ASBURY AUTOMOTIVE GROUP, INC. DULUTH, Ga., Oct. 25, 2016 /PRNewswire/ -- Asbury Automotive Group, Inc. (NYSE: ABG), one of the largest automotive retail and service companies in the U.S., today reported net income for the third quarter 2016 of $32.4 million, or $1.47 per diluted share, compared to $51.1 million, or $1.96 per diluted share in the prior year quarter. Adjusted net income (a non-GAAP measure) for the third quarter 2016 was $33.5 million, or $1.52 per diluted share, compared to adjusted net income of $37.2 million, or $1.43 per diluted share in the prior year quarter, a 6% increase in adjusted earnings per share. Adjusted net income for the third quarter 2016 excluded $1.8 million in pre-tax real estate related charges, or $0.05 per diluted share. Adjusted net income for the third quarter 2015 excluded $21.4 million in pre-tax gain on divestitures, or $0.50 per diluted share, and a $0.8 million benefit from a lower effective tax rate, or $0.03 per diluted share. See attached reconciliation for reported adjustments. Total revenue for the third quarter was $1.7 billion, down 2% from the prior year period principally attributable to strategic divestitures over the past year; total revenue on a same-store basis (a non-GAAP measure) was up 1% from the prior year period.
Third Quarter 2016 Operational Summary (compared to prior year period):
Same store:
-- Total revenues increased 1%; gross profit flat
-- New vehicle revenue was flat; gross profit down 7%
-- Used vehicle retail revenue down 1%; gross profit down 6%
-- Finance and insurance revenue down 3%
-- Parts and service revenue up 8%; gross profit up 7%
-- Parts and service customer pay gross profit up 7%
Total store:
-- SG&A as a percentage of gross profit was up 70 basis points to 69.9%
-- Total company adjusted income from operations (a non-GAAP measure) as a
percentage of revenue was 4.3%
"Despite a very competitive market for vehicle sales and margins, our strong parts and service customer pay performance combined with capital deployment enabled us to deliver 6% EPS growth." said Craig Monaghan, Asbury's President and Chief Executive Officer.
"We continue to grow our parts and service business, with gross profit up 7% from last year on a same store basis," said Asbury's Executive Vice President and Chief Operating Officer, David Hult. "This was a direct result of our team's commitment to improve our high margin parts and service business. Their hard work helped offset the pressure in other areas of the business to deliver flat same store gross profit."
For the nine-month period ended September 30, 2016, the Company reported net income of $100.1 million, or $4.37 per diluted share, compared to net income of $128.1 million, or $4.76 per diluted share in the prior year period. Adjusted net income for the nine-month period ended September 30, 2016 was $103.3 million, or $4.51 per diluted share, compared to $114.2 million, or $4.25 per diluted share in the prior year quarter, a 6% increase in adjusted earnings per share.
The conference call will be today at 10:00 a.m. Eastern Time and will also be simulcast live on the Internet. The simulcast can be accessed by logging onto www.asburyauto.com or www.ccbn.com. A replay will be available at these sites for 30 days. In addition, a live audio of the call will be accessible to the public by calling (719) 325-2118 (domestic), or (800) 311-6662 (international); passcode - 2712732. Callers should dial in approximately 5 to 10 minutes before the call begins. A conference call replay will be available two hours following the call for seven days, and can be accessed by calling (888) 203-1112 (domestic), or (719) 457-0820 (international); passcode - 2712732.
About Asbury Automotive Group, Inc.
Asbury Automotive Group, Inc. ("Asbury"), a Fortune 500 company headquartered in Duluth, Georgia, a suburb of Atlanta, is one of the largest automotive retailers in the U.S. Built through a combination of organic growth and a series of strategic acquisitions, Asbury operated 81 dealership locations, encompassing 98 franchises for the sale and servicing of 28 domestic and foreign brands of new vehicles as of September 30, 2016. Asbury also operated 25 collision repair centers and 4 stand-alone used vehicle stores. Asbury offers customers an extensive range of automotive products and services, including new and used vehicle sales and related financing and insurance, vehicle maintenance and repair services, replacement parts and service contracts.
Forward-Looking Statements
This press release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are statements other than historical fact, and may include statements relating to goals, plans, market conditions and projections regarding Asbury's financial position, liquidity, results of operations, market position and dealership portfolio, and other initiatives and future business strategy. These statements are based on management's current expectations and beliefs and involve significant risks and uncertainties that may cause results to differ materially from those set forth in the statements. These risks and uncertainties include, among other things, 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 U.S. Securities and Exchange Commission from time to time, including its most recent annual report on Form 10-K and any subsequently filed quarterly reports on Form 10-Q. We undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future events or otherwise.
ASBURY AUTOMOTIVE GROUP, INC.
CONSOLIDATED STATEMENTS OF INCOME (In millions, except per share data)
(Unaudited)
For the Three Months Ended Increase %
September 30, (Decrease) Change
------------- --------- ------
2016 2015
---- ----
REVENUE:
New vehicle $940.9 $964.0 $(23.1) (2)%
Used vehicle:
Retail 423.3 438.8 (15.5) (4)%
Wholesale 53.1 54.2 (1.1) (2)%
---- ----
Total used vehicle 476.4 493.0 (16.6) (3)%
Parts and service 200.4 190.6 9.8 5%
Finance and insurance, net 65.4 68.8 (3.4) (5)%
---- ----
TOTAL REVENUE 1,683.1 1,716.4 (33.3) (2)%
GROSS PROFIT:
New vehicle 47.5 52.3 (4.8) (9)%
Used vehicle:
Retail 31.9 35.2 (3.3) (9)%
Wholesale (2.1) (1.8) (0.3) (17)%
Total used vehicle 29.8 33.4 (3.6) (11)%
Parts and service 123.0 118.2 4.8 4%
Finance and insurance, net 65.4 68.8 (3.4) (5)%
---- ----
TOTAL GROSS PROFIT 265.7 272.7 (7.0) (3)%
OPERATING EXPENSES (INCOME):
Selling, general and administrative 185.7 188.8 (3.1) (2)%
Depreciation and amortization 7.8 7.5 0.3 4%
Other operating expense (income), net 1.5 (0.2) 1.7 NM
--- ----
INCOME FROM OPERATIONS 70.7 76.6 (5.9) (8)%
OTHER EXPENSES (INCOME):
Floor plan interest expense 5.0 4.1 0.9 22%
Other interest expense, net 13.2 10.7 2.5 23%
Swap interest expense 0.8 1.0 (0.2) (20)%
Gain on divestitures - (21.4) 21.4 100%
--- -----
Total other expenses, net 19.0 (5.6) 24.6 NM
---- ----
INCOME FROM CONTINUING OPERATIONS 51.7 82.2 (30.5) (37)%
BEFORE INCOME TAXES
Income tax expense 19.3 31.0 (11.7) (38)%
---- ----
INCOME FROM CONTINUING OPERATIONS 32.4 51.2 (18.8) (37)%
Discontinued operations, net of tax - (0.1) 0.1 100%
--- ----
NET INCOME $32.4 $51.1 $(18.7) (37)%
===== =====
EARNINGS PER COMMON SHARE:
Basic-
Continuing operations $1.47 $1.98 $(0.51) (26)%
Discontinued operations - (0.01) 0.01 100%
--- -----
Net income $1.47 $1.97 $(0.50) (25)%
===== =====
Diluted-
Continuing operations $1.47 $1.96 $(0.49) (25)%
Discontinued operations - - - - %
--- ---
Net income $1.47 $1.96 $(0.49) (25)%
===== =====
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
Basic 22.0 25.9 (3.9) (15)%
Restricted stock - 0.1 (0.1) (100)%
Performance share units 0.1 0.1 - - %
--- ---
Diluted 22.1 26.1 (4.0) (15)%
==== ====
______________________________
NM--Not Meaningful
ASBURY AUTOMOTIVE GROUP, INC.
KEY OPERATING HIGHLIGHTS (In millions, except per unit data)
(Unaudited)
For the Three Months Ended Increase %
September 30, (Decrease) Change
------------- --------- ------
2016 2015
---- ----
Unit sales
----------
New vehicle:
Luxury 6,061 6,381 (320) (5)%
Import 15,522 16,501 (979) (6)%
Domestic 5,232 5,482 (250) (5)%
----- -----
Total new vehicle 26,815 28,364 (1,549) (5)%
Used vehicle retail 20,030 21,306 (1,276) (6)%
Used to new ratio 74.7% 75.1% (40) bps
Average selling price
---------------------
New vehicle $35,089 $33,987 $1,102 3%
Used vehicle retail 21,133 20,595 538 3%
Average gross profit per unit
-----------------------------
New vehicle:
Luxury $3,432 $3,197 $235 7%
Import 1,179 1,242 (63) (5)%
Domestic 1,606 2,080 (474) (23)%
Total new vehicle 1,771 1,844 (73) (4)%
Used vehicle 1,593 1,652 (59) (4)%
Finance and insurance, net 1,396 1,385 11 1%
Front end yield (1) 3,091 3,147 (56) (2)%
Gross margin
------------
New vehicle:
Luxury 6.5% 6.3% 20 bps
Import 4.3% 4.6% (30) bps
Domestic 4.3% 5.7% (140) bps
Total new vehicle 5.0% 5.4% (40) bps
Used vehicle retail 7.5% 8.0% (50) bps
Parts and service 61.4% 62.0% (60) bps
Total gross profit margin 15.8% 15.9% (10) bps
SG&A metrics
------------
Rent expense $7.6 $8.0 $(0.4) (5)%
Total SG&A as a percentage of gross profit 69.9% 69.2% 70 bps
SG&A, excluding rent expense as a percent of gross profit 67.0% 66.3% 70 bps
Operating metrics
-----------------
Income from operations as a percentage of revenue 4.2% 4.5% (30) bps
Income from operations as a percentage of gross profit 26.6% 28.1% (150) bps
Adjusted income from operations as a percentage of revenue 4.3% 4.5% (20) bps
Adjusted income from operations as a percentage of gross profit 27.3% 28.1% (80) bps
Revenue mix
-----------
New vehicle 55.9% 56.2%
Used vehicle retail 25.1% 25.5%
Used vehicle wholesale 3.2% 3.2%
Parts and service 11.9% 11.1%
Finance and insurance 3.9% 4.0%
--- ---
Total revenue 100.0% 100.0%
===== =====
Gross profit mix
----------------
New vehicle 17.9% 19.2%
Used vehicle retail 12.0% 13.0%
Used vehicle wholesale (0.8)% (0.7)%
Parts and service 46.3% 43.3%
Finance and insurance 24.6% 25.2%
---- ----
Total gross profit 100.0% 100.0%
===== =====
_____________________________
(1) Front end yield is calculated as gross profit from new vehicles, used retail vehicles and finance and insurance (net), divided by combined new and used retail unit sales.
ASBURY AUTOMOTIVE GROUP, INC.
SAME STORE OPERATING HIGHLIGHTS (In millions)
(Unaudited)
For the Three Months Ended Increase %
September 30, (Decrease) Change
------------- --------- ------
2016 2015
---- ----
Revenue
-------
New vehicle:
Luxury $318.2 $321.8 $(3.6) (1)%
Import 423.2 417.6 5.6 1%
Domestic 195.5 199.2 (3.7) (2)%
----- -----
Total new vehicle 936.9 938.6 (1.7) - %
Used Vehicle:
Retail 419.6 422.0 (2.4) (1)%
Wholesale 52.7 52.3 0.4 1%
---- ----
Total used vehicle 472.3 474.3 (2.0) - %
Parts and service 199.2 185.2 14.0 8%
Finance and insurance 64.7 66.4 (1.7) (3)%
---- ----
Total revenue $1,673.1 $1,664.5 $8.6 1%
======== ========
Gross profit
------------
New vehicle:
Luxury $20.8 $20.4 $0.4 2%
Import 18.2 19.4 (1.2) (6)%
Domestic 8.4 11.4 (3.0) (26)%
--- ----
Total new vehicle 47.4 51.2 (3.8) (7)%
Used Vehicle:
Retail 31.9 34.0 (2.1) (6)%
Wholesale (2.0) (1.6) (0.4) (25)%
---- ----
Total used vehicle 29.9 32.4 (2.5) (8)%
Parts and service:
Customer pay 66.7 62.3 4.4 7%
Warranty 19.8 17.8 2.0 11%
Wholesale parts 5.0 5.0 - - %
--- ---
Parts and service, excluding reconditioning and preparation 91.5 85.1 6.4 8%
Reconditioning and preparation 30.7 29.6 1.1 4%
Total parts and service 122.2 114.7 7.5 7%
Finance and insurance 64.7 66.4 (1.7) (3)%
---- ----
Total gross profit $264.2 $264.7 $(0.5) - %
====== ======
SG&A expense $184.0 $182.0 $2.0 1%
====== ======
SG&A expense as a percentage of gross profit 69.6% 68.8% 80 bps
==== ====
_____________________________
Same store amounts consist of information from dealerships for identical months in each comparative period, commencing with the first month we owned the dealership. Additionally, amounts related to divested dealerships are excluded from each comparative period.
ASBURY AUTOMOTIVE GROUP, INC.
SAME STORE OPERATING HIGHLIGHTS (Continued)
(Unaudited)
For the Three Months Ended September
30, Increase %
(Decrease) Change
------
2016 2015
---- ----
Unit sales
----------
New vehicle:
Luxury 6,061 6,371 (310) (5)%
Import 15,363 15,563 (200) (1)%
Domestic 5,232 5,482 (250) (5)%
----- -----
Total new vehicle 26,656 27,416 (760) (3)%
Used vehicle retail 19,774 20,294 (520) (3)%
Used to new ratio 74.2% 74.0% 20 bps
Average selling price
---------------------
New vehicle $35,148 $34,235 $913 3%
Used vehicle retail 21,220 20,794 426 2%
Average gross profit per unit
-----------------------------
New vehicle:
Luxury $3,432 $3,202 $230 7%
Import 1,185 1,247 (62) (5)%
Domestic 1,606 2,080 (474) (23)%
Total new vehicle 1,778 1,868 (90) (5)%
Used vehicle 1,613 1,675 (62) (4)%
Finance and insurance, net 1,393 1,392 1 - %
Front end yield (1) 3,101 3,178 (77) (2)%
Gross margin
------------
New vehicle:
Luxury 6.5% 6.3% 20 bps
Import 4.3% 4.6% (30) bps
Domestic 4.3% 5.7% (140) bps
Total new vehicle 5.1% 5.5% (40) bps
Used vehicle retail 7.6% 8.1% (50) bps
Parts and service:
Parts and service, excluding reconditioning and preparation 45.9% 46.0% (10) bps
Parts and service, including reconditioning and preparation 61.3% 61.9% (60) bps
Total gross profit margin 15.8% 15.9% (10) bps
_____________________________
Same store amounts consist of information from dealerships for identical months in each comparative period, commencing with the first month we owned the dealership. Additionally, amounts related to divested dealerships are excluded from each comparative period.
(1) Front end yield is calculated as gross profit from new vehicles, used retail vehicles and finance and insurance (net), divided by combined new and used retail unit sales.
ASBURY AUTOMOTIVE GROUP, INC.
CONSOLIDATED STATEMENTS OF INCOME
(In millions, except per share data)
(Unaudited)
For the Nine Months Ended Increase %
September 30, (Decrease) Change
------------- --------- ------
2016 2015
---- ----
REVENUE:
New vehicle $2,676.3 $2,720.7 $(44.4) (2)%
Used vehicle:
Retail 1,254.7 1,309.8 (55.1) (4)%
Wholesale 152.8 164.2 (11.4) (7)%
Total used vehicle 1,407.5 1,474.0 (66.5) (5)%
Parts and service 584.9 555.5 29.4 5%
Finance and insurance, net 192.6 197.6 (5.0) (3)%
----- -----
TOTAL REVENUE 4,861.3 4,947.8 (86.5) (2)%
GROSS PROFIT:
New vehicle 139.7 152.5 (12.8) (8)%
Used vehicle:
Retail 101.4 105.6 (4.2) (4)%
Wholesale (1.6) (3.2) 1.6 50%
Total used vehicle 99.8 102.4 (2.6) (3)%
Parts and service 362.0 347.9 14.1 4%
Finance and insurance, net 192.6 197.6 (5.0) (3)%
----- -----
TOTAL GROSS PROFIT 794.1 800.4 (6.3) (1)%
OPERATING EXPENSES:
Selling, general and administrative 549.2 546.4 2.8 1%
Depreciation and amortization 23.0 22.0 1.0 5%
Other operating expense, net 4.2 0.1 4.1 NM
--- ---
INCOME FROM OPERATIONS 217.7 231.9 (14.2) (6)%
OTHER EXPENSES (INCOME):
Floor plan interest expense 14.4 12.0 2.4 20%
Other interest expense, net 40.0 31.5 8.5 27%
Swap interest expense 2.4 2.0 0.4 20%
Gain on divestitures - (21.4) 21.4 100%
Total other expenses, net 56.8 24.1 32.7 136%
---- ----
INCOME FROM CONTINUING OPERATIONS 160.9 207.8 (46.9) (23)%
BEFORE INCOME TAXES
Income tax expense 60.8 79.6 (18.8) (24)%
---- ----
INCOME FROM CONTINUING OPERATIONS 100.1 128.2 (28.1) (22)%
Discontinued operations, net of tax - (0.1) 0.1 100%
--- ----
NET INCOME $100.1 $128.1 $(28.0) (22)%
====== ======
EARNINGS PER COMMON SHARE:
Basic-
Continuing operations $4.39 $4.80 $(0.41) (9)%
Discontinued operations - - - - %
--- ---
Net income $4.39 $4.80 $(0.41) (9)%
===== =====
Diluted-
Continuing operations $4.37 $4.77 $(0.40) (8)%
Discontinued operations - (0.01) 0.01 100%
--- -----
Net income $4.37 $4.76 $(0.39) (8)%
===== =====
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
Basic 22.8 26.7 (3.9) (15)%
Restricted stock - 0.1 (0.1) (100)%
Performance share units 0.1 0.1 - - %
--- ---
Diluted 22.9 26.9 (4.0) (15)%
==== ====
______________________________
NM--Not Meaningful
ASBURY AUTOMOTIVE GROUP, INC.
KEY OPERATING HIGHLIGHTS (In millions, except per unit data)
(Unaudited)
For the Nine Months Ended Increase %
September 30, (Decrease) Change
------------- --------- ------
2016 2015
---- ----
Unit sales
----------
New vehicle:
Luxury 17,469 18,632 (1,163) (6)%
Import 43,814 47,052 (3,238) (7)%
Domestic 15,326 14,137 1,189 8%
------ ------
Total new vehicle 76,609 79,821 (3,212) (4)%
Used vehicle retail 59,378 63,164 (3,786) (6)%
Used to new ratio 77.5% 79.1% (160) bps
Average selling price
---------------------
New vehicle $34,935 $34,085 $850 2%
Used vehicle retail 21,131 20,736 395 2%
Average gross profit per unit
-----------------------------
New vehicle:
Luxury $3,515 $3,413 $102 3%
Import 1,207 1,262 (55) (4)%
Domestic 1,657 2,087 (430) (21)%
Total new vehicle 1,824 1,911 (87) (5)%
Used vehicle 1,708 1,672 36 2%
Finance and insurance, net 1,416 1,382 34 2%
Front end yield (1) 3,189 3,187 2 - %
Gross margin
------------
New vehicle:
Luxury 6.7% 6.7% - bps
Import 4.4% 4.7% (30) bps
Domestic 4.5% 5.8% (130) bps
Total new vehicle 5.2% 5.6% (40) bps
Used vehicle retail 8.1% 8.1% - bps
Parts and service 61.9% 62.6% (70) bps
Total gross profit margin 16.3% 16.2% 10 bps
SG&A metrics
------------
Rent expense $23.0 $23.5 $(0.5) (2)%
Total SG&A as a percentage of gross profit 69.2% 68.3% 90 bps
SG&A, excluding rent expense as a percent of gross profit 66.3% 65.3% 100 bps
Operating metrics
-----------------
Income from operations as a percentage of revenue 4.5% 4.7% (20) bps
Income from operations as a percentage of gross profit 27.4% 29.0% (160) bps
Adjusted income from operations as a percentage of revenue 4.6% 4.7% (10) bps
Adjusted income from operations as a percentage of gross profit 28.1% 29.0% (90) bps
Revenue mix
-----------
New vehicle 55.1% 55.0%
Used vehicle retail 25.8% 26.5%
Used vehicle wholesale 3.1% 3.3%
Parts and service 12.0% 11.2%
Finance and insurance 4.0% 4.0%
--- ---
Total revenue 100.0% 100.0%
===== =====
Gross profit mix
----------------
New vehicle 17.6% 19.1%
Used vehicle retail 12.7% 13.1%
Used vehicle wholesale (0.2)% (0.4)%
Parts and service 45.6% 43.5%
Finance and insurance 24.3% 24.7%
---- ----
Total gross profit 100.0% 100.0%
===== =====
_____________________________
(1) Front end yield is calculated as gross profit from new vehicles, used retail vehicles and finance and insurance (net), divided by combined new and used retail unit sales.
ASBURY AUTOMOTIVE GROUP, INC.
SAME STORE OPERATING HIGHLIGHTS (In millions)
(Unaudited)
For the Nine Months Ended Increase %
September 30, (Decrease) Change
------------- --------- ------
2016 2015
---- ----
Revenue
-------
New vehicle:
Luxury $909.7 $928.1 $(18.4) (2)%
Import 1,176.3 1,178.0 (1.7) - %
Domestic 530.0 506.5 23.5 5%
----- -----
Total new vehicle 2,616.0 2,612.6 3.4 - %
Used Vehicle:
Retail 1,227.5 1,243.2 (15.7) (1)%
Wholesale 150.4 156.3 (5.9) (4)%
----- -----
Total used vehicle 1,377.9 1,399.5 (21.6) (2)%
Parts and service 571.7 531.6 40.1 8%
Finance and insurance 187.4 189.4 (2.0) (1)%
----- -----
Total revenue $4,753.0 $4,733.1 $19.9 - %
======== ========
Gross profit
------------
New vehicle:
Luxury $61.4 $62.5 $(1.1) (2)%
Import 51.9 55.5 (3.6) (6)%
Domestic 23.4 29.5 (6.1) (21)%
---- ----
Total new vehicle 136.7 147.5 (10.8) (7)%
Used Vehicle:
Retail 99.1 101.0 (1.9) (2)%
Wholesale (1.4) (2.7) 1.3 48%
---- ----
Total used vehicle 97.7 98.3 (0.6) (1)%
Parts and service:
Customer pay 198.2 182.5 15.7 9%
Warranty 52.7 49.9 2.8 6%
Wholesale parts 15.0 14.9 0.1 1%
---- ----
Parts and service, excluding reconditioning 265.9 247.3 18.6 8%
and preparation
Reconditioning and preparation 88.4 86.0 2.4 3%
---- ----
Total parts and service 354.3 333.3 21.0 6%
Finance and insurance 187.4 189.4 (2.0) (1)%
----- -----
Total gross profit $776.1 $768.5 $7.6 1%
====== ======
SG&A expense $537.1 $521.5 $15.6 3%
====== ======
SG&A expense as a percentage of gross profit 69.2% 67.9% 130 bps
==== ====
_____________________________
NM--Not Meaningful
Same store amounts consist of information from dealerships for identical months in each comparative period, commencing with the first month we owned the dealership. Additionally, amounts related to divested dealerships are excluded from each comparative period.
ASBURY AUTOMOTIVE GROUP, INC.
SAME STORE OPERATING HIGHLIGHTS (Continued)
(Unaudited)
For the Nine Months Ended Increase %
September 30, (Decrease) Change
------------- --------- ------
2016 2015
---- ----
Unit sales
----------
New vehicle:
Luxury 17,469 18,254 (785) (4)%
Import 42,693 43,844 (1,151) (3)%
Domestic 14,414 14,137 277 2%
------ ------
Total new vehicle 74,576 76,235 (1,659) (2)%
Used vehicle retail 57,756 59,595 (1,839) (3)%
Used to new ratio 77.4% 78.2% (80) bps
Average selling price
---------------------
New vehicle $35,078 $34,270 $808 2%
Used vehicle retail 21,253 20,861 392 2%
Average gross profit per unit
-----------------------------
New vehicle:
Luxury $3,515 $3,424 $91 3%
Import 1,216 1,266 (50) (4)%
Domestic 1,623 2,087 (464) (22)%
Total new vehicle 1,833 1,935 (102) (5)%
Used vehicle 1,716 1,695 21 1%
Finance and insurance, net 1,416 1,394 22 2%
Front end yield (1) 3,198 3,224 (26) (1)%
Gross margin
------------
New vehicle:
Luxury 6.7% 6.7% - bps
Import 4.4% 4.7% (30) bps
Domestic 4.4% 5.8% (140) bps
Total new vehicle 5.2% 5.6% (40) bps
Used vehicle retail 8.1% 8.1% - bps
Parts and service:
Parts and service, excluding reconditioning and preparation 46.5% 46.5% - bps
Parts and service, including reconditioning and preparation 62.0% 62.7% (70) bps
Total gross profit margin 16.3% 16.2% 10 bps
_____________________________
Same store amounts consist of information from dealerships for identical months in each comparative period, commencing with the first month we owned the dealership. Additionally, amounts related to divested dealerships are excluded from each comparative period.
(1) Front end yield is calculated as gross profit from new vehicles, used retail vehicles and finance and insurance (net), divided by combined new and used retail unit sales.
ASBURY AUTOMOTIVE GROUP, INC.
Additional Disclosures (In millions)
(Unaudited)
September 30,
2016 December 31, Increase % Change
2015
(Decrease)
---
SELECTED BALANCE SHEET DATA
Cash and cash equivalents $3.7 $2.8 $0.9 32%
New vehicle inventory 694.9 739.2 (44.3) (6)%
Used vehicle inventory 156.4 134.1 22.3 17%
Parts inventory 41.1 43.9 (2.8) (6)%
Total current assets 1,337.1 1,343.0 (5.9) - %
Floor plan notes payable 769.5 712.2 57.3 8%
Total current liabilities 1,099.8 1,007.8 92.0 9%
CAPITALIZATION:
Long-term debt (including current portion) $930.2 $954.3 $(24.1) (3)%
Shareholders' equity 255.6 314.5 (58.9) (19)%
----- -----
Total $1,185.8 $1,268.8 $(83.0) (7)%
======== ========
September 30, December 31,
2016 2015
---- ----
DAYS SUPPLY
New vehicle inventory 72 62
Used vehicle inventory 40 30
_____________________________
Days supply of inventory is calculated based on new and used inventory levels at the end of each reporting period and a 30-day historical cost of sales
Brand Mix - New Vehicle Revenue by Brand-
For the Nine Months
Ended
September 30,
-------------
2016 2015
---- ----
Luxury:
BMW 6% 8%
Mercedes-Benz 7% 7%
Lexus 7% 6%
Acura 4% 5%
Infiniti 3% 3%
Other luxury 7% 6%
--- ---
Total luxury 34% 35%
Imports:
Honda 17% 16%
Nissan 11% 12%
Toyota 13% 12%
Other imports 4% 6%
--- ---
Total imports 45% 46%
Domestic:
Ford 13% 11%
Dodge 3% 3%
Chevrolet 3% 3%
Other domestics 2% 2%
--- ---
Total domestic 21% 19%
Total New Vehicle Revenue 100% 100%
=== ===
ASBURY AUTOMOTIVE GROUP INC.
Supplemental Disclosures
(Unaudited)
Non-GAAP Financial Disclosure and Reconciliation
In addition to evaluating the financial condition and results of our operations in accordance with GAAP, from time to time management evaluates and analyzes results and any impact on the Company of strategic decisions and actions relating to, among other things, cost reduction, growth, and profitability improvement initiatives, and other events outside of normal, or "core," business and operations, by considering certain alternative financial measures not prepared in accordance with GAAP. These measures include "Adjusted leverage ratio," "Adjusted income from operations," "Adjusted net income," and "Adjusted diluted earnings per share ("EPS") from continuing operations." Further, management assesses the organic growth of our revenue and gross profit on a same store basis. We believe that our assessment on a same store basis represents an important indicator of comparative financial performance and provides relevant information to assess our performance at our existing locations. Same store amounts consist of information from dealerships for identical months in each comparative period, commencing with the first month we owned the dealership. Additionally, amounts related to divested dealerships are excluded from each comparative period. Non-GAAP measures do not have definitions under GAAP and may be defined differently by and not be comparable to similarly titled measures used by other companies. As a result, any non-GAAP financial measures considered and evaluated by management are reviewed in conjunction with a review of the most directly comparable measures calculated in accordance with GAAP. Management cautions investors not to place undue reliance on such non-GAAP measures, but also to consider them with the most directly comparable GAAP measures. In their evaluation of results from time to time, management excludes items that do not arise directly from core operations, or are otherwise of an unusual or non-recurring nature. Because these non-core, unusual or non-recurring charges and gains materially affect Asbury's financial condition or results in the specific period in which they are recognized, management also evaluates, and makes resource allocation and performance evaluation decisions based on, the related non-GAAP measures excluding such items. In addition to using such non-GAAP measures to evaluate results in a specific period, management believes that such measures may provide more complete and consistent comparisons of operational performance on a period-over-period historical basis and a better indication of expected future trends. Management discloses these non-GAAP measures, and the related reconciliations, because it believes investors use these metrics in evaluating longer-term period-over-period performance, and to allow investors to better understand and evaluate the information used by management to assess operating performance.
The following tables provide reconciliations for our non-GAAP metrics:
For the Twelve Months Ended
---------------------------
September 31, 2016 June 30, 2016
------------------ -------------
(Dollars in millions)
Adjusted leverage ratio:
------------------------
Long-term debt (including current portion) $930.2 $942.5
Calculation of earnings before interest, taxes,
depreciation and amortization ("EBITDA"):
Income from continuing operations $141.3 $160.1
Add:
Depreciation and amortization 30.5 30.1
Income tax expense 85.1 96.9
Swap and other interest expense 56.0 53.6
---- ----
Earnings before interest, taxes, depreciation
and amortization ("EBITDA") $312.9 $340.7
====== ======
Non-core items - (income) expense:
Real estate-related charges $5.2 $3.4
Gain on divestitures (13.5) (34.9)
Total non-core items (8.3) (31.5)
Adjusted EBITDA $304.6 $309.2
====== ======
Adjusted leverage ratio 3.1 3.0
=== ===
For the Three Months Ended
September 30,
-------------
2016 2015
---- ----
(In millions, except per share
data)
Adjusted income from
operations:
--------------------
Income from operations $70.7 $76.6
Real estate-related
charges 1.8 -
Adjusted income from
operations $72.5 $76.6
===== =====
Adjusted net income:
--------------------
Net income $32.4 $51.1
Non-core items -
(income) expense:
Real estate-related
charges 1.8 -
Gain on divestitures - (21.4)
Income tax (benefit)
expense on non-core
items above (0.7) 8.3
Income tax benefit - (0.8)
--- ----
Total non-core items 1.1 (13.9)
Adjusted net income $33.5 $37.2
===== =====
Adjusted diluted earnings
per share (EPS) from
continuing operations:
-------------------------
Net income $1.47 $1.96
Discontinued operations,
net of tax - -
--- ---
Income from continuing
operations $1.47 $1.96
Total non-core items 0.05 (0.53)
---- -----
Adjusted diluted EPS from
continuing operations $1.52 $1.43
===== =====
Weighted average common
shares outstanding -
diluted 22.1 26.1
==== ====
For the Nine Months Ended
September 30,
-------------
2016 2015
---- ----
(In millions, except per share
data)
Adjusted income from operations:
--------------------------------
Income from operations $217.7 $231.9
Real estate-related charges 5.2 -
Adjusted income from operations $222.9 $231.9
====== ======
Adjusted net income:
--------------------
Net income $100.1 $128.1
Non-core items - (income) expense:
Real estate-related charges 5.2 -
Gain on divestitures - (21.4)
Income tax (benefit) expense on non-core items above (2.0) 8.3
Income tax benefit - (0.8)
--- ----
Total non-core items 3.2 (13.9)
Adjusted net income $103.3 $114.2
====== ======
Adjusted diluted earnings per share (EPS) from continuing operations:
---------------------------------------------------------------------
Net income $4.37 $4.76
Discontinued operations, net of tax - 0.01
--- ----
Income from continuing operations $4.37 $4.77
Total non-core items 0.14 (0.52)
---- -----
Adjusted diluted EPS from continuing operations $4.51 $4.25
===== =====
Weighted average common shares outstanding - diluted 22.9 26.9
==== ====
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/asbury-automotive-group-announces-third-quarter-2016-earnings-300350286.html
SOURCE Asbury Automotive Group, Inc.
