Attached files
| file | filename |
|---|---|
| 8-K - FORM 8-K - ASBURY AUTOMOTIVE GROUP INC | a2014q38-k.htm |
Exhibit 99.1
Investors & Reporters May Contact:
Matt Pettoni
VP & Treasurer
(770) 418-8219
ir@asburyauto.com
ASBURY AUTOMOTIVE GROUP ANNOUNCES RECORD
2014 THIRD QUARTER FINANCIAL RESULTS
Record third quarter EPS from continuing operations of $1.08 per diluted share, up 19% over prior year quarter adjusted EPS from continuing operations
Duluth, GA, October 21, 2014 - Asbury Automotive Group, Inc. (NYSE: ABG), one of the largest automotive retail and service companies in the U.S., today reported income from continuing operations for the third quarter of 2014 of $32.4 million, or $1.08 per diluted share, versus adjusted income from continuing operations in the third quarter of 2013 of $28.3 million, or $0.91 per diluted share, a 19% increase per diluted share. There were no adjustments for the third quarter of 2014, see attached reconciliation for reported adjustments related to the third quarter of 2013. Net income for the third quarter of 2014 was $32.5 million, or $1.08 per diluted share, compared to $22.7 million, or $0.73 per diluted share in the prior year period.
Third Quarter 2014 Operational Highlights (compared to the prior year period):
•Total revenues increased 8% to $1.5 billion
•New vehicle retail revenues up 8%; gross profit up 6%
•Used vehicle retail revenues up 8%; gross profit up 2%
•Finance and insurance revenues up 8%
•Parts and service gross profit up 12%
•Total gross profit up 9% with increases from all business lines
• | SG&A expense as a percent of gross profit improved 60 basis points to 70.1%; same-store SG&A expense as a percent of gross profit improved 120 basis points to 69.5% |
•Operating margin of 4.4%
Strategic Highlights:
• | Entered into agreements to acquire two stores approximating $250 million of annualized revenues (subject to manufacturer approvals and customary closing conditions) |
•Opened second stand-alone used vehicle store branded as “Q auto” in Jacksonville, FL
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•Announced plans to open third “Q auto” store in Ft. Myers, FL in Q4 2014
•Repurchased $40 million of common stock in Q3 2014
•Closed on $60 million of mortgages in Q3 2014
• | At its October 15, 2014 meeting, the Board authorized an increase in share repurchase authorization to a total of $200 million |
“Asbury is pleased to announce another record third quarter EPS from continuing operations,” said Craig Monaghan, Asbury's President and Chief Executive Officer. “The overall automotive retail and lending environments remain healthy. Going forward we will continue to execute our two part strategy: to drive operational excellence and to deploy capital to its highest returns.”
“Our current quarter results demonstrate, once again, the strength and diversity of our business model,” said Asbury's Executive Vice President and Chief Operating Officer, Michael Kearney. “While we did experience some pressure on new and used vehicle margins, our parts and service gross profit grew at 12% driven principally by growth in warranty and reconditioning.”
For the nine-month period ended September 30, 2014, the Company reported income from continuing operations of $100.1 million, or $3.29 per diluted share, compared to adjusted income from continuing operations $82.6 million, or $2.66 per diluted share in the prior year period. The Company’s revenues for the nine-month period of 2014 totaled $4.4 billion, an increase of 10% compared to $4.0 billion in the prior year period. Net income for the nine-month period ended September 30, 2014 was $99.8 million, or $3.28 per diluted share, compared to $82.2 million, or $2.64 per diluted share, for the prior year period. Included in net income for the prior year period, as part of discontinued operations, is an after tax gain of $8.9 million, or $0.29 per diluted share, from the sale of a mid-line import store. See attached reconciliation for reported adjustments.
The conference call will be simulcast live on the Internet and 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 (888) 523-1228 (domestic), or (719) 457-1035 (international); passcode - 5097575. 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 - 5097575.
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 currently operates 81 dealership locations, encompassing 102 franchises for the sale and servicing of 29 domestic and foreign brands of new vehicles. We also operate 24 collision repair centers and two standalone 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.
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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, capital allocation, 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), 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.
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ASBURY AUTOMOTIVE GROUP, INC.
CONSOLIDATED STATEMENTS OF INCOME
(In millions, except per share data)
(Unaudited)
For the Three Months Ended September 30, | For the Nine Months Ended September 30, | ||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||
REVENUES: | |||||||||||||||
New vehicle | $ | 821.3 | $ | 759.9 | $ | 2,378.8 | $ | 2,167.9 | |||||||
Used vehicle | 457.0 | 421.7 | 1,319.2 | 1,183.5 | |||||||||||
Parts and service | 168.3 | 154.0 | 495.9 | 455.5 | |||||||||||
Finance and insurance, net | 59.0 | 54.7 | 170.8 | 154.1 | |||||||||||
Total revenues | 1,505.6 | 1,390.3 | 4,364.7 | 3,961.0 | |||||||||||
COST OF SALES: | |||||||||||||||
New vehicle | 772.1 | 713.4 | 2,232.4 | 2,035.6 | |||||||||||
Used vehicle | 425.8 | 391.2 | 1,220.6 | 1,090.8 | |||||||||||
Parts and service | 63.1 | 60.4 | 189.1 | 180.7 | |||||||||||
Total cost of sales | 1,261.0 | 1,165.0 | 3,642.1 | 3,307.1 | |||||||||||
GROSS PROFIT | 244.6 | 225.3 | 722.6 | 653.9 | |||||||||||
OPERATING EXPENSES: | |||||||||||||||
Selling, general and administrative | 171.5 | 159.2 | 500.5 | 460.8 | |||||||||||
Depreciation and amortization | 6.7 | 6.2 | 19.4 | 18.0 | |||||||||||
Other operating expense, net | 0.3 | 1.9 | 0.2 | 7.1 | |||||||||||
Income from operations | 66.1 | 58.0 | 202.5 | 168.0 | |||||||||||
OTHER EXPENSES: | |||||||||||||||
Floor plan interest expense | (3.0 | ) | (2.9 | ) | (9.3 | ) | (9.1 | ) | |||||||
Other interest expense, net | (9.6 | ) | (11.1 | ) | (28.2 | ) | (29.8 | ) | |||||||
Swap interest expense | (0.5 | ) | (0.1 | ) | (1.5 | ) | (2.2 | ) | |||||||
Loss on extinguishment of long-term debt | — | (6.8 | ) | — | (6.8 | ) | |||||||||
Total other expenses, net | (13.1 | ) | (20.9 | ) | (39.0 | ) | (47.9 | ) | |||||||
Income before income taxes | 53.0 | 37.1 | 163.5 | 120.1 | |||||||||||
INCOME TAX EXPENSE | 20.6 | 14.3 | 63.4 | 46.2 | |||||||||||
INCOME FROM CONTINUING OPERATIONS | 32.4 | 22.8 | 100.1 | 73.9 | |||||||||||
DISCONTINUED OPERATIONS, net of tax | 0.1 | (0.1 | ) | (0.3 | ) | 8.3 | |||||||||
NET INCOME | $ | 32.5 | $ | 22.7 | $ | 99.8 | $ | 82.2 | |||||||
EARNINGS PER COMMON SHARE: | |||||||||||||||
Basic— | |||||||||||||||
Continuing operations | $ | 1.09 | $ | 0.74 | $ | 3.31 | $ | 2.40 | |||||||
Discontinued operations | — | — | (0.01 | ) | 0.27 | ||||||||||
Net income | $ | 1.09 | $ | 0.74 | $ | 3.30 | $ | 2.67 | |||||||
Diluted— | |||||||||||||||
Continuing operations | $ | 1.08 | $ | 0.73 | $ | 3.29 | $ | 2.38 | |||||||
Discontinued operations | — | — | (0.01 | ) | 0.26 | ||||||||||
Net income | $ | 1.08 | $ | 0.73 | $ | 3.28 | $ | 2.64 | |||||||
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING: | |||||||||||||||
Basic | 29.8 | 30.7 | 30.2 | 30.8 | |||||||||||
Restricted stock | 0.1 | 0.2 | 0.1 | 0.2 | |||||||||||
Performance share units | 0.1 | 0.2 | 0.1 | 0.1 | |||||||||||
Diluted | 30.0 | 31.1 | 30.4 | 31.1 | |||||||||||
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New Vehicle-
For the Three Months Ended September 30, | Increase | % Change | ||||||||||||
2014 | 2013 | |||||||||||||
(Dollars in millions, except for per vehicle data) | ||||||||||||||
Revenue: | ||||||||||||||
New vehicle revenue—same store(1) | ||||||||||||||
Luxury | $ | 298.0 | $ | 282.8 | $ | 15.2 | 5 | % | ||||||
Mid-line import | 403.5 | 377.5 | 26.0 | 7 | % | |||||||||
Mid-line domestic | 112.1 | 99.6 | 12.5 | 13 | % | |||||||||
Total new vehicle revenue—same store(1) | 813.6 | 759.9 | 53.7 | 7 | % | |||||||||
New vehicle revenue—acquisitions and new stores | 7.7 | — | ||||||||||||
New vehicle revenue, as reported | $ | 821.3 | $ | 759.9 | $ | 61.4 | 8 | % | ||||||
Gross profit: | ||||||||||||||
New vehicle gross profit—same store(1) | ||||||||||||||
Luxury | $ | 21.2 | $ | 20.6 | $ | 0.6 | 3 | % | ||||||
Mid-line import | 20.6 | 19.5 | 1.1 | 6 | % | |||||||||
Mid-line domestic | 6.7 | 6.4 | 0.3 | 5 | % | |||||||||
Total new vehicle gross profit—same store(1) | 48.5 | 46.5 | 2.0 | 4 | % | |||||||||
New vehicle gross profit—acquisitions and new stores | 0.7 | — | ||||||||||||
New vehicle gross profit, as reported | $ | 49.2 | $ | 46.5 | $ | 2.7 | 6 | % | ||||||
For the Three Months Ended September 30, | Increase | % Change | ||||||||||||
2014 | 2013 | |||||||||||||
New vehicle units: | ||||||||||||||
New vehicle retail units—same store(1) | ||||||||||||||
Luxury | 5,879 | 5,705 | 174 | 3 | % | |||||||||
Mid-line import | 15,238 | 14,193 | 1,045 | 7 | % | |||||||||
Mid-line domestic | 2,965 | 2,747 | 218 | 8 | % | |||||||||
Total new vehicle retail units—same store(1) | 24,082 | 22,645 | 1,437 | 6 | % | |||||||||
Fleet vehicles | 336 | 242 | 94 | 39 | % | |||||||||
Total new vehicle units—same store(1) | 24,418 | 22,887 | 1,531 | 7 | % | |||||||||
New vehicle units—acquisitions and new stores | 236 | — | ||||||||||||
New vehicle units—actual | 24,654 | 22,887 | 1,767 | 8 | % | |||||||||
New Vehicle Metrics-
For the Three Months Ended September 30, | Increase (Decrease) | % Change | ||||||||||||
2014 | 2013 | |||||||||||||
Revenue per new vehicle sold—same store(1) | $ | 33,320 | $ | 33,202 | $ | 118 | — | % | ||||||
Gross profit per new vehicle sold—same store(1) | $ | 1,986 | $ | 2,032 | $ | (46 | ) | (2 | )% | |||||
New vehicle gross margin—same store(1) | 6.0 | % | 6.1 | % | (0.1 | )% | (2 | )% | ||||||
______________________________
(1) | Same store amounts consist of information from dealerships for the identical months of each period presented in the comparison, commencing with the first full month in which the dealership was owned by us. |
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Used Vehicle-
For the Three Months Ended September 30, | Increase (Decrease) | % Change | ||||||||||||
2014 | 2013 | |||||||||||||
(Dollars in millions, except for per vehicle data) | ||||||||||||||
Revenue: | ||||||||||||||
Used vehicle retail revenues—same store(1) | $ | 391.0 | $ | 371.2 | $ | 19.8 | 5 | % | ||||||
Used vehicle retail revenues—acquisitions and new stores | 8.6 | — | ||||||||||||
Total used vehicle retail revenues | 399.6 | 371.2 | 28.4 | 8 | % | |||||||||
Used vehicle wholesale revenues—same store(1) | 56.8 | 50.5 | 6.3 | 12 | % | |||||||||
Used vehicle wholesale revenues—acquisitions and new stores | 0.6 | — | ||||||||||||
Total used vehicle wholesale revenues | 57.4 | 50.5 | 6.9 | 14 | % | |||||||||
Used vehicle revenue, as reported | $ | 457.0 | $ | 421.7 | $ | 35.3 | 8 | % | ||||||
Gross profit: | ||||||||||||||
Used vehicle retail gross profit—same store(1) | $ | 31.9 | $ | 31.6 | $ | 0.3 | 1 | % | ||||||
Used vehicle retail gross profit—acquisitions and new stores | 0.7 | — | ||||||||||||
Total used vehicle retail gross profit | 32.6 | 31.6 | 1.0 | 3 | % | |||||||||
Used vehicle wholesale gross profit—same store(1) | (1.2 | ) | (1.1 | ) | (0.1 | ) | (9 | )% | ||||||
Used vehicle wholesale gross profit—acquisitions and new stores | (0.2 | ) | — | |||||||||||
Total used vehicle wholesale gross profit | (1.4 | ) | (1.1 | ) | (0.3 | ) | (27 | )% | ||||||
Used vehicle gross profit, as reported | $ | 31.2 | $ | 30.5 | $ | 0.7 | 2 | % | ||||||
Used vehicle retail units: | ||||||||||||||
Used vehicle retail units—same store(1) | 19,178 | 18,715 | 463 | 2 | % | |||||||||
Used vehicle retail units—acquisitions and new stores | 447 | — | ||||||||||||
Used vehicle retail units—actual | 19,625 | 18,715 | 910 | 5 | % | |||||||||
Used Vehicle Metrics-
For the Three Months Ended September 30, | Increase (Decrease) | % Change | ||||||||||||
2014 | 2013 | |||||||||||||
Revenue per used vehicle retailed—same store(1) | $ | 20,388 | $ | 19,834 | $ | 554 | 3 | % | ||||||
Gross profit per used vehicle retailed—same store(1) | $ | 1,663 | $ | 1,688 | $ | (25 | ) | (1 | )% | |||||
Used vehicle retail gross margin—same store(1) | 8.2 | % | 8.5 | % | (0.3 | )% | (4 | )% | ||||||
______________________________
(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. |
6
Parts and Service-
For the Three Months Ended September 30, | Increase | % Change | ||||||||||||
2014 | 2013 | |||||||||||||
(Dollars in millions) | ||||||||||||||
Revenue: | ||||||||||||||
Parts and service revenue—same store(1) | $ | 167.6 | $ | 154.0 | $ | 13.6 | 9 | % | ||||||
Parts and service revenues—acquisitions and new stores | 0.7 | — | ||||||||||||
Parts and service revenue, as reported | $ | 168.3 | $ | 154.0 | $ | 14.3 | 9 | % | ||||||
Gross profit: | ||||||||||||||
Parts and service gross profit—same store(1) | ||||||||||||||
Customer pay | $ | 58.2 | $ | 54.4 | $ | 3.8 | 7 | % | ||||||
Reconditioning and preparation | 27.2 | 23.0 | 4.2 | 18 | % | |||||||||
Warranty | 14.2 | 11.4 | 2.8 | 25 | % | |||||||||
Wholesale parts | 5.1 | 4.8 | 0.3 | 6 | % | |||||||||
Total parts and service gross profit—same store(1) | 104.7 | 93.6 | 11.1 | 12 | % | |||||||||
Parts and service gross profit—acquisitions and new stores | 0.5 | — | ||||||||||||
Parts and service gross profit, as reported | $ | 105.2 | $ | 93.6 | $ | 11.6 | 12 | % | ||||||
Parts and service gross margin—same store(1) | 62.5 | % | 60.8 | % | 1.7 | % | 3 | % | ||||||
_____________________________
(1) | Same store amounts consist of information from dealerships for the identical months of each period presented in the comparison, commencing with the first full month in which the dealership was owned by us. |
Finance and Insurance, net-
For the Three Months Ended September 30, | Increase | % Change | ||||||||||||
2014 | 2013 | |||||||||||||
(Dollars in millions, except for per vehicle data) | ||||||||||||||
Finance and insurance, net—same store(1) | $ | 58.3 | $ | 54.7 | $ | 3.6 | 7 | % | ||||||
Finance and insurance, net—acquisitions and new stores | 0.7 | — | ||||||||||||
Finance and insurance, net as reported | $ | 59.0 | $ | 54.7 | $ | 4.3 | 8 | % | ||||||
Finance and insurance, net per vehicle sold—same store(1) | $ | 1,337 | $ | 1,315 | $ | 22 | 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. |
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For the Three Months Ended September 30, | |||||
2014 | 2013 | ||||
REVENUE MIX PERCENTAGES: | |||||
New vehicles | 54.5 | % | 54.7 | % | |
Used retail vehicles | 26.6 | % | 26.7 | % | |
Used vehicle wholesale | 3.8 | % | 3.6 | % | |
Parts and service | 11.2 | % | 11.1 | % | |
Finance and insurance, net | 3.9 | % | 3.9 | % | |
Total revenue | 100.0 | % | 100.0 | % | |
GROSS PROFIT MIX PERCENTAGES: | |||||
New vehicles | 20.1 | % | 20.6 | % | |
Used retail vehicles | 13.4 | % | 14.1 | % | |
Used vehicle wholesale | (0.6 | )% | (0.5 | )% | |
Parts and service | 43.0 | % | 41.5 | % | |
Finance and insurance, net | 24.1 | % | 24.3 | % | |
Total gross profit | 100.0 | % | 100.0 | % | |
SG&A EXPENSES AS A PERCENTAGE OF GROSS PROFIT | 70.1 | % | 70.7 | % | |
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New Vehicle-
For the Nine Months Ended September 30, | Increase | % Change | ||||||||||||
2014 | 2013 | |||||||||||||
(Dollars in millions, except for per vehicle data) | ||||||||||||||
Revenue: | ||||||||||||||
New vehicle revenue—same store(1) | ||||||||||||||
Luxury | $ | 873.4 | $ | 783.5 | $ | 89.9 | 11 | % | ||||||
Mid-line import | 1,119.5 | 1,079.8 | 39.7 | 4 | % | |||||||||
Mid-line domestic | 337.2 | 304.6 | 32.6 | 11 | % | |||||||||
Total new vehicle revenue—same store(1) | 2,330.1 | 2,167.9 | 162.2 | 7 | % | |||||||||
New vehicle revenue—acquisitions and new stores | 48.7 | — | ||||||||||||
New vehicle revenue, as reported | $ | 2,378.8 | $ | 2,167.9 | $ | 210.9 | 10 | % | ||||||
Gross profit: | ||||||||||||||
New vehicle gross profit—same store(1) | ||||||||||||||
Luxury | $ | 63.2 | $ | 56.3 | $ | 6.9 | 12 | % | ||||||
Mid-line import | 59.5 | 56.2 | 3.3 | 6 | % | |||||||||
Mid-line domestic | 20.9 | 19.8 | 1.1 | 6 | % | |||||||||
Total new vehicle gross profit—same store(1) | 143.6 | 132.3 | 11.3 | 9 | % | |||||||||
New vehicle gross profit—acquisitions and new stores | 2.8 | — | ||||||||||||
New vehicle gross profit, as reported | $ | 146.4 | $ | 132.3 | $ | 14.1 | 11 | % | ||||||
For the Nine Months Ended September 30, | Increase | % Change | ||||||||||||
2014 | 2013 | |||||||||||||
New vehicle units: | ||||||||||||||
New vehicle retail units—same store(1) | ||||||||||||||
Luxury | 17,143 | 15,633 | 1,510 | 10 | % | |||||||||
Mid-line import | 42,168 | 40,401 | 1,767 | 4 | % | |||||||||
Mid-line domestic | 8,692 | 8,415 | 277 | 3 | % | |||||||||
Total new vehicle retail units—same store(1) | 68,003 | 64,449 | 3,554 | 6 | % | |||||||||
Fleet vehicles | 1,535 | 924 | 611 | 66 | % | |||||||||
Total new vehicle units—same store(1) | 69,538 | 65,373 | 4,165 | 6 | % | |||||||||
New vehicle units—acquisitions and new stores | 1,809 | — | ||||||||||||
New vehicle units—actual | 71,347 | 65,373 | 5,974 | 9 | % | |||||||||
New Vehicle Metrics-
For the Nine Months Ended September 30, | Increase | % Change | ||||||||||||
2014 | 2013 | |||||||||||||
Revenue per new vehicle sold—same store(1) | $ | 33,508 | $ | 33,162 | $ | 346 | 1 | % | ||||||
Gross profit per new vehicle sold—same store(1) | $ | 2,065 | $ | 2,024 | $ | 41 | 2 | % | ||||||
New vehicle gross margin—same store(1) | 6.2 | % | 6.1 | % | 0.1 | % | 2 | % | ||||||
______________________________
(1) | Same store amounts consist of information from dealerships for the identical months of each period presented in the comparison, commencing with the first full month in which the dealership was owned by us. |
9
Used Vehicle-
For the Nine Months Ended September 30, | Increase | % Change | ||||||||||||
2014 | 2013 | |||||||||||||
(Dollars in millions, except for per vehicle data) | ||||||||||||||
Revenue: | ||||||||||||||
Used vehicle retail revenues—same store(1) | $ | 1,129.1 | $ | 1,040.7 | $ | 88.4 | 8 | % | ||||||
Used vehicle retail revenues—acquisitions and new stores | 30.8 | — | ||||||||||||
Total used vehicle retail revenues | 1,159.9 | 1,040.7 | 119.2 | 11 | % | |||||||||
Used vehicle wholesale revenues—same store(1) | 156.3 | 142.8 | 13.5 | 9 | % | |||||||||
Used vehicle wholesale revenues—acquisitions and new stores | 3.0 | — | ||||||||||||
Total used vehicle wholesale revenues | 159.3 | 142.8 | 16.5 | 12 | % | |||||||||
Used vehicle revenue, as reported | $ | 1,319.2 | $ | 1,183.5 | $ | 135.7 | 11 | % | ||||||
Gross profit: | ||||||||||||||
Used vehicle retail gross profit—same store(1) | $ | 97.1 | $ | 93.6 | $ | 3.5 | 4 | % | ||||||
Used vehicle retail gross profit—acquisitions and new stores | 2.4 | — | ||||||||||||
Total used vehicle retail gross profit | 99.5 | 93.6 | 5.9 | 6 | % | |||||||||
Used vehicle wholesale gross profit—same store(1) | (0.7 | ) | (0.9 | ) | 0.2 | 22 | % | |||||||
Used vehicle wholesale gross profit—acquisitions and new stores | (0.2 | ) | — | |||||||||||
Total used vehicle wholesale gross profit | (0.9 | ) | (0.9 | ) | — | — | % | |||||||
Used vehicle gross profit, as reported | $ | 98.6 | $ | 92.7 | $ | 5.9 | 6 | % | ||||||
Used vehicle retail units: | ||||||||||||||
Used vehicle retail units—same store(1) | 55,315 | 52,761 | 2,554 | 5 | % | |||||||||
Used vehicle retail units—acquisitions and new stores | 1,653 | — | ||||||||||||
Used vehicle retail units—actual | 56,968 | 52,761 | 4,207 | 8 | % | |||||||||
Used Vehicle Metrics-
For the Nine Months Ended September 30, | Increase (Decrease) | % Change | ||||||||||||
2014 | 2013 | |||||||||||||
Revenue per used vehicle retailed—same store(1) | $ | 20,412 | $ | 19,725 | $ | 687 | 3 | % | ||||||
Gross profit per used vehicle retailed—same store(1) | $ | 1,755 | $ | 1,774 | $ | (19 | ) | (1 | )% | |||||
Used vehicle retail gross margin—same store(1) | 8.6 | % | 9.0 | % | (0.4 | )% | (4 | )% | ||||||
______________________________
(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. |
10
Parts and Service-
For the Nine Months Ended September 30, | Increase | % Change | ||||||||||||
2014 | 2013 | |||||||||||||
(Dollars in millions) | ||||||||||||||
Revenue: | ||||||||||||||
Parts and service revenue—same store(1) | $ | 489.2 | $ | 455.5 | $ | 33.7 | 7 | % | ||||||
Parts and service revenues—acquisitions and new stores | 6.7 | — | ||||||||||||
Parts and service revenue, as reported | $ | 495.9 | $ | 455.5 | $ | 40.4 | 9 | % | ||||||
Gross profit: | ||||||||||||||
Parts and service gross profit—same store(1) | ||||||||||||||
Customer pay | $ | 171.7 | $ | 161.4 | $ | 10.3 | 6 | % | ||||||
Reconditioning and preparation | 74.9 | 63.9 | 11.0 | 17 | % | |||||||||
Warranty | 40.5 | 34.9 | 5.6 | 16 | % | |||||||||
Wholesale parts | 15.3 | 14.6 | 0.7 | 5 | % | |||||||||
Total parts and service gross profit—same store(1) | 302.4 | 274.8 | 27.6 | 10 | % | |||||||||
Parts and service gross profit—acquisitions and new stores | 4.4 | — | ||||||||||||
Parts and service gross profit, as reported | $ | 306.8 | $ | 274.8 | $ | 32.0 | 12 | % | ||||||
Parts and service gross margin—same store(1) | 61.8 | % | 60.3 | % | 1.5 | % | 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 Nine Months Ended September 30, | Increase | % Change | ||||||||||||
2014 | 2013 | |||||||||||||
(Dollars in millions, except for per vehicle data) | ||||||||||||||
Finance and insurance, net—same store(1) | $ | 164.6 | $ | 154.1 | $ | 10.5 | 7 | % | ||||||
Finance and insurance, net—acquisitions and new stores | 6.2 | — | ||||||||||||
Finance and insurance, net as reported | $ | 170.8 | $ | 154.1 | $ | 16.7 | 11 | % | ||||||
Finance and insurance, net per vehicle sold—same store(1) | $ | 1,318 | $ | 1,304 | $ | 14 | 1 | % | ||||||
______________________________
(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. |
11
For the Nine Months Ended September 30, | |||||
2014 | 2013 | ||||
REVENUE MIX PERCENTAGES: | |||||
New vehicles | 54.5 | % | 54.7 | % | |
Used retail vehicles | 26.6 | % | 26.3 | % | |
Used vehicle wholesale | 3.6 | % | 3.6 | % | |
Parts and service | 11.4 | % | 11.5 | % | |
Finance and insurance, net | 3.9 | % | 3.9 | % | |
Total revenue | 100.0 | % | 100.0 | % | |
GROSS PROFIT MIX PERCENTAGES: | |||||
New vehicles | 20.3 | % | 20.2 | % | |
Used retail vehicles | 13.7 | % | 14.3 | % | |
Used vehicle wholesale | (0.1 | )% | (0.1 | )% | |
Parts and service | 42.5 | % | 42.0 | % | |
Finance and insurance, net | 23.6 | % | 23.6 | % | |
Total gross profit | 100.0 | % | 100.0 | % | |
SG&A EXPENSES AS A PERCENTAGE OF GROSS PROFIT | 69.3 | % | 70.5 | % | |
12
ASBURY AUTOMOTIVE GROUP, INC.
Additional Disclosures
(In millions)
(Unaudited)
September 30, 2014 | December 31, 2013 | Increase (Decrease) | % Change | |||||||||||
SELECTED BALANCE SHEET DATA | ||||||||||||||
Cash and cash equivalents | $ | 11.1 | $ | 5.4 | $ | 5.7 | 106 | % | ||||||
New vehicle inventory | 611.7 | 605.2 | 6.5 | 1 | % | |||||||||
Used vehicle inventory | 130.4 | 121.8 | 8.6 | 7 | % | |||||||||
Parts inventory | 42.5 | 40.7 | 1.8 | 4 | % | |||||||||
Total current assets | 1,091.2 | 1,108.6 | (17.4 | ) | (2 | )% | ||||||||
Floor plan notes payable | 557.1 | 609.5 | (52.4 | ) | (9 | )% | ||||||||
Total current liabilities | 787.3 | 834.2 | (46.9 | ) | (6 | )% | ||||||||
CAPITALIZATION: | ||||||||||||||
Long-term debt (including current portion) | $ | 605.6 | $ | 554.4 | $ | 51.2 | 9 | % | ||||||
Shareholders' equity | 523.9 | 490.6 | 33.3 | 7 | % | |||||||||
Total | $ | 1,129.5 | $ | 1,045.0 | $ | 84.5 | 8 | % | ||||||
Brand Mix - New Vehicle Revenue by Brand-
For the Nine Months Ended September 30, | |||||
2014 | 2013 | ||||
Luxury | |||||
BMW | 9 | % | 9 | % | |
Mercedes-Benz | 7 | % | 7 | % | |
Lexus | 7 | % | 6 | % | |
Acura | 5 | % | 5 | % | |
Infiniti | 4 | % | 4 | % | |
Other luxury | 6 | % | 5 | % | |
Total luxury | 38 | % | 36 | % | |
Mid-Line Imports: | |||||
Honda | 18 | % | 20 | % | |
Nissan | 12 | % | 13 | % | |
Toyota | 12 | % | 12 | % | |
Other imports | 6 | % | 5 | % | |
Total imports | 48 | % | 50 | % | |
Mid-Line Domestic: | |||||
Ford | 7 | % | 7 | % | |
Dodge | 3 | % | 3 | % | |
Chevrolet | 2 | % | 2 | % | |
Other domestics | 2 | % | 2 | % | |
Total domestic | 14 | % | 14 | % | |
Total New Vehicle Revenue | 100 | % | 100 | % | |
13
Selling, General and Administrative Expense (“SG&A”)-
For the Three Months Ended September 30, | Increase (Decrease) | % of Gross Profit Decrease | ||||||||||||||||||
2014 | % of Gross Profit | 2013 | % of Gross Profit | |||||||||||||||||
(Dollars in millions) | ||||||||||||||||||||
SG&A, excluding rent expense | $ | 163.7 | 66.9 | % | $ | 151.1 | 67.1 | % | $ | 12.6 | (0.2 | )% | ||||||||
Rent expense | 7.8 | 3.2 | % | 8.1 | 3.6 | % | (0.3 | ) | (0.4 | )% | ||||||||||
SG&A-total | $ | 171.5 | 70.1 | % | $ | 159.2 | 70.7 | % | $ | 12.3 | (0.6 | )% | ||||||||
Gross profit | $ | 244.6 | $ | 225.3 | ||||||||||||||||
For the Nine Months Ended September 30, | Increase (Decrease) | % of Gross Profit Decrease | ||||||||||||||||||
2014 | % of Gross Profit | 2013 | % of Gross Profit | |||||||||||||||||
(Dollars in millions) | ||||||||||||||||||||
SG&A, excluding rent expense | $ | 477.4 | 66.1 | % | $ | 435.6 | 66.6 | % | $ | 41.8 | (0.5 | )% | ||||||||
Rent expense | 23.1 | 3.2 | % | 25.2 | 3.9 | % | (2.1 | ) | (0.7 | )% | ||||||||||
SG&A-total | $ | 500.5 | 69.3 | % | $ | 460.8 | 70.5 | % | $ | 39.7 | (1.2 | )% | ||||||||
Gross profit | $ | 722.6 | $ | 653.9 | ||||||||||||||||
14
ASBURY AUTOMOTIVE GROUP INC.
Supplemental Disclosures
(Unaudited)
Non-GAAP Financial Disclosures and Reconciliations
In addition to evaluating the financial condition and results of our operations in accordance with GAAP, from time to time management evaluates and analyzes results and any impact on the Company of strategic decisions and actions relating to, among other things, cost reduction, growth, and profitability improvement initiatives, and other events outside of normal, or "core," business and operations, by considering certain alternative financial measures not prepared in accordance with GAAP. These measures include "Adjusted income from continuing operations," "Adjusted earnings per share ("EPS") from continuing operations," "Adjusted long-term debt," "Adjusted EBITDA" and "Adjusted leverage ratio." Non-GAAP measures do not have definitions under GAAP and may be defined differently by and not be comparable to similarly titled measures used by other companies. As a result, any non-GAAP financial measures considered and evaluated by management are reviewed in connection with a review of the most directly comparable measures calculated in accordance with GAAP. Management cautions investors not to place undue reliance on such non-GAAP measures, but also to consider them with the most directly comparable GAAP measures. In its evaluation of results from time to time, management excludes items that do not arise directly from core operations, or are otherwise of an unusual or non-recurring nature. Because these non-core, unusual or non-recurring charges and gains materially affect Asbury's financial condition or results in the specific period in which they are recognized, management also evaluates, and makes resource allocation and performance evaluation decisions based on, the related non-GAAP measures excluding such items. In addition to using such non-GAAP measures to evaluate results in a specific period, management believes that such measures may provide more complete and consistent comparisons of operational performance on a period-over-period historical basis and a better indication of expected future trends. Management discloses these non-GAAP measures, and the related reconciliations, because it believes investors use these metrics in evaluating longer-term period-over-period performance, and to allow investors to better understand and evaluate the information used by management to assess operating performance.
15
For the Twelve Months Ended | |||||||
September 30, 2014 | June 30, 2014 | ||||||
(Dollars in millions) | |||||||
Adjusted leverage ratio: | |||||||
Long-term debt (including current portion) | $ | 605.6 | $ | 548.9 | |||
Less: unamortized premium on 8.375% Senior Subordinated Notes due 2020 | (8.4 | ) | (8.7 | ) | |||
Adjusted long-term debt (including current portion) | $ | 597.2 | $ | 540.2 | |||
Calculation of earnings before interest, taxes, depreciation and amortization ("EBITDA"): | |||||||
Income from continuing operations | $ | 127.3 | $ | 117.8 | |||
Add: | |||||||
Depreciation and amortization | 25.6 | 25.1 | |||||
Income tax expense | 81.5 | 75.0 | |||||
Swap and other interest expense | 39.1 | 40.5 | |||||
Earnings before interest, taxes, depreciation and amortization ("EBITDA") | $ | 273.5 | $ | 258.4 | |||
Non-core items - expense: | |||||||
Real estate-related charges | — | 2.1 | |||||
Loss on extinguishment of long-term debt | — | 6.8 | |||||
Total non-core items | — | 8.9 | |||||
Adjusted EBITDA | $ | 273.5 | $ | 267.3 | |||
Adjusted leverage ratio | 2.2 | 2.0 | |||||
16
The non-core operating items shown in the table below consist of expenses related to real estate transactions.
For the Three Months Ended September 30, | |||||||
2014 | 2013 | ||||||
(In millions, except per share data) | |||||||
Adjusted income from continuing operations: | |||||||
Net income | $ | 32.5 | $ | 22.7 | |||
Discontinued operations, net of tax | (0.1 | ) | 0.1 | ||||
Income from continuing operations | 32.4 | 22.8 | |||||
Non-core items - expense (income): | |||||||
Real estate-related charges | — | 2.1 | |||||
Loss on extinguishment of long-term debt | — | 6.8 | |||||
Tax benefit on non-core items above | — | (3.4 | ) | ||||
Total non-core items | — | 5.5 | |||||
Adjusted income from continuing operations | $ | 32.4 | $ | 28.3 | |||
Adjusted diluted earnings per share (EPS) from continuing operations: | |||||||
Net income | $ | 1.08 | $ | 0.73 | |||
Discontinued operations, net of tax | — | — | |||||
Income from continuing operations | $ | 1.08 | $ | 0.73 | |||
Total non-core items | — | 0.18 | |||||
Adjusted diluted EPS from continuing operations | $ | 1.08 | $ | 0.91 | |||
Weighted average common shares outstanding - diluted | 30.0 | 31.1 | |||||
17
For the Nine Months Ended September 30, | |||||||
2014 | 2013 | ||||||
(In millions, except per share data) | |||||||
Adjusted income from continuing operations: | |||||||
Net income | $ | 99.8 | $ | 82.2 | |||
Discontinued operations, net of tax | 0.3 | (8.3 | ) | ||||
Income from continuing operations | 100.1 | 73.9 | |||||
Non-core items - expense (income): | |||||||
Real estate-related charges | — | 7.3 | |||||
Loss on the extinguishment of long-term debt | — | 6.8 | |||||
Tax benefit on non-core items above | — | (5.4 | ) | ||||
Total non-core items | — | 8.7 | |||||
Adjusted income from continuing operations | $ | 100.1 | $ | 82.6 | |||
Adjusted diluted earnings per share (EPS) from continuing operations: | |||||||
Net income | $ | 3.28 | $ | 2.64 | |||
Discontinued operations, net of tax | 0.01 | (0.26 | ) | ||||
Income from continuing operations | $ | 3.29 | $ | 2.38 | |||
Total non-core items | — | 0.28 | |||||
Adjusted diluted EPS from continuing operations | $ | 3.29 | $ | 2.66 | |||
Weighted average common shares outstanding - diluted | 30.4 | 31.1 | |||||
18