0
bps
Used vehicle retail 6.3
% 6.9
% (60)
bps
Parts and service:
Parts and service, excluding reconditioning and preparation 47.5 47.6
% % (10)
bps
Parts and service, including reconditioning and preparation 61.9 62.2
% % (30)
bps
Total gross profit margin 16.0 15.8
% % 20
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
2019 2018
REVENUE:
New vehicle $
3,863.3 $
3,788.7 $
74.6 2
%
Used vehicle:
Retail 1,941.3 1,783.3 158.0 9
%
Wholesale 190.3 189.1 1.2 1
%
Total used vehicle 2,131.6 1,972.4 159.2 8
%
Parts and service 899.4 821.0 78.4 10
%
Finance and insurance, net 316.0 292.3 23.7 8
%
TOTAL REVENUE 7,210.3 6,874.4 335.9 5
%
GROSS PROFIT:
New vehicle 159.5 165.2 (5.7) (3)
%
Used vehicle:
Retail 133.1 127.8 5.3 4
%
Wholesale 1.0 1.9 (0.9) (47)
%
Total used vehicle 134.1 129.7 4.4 3
%
Parts and service 559.3 515.8 43.5 8
%
Finance and insurance, net 316.0 292.3 23.7 8
%
TOTAL GROSS PROFIT 1,168.9 1,103.0 65.9 6
%
OPERATING EXPENSES:
Selling, general and administrative 799.8 755.8 44.0 6
%
Depreciation and amortization 36.2 33.7 2.5 7
%
Franchise rights impairment 7.1 3.7 3.4 92
%
Other operating expense (income), net 0.8 (1.1) 1.9 173
%
INCOME FROM OPERATIONS 325.0 310.9 14.1 5
%
OTHER EXPENSES (INCOME):
Floor plan interest expense 37.9 32.5 5.4 17
%
Other interest expense, net 54.9 53.1 1.8 3
%
Swap interest expense - 0.5 (0.5) (100)
%
Gain on divestiture (11.7) (11.7) %
Total other expenses, net 81.1 86.1 (5.0) (6)
%
INCOME BEFORE INCOME TAXES 243.9 224.8 19.1 8
%
Income tax expense 59.5 56.8 2.7 5
%
NET INCOME $
184.4 $
168.0 $
16.4 10
%
EARNINGS PER COMMON SHARE:
Basic-
Net income $
9.65 $
8.36 $
1.29 15
%
Diluted-
Net income $
9.55 $
8.28 $
1.27 15
%
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
Basic 19.1 20.1 (1.0) (5)
%
Restricted stock 0.1 0.1 %
Performance share units 0.1 0.1 %
Diluted 19.3 20.3 (1.0) (5)
%
ASBURY AUTOMOTIVE GROUP, INC.
KEY OPERATING HIGHLIGHTS (In millions, except per unit data)
(Unaudited)
For the Twelve Months Increase %
Ended December 31, (Decrease) Change
2019 2018
Unit sales
---
New vehicle:
Luxury 23,988 22,979 1,009 4
%
Import 61,420 62,939 (1,519) (2)
%
Domestic 19,835 19,357 478 2
%
Total new vehicle 105,243 105,275 (32) %
Used vehicle retail 88,602 82,377 6,225 8
%
Used to new ratio 84.2 78.2
% % 600
bps
Average selling price
---
New vehicle $
36,708 $
35,989 $
719 2
%
Used vehicle retail 21,910 21,648 262 1
%
Average gross profit per unit
---
New vehicle:
Luxury $
3,473 $
3,481 $
(8) %
Import 685 836 (151) (18)
%
Domestic 1,719 1,684 35 2
%
Total new vehicle 1,516 1,569 (53) (3)
%
Used vehicle retail 1,502 1,551 (49) (3)
%
Finance and insurance, net 1,630 1,558 72 5
%
Front end yield (1) 3,140 3,119 21 1
%
Gross margin
---
New vehicle:
Luxury 6.3
% 6.5
% (20)
bps
Import 2.4
% 2.9
% (50)
bps
Domestic 4.3
% 4.3
% 0
bps
Total new vehicle 4.1
% 4.4
% (30)
bps
Used vehicle retail 6.9
% 7.2
% (30)
bps
Parts and service 62.2 62.8
% % (60)
bps
Total gross profit margin 16.2 16.0
% % 20
bps
SG&A metrics
---
Rent expense $
27.1 $
25.6 $
1.5 6
%
Total SG&A as a percentage of gross profit 68.4 68.5
% % (10)
bps
SG&A, excluding rent expense as a percentage of gross profit 66.1 66.2
% % (10)
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 27.8 28.2
% % (40)
bps
Adjusted income from operations as a percentage of revenue 4.6
% 4.6
%
bps
Adjusted income from operations as a percentage of gross profit 28.6 28.5
% % 10
bps
Revenue mix
---
New vehicle 53.6 55.1
% %
Used vehicle retail 26.9 25.9
% %
Used vehicle wholesale 2.6
% 2.8
%
Parts and service 12.5 11.9
% %
Finance and insurance 4.4
% 4.3
%
Total revenue 100.0 100.0
% %
Gross profit mix
---
New vehicle 13.6 15.0
% %
Used vehicle retail 11.5 11.5
% %
Used vehicle wholesale 0.1
% 0.2
%
Parts and service 47.8 46.8
% %
Finance and insurance 27.0 26.5
% %
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
2019 2018
Revenue
---
New vehicle:
Luxury $
1,314.4 $
1,235.3 $
79.1 6
%
Import 1,687.1 1,744.8 (57.7) (3)
%
Domestic 681.0 763.2 (82.2) (11)
%
Total new vehicle 3,682.5 3,743.3 (60.8) (2)
%
Used Vehicle:
Retail 1,848.9 1,755.7 93.2 5
%
Wholesale 183.9 185.4 (1.5) (1)
%
Total used vehicle 2,032.8 1,941.1 91.7 5
%
Parts and service 867.0 810.9 56.1 7
%
Finance and insurance, net 302.4 287.1 15.3 5
%
Total revenue $
6,884.7 $
6,782.4 $
102.3 2
%
Gross profit
---
New vehicle:
Luxury $
83.4 $
80.0 $
3.4 4
%
Import 39.9 51.0 (11.1) (22)
%
Domestic 27.9 32.6 (4.7) (14)
%
Total new vehicle 151.2 163.6 (12.4) (8)
%
Used Vehicle:
Retail 126.0 126.1 (0.1) %
Wholesale 1.1 2.0 (0.9) (45)
%
Total used vehicle 127.1 128.1 (1.0) (1)
%
Parts and service:
Customer pay 305.4 288.6 16.8 6
%
Warranty 85.4 76.1 9.3 12
%
Wholesale parts 23.4 22.5 0.9 4
%
Parts and service, excluding reconditioning and preparation 414.2 387.2 27.0 7
%
Reconditioning and preparation 124.5 122.0 2.5 2
%
Total parts and service 538.7 509.2 29.5 6
%
Finance and insurance 302.4 287.1 15.3 5
%
Total gross profit $
1,119.4 $
1,088.0 $
31.4 3
%
SG&A expense $
766.0 $
743.9 $
22.1 3
%
SG&A expense as a percentage of gross profit 68.4 68.4
% % 0 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
2019 2018
Unit sales
---
New vehicle:
Luxury 23,890 22,979 911 4
%
Import 59,539 61,305 (1,766) (3)
%
Domestic 16,817 19,357 (2,540) (13)
%
Total new vehicle 100,246 103,641 (3,395) (3)
%
Used vehicle retail 83,822 80,963 2,859 4
%
Used to new ratio 83.6 78.1
% % 550
bps
Average selling price
---
New vehicle $
36,735 $
36,118 $
617 2
%
Used vehicle retail 22,057 21,685 372 2
%
Average gross profit per unit
---
New vehicle:
Luxury $
3,491 $
3,481 $
10 %
Import 670 832 (162) (19)
%
Domestic 1,659 1,684 (25) (1)
%
Total new vehicle 1,508 1,579 (71) (4)
%
Used vehicle retail 1,503 1,558 (55) (4)
%
Finance and insurance, net 1,643 1,555 88 6
%
Front end yield (1) 3,149 3,125 24 1
%
Gross margin
---
New vehicle:
Luxury 6.3
% 6.5
% (20)
bps
Import 2.4
% 2.9
% (50)
bps
Domestic 4.1
% 4.3
% (20)
bps
Total new vehicle 4.1
% 4.4
% (30)
bps
Used vehicle retail 6.8
% 7.2
% (40)
bps
Parts and service:
Parts and service, excluding reconditioning and preparation 47.8 47.7
% % 10
bps
Parts and service, including reconditioning and preparation 62.1 62.8
% % (70)
bps
Total gross profit margin 16.2 16.0
% % 20
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
2019 2018 (Decrease)
---
SELECTED BALANCE SHEET DATA
Cash and cash equivalents $
3.5 $
8.3 $
(4.8) (58)
%
New vehicle inventory 802.6 (a) 867.2 (64.6) (7)
%
Used vehicle inventory 140.1 (b) 158.9 (18.8) (12)
%
Parts inventory 42.3 (c) 41.5 0.8 2
%
Total current assets 1,602.6 1,553.0 49.6 3
%
Floor plan notes payable 788.0 (d) 966.1 (178.1) (18)
%
Total current liabilities 1,247.0 1,303.3 (56.3) (4)
%
CAPITALIZATION:
Long-term debt (including current portion) $
939.4 (e) $
905.3 $
34.1 4
%
Shareholders' equity 646.3 473.2 173.1 37
%
Total $
1,585.7 $
1,378.5 $
207.2 15
%
_____________________________
(a) Excluding $56.3 million of new vehicle inventory classified as
Assets held for sale as of December 31, 2019
(b) Excluding $8.6 million of used vehicle inventory classified as
Assets held for sale as of December 31, 2019
(c) Excluding $2.8 million of parts inventory classified as Assets held
for sale as of December 31, 2019
(d) Excluding $62.8 million of Floor plan notes payable classified as
Liabilities associated with assets held for sale as of December 31,
2019
(e) Excluding $28.1 million of Long-term debt classified as Liabilities
associated with assets held for sale as of December 31, 2019
December 31, December 31,
2019 2018
DAYS SUPPLY
New vehicle inventory 66 67
Used vehicle inventory 29 34
_____________________
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,
2019 2018
---
Luxury:
Mercedes-Benz 7 6
% %
Lexus 7 7
% %
BMW 6 5
% %
Acura 4 4
% %
Infiniti 3 3
% %
Other luxury 7 8
% %
---
Total luxury 34 33
% %
Imports:
Honda 18 19
% %
Nissan 8 11
% %
Toyota 13 12
% %
Other imports 6 5
% %
---
Total imports 45 47
% %
Domestic:
Ford 9 10
% %
Chevrolet 6 5
% %
Dodge 3 3
% %
Other domestics 3 2
% %
---
Total domestic 21 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, 2019 September 30, 2019
(Dollars in millions)
Adjusted leverage ratio:
---
Long-term debt (including current portion and HFS) $
967.5 $
905.9
Calculation of earnings before interest, taxes, depreciation and amortization
("EBITDA"):
Net Income $
184.4 $
181.2
Add:
Depreciation and amortization 36.2 35.2
Income tax expense 59.5 59.8
Swap and other interest expense 54.9 54.8
Earnings before interest, taxes, depreciation and amortization $
335.0 $
331.0
("EBITDA")
Non-core items - expense (income):
Gain on divestiture $
(11.7) $
(11.7)
Legal settlements (0.6)
$
Gain on sale of real estate (0.3) (0.3)
Franchise rights impairment 7.1 3.7
Real estate-related charges 0.6
Fixed assets write-off 2.4 2.4
Total non-core items (2.5) (5.9)
Adjusted EBITDA $
332.5 $
325.1
Adjusted leverage ratio 2.9 2.8
For the Three Months
Ended December 31,
2019 2018
(In millions, except per share
data)
Adjusted income from operations:
---
Income from operations $
79.1 $
77.3
Franchise rights impairment 7.1 3.7
Legal settlements (0.6)
Real estate-related charges 0.6
Adjusted income from operations $
86.2 $
81.0
Adjusted net income:
---
Net income $
43.6 $
40.4
Non-core items - (income) expense:
Franchise rights impairment 7.1 3.7
Legal settlements (0.6)
Real estate-related charges 0.6
Income tax effect on non-core items above (1.8) (0.9)
Total non-core items 5.3 2.8
Adjusted net income $
48.9 $
43.2
Adjusted diluted earnings per share (EPS):
---
Diluted EPS $
2.26 $
2.06
Total non-core items 0.27 0.14
Adjusted diluted EPS $
2.53 $
2.20
Weighted average common shares outstanding - diluted 19.3 19.6
For the Twelve Months
Ended December 31,
2019 2018
(In millions, except per
share data)
Adjusted income from operations:
---
Income from operations $
325.0 $
310.9
Franchise rights impairment 7.1 3.7
Legal settlements (0.6) (0.7)
Gain on sale of real estate (0.3)
Real estate-related charges 0.6
Fixed assets write-off 2.4
Adjusted income from operations $
334.2 $
313.9
Adjusted net income:
---
Net income $
184.4 $
168.0
Non-core items - (income) expense:
Franchise rights impairment 7.1 3.7
Gain on divestiture (11.7)
Gain on sale of real estate (0.3)
Fixed assets write-off 2.4
Real estate-related charges 0.6
Legal settlements (0.6) (0.7)
Income tax effect on non-core items above 0.6 (0.8)
2017 Tax Act Adjustment 0.6
Total non-core items (1.9) 2.8
Adjusted net income $
182.5 $
170.8
Adjusted diluted earnings per share (EPS):
---
Diluted EPS $
9.55 $
8.28
Total non-core items (0.09) 0.13
Adjusted diluted EPS $
9.46 $
8.41
Weighted average common shares outstanding - diluted 19.3 20.3
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SOURCE Asbury Automotive Group, Inc.
