Asbury Automotive Group Announces 2011 Second Quarter Financial Results
DULUTH, Ga., July 26, 2011 /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 second quarter 2011 of $16.8 million, or $0.51 per diluted share, versus income from continuing operations in the second quarter 2010 of $13.1 million, or $0.40 per diluted share, a 28% increase per diluted share. Net income for the second quarter 2011 was $14.2 million, or $0.43 per diluted share, compared to $12.8 million, or $0.39 per diluted share in the prior year period. See attached reconciliation for reported adjustments.
Second Quarter 2011 Highlights (compared to the prior year period):
- Total revenues increased 9% to $1.1 billion
- New vehicle revenues increased 5%, including 2% from same store revenues
- Used vehicle retail revenues and units up 22%, including 17% from same store revenues
- Finance and insurance revenues up 20%
- Total gross profit up 14% with strong increases from all business lines
- Adjusted SG&A expense as a percent of gross profit improved 130 basis points to 75.1%
- J6 inventories down approximately 50% versus March 2011 (see tables below)
Strategic Updates:
- Board elected Thomas C. DeLoach, Jr. as Non-Executive Chairman effective as of August 1, 2011
- Repurchased $13 million of Asbury common stock during the quarter
- Board increased share repurchase authorization in July; $45 million remaining
- Reducing leverage target to 3.0x Total Debt/EBITDA
- Acquired $13 million of previously leased properties during the quarter
- Subsequent to the end of the quarter, repurchased $9 million of the convertible notes due 2012
- 65% of the DMS conversions completed to date
“Once again, Asbury is pleased to announce double-digit growth in adjusted EPS from continuing operations, proving both the resiliency of our business model and the agility of our Company,” said Craig T. Monaghan, Asbury’s President and CEO. “We produced these excellent results through a dramatic 70 basis point improvement in our new vehicle margins, achieving a Company record used-to-new ratio, and setting a Company record increase in finance and insurance profit per vehicle retailed.”
Commenting on the Japanese supply challenges, Michael S. Kearney, Asbury’s Executive Vice President and Chief Operating Officer stated, “We are encouraged by the speed and efficiency with which our Japanese manufacturing partners are restoring production capacity, and admire their dedication. Our Japanese dealerships are experiencing the impact of inventory shortages; we anticipate that our affected inventories will bottom-out in July or August. We believe our third quarter earnings could be adversely impacted in the range of $0.05-0.10 per diluted share as a result of disruptions in the market. Our results will depend on, amongst other things, SAAR, when production reaches normalized levels, and when we are able to receive a more favorable mix of product at our dealerships. We believe this will be a short-term issue and expect much healthier inventory levels heading into the fourth quarter.”
Asbury will host a conference call to discuss its second quarter results this afternoon at 2:00 p.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) 768-6563 (domestic), or (785) 830-7991 (international); passcode – 4451418. 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 80 retail auto stores, encompassing 99 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, the impact of supply challenges resulting from weather-related or other events in Japan, risks associated with Asbury’s indebtedness (including available borrowing capacity, compliance with its financial covenants and ability to refinance 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)
For the Three For the Six
(Unaudited) Months Ended Months Ended
------------- ------------
June 30, June 30,
-------- --------
2011 2010 2011 2010
---- ---- ---- ----
REVENUES:
New vehicle $578.3 $548.4 $1,149.5 $1,025.4
Used vehicle 322.7 279.9 624.1 528.7
Parts and
service 149.2 141.0 293.8 278.5
Finance and
insurance, net 36.0 30.0 68.4 55.2
---- ---- ---- ----
Total revenues 1,086.2 999.3 2,135.8 1,887.8
COST OF SALES:
New vehicle 536.7 512.6 1,073.8 956.7
Used vehicle 294.3 255.8 568.3 481.5
Parts and
service 66.3 64.5 131.9 128.6
---- ---- ----- -----
Total cost of
sales 897.3 832.9 1,774.0 1,566.8
----- ----- ------- -------
GROSS PROFIT 188.9 166.4 361.8 321.0
OPERATING
EXPENSES:
Selling,
general and
administrative 142.8 127.2 277.6 248.9
Depreciation
and
amortization 5.8 5.2 11.1 10.6
Other operating
expense
(income), net 2.8 (0.6) 13.2 (1.3)
--- ---- ---- ----
Income from
operations 37.5 34.6 59.9 62.8
OTHER EXPENSE:
Floor plan
interest
expense (2.3) (2.2) (5.0) (4.6)
Other interest
expense, net (10.3) (9.0) (20.8) (18.0)
Swap interest
expense (1.4) (1.6) (2.8) (3.3)
Convertible
debt discount
amortization (0.3) (0.4) (0.5) (0.8)
---- ---- ---- ----
Total other
expense, net (14.3) (13.2) (29.1) (26.7)
----- ----- ----- -----
Income before
income taxes 23.2 21.4 30.8 36.1
INCOME TAX
EXPENSE 9.0 8.3 11.9 14.0
--- --- ---- ----
INCOME FROM
CONTINUING
OPERATIONS 14.2 13.1 18.9 22.1
DISCONTINUED
OPERATIONS,
net of tax - (0.3) 15.2 (1.9)
--- ---- ---- ----
NET INCOME $14.2 $12.8 $34.1 $20.2
===== ===== ===== =====
EARNINGS PER
COMMON SHARE:
Basic-
Continuing
operations $0.44 $0.41 $0.59 $0.69
Discontinued
operations - (0.01) 0.47 (0.06)
--- ----- ---- -----
Net income $0.44 $0.40 $1.06 $0.63
===== ===== ===== =====
Diluted-
Continuing
operations $0.43 $0.40 $0.57 $0.67
Discontinued
operations - (0.01) 0.46 (0.05)
--- ----- ---- -----
Net income $0.43 $0.39 $1.03 $0.62
===== ===== ===== =====
WEIGHTED
AVERAGE COMMON
SHARES
OUTSTANDING:
Basic 32.1 32.2 32.3 32.2
Stock options 0.6 0.5 0.6 0.5
Restricted
stock 0.1 0.2 0.2 0.1
Performance
share units 0.1 0.1 0.1 -
--- --- --- ---
Diluted 32.9 33.0 33.2 32.8
==== ==== ==== ====
New Vehicle-
For the Three
Months Ended
-------------
June 30,
--------
2011 2010
---- ----
(Dollars in millions, except for per
vehicle data)
Revenue:
New vehicle
revenue-same store(1)
Luxury $197.9 $191.6
Mid-line import 275.1 277.9
Mid-line domestic 87.3 78.9
---- ----
Total new vehicle
revenue-same store(1) 560.3 548.4
New vehicle
revenue-acquisitions 18.0 -
---- ---
New vehicle revenue,
as reported $578.3 $548.4
====== ======
Gross profit:
New vehicle gross
profit-same store(1)
Luxury $15.7 $14.3
Mid-line import 18.8 15.7
Mid-line domestic 5.7 5.8
--- ---
Total new vehicle
gross profit-same
store(1) 40.2 35.8
New vehicle gross
profit-acquisitions 1.4 -
--- ---
New vehicle gross
profit, as reported $41.6 $35.8
===== =====
For the Three
Months Ended
--------------
June 30,
--------
2011 2010
---- ----
New vehicle units:
New vehicle retail
units-same store(1)
Luxury 3,999 3,992
Mid-line import 10,645 11,131
Mid-line domestic 2,388 2,051
----- -----
Total new vehicle
retail units-same
store(1) 17,032 17,174
Fleet vehicles 566 675
--- ---
Total new vehicle
units-same store(1) 17,598 17,849
New vehicle
units-acquisitions 529 -
--- ---
New vehicle
units-actual 18,127 17,849
====== ======
Increase %
-------- ---
(Decrease) Change
---------- ------
(Dollars in millions, except for per
vehicle data)
Revenue:
New vehicle
revenue-same store(1)
Luxury $6.3 3%
Mid-line import (2.8) (1)%
Mid-line domestic 8.4 11%
Total new vehicle
revenue-same store(1) 11.9 2%
New vehicle
revenue-acquisitions
New vehicle revenue,
as reported $29.9 5%
Gross profit:
New vehicle gross
profit-same store(1)
Luxury $1.4 10%
Mid-line import 3.1 20%
Mid-line domestic (0.1) (2)%
Total new vehicle
gross profit-same
store(1) 4.4 12%
New vehicle gross
profit-acquisitions
New vehicle gross
profit, as reported $5.8 16%
Increase %
-------- ---
(Decrease) Change
---------- ------
New vehicle units:
New vehicle retail
units-same store(1)
Luxury 7 - %
Mid-line import (486) (4)%
Mid-line domestic 337 16%
Total new vehicle
retail units-same
store(1) (142) (1)%
Fleet vehicles (109) (16)%
Total new vehicle
units-same store(1) (251) (1)%
New vehicle
units-acquisitions
New vehicle
units-actual 278 2%
New Vehicle Metrics-
For the Three Months
Ended
--------------------
June 30,
--------
2011 2010 Increase %
---- ---- -------- ---
Change
------
Revenue per new vehicle
sold-same store(1) $31,839 $30,724 $1,115 4%
======= =======
Gross profit per new
vehicle sold-same
store(1) $2,284 $2,006 $278 14%
====== ======
New vehicle gross
margin-same store(1) 7.2% 6.5% 0.7% 11%
=== === ===
(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
-------------
June 30,
--------
2011 2010
---- ----
(Dollars in millions, except for per
vehicle data)
Revenue:
Used vehicle retail
revenues-same store(1) $263.9 $224.6
Used vehicle retail
revenues-acquisitions 10.2 -
---- ---
Total used vehicle
retail revenues 274.1 224.6
Used vehicle wholesale
revenues-same store(1) 47.5 55.3
Used vehicle wholesale
revenues-acquisitions 1.1 -
--- ---
Total used vehicle
wholesale revenues 48.6 55.3
---- ----
Used vehicle revenue,
as reported $322.7 $279.9
====== ======
Gross profit:
Used vehicle retail
gross profit-same
store(1) $27.6 $24.0
Used vehicle retail
gross
profit-acquisitions 1.0 -
--- ---
Total used vehicle
retail gross profit 28.6 24.0
Used vehicle wholesale
gross profit-same
store(1) (0.1) 0.1
Used vehicle wholesale
gross
profit-acquisitions (0.1) -
---- ---
Total used vehicle
wholesale gross profit (0.2) 0.1
---- ---
Used vehicle gross
profit, as reported $28.4 $24.1
===== =====
Used vehicle retail
units:
Used vehicle retail
units-same store(1) 13,774 11,713
Used vehicle retail
units-acquisitions 506 -
--- ---
Used vehicle retail
units-actual 14,280 11,713
====== ======
Increase %
(Decrease) Change
(Dollars in millions, except for per
vehicle data)
Revenue:
Used vehicle retail
revenues-same store(1) $39.3 17%
Used vehicle retail
revenues-acquisitions
Total used vehicle
retail revenues 49.5 22%
Used vehicle wholesale
revenues-same store(1) (7.8) (14)%
Used vehicle wholesale
revenues-acquisitions
Total used vehicle
wholesale revenues (6.7) (12)%
Used vehicle revenue,
as reported $42.8 15%
Gross profit:
Used vehicle retail
gross profit-same
store(1) $3.6 15%
Used vehicle retail
gross
profit-acquisitions
Total used vehicle
retail gross profit 4.6 19%
Used vehicle wholesale
gross profit-same
store(1) (0.2) (200)%
Used vehicle wholesale
gross
profit-acquisitions
Total used vehicle
wholesale gross profit (0.3) (300)%
Used vehicle gross
profit, as reported $4.3 18%
Used vehicle retail
units:
Used vehicle retail
units-same store(1) 2,061 18%
Used vehicle retail
units-acquisitions
Used vehicle retail
units-actual 2,567 22%
Used Vehicle Metrics-
For the Three
Months Ended
-------------
June 30,
--------
2011 2010 Decrease %
---- ---- -------- ---
Change
------
Revenue per used
vehicle retailed-same
store(1) $19,159 $19,175 $(16) - %
======= =======
Gross profit per used
vehicle retailed-same
store(1) $2,004 $2,049 $(45) (2)%
====== ======
Used vehicle retail
gross margin-same
store(1) 10.5% 10.7% (0.2)% (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.
Parts and Service-
For the Three
Months Ended
-------------
June 30,
--------
2011 2010
---- ----
(Dollars in millions)
Revenue:
Parts and service revenue-same
store(1) $143.9 $141.0
Parts and service
revenues-acquisitions 5.3 -
--- ---
Parts and service revenue, as
reported $149.2 $141.0
====== ======
Gross profit:
Parts and service gross
profit-same store(1):
Customer pay $49.5 $48.9
Reconditioning and preparation 13.9 11.2
Warranty 11.3 11.1
Wholesale parts 5.2 5.3
--- ---
Total parts and service gross
profit-same store(1) 79.9 76.5
Parts and service gross
profit-acquisitions 3.0 -
--- ---
Parts and service gross profit, as
reported $82.9 $76.5
===== =====
Parts and service gross
margin-same store(1) 55.5% 54.3%
==== ====
Increase %
(Decrease) Change
(Dollars in millions)
Revenue:
Parts and service revenue-same
store(1) $2.9 2%
Parts and service
revenues-acquisitions
Parts and service revenue, as
reported $8.2 6%
Gross profit:
Parts and service gross
profit-same store(1):
Customer pay $0.6 1%
Reconditioning and preparation 2.7 24%
Warranty 0.2 2%
Wholesale parts (0.1) (2)%
Total parts and service gross
profit-same store(1) 3.4 4%
Parts and service gross
profit-acquisitions
Parts and service gross profit, as
reported $6.4 8%
Parts and service gross
margin-same store(1) 1.2% 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.
Finance and Insurance, net-
For the Three
Months Ended
-------------
June 30,
--------
2011 2010 Increase %
---- ---- -------- ---
Change
------
(Dollar in millions, except for per
vehicle data)
Finance and
insurance, net-same
store(1) $34.9 $30.0 $4.9 16%
Finance and
insurance,
net-acquisitions 1.1 -
--- ---
Finance and
insurance, net as
reported $36.0 $30.0 $6.0 20%
===== =====
Finance and
insurance, net per
vehicle sold-same
store(1) $1,112 $1,015 $97 10%
====== ======
(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
--------------------
June 30,
--------
2011 2010
---- ----
REVENUE MIX PERCENTAGES:
New vehicles 53.2% 54.9%
Used retail vehicles 25.3% 22.5%
Used vehicle wholesale 4.5% 5.5%
Parts and service 13.7% 14.1%
Finance and insurance, net 3.3% 3.0%
--- ---
Total revenue 100.0% 100.0%
===== =====
GROSS PROFIT MIX PERCENTAGES:
New vehicles 22.0% 21.5%
Used retail vehicles 15.1% 14.4%
Used vehicle wholesale (0.1)% 0.1%
Parts and service 43.9% 46.0%
Finance and insurance, net 19.1% 18.0%
---- ----
Total gross profit 100.0% 100.0%
===== =====
SG&A EXPENSES AS A PERCENTAGE OF GROSS
PROFIT 75.6% 76.4%
New Vehicle-
For the Six Months
Ended
------------------
June 30,
--------
2011 2010
---- ----
(Dollars in millions, except for per
vehicle data)
Revenue:
New vehicle
revenue-same store(1)
Luxury $396.0 $367.3
Mid-line import 554.2 512.3
Mid-line domestic 163.9 145.8
Total new vehicle
revenue-same store(1) 1,114.1 1,025.4
New vehicle
revenue-acquisitions 35.4 -
---- ---
New vehicle revenue,
as reported $1,149.5 $1,025.4
======== ========
Gross profit:
New vehicle gross
profit-same store(1)
Luxury $29.3 $28.1
Mid-line import 33.3 30.1
Mid-line domestic 10.9 10.5
Total new vehicle
gross profit-same
store(1) 73.5 68.7
New vehicle gross
profit-acquisitions 2.2 -
--- ---
New vehicle gross
profit, as reported $75.7 $68.7
===== =====
For the Six Months
Ended
-------------------
June 30,
--------
2011 2010
---- ----
New vehicle units:
New vehicle retail
units-same store(1)
Luxury 8,009 7,686
Mid-line import 21,717 20,494
Mid-line domestic 4,531 3,843
Total new vehicle
retail units-same
store(1) 34,257 32,023
Fleet vehicles 1,272 1,156
----- -----
Total new vehicle
units-same store(1) 35,529 33,179
New vehicle
units-acquisitions 1,085 -
----- ---
New vehicle
units-actual 36,614 33,179
====== ======
Increase %
-------- ---
(Decrease) Change
---------- ------
(Dollars in millions, except for per
vehicle data)
Revenue:
New vehicle
revenue-same store(1)
Luxury $28.7 8%
Mid-line import 41.9 8%
Mid-line domestic 18.1 12%
Total new vehicle
revenue-same store(1) 88.7 9%
New vehicle
revenue-acquisitions
New vehicle revenue,
as reported $124.1 12%
Gross profit:
New vehicle gross
profit-same store(1)
Luxury $1.2 4%
Mid-line import 3.2 11%
Mid-line domestic 0.4 4%
Total new vehicle
gross profit-same
store(1) 4.8 7%
New vehicle gross
profit-acquisitions
New vehicle gross
profit, as reported $7.0 10%
Increase %
-------- ---
Change
------
New vehicle units:
New vehicle retail
units-same store(1)
Luxury 323 4%
Mid-line import 1,223 6%
Mid-line domestic 688 18%
Total new vehicle
retail units-same
store(1) 2,234 7%
Fleet vehicles 116 10%
Total new vehicle
units-same store(1) 2,350 7%
New vehicle
units-acquisitions
New vehicle
units-actual 3,435 10%
New Vehicle Metrics-
For the Six Months
Ended
------------------
June 30,
--------
2011 2010
---- ----
Revenue per new vehicle
sold-same store(1) $31,357 $30,905
======= =======
Gross profit per new vehicle
sold-same store(1) $2,069 $2,071
====== ======
New vehicle gross margin-same
store(1) 6.6% 6.7%
=== ===
Increase %
-------- ---
(Decrease) Change
---------- ------
Revenue per new vehicle
sold-same store(1) $452 1%
Gross profit per new vehicle
sold-same store(1) $(2) - %
New vehicle gross margin-same
store(1) (0.1)% (1)%
(1) Same store information consists of amounts 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 Six Months
Ended
------------------
June 30,
--------
2011 2010
---- ----
(Dollars in millions, except for per
vehicle data)
Revenue:
Used vehicle retail
revenues-same
store(1) $503.7 $428.6
Used vehicle retail
revenues-acquisitions 18.9 -
---- ---
Total used vehicle
retail revenues 522.6 428.6
Used vehicle wholesale
revenues-same
store(1) 99.4 100.1
Used vehicle wholesale
revenues-acquisitions 2.1 -
--- ---
Total used vehicle
wholesale revenues 101.5 100.1
----- -----
Used vehicle revenue,
as reported $624.1 $528.7
====== ======
Gross profit:
Used vehicle retail
gross profit-same
store(1) $53.0 $46.7
Used vehicle retail
gross
profit-acquisitions 2.0 -
--- ---
Total used vehicle
retail gross profit 55.0 46.7
Used vehicle wholesale
gross profit-same
store(1) 0.8 0.5
Used vehicle wholesale
gross
profit-acquisitions - -
--- ---
Total used vehicle
wholesale gross
profit 0.8 0.5
--- ---
Used vehicle gross
profit, as reported $55.8 $47.2
===== =====
Used vehicle retail
units:
Used vehicle retail
units-same store(1) 26,853 22,600
Used vehicle retail
units-acquisitions 946 -
--- ---
Used vehicle retail
units-actual 27,799 22,600
====== ======
Increase %
(Decrease) Change
(Dollars in millions, except for per
vehicle data)
Revenue:
Used vehicle retail
revenues-same
store(1) $75.1 18%
Used vehicle retail
revenues-acquisitions
Total used vehicle
retail revenues 94.0 22%
Used vehicle wholesale
revenues-same
store(1) (0.7) (1)%
Used vehicle wholesale
revenues-acquisitions
Total used vehicle
wholesale revenues 1.4 1%
Used vehicle revenue,
as reported $95.4 18%
Gross profit:
Used vehicle retail
gross profit-same
store(1) $6.3 13%
Used vehicle retail
gross
profit-acquisitions
Total used vehicle
retail gross profit 8.3 18%
Used vehicle wholesale
gross profit-same
store(1) 0.3 60%
Used vehicle wholesale
gross
profit-acquisitions
Total used vehicle
wholesale gross
profit 0.3 60%
Used vehicle gross
profit, as reported $8.6 18%
Used vehicle retail
units:
Used vehicle retail
units-same store(1) 4,253 19%
Used vehicle retail
units-acquisitions
Used vehicle retail
units-actual 5,199 23%
Used Vehicle Metrics-
For the Six Months
Ended
------------------
June 30,
--------
2011 2010
---- ----
Revenue per used vehicle
retailed-same store(1) $18,758 $18,965
======= =======
Gross profit per used vehicle
retailed-same store(1) $1,974 $2,066
====== ======
Used vehicle retail gross
margin-same store(1) 10.5% 10.9%
==== ====
Decrease %
-------- ---
Change
------
Revenue per used vehicle
retailed-same store(1) $(207) (1)%
Gross profit per used vehicle
retailed-same store(1) $(92) (4)%
Used vehicle retail gross
margin-same store(1) (0.4)% (4)%
(1) Same store information consists of amounts 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.
Parts and Service-
For the Six Months
Ended
------------------
June 30,
--------
2011 2010
---- ----
(Dollars in millions)
Revenue:
Parts and service
revenue-same store(1) $283.0 $278.5
Parts and service
revenues-acquisitions 10.8 -
---- ---
Parts and service revenue,
as reported $293.8 $278.5
Gross profit:
Parts and service gross
profit-same store(1):
Customer pay $95.7 $95.1
Reconditioning and
preparation 26.6 21.4
Warranty 23.3 22.8
Wholesale parts 10.2 10.6
---- ----
Total parts and service
gross profit-same
store(1) $155.8 $149.9
Parts and service gross
profit-acquisitions 6.1 -
--- ---
Parts and service gross
profit, as reported $161.9 $149.9
====== ======
Parts and service gross
margin-same store(1) 55.1% 53.8%
==== ====
Increase %
(Decrease) Change
(Dollars in millions)
Revenue:
Parts and service
revenue-same store(1) $4.5 2%
Parts and service
revenues-acquisitions
Parts and service revenue,
as reported $15.3 5%
Gross profit:
Parts and service gross
profit-same store(1):
Customer pay $0.6 1%
Reconditioning and
preparation 5.2 24%
Warranty 0.5 2%
Wholesale parts (0.4) (4)%
Total parts and service
gross profit-same
store(1) $5.9 4%
Parts and service gross
profit-acquisitions
Parts and service gross
profit, as reported $12.0 8%
Parts and service gross
margin-same store(1) 1.3% 2%
(1) Same store information consists of amounts 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 Six Months
Ended
------------------
June 30,
--------
2011 2010
---- ----
(Dollars in millions, except for per
vehicle data)
Finance and insurance, net-same
store(1) $66.6 $55.2
Finance and insurance,
net-acquisitions 1.8 -
--- ---
Finance and insurance, net as
reported $68.4 $55.2
===== =====
F&I per vehicle sold-same
store(1) $1,068 $990
====== ====
Increase %
Change
(Dollars in millions, except for per
vehicle data)
Finance and insurance, net-same
store(1) $11.4 21%
Finance and insurance,
net-acquisitions
Finance and insurance, net as
reported $13.2 24%
F&I per vehicle sold-same
store(1) $78 8%
(1) Same store information consists of amounts 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 Six Months
Ended
------------------
June 30,
--------
2011 2010
---- ----
REVENUE MIX PERCENTAGES:
New vehicles 53.8% 54.3%
Used retail vehicles 24.4% 22.7%
Used vehicle wholesale 4.8% 5.3%
Parts and service 13.8% 14.8%
Finance and insurance, net 3.2% 2.9%
Total revenue 100.0% 100.0%
===== =====
GROSS PROFIT MIX PERCENTAGES:
New vehicles 20.9% 21.4%
Used retail vehicles 15.3% 14.5%
Used vehicle wholesale 0.2% 0.2%
Parts and service 44.7% 46.7%
Finance and insurance, net 18.9% 17.2%
Total gross profit 100.0% 100.0%
===== =====
SG&A EXPENSES AS A PERCENTAGE OF GROSS
PROFIT 76.7% 77.5%
ASBURY AUTOMOTIVE GROUP, INC.
Additional Disclosures
(In millions)
(Unaudited)
June
30, December
2011 31, Increase % Change
----- -------- -------- --------
2010 (Decrease)
---- ----------
SELECTED BALANCE
SHEET DATA
Cash and cash
equivalents $23.2 $21.3 $1.9 9%
New vehicle
inventory 349.0 436.1 (87.1) (20)%
Used vehicle
inventory 96.3 74.8 21.5 29%
Parts inventory 37.6 36.5 1.1 3%
Total current
assets 710.3 876.8 (166.5) (19)%
Floor plan notes
payable 271.4 424.6 (153.2) (36)%
Total current
liabilities 472.2 635.8 (163.6) (26)%
CAPITALIZATION:
Long-term debt
(including
current
portion) $543.8 $543.8 $ - - %
Shareholders'
equity 311.2 287.1 24.1 8%
----- -----
Total $855.0 $830.9 $24.1 3%
====== ======
Brand Mix - New Vehicle Revenue by Brand-
For the Six Months
Ended
June 30,
--------
2011 2010
---- ----
Luxury
BMW 9% 8%
Mercedes-Benz 7% 7%
Lexus 5% 6%
Infiniti 4% 5%
Acura 5% 5%
Other luxury 6% 5%
--- ---
Total luxury 36% 36%
Mid-Line Imports:
Honda 23% 23%
Nissan 13% 13%
Toyota 10% 10%
Other imports 4% 4%
--- ---
Total imports 50% 50%
Mid-Line Domestic:
Ford 8% 9%
Chevrolet 3% 2%
Other domestics 3% 3%
--- ---
Total domestic 14% 14%
Total New Vehicle Revenue 100% 100%
=== ===
Japanese Manufacturer New Vehicle Inventory -
As of As of Increase % Change
----- ----- -------- --------
July 31, March
2011 31, (Decrease)
--------- ------ ----------
(EST) 2011
----- ----
Honda $20 $79 $(59) (75)%
Nissan 52 67 (15) (22)%
Toyota 23 49 (26) (53)%
Infiniti 15 26 (11) (42)%
Lexus 6 16 (10) (63)%
Acura 7 17 (10) (59)%
Total $123 $254 $(131) (52)%
==== ====
Asbury Automotive Group, Inc.
Supplemental Disclosures
(Dollars in millions, except per share data)
(Unaudited)
Our selling, general and administrative (“SG&A”) expense for the three and six months ended June 30, 2011 was impacted by a lease termination charge. The table below shows the impact of the lease termination charge on our SG&A expense as a percentage of gross profit when compared to the applicable prior year periods.
For the Three Months Ended June 30,
-----------------------------------
% of
2011 Gross
---- -----
Profit
------
(Dollars in millions)
SG&A, as reported $142.8 75.6%
Less: lease termination
charge (1.0) (0.5)%
----
Adjusted SG&A $141.8 75.1%
======
Gross profit $188.9
======
For the Six Months Ended June 30,
---------------------------------
% of
2011 Gross
---- -----
Profit
------
(Dollars in millions)
SG&A, as reported $277.6 76.7%
Less: lease termination
charge (1.0) (0.2)%
Adjusted SG&A $276.6 76.5%
======
Gross profit $361.8
======
For the Three Months Ended June 30,
-----------------------------------
% of
2010 Gross
---- -----
Profit
------
(Dollars in millions)
SG&A, as reported $127.2 76.4%
Less: lease termination
charge - - %
---
Adjusted SG&A $127.2 76.4%
======
Gross profit $166.4
======
For the Six Months Ended June 30,
---------------------------------
% of
2010 Gross
---- -----
Profit
------
(Dollars in millions)
SG&A, as reported $248.9 77.5%
Less: lease termination
charge - - %
Adjusted SG&A $248.9 77.5%
======
Gross profit $321.0
======
% of
Increase Gross
Profit
Decrease
(Dollars in millions)
SG&A, as reported $15.6 (0.8)%
Less: lease termination
charge
Adjusted SG&A $14.6 (1.3)%
Gross profit
% of
Increase Gross
Profit
Decrease
(Dollars in millions)
SG&A, as reported $28.7 (0.8)%
Less: lease termination
charge
Adjusted SG&A $27.7 (1.0)%
Gross profit
Our income from continuing operations during 2011 was impacted by several items shown below (collectively referred to as “2011 Adjusting Items”). We believe that an alternative comparison of our income from continuing operations (“Adjusted Income From Continuing Operations”), which is not defined by Generally Accepted Accounting Principles (“GAAP”), can be made by adjusting for items that are not core operating items and should be considered when forecasting our future results. These 2011 Adjusting items are excluded by management when comparing actual results to forecasted results and are generally not included in external financial estimates of our business.
The non-GAAP measure Adjusted Income From Continuing Operations contains material limitations. Although we believe that litigation related expense and executive separation costs are infrequent, we cannot assure you that we will not recognize them in the future. Our adjusted income from continuing operations may not be comparable with adjusted income from continuing operations of other companies to the extent that other companies recognize similar items in adjusted income from continuing operations and do not provide disclosure of the amounts. In order to compensate for these limitations, we also review the related GAAP measures. In addition, these non-GAAP measures are not defined by GAAP and our definition of each measure may differ from, and therefore may not be comparable to, similarly titled measures used by other companies, thereby limiting its usefulness as a comparative measure. These non-GAAP measures should not be considered in isolation, or as a substitute for analysis of our operating results as reported under GAAP.
The non-core operating items shown in the table below are (i) expenses related to executive separation benefits, (ii) real estate related charges consisting of a lease termination charge and impairment of certain property not used in our operations and (iii) legal claims related to operations from 2000 to 2006.
For the Three
Months Ended
June 30,
2011 2010
---- ----
(In millions,
except per share
data)
Adjusted income from continuing
operations:
-------------------------------
Net income $14.2 $12.8
Discontinued operations, net of tax - 0.3
--- ---
Income from continuing operations $14.2 $13.1
Non-core items - expense (income):
Executive separation costs $2.7 $ -
Real estate-related charges 1.5 -
Tax benefit on non-core items above (1.6) -
---- ---
Total non-core items $2.6 $ -
Adjusted income from continuing
operations $16.8 $13.1
===== =====
Adjusted earnings per common share -
diluted:
------------------------------------
Net income $0.43 $0.39
Discontinued operation, net of tax - 0.01
--- ----
Income from continuing operations 0.43 0.40
Total non-core items 0.08 -
Adjusted income from continuing
operations $0.51 $0.40
===== =====
Weighted average common share outstanding
-diluted 32.9 33.0
==== ====
For the Six Months
Ended
June 30,
2011 2010
---- ----
(In millions,
except per share
data)
Adjusted income from continuing operations:
-------------------------------------------
Net income $34.1 $20.2
Discontinued operations, net of tax (15.2) 1.9
----- ---
Income from continuing operations $18.9 $22.1
Non-core items - expense (income):
Litigation related expense $9.0 $ -
Executive separation costs 5.0 -
Real estate-related charges 1.5 -
Tax benefit on non-core items above (6.0) -
---- ---
Total non-core items $9.5 $ -
Adjusted income from continuing operations $28.4 $22.1
===== =====
Adjusted earnings per common share -
diluted:
------------------------------------
Net income $1.03 $0.62
Discontinued operation, net of tax (0.46) 0.05
----- ----
Income from continuing operations 0.57 0.67
Total non-core items 0.29 -
Adjusted income from continuing operations $0.86 $0.67
===== =====
Weighted average common share outstanding -
diluted 33.2 32.8
==== ====
SOURCE Asbury Automotive Group, Inc.