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Asbury Automotive Group Announces Record Third Quarter 2021 Financial Results

October 26, 2021 7:00 AM EDT

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  • Third quarter EPS of $7.54 per diluted share, up 52% over prior year EPS
  • Third quarter adjusted EPS of $7.36 per diluted share (a non-GAAP measure), up 80% over prior year adjusted EPS
  • Third quarter revenue increased 30% and gross profit increased 43% over prior year quarter
  • Third quarter SG&A as a percentage of gross profit decreased 550 bps over prior year to 56.0%, while adjusted SG&A decreased 580 bps to 55.3%

DULUTH, Ga.--(BUSINESS WIRE)-- Asbury Automotive Group, Inc. (NYSE: ABG), one of the largest automotive retail and service companies in the U.S., reported record net income for the third quarter 2021 of $147.0 million ($7.54 per diluted share). This result compares to net income of $96.2 million ($4.96 per diluted share) in the prior year quarter.

The financial measures discussed below include both GAAP and adjusted (non-GAAP) financial measures. Please see reconciliations for our non-GAAP metrics included in the accompanying financial tables.

“This quarter, though the supply of new inventory remained constrained, our teams continued to excel and achieved record third quarter levels in revenue, operating margins, SG&A as a percentage of gross profit, net income, and EPS. We are trending well on our same store pillar of our five-year growth plan,” said David Hult, Asbury’s President and Chief Executive Officer. “In addition, on our M&A pillar, we announced the upcoming transformative acquisition of the Larry H. Miller Dealerships and Total Care Auto, Powered by Landcar, with annualized revenues of approximately $5.7 billion. Along with other acquisitions, both closed and under contract, of an additional $900 million, in 2021, we expect to close on acquisitions totaling $6.6 billion in annualized revenue. Overall, we are tracking to surpass our strategic five-year plan.”

The Company reported adjusted net income (a non-GAAP measure) for the third quarter 2021 of $143.6 million ($7.36 per diluted share) compared to $79.2 million ($4.08 per diluted share) in the prior year quarter.

Net income for the third quarter 2021 was adjusted for acquisition expenses of $3.5 million ($0.13 per diluted share) and gain on divestiture of $8.0 million ($0.31 per diluted share).

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.

The Company reported total revenue for the third quarter of $2.4 billion, up 30% from the prior year period; total revenue on a same-store basis was up 16% from the prior year period.

Third Quarter 2021 Operational Summary

Total Company vs. 3rd Quarter 2020:

  • Revenue increased 30%
  • Gross profit increased 43%
  • Gross margin increased 180 bps to 20%
  • New vehicle unit volume increased 1%; new vehicle revenue increased 18%; gross profit increased 108%
  • Used vehicle retail unit volume increased 36%; used vehicle retail revenue increased 62%; gross profit increased 59%
  • Finance and insurance revenue and gross profit increased 24%
  • Parts and service revenue and gross profit increased 25%; customer pay revenue and gross profit increased 30%
  • Adjusted SG&A as a percentage of gross profit fell to 55.3%, a decrease of 580 bps
  • Operating income increased 69%
  • Operating margin increased 190 bps to 8.4%; adjusted operating margin increased 190 bps to 8.5%
  • Adjusted EPS increased 80% to $7.36

Same store vs. 3rd Quarter 2020:

  • Revenue increased 16%
  • Gross profit increased 28%
  • Gross margin increased 190 bps to 20.1%
  • New vehicle unit volume decreased 7%; new vehicle revenue increased 5%; gross profit increased 83%
  • Used vehicle retail unit volume increased 27%; used vehicle retail revenue increased 47%; gross profit increased 45%
  • Finance and insurance revenue and gross profit increased 18%
  • Parts and service revenue and gross profit increased 10%; customer pay gross profit increased 12%

Liquidity and Leverage

As of September 30, 2021, the company had approximately $780 million of liquidity (including cash of $331 million, floorplan offset accounts of $47 million, $190 million under our new floor plan facility that is able to be converted to our revolver, and availability under our used vehicle floorplan line and revolver of $209 million). The company’s adjusted net leverage ratio was 1.2x at quarter-end.

Earnings Call

Additional commentary regarding the third quarter results will be provided during the earnings conference call on Tuesday, October 26, 2021, at 10:00 a.m. ET. The conference call will be simulcast live on the internet and can be accessed by logging onto www.asburyauto.com/company/investor-relations. A replay will be available on this site for 30 days.

In addition, live audio of the call will be accessible to the public by calling (800) 353-6461 (domestic), or (334) 323-0501 (international); passcode – 5585333. 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 – 5585333.

About Asbury Automotive Group, Inc.

Asbury Automotive Group, Inc. (NYSE: ABG), a Fortune 500 company headquartered in Duluth, GA, is one of the largest automotive retailers in the U.S. In late 2020, Asbury embarked on a 5‑year plan to strategically increase revenue and profitability through organic and acquisitive growth as well as their innovative Clicklane digital car purchasing platform, with its guest-centric approach as Asbury’s constant North Star. Asbury currently operates 92 dealerships, consisting of 115 franchises, representing 31 domestic and foreign brands of vehicles. Asbury also operates 25 collision repair centers. Asbury offers an extensive range of automotive products and services, including new and used vehicles; parts and service, which includes vehicle repair and maintenance services, replacement parts and collision repair services; and finance and insurance products, including arranging vehicle financing through third parties and aftermarket products, such as extended service contracts, guaranteed asset protection debt cancellation, prepaid maintenance, and credit life and disability insurance.

For additional information, visit www.asburyauto.com.

Forward-Looking Statements

This press release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are statements other than historical fact, and may include statements relating to goals, plans, market conditions and projections regarding Asbury's financial position, liquidity, results of operations, market position and dealership portfolio, the expected benefits of Clicklane, and other initiatives and future business strategy, including the expected terms or timeline of currently anticipated or recently completed acquisitions or dispositions, such as the LHM acquisition, the anticipated cost savings, run-rate synergies, revenue enhancement strategies, operational improvements and other benefits of such currently anticipated or recently completed acquisitions or dispositions. 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 ongoing COVID-19 pandemic on our industry and business, market factors, Asbury's relationships with, and the financial and operational stability of, vehicle manufacturers and other suppliers, acts of God or other incidents and the shortage of semiconductor chips, which may adversely impact supply from vehicle manufacturers and/or present retail sales challenges, any event or circumstance that could give rise to the termination of the LHM acquisition, including the failure to obtain necessary manufacturer and regulatory approvals; the ability to consummate the LHM acquisition and other pending acquisitions on the terms or timeline currently contemplated or at all; the ability to successfully integrate the LHM business or other acquisitions in our existing operations and the diversion of management’s attention from ongoing business and regular business responsibilities; the effects of increased expenses or unanticipated liabilities incurred as a result of the LHM acquisition and other pending acquisitions; the disruption from the LHM acquisition and other acquisitions, making it more difficult to maintain relationships with customers or suppliers; risks associated with Asbury's indebtedness and our ability to comply with applicable covenants in our various financing agreements, or to obtain waivers of these covenants as necessary; 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 five-year strategic plan, 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

September 30,

 

Increase

(Decrease)

 

%

Change

 

2021

 

2020

 

 

REVENUE:

 

 

 

 

 

 

 

New vehicle

$

1,129.5

 

 

$

957.9

 

 

$

171.6

 

 

18

%

Used vehicle:

 

 

 

 

 

 

 

Retail

823.7

 

 

507.4

 

 

316.3

 

 

62

%

Wholesale

55.3

 

 

62.1

 

 

(6.8)

 

 

(11)

%

Total used vehicle

879.0

 

 

569.5

 

 

309.5

 

 

54

%

Parts and service

297.1

 

 

237.2

 

 

59.9

 

 

25

%

Finance and insurance, net

100.4

 

 

80.8

 

 

19.6

 

 

24

%

TOTAL REVENUE

2,406.0

 

 

1,845.4

 

 

560.6

 

 

30

%

GROSS PROFIT:

 

 

 

 

 

 

 

New vehicle

126.0

 

 

60.6

 

 

65.4

 

 

108

%

Used vehicle:

 

 

 

 

 

 

 

Retail

68.7

 

 

43.3

 

 

25.4

 

 

59

%

Wholesale

3.5

 

 

5.9

 

 

(2.4)

 

 

(41)

%

Total used vehicle

72.2

 

 

49.2

 

 

23.0

 

 

47

%

Parts and service

181.4

 

 

145.3

 

 

36.1

 

 

25

%

Finance and insurance, net

100.4

 

 

80.8

 

 

19.6

 

 

24

%

TOTAL GROSS PROFIT

480.0

 

 

335.9

 

 

144.1

 

 

43

%

OPERATING EXPENSES:

 

 

 

 

 

 

 

Selling, general and administrative

268.7

 

 

206.5

 

 

62.2

 

 

30

%

Depreciation and amortization

10.7

 

 

9.8

 

 

0.9

 

 

9

%

Other operating (income) expense, net

(0.4)

 

 

0.5

 

 

(0.9)

 

 

(180)

%

INCOME FROM OPERATIONS

201.0

 

 

119.1

 

 

81.9

 

 

69

%

OTHER EXPENSES (INCOME):

 

 

 

 

 

 

 

Floor plan interest expense

1.5

 

 

3.0

 

 

(1.5)

 

 

(50)

%

Other interest expense, net

14.8

 

 

12.9

 

 

1.9

 

 

15

%

Gain on dealership divestitures, net

(8.0)

 

 

(24.7)

 

 

16.7

 

 

68

%

Total other expenses (income), net

8.3

 

 

(8.8)

 

 

17.1

 

 

194

%

INCOME BEFORE INCOME TAXES

192.7

 

 

127.9

 

 

64.8

 

 

51

%

Income tax expense

45.7

 

 

31.7

 

 

14.0

 

 

44

%

NET INCOME

$

147.0

 

 

$

96.2

 

 

$

50.8

 

 

53

%

EARNINGS PER COMMON SHARE:

 

 

 

 

 

 

 

Basic—

 

 

 

 

 

 

 

Net income

$

7.62

 

 

$

5.01

 

 

$

2.61

 

 

52

%

Diluted—

 

 

 

 

 

 

 

Net income

$

7.54

 

 

$

4.96

 

 

$

2.58

 

 

52

%

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:

 

 

 

 

 

 

 

Basic

19.3

 

 

19.2

 

 

0.1

 

 

 

Restricted stock

0.1

 

 

0.1

 

 

 

 

 

Performance share units

0.1

 

 

0.1

 

 

 

 

 

Diluted

19.5

 

 

19.4

 

 

0.1

 

 

 

ASBURY AUTOMOTIVE GROUP, INC.

KEY OPERATING HIGHLIGHTS (In millions, except per unit data)

(Unaudited)

 

 

For the Three Months Ended

September 30,

 

Increase

(Decrease)

 

%
Change

 

2021

 

2020

 

 

Unit sales

 

 

 

 

 

 

 

New vehicle:

 

 

 

 

 

 

 

Luxury

7,972

 

 

6,157

 

 

1,815

 

 

29

%

Import

13,491

 

 

13,818

 

 

(327)

 

 

(2)

%

Domestic

3,300

 

 

4,580

 

 

(1,280)

 

 

(28)

%

Total new vehicle

24,763

 

 

24,555

 

 

208

 

 

1

%

Used vehicle retail

27,761

 

 

20,464

 

 

7,297

 

 

36

%

Used to new ratio

112.1

%

 

83.3

%

 

2,880 bps

 

 

Average selling price

 

 

 

 

 

 

 

New vehicle

$

45,612

 

 

$

39,010

 

 

$

6,602

 

 

17

%

Used vehicle retail

29,671

 

 

24,795

 

 

4,876

 

 

20

%

Average gross profit per unit

 

 

 

 

 

 

 

New vehicle:

 

 

 

 

 

 

 

Luxury

$

7,551

 

 

$

4,613

 

 

$

2,938

 

 

64

%

Import

3,714

 

 

1,397

 

 

2,317

 

 

166

%

Domestic

4,758

 

 

2,817

 

 

1,941

 

 

69

%

Total new vehicle

5,088

 

 

2,468

 

 

2,620

 

 

106

%

Used vehicle retail

2,475

 

 

2,116

 

 

359

 

 

17

%

Finance and insurance, net

1,912

 

 

1,795

 

 

117

 

 

7

%

Front end yield (1)

5,618

 

 

4,103

 

 

1,515

 

 

37

%

Gross margin

 

 

 

 

 

 

 

New vehicle:

 

 

 

 

 

 

 

Luxury

11.8

%

 

8.2

%

 

360 bps

 

 

Import

10.9

%

 

4.7

%

 

620 bps

 

 

Domestic

9.7

%

 

6.5

%

 

320 bps

 

 

Total new vehicle

11.2

%

 

6.3

%

 

490 bps

 

 

Used vehicle retail

8.3

%

 

8.5

%

 

(20) bps

 

 

Parts and service

61.1

%

 

61.3

%

 

(20) bps

 

 

Total gross profit margin

20.0

%

 

18.2

%

 

180 bps

 

 

SG&A metrics

 

 

 

 

 

 

 

Rent expense

$

8.3

 

 

$

8.1

 

 

$

0.2

 

 

2

%

SG&A as a percentage of gross profit

56.0

%

 

61.5

%

 

(550) bps

 

 

SG&A, excluding rent expense as a percentage of gross profit

54.3

%

 

59.1

%

 

(480) bps

 

 

Adjusted SG&A as a percentage of gross profit

55.3

%

 

61.1

%

 

(580) bps

 

 

Operating metrics

 

 

 

 

 

 

 

Income from operations as a percentage of revenue

8.4

%

 

6.5

%

 

190 bps

 

 

Income from operations as a percentage of gross profit

41.9

%

 

35.5

%

 

640 bps

 

 

Adjusted income from operations as a percentage of revenue

8.5

%

 

6.6

%

 

190 bps

 

 

Adjusted income from operations as a percentage of gross profit

42.6

%

 

36.1

%

 

650 bps

 

 

Revenue mix

 

 

 

 

 

 

 

New vehicle

46.9

%

 

51.9

%

 

 

 

 

Used vehicle retail

34.3

%

 

27.4

%

 

 

 

 

Used vehicle wholesale

2.3

%

 

3.4

%

 

 

 

 

Parts and service

12.3

%

 

12.9

%

 

 

 

 

Finance and insurance

4.2

%

 

4.4

%

 

 

 

 

Total revenue

100.0

%

 

100.0

%

 

 

 

 

Gross profit mix

 

 

 

 

 

 

 

New vehicle

26.3

%

 

18.0

%

 

 

 

 

Used vehicle retail

14.3

%

 

12.8

%

 

 

 

 

Used vehicle wholesale

0.7

%

 

1.8

%

 

 

 

 

Parts and service

37.8

%

 

43.3

%

 

 

 

 

Finance and insurance

20.9

%

 

24.1

%

 

 

 

 

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 Ended

September 30,

 

Increase

(Decrease)

 

%
Change

 

2021

 

2020

 

 

Revenue

 

 

 

 

 

 

 

New vehicle:

 

 

 

 

 

 

 

Luxury

$

371.3

 

 

$

334.5

 

 

$

36.8

 

 

11

%

Import

452.1

 

 

413.9

 

 

38.2

 

 

9

%

Domestic

162.4

 

 

192.6

 

 

(30.2)

 

 

(16)

%

Total new vehicle

985.8

 

 

941.0

 

 

44.8

 

 

5

%

Used Vehicle:

 

 

 

 

 

 

 

Retail

728.2

 

 

496.1

 

 

232.1

 

 

47

%

Wholesale

38.4

 

 

61.4

 

 

(23.0)

 

 

(37)

%

Total used vehicle

766.6

 

 

557.5

 

 

209.1

 

 

38

%

Parts and service

256.0

 

 

232.5

 

 

23.5

 

 

10

%

Finance and insurance

93.8

 

 

79.7

 

 

14.1

 

 

18

%

Total revenue

$

2,102.2

 

 

$

1,810.7

 

 

$

291.5

 

 

16

%

 

 

 

 

 

 

 

 

Gross profit

 

 

 

 

 

 

 

New vehicle:

 

 

 

 

 

 

 

Luxury

$

43.3

 

 

$

27.3

 

 

$

16.0

 

 

59

%

Import

49.4

 

 

19.4

 

 

30.0

 

 

155

%

Domestic

15.7

 

 

12.4

 

 

3.3

 

 

27

%

Total new vehicle

108.4

 

 

59.1

 

 

49.3

 

 

83

%

Used Vehicle:

 

 

 

 

 

 

 

Retail

61.1

 

 

42.2

 

 

18.9

 

 

45

%

Wholesale

2.6

 

 

5.9

 

 

(3.3)

 

 

(56)

%

Total used vehicle

63.7

 

 

48.1

 

 

15.6

 

 

32

%

Parts and service:

 

 

 

 

 

 

 

Customer pay

92.5

 

 

82.3

 

 

10.2

 

 

12

%

Warranty

19.7

 

 

25.0

 

 

(5.3)

 

 

(21)

%

Wholesale parts

7.7

 

 

5.7

 

 

2.0

 

 

35

%

Parts and service, excluding reconditioning and preparation

119.9

 

 

113.0

 

 

6.9

 

 

6

%

Reconditioning and preparation

36.0

 

 

29.2

 

 

6.8

 

 

23

%

Total parts and service

155.9

 

 

142.2

 

 

13.7

 

 

10

%

Finance and insurance

93.8

 

 

79.7

 

 

14.1

 

 

18

%

Total gross profit

$

421.8

 

 

$

329.1

 

 

$

92.7

 

 

28

%

 

 

 

 

 

 

 

 

SG&A expense

$

239.6

 

 

$

202.6

 

 

$

37.0

 

 

18

%

SG&A expense as a percentage of gross profit

56.8

%

 

61.6

%

 

(480) 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

September 30,

 

Increase

(Decrease)

 

%
Change

 

2021

 

2020

 

 

Unit sales

 

 

 

 

 

 

 

New vehicle:

 

 

 

 

 

 

 

Luxury

5,918

 

 

5,951

 

 

(33)

 

 

(1)

%

Import

13,329

 

 

13,818

 

 

(489)

 

 

(4)

%

Domestic

3,300

 

 

4,464

 

 

(1,164)

 

 

(26)

%

Total new vehicle

22,547

 

 

24,233

 

 

(1,686)

 

 

(7)

%

Used vehicle retail

25,442

 

 

20,050

 

 

5,392

 

 

27

%

Used to new ratio

112.8

%

 

82.7

%

 

3,010 bps

 

 

 

 

 

 

 

 

 

 

Average selling price

 

 

 

 

 

 

 

New vehicle

$

43,722

 

 

$

38,831

 

 

$

4,891

 

 

13

%

Used vehicle retail

28,622

 

 

24,743

 

 

3,879

 

 

16

%

 

 

 

 

 

 

 

 

Average gross profit per unit

 

 

 

 

 

 

 

New vehicle:

 

 

 

 

 

 

 

Luxury

$

7,317

 

 

$

4,587

 

 

$

2,730

 

 

60

%

Import

3,706

 

 

1,404

 

 

2,302

 

 

164

%

Domestic

4,758

 

 

2,778

 

 

1,980

 

 

71

%

Total new vehicle

4,808

 

 

2,439

 

 

2,369

 

 

97

%

Used vehicle retail

2,402

 

 

2,105

 

 

297

 

 

14

%

Finance and insurance, net

1,955

 

 

1,800

 

 

155

 

 

9

%

Front end yield (1)

5,487

 

 

4,087

 

 

1,400

 

 

34

%

 

 

 

 

 

 

 

 

Gross margin

 

 

 

 

 

 

 

New vehicle:

 

 

 

 

 

 

 

Luxury

11.7

%

 

8.2

%

 

350 bps

 

 

Import

10.9

%

 

4.7

%

 

620 bps

 

 

Domestic

9.7

%

 

6.4

%

 

330 bps

 

 

Total new vehicle

11.0

%

 

6.3

%

 

470 bps

 

 

Used vehicle retail

8.4

%

 

8.5

%

 

(10) bps

 

 

Parts and service:

 

 

 

 

 

 

 

Parts and service, excluding reconditioning and preparation

46.8

%

 

48.6

%

 

(180) bps

 

 

Parts and service, including reconditioning and preparation

60.9

%

 

61.2

%

 

(30) bps

 

 

Total gross profit margin

20.1

%

 

18.2

%

 

190 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

September 30,

 

Increase

(Decrease)

 

%
Change

 

2021

 

2020

 

 

REVENUE:

 

 

 

 

 

 

 

New vehicle

$

3,649.6

 

 

$

2,541.8

 

 

$

1,107.8

 

 

44

%

Used vehicle:

 

 

 

 

 

 

 

Retail

2,190.6

 

 

1,366.0

 

 

824.6

 

 

60

%

Wholesale

195.5

 

 

144.2

 

 

51.3

 

 

36

%

Total used vehicle

2,386.1

 

 

1,510.2

 

 

875.9

 

 

58

%

Parts and service

851.5

 

 

628.0

 

 

223.5

 

 

36

%

Finance and insurance, net

295.7

 

 

217.8

 

 

77.9

 

 

36

%

TOTAL REVENUE

7,182.9

 

 

4,897.8

 

 

2,285.1

 

 

47

%

GROSS PROFIT:

 

 

 

 

 

 

 

New vehicle

325.6

 

 

135.6

 

 

190.0

 

 

140

%

Used vehicle:

 

 

 

 

 

 

 

Retail

189.7

 

 

106.1

 

 

83.6

 

 

79

%

Wholesale

21.8

 

 

10.9

 

 

10.9

 

 

100

%

Total used vehicle

211.5

 

 

117.0

 

 

94.5

 

 

81

%

Parts and service

527.1

 

 

380.7

 

 

146.4

 

 

38

%

Finance and insurance, net

295.7

 

 

217.8

 

 

77.9

 

 

36

%

TOTAL GROSS PROFIT

1,359.9

 

 

851.1

 

 

508.8

 

 

60

%

OPERATING EXPENSES:

 

 

 

 

 

 

 

Selling, general and administrative

778.2

 

 

553.4

 

 

224.8

 

 

41

%

Depreciation and amortization

30.6

 

 

29.0

 

 

1.6

 

 

6

%

Franchise rights impairment

 

 

23.0

 

 

(23.0)

 

 

(100)

%

Other operating (income) expense, net

(4.6)

 

 

9.4

 

 

(14.0)

 

 

(149)

%

INCOME FROM OPERATIONS

555.7

 

 

236.3

 

 

319.4

 

 

135

%

OTHER EXPENSES:

 

 

 

 

 

 

 

Floor plan interest expense

6.5

 

 

14.1

 

 

(7.6)

 

 

(54)

%

Other interest expense, net

43.2

 

 

41.7

 

 

1.5

 

 

4

%

Loss on extinguishment of long-term debt, net

 

 

20.6

 

 

(20.6)

 

 

(100)

%

Gain on dealership divestitures, net

(8.0)

 

 

(58.4)

 

 

50.4

 

 

86

%

Total other expenses, net

41.7

 

 

18.0

 

 

23.7

 

 

132

%

INCOME BEFORE INCOME TAXES

514.0

 

 

218.3

 

 

295.7

 

 

135

%

Income tax expense

122.1

 

 

53.0

 

 

69.1

 

 

130

%

NET INCOME

$

391.9

 

 

$

165.3

 

 

$

226.6

 

 

137

%

EARNINGS PER COMMON SHARE:

 

 

 

 

 

 

 

Basic—

 

 

 

 

 

 

 

Net income

$

20.31

 

 

$

8.61

 

 

$

11.70

 

 

136

%

Diluted—

 

 

 

 

 

 

 

Net income

$

20.10

 

 

$

8.56

 

 

$

11.54

 

 

135

%

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:

 

 

 

 

 

 

 

Basic

19.3

 

 

19.2

 

 

0.1

 

 

 

Restricted stock

0.1

 

 

 

 

0.1

 

 

 

Performance share units

0.1

 

 

0.1

 

 

 

 

 

Diluted

19.5

 

 

19.3

 

 

0.2

 

 

 

 

ASBURY AUTOMOTIVE GROUP, INC.

KEY OPERATING HIGHLIGHTS (In millions, except per unit data)

(Unaudited)

 

 

For the Nine Months Ended

September 30,

 

Increase

(Decrease)

 

%

Change

 

2021

 

2020

 

 

Unit sales

 

 

 

 

 

 

 

New vehicle:

 

 

 

 

 

 

 

Luxury

26,568

 

 

15,508

 

 

11,060

 

 

71

%

Import

45,125

 

 

37,886

 

 

7,239

 

 

19

%

Domestic

12,054

 

 

13,198

 

 

(1,144)

 

 

(9)

%

Total new vehicle

83,747

 

 

66,592

 

 

17,155

 

 

26

%

Used vehicle retail

78,136

 

 

59,151

 

 

18,985

 

 

32

%

Used to new ratio

93.3

%

 

88.8

%

 

450 bps

 

 

Average selling price

 

 

 

 

 

 

 

New vehicle

$

43,579

 

 

$

38,170

 

 

$

5,409

 

 

14

%

Used vehicle retail

28,036

 

 

23,093

 

 

4,943

 

 

21

%

Average gross profit per unit

 

 

 

 

 

 

 

New vehicle:

 

 

 

 

 

 

 

Luxury

$

6,278

 

 

$

4,004

 

 

$

2,274

 

 

57

%

Import

2,486

 

 

1,122

 

 

1,364

 

 

122

%

Domestic

3,866

 

 

2,349

 

 

1,517

 

 

65

%

Total new vehicle

3,888

 

 

2,036

 

 

1,852

 

 

91

%

Used vehicle retail

2,428

 

 

1,794

 

 

634

 

 

35

%

Finance and insurance, net

1,827

 

 

1,732

 

 

95

 

 

5

%

Front end yield (1)

5,010

 

 

3,654

 

 

1,356

 

 

37

%

Gross margin

 

 

 

 

 

 

 

New vehicle:

 

 

 

 

 

 

 

Luxury

10.2

%

 

7.2

%

 

300 bps

 

 

Import

7.7

%

 

3.8

%

 

390 bps

 

 

Domestic

8.3

%

 

5.5

%

 

280 bps

 

 

Total new vehicle

8.9

%

 

5.3

%

 

360 bps

 

 

Used vehicle retail

8.7

%

 

7.8

%

 

90 bps

 

 

Parts and service

61.9

%

 

60.6

%

 

130 bps

 

 

Total gross profit margin

18.9

%

 

17.4

%

 

150 bps

 

 

SG&A metrics

 

 

 

 

 

 

 

Rent expense

$

28.7

 

 

$

20.8

 

 

$

7.9

 

 

38

%

SG&A as a percentage of gross profit

57.2

%

 

65.0

%

 

(780) bps

 

 

SG&A, excluding rent expense as a percentage of gross profit

55.1

%

 

62.6

%

 

(750) bps

 

 

Adjusted SG&A as a percentage of gross profit

57.0

%

 

64.9

%

 

(790) bps

 

 

Operating metrics

 

 

 

 

 

 

 

Income from operations as a percentage of revenue

7.7

%

 

4.8

%

 

290 bps

 

 

Income from operations as a percentage of gross profit

40.9

%

 

27.8

%

 

1,310 bps

 

 

Adjusted income from operations as a percentage of revenue

7.7

%

 

5.5

%

 

220 bps

 

 

Adjusted income from operations as a percentage of gross profit

40.9

%

 

31.8

%

 

910 bps

 

 

Revenue mix

 

 

 

 

 

 

 

New vehicle

50.8

%

 

51.9

%

 

 

 

 

Used vehicle retail

30.5

%

 

28.0

%

 

 

 

 

Used vehicle wholesale

2.7

%

 

2.9

%

 

 

 

 

Parts and service

11.9

%

 

12.8

%

 

 

 

 

Finance and insurance

4.1

%

 

4.4

%

 

 

 

 

Total revenue

100.0

%

 

100.0

%

 

 

 

 

Gross profit mix

 

 

 

 

 

 

 

New vehicle

23.9

%

 

15.9

%

 

 

 

 

Used vehicle retail

14.0

%

 

12.5

%

 

 

 

 

Used vehicle wholesale

1.6

%

 

1.3

%

 

 

 

 

Parts and service

38.8

%

 

44.7

%

 

 

 

 

Finance and insurance

21.7

%

 

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 Nine Months Ended

September 30,

 

Increase

(Decrease)

 

%
Change

 

2021

 

2020

 

 

Revenue

 

 

 

 

 

 

 

New vehicle:

 

 

 

 

 

 

 

Luxury

$

1,064.8

 

 

$

829.8

 

 

$

235.0

 

 

28

%

Import

1,443.6

 

 

1,098.3

 

 

345.3

 

 

31

%

Domestic

556.0

 

 

532.7

 

 

23.3

 

 

4

%

Total new vehicle

3,064.4

 

 

2,460.8

 

 

603.6

 

 

25

%

Used Vehicle:

 

 

 

 

 

 

 

Retail

1,837.1

 

 

1,311.7

 

 

525.4

 

 

40

%

Wholesale

127.9

 

 

140.4

 

 

(12.5)

 

 

(9)

%

Total used vehicle

1,965.0

 

 

1,452.1

 

 

512.9

 

 

35

%

Parts and service

700.0

 

 

607.9

 

 

92.1

 

 

15

%

Finance and insurance, net

271.6

 

 

212.2

 

 

59.4

 

 

28

%

Total revenue

$

6,001.0

 

 

$

4,733.0

 

 

$

1,268.0

 

 

27

%

 

 

 

 

 

 

 

 

Gross profit

 

 

 

 

 

 

 

New vehicle:

 

 

 

 

 

 

 

Luxury

$

103.2

 

 

$

59.3

 

 

$

43.9

 

 

74

%

Import

111.4

 

 

42.3

 

 

69.1

 

 

163

%

Domestic

46.3

 

 

29.3

 

 

17.0

 

 

58

%

Total new vehicle

260.9

 

 

130.9

 

 

130.0

 

 

99

%

Used Vehicle:

 

 

 

 

 

 

 

Retail

162.1

 

 

102.7

 

 

59.4

 

 

58

%

Wholesale

15.3

 

 

11.0

 

 

4.3

 

 

39

%

Total used vehicle

177.4

 

 

113.7

 

 

63.7

 

 

56

%

Parts and service:

 

 

 

 

 

 

 

Customer pay

252.5

 

 

209.4

 

 

43.1

 

 

21

%

Warranty

57.9

 

 

63.3

 

 

(5.4)

 

 

(9)

%

Wholesale parts

20.1

 

 

15.1

 

 

5.0

 

 

33

%

Parts and service, excluding reconditioning and preparation

330.5

 

 

287.8

 

 

42.7

 

 

15

%

Reconditioning and preparation

100.8

 

 

80.5

 

 

20.3

 

 

25

%

Total parts and service

431.3

 

 

368.3

 

 

63.0

 

 

17

%

Finance and insurance

271.6

 

 

212.2

 

 

59.4

 

 

28

%

Total gross profit

$

1,141.2

 

 

$

825.1

 

 

$

316.1

 

 

38

%

 

 

 

 

 

 

 

 

SG&A expense

$

664.7

 

 

$

535.9

 

 

$

128.8

 

 

24

%

SG&A expense as a percentage of gross profit

58.2

%

 

64.9

%

 

(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 Nine Months Ended

September 30,

 

Increase

(Decrease)

 

%
Change

 

2021

 

2020

 

 

Unit sales

 

 

 

 

 

 

 

New vehicle:

 

 

 

 

 

 

 

Luxury

17,795

 

 

14,851

 

 

2,944

 

 

20

%

Import

44,885

 

 

37,383

 

 

7,502

 

 

20

%

Domestic

11,953

 

 

12,558

 

 

(605)

 

 

(5)

%

Total new vehicle

74,633

 

 

64,792

 

 

9,841

 

 

15

%

Used vehicle retail

69,250

 

 

56,884

 

 

12,366

 

 

22

%

Used to new ratio

92.8

%

 

87.8

%

 

500 bps

 

 

 

 

 

 

 

 

 

 

Average selling price

 

 

 

 

 

 

 

New vehicle

$

41,060

 

 

$

37,980

 

 

$

3,080

 

 

8

%

Used vehicle retail

26,529

 

 

23,059

 

 

3,470

 

 

15

%

 

 

 

 

 

 

 

 

Average gross profit per unit

 

 

 

 

 

 

 

New vehicle:

 

 

 

 

 

 

 

Luxury

$

5,799

 

 

$

3,993

 

 

$

1,806

 

 

45

%

Import

2,482

 

 

1,132

 

 

1,350

 

 

119

%

Domestic

3,874

 

 

2,333

 

 

1,541

 

 

66

%

Total new vehicle

3,496

 

 

2,020

 

 

1,476

 

 

73

%

Used vehicle retail

2,341

 

 

1,805

 

 

536

 

 

30

%

Finance and insurance, net

1,888

 

 

1,744

 

 

144

 

 

8

%

Front end yield (1)

4,828

 

 

3,664

 

 

1,164

 

 

32

%

 

 

 

 

 

 

 

 

Gross margin

 

 

 

 

 

 

 

New vehicle:

 

 

 

 

 

 

 

Luxury

9.7

%

 

7.1

%

 

260 bps

 

 

Import

7.7

%

 

3.9

%

 

380 bps

 

 

Domestic

8.3

%

 

5.5

%

 

280 bps

 

 

Total new vehicle

8.5

%

 

5.3

%

 

320 bps

 

 

Used vehicle retail

8.8

%

 

7.8

%

 

100 bps

 

 

Parts and service:

 

 

 

 

 

 

 

Parts and service, excluding reconditioning and preparation

47.2

%

 

47.3

%

 

(10) bps

 

 

Parts and service, including reconditioning and preparation

61.6

%

 

60.6

%

 

100 bps

 

 

Total gross profit margin

19.0

%

 

17.4

%

 

160 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,

2021

 

December 31,

2020

 

Increase

(Decrease)

 

% Change

SELECTED BALANCE SHEET DATA

 

 

 

 

 

 

 

Cash and cash equivalents

$

330.6

 

 

$

1.4

 

 

$

329.2

 

 

NM

New vehicle inventory

121.9

 

 

640.0

 

 

(518.1)

 

 

(81)

%

Used vehicle inventory

236.4

 

 

188.5

 

 

47.9

 

 

25

%

Parts inventory

55.5

 

 

46.7

 

 

8.8

 

 

19

%

Total current assets

1,150.5

 

 

1,405.7

 

 

(255.2)

 

 

(18)

%

Floor plan notes payable (a)

138.2

 

 

702.2

 

 

(564.0)

 

 

(80)

%

Total current liabilities

659.2

 

 

1,223.4

 

 

(564.2)

 

 

(46)

%

CAPITALIZATION:

 

 

 

 

 

 

 

Long-term debt (including current portion) (b)

$

1,371.0

 

 

$

1,201.8

 

 

$

169.2

 

 

14

%

Shareholders' equity

1,301.3

 

 

905.5

 

 

395.8

 

 

44

%

Total

$

2,672.3

 

 

$

2,107.3

 

 

$

565.0

 

 

27

%

________________

NMNot Meaningful

(a) Net of $46.8 million and $85.4 million in our floor plan offset account as of September 30, 2021 and December 31, 2020, respectively.

 

(b) Excluding $8.9 million of Long-term debt classified as Liabilities associated with assets held for sale as of December 31, 2020.

 

September 30, 2021

 

December 31, 2020

 

September 30, 2020

DAYS SUPPLY

 

 

 

 

 

New vehicle inventory

12

 

40

 

47

Used vehicle inventory

28

 

31

 

35

___________________

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,

 

2021

 

2020

Luxury:

 

 

 

Mercedes-Benz

11

%

 

8

%

Lexus

12

%

 

8

%

BMW

5

%

 

6

%

Acura

4

%

 

4

%

Range Rover

2

%

 

2

%

Audi

2

%

 

2

%

Porsche

2

%

 

1

%

Other luxury

7

%

 

3

%

Total luxury

45

%

 

34

%

Imports:

 

 

 

Honda

16

%

 

18

%

Toyota

12

%

 

13

%

Nissan

5

%

 

6

%

Other imports

7

%

 

7

%

Total imports

40

%

 

44

%

Domestic:

 

 

 

Ford

5

%

 

9

%

Chevrolet

4

%

 

6

%

Dodge

3

%

 

4

%

Other domestics

3

%

 

3

%

Total domestic

15

%

 

22

%

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 "Pro forma 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, 2021

 

June 30, 2021

 

(Dollars in millions)

Adjusted leverage ratio:

 

 

 

Long-term debt (including current portion)

$

1,371.0

 

 

$

1,378.2

 

Debt included in Liabilities held for sale

 

 

2.3

 

Cash and floor plan offset

(377.4)

 

 

(177.3)

 

Availability under our used vehicle revolving floor plan facility

(160.0)

 

 

(160.0)

 

Adjusted long-term net debt

$

833.6

 

 

$

1,043.2

 

 

 

 

 

Calculation of earnings before interest, taxes, depreciation and amortization ("EBITDA"):

 

 

 

Net Income

$

481.0

 

 

$

430.1

 

 

 

 

 

Depreciation and amortization

40.1

 

 

39.2

 

Income tax expense

153.0

 

 

138.9

 

Swap and other interest expense

58.4

 

 

56.4

 

Earnings before interest, taxes, depreciation and amortization ("EBITDA")

$

732.5

 

 

$

664.6

 

 

 

 

 

Non-core items - expense (income):

 

 

 

Gain on dealership divestitures

$

(36.6)

 

 

$

(28.6)

 

Legal settlements

(3.5)

 

 

(3.5)

 

Gain on sale of real estate

(1.9)

 

 

(1.9)

 

Professional fees associated with acquisitions

4.8

 

 

1.3

 

Real estate-related charges

2.8

 

 

2.8

 

Total non-core items

(34.4)

 

 

(29.9)

 

 

 

 

 

Adjusted EBITDA

$

698.1

 

 

$

634.7

 

 

 

 

 

Adjusted net leverage ratio

1.2

 

 

1.6

 

 

 

For the Three Months Ended

September 30,

 

2021

 

2020

 

(In millions, except per share

data)

Adjusted income from operations:

 

 

 

Income from operations

$

201.0

 

 

$

119.1

 

Professional fees associated with acquisitions

3.5

 

 

1.3

 

Real estate-related charges

 

 

0.7

 

Adjusted income from operations

$

204.5

 

 

$

121.1

 

 

 

 

 

Adjusted operating margin:

 

 

 

Adjusted income from operations

$

204.5

 

 

$

121.1

 

Total revenue

2,406.0

 

 

1,845.4

 

Adjusted operating margin

8.5%

 

6.6%

 

 

 

 

Adjusted net income:

 

 

 

Net income

$

147.0

 

 

$

96.2

 

 

 

 

 

Non-core items - (income) expense:

 

 

 

Gain on dealership divestiture

(8.0)

 

 

(24.7)

 

Real estate-related charges

 

 

0.7

 

Professional fees associated with acquisitions

3.5

 

 

1.3

 

Income tax effect on non-core items above

1.1

 

 

5.7

 

Total non-core items

(3.4)

 

 

(17.0)

 

Adjusted net income

$

143.6

 

 

$

79.2

 

 

 

 

 

Adjusted diluted earnings per share (EPS):

 

 

 

Diluted EPS

$

7.54

 

 

$

4.96

 

 

 

 

 

Total non-core items

(0.18)

 

 

(0.88)

 

Adjusted diluted EPS

$

7.36

 

 

$

4.08

 

 

 

 

 

Weighted average common shares outstanding - diluted

19.5

 

19.4

 

 

 

 

Adjusted Selling, general, and administrative expense:

 

 

 

Selling, general, and administrative expense

$

268.7

 

 

$

206.5

 

Professional fees associated with acquisitions

(3.5)

 

 

(1.3)

 

Adjusted Selling, general, and administrative expense:

$

265.2

 

 

$

205.2

 

 

For the Nine Months Ended

September 30,

 

2021

 

2020

 

(In millions, except per share

data)

Adjusted income from operations:

 

 

 

Income from operations

$

555.7

 

 

$

236.3

 

Legal settlements

(3.5)

 

 

(2.1)

 

Gain on sale of real estate

(1.9)

 

 

(0.3)

 

Real estate related charges

2.1

 

 

0.7

 

Park Place related costs

 

 

11.6

 

Professional fees associated with acquisitions

3.5

 

 

1.3

 

Franchise rights impairment

 

 

23.0

 

Adjusted income from operations

$

555.9

 

 

$

270.5

 

 

 

 

 

Adjusted net income:

 

 

 

Net income

$

391.9

 

 

$

165.3

 

 

 

 

 

Non-core items - (income) expense:

 

 

 

Legal settlements

(3.5)

 

 

(2.1)

 

Gain on sale of real estate

(1.9)

 

 

(0.3)

 

Real estate related charges

2.1

 

 

0.7

 

Gain on dealership divestitures

(8.0)

 

 

(58.4)

 

Park Place related costs

 

 

11.6

 

Professional fees associated with acquisitions

3.5

 

 

1.3

 

Loss on extinguishment of debt

 

 

20.7

 

Franchise rights impairment

 

 

23.0

 

Income tax effect on non-core items above

1.9

 

 

0.9

 

Total non-core items

(5.9)

 

 

(2.6)

 

Adjusted net income

$

386.0

 

 

$

162.7

 

 

 

 

 

Adjusted diluted earnings per share (EPS):

 

 

 

Diluted EPS

$

20.10

 

 

$

8.56

 

 

 

 

 

Total non-core items

(0.31)

 

 

(0.13)

 

Adjusted diluted EPS

$

19.79

 

 

$

8.43

 

 

 

 

 

Weighted average common shares outstanding - diluted

19.5

 

19.3

 

 

 

 

Adjusted Selling, general, and administrative expense:

 

 

 

Selling, general, and administrative expense

$

778.2

 

 

$

553.4

 

Professional fees associated with acquisitions

(3.5)

 

 

(1.3)

 

Adjusted Selling, general, and administrative expense:

$

774.7

 

 

$

552.1

 

 

Investors & Reporters May Contact:
Karen Reid
VP & Treasurer
(770) 418-8211
[email protected]

Source: Asbury Automotive Group, Inc.



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