Asbury Automotive Group Reports All-Time Record Quarterly EPS From Continuing Operations Second quarter EPS from continuing operations of $0.69 per diluted share, up 38% over prior period adjusted EPS from continuing operations of $0.50 per diluted share

DULUTH, Ga., July 24, 2012 /PRNewswire/ -- Asbury Automotive Group, Inc. (NYSE: ABG), one of the largest automotive retail and service companies in the U.S., today reported income from continuing operations for the second quarter 2012 of $21.6 million, or $0.69 per diluted share, versus adjusted income from continuing operations in the second quarter 2011 of $16.6 million, or $0.50 per diluted share, a 38% increase per diluted share.  Net income for the second quarter 2012 was $21.1 million, or $0.67 per diluted share, compared to $14.2 million, or $0.43 per diluted share in the prior year period.  See attached reconciliation for reported adjustments.

Second Quarter 2012 Highlights (compared to the prior year period):

  • Total revenues increased 11% to $1.2 billion
  • New vehicle retail revenues up 16%
  • Used vehicle retail revenues up 7%
  • Finance and insurance revenues up 21%
  • Parts and service gross profit up 4%
  • SG&A expense as a percent of gross profit improved 250 basis points from an adjusted 74.9% in the prior year period to 72.4%
  • Reduced debt over $16 million during the quarter; second quarter leverage at 2.3x Total       Debt/Adjusted EBITDA
  • Completed a $5 million lease buy-out
  • Repurchased $9 million of Asbury common stock during the quarter

"Asbury is pleased to announce all-time record quarterly results from continuing operations," said Craig T. Monaghan, Asbury's President and Chief Executive Officer. "Our second quarter results were achieved through solid operational performance and disciplined expense control.  We continue to build a stronger Company with the flexibility to capitalize on market opportunities."

Asbury's Executive Vice President and Chief Operating Officer, Michael S. Kearney, added, "Consistent with what we are seeing across our industry, retail margins continue to be under pressure as Japanese branded inventory levels and sales volumes recover.  However, we again demonstrated the diversity of our business by delivering growth in both F&I and parts and service gross profit."

For the six-month period ended June 30, 2012, the Company reported income from continuing operations of $39.6 million, or $1.25 per diluted share, compared to adjusted income from continued operations of $28.0 million, or $0.84 per diluted share in the prior year period.  Last year's results included a net charge of $9.5 million, net of taxes, or $0.28 per diluted share, related to non-core items in SG&A and Other operating expense.  The Company's revenues for the 2012 period totaled $2.3 billion, an increase of 9% compared to $2.1 billion in the prior year period.  Net income for the six-month period ended June 30, 2012 was $38.7 million, or $1.22 per diluted share compared to $34.1 million, or $1.03 per diluted share, for the prior year period.

Asbury will host a conference call to discuss its second quarter results this morning at 10:00 a.m. Eastern Time.  The call will be simulcast live on the Internet and can be accessed by logging onto http://www.asburyauto.com or http://www.ccbn.com.  In addition, a live audio of the call will be accessible to the public by calling (800) 967-7140 (domestic), or (719) 457-2637 (international); passcode - 5504669.  Callers should dial in approximately 5 to 10 minutes before the call begins.

About Asbury Automotive Group, Inc.

Asbury Automotive Group, Inc. ("Asbury"), headquartered in Duluth, Georgia, a suburb of Atlanta, is one of the largest automobile retailers in the U.S.  Built through a combination of organic growth and a series of strategic acquisitions, Asbury currently operates 77 retail auto stores, encompassing 98 franchises for the sale and servicing of 30 different brands of American, European and Asian automobiles.  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, the benefits of its restructuring program and other initiatives and future business strategy.  These statements are based on management's current expectations and beliefs and involve significant risks and uncertainties that may cause results to differ materially from those set forth in the statements.  These risks and uncertainties include, among other things, market factors, Asbury's relationships with, and the financial and operational stability of, vehicle manufacturers and other suppliers, acts of God or other incidents outside of Asbury's control 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, particularly upcoming maturities, 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, Asbury's ability to execute its 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 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.

Non-GAAP Financial Measures

This press release and the attached financial tables contain certain non-GAAP financial measures as defined under SEC rules, such as adjusted income from continuing operations, adjusted diluted earnings per share from continuing operations, adjusted EBITDA, and adjusted leverage ratio, which exclude certain items disclosed in the attached financial tables. As required by SEC rules, the Company provides reconciliations of these measures to the most directly comparable GAAP measures.

 

ASBURY AUTOMOTIVE GROUP, INC.
CONSOLIDATED STATEMENTS OF INCOME
(In millions, except per share data)
(Unaudited)



For the Three Months Ended

 June 30,


For the Six Months Ended 

 June 30,


2012


2011


2012


2011

REVENUES:








New vehicle

$

663.4



$

570.7



$

1,253.1



$

1,135.0


Used vehicle

339.1



316.7



664.8



613.3


Parts and service

145.7



146.0



290.8



287.6


Finance and insurance, net

42.8



35.5



81.8



67.6


Total revenues

1,191.0



1,068.9



2,290.5



2,103.5


COST OF SALES:








New vehicle

620.5



529.6



1,170.9



1,060.1


Used vehicle

313.4



288.6



610.6



558.2


Parts and service

60.7



64.4



123.1



128.5


Total cost of sales

994.6



882.6



1,904.6



1,746.8


GROSS PROFIT

196.4



186.3



385.9



356.7


OPERATING EXPENSES:








Selling, general and administrative

142.1



140.5



283.5



273.1


Depreciation and amortization

5.8



5.7



11.5



11.0


Other operating expense (income), net

0.3



3.0



(0.1)



13.5


Income from operations

48.2



37.1



91.0



59.1


OTHER EXPENSES:








Floor plan interest expense

(3.0)



(2.2)



(5.7)



(4.9)


Other interest expense, net

(8.6)



(10.4)



(17.9)



(20.8)


Swap interest expense

(1.2)



(1.4)



(2.5)



(2.8)


Convertible debt discount amortization

(0.2)



(0.3)



(0.3)



(0.5)


Total other expenses, net

(13.0)



(14.3)



(26.4)



(29.0)


Income before income taxes

35.2



22.8



64.6



30.1


INCOME TAX EXPENSE

13.6



8.8



25.0



11.6


INCOME FROM CONTINUING OPERATIONS

21.6



14.0



39.6



18.5


DISCONTINUED OPERATIONS, net of tax

(0.5)



0.2



(0.9)



15.6


NET INCOME

$

21.1



$

14.2



$

38.7



$

34.1


EARNINGS PER COMMON SHARE:








Basic—








Continuing operations

$

0.69



$

0.44



$

1.27



$

0.57


Discontinued operations

(0.01)





(0.03)



0.49


Net income

$

0.68



$

0.44



$

1.24



$

1.06


Diluted—








Continuing operations

$

0.69



$

0.43



$

1.25



$

0.56


Discontinued operations

(0.02)





(0.03)



0.47


Net income

$

0.67



$

0.43



$

1.22



$

1.03


WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:








Basic

31.1



32.1



31.1



32.3


Stock options

0.2



0.6



0.3



0.6


Restricted stock

0.1



0.1



0.1



0.2


Performance share units

0.1



0.1



0.1



0.1


Diluted

31.5



32.9



31.6



33.2


 

New Vehicle-



For the Three Months Ended

 June 30,


Increase

(Decrease)


%

Change


2012


2011




(Dollars in millions, except for per vehicle data)

Revenue:








New vehicle revenue








Luxury

$

235.3



$

204.7



$

30.6



15

%

Mid-line import

333.7



278.7



55.0



20

%

Mid-line domestic

94.4



87.3



7.1



8

%

New vehicle revenue, as reported

$

663.4



$

570.7



$

92.7



16

%

Gross profit:








New vehicle gross profit








Luxury

$

18.3



$

16.4



$

1.9



12

%

Mid-line import

18.5



18.8



(0.3)



(2)

%

Mid-line domestic

6.1



5.9



0.2



3

%

New vehicle gross profit, as reported

$

42.9



$

41.1



$

1.8



4

%






For the Three Months Ended

 June 30,


Increase


%

Change


2012


2011



New vehicle units:








New vehicle retail units








Luxury

4,911



4,132



779



19

%

Mid-line import

12,749



10,753



1,996



19

%

Mid-line domestic

2,407



2,388



19



1

%

Total new vehicle retail units

20,067



17,273



2,794



16

%

Fleet vehicles

694



600



94



16

%

New vehicle units—actual

20,761



17,873



2,888



16

%


New Vehicle Metrics-



For the Three Months Ended

 June 30,


Increase

(Decrease)


%

Change


2012


2011



Revenue per new vehicle sold

$

31,954



$

31,931



$

23



%

Gross profit per new vehicle sold

$

2,066



$

2,300



$

(234)



(10)

%

New vehicle gross margin

6.5

%


7.2

%


(0.7)

%


(10)

%

 

 

Used Vehicle-



For the Three Months Ended

June 30,


Increase

(Decrease)


%

Change


2012


2011




(Dollars in millions, except for per vehicle data)

Revenue:








Used vehicle retail revenues

$

287.0



$

269.1



$

17.9



7

%

Used vehicle wholesale revenues

52.1



47.6



4.5



9

%

Used vehicle revenue, as reported

$

339.1



$

316.7



$

22.4



7

%

Gross profit:








Used vehicle retail gross profit

$

26.1



$

28.2



$

(2.1)



(7)

%

Used vehicle wholesale gross profit

(0.4)



(0.1)



(0.3)



300

%

Used vehicle gross profit, as reported

$

25.7



$

28.1



$

(2.4)



(9)

%

Used vehicle retail units:








Used vehicle retail units—actual

14,897



14,036



861



6

%


Used Vehicle Metrics-



For the Three Months Ended

 June 30,


Increase

(Decrease)


%

Change


2012


2011



Revenue per used vehicle retailed

$

19,266



$

19,172



$

94



%

Gross profit per used vehicle retailed

$

1,752



$

2,009



$

(257)



(13)

%

Used vehicle retail gross margin

9.1

%


10.5

%


(1.4)

%


(13)

%

 

 

Parts and Service-



For the Three Months Ended

June 30,


Increase

(Decrease)


%

Change


2012


2011




(Dollars in millions)

Revenue:








Parts and service revenue

$

145.7



$

146.0



$

(0.3)



%









Gross profit:








Parts and service gross profit








Customer pay

$

52.2



$

50.6



$

1.6



3

%

Reconditioning and preparation

17.8



14.6



3.2



22

%

Warranty

9.8



11.3



(1.5)



(13)

%

Wholesale parts

5.2



5.1



0.1



2

%

Total parts and service gross profit

$

85.0



$

81.6



$

3.4



4

%

Parts and service gross margin

58.3

%


55.9

%


2.4

%


4

%


Finance and Insurance, net-



For the Three Months Ended

 June 30,


Increase


%

Change


2012


2011




(Dollars in millions, except for per vehicle data)









Finance and insurance, net

$

42.8



$

35.5



$

7.3



21

%

Finance and insurance, net per vehicle sold

$

1,200



$

1,113



$

87



8

%

 

 


For the Three Months Ended

June 30,


2012


2011

REVENUE MIX PERCENTAGES:




New vehicles

55.7

%


53.4

%

Used retail vehicles

24.1

%


25.1

%

Used vehicle wholesale

4.4

%


4.5

%

Parts and service

12.2

%


13.7

%

Finance and insurance, net

3.6

%


3.3

%

Total revenue

100.0

%


100.0

%

GROSS PROFIT MIX PERCENTAGES:




New vehicles

21.8

%


22.1

%

Used retail vehicles

13.3

%


15.1

%

Used vehicle wholesale

(0.2)

%


(0.1)

%

Parts and service

43.3

%


43.8

%