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Asbury Automotive Group (ABG) Increases Share Buyback by $100M, Reports Q4 Revenues

February 15, 2022 7:02 AM EST

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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 fourth quarter 2021 of $141 million ($6.44 per diluted share). This result compares to net income of $89 million ($4.59 per diluted share) in the prior year quarter.

“In the fourth quarter, we closed on the transformative acquisitions of:

  • Larry H. Miller Dealerships and Total Care Auto, Powered by Landcar (“TCA”, collectively, “LHM Acquisition”), in seven Western states,
  • Stevinson Automotive Group in Colorado,
  • Arapahoe Hyundai-Genesis in the Denver market and
  • Kahlo CDJR in the Indianapolis market.

“We established a coast-to-coast presence and built scale in several strategic high-growth markets through these acquisitions. More importantly, all of these dealerships share Asbury's vision of being the most guest-centric auto retailer in the country. While we acquired approximately $6.6 billion in annualized revenue, we still ended the year with a strong balance sheet with an adjusted net leverage ratio of 2.7x,” said David Hult, Asbury’s President and Chief Executive Officer. “We’ll be working together with our new team members to integrate these acquisitions over the next few quarters.

“Though a supply/demand imbalance remains ongoing with vehicle sales, our incredible team members outperformed once again, achieving record fourth quarter levels in revenue, operating margins, SG&A as a percentage of gross profit, net income and EPS. As we continue to excel on our same store results and we’re pleased with the progress of Clicklane, we will update our strategic five-year plan after we close the first quarter of 2022.”

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

The Company reported adjusted net income (a non-GAAP measure) for the fourth quarter 2021 of $163 million ($7.46 per diluted share) compared to $86 million ($4.44 per diluted share) in the prior year quarter.

Net income for the fourth quarter 2021 was adjusted for acquisition expenses and acquisition financing expenses of $28.9 million ($1.02 per diluted share).

Net income for the fourth quarter 2020 was adjusted for a $3.9 million ($0.15 per diluted share) gain from a divestiture.

Fourth Quarter 2021 Operational Summary

Total company vs. 4th Quarter 2020:

  • Revenue of $2.7 billion, an increase of 19%
  • Gross profit increased 46%
  • Gross margin increased 370 bps to 20.4%
  • New vehicle unit volume decreased 8%; new vehicle revenue increased 5%; gross profit increased 99%
  • Used vehicle retail unit volume increased 27%; used vehicle retail revenue increased 53%; gross profit increased 84%
  • Finance and insurance revenue increased 25%
  • Parts and service revenue increased 27%; gross profit increased 20%
  • Adjusted SG&A as a percentage of gross profit fell to 54.3%, a decrease of 710 bps
  • Operating income increased 76%; adjusted operating income increased 77%
  • Operating margin increased 290 bps to 8.9%; adjusted operating margin also increased 290 bps to 8.9%
  • Adjusted EPS increased 68% to $7.46

Same store (dealership only) vs. 4th Quarter 2020:

  • Revenue increased 5%
  • Gross profit increased 29%
  • Gross margin increased 380 bps to 20.5%
  • New vehicle unit volume decreased 21%; new vehicle revenue decreased 9%; gross profit increased 74%
  • Used vehicle retail unit volume increased 15%; used vehicle retail revenue increased 40%; gross profit increased 64%
  • Finance and insurance revenue increased 6%; gross profit per unit increased 12%
  • Parts and service revenue increased 13%; gross profit increased 8%; customer pay gross profit increased 17%

Full Year 2021 Results

For the full year 2021, the Company reported record net income of $532 million ($26.49 per diluted share) compared to $254 million ($13.18 per diluted share) in the prior year, a 101% increase in EPS. Adjusted net income (a non-GAAP measure) for 2021 was $549 million ($27.29 per diluted share) compared to $249 million ($12.90 per diluted share) in the prior year, a 112% increase in adjusted EPS.

Total revenue for the full year 2021 was $9.8 billion, up 38% from the prior year; total revenue on a same-store basis was up 20% from the prior year. Total Adjusted EBITDA for the full year 2021 was a record $828 million, up 94% from the prior year.

Liquidity and Leverage

As of December 31, 2021, the company had approximately $437 million of liquidity, including cash of $63 million (which excludes $127 million of cash at TCA), floorplan offset accounts of $84 million and availability under the used vehicle floorplan line and revolver of $291 million. The company’s adjusted net leverage ratio was 2.7x at quarter end.

Financing

During the fourth quarter, to finance the Company’s acquisitions and the related growth of the business, the Company upsized its credit facility, entered into a mortgage facility and completed debt and equity offerings. If the financings had closed simultaneously with the LHM Acquisition, our adjusted EPS for the fourth quarter would have been positively impacted by $0.87 as a result of lower interest expense and fewer outstanding shares.

Share Repurchase Authorization Increase

The Company announced that its Board of Directors increased the Company's common stock share repurchase authorization by $100.0 million, to $200.0 million. The shares may be purchased from time to time in the open market, in privately negotiated transactions or in other manners as permitted by federal securities laws and other legal and contractual requirements. The extent to which the Company repurchases its shares, the number of shares and the timing of any repurchase will depend on such factors as Asbury’s stock price, general economic and market conditions, the potential impact on its capital structure, the expected return on competing uses of capital such as strategic dealership acquisitions and capital investments and other considerations.

Earnings Call

Additional commentary regarding the third quarter results will be provided during the earnings conference call on Tuesday, February 15, 2022, 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 (888) 220-8474 (domestic) or (646) 828-8193 (international); confirmation code – 3116958. 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 – 3116958.

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 five-year plan to increase revenue and profitability strategically through organic and acquisitive growth as well as their innovative Clicklane digital vehicle purchasing platform, with its guest-centric approach as Asbury’s constant North Star. Asbury currently operates 154 new vehicle dealerships in 15 states, consisting of 204 franchises, representing 31 brands of vehicles, and seven stand-alone used vehicle dealerships. Asbury also operates 35 collision repair centers, an auto auction, a used vehicle wholesale business and Total Care Auto, Powered by Landcar, a leading provider of service contracts and other vehicle protection products. 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 and prepaid maintenance.

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, our inability to realize the benefits expected from recently completed transactions; our inability to promptly and effectively integrate recently completed transactions and the diversion of management’s attention from ongoing business and regular business responsibilities; our inability to complete future acquisitions or divestitures and the risks resulting thereto; 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; 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 strategic and operational strategies and initiatives, including its five-year strategic plan, 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

December 31,

Increase

(Decrease)

%

Change

2021

2020

REVENUE:

New vehicle

$

1,284.5

$

1,225.6

$

58.9

5

%

Used vehicle:

Retail

865.3

564.0

301.3

53

%

Wholesale

64.2

95.3

(31.1

)

(33

)%

Total used vehicle

929.5

659.3

270.2

41

%

Parts and service

331.4

261.8

69.6

27

%

Finance and insurance

109.4

87.3

22.1

25

%

TOTAL REVENUE

2,654.8

2,234.0

420.8

19

%

COST OF SALES:

New vehicle

1,119.6

1,142.7

(23.1

)

(2

)%

Used vehicle:

Retail

793.0

524.8

268.2

51

%

Wholesale

59.7

94.9

(35.2

)

(37

)%

Total used vehicle

852.7

619.7

233.0

38

%

Parts and service

136.6

99.3

37.3

38

%

Finance and insurance

3.6

3.6

%

TOTAL COST OF SALES

2,112.5

1,861.7

250.8

13

%

GROSS PROFIT

542.3

372.3

170.0

46

%

OPERATING EXPENSES:

Selling, general and administrative

295.7

228.5

67.2

29

%

Depreciation and amortization

11.3

9.5

1.8

19

%

Other operating (income) expense, net

(0.8

)

(0.2

)

(0.6

)

(300

)%

INCOME FROM OPERATIONS

236.1

134.5

101.6

76

%

OTHER EXPENSES (INCOME):

Floor plan interest expense

1.7

3.6

(1.9

)

(53

)%

Other interest expense, net

50.7

15.0

35.7

238

%

Gain on dealership divestitures, net

(3.9

)

3.9

100

%

Total other expenses (income), net

52.4

14.7

37.7

256

%

INCOME BEFORE INCOME TAXES

183.7

119.8

63.9

53

%

Income tax expense

43.2

30.7

12.5

41

%

NET INCOME

$

140.5

$

89.1

$

51.4

58

%

EARNINGS PER COMMON SHARE:

Basic—

Net income

$

6.47

$

4.64

$

1.83

39

%

Diluted—

Net income

$

6.44

$

4.59

$

1.85

40

%

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:

Basic

21.7

19.2

2.5

Restricted stock

0.1

0.1

Performance share units

0.1

(0.1

)

Diluted

21.8

19.4

2.4

ASBURY AUTOMOTIVE GROUP, INC.

CONSOLIDATED STATEMENTS OF INCOME (In millions, except per share data)

(Unaudited)

For the Twelve Months

Ended December 31,

Increase

(Decrease)

%

Change

2021

2020

REVENUE:

New vehicle

$

4,934.1

$

3,767.4

$

1,166.7

31

%

Used vehicle:

Retail

3,055.9

1,930.0

1,125.9

58

%

Wholesale

259.7

239.5

20.2

8

%

Total used vehicle

3,315.6

2,169.5

1,146.1

53

%

Parts and service

1,182.9

889.8

293.1

33

%

Finance and insurance

405.1

305.1

100.0

33

%

TOTAL REVENUE

9,837.7

7,131.8

2,705.9

38

%

COST OF SALES:

New vehicle

4,443.6

3,548.9

894.7

25

%

Used vehicle:

Retail

2,793.9

1,784.7

1,009.2

57

%

Wholesale

233.4

228.2

5.2

2

%

Total used vehicle

3,027.3

2,012.9

1,014.4

50

%

Parts and service

461.0

346.6

114.4

33

%

Finance and insurance

3.6

3.6

%

TOTAL COST OF SALES

7,935.5

5,908.4

2,027.1

34

%

GROSS PROFIT

1,902.2

1,223.4

678.8

55

%

OPERATING EXPENSES:

Selling, general and administrative

1,073.9

781.9

292.0

37

%

Depreciation and amortization

41.9

38.5

3.4

9

%

Franchise rights impairment

23.0

(23.0

)

(100

)%

Other operating (income) expense, net

(5.4

)

9.2

(14.6

)

(159

)%

INCOME FROM OPERATIONS

791.8

370.8

421.0

114

%

OTHER EXPENSES:

Floor plan interest expense

8.2

17.7

(9.5

)

(54

)%

Other interest expense, net

93.9

56.7

37.2

66

%

Loss on extinguishment of long-term debt, net

20.6

(20.6

)

(100

)%

Gain on dealership divestitures, net

(8.0

)

(62.3

)

54.3

87

%

Total other expenses, net

94.1

32.7

61.4

188

%

INCOME BEFORE INCOME TAXES

697.7

338.1

359.6

106

%

Income tax expense

165.3

83.7

81.6

97

%

NET INCOME

$

532.4

$

254.4

$

278.0

109

%

EARNINGS PER COMMON SHARE:

Basic—

Net income

$

26.75

$

13.25

$

13.50

102

%

Diluted—

Net income

$

26.49

$

13.18

$

13.31

101

%

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:

Basic

19.9

19.2

0.7

Restricted stock

0.1

0.1

Performance share units

0.1

0.1

Diluted

20.1

19.3

0.8

ASBURY AUTOMOTIVE GROUP, INC.

Additional Disclosures-Consolidated (In millions)

(Unaudited)

December 31,

2021

December 31,

2020

Increase

(Decrease)

% Change

SELECTED BALANCE SHEET DATA

Cash and cash equivalents

$

189.4

$

1.4

$

188.0

NM

New vehicle inventory (a)

206.5

640.0

(433.5

)

(68

)%

Used vehicle inventory (b)

402.0

188.5

213.5

113

%

Parts inventory (c)

109.9

46.7

63.2

135

%

Total current assets

2,051.5

1,405.7

645.8

46

%

Floor plan notes payable (d)

564.5

702.2

(137.7

)

(20

)%

Total current liabilities

1,598.0

1,223.4

374.6

31

%

CAPITALIZATION:

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

$

3,582.6

$

1,201.8

$

2,380.8

198

%

Shareholders' equity

2,115.5

905.5

1,210.0

134

%

Total

$

5,698.1

$

2,107.3

$

3,590.8

170

%

_____________________________

NMNot Meaningful

(a) Excluding $4.3 million of new vehicle inventory classified as Assets held for sale as of December 31, 2021

(b) Excluding $16.0 million of used vehicle inventory classified as Assets held for sale as of December 31, 2021

(c) Excluding $3.8 million of parts inventory classified as Assets held for sale as of December 31, 2021

(d) Excluding $9.1 million of Floor plan notes payable classified as Liabilities associated with assets held for sale as of December 31, 2021

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

December 31, 2021

September 30, 2021

December 31, 2020

Day Supply

New vehicle inventory

8

12

40

Used vehicle inventory

34

28

31

_____________________________

Days supply of inventory is calculated based on new and used inventory levels at the end of each reporting period and a 30-day historical cost of sales.

Brand Mix - New Vehicle Revenue by Brand

For the Three Months

Ended December 31,

2021

2020

Luxury

Mercedes-Benz

12

%

13

%

Lexus

11

%

13

%

BMW

6

%

6

%

Acura

3

%

3

%

Land Rover

2

%

3

%

Porsche

2

%

2

%

Audi

1

%

2

%

Other luxury

6

%

6

%

Total luxury

43

%

48

%

Imports

Toyota

13

%

11

%

Honda

12

%

13

%

Nissan

4

%

4

%

Other imports

8

%

7

%

Total imports

37

%

35

%

Domestic

Ford

7

%

6

%

Dodge

5

%

3

%

Chevrolet

3

%

4

%

Jeep

3

%

2

%

Other domestics

2

%

2

%

Total domestic

20

%

17

%

Total New Vehicle Revenue

100

%

100

%

ASBURY AUTOMOTIVE GROUP, INC.

STATEMENTS OF INCOME-CONSOLIDATED (In millions)

(Unaudited)

For the Three Months Ended

December 31,

Increase

(Decrease)

%

Change

2021

2020

Revenue

New vehicle

$

1,284.5

$

1,225.6

$

58.9

5

%

Used vehicle:

Retail

865.3

564.0

301.3

53

%

Wholesale

64.2

95.3

(31.1

)

(33

)%

Total used vehicle

929.5

659.3

270.2

41

%

Parts and service

331.4

261.8

69.6

27

%

Finance and insurance

109.4

87.3

22.1

25

%

Total Revenue

2,654.8

2,234.0

420.8

19

%

Gross profit

New vehicle

164.9

82.9

82.0

99

%

Used vehicle:

Retail

72.3

39.2

33.1

84

%

Wholesale

4.5

0.4

4.1

NM

Total used vehicle

76.8

39.6

37.2

94

%

Parts and service

194.8

162.5

32.3

20

%

Finance and insurance

105.8

87.3

18.5

21

%

Total gross profit

542.3

372.3

170.0

46

%

Operating expenses

Selling, general and administrative

295.7

228.5

67.2

29

%

Operating metrics

SG&A as a percentage of gross profit

54.5

%

61.4

%

(690) bps

Adjusted SG&A as a percentage of gross profit

54.3

%

61.4

%

(710) bps

Income from operations as a percentage of revenue

8.9

%

6.0

%

290 bps

Income from operations as a percentage of gross profit

43.5

%

36.1

%

740 bps

Adjusted income from operations as a percentage of revenue

8.9

%

6.0

%

290 bps

Adjusted income from operations as a percentage of gross profit

43.8

%

36.1

%

770 bps

Revenue mix

New vehicle

48.4

%

54.9

%

Used vehicle retail

32.6

%

25.2

%

Used vehicle wholesale

2.4

%

4.3

%

Parts and service

12.5

%

11.7

%

Finance and insurance

4.1

%

3.9

%

Total revenue

100.0

%

100.0

%

Gross profit mix

New vehicle

30.4

%

22.3

%

Used vehicle retail

13.4

%

10.6

%

Used vehicle wholesale

0.8

%

0.1

%

Parts and service

35.9

%

43.6

%

Finance and insurance

19.5

%

23.4

%

Total gross profit

100.0

%

100.0

%

____________________________

NMNot Meaningful

ASBURY AUTOMOTIVE GROUP, INC.

STATEMENTS OF INCOME-DEALERSHIPS (In millions)

(Unaudited)

For the Three Months Ended

December 31,

Increase

(Decrease)

%

Change

2021

2020

Revenue

New vehicle

$

1,284.5

$

1,225.6

$

58.9

5

%

Used vehicle:

Retail

865.3

564.0

301.3

53

%

Wholesale

64.2

95.3

(31.1

)

(33

)%

Total used vehicle

929.5

659.3

270.2

41

%

Parts and service

332.8

261.8

71.0

27

%

Finance and insurance, net

107.0

87.3

19.7

23

%

Total Revenue

2,653.8

2,234.0

419.8

19

%

Gross profit

New vehicle

164.9

82.9

82.0

99

%

Used vehicle:

Retail

72.3

39.2

33.1

84

%

Wholesale

4.5

0.4

4.1

NM

Total used vehicle

76.8

39.6

37.2

94

%

Parts and service

193.1

162.5

30.6

19

%

Finance and insurance, net

107.0

87.3

19.7

23

%

Total gross profit

541.8

372.3

169.5

46

%

Operating expenses

Selling, general and administrative

298.7

228.5

70.2

31

%

SG&A as a percentage of gross profit

55.1

%

61.4

%

(630) bps

_____________________________

NMNot Meaningful

ASBURY AUTOMOTIVE GROUP, INC.

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

(Unaudited)

For the Three Months Ended

December 31,

Increase

(Decrease)

%

Change

2021

2020

Unit sales

New vehicle:

Luxury

8,080

9,751

(1,671

)

(17

)%

Import

13,288

14,315

(1,027

)

(7

)%

Domestic

4,795

4,507

288

6

%

Total new vehicle

26,163

28,573

(2,410

)

(8

)%

Used vehicle retail

27,070

21,386

5,684

27

%

Used to new ratio

103.5

%

74.8

%

NM

Average selling price

New vehicle

$

49,096

$

42,894

$

6,202

14

%

Used vehicle retail

31,965

26,372

5,593

21

%

Average gross profit per unit

New vehicle:

Luxury

$

9,196

$

5,292

$

3,904

74

%

Import

4,749

1,202

3,547

295

%

Domestic

5,735

3,128

2,607

83

%

Total new vehicle

6,303

2,901

3,402

117

%

Used vehicle retail

2,671

1,833

838

46

%

Finance and insurance

2,010

1,747

263

15

%

Front end yield (1)

6,466

4,191

2,275

54

%

Gross margin

New vehicle:

Luxury

13.5

%

8.8

%

470 bps

Import

13.1

%

3.9

%

920 bps

Domestic

10.8

%

6.9

%

390 bps

Total new vehicle

12.8

%

6.8

%

600 bps

Used vehicle retail

8.4

%

7.0

%

140 bps

Parts and service

58.0

%

62.1

%

(410) bps

Total gross profit margin

20.4

%

16.7

%

370 bps

_____________________________
NMNot Meaningful

(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-DEALERSHIPS (In millions)

(Unaudited)

For the Three Months Ended

December 31,

Increase

(Decrease)

%

Change

2021

2020

Revenue

New vehicle:

Luxury

$

532.6

$

579.5

$

(46.9

)

(8

)%

Import

404.0

436.5

(32.5

)

(7

)%

Domestic

174.2

202.1

(27.9

)

(14

)%

Total new vehicle

1,110.8

1,218.1

(107.3

)

(9

)%

Used Vehicle:

Retail

784.8

560.4

224.4

40

%

Wholesale

47.2

94.8

(47.6

)

(50

)%

Total used vehicle

832.0

655.2

176.8

27

%

Parts and service

294.5

259.9

34.6

13

%

Finance and insurance

92.4

86.9

5.5

6

%

Total revenue

$

2,329.7

$

2,220.1

$

109.6

5

%

Gross profit

New vehicle:

Luxury

$

72.0

$

51.2

$

20.8

41

%

Import

52.4

17.2

35.2

205

%

Domestic

18.5

13.9

4.6

33

%

Total new vehicle

142.9

82.3

60.6

74

%

Used Vehicle:

Retail

64.4

39.2

25.2

64

%

Wholesale

3.6

0.4

3.2

NM

Total used vehicle

68.0

39.6

28.4

72

%

Parts and service:

Customer pay

110.4

94.1

16.3

17

%

Warranty

20.6

26.8

(6.2

)

(23

)%

Wholesale parts

8.6

6.4

2.2

34

%

Parts and service, excluding reconditioning and preparation

139.6

127.3

12.3

10

%

Reconditioning and preparation

35.0

34.1

0.9

3

%

Total parts and service

174.6

161.4

13.2

8

%

Finance and insurance

92.4

86.9

5.5

6

%

Total gross profit

$

477.9

$

370.2

$

107.7

29

%

SG&A expense

$

266.5

$

227.0

$

39.5

17

%

SG&A expense as a percentage of gross profit

55.8

%

61.3

%

(550) bps

_____________________________

NMNot Meaningful

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-DEALERSHIPS (Continued)

(Unaudited)

For the Three Months Ended

December 31,

Increase

(Decrease)

%

Change

2021

2020

Unit sales

New vehicle:

Luxury

7,852

9,675

(1,823

)

(19

)%

Import

11,342

14,315

(2,973

)

(21

)%

Domestic

3,363

4,451

(1,088

)

(24

)%

Total new vehicle

22,557

28,441

(5,884

)

(21

)%

Used vehicle retail

24,553

21,260

3,293

15

%

Used to new ratio

108.8

%

74.8

%

NM

Average selling price

New vehicle

$

49,244

$

42,829

$

6,415

15

%

Used vehicle retail

31,964

26,359

5,605

21

%

Average gross profit per unit

New vehicle:

Luxury

$

9,170

$

5,292

$

3,878

73

%

Import

4,620

1,202

3,418

284

%

Domestic

5,501

3,123

2,378

76

%

Total new vehicle

6,335

2,894

3,441

119

%

Used vehicle retail

2,623

1,844

779

42

%

Finance and insurance

1,961

1,748

213

12

%

Front end yield (1)

6,362

4,193

2,169

52

%

Gross margin

New vehicle:

Luxury

13.5

%

8.8

%

470 bps

Import

13.0

%

3.9

%

910 bps

Domestic

10.6

%

6.9

%

370 bps

Total new vehicle

12.9

%

6.8

%

610 bps

Used vehicle retail

8.2

%

7.0

%

120 bps

Parts and service:

Parts and service, excluding reconditioning and preparation

47.4

%

49.0

%

(160) bps

Parts and service, including reconditioning and preparation

59.3

%

62.1

%

(280) bps

Total gross profit margin

20.5

%

16.7

%

380 bps

_____________________________
NMNot Meaningful
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.

STATEMENTS OF INCOME-CONSOLIDATED (In millions)

(Unaudited)

For the Twelve Months Ended

December 31,

Increase

(Decrease)

%

Change

2021

2020

Revenue

New vehicle

$

4,934.1

$

3,767.4

$

1,166.7

31

%

Used vehicle:

Retail

3,055.9

1,930.0

1,125.9

58

%

Wholesale

259.7

239.5

20.2

8

%

Total used vehicle

3,315.6

2,169.5

1,146.1

53

%

Parts and service

1,182.9

889.8

293.1

33

%

Finance and insurance

405.1

305.1

100.0

33

%

Total Revenue

9,837.7

7,131.8

2,705.9

38

%

Gross profit

New vehicle

490.5

218.5

272.0

124

%

Used vehicle:

Retail

262.0

145.3

116.7

80

%

Wholesale

26.3

11.3

15.0

133

%

Total used vehicle

288.3

156.6

131.7

84

%

Parts and service

721.9

543.2

178.7

33

%

Finance and insurance

401.5

305.1

96.4

32

%

Total gross profit

1,902.2

1,223.4

678.8

55

%

Operating expenses

Selling, general and administrative

1,073.9

781.9

292.0

37

%

Operating metrics

SG&A as a percentage of gross profit

56.5

%

63.9

%

(740) bps

Adjusted SG&A as a percentage of gross profit

56.2

%

63.8

%

(760) bps

Income from operations as a percentage of revenue

8.0

%

5.2

%

280 bps

Income from operations as a percentage of gross profit

41.6

%

30.3

%

1,130 bps

Adjusted income from operations as a percentage of revenue

8.1

%

5.7

%

240 bps

Adjusted income from operations as a percentage of gross profit

41.7

%

33.1

%

860 bps

Revenue mix

New vehicle

50.2

%

52.8

%

Used vehicle retail

31.1

%

27.0

%

Used vehicle wholesale

2.6

%

3.4

%

Parts and service

12.0

%

12.5

%

Finance and insurance

4.1

%

4.3

%

Total revenue

100.0

%

100.0

%

Gross profit mix

New vehicle

25.8

%

17.9

%

Used vehicle retail

13.7

%

11.9

%

Used vehicle wholesale

1.4

%

0.9

%

Parts and service

38.0

%

44.4

%

Finance and insurance

21.1

%

24.9

%

Total gross profit

100.0

%

100.0

%

ASBURY AUTOMOTIVE GROUP, INC.

STATEMENTS OF INCOME-DEALERSHIPS (In millions)

(Unaudited)

For the Twelve Months

Ended December 31,

Increase

(Decrease)

%

Change

2021

2020

Revenue

New vehicle

$

4,934.1

$

3,767.4

$

1,166.7

31

%

Used vehicle:

Retail

3,055.9

1,930.0

1,125.9

58

%

Wholesale

259.7

239.5

20.2

8

%

Total used vehicle

3,315.6

2,169.5

1,146.1

53

%

Parts and service

1,184.3

889.8

294.5

33

%

Finance and insurance, net

402.7

305.1

97.6

32

%

Total Revenue

9,836.7

7,131.8

2,704.9

38

%

Gross profit

New vehicle

490.5

218.5

272.0

124

%

Used vehicle:

Retail

262.0

145.3

116.7

80

%

Wholesale

26.3

11.3

15.0

133

%

Total used vehicle

288.3

156.6

131.7

84

%

Parts and service

720.2

543.2

177.0

33

%

Finance and insurance, net

402.7

305.1

97.6

32

%

Total gross profit

1,901.7

1,223.4

678.3

55

%

Operating expenses

Selling, general and administrative

1,076.9

781.9

295.0

38

%

SG&A as a percentage of gross profit

56.6

%

63.9

%

(730) bps

ASBURY AUTOMOTIVE GROUP, INC.

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

(Unaudited)

For the Twelve Months

Ended December 31,

Increase

(Decrease)

%

Change

2021

2020

Unit sales

New vehicle:

Luxury

34,648

25,259

9,389

37

%

Import

58,413

52,201

6,212

12

%

Domestic

16,849

17,705

(856

)

(5

)%

Total new vehicle

109,910

95,165

14,745

15

%

Used vehicle retail

105,206

80,537

24,669

31

%

Used to new ratio

95.7

%

84.6

%

NM

Average selling price

New vehicle

$

44,892

$

39,588

$

5,304

13

%

Used vehicle retail

29,047

23,964

5,083

21

%

Average gross profit per unit

New vehicle:

Luxury

$

6,959

$

4,501

$

2,458

55

%

Import

3,001

1,144

1,857

162

%

Domestic

4,398

2,547

1,851

73

%

Total new vehicle

4,463

2,296

2,167

94

%

Used vehicle retail

2,490

1,804

686

38

%

Finance and insurance

1,872

1,736

136

8

%

Front end yield (1)

5,370

3,807

1,563

41

%

Gross margin

New vehicle:

Luxury

11.0

%

7.8

%

320 bps

Import

9.1

%

3.9

%

520 bps

Domestic

9.1

%

5.9

%

320 bps

Total new vehicle

9.9

%

5.8

%

410 bps

Used vehicle retail

8.6

%

7.5

%

110 bps

Parts and service

60.8

%

61.0

%

(20) bps

Total gross profit margin

19.3

%

17.2

%

210 bps

_____________________________
NMNot Meaningful

(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-DEALERSHIPS (In millions)

(Unaudited)

For the Twelve Months

Ended December 31,

Increase

(Decrease)

%

Change

2021

2020

Revenue

New vehicle:

Luxury

$

1,597.4

$

1,409.3

$

188.1

13

%

Import

1,847.6

1,534.8

312.8

20

%

Domestic

730.2

734.8

(4.6

)

(1

)%

Total new vehicle

4,175.2

3,678.9

496.3

13

%

Used Vehicle:

Retail

2,621.9

1,872.1

749.8

40

%

Wholesale

175.1

235.2

(60.1

)

(26

)%

Total used vehicle

2,797.0

2,107.3

689.7

33

%

Parts and service

994.5

867.8

126.7

15

%

Finance and insurance

364.0

299.1

64.9

22

%

Total revenue

$

8,330.7

$

6,953.1

$

1,377.6

20

%

Gross profit

New vehicle:

Luxury

$

175.2

$

110.6

$

64.6

58

%

Import

163.8

59.4

104.4

176

%

Domestic

64.8

43.2

21.6

50

%

Total new vehicle

403.8

213.2

190.6

89

%

Used Vehicle:

Retail

226.5

141.9

84.6

60

%

Wholesale

18.9

11.4

7.5

66

%

Total used vehicle

245.4

153.3

92.1

60

%

Parts and service:

Customer pay

363.0

303.2

59.8

20

%

Warranty

78.4

90.2

(11.8

)

(13

)%

Wholesale parts

28.7

21.6

7.1

33

%

Parts and service, excluding reconditioning and preparation

470.1

415.0

55.1

13

%

Reconditioning and preparation

135.8

114.7

21.1

18

%

Total parts and service

605.9

529.7

76.2

14

%

Finance and insurance

364.0

299.1

64.9

22

%

Total gross profit

$

1,619.1

$

1,195.3

$

423.8

35

%

SG&A expense

$

931.2

$

762.9

$

168.3

22

%

SG&A expense as a percentage of gross profit

57.5

%

63.8

%

(630) 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-DEALERSHIPS (Continued)

(Unaudited)

For the Twelve Months

Ended December 31,

Increase

(Decrease)

%

Change

2021

2020

Unit sales

New vehicle:

Luxury

25,647

24,526

1,121

5

%

Import

56,227

51,698

4,529

9

%

Domestic

15,316

17,009

(1,693

)

(10

)%

Total new vehicle

97,190

93,233

3,957

4

%

Used vehicle retail

93,803

78,144

15,659

20

%

Used to new ratio

96.5

%

83.8

%

NM

Average selling price

New vehicle

$

42,959

$

39,459

$

3,500

9

%

Used vehicle retail

27,951

23,957

3,994

17

%

Average gross profit per unit

New vehicle:

Luxury

$

6,831

$

4,510

$

2,321

51

%

Import

2,913

1,149

1,764

154

%

Domestic

4,231

2,540

1,691

67

%

Total new vehicle

4,155

2,287

1,868

82

%

Used vehicle retail

2,415

1,816

599

33

%

Finance and insurance

1,906

1,745

161

9

%

Front end yield (1)

5,206

3,817

1,389

36

%

Gross margin

New vehicle:

Luxury

11.0

%

7.8

%

320 bps

Import

8.9

%

3.9

%

500 bps

Domestic

8.9

%

5.9

%

300 bps

Total new vehicle

9.7

%

5.8

%

390 bps

Used vehicle retail

8.6

%

7.6

%

100 bps

Parts and service:

Parts and service, excluding reconditioning and preparation

47.3

%

47.8

%

(50) bps

Parts and service, including reconditioning and preparation

60.9

%

61.0

%

(10) bps

Total gross profit margin

19.4

%

17.2

%

220 bps

_____________________________
NMNot Meaningful

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.
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

December 31, 2021

September 30, 2021

(Dollars in millions)

Adjusted leverage ratio:

Long-term debt (including current portion)

$

3,582.6

$

1,371.0

Cash and floor plan offset

(272.9

)

(377.4

)

TCA restricted cash

127.3

Availability under our used vehicle revolving floor plan facility

(20.6

)

(160.0

)

Adjusted long-term net debt

$

3,416.4

$

833.6

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

Net Income

$

532.4

$

481.0

Depreciation and amortization

41.9

40.1

Income tax expense

165.3

153.0

Swap and other interest expense

94.5

58.4

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

$

834.1

$

732.5

Non-core items - expense (income):

Gain on dealership divestitures

$

(8.0

)

$

(11.9

)

Legal settlements

(3.5

)

(3.5

)

Gain on sale of real estate

(1.9

)

(1.9

)

Professional fees associated with acquisitions

4.9

3.5

Real estate-related charges

2.1

2.1

Total non-core items

(6.4

)

(11.7

)

Adjusted EBITDA

$

827.7

$

720.8

Pro forma impact of acquisition and divestitures on EBITDA

$

440.4

$

Pro forma Adjusted EBITDA

$

1,268.1

$

720.8

Pro forma Adjusted net leverage ratio

2.7

1.2

For the Three Months

Ended December 31,

2021

2020

(In millions, except per share data)

Adjusted income from operations:

Income from operations

$

236.1

$

134.5

Professional fees associated with acquisitions

1.4

Adjusted income from operations

$

237.5

$

134.5

Adjusted operating margin:

Total revenue

$

2,654.8

$

2,234.0

Operating margin

8.9

%

6.0

%

Adjusted operating margin

8.9

%

6.0

%

Adjusted net income:

Net income

$

140.5

$

89.1

Non-core items - (income) expense:

Bridge commitment fee

27.5

Professional fees associated with acquisitions

1.4

Gain on dealership divestiture

(3.9

)

Income tax effect on non-core items above

(6.8

)

1.0

Total non-core items

22.1

(2.9

)

Adjusted net income

$

162.6

$

86.2

Adjusted diluted earnings per share (EPS):

Diluted EPS

$

6.44

$

4.59

Total non-core items

1.02

(0.15

)

Adjusted diluted EPS

$

7.46

$

4.44

Weighted average common shares outstanding - diluted

21.8

19.4

Adjusted selling, general, and administrative expense:

Selling, general, and administrative expense

$

295.7

$

228.5

Professional fees associated with acquisitions

(1.4

)

Adjusted selling, general, and administrative expense:

$

294.3

$

228.5

Adjusted selling, general, and administrative expense as a percentage of gross profit:

Total gross profit

$

542.3

$

372.3

Selling, general, and administrative expense as a percentage of gross profit

54.5

%

61.4

%

Adjusted selling, general, and administrative expense as a percentage of gross profit

54.3

%

61.4

%

For the Twelve Months

Ended December 31,

2021

2020

(In millions, except per share data)

Adjusted income from operations:

Income from operations

$

791.8

$

370.8

Legal settlements

(3.5

)

(2.1

)

Gain on sale of real estate

(1.9

)

(0.3

)

Real estate-related charges

2.1

0.7

Professional fees associated with acquisitions

4.9

1.3

Park Place related costs

11.6

Franchise rights impairment

23.0

Adjusted income from operations

$

793.4

$

405.0

Adjusted operating margin:

Total revenue

$

9,837.7

$

7,131.8

Operating margin

8.0

%

5.2

%

Adjusted operating margin

8.1

%

5.7

%

Adjusted net income:

Net income

$

532.4

$

254.4

Non-core items - (income) expense:

Gain on dealership divestitures

(8.0

)

(62.3

)

Legal settlements

(3.5

)

(2.1

)

Gain on sale of real estate

(1.9

)

(0.3

)

Bridge commitment fee

27.5

Professional fees associated with acquisitions

4.9

1.3

Real estate related charges

2.1

0.7

Park Place related costs

11.6

Loss on extinguishment of debt

20.7

Franchise rights impairment

23.0

Income tax effect on non-core items above

(5.0

)

1.9

Total non-core items

16.1

(5.5

)

Adjusted net income

$

548.5

$

248.9

Adjusted diluted earnings per share (EPS):

Diluted EPS

$

26.49

$

13.18

Total non-core items

0.80

(0.28

)

Adjusted diluted EPS

$

27.29

$

12.90

Weighted average common shares outstanding - diluted

20.1

19.3

Adjusted Selling, general, and administrative expense:

Selling, general, and administrative expense

$

1,073.9

$

781.9

Professional fees associated with acquisitions

(4.9

)

(1.3

)

Adjusted Selling, general, and administrative expense:

$

1,069.0

$

780.6

Adjusted selling, general, and administrative expense as a percentage of gross profit:

Total gross profit

$

1,902.2

$

1,223.4

Selling, general, and administrative expense as a percentage of gross profit

56.5

%

63.9

%

Adjusted selling, general, and administrative expense as a percentage of gross profit

56.2

%

63.8

%

Investors & Reporters May Contact:

Karen Reid

VP & Treasurer

(770) 418-8211

[email protected]

Source: Asbury Automotive Group, Inc.



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