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Asbury Automotive Group Announces All Time Record Third Quarter 2020 Financial Results

Third quarter EPS of $4.96 per diluted share, up 113% over prior year EPS Record third quarter adjusted EPS of $4.08 per diluted share (a non-GAAP measure), up 75% over prior year adjusted EPS Record adjusted operating margin of 6.6% Record low adjusted SG&A as a percentage of gross profit of 61.1% Pro forma adjusted net leverage at 2.4x post acquisition

October 27, 2020 7:00 AM EDT

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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 EndedSeptember 30,

Increase

(Decrease)

%Change

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

%

NMNot Meaningful

 

ASBURY AUTOMOTIVE GROUP, INC.

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

(Unaudited)

For the Three Months EndedSeptember 30,

Increase

(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 EndedSeptember 30,

Increase

(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 EndedSeptember 30,

Increase

(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 EndedSeptember 30,

Increase

(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

%

NMNot Meaningful

 

ASBURY AUTOMOTIVE GROUP, INC.

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

(Unaudited)

For the Nine Months EndedSeptember 30,

Increase

(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 EndedSeptember 30,

Increase

(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 EndedSeptember 30,

Increase

(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 30,2020

December 31,2019

Increase

(Decrease)

% Change

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 30, 2020

December 31, 2019

September 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 EndedSeptember 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("EBITDA")

$

370.4

$

301.9

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 EndedSeptember 30,

2020

2019

(In millions, except per sharedata)

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 MonthsEnded September 30,

2020

2019

(In millions, except pershare 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

 

 

 

Cision 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.



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