Asbury Automotive Group Reports Third Quarter Financial ResultsEPS of $0.58 from Continuing Operations Up 7%Announces Three Dealership Acquisitions Totaling $210 Million in Annual Revenue
NEW YORK, Oct. 30 /PRNewswire-FirstCall/ -- Asbury Automotive Group, Inc. , one of the largest automotive retail and service companies in the U.S., today reported financial results for the third quarter and nine months ended September 30, 2007. Income from continuing operations for the third quarter was $19.2 million, or $0.58 per diluted share, a 5% increase from $18.4 million, or $0.54 per diluted share, a year ago. Results for last year's third quarter included $0.05 per diluted share in non-operating expenses. For the first nine months of 2007, income from continuing operations was $42.8 million, or $1.27 per diluted share, compared with $51.6 million, or $1.52 per diluted share, in the corresponding period last year. Non-operating items reduced earnings per diluted share by $0.41 in the first nine months of 2007, and reduced earnings by $0.01 per diluted share in the corresponding period last year. Excluding these items, income from continuing operations for the first nine months of 2007 increased 9% to $56.5 million, or $1.68 per diluted share, from $51.9 million, or $1.53 per diluted share. President and CEO Charles R. Oglesby said, "The soft retail vehicle environment presented a significant challenge for Asbury in the third quarter. The decline we experienced in used vehicles weighed heavily on our overall results, while the performance in the remaining three business lines remained relatively strong. In new vehicles we outperformed our local competition, gaining market share; in F&I we achieved high single-digit gains per vehicle retailed; and our fixed operations once again delivered record results." Mr. Oglesby continued, "Our results were further weighed down by continued weakness in the heavy truck market, with our new unit sales down 25%. We now expect that the turnaround in this market may be pushed out as far as the second quarter of 2008." J. Gordon Smith, Senior Vice President and CFO, said, "The third quarter was characterized by a weak July, followed by a relatively strong August, and culminating with a soft September. Adjusting our cost structure proved to be a challenge in this choppy retail environment, although 80 basis points, or nearly half, of the deterioration in our selling, general and administrative expenses as a percentage of gross profit was related to an abandoned real estate development project and legal settlement costs. We continued to make adjustments throughout the quarter in response to local market conditions, including reductions in our advertising plans and an in-depth review of our staffing to ensure our dealerships are correctly positioned heading into the slower selling season." Mr. Smith continued, "For the quarter, the effective tax rate was 32.3%, compared to 37.5% last year. The benefit in the tax rate was offset by several non-operating charges to SG&A expense during the quarter. We expect an effective tax rate of approximately 37.3% for the fourth quarter." During the third quarter, Asbury acquired a Honda dealership and a Dodge dealership in the Tampa market. In October, the Company acquired a BMW-Mini dealership in Princeton, New Jersey. "Collectively, these acquisitions total approximately $210 million in annualized revenues," Mr. Oglesby said, "and represent exceptional growth opportunities for Asbury. For the year to date, we have now acquired dealerships with approximately $350 million in annualized revenues, substantially exceeding our target of $200 million per year." Additional financial information for the third quarter of 2007, as compared to last year's third quarter, included:
-- Total revenue for the quarter of approximately $1.5 billion was down 1
percent from a year ago. Total gross profit was $228.3 million, up
less than 1 percent.
-- New light vehicle retail revenue increased 1% (down 1% on a same-store
basis) and new light vehicle unit sales decreased 1% (down 3% same-
store). New light vehicle retail gross profit was up 3% (up 1% same-
store). New heavy truck retail revenue decreased 27% and new heavy
truck unit sales declined 25%. New heavy truck retail gross profit was
down 28%.
-- Used vehicle retail revenue decreased 6% (down 7% same-store), and used
unit sales decreased 9% (down 10% same-store). Used vehicle retail
gross profit decreased 14% (down 16% same-store).
-- Parts, service and collision repair revenue increased 4% (2% same-
store), and gross profit rose 6% (4% same-store).
-- Net finance and insurance (F&I) revenue increased 4% (2% same-store).
F&I per vehicle retailed increased 9% to $989.
-- Selling, general and administrative (SG&A) expenses as a percentage of
gross profit were 77.1%, compared with 75.9% a year ago. Adjusted for
non-operating items, SG&A expenses a year ago were 75.5% of gross
profit.
Under the current share repurchase program, the Company has repurchased approximately one million shares of Asbury common stock through October 30, 2007, with one million shares remaining available for repurchase under the current two million share repurchase program authorized in August 2007. This brings total repurchases of Asbury stock for the year to date to approximately 2.3 million shares. On October 26, 2007, the Company announced that the board of directors has declared a quarterly cash dividend of $0.225 per share of the Company's outstanding common stock payable on November 19, 2007, to stockholders of record as of the close of business on November 5, 2007. The Company is reducing its guidance for 2007 diluted earnings per share from continuing operations to a range between $2.10 and $2.18, from $2.20 to $2.28 previously. Asbury will host a conference call to discuss its third 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 877-718-5111 (domestic), or 719-325-4817 (international); no access code is necessary. Callers should dial in approximately 5-10 minutes before the call begins. About Asbury Automotive Group Asbury Automotive Group, Inc. ("Asbury"), headquartered in New York City, 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 93 retail auto stores, encompassing 124 franchises for the sale and servicing of 35 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" as that term is defined in the Private Securities Litigation Reform Act of 1995. The forward- looking statements include statements relating to goals, plans, earnings projections, acquisition performance and guidance regarding the Company's financial position, results of operations, market position, potential future acquisitions and business strategy. These statements are based on management's current expectations 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, the Company's relationships with vehicle manufacturers and other suppliers, risks associated with the Company's indebtedness, risks related to potential future acquisitions, risks related to competition in the automotive retail and service industries, general economic conditions both nationally and locally, governmental regulations, legislation and the Company's ability to execute certain operational strategies. There can be no guarantees that the Company's plans for future operations will be successfully implemented or that they will prove to be commercially successful or that the Company will be able to continue paying dividends in the future at the current rate or at all. These and other risk factors are discussed in the Company's annual report on Form 10-K/A and in its other filings with the Securities and Exchange Commission. We undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future events or otherwise.
Investors May Contact:
Keith R. Style
V.P.-Finance and Investor Relations
(212) 885-2530
investor@asburyauto.com
Reporters May Contact:
Stephanie Lowenthal
RF|Binder Partners
(212) 994-7619
Stephanie.Lowenthal@RFBinder.com
Asbury Automotive Group, Inc.
Consolidated Statements of Income
(In thousands, except per share data)
(Unaudited)
For the Three For the Nine
Months Ended Months Ended
September 30, September 30,
2007 2006 2007 2006
REVENUES:
New vehicle $ 893,977 $ 901,783 $2,609,709 $2,618,109
Used vehicle 378,140 388,095 1,151,790 1,119,249
Parts, service and
collision repair 176,707 170,246 527,168 509,476
Finance and insurance, net 42,210 40,590 124,470 118,446
Total revenues 1,491,034 1,500,714 4,413,137 4,365,280
COST OF SALES:
New vehicle 829,977 838,231 2,423,950 2,434,562
Used vehicle 348,391 351,941 1,051,375 1,016,381
Parts, service and
collision repair 84,351 83,153 253,022 251,596
Total cost of sales 1,262,719 1,273,325 3,728,347 3,702,539
GROSS PROFIT 228,315 227,389 684,790 662,741
OPERATING EXPENSES:
Selling, general and
administrative 176,067 172,568 526,078 505,317
Depreciation and
amortization 5,385 5,056 16,061 15,104
Income from operations 46,863 49,765 142,651 142,320
OTHER INCOME (EXPENSE):
Floor plan interest expense (10,618) (10,123) (33,024) (30,067)
Other interest expense (9,083) (11,225) (30,037) (33,268)
Interest income 900 1,523 3,906 3,271
Loss on extinguishment of
long-term debt - (914) (18,523) (914)
Other income, net 343 399 1,032 1,223
Total other expense,
net (18,458) (20,340) (76,646) (59,755)
Income before income
taxes 28,405 29,425 66,005 82,565
INCOME TAX EXPENSE 9,185 11,035 23,210 30,962
Income from continuing
operations 19,220 18,390 42,795 51,603
DISCONTINUED OPERATIONS,
net of tax (210) (1,211) (2,793) (2,867)
Net income 19,010 17,179 40,002 48,736
EARNINGS PER COMMON SHARE:
BASIC -
Continuing operations $0.59 $0.55 $1.31 $1.56
Discontinued operations - (0.03) (0.09) (0.09)
Net income $0.59 $0.52 $1.22 $1.47
DILUTED -
Continuing operations $0.58 $0.54 $1.27 $1.52
Discontinued operations (0.01) (0.03) (0.08) (0.08)
Net income $0.57 $0.51 $1.19 $1.44
WEIGHTED AVERAGE COMMON
SHARES OUTSTANDING:
Basic 32,450 33,258 32,754 33,087
Diluted 33,244 33,841 33,693 33,853
Asbury Automotive Group, Inc.
Selected Data
(Dollars in thousands, except per vehicle data)
(Unaudited)
As Reported for the Three Months
Ended September 30, Increase %
2007 2006 (Decrease) Change
RETAIL VEHICLES SOLD:
New retail units -
light vehicles 26,262 61.5% 26,497 59.2% (235) (0.9)%
New retail units -
heavy trucks 964 2.3% 1,288 2.9% (324) (25.2)%
Total new retail
units 27,226 63.8% 27,785 62.1% (559) (2.0)%
Used retail units 15,454 36.2% 16,941 37.9% (1,487) (8.8)%
Total retail units 42,680 100.0% 44,726 100.0% (2,046) (4.6)%
NEW UNITS SOLD
(INCLUDING FLEET) 29,361 29,676 (315) (1.1)%
REVENUE:
New retail -
light vehicles $792,166 53.1% $781,739 52.1% $10,427 1.3%
New retail -
heavy trucks 58,923 4.0% 81,0355.4% (22,112) (27.3)%
Total new retail
revenue 851,089 57.1% 862,774 57.5% (11,685) (1.4)%
Used retail 284,103 19.1% 300,752 20.0% (16,649) (5.5)%
Parts, service and
collision repair 176,707 11.8% 170,246 11.4% 6,461 3.8%
Finance and insurance,
net 42,210 2.8% 40,590 2.7% 1,620 4.0%
Total retail
revenue 1,354,109 1,374,362 (20,253) (1.5)%
Fleet 42,888 2.9% 39,009 2.6% 3,879 9.9%
Wholesale 94,037 6.3% 87,343 5.8% 6,694 7.7%
Total revenue $1,491,034 100.0% $1,500,714 100.0% $(9,680) (0.6)%
GROSS PROFIT:
New retail -
light vehicles $61,078 26.8% $59,420 26.1% $ 1,658 2.8%
New retail -
heavy trucks 2,236 1.0% 3,124 1.4% (888) (28.4)%
Total new retail
gross profit 63,314 27.8% 62,544 27.5% 770 1.2%
Used retail 31,237 13.7% 36,332 16.0% (5,095) (14.0)%
Parts, service and
collision repair 92,356 40.4% 87,093 38.3% 5,263 6.0%
Finance and
insurance, net 42,210 18.5% 40,590 17.9% 1,620 4.0%
Total retail
gross profit 229,117 226,559 2,558 1.1%
Fleet 686 0.3% 1,008 0.4% (322) (31.9)%
Wholesale (1,488) (0.7)% (178) (0.1)% (1,310)(736.0)%
Total gross
profit $228,315 100.0% $227,389 100.0% $926 0.4%
Adjusted SG&A
expenses $176,067 $171,722 $ 4,345 2.5%
Adjusted SG&A
expenses as a
percentage
of gross profit 77.1% 75.5% 1.6% 2.1%
REVENUE PER VEHICLE RETAILED:
New retail -
light vehicles $30,164 $29,503 $661 2.2%
New retail -
heavy trucks 61,123 62,915 (1,792) (2.8)%
Used retail 18,384 17,753 631 3.6%
GROSS PROFIT PER VEHICLE RETAILED:
New retail -
light vehicles $2,326 $2,243 $83 3.7%
New retail -
heavy trucks 2,320 2,425 (105) (4.3)%
Used retail 2,021 2,145 (124) (5.8)%
Finance and
insurance, net 989 908 81 8.9%
GROSS PROFIT MARGIN:
New retail -
light vehicles 7.7% 7.6% 0.1% 1.3%
New retail -
heavy trucks 3.8% 3.9% (0.1)% (2.6)%
Used retail 11.0% 12.1% (1.1)% (9.1)%
Parts, service and
collision repair 52.3% 51.2% 1.1% 2.1%
Asbury Automotive Group, Inc.
Selected Data
(Dollars in thousands, except per vehicle data)
(Unaudited)
Same Store for the Three Months
Ended September 30, Increase %
2007 2006 (Decrease) Change
RETAIL VEHICLES SOLD:
New retail units -
light vehicles 25,750 61.4% 26,497 59.2% (747) (2.8)%
New retail units -
heavy trucks 964 2.4% 1,288 2.9% (324) (25.2)%
Total new retail
units 26,714 63.8% 27,785 62.1% (1,071) (3.9)%
Used retail units 15,172 36.2% 16,941 37.9% (1,769) (10.4)%
Total retail units 41,886 100.0% 44,726 100.0% (2,840) (6.3)%
NEW UNITS SOLD
(INCLUDING FLEET) 28,849 29,676 (827) (2.8)%
REVENUE:
New retail -
light vehicles $776,000 53.1% $781,739 52.1% $(5,739) (0.7)%
New retail -
heavy trucks 58,923 4.0% 81,035 5.4% (22,112) (27.3)%
Total new retail
revenue 834,923 57.1% 862,774 57.5% (27,851) (3.2)%
Used retail 278,514 19.1% 300,752 20.0% (22,238) (7.4)%
Parts, service and
collision repair 173,475 11.9% 170,246 11.4% 3,229 1.9 %
Finance and insurance,
net 41,543 2.8% 40,590 2.7% 953 2.3 %
Total retail
revenue 1,328,455 1,374,362 (45,907) (3.3)%
Fleet 42,888 2.9% 39,009 2.6% 3,879 9.9 %
Wholesale 91,010 6.2% 87,343 5.8% 3,667 4.2 %
Total revenue $1,462,353100.0%$1,500,714 100.0%$(38,361) (2.6)%
GROSS PROFIT:
New retail -
light vehicles $59,787 26.7% $59,420 26.1% $367 0.6 %
New retail -
heavy trucks 2,236 1.0% 3,124 1.4% (888) (28.4)%
Total new retail
gross profit 62,023 27.7% 62,544 27.5% (521) (0.8)%
Used retail 30,660 13.7% 36,332 16.0% (5,672) (15.6)%
Parts, service and
collision repair 90,567 40.4% 87,093 38.3% 3,474 4.0 %
Finance and insurance,
net 41,543 18.5% 40,590 17.9% 953 2.3 %
Total retail gross
profit 224,793 226,559 (1,766) (0.8)%
Fleet 686 0.3% 1,008 0.4% (322) (31.9)%
Wholesale (1,425) (0.6)% (178) (0.1)% (1,247) (700.6)%
Total gross
profit $224,054 100.0% $227,389 100.0% $(3,335) (1.5)%
Adjusted SG&A
expenses $172,301 $171,722 $579 0.3 %
Adjusted SG&A expenses
as a percentage
of gross profit 76.9% 75.5% 1.4% 1.9 %
REVENUE PER VEHICLE RETAILED:
New retail -
light vehicles $30,136 $29,503 $633 2.1%
New retail -
heavy trucks 61,123 62,915 (1,792) (2.8)%
Used retail 18,357 17,753 604 3.4%
GROSS PROFIT PER VEHICLE RETAILED:
New retail -
light vehicles $2,322 $2,243 $79 3.5%
New retail -
heavy trucks 2,320 2,425 (105) (4.3)%
Used retail 2,021 2,145 (124) (5.8)%
Finance and insurance,
net 992 908 84 9.3%
GROSS PROFIT MARGIN:
New retail -
light vehicles 7.7% 7.6% 0.1% 1.3%
New retail -
heavy trucks 3.8% 3.9% (0.1)% (2.6)%
Used retail 11.0% 12.1% (1.1)% (9.1)%
Parts, service and
collision repair 52.2% 51.2% 1.0 % 2.0%
Asbury Automotive Group, Inc.
Selected Data
(Dollars in thousands, except per vehicle data)
(Unaudited)
As Reported for the Nine Months
Ended September 30, Increase %
2007 2006 (Decrease) Change
RETAIL VEHICLES SOLD:
New retail units -
light vehicles 75,740 59.6% 75,628 59.1% 112 0.1%
New retail units -
heavy trucks 2,956 2.3% 4,062 3.2% (1,106) (27.2)%
Total new retail
units 78,696 61.9% 79,690 62.3% (994) (1.2)%
Used retail units 48,480 38.1% 48,356 37.7% 124 0.3%
Total retail
units 127,176 100.0% 128,046 100.0% (870) (0.7)%
NEW UNITS SOLD
(INCLUDING FLEET) 85,503 85,874 (371) (0.4)%
REVENUE:
New retail -
light
vehicles $2,295,505 52.0% $2,251,286 51.6% $44,219 2.0%
New retail -
heavy trucks 174,623 4.0% 247,915 5.7% (73,292) (29.6)%
Total new
retail
revenue 2,470,128 56.0% 2,499,201 57.3% (29,073) (1.2)%
Used retail 881,458 20.0% 859,515 19.7% 21,943 2.6%
Parts, service
and collision
repair 527,168 11.9% 509,476 11.7% 17,692 3.5%
Finance and
insurance, net 124,470 2.8% 118,446 2.7% 6,024 5.1%
Total retail
revenue 4,003,224 3,986,638 16,586 0.4%
Fleet 139,581 3.2% 118,908 2.7% 20,673 17.4%
Wholesale 270,332 6.1% 259,734 5.9% 10,598 4.1%
Total
revenue $4,413,137 100.0% 4,365,280 100.0% $47,857 1.1%
GROSS PROFIT:
New retail -
light vehicles $175,143 25.6% $170,787 25.8% $4,356 2.6%
New retail -
heavy trucks 8,017 1.2% 9,670 1.5% (1,653) (17.1)%
Total new
retail
gross profit 183,160 26.8% 180,457 27.3% 2,703 1.5%
Used retail 101,591 14.8% 103,892 15.7% (2,301) (2.2)%
Parts, service
and collision
repair 274,146 40.0% 257,880 38.9% 16,266 6.3%
Finance and
insurance, net 124,470 18.2%18,446 17.9% 6,024 5.1%
Total retail
gross profit 683,367 660,675 22,692 3.4%
Fleet 2,599 0.4% 3,090 0.5% (491) (15.9)%
Wholesale (1,176) (0.2)% (1,024) (0.3)% (152) (14.8)%
Total gross
profit $684,790 100.0% $662,741 100.0% $22,049 3.3%
Adjusted gross
profit $684,790 $659,341 $25,449 3.9%
Adjusted SG&A
expenses $522,858 $502,813 $20,045 4.0%
Adjusted SG&A
expenses as a
percentage of
gross profit 76.4% 76.3% 0.1% 0.1%
REVENUE PER VEHICLE RETAILED:
New retail -
light vehicles $30,308 $29,768 $540 1.8%
New retail -
heavy trucks 59,074 61,033 (1,959) (3.2)%
Used retail 18,182 17,775 407 2.3%
GROSS PROFIT PER VEHICLE RETAILED:
New retail -
light vehicles $2,312 $2,258 $54 2.4%
New retail -
heavy trucks 2,712 2,381 331 13.9%
Used retail 2,096 2,148 (52) (2.4)%
Finance and
insurance, net 979 925 54 5.8%
Dealership generated
finance and
insurance, net 979 885 94 10.6%
GROSS PROFIT MARGIN:
New retail -
light vehicles 7.6% 7.6%
New retail -
heavy trucks 4.6% 3.9% 0.7% 17.9%
Used retail 11.5% 12.1% (0.6)% (5.0)%
Parts, service and
collision repair 52.0% 50.6% 1.4% 2.8%
Asbury Automotive Group, Inc.
Selected Data
(Dollars in thousands, except per vehicle data)
(Unaudited)
Same Store for the Nine Months
Ended September 30, Increase %
2007 2006 (Decrease) Change
RETAIL VEHICLES SOLD:
New retail units -
light vehicles 74,830 59.5% 75,628 59.1% (798) (1.1)%
New retail units -
heavy trucks 2,956 2.4% 4,062 3.2% (1,106) (27.2)%
Total new
retail units 77,786 61.9% 79,690 62.3% (1,904) (2.4)%
Used retail units 47,886 38.1% 48,356 37.7% (470) (1.0)%
Total retail
units 125,672 100.0% 128,046 100.0% (2,374) (1.9)%
NEW UNITS SOLD
(INCLUDING FLEET) 84,593 85,874 (1,281) (1.5)%
REVENUE:
New retail -
light vehicles $2,267,265 52.0% $2,251,286 51.6% $15,979 0.7%
New retail -
heavy trucks 174,623 4.0% 247,915 5.7% (73,292) (29.6)%
Total new retail
revenue 2,441,888 56.0% 2,499,201 57.3% (57,313) (2.3)%
Used retail 870,647 19.9% 859,515 19.7% 11,132 1.3%
Parts, service and
collision repair 521,571 12.0% 509,476 11.7% 12,095 2.4%
Finance and
insurance, net 123,245 2.8% 118,446 2.7% 4,799 4.1%
Total retail
revenue 3,957,351 3,986,638 (29,287) (0.7)%
Fleet 139,581 3.2% 18,908 2.7% 20,673 17.4%
Wholesale 265,758 6.1% 259,734 5.9% 6,024 2.3%
Total revenue $4,362,690 100.0% $4,365,280 100.0% $(2,590) (0.1)%
GROSS PROFIT:
New retail -
light vehicles $172,962 25.5% $170,787 25.8% $2,175 1.3%
New retail -
heavy trucks 8,017 1.2% 9,670 1.5% (1,653) (17.1)%
Total new retail
gross profit 180,979 26.7% 180,457 27.3% 522 0.3%
Used retail 100,431 14.9% 103,892 15.7% (3,461) (3.3)%
Parts, service and
collision repair 270,943 40.0% 257,880 38.9% 13,063 5.1%
Finance and
insurance, net 123,245 18.2% 118,446 17.9% 4,799 4.1%
Total retail
gross profit 675,598 660,675 14,923 2.3%
Fleet 2,599 0.4% 3,090 0.5% (491) (15.9)%
Wholesale (1,148) (0.2)% (1,024)(0.3)% (124) (12.1)%
Total gross
profit $677,049 100.0% $662,741 100.0% $14,308 2.2%
Adjusted gross
profit $677,049 $659,341 $17,708 2.7%
Adjusted SG&A
expenses $516,181 $502,813 $13,368 2.7%
Adjusted SG&A
expenses as a
percentage of
gross profit 76.2% 76.3% (0.1)% (0.1)%
REVENUE PER VEHICLE RETAILED:
New retail -
light vehicles $30,299 $29,768 $531 1.8%
New retail -
heavy trucks 59,074 61,033 (1,959) (3.2)%
Used retail 18,182 17,775 407 2.3%
GROSS PROFIT PER VEHICLE RETAILED:
New retail -
light vehicles $2,311 $2,258 $53 2.3%
New retail -
heavy trucks 2,712 2,381 331 13.9%
Used retail 2,097 2,148 (51) (2.4)%
Finance and
insurance, net 981 925 56 6.1%
Dealership generated
finance and
insurance, net 981 885 96 10.8%
GROSS PROFIT MARGIN:
New retail -
light vehicles 7.6% 7.6%
New retail -
heavy trucks 4.6% 3.9% 0.7% 17.9%
Used retail 11.5% 12.1% (0.6)% (5.0)%
Parts, service and
collision repair 51.9% 50.6% 1.3% 2.6%
Asbury Automotive Group, Inc.
Selected Data
(In thousands)
(Unaudited)
As of As of
September 30, 2007 December 31, 2006
BALANCE SHEET HIGHLIGHTS:
Cash and cash equivalents $40,794 $129,170
Inventories 745,428 775,313
Total current assets 1,138,020 1,293,064
Floor plan notes payable 617,187 700,777
Total current liabilities 776,251 881,055
CAPITALIZATION:
Long-term debt
(including current portion) $491,672 $477,154
Stockholders' equity 587,186 611,833
Total $ 1,078,858 $ 1,088,987
ASBURY AUTOMOTIVE GROUP, INC.
SUPPLEMENTAL DISCLOSURES REGARDING NON-GAAP FINANCIAL INFORMATION
(Dollars in thousands)
(Unaudited)
Our operations during the nine months ended September 30, 2007 were impacted by (i) expenses associated with the secondary stock offerings of our former private equity owners, (ii) the retirement benefit paid to our former Chief Executive Officer and (iii) the losses associated with the extinguishment of certain of our senior subordinated notes. Our operations during nine months ended September 30, 2006 were impacted by (i) our decision to abandon certain strategic projects, (ii) expenses associated with the secondary stock offerings of our former private equity owners, (iii) the losses associated with the extinguishment of certain of our senior subordinated notes, and (iv) the one-time gain recognized on the sale of a pool of extended warranty contracts. We believe that excluding these items provides a more accurate measure of our operations for the nine months ended September 30, 2007 and 2006.
As Reported
for the Three Months
Ended September 30, Increase
2007 2006 (Decrease) % Change
SG&A expenses $176,067 $172,568 $3,499 2.0%
Secondary stock
offering expenses - (846)
Adjusted SG&A
expenses $176,067 $171,722 $4,345 3.0%
Gross profit $228,315 $227,389 $926 -%
Adjusted SG&A
expenses as a
percentage of gross
profit 77.1% 75.5% 1.6% 2.1%
Same Store for the
Three Months Ended
September 30, Increase
2007 2006 (Decrease) % Change
SG&A expenses $172,301 $172,568 $(267) - %
Secondary stock
offering expenses - (846)
Adjusted SG&A
expenses $172,301 $171,722 $579 - %
Gross profit $224,054 $227,389 $(3,335) (1.0)%
Adjusted SG&A
expenses as a
percentage of gross
profit 76.9% 75.5% 1.4% 1.9%
As Reported for the
Nine Months Ended
September 30, Increase
2007 2006 (Decrease) % Change
SG&A expenses $526,078 $505,317 $20,761 4.0%
Secondary stock
offering expenses (270) (846)
Abandoned strategic
project expenses - (1,658)
Retirement benefits
expense (2,950) -
Adjusted SG&A
expenses $522,858 $502,813 $20,045 4.0%
Gross profit $684,790 $662,741
Corporate generated
F&I gain - (3,400)
Adjusted gross profit $684,790 $659,341 $25,449 4.0%
Adjusted SG&A
expenses as a
percentage of
adjusted gross profit 76.4% 76.3% 0.1% 0.1%
Same Store for the
Nine Months Ended
September 30, Increase
2007 2006 (Decrease) % Change
SG&A expenses $519,401 $505,317 $14,084 3.0%
Secondary stock
offering expenses (270) (846)
Abandoned strategic
project expenses - (1,658)
Retirement benefits
expense (2,950) -
Adjusted SG&A
expenses $516,181 $502,813 $13,368 3.0%
Gross profit $677,049 $662,741
Corporate generated
F&I gain - (3,400)
Adjusted gross
profit $677,049 $659,341 $17,708 3.0%
Adjusted SG&A
expenses as a
percentage of
adjusted gross profit 76.2% 76.3% (0.1)% (0.1)%
As Reported for the
Three Months Ended
September 30, Increase
2007 2006 (Decrease) % Change
Net income $19,010 $17,179 $1,831 11%
Discontinued
operations,
net of tax 210 1,211
Income from continuing
operations 19,220 18,390 830 5%
Loss on extinguishment
of long-term debt,
net of tax - 571
Secondary stock
offering expenses - 846
Adjusted income from
continuing
operations $19,220 $19,807 $(587) (3)%
Net income $0.57 $0.51 $0.06 12%
Discontinued operations,
net of tax 0.01 0.03
Income from continuing
operations 0.58 0.54 0.04 7%
Loss on extinguishment
of long-term debt,
net of tax - 0.02
Secondary stock
offering expenses - 0.03
Adjusted income from
continuing operations $0.58 $0.59 $(0.01) (2)%
Weighted average
common shares
outstanding
(diluted): 33,244 33,841
As Reported for the
Nine Months Ended
September 30,Increase
2007 2006 (Decrease) % Change
Net income $40,002 $48,736 $ (8,734) (18)%
Discontinued
operations,
net of tax 2,793 2,867
Income from continuing
operations 42,795 51,603 (8,808) (17)%
Corporate generated
F&I gain, net of tax - (2,125)
Loss on extinguishment of
long-term debt,
net of tax 11,614 571
Abandoned strategic
project expense,
net of tax - 1,036
Secondary stock
offering expenses 270 846
Retirement benefits
expense, net of tax 1,850 -
Adjusted income from
continuing operations $56,529 $51,931 $ 4,598 9%
Net income $1.19 $1.44 $(0.25) (17)%
Discontinued operations,
net of tax 0.08 0.08
Income from continuing
operations 1.27 1.52 (0.25) (16)%
Corporate generated
F&I gain, net of tax - (0.06)
Loss on extinguishment of
long-term debt,
net of tax 0.35 0.02
Abandoned strategic
project expense,
net of tax - 0.03
Secondary stock
offering expenses 0.01 0.02
Retirement benefits
expense, net of tax 0.05 -
Adjusted income from
continuing operations $1.68 $1.53 $0.15 10%
Weighted average common
shares outstanding
(diluted): 33,693 33,853
Asbury Automotive Group, Inc.
Supplemental Disclosures Regarding Non-GAAP Financial Information
(In thousands, except vehicle and per vehicle date)
(Unaudited)
We evaluate finance and insurance gross profit performance on a per vehicle retailed ("PVR") basis by dividing total finance and insurance gross profit by the number of retail vehicles sold. During 2003, we renegotiated a contract with a third party finance and insurance product provider, which resulted in the recognition of income in 2006 that was not attributable to retail vehicles sold during 2006 (referred to as "corporated generated finance and insurance gross profit"). During the second quarter of 2006, we decided to sell our remaining interest in the pool of extended service contracts which had been the sources of our corporate generated finance and insurance gross profit, which resulted in the recognition of a $3.4 million gain on the sale ("corporate generated finance and insurance gain"). We believe that dealership generated finance and insurance PVR, which excludes the additional amounts derived from contracts negotiated by our corporate office, provides a more accurate measure of our finance and insurance operating performance. The following table reconciles finance and insurance gross profit to dealership generated finance and insurance gross profit, and provides the necessary components to calculate dealership generated finance and insurance gross profit PVR.
As Reported for the Same Store for the
Nine Months Ended Nine Months Ended
September 30, September 30,
2007 2006 2007 2006
RECONCILIATION OF FINANCE AND
INSURANCE GROSS PROFIT TO
DEALERSHIP GENERATED FINANCE
AND INSURANCE GROSS PROFIT:
Finance and insurance, net $124,470 $118,446 $123,245 $118,446
Less :corporate generated
finance and insurance - (1,685) - (1,685)
Less: corporate generated
finance and insurance gain - (3,400) - (3,400)
Dealership generated
finance and insurance, net $124,470 $113,361 $123,245 $113,361
RETAIL VEHICLES SOLD:
New retail units 78,696 79,690 77,786 79,690
Used retail units 48,480 48,356 47,886 48,356
Total retail units 127,176 128,046 125,672 128,046
Finance and insurance PVR, net $979 $925 $981 $925
Dealership generated finance
and insurance PVR, net $979 $885 $981 $885
Asbury Automotive Group, Inc.
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