2014

Asbury Automotive Group Reports Record Third Quarter Adjusted EPS from Continuing Operations Third quarter Adjusted EPS from continuing operations of $0.91 per diluted share, up 26% over prior year third quarter

DULUTH, Ga., Oct. 22, 2013 /PRNewswire/ -- Asbury Automotive Group, Inc. (NYSE: ABG), one of the largest automotive retail and service companies in the U.S., today reported adjusted income from continuing operations for the third quarter 2013 of $28.3 million, or $0.91 per diluted share, versus income from continuing operations in the third quarter 2012 of $22.6 million, or $0.72 per diluted share, a 26% increase per diluted share.  Adjusted income from continuing operations for the third quarter of 2013 excludes debt redemption costs of $4.2 million after tax, or $0.14 per diluted share and a real estate-related charge resulting from the purchase of a previously leased property of $1.3 million after tax, or $0.04 per diluted share.  On a GAAP basis, 2013 third quarter net income was $22.7 million, or $0.73 per diluted share, compared to 2012 third quarter net income of $20.7 million, or $0.66 per diluted share.  See attached reconciliation for reported adjustments.

Third Quarter 2013 Highlights (compared to the prior year period):

  • Total revenues increased 17% to $1.4 billion
  • New vehicle retail revenues up 13%
  • Used vehicle retail revenues up 33%
  • Finance and insurance revenues up 24%
  • Parts and service revenues up 9%
  • Total gross profit up 16% with increases from all business lines
  • SG&A expense as a percent of gross profit improved 120 basis points to 70.9%
  • Redeemed remaining $143 million of 7.625% senior subordinated notes due in 2017 and raised $79 million of mortgage debt during the quarter; third quarter leverage at 2.2x Total Debt/Adjusted EBITDA
  • Spent $19 million to purchase a previously leased property; $2 million of annualized rent savings
  • Repurchased $8 million of Asbury common stock during the quarter

"Asbury is pleased to announce record third quarter results from continuing operations," said Craig Monaghan, Asbury's President and Chief Executive Officer. "Our stores continue to deliver operational excellence while successfully integrating our recent acquisitions.  The future looks bright as auto sales continue their four year recovery, delivering record cash flow for reinvesting in continued growth."

Asbury's Executive Vice President and Chief Operating Officer, Michael Kearney, added, "These record results reflect the competitive spirit and winning culture of our teams.  We are very pleased with our operating performance and would like to extend our gratitude to everyone in the Company - thank you for your hard work and dedication to our customers."

For the nine-month period ended September 30, 2013, the Company reported adjusted income from continuing operations of $82.6 million, or $2.66 per diluted share, compared to income from continuing operations of $60.7 million, or $1.92 per diluted share in the prior year period.  The Company's revenues for the 2013 period totaled $4.0 billion, an increase of 16% compared to $3.4 billion in the prior year period.  On a GAAP basis, net income for the nine-month period ended September 30, 2013 was $82.2 million, or $2.64 per diluted share compared to $59.4 million or $1.88 per diluted share for the prior year period.

Asbury will host a conference call to discuss its third 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.  In addition, a live audio of the call will be accessible to the public by calling (888) 378-0320 (domestic), or (719) 457-2648 (international); passcode - 6525301.  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 79 retail auto stores, encompassing 100 franchises for the sale and servicing of 29 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 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 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.


ASBURY AUTOMOTIVE GROUP, INC.

CONSOLIDATED STATEMENTS OF INCOME

(In millions, except per share data)

(Unaudited)



For the Three Months Ended

September 30,


For the Nine Months Ended

September 30,


2013


2012


2013


2012

REVENUES:








New vehicle

$

759.7



$

672.3



$

2,167.2



$

1,895.2


Used vehicle

421.6



333.0



1,183.1



980.4


Parts and service

154.0



141.8



455.5



423.9


Finance and insurance, net

54.7



44.0



154.1



123.1


Total revenues

1,390.0



1,191.1



3,959.9



3,422.6


COST OF SALES:








New vehicle

713.4



630.5



2,035.6



1,773.0


Used vehicle

391.3



307.1



1,090.9



900.8


Parts and service

60.0



59.3



179.5



178.3


Total cost of sales

1,164.7



996.9



3,306.0



2,852.1


GROSS PROFIT

225.3



194.2



653.9



570.5


OPERATING EXPENSES:








Selling, general and administrative

159.7



140.0



462.0



415.9


Depreciation and amortization

6.2



5.5



18.0



16.9


Other operating expense, net

1.4



(0.5)



5.9



0.1


Income from operations

58.0



49.2



168.0



137.6


OTHER EXPENSES:








Floor plan interest expense

(2.9)



(2.9)



(9.1)



(8.5)


Other interest expense, net

(11.1)



(8.7)



(29.8)



(26.6)


Swap interest expense

(0.1)



(1.3)



(2.2)



(3.8)


Convertible debt discount amortization



(0.1)





(0.4)


Loss on extinguishment of long-term debt

(6.8)





(6.8)




Total other expenses, net

(20.9)



(13.0)



(47.9)



(39.3)


Income before income taxes

37.1



36.2



120.1



98.3


INCOME TAX EXPENSE

14.3



13.6



46.2



37.6


INCOME FROM CONTINUING OPERATIONS

22.8



22.6



73.9



60.7


DISCONTINUED OPERATIONS, net of tax

(0.1)



(1.9)



8.3



(1.3)


NET INCOME

$

22.7



$

20.7



$

82.2



$

59.4


EARNINGS PER COMMON SHARE:








Basic—








Continuing operations

$

0.74



$

0.73



$

2.40



$

1.95


Discontinued operations



(0.06)



0.27



(0.04)


Net income

$

0.74



$

0.67



$

2.67



$

1.91


Diluted—








Continuing operations

$

0.73



$

0.72



$

2.38



$

1.92


Discontinued operations



(0.06)



0.26



(0.04)


Net income

$

0.73



$

0.66



$

2.64



$

1.88


WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:   








Basic

30.7



31.1



30.8



31.1


Stock options



0.1





0.2


Restricted stock

0.2



0.2



0.2



0.2


Performance share units

0.2



0.1



0.1



0.1


Diluted

31.1



31.5



31.1



31.6



 


New Vehicle—



For the Three Months Ended

September 30,


Increase

(Decrease)


%

Change


2013


2012



(Dollars in millions, except for per vehicle data)

Revenue:








New vehicle revenue—same store(1)








Luxury

$

279.6



$

245.6



$

34.0



14

%

Mid-line import

360.5



332.4



28.1



8

%

Mid-line domestic

99.6



94.3



5.3



6

%

Total new vehicle revenue—same store(1)

739.7



672.3



67.4



10

%

New vehicle revenue—acquisitions

20.0








New vehicle revenue, as reported

$

759.7



$

672.3



$

87.4



13

%

Gross profit:








New vehicle gross profit—same store(1)








Luxury

$

20.2



$

18.4



$

1.8



10

%

Mid-line import

18.3



16.8



1.5



9

%

Mid-line domestic

6.4



6.6



(0.2)



(3)

%

Total new vehicle gross profit—same store(1)   

44.9



41.8



3.1



7

%

New vehicle gross profit—acquisitions

1.4








New vehicle gross profit, as reported

$

46.3



$

41.8



$

4.5



11

%











For the Three Months Ended

September 30,


Increase

(Decrease)


%

Change


2013


2012


New vehicle units:

New vehicle retail units—same store(1)








Luxury

5,692



5,020



672



13

%

Mid-line import

13,533



12,642



891



7

%

Mid-line domestic

2,747



2,595



152



6

%

Total new vehicle retail units—same store(1)

21,972



20,257



1,715



8

%

Fleet vehicles

242



537



(295)



(55)

%

Total new vehicle units—same store(1)

22,214



20,794



1,420



7

%

New vehicle units—acquisitions

673








New vehicle units—actual

22,887



20,794



2,093



10

%


 


New Vehicle Metrics—



For the Three Months Ended

September 30,


Increase

(Decrease)


%

Change


2013


2012




Revenue per new vehicle sold—same store(1)

$

33,299



$

32,331



$

968



3

%

Gross profit per new vehicle sold—same store(1)   

$

2,021



$

2,010



$

11



1

%

New vehicle gross margin—same store(1)

6.1

%


6.2

%


(0.1)

%


(2)

%

______________________________

(1)   Same store amounts consist of information from dealerships for the identical months of each period presented in

        the comparison, commencing with the first full month in which the dealership was owned by us.


 


Used Vehicle—



For the Three Months Ended

September 30,


Increase

(Decrease)


%

Change


2013


2012



(Dollars in millions, except for per vehicle data)

Revenue:








Used vehicle retail revenues—same store(1)

$

359.3



$

279.3



$

80.0



29

%

Used vehicle retail revenues—acquisitions

11.8








Total used vehicle retail revenues

371.1



279.3



91.8



33

%









Used vehicle wholesale revenues—same store(1)

49.7



53.7



(4.0)



(7)

%

Used vehicle wholesale revenues—acquisitions

0.8








Total used vehicle wholesale revenues

50.5



53.7



(3.2)



(6)

%

Used vehicle revenue, as reported

$

421.6



$

333.0



$

88.6



27

%

Gross profit:








Used vehicle retail gross profit—same store(1)

$

31.0



$

26.3



$

4.7



18

%

Used vehicle retail gross profit—acquisitions

0.4








Total used vehicle retail gross profit

31.4



26.3



5.1



19

%









Used vehicle wholesale gross profit—same store(1)   

(1.2)



(0.4)



(0.8)




NM

Used vehicle wholesale gross profit—acquisitions

0.1








Total used vehicle wholesale gross profit

(1.1)



(0.4)



(0.7)




NM

Used vehicle gross profit, as reported

$

30.3



$

25.9



$

4.4



17

%

Used vehicle retail units:








Used vehicle retail units—same store(1)

18,099



14,463



3,636



25

%

Used vehicle retail units—acquisitions

616








Used vehicle retail units—actual

18,715



14,463



4,252



29

%

 



Used Vehicle Metrics—





For the Three Months Ended

September 30,


Increase (Decrease)


%

Change


2013


2012




Revenue per used vehicle retailed—same store(1)

$

19,852



$

19,311



$

541



3

%

Gross profit per used vehicle retailed—same store(1)   

$

1,713



$

1,818



$

(105)



(6)

%

Used vehicle retail gross margin—same store(1)

8.6

%


9.4

%


(0.8)

%


(9)

%

______________________________

(1)   Same store amounts consist of information from dealerships for the identical months of each period presented in

        the comparison, commencing with the first full month in which the dealership was owned by us.


NMNot Meaningful


 


Parts and Service—



For the Three Months Ended

September 30,


Increase


%

Change


2013


2012



(Dollars in millions)

Revenue:








Parts and service revenue—same store(1)

$

150.5



$

141.8



$

8.7



6

%

Parts and service revenues—acquisitions

3.5








Parts and service revenue, as reported

$

154.0



$

141.8



$

12.2



9

%









Gross profit:








Parts and service gross profit—same store(1)








Customer pay

$

53.4



$

51.1



$

2.3



5

%

Reconditioning and preparation

22.4



17.2



5.2



30

%

Warranty

11.1



9.5



1.6



17

%

Wholesale parts

4.8



4.7



0.1



2

%

Total parts and service gross profit—same store(1)   

91.7



82.5



9.2



11

%

Parts and service gross profit—acquisitions

2.3








Parts and service gross profit, as reported

$

94.0



$

82.5



$

11.5



14

%

Parts and service gross margin—same store(1)

60.9

%


58.2

%


2.7

%


5

%

______________________________

(1)   Same store amounts consist of information from dealerships for the identical months of each period presented in

        the comparison, commencing with the first full month in which the dealership was owned by us.


 


Finance and Insurance, net—



For the Three Months Ended

September 30,


Increase


%

Change


2013


2012



(Dollars in millions, except for per vehicle data)










Finance and insurance, net—same store(1)

$

52.6



$

44.0



$

8.6



20

%

Finance and insurance, net—acquisitions

2.1








Finance and insurance, net as reported

$

54.7



$

44.0



$

10.7



24

%

Finance and insurance, net per vehicle sold—same store(1)   

$

1,305



$

1,248



$

57



5

%

______________________________

(1)   Same store amounts consist of information from dealerships for the identical months of each period presented in

        the comparison, commencing with the first full month in which the dealership was owned by us.


 



For the Three Months Ended

September 30,


2013


2012

REVENUE MIX PERCENTAGES:




New vehicles

54.7

%


56.4

%

Used retail vehicles

26.7

%


23.5

%

Used vehicle wholesale

3.6

%


4.5

%

Parts and service

11.1

%


11.9

%

Finance and insurance, net

3.9

%


3.7

%

Total revenue

100.0

%


100.0

%

GROSS PROFIT MIX PERCENTAGES:




New vehicles

20.6

%


21.5

%

Used retail vehicles

13.9

%


13.5

%

Used vehicle wholesale

(0.5)

%


(0.2)

%

Parts and service

41.7

%


42.5

%

Finance and insurance, net

24.3

%


22.7

%

Total gross profit

100.0

%


100.0

%

SG&A EXPENSES AS A PERCENTAGE OF GROSS PROFIT   

70.9

%


72.1

%


 


New Vehicle—



For the Nine Months Ended 

September 30,


Increase


%

Change


2013


2012




(Dollars in millions, except for per vehicle data)

Revenue:








New vehicle revenue—same store(1)








Luxury

$

772.1



$

673.9



$

98.2



15

%

Mid-line import

1,050.4



945.3



105.1



11

%

Mid-line domestic

304.5



276.0



28.5



10

%

Total new vehicle revenue—same store(1)

2,127.0



1,895.2



231.8



12

%

New vehicle revenue—acquisitions

40.2








New vehicle revenue, as reported

$

2,167.2



$

1,895.2



$

272.0



14

%

Gross profit:








New vehicle gross profit—same store(1)








Luxury

$

55.2



$

51.8



$

3.4



7

%

Mid-line import

54.2



51.7



2.5



5

%

Mid-line domestic

19.7



18.7



1.0



5

%

Total new vehicle gross profit—same store(1)   

129.1



122.2



6.9



6

%

New vehicle gross profit—acquisitions

2.5








New vehicle gross profit, as reported

$

131.6



$

122.2



$

9.4



8

%







For the Nine Months Ended

September 30,


Increase

(Decrease)


%

Change


2013


2012



New vehicle units:








New vehicle retail units—same store(1)








Luxury

15,562



13,634



1,928



14

%

Mid-line import

39,268



35,969



3,299



9

%

Mid-line domestic

8,415



7,564



851



11

%

Total new vehicle retail units—same store(1)

63,245



57,167



6,078



11

%

Fleet vehicles

908



1,810



(902)



(50)

%

Total new vehicle units—same store(1)

64,153



58,977



5,176



9

%

New vehicle units—acquisitions

1,220








New vehicle units—actual

65,373



58,977



6,396



11

%


 


New Vehicle Metrics—



For the Nine Months Ended

September 30,


Increase

(Decrease)


%

Change


2013


2012



Revenue per new vehicle sold—same store(1)

$

33,155



$

32,135



$

1,020



3

%

Gross profit per new vehicle sold—same store(1)   

$

2,012



$

2,072



$

(60)



(3)

%

New vehicle gross margin—same store(1)

6.1

%


6.4

%


(0.3)

%


(5)

%

______________________________

(1)   Same store amounts consist of information from dealerships for the identical months of each period presented in

        the comparison, commencing with the first full month in which the dealership was owned by us.


 


Used Vehicle—



For the Nine Months Ended

September 30,


Increase

(Decrease)


%

Change


2013


2012




(Dollars in millions, except for per vehicle data)

Revenue:








Used vehicle retail revenues—same store(1)

$

1,016.4



$

832.4



$

184.0



22

%

Used vehicle retail revenues—acquisitions

23.9








Total used vehicle retail revenues

1,040.3



832.4



207.9



25

%









Used vehicle wholesale revenues—same store(1)

140.9



148.0



(7.1)



(5)

%

Used vehicle wholesale revenues—acquisitions

1.9








Total used vehicle wholesale revenues

142.8



148.0



(5.2)



(4)

%

Used vehicle revenue, as reported

$

1,183.1



$

980.4



$

202.7



21

%

Gross profit:








Used vehicle retail gross profit—same store(1)

$

91.7



$

79.8



$

11.9



15

%

Used vehicle retail gross profit—acquisitions

1.4








Total used vehicle retail gross profit

93.1



79.8



13.3



17

%









Used vehicle wholesale gross profit—same store(1)   

(0.9)



(0.2)



(0.7)




NM

Used vehicle wholesale gross profit—acquisitions








Total used vehicle wholesale gross profit

(0.9)



(0.2)



(0.7)




NM

Used vehicle gross profit, as reported

$

92.2



$

79.6



$

12.6



16

%

Used vehicle retail units:








Used vehicle retail units—same store(1)

51,692



43,753



7,939



18

%

Used vehicle retail units—acquisitions

1,069








Used vehicle retail units—actual

52,761



43,753



9,008



21

%


 


Used Vehicle Metrics— 



For the Nine Months Ended

September 30,


Increase

(Decrease)


%

Change


2013


2012



Revenue per used vehicle retailed—same store(1)

$

19,663



$

19,025



$

638



3

%

Gross profit per used vehicle retailed—same store(1)  

$

1,774



$

1,824



$

(50)



(3)

%

Used vehicle retail gross margin—same store(1)

9.0

%


9.6

%


(0.6)

%


(6)

%

______________________________

(1)   Same store amounts consist of information from dealerships for the identical months of each period presented in

        the comparison, commencing with the first full month in which the dealership was owned by us.


NMNot Meaningful


 


Parts and Service—



For the Nine Months Ended

September 30,


Increase


%

Change


2013


2012




(Dollars in millions)

Revenue:








Parts and service revenue—same store(1)

$

447.8



$

423.9



$

23.9



6

%

Parts and service revenues—acquisitions

7.7








Parts and service revenue, as reported

$

455.5



$

423.9



$

31.6



7

%









Gross profit:








Parts and service gross profit—same store(1)








Customer pay

$

159.5



$

151.8



$

7.7



5

%

Reconditioning and preparation

63.1



50.4



12.7



25

%

Warranty

34.0



29.0



5.0



17

%

Wholesale parts

14.7



14.4



0.3



2

%

Total parts and service gross profit—same store(1)  

271.3



245.6



25.7



10

%

Parts and service gross profit—acquisitions

4.7








Parts and service gross profit, as reported

$

276.0



$

245.6



$

30.4



12

%

Parts and service gross margin—same store(1)

60.6

%


57.9

%


2.7

%


5

%

 _____________________________

(1)   Same store amounts consist of information from dealerships for the identical months of each period presented in

        the comparison, commencing with the first full month in which the dealership was owned by us.


 


Finance and Insurance, net—



For the Nine Months Ended

September 30,


Increase


%

Change


2013


2012




(Dollars in millions, except for per vehicle data)









Finance and insurance, net—same store(1)

$

150.8



$

123.1



$

27.7



23

%

Finance and insurance, net—acquisitions

3.3








Finance and insurance, net as reported

$

154.1



$

123.1



$

31.0



25

%

Finance and insurance, net per vehicle sold—same store(1)  

$

1,302



$

1,198



$

104



9

%

______________________________

(1)   Same store amounts consist of information from dealerships for the identical months of each period presented in

        the comparison, commencing with the first full month in which the dealership was owned by us.


 




For the Nine Months Ended

September 30,


2013


2012

REVENUE MIX PERCENTAGES:




New vehicles

54.7

%


55.4

%

Used retail vehicles

26.3

%


24.3

%

Used vehicle wholesale

3.6

%


4.3

%

Parts and service

11.5

%


12.4

%

Finance and insurance, net

3.9

%


3.6

%

Total revenue

100.0

%


100.0

%

GROSS PROFIT MIX PERCENTAGES:




New vehicles

20.1

%


21.4

%

Used retail vehicles

14.2

%


14.0

%

Used vehicle wholesale

(0.1)

%


%

Parts and service

42.2

%


43.0

%

Finance and insurance, net

23.6

%


21.6

%

Total gross profit

100.0

%


100.0

%

SG&A EXPENSES AS A PERCENTAGE OF GROSS PROFIT  

70.7

%


72.9

%







 


ASBURY AUTOMOTIVE GROUP, INC.

Additional Disclosures

(In millions)

(Unaudited)



September 30,

2013


December 31,

2012


Increase

(Decrease)


% Change

SELECTED BALANCE SHEET DATA








Cash and cash equivalents

$

1.3



$

6.2



$

(4.9)



(79)

%

New vehicle inventory

573.8



517.4



56.4



11

%

Used vehicle inventory

121.1



94.6



26.5



28

%

Parts inventory

39.6



36.5



3.1



8

%

Total current assets

1,010.8



986.4



24.4



2

%

Floor plan notes payable

570.1



556.7



13.4



2

%

Total current liabilities

773.3



779.8



(6.5)



(1)

%









CAPITALIZATION:








Long-term debt (including current portion)  

$

519.8



$

466.0



$

53.8



12

%

Shareholders' equity

470.9



402.8



68.1



17

%

Total

$

990.7



$

868.8



$

121.9



14

%

 


Brand Mix - New Vehicle Revenue by Brand—



For the Nine Months Ended

September 30,


2013


2012

Luxury




BMW

9

%


8

%

Mercedes-Benz

7

%


7

%

Lexus

7

%


6

%

Acura

5

%


5

%

Infiniti

4

%


5

%

Other luxury

6

%


5

%

Total luxury

38

%


36

%

Mid-Line Imports:




Honda

21

%


21

%

Nissan

13

%


13

%

Toyota

12

%


12

%

Other imports

3

%


4

%

Total imports

49

%


50

%

Mid-Line Domestic:




Ford

7

%


8

%

Dodge

3

%


2

%

Chevrolet

2

%


2

%

Other domestics

1

%


2

%

Total domestic

13

%


14

%

Total New Vehicle Revenue  

100

%


100

%


 


Selling, General and Administrative Expense ("SG&A")—



For the Three Months Ended September 30,


Increase

(Decrease)


% of Gross

Profit

Decrease


2013


% of Gross

Profit


2012


% of Gross

Profit




(Dollars in millions)







SG&A, excluding rent expense  

$

151.6



67.3

%


$

130.9



67.4

%


20.7



(0.1)

%

Rent expense

8.1



3.6

%


9.1



4.7

%


(1.0)



(1.1)

%

SG&A-total

$

159.7



70.9

%


$

140.0



72.1

%


19.7



(1.2)

%

Gross profit

$

225.3





$

194.2









 


For the Nine Months Ended September 30,


Increase

(Decrease)


% of Gross

Profit

Decrease


2013


% of Gross

Profit


2012


% of Gross

Profit




(Dollars in millions)








SG&A, excluding rent expense  

$

436.8



66.8

%


$

389.2



68.2

%


$

47.6



(1.4)

%

Rent expense

25.2



3.9

%


26.7



4.7

%


(1.5)



(0.8)

%

SG&A-total

$

462.0



70.7

%


$

415.9



72.9

%


$

46.1



(2.2)

%

Gross profit

$

653.9





$

570.5









 


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 income from continuing operations," "Adjusted diluted earnings per share ("EPS") from continuing operations," "Adjusted EBITDA," "Adjusted leverage ratio," and "Adjusted SG&A expense."  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 connection 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 its 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.


 



For the Twelve Months Ended


September 30, 2013


June 30, 2013


(Dollars in millions)

Adjusted leverage ratio:




Long-term debt (including current portion)

519.8



$

585.8


Less: unamortized premium on 8.375% Senior Subordinated Notes due 2020  

(9.5)



(9.7)


Adjusted long-term debt (including current portion)

$

510.3



$

576.1






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




Income from continuing operations

$

96.5



$

96.3






Add:




Depreciation and amortization

23.7



23.0


Income tax expense

58.6



58.0


Convertible debt discount amortization



0.1


Swap and other interest expense

42.3



40.8


Earnings before interest, taxes, depreciation and amortization    

("EBITDA")

$

221.1



$

218.2






Non-core items - expense:




Real estate-related charges

7.3



5.2


Loss on extinguishment of long-term debt

6.8




Total non-core items

14.1



5.2






Adjusted EBITDA

$

235.2



$

223.4






Adjusted leverage ratio

2.2



2.6



 


The non-core operating items shown in the table below consist of expenses related to real estate transactions.




For the Three Months Ended

September 30,


2013


2012


(In millions, except per share data)

Adjusted income from continuing operations:




Net income

$

22.7



$

20.7


Discontinued operations, net of tax

0.1



1.9


Income from continuing operations

22.8



22.6






Non-core items - expense (income):




Real estate-related charges

2.1




Loss on the extinguishment of long-term debt

6.8




Tax benefit on non-core items above

(3.4)




Total non-core items

5.5




Adjusted income from continuing operations

$

28.3



$

22.6






Adjusted diluted earnings per share (EPS) from continuing operations:  




Net income

$

0.73



$

0.66


Discontinued operations, net of tax



0.06


Income from continuing operations

$

0.73



$

0.72






Total non-core items

0.18




Adjusted diluted EPS from continuing operations

$

0.91



$

0.72






Weighted average common shares outstanding - diluted

31.1



31.5



 



For the Nine Months Ended

September 30,


2013


2012


(In millions, except per share data)

Adjusted income from continuing operations:




Net income

$

82.2



$

59.4


Discontinued operations, net of tax

(8.3)



1.3


Income from continuing operations

73.9



60.7






Non-core items - expense (income):




Real estate-related charges

7.3




Loss on the extinguishment of long-term debt

6.8




Tax benefit on non-core items above

(5.4)




Total non-core items

8.7




Adjusted income from continuing operations

$

82.6



$

60.7






Adjusted diluted earnings per share (EPS) from continuing operations:  




Net income

$

2.64



$

1.88


Discontinued operations, net of tax

(0.26)



0.04


Income from continuing operations

$

2.38



$

1.92






Total non-core items

0.28




Adjusted diluted EPS from continuing operations

$

2.66



$

1.92






Weighted average common shares outstanding - diluted

31.1



31.6



 

SOURCE Asbury Automotive Group, Inc.



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