Asbury Automotive Group Announces All Time Record Third Quarter 2020 Financial Results
DULUTH, Ga., Oct. 27, 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 third quarter 2020 of $96.2 million ($4.96 per diluted share) and adjusted net income (a non-GAAP measure) of $79.2 million ($4.08 per diluted share). This compares to net income of $45.0 million ($2.33 per diluted share) in the prior year quarter.
Net income for the third quarter 2020 was adjusted for a $24.7 million ($0.96 per diluted share) gain on a dealership divestiture, $1.3 million ($0.05 per diluted share) of acquisition related costs and a $0.7 million ($0.03 per diluted share) real estate related charge. There were no adjustments in the prior year quarter.
Total revenue for the third quarter was $1.8 billion, flat from the prior year period; total revenue on a same-store basis was down 5% from the prior year period.
"In addition to closing on the largest acquisition in the company's history and increasing our size by 25%, we delivered another very strong quarter reflecting the resilience and the flexibility of our business model. We delivered a record adjusted operating margin of 6.6% and a record low adjusted SG&A as a percentage of gross profit of 61.1% in a 15.4 million SAAR environment," said David Hult, Asbury's President and Chief Executive Officer. "Our continued focus on gross profit combined with disciplined expense management enabled us to deliver the best quarterly results in our company's history with adjusted earnings of $4.08 per share, up 75%," Hult concluded.
Third Quarter 2020 Highlights
-- New gross profit per vehicle up 73% to $2,468
-- Used retail gross profit per vehicle up 43% to $2,116
-- Finance and Insurance gross profit per vehicle up 11% to $1,795
-- Adjusted SG&A as a percentage of gross profit decreased 780 basis points
to 61.1%
-- Adjusted Income from operations as percentage of revenue increased 210
basis points to 6.6%
-- Adjusted EPS increased 75%
-- Closed on the acquisition of Park Place Dealerships, adding $1.7 billion
of annualized revenue
-- Divested a Lexus dealership with approximately $90 million in annual
revenues, as we reached our regional ownership cap due to acquiring two
Park Place Lexus stores
-- Ended the quarter with total liquidity of $385 million and a pro forma
net leverage ratio of 2.4x
For the nine-month period ended September 30, 2020, the Company reported net income of $165.3 million, or $8.56 per diluted share, compared to net income of $140.8 million, or $7.30 per diluted share in the prior year period. Adjusted net income for the nine-month period ended September 30, 2020 was $162.7 million, or $8.43 per diluted share, compared to $133.6 million, or $6.92 per diluted share in the prior year, a 22% increase in adjusted earnings per share.
Additional commentary regarding the third quarter results will be provided during the earnings conference call on October 27, 2020 at 10:00 a.m. Eastern Time. The conference call will be simulcast live on the internet and can be accessed at www.asburyauto.com/company/investor-relations. A replay will be available at this site for 30 days.
In addition, a live audio of the call will be accessible to the public by calling (800) 430-8332 (domestic), or (323) 289-6581 (international); passcode - 1504679. 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 - 1504679.
About Asbury Automotive Group
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 90 dealerships, consisting of 113 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, the impact of the COVID-19 pandemic, 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 technology initiatives and other operational strategies, Asbury's ability to leverage gains from its dealership portfolio, including its ability to realize the expected benefits of the acquisition of the Park Place dealership group. 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 %
September 30, Change
(Decrease)
---
2020 2019
REVENUE:
New vehicle $
957.9 $
986.9 $
(29.0) (3)
%
Used vehicle:
Retail 507.4 505.0 2.4
%
Wholesale 62.1 41.9 20.2 48
%
Total used vehicle 569.5 546.9 22.6 4
%
Parts and service 237.2 227.6 9.6 4
%
Finance and insurance, net 80.8 80.6 0.2
%
TOTAL REVENUE 1,845.4 1,842.0 3.4
%
GROSS PROFIT:
New vehicle 60.6 38.6 22.0 57
%
Used vehicle:
Retail 43.3 33.9 9.4 28
%
Wholesale 5.9 (1.5) 7.4
NM
Total used vehicle 49.2 32.4 16.8 52
%
Parts and service 145.3 141.5 3.8 3
%
Finance and insurance, net 80.8 80.6 0.2
%
TOTAL GROSS PROFIT 335.9 293.1 42.8 15
%
OPERATING EXPENSES:
Selling, general and administrative 206.5 202.0 4.5 2
%
Depreciation and amortization 9.8 9.1 0.7 8
%
Other operating expense (income), net 0.5 (0.2) 0.7
NM
INCOME FROM OPERATIONS 119.1 82.2 36.9 45
%
OTHER EXPENSES (INCOME):
Floor plan interest expense 3.0 9.0 (6.0) (67)
%
Other interest expense, net 12.9 13.7 (0.8) (6)
%
Gain on divestiture (24.7) (24.7)
%
Total other (income) expenses, net (8.8) 22.7 (31.5) (139)
%
INCOME BEFORE INCOME TAXES 127.9 59.5 68.4 115
%
Income tax expense 31.7 14.5 17.2 119
%
NET INCOME $
96.2 $
45.0 $
51.2 114
%
EARNINGS PER COMMON SHARE:
Basic-
Net income $
5.01 $
2.36 $
2.65 112
%
Diluted-
Net income $
4.96 $
2.33 $
2.63 113
%
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
Basic 19.2 19.1 0.1 1
%
Restricted stock 0.1 0.1
%
Performance share units 0.1 0.1
%
Diluted 19.4 19.3 0.1 1
%
NM-Not Meaningful
ASBURY AUTOMOTIVE GROUP, INC.
KEY OPERATING HIGHLIGHTS (In millions, except per unit data)
(Unaudited)
For the Three Months Ended Increase %
September 30,
(Decrease) Change
---
2020 2019
Unit sales
---
New vehicle:
Luxury 6,157 6,025 132 2
%
Import 13,818 15,998 (2,180) (14)
%
Domestic 4,580 5,055 (475) (9)
%
Total new vehicle 24,555 27,078 (2,523) (9)
%
Used vehicle retail 20,464 22,988 (2,524) (11)
%
Used to new ratio 83.3 84.9
% % (160) bps
Average selling price
---
New vehicle $
39,010 $
36,447 $
2,563 7
%
Used vehicle retail 24,795 21,968 2,827 13
%
Average gross profit per unit
---
New vehicle:
Luxury $
4,613 $
3,270 $
1,343 41
%
Import 1,397 638 759 119
%
Domestic 2,817 1,721 1,096 64
%
Total new vehicle 2,468 1,426 1,042 73
%
Used vehicle retail 2,116 1,475 641 43
%
Finance and insurance, net 1,795 1,610 185 11
%
Front end yield (1) 4,103 3,058 1,045 34
%
Gross margin
---
New vehicle:
Luxury 8.2
% 6.1
% 210 bps
Import 4.7
% 2.2
% 250 bps
Domestic 6.5
% 4.2
% 230 bps
Total new vehicle 6.3
% 3.9
% 240 bps
Used vehicle retail 8.5
% 6.7
% 180 bps
Parts and service 61.3 62.2
% % (90) bps
Total gross profit margin 18.2 15.9
% % 230 bps
SG&A metrics
---
Rent expense $
8.1 $
6.7 $
1.4 21
%
SG&A as a percentage of gross profit 61.5 68.9
% % (740) bps
SG&A, excluding rent expense as a percentage of gross profit 59.1 66.6
% % (750) bps
Adjusted SG&A as a percentage of gross profit 61.1 68.9
% % (780) bps
Operating metrics
---
Income from operations as a percentage of revenue 6.5
% 4.5
% 200 bps
Income from operations as a percentage of gross profit 35.5 28.0
% % 750 bps
Adjusted income from operations as a percentage of revenue 6.6
% 4.5
% 210 bps
Adjusted income from operations as a percentage of gross profit 36.1 28.0
% % 810 bps
Revenue mix
---
New vehicle 51.9 53.6
% %
Used vehicle retail 27.4 27.3
% %
Used vehicle wholesale 3.4
% 2.3
%
Parts and service 12.9 12.4
% %
Finance and insurance 4.4
% 4.4
%
Total revenue 100.0 100.0
% %
Gross profit mix
---
New vehicle 18.0 13.2
% %
Used vehicle retail 12.8 11.5
% %
Used vehicle wholesale 1.8
% (0.5)
%
Parts and service 43.3 48.3
% %
Finance and insurance 24.1 27.5
% %
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 Three Months Ended Increase %
September 30,
(Decrease) Change
---
2020 2019
Revenue
---
New vehicle:
Luxury $
267.0 $
312.2 $
(45.2) (14)
%
Import 394.6 422.9 (28.3) (7)
%
Domestic 179.2 187.0 (7.8) (4)
%
Total new vehicle 840.8 922.1 (81.3) (9)
%
Used Vehicle:
Retail 451.6 464.2 (12.6) (3)
%
Wholesale 50.7 39.0 11.7 30
%
Total used vehicle 502.3 503.2 (0.9) %
Parts and service 209.0 214.8 (5.8) (3)
%
Finance and insurance 75.1 75.2 (0.1) %
Total revenue $
1,627.2 $
1,715.3 $
(88.1) (5)
%
Gross profit
---
New vehicle:
Luxury $
20.6 $
18.9 $
1.7 9
%
Import 18.2 9.9 8.3 84
%
Domestic 11.6 7.6 4.0 53
%
Total new vehicle 50.4 36.4 14.0 38
%
Used Vehicle:
Retail 38.3 31.7 6.6 21
%
Wholesale 4.9 (1.3) 6.2 NM
Total used vehicle 43.2 30.4 12.8 42
%
Parts and service:
Customer pay 74.0 75.8 (1.8) (2)
%
Warranty 21.1 21.1 %
Wholesale parts 5.2 5.4 (0.2) (4)
%
Parts and service, excluding reconditioning and preparation 100.3 102.3 (2.0) (2)
%
Reconditioning and preparation 26.8 31.1 (4.3) (14)
%
Total parts and service 127.1 133.4 (6.3) (5)
%
Finance and insurance 75.1 75.2 (0.1) %
Total gross profit $
295.8 $
275.4 $
20.4 7
%
SG&A expense $
185.3 $
190.8 $
(5.5) (3)
%
SG&A expense as a percentage of gross profit 62.6 69.3
% % (670) 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 Increase %
September 30,
(Decrease) Change
---
2020 2019
Unit sales
---
New vehicle:
Luxury 4,834 5,790 (956) (17)
%
Import 13,202 14,922 (1,720) (12)
%
Domestic 4,181 4,592 (411) (9)
%
Total new vehicle 22,217 25,304 (3,087) (12)
%
Used vehicle retail 18,815 21,070 (2,255) (11)
%
Used to new ratio 84.7 83.3
% % 140 bps
Average selling price
---
New vehicle $
37,845 $
36,441 $
1,404 4
%
Used vehicle retail 24,002 22,031 1,971 9
%
Average gross profit per unit
---
New vehicle:
Luxury $
4,261 $
3,264 $
997 31
%
Import 1,379 663 716 108
%
Domestic 2,774 1,655 1,119 68
%
Total new vehicle 2,269 1,439 830 58
%
Used vehicle retail 2,036 1,505 531 35
%
Finance and insurance, net 1,830 1,622 208 13
%
Front end yield (1) 3,992 3,090 902 29
%
Gross margin
---
New vehicle:
Luxury 7.7
% 6.1
% 160 bps
Import 4.6
% 2.3
% 230 bps
Domestic 6.5
% 4.1
% 240 bps
Total new vehicle 6.0
% 3.9
% 210 bps
Used vehicle retail 8.5
% 6.8
% 170 bps
Parts and service:
Parts and service, excluding reconditioning and preparation 48.0 47.6
% % 40 bps
Parts and service, including reconditioning and preparation 60.8 62.1
% % (130) bps
Total gross profit margin 18.2 16.1
% % 210 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 Nine Months Ended Increase %
September 30,
(Decrease) Change
---
2020 2019
REVENUE:
New vehicle $
2,541.8 $
2,823.9 $
(282.1) (10)
%
Used vehicle:
Retail 1,366.0 1,449.8 (83.8) (6)
%
Wholesale 144.2 140.6 3.6 3
%
Total used vehicle 1,510.2 1,590.4 (80.2) (5)
%
Parts and service 628.0 669.7 (41.7) (6)
%
Finance and insurance, net 217.8 232.3 (14.5) (6)
%
TOTAL REVENUE 4,897.8 5,316.3 (418.5) (8)
%
GROSS PROFIT:
New vehicle 135.6 114.8 20.8 18
%
Used vehicle:
Retail 106.1 102.2 3.9 4
%
Wholesale 10.9 0.6 10.3 NM
Total used vehicle 117.0 102.8 14.2 14
%
Parts and service 380.7 417.4 (36.7) (9)
%
Finance and insurance, net 217.8 232.3 (14.5) (6)
%
TOTAL GROSS PROFIT 851.1 867.3 (16.2) (2)
%
OPERATING EXPENSES:
Selling, general and administrative 553.4 593.7 (40.3) (7)
%
Depreciation and amortization 29.0 26.7 2.3 9
%
Franchise rights impairment 23.0 23.0 %
Other operating expense, net 9.4 1.0 8.4 NM
INCOME FROM OPERATIONS 236.3 245.9 (9.6) (4)
%
OTHER EXPENSES (INCOME):
Floor plan interest expense 14.1 29.7 (15.6) (53)
%
Other interest expense, net 41.7 41.2 0.5 1
%
Loss on extinguishment of long-term debt, net 20.6 20.6 %
Gain on dealership divestitures, net (58.4) (11.7) (46.7) NM
Total other expenses, net 18.0 59.2 (41.2) (70)
%
INCOME BEFORE INCOME TAXES 218.3 186.7 31.6 17
%
Income tax expense 53.0 45.9 7.1 15
%
NET INCOME $
165.3 $
140.8 $
24.5 17
%
EARNINGS PER COMMON SHARE:
Basic-
Net income $
8.61 $
7.37 $
1.24 17
%
Diluted-
Net income $
8.56 $
7.30 $
1.26 17
%
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
Basic 19.2 19.1 0.1 1
%
Restricted stock - 0.1 (0.1) (100)
%
Performance share units 0.1 0.1 %
Diluted 19.3 19.3 %
NM-Not Meaningful
ASBURY AUTOMOTIVE GROUP, INC.
KEY OPERATING HIGHLIGHTS (In millions, except per unit data)
(Unaudited)
For the Nine Months Ended Increase %
September 30,
(Decrease) Change
---
2020 2019
Unit sales
---
New vehicle:
Luxury 15,508 16,933 (1,425) (8)
%
Import 37,886 45,697 (7,811) (17)
%
Domestic 13,198 15,006 (1,808) (12)
%
Total new vehicle 66,592 77,636 (11,044) (14)
%
Used vehicle retail 59,151 66,330 (7,179) (11)
%
Used to new ratio 88.8 85.4
% % 340 bps
Average selling price
---
New vehicle $
38,170 $
36,374 $
1,796 5
%
Used vehicle retail 23,093 21,857 1,236 6
%
Average gross profit per unit
---
New vehicle:
Luxury $
4,004 $
3,425 $
579 17
%
Import 1,122 689 433 63
%
Domestic 2,349 1,686 663 39
%
Total new vehicle 2,036 1,479 557 38
%
Used vehicle retail 1,794 1,541 253 16
%
Finance and insurance, net 1,732 1,614 118 7
%
Front end yield (1) 3,654 3,121 533 17
%
Gross margin
---
New vehicle:
Luxury 7.2
% 6.2
% 100 bps
Import 3.8
% 2.4
% 140 bps
Domestic 5.5
% 4.2
% 130 bps
Total new vehicle 5.3
% 4.1
% 120 bps
Used vehicle retail 7.8
% 7.0
% 80 bps
Parts and service 60.6 62.3
% % (170) bps
Total gross profit margin 17.4 16.3
% % 110 bps
SG&A metrics
---
Rent expense $
20.8 $
20.3 $
0.5 2
%
SG&A as a percentage of gross profit 65.0 68.5
% % (350) bps
SG&A, excluding rent expense as a percentage of gross profit 62.6 66.1
% % (350) bps
Adjusted SG&A as a percentage of gross profit 64.9 68.5
% % (360) bps
Operating metrics
---
Income from operations as a percentage of revenue 4.8
% 4.6
% 20 bps
Income from operations as a percentage of gross profit 27.8 28.4
% % (60) bps
Adjusted income from operations as a percentage of revenue 5.5
% 4.7
% 80 bps
Adjusted income from operations as a percentage of gross profit 31.8 28.6
% % 320 bps
Revenue mix
---
New vehicle 51.9 53.1
% %
Used vehicle retail 28.0 27.3
% %
Used vehicle wholesale 2.9
% 2.6
%
Parts and service 12.8 12.6
% %
Finance and insurance 4.4
% 4.4
%
Total revenue 100.0 100.0
% %
Gross profit mix
---
New vehicle 15.9 13.2
% %
Used vehicle retail 12.5 11.8
% %
Used vehicle wholesale 1.3
% 0.1
%
Parts and service 44.7 48.1
% %
Finance and insurance 25.6 26.8
% %
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 Nine Months Ended Increase %
September 30,
(Decrease) Change
---
2020 2019
Revenue
---
New vehicle:
Luxury $
770.0 $
896.1 $
(126.1) (14)
%
Import 1,037.5 1,175.3 (137.8) (12)
%
Domestic 484.0 543.4 (59.4) (11)
%
Total new vehicle 2,291.5 2,614.8 (323.3) (12)
%
Used Vehicle:
Retail 1,241.9 1,332.5 (90.6) (7)
%
Wholesale 127.5 130.2 (2.7) (2)
%
Total used vehicle 1,369.4 1,462.7 (93.3) (6)
%
Parts and service 571.0 628.8 (57.8) (9)
%
Finance and insurance, net 202.2 215.6 (13.4) (6)
%
Total revenue $
4,434.1 $
4,921.9 $
(487.8) (10)
%
Gross profit
---
New vehicle:
Luxury $
53.2 $
55.6 $
(2.4) (4)
%
Import 38.9 29.1 9.8 34
%
Domestic 26.6 22.5 4.1 18
%
Total new vehicle 118.7 107.2 11.5 11
%
Used Vehicle:
Retail 95.7 95.4 0.3 %
Wholesale 9.9 0.8 9.1 NM
Total used vehicle 105.6 96.2 9.4 10
%
Parts and service:
Customer pay 124.5 149.7 (25.2) (17)
%
Warranty 36.2 42.1 (5.9) (14)
%
Wholesale parts 133.8 141.9 (8.1) (6)
%
Parts and service, excluding reconditioning and preparation 294.5 333.7 (39.2) (12)
%
Reconditioning and preparation 50.7 58.3 (7.6) (13)
%
Total parts and service 345.2 392.0 (46.8) (12)
%
Finance and insurance 202.2 215.6 (13.4) (6)
%
Total gross profit $
771.7 $
811.0 $
(39.3) (5)
%
SG&A expense $
507.7 $
556.8 $
(49.1) (9)
%
SG&A expense as a percentage of gross profit 65.8 68.7
% % (290) 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 Nine Months Ended Increase %
September 30,
(Decrease) Change
---
2020 2019
Unit sales
---
New vehicle:
Luxury 13,863 16,293 (2,430) (15)
%
Import 35,457 41,775 (6,318) (15)
%
Domestic 11,487 13,551 (2,064) (15)
%
Total new vehicle 60,807 71,619 (10,812) (15)
%
Used vehicle retail 54,299 60,826 (6,527) (11)
%
Used to new ratio 89.3 84.9
% % 440 bps
Average selling price
---
New vehicle $
37,685 $
36,510 $
1,175 3
%
Used vehicle retail 22,872 21,907 965 4
%
Average gross profit per unit
---
New vehicle:
Luxury $
3,838 $
3,413 $
425 12
%
Import 1,097 697 400 57
%
Domestic 2,316 1,660 656 40
%
Total new vehicle 1,952 1,497 455 30
%
Used vehicle retail 1,762 1,568 194 12
%
Finance and insurance, net 1,757 1,628 129 8
%
Front end yield (1) 3,619 3,158 461 15
%
Gross margin
---
New vehicle:
Luxury 6.9
% 6.2
% 70 bps
Import 3.7
% 2.5
% 120 bps
Domestic 5.5
% 4.1
% 140 bps
Total new vehicle 5.2
% 4.1
% 110 bps
Used vehicle retail 7.7
% 7.2
% 50 bps
Parts and service:
Parts and service, excluding reconditioning and preparation 51.6 53.1
% % (150) bps
Parts and service, including reconditioning and preparation 60.5 62.3
% % (180) bps
Total gross profit margin 17.4 16.5
% % 90 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)
September 30, December 31, Increase % Change
2020 2019
(Decrease)
---
SELECTED BALANCE SHEET DATA
Cash and cash equivalents $
4.1 $
3.5 $
0.6 17
%
New vehicle inventory (a) 578.5 802.6 (224.1) (28)
%
Used vehicle inventory (b) 203.9 140.1 63.8 46
%
Parts inventory (c) 46.3 42.3 4.0 9
%
Total current assets 1,298.0 1,602.6 (304.6) (19)
%
Floor plan notes payable (d) 695.6 788.0 (92.4) (12)
%
Total current liabilities 1,212.7 1,247.0 (34.3) (3)
%
CAPITALIZATION:
Long-term debt (including current portion) (e) $
1,223.8 $
939.4 $
284.4 30
%
Shareholders' equity 811.9 646.3 165.6 26
%
Total $
2,035.7 $
1,585.7 $
450.0 28
%
(a) Excluding $5.1 million and
$56.3 million of new vehicle
inventory classified as Assets
held for sale as of September
30, 2020 and December 31,
2019, respectively
(b) Excluding $1.4 million and
$8.6 million of used vehicle
inventory classified as Assets
held for sale as of September
30, 2020 and December 31,
2019, respectively
(c) Excluding $0.4 million and $2.8
million of parts inventory
classified as Assets held for
sale as of September 30, 2020
and December 31, 2019,
respectively
(d) Excluding $5.8 million and
$62.8 million of Floor plan
notes payable classified as
Liabilities associated with
assets held for sale as of
September 30, 2020 and
December 31, 2019,
respectively
(e) Excluding $16.6 million and
$28.1 million of Long-term
debt classified as Liabilities
associated with assets held
for sale as of September 30,
2020 and December 31, 2019,
respectively
September December September
30, 2020 31, 2019 30, 2019
DAYS SUPPLY
New vehicle inventory 47 66 76
Used vehicle inventory 35 29 36
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 Nine Months
Ended
September 30,
2020 2019
Luxury:
Mercedes-Benz 8 7
% %
Lexus 8 6
% %
BMW 6 6
% %
Acura 4 4
% %
Infiniti 2 3
% %
Other luxury 6 7
% %
Total luxury 34 33
% %
Imports:
Honda 18 19
% %
Toyota 13 13
% %
Nissan 6 9
% %
Other imports 7 5
% %
Total imports 44 46
% %
Domestic:
Ford 9 9
% %
Chevrolet 6 6
% %
Dodge 4 3
% %
Other domestics 3 3
% %
Total domestic 22 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
September 30, 2020 June 30, 2020
(Dollars in millions)
Adjusted leverage ratio:
---
Long-term debt (including current portion) $
1,223.8 $
1,233.5
Debt included in Liabilities held for sale 16.6
Cash and floor plan offset (43.9) (729.9)
Availability under our used vehicle revolving floor plan facility (103.7) (17.0)
Adjusted long-term net debt $
1,092.8 $
486.6
Calculation of earnings before interest, taxes, depreciation and amortization ("EBITDA"):
Net Income $
208.9 $
157.7
Depreciation and amortization 38.5 37.7
Income tax expense 66.7 49.5
Swap and other interest expense 56.3 57.0
Earnings before interest, taxes, depreciation and amortization $
370.4 $
301.9
("EBITDA")
Non-core items - expense (income):
Gain on dealership divestitures $
(58.4) $
(33.7)
Legal settlements (2.7) (2.7)
Gain on sale of real estate (0.3) (0.3)
Franchise rights impairment 30.1 30.1
Real estate-related charges 1.3 0.6
Park Place related acquisition costs 12.9 11.6
Loss on debt extinguishment 20.7 20.7
Total non-core items 3.6 26.3
Adjusted EBITDA $
374.0 $
328.2
Pro forma EBITDA for Acquisitions and Divestitures $
77.5
$
Pro forma Adjusted EBITDA $
451.5 $
328.2
Pro forma Adjusted net leverage ratio 2.4 1.5
For the Three Months Ended
September 30,
2020 2019
(In millions, except per share
data)
Adjusted income from operations:
---
Income from operations $
119.1 $
82.2
Park Place related acquisition costs 1.3
Real estate-related charges 0.7
Adjusted income from operations $
121.1 $
82.2
Adjusted net income:
---
Net income $
96.2 $
45.0
Non-core items - (income) expense:
Gain on dealership divestiture (24.7)
Real estate-related charges 0.7
Park Place related acquisition costs 1.3
Income tax effect on non-core items above 5.7
Total non-core items (17.0)
Adjusted net income $
79.2 $
45.0
Adjusted diluted earnings per share (EPS):
---
Diluted EPS $
4.96 $
2.33
Total non-core items (0.88)
Adjusted diluted EPS $
4.08 $
2.33
Weighted average common shares outstanding - diluted 19.4 19.3
Adjusted Selling, general, and administrative expense:
---
Selling, general, and administrative expense $
206.5 $
202.0
Park Place related acquisition costs (1.3)
Adjusted Selling, general, and administrative expense: $
205.2 $
202.0
For the Nine Months
Ended September 30,
2020 2019
(In millions, except per
share data)
Adjusted income from operations:
---
Income from operations $
236.3 $
245.9
Legal settlements (2.1)
Gain on sale of real estate (0.3) (0.3)
Real estate-related charges 0.7
Park Place related costs 11.6
Park Place acquisition costs 1.3
Franchise rights impairment 23.0
Fixed assets write-off 2.4
Adjusted income from operations $
270.5 $
248.0
Adjusted net income:
---
Net income $
165.3 $
140.8
Non-core items - (income) expense:
Gain on dealership divestitures (58.4) (11.7)
Legal settlements (2.1)
Gain on sale of real estate (0.3) (0.3)
Real estate-related charges 0.7
Park Place related costs 11.6
Park Place acquisition costs 1.3
Loss on extinguishment of debt 20.7
Franchise rights impairment 23.0
Fixed assets write-off 2.4
Income tax effect on non-core items above 0.9 2.4
Total non-core items (2.6) (7.2)
Adjusted net income $
162.7 $
133.6
Adjusted diluted earnings per share (EPS):
---
Diluted EPS $
8.56 $
7.30
Total non-core items (0.13) (0.38)
Adjusted diluted EPS $
8.43 $
6.92
Weighted average common shares outstanding - diluted 19.3 19.3
Adjusted Selling, general, and administrative expense:
---
Selling, general, and administrative expense $
553.4 $
593.7
Park Place related acquisition costs (1.3)
Adjusted Selling, general, and administrative expense: $
552.1 $
593.7
View original content to download multimedia:http://www.prnewswire.com/news-releases/asbury-automotive-group-announces-all-time-record-third-quarter-2020-financial-results-301159999.html
SOURCE Asbury Automotive Group, Inc.
