Asbury Automotive Group Announces Fourth Quarter Financial Results

DULUTH, Ga., Feb. 2, 2021 /PRNewswire/ — Asbury Automotive Group, Inc. (NYSE: ABG), one of the…

DULUTH, Ga., Feb. 2, 2021 /PRNewswire/ — Asbury Automotive Group, Inc. (NYSE: ABG), one of the largest automotive retail and service companies in the U.S., reported net income for the fourth quarter 2020 of $89.1 million ($4.59 per diluted share).  This compares to net income of $43.6 million ($2.26 per diluted share) in the prior year quarter, a 104% increase.

The financial measures discussed below include both GAAP and adjusted (non-GAAP) financial measures. Please see reconciliations for our non-GAAP metrics included in the accompanying financial tables.

“The fourth quarter of 2020 was a pivotal period for us where we launched our online car buying platform Clicklane and also unveiled our five year strategic plan to reach $20 billion of revenue by 2025,” said David Hult, Asbury’s President and Chief Executive Officer.  “On top of this, we posted the best quarterly results in our company’s history with adjusted earnings of $4.44 per share, up 76%.”

The Company reported adjusted net income (a non-GAAP measure) for the fourth quarter 2020 of $86.2 million ($4.44 per diluted share) compared to $48.9 million ($2.53 per diluted share) in the prior year quarter, a 76% increase.

Net income for the fourth quarter 2020 was adjusted for a $3.9 million pre-tax gain from a dealership divestiture ($0.15 per diluted share). Net income for the fourth quarter 2019 was adjusted for a $7.1 million pre-tax charge for franchise rights impairments ($0.27 per diluted share), a $0.6 million pre-tax charge for real estate related charges ($0.03 per diluted share), and a $0.6 million pre-tax gain from a legal settlement ($0.03 per diluted share).

The Company reported total revenue for the fourth quarter of $2.2 billion, up 18% from the prior year period; total revenue on a same-store basis was up 1% from the prior year period.

Fourth Quarter 2020 Operational Summary

Total company:

  • Total revenue increased 18%; gross profit increased 23%
  • Gross margin increased 80 basis points to 16.7%
  • EPS increased 103%
  • SG&A as a percentage of gross profit decreased 690 basis points to 61.4%
  • Operating margin increased 180 basis points to 6.0%
  • Adjusted EPS increased 76%

Same store (non-GAAP measure):

  • Total revenue increased 1%; gross profit increased 4%
  • Gross margin increased 60 basis points to 16.6%
  • New vehicle revenue was flat; gross profit increased 40%
  • Used vehicle retail revenue was flat; gross profit increased 10%
  • Finance and insurance revenue and gross profit was flat
  • Parts and service revenue decreased 4%; gross profit decreased 4%
  • New gross profit per vehicle increased 49% to $2,385
  • Used retail gross profit per vehicle increased 21% to $1,741
  • Finance and insurance gross profit per vehicle increased 7% to $1,817

Strategic Highlights:

  • Launched the innovative platform Clicklane, which is an evolution of Asbury’s PushStart tool and allows for consumers to complete the entire car-buying transaction online within 15 minutes
  • Unveiled a five-year strategic plan to reach $20 billion of revenue by 2025 (20% compound annual growth), expand operating margins, and grow EPS in excess of revenue growth
  • Divested a Ford dealership with approximately $50 million in annual revenues
  • Ended the quarter with total liquidity of $462 million and a pro forma net leverage ratio of 2.1x

For the full year 2020, the Company reported net income of $254.4 million ($13.18 per diluted share) compared to $184.4 million ($9.55 per diluted share) in the prior year period. Adjusted net income (a non-GAAP measure) for 2020 was $248.8 million ($12.90 per diluted share) compared to $182.5 million ($9.46 per diluted share) in the prior year period, a 36% increase in adjusted EPS.

Total revenue for the full year 2020 was $7.1 billion, down 1% from the prior year period; total revenue on a same-store basis was down 7% from the prior year period.

Additional commentary regarding the fourth quarter results will be provided during the earnings conference call on February 2, 2021 at 10:00 a.m.  The conference call will be simulcast live on the internet and can be accessed at www.asburyauto.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 (866) 248-8441 (domestic), or (323) 347-3278 (international); passcode – 1603957.  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 – 1603957.

About Asbury Automotive Group, Inc.

Asbury Automotive Group, Inc. (“Asbury”), a Fortune 500 company headquartered in Duluth, GA, is one of the largest automotive retailers in the U.S.  Asbury currently operates 91 dealerships, consisting of 112 franchises, representing 31 domestic and foreign brands of vehicles.  Asbury also operates 25 collision repair centers.  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, expectations, projections regarding the expected benefits of Clicklane, management’s plans, projections and objectives for future operations, scale and performance, integration plans and expected synergies from acquisitions, our financial position, results of operations, market position, capital allocation strategy, business strategy and expectations of our management with respect to, among other things: changes in general economic and business conditions, including the impact of COVID-19 on the automotive industry in general, the automotive retail industry in particular and our customers, suppliers, vendors and business partners; our relationships with vehicle manufacturers; our ability to improve our margins; operating cash flows and availability of capital; capital expenditures; the amount of our indebtedness; the completion of any pending and future acquisitions and divestitures; future return targets; future annual savings; general economic trends, including consumer confidence levels, interest rates, and fuel prices; and automotive retail industry trends. The following are some but not all of the factors that could cause actual results or events to differ materially from those anticipated, including: the impact of the COVID-19 pandemic, 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 technology initiatives and other operational strategies, Asbury’s ability to leverage gains from its dealership portfolio, including its ability to realize the expected benefits of the acquisition of the Park Place dealership group, 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 risks, uncertainties and other factors are disclosed in Asbury’s Annual Report on Form 10-K, subsequent quarterly reports on Form 10-Q and other periodic and current reports filed with the Securities and Exchange Commission from time to time.  These forward-looking statements and such risks, uncertainties and other factors speak only as of the date of this press release. We expressly disclaim any obligation or undertaking to disseminate any updates or revisions to any forward-looking statement contained herein, 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
December 31,

Increase

(Decrease)

%



Change

2020

2019

REVENUE:

New vehicle



$

1,225.6

$

1,039.4

$



186.2

18

%

Used vehicle:

Retail



564.0

491.5

72.5

15

%



Wholesale

95.3

49.7

45.6

92



%

     Total used vehicle

659.3

541.2

118.1



22

%

Parts and service

261.8

229.7



32.1

14

%

Finance and insurance, net

87.3



83.7

3.6

4

%

TOTAL REVENUE



2,234.0

1,894.0

340.0

18

%



GROSS PROFIT:

New vehicle

82.9

44.7

38.2



85

%

Used vehicle:

Retail

39.2



30.9

8.3

27

%

Wholesale



0.4

0.4

%



     Total used vehicle

39.6

31.3

8.3

27



%

Parts and service

162.5

141.9

20.6



15

%

Finance and insurance, net

87.3

83.7



3.6

4

%

TOTAL GROSS PROFIT

372.3



301.6

70.7

23

%

OPERATING EXPENSES:



Selling, general and administrative

228.5

206.1

22.4

11



%

Depreciation and amortization

9.5

9.5



%

Franchise rights impairment

7.1



(7.1)

(100)

%

Other operating (income) expense, net

(0.2)



(0.2)

%

INCOME FROM OPERATIONS



134.5

79.1

55.4

70

%



OTHER EXPENSES (INCOME):

Floor plan interest expense

3.6

8.2

(4.6)



(56)

%

Other interest expense, net

15.0

13.7



1.3

9

%

Gain on dealership divestitures, net

(3.9)



(3.9)

%

Total other expenses, net



14.7

21.9

(7.2)

(33)

%



INCOME BEFORE INCOME TAXES

119.8

57.2

62.6

109



%

Income tax expense

30.7

13.6

17.1



126

%

NET INCOME

$

89.1



$

43.6

$

45.5

104



%

EARNINGS PER COMMON SHARE:

Basic—

Net income

$



4.64

$

2.28

$

2.36



104

%

Diluted—

Net income

$



4.59

$

2.26

$

2.33



103

%

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:

Basic

19.2



19.1

0.1

Restricted stock

0.1

0.1



Performance share units

0.1

0.1



Diluted

19.4

19.3

0.1

______________________________



NMNot Meaningful

 

ASBURY AUTOMOTIVE GROUP, INC.
KEY OPERATING HIGHLIGHTS (In millions, except per unit data)
(Unaudited)

For the Three Months Ended
December 31,

Increase



(Decrease)

%

Change

2020

2019



Unit sales

New vehicle:

Luxury

9,751

7,055



2,696

38

%

Import

14,315



15,723

(1,408)

(9)

%

Domestic



4,507

4,829

(322)

(7)

%



     Total new vehicle

28,573

27,607

966

3



%

Used vehicle retail

21,386

22,272

(886)



(4)

%

Used to new ratio

74.8

%



80.7

%

(590) bps

Average selling price

New vehicle



$

42,894

$

37,650

$



5,244

14

%

Used vehicle retail

26,372



22,068

4,304

20

%

Average gross profit per unit



New vehicle:

Luxury

$

5,292

$



3,586

$

1,706

48

%



Import

1,202

674

528

78



%

Domestic

3,128

1,822

1,306



72

%

Total new vehicle

2,901

1,619



1,282

79

%

Used vehicle retail

1,833



1,387

446

32

%

Finance and insurance, net



1,747

1,678

69

4

%



Front end yield (1)

4,191

3,194

997

31



%

Gross margin

New vehicle:

Luxury

8.8



%

6.5

%

230 bps

Import



3.9

%

2.3

%

160 bps



Domestic

6.9

%

4.4

%



250 bps

Total new vehicle

6.8

%

4.3



%

250 bps

Used vehicle retail

7.0

%



6.3

%

70 bps

Parts and service

62.1



%

61.8

%

30 bps

Total gross profit margin



16.7

%

15.9

%

80 bps



SG&A metrics

Rent expense

$

11.4

$



6.8

$

4.6

68

%



SG&A as a percentage of gross profit

61.4

%

68.3

%



(690) bps

SG&A, excluding rent expense as a percentage of gross profit

58.3

%

66.1



%

(780) bps

Operating metrics

Income from operations as a percentage of revenue

6.0



%

4.2

%

180 bps

Income from operations as a percentage of gross profit



36.1

%

26.2

%

990 bps



Adjusted income from operations as a percentage of revenue

6.0

%

4.6

%



140 bps

Adjusted income from operations as a percentage of gross profit

36.1

%

28.6



%

750 bps

Revenue mix

New vehicle

54.9



%

54.9

%

Used vehicle retail

25.2



%

26.0

%

Used vehicle wholesale

4.3



%

2.6

%

Parts and service

11.7



%

12.1

%

Finance and insurance

3.9



%

4.4

%

     Total revenue

100.0



%

100.0

%

Gross profit mix

New vehicle



22.3

%

14.8

%

Used vehicle retail



10.6

%

10.3

%

Used vehicle wholesale



0.1

%

0.1

%

Parts and service



43.6

%

47.0

%

Finance and insurance



23.4

%

27.8

%

     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 December 31,

Increase



(Decrease)

%

Change

2020

2019



Revenue

New vehicle:

Luxury

$

356.3



$

375.1

$

(18.8)

(5)



%

Import

435.1

427.1

8.0



2

%

Domestic

182.6

173.4



9.2

5

%

     Total new vehicle

974.0



975.6

(1.6)

%

Used Vehicle:



Retail

452.3

450.2

2.1



%

Wholesale

64.0

46.4

17.6



38

%

     Total used vehicle

516.3

496.6



19.7

4

%

Parts and service

207.7



215.5

(7.8)

(4)

%

Finance and insurance



78.2

78.3

(0.1)

%



Total revenue

$

1,776.2

$

1,766.0



$

10.2

1

%

Gross profit



New vehicle:

Luxury

$

28.5

$



24.4

$

4.1

17

%



Import

17.4

10.0

7.4

74



%

Domestic

12.5

7.3

5.2



71

%

     Total new vehicle

58.4

41.7



16.7

40

%

Used Vehicle:

Retail



32.3

29.3

3.0

10

%



Wholesale

(0.8)

0.7

(1.5)

NM



     Total used vehicle

31.5

30.0

1.5

5



%

Parts and service:

Customer pay

73.5

76.0



(2.5)

(3)

%

Warranty

20.3



21.3

(1.0)

(5)

%

Wholesale parts



5.4

5.7

(0.3)

(5)

%



     Parts and service, excluding reconditioning and preparation

99.2

103.0

(3.8)

(4)



%

Reconditioning and preparation

28.3

30.1

(1.8)



(6)

%

Total parts and service

127.5

133.1



(5.6)

(4)

%

Finance and insurance

78.2



78.3

(0.1)

%

Total gross profit



$

295.6

$

283.1

$



12.5

4

%

SG&A expense

$



188.2

$

194.3

$

(6.1)



(3)

%

SG&A expense as a percentage of gross profit

63.7

%



68.6

%

(490) 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 December 31,

Increase

(Decrease)



%

Change

2020

2019

Unit sales



New vehicle:

Luxury

6,146

6,792

(646)



(10)

%

Import

14,287

14,932



(645)

(4)

%

Domestic

4,058



4,247

(189)

(4)

%

     Total new vehicle



24,491

25,971

(1,480)

(6)

%



Used vehicle retail

18,551

20,346

(1,795)

(9)



%

Used to new ratio

75.7

%

78.3



%

(260) bps

Average selling price

New vehicle

$



39,770

$

37,565

$

2,205



6

%

Used vehicle retail

24,381

22,127



2,254

10

%

Average gross profit per unit

New vehicle:



Luxury

$

4,637

$

3,592



$

1,045

29

%

Import



1,218

670

548

82

%



Domestic

3,080

1,719

1,361

79



%

Total new vehicle

2,385

1,606

779



49

%

Used vehicle retail

1,741

1,440



301

21

%

Finance and insurance, net

1,817



1,691

126

7

%

Front end yield (1)



3,924

3,223

701

22

%



Gross margin

New vehicle:

Luxury

8.0

%



6.5

%

150 bps

Import

4.0



%

2.3

%

170 bps

Domestic



6.8

%

4.2

%

260 bps



Total new vehicle

6.0

%

4.3

%



170 bps

Used vehicle retail

7.1

%

6.5



%

60 bps

Parts and service:

Parts and service, excluding reconditioning and preparation

47.8



%

47.8

%

— bps

Parts and service, including reconditioning and preparation



61.4

%

61.8

%

(40) bps



Total gross profit margin

16.6

%

16.0

%



60 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 Twelve  Months
Ended December 31,

Increase

(Decrease)

%



Change

2020

2019

REVENUE:

New vehicle



$

3,767.4

$

3,863.3

$



(95.9)

(2)

%

Used vehicle:

Retail



1,930.0

1,941.3

(11.3)

(1)

%



Wholesale

239.5

190.3

49.2

26



%

     Total used vehicle

2,169.5

2,131.6

37.9



2

%

Parts and service

889.8

899.4



(9.6)

(1)

%

Finance and insurance, net

305.1



316.0

(10.9)

(3)

%

TOTAL REVENUE



7,131.8

7,210.3

(78.5)

(1)

%



GROSS PROFIT:

New vehicle

218.5

159.5

59.0



37

%

Used vehicle:

Retail

145.3



133.1

12.2

9

%

Wholesale



11.3

1.0

10.3

NM

     Total used vehicle



156.6

134.1

22.5

17

%



Parts and service

543.2

559.3

(16.1)

(3)



%

Finance and insurance, net

305.1

316.0

(10.9)



(3)

%

TOTAL GROSS PROFIT

1,223.4

1,168.9



54.5

5

%

OPERATING EXPENSES:

Selling, general and administrative



781.9

799.8

(17.9)

(2)

%



Depreciation and amortization

38.5

36.2

2.3

6



%

Franchise rights impairment

23.0

7.1

15.9



NM

Other operating expense, net

9.2

0.8

8.4



NM

INCOME FROM OPERATIONS

370.8

325.0

45.8



14

%

OTHER EXPENSES (INCOME):

Floor plan interest expense

17.7



37.9

(20.2)

(53)

%

Other interest expense, net



56.7

54.9

1.8

3

%



Loss on extinguishment of long-term debt, net

20.6

20.6



%

Gain on dealership divestitures, net

(62.3)

(11.7)

(50.6)



NM

Total other expenses, net

32.7

81.1

(48.4)



(60)

%

INCOME BEFORE INCOME TAXES

338.1

243.9



94.2

39

%

Income tax expense

83.7



59.5

24.2

41

%

NET INCOME



$

254.4

$

184.4

$



70.0

38

%

EARNINGS PER COMMON SHARE:

Basic—



Net income

$

13.25

$

9.65



$

3.60

37

%

Diluted—



Net income

$

13.18

$

9.55



$

3.63

38

%

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:



Basic

19.2

19.1

0.1

Restricted stock



0.1

(0.1)

Performance share units

0.1



0.1

Diluted

19.3

19.3



______________________________

NMNot Meaningful

 

ASBURY AUTOMOTIVE GROUP, INC.
KEY OPERATING HIGHLIGHTS (In millions, except per unit data)
(Unaudited)



For the Twelve  Months
Ended December 31,

Increase

(Decrease)

%

Change



2020

2019

Unit sales

New vehicle:

Luxury



25,259

23,988

1,271

5

%



Import

52,201

61,420

(9,219)

(15)



%

Domestic

17,705

19,835

(2,130)



(11)

%

     Total new vehicle

95,165

105,243



(10,078)

(10)

%

Used vehicle retail

80,537



88,602

(8,065)

(9)

%

Used to new ratio



84.6

%

84.2

%

40 bps



Average selling price

New vehicle

$

39,588

$



36,708

$

2,880

8

%



Used vehicle retail

23,964

21,910

2,054

9



%

Average gross profit per unit

New vehicle:

Luxury

$



4,501

$

3,473

$

1,028



30

%

Import

1,144

685



459

67

%

Domestic

2,547



1,719

828

48

%

Total new vehicle



2,296

1,516

780

51

%



Used vehicle retail

1,804

1,502

302

20



%

Finance and insurance, net

1,736

1,630

106



7

%

Front end yield (1)

3,807

3,140



667

21

%

Gross margin

New vehicle:



Luxury

7.8

%

6.3

%



150 bps

Import

3.9

%

2.4



%

150 bps

Domestic

5.9

%



4.3

%

160 bps

Total new vehicle

5.8



%

4.1

%

170 bps

Used vehicle retail



7.5

%

6.9

%

60 bps



Parts and service

61.0

%

62.2

%



(120) bps

Total gross profit margin

17.2

%

16.2



%

100 bps

SG&A metrics

Rent expense

$



32.2

$

27.1

$

5.1



19

%

SG&A as a percentage of gross profit

63.9

%



68.4

%

(450) bps

SG&A, excluding rent expense as a percentage of gross profit

61.3



%

66.1

%

(480) bps

Adjusted SG&A as a percentage of gross profit



63.8

%

68.4

%

(460) bps



Operating metrics

Income from operations as a percentage of revenue

5.2

%

4.5



%

70 bps

Income from operations as a percentage of gross profit

30.3

%



27.8

%

250 bps

Adjusted income from operations as a percentage of revenue

5.7



%

4.6

%

110 bps

Adjusted income from operations as a percentage of gross profit



33.1

%

28.6

%

450 bps



Revenue mix

New vehicle

52.8

%

53.6



%

Used vehicle retail

27.0

%

26.9



%

Used vehicle wholesale

3.4

%

2.6



%

Parts and service

12.5

%

12.5



%

Finance and insurance

4.3

%

4.4



%

     Total revenue

100.0

%

100.0



%

Gross profit mix

New vehicle

17.9

%



13.6

%

Used vehicle retail

11.9

%



11.5

%

Used vehicle wholesale

0.9

%



0.1

%

Parts and service

44.4

%



47.8

%

Finance and insurance

24.9

%



27.0

%

     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 Twelve  Months
Ended December 31,

Increase

(Decrease)

%



Change

2020

2019

Revenue

New vehicle:



Luxury

$

1,126.3

$

1,271.2



$

(144.9)

(11)

%

Import



1,472.7

1,602.5

(129.8)

(8)

%



Domestic

648.1

690.5

(42.4)

(6)



%

     Total new vehicle

3,247.1

3,564.2

(317.1)



(9)

%

Used Vehicle:

Retail

1,685.8



1,772.4

(86.6)

(5)

%

Wholesale



190.7

175.5

15.2

9

%



     Total used vehicle

1,876.5

1,947.9

(71.4)

(4)



%

Parts and service

775.4

840.0

(64.6)



(8)

%

Finance and insurance, net

279.4

292.3



(12.9)

(4)

%

Total revenue

$



6,178.4

$

6,644.4

$

(466.0)



(7)

%

Gross profit

New vehicle:

Luxury



$

81.8

$

80.1

$



1.7

2

%

Import

56.3



39.1

17.2

44

%

Domestic



37.8

28.8

9.0

31

%



     Total new vehicle

175.9

148.0

27.9

19



%

Used Vehicle:

Retail

127.4

124.1



3.3

3

%

Wholesale

9.1



1.6

7.5

NM

     Total used vehicle

136.5



125.7

10.8

9

%

Parts and service:



Customer pay

269.5

298.7

(29.2)

(10)



%

Warranty

76.7

83.4

(6.7)



(8)

%

Wholesale parts

19.7

21.8



(2.1)

(10)

%

     Parts and service, excluding reconditioning and preparation

365.9



403.9

(38.0)

(9)

%

Reconditioning and preparation



104.9

118.4

(13.5)

(11)

%



Total parts and service

470.8

522.3

(51.5)

(10)



%

Finance and insurance

279.4

292.3

(12.9)



(4)

%

Total gross profit

$

1,062.6



$

1,088.3

$

(25.7)

(2)



%

SG&A expense

$

692.3

$



746.9

$

(54.6)

(7)

%



SG&A expense as a percentage of gross profit

65.2

%

68.6

%



(340) 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 Twelve  Months
Ended December 31,

Increase

(Decrease)

%

Change



2020

2019

Unit sales

New vehicle:

Luxury



20,009

23,085

(3,076)

(13)

%



Import

49,744

56,707

(6,963)

(12)



%

Domestic

15,156

17,205

(2,049)



(12)

%

     Total new vehicle

84,909

96,997



(12,088)

(12)

%

Used vehicle retail

72,468



80,717

(8,249)

(10)

%

Used to new ratio



85.3

%

83.2

%

210 bps



Average selling price

New vehicle

$

38,242

$



36,745

$

1,497

4

%



Used vehicle retail

23,263

21,958

1,305

6



%

Average gross profit per unit

New vehicle:

Luxury

$



4,088

$

3,470

$

618



18

%

Import

1,132

690



442

64

%

Domestic

2,494



1,674

820

49

%

Total new vehicle



2,072

1,526

546

36

%



Used vehicle retail

1,758

1,537

221

14



%

Finance and insurance, net

1,775

1,645

130



8

%

Front end yield (1)

3,703

3,176



527

17

%

Gross margin

New vehicle:



Luxury

7.3

%

6.3

%



100 bps

Import

3.8

%

2.4



%

140 bps

Domestic

5.8

%



4.2

%

160 bps

Total new vehicle

5.4



%

4.2

%

120 bps

Used vehicle retail



7.6

%

7.0

%

60 bps



Parts and service:

Parts and service, excluding reconditioning and preparation

47.2

%

48.1



%

(90) bps

Parts and service, including reconditioning and preparation

60.7

%



62.2

%

(150) bps

Total gross profit margin

17.2



%

16.4

%

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.

(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)

December 31,
2020



December 31,
2019

Increase

(Decrease)

% Change

SELECTED BALANCE SHEET DATA



Cash and cash equivalents

$

1.4

$

3.5



$

(2.1)

(60)

%

New vehicle inventory (a)



640.0

802.6

(162.6)

(20)

%



Used vehicle inventory (b)

188.5

140.1

48.4

35



%

Parts inventory (c)

46.7

42.3

4.4



10

%

Total current assets

1,405.7

1,602.6



(196.9)

(12)

%

Floor plan notes payable (d)

702.2



788.0

(85.8)

(11)

%

Total current liabilities



1,223.4

1,247.0

(23.6)

(2)

%



CAPITALIZATION:

Long-term debt (including current portion) (e)

$

1,201.8

$



939.4

$

262.4

28

%



Shareholders’ equity

905.5

646.3

259.2

40



%

Total

$

2,107.3

$



1,585.7

$

521.6

33

%



_____________________________

(a) Excluding $56.3 million of new vehicle inventory classified as Assets held for sale as of December 31, 2019

(b) Excluding $8.6 million of used vehicle inventory classified as Assets held for sale as of December 31, 2019

(c) Excluding $2.8 million of parts inventory classified as Assets held for sale as of December 31, 2019

(d) Excluding $62.8 million of Floor plan notes payable classified as Liabilities associated with assets held for sale as of December 31, 2019



(e) Excluding $8.9 million and $28.1 million of Long-term debt classified as Liabilities associated with assets held for sale as of December 31, 2020 and December 31, 2019, respectively

 

December 31, 2020

September 30, 2020

December 31, 2019



DAYS SUPPLY

New vehicle inventory

40

47

66



Used vehicle inventory

31

35

29


_____________________________



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 Twelve  Months
Ended December 31,

2020



2019

Luxury:

Mercedes-Benz

10

%



7

%

Lexus

9

%



7

%

BMW

6

%



6

%

Acura

4

%



4

%

Infiniti

2

%



3

%

Other luxury

8

%



7

%

Total luxury

39

%



34

%

Imports:

Honda

16



%

18

%

Toyota

12



%

13

%

Nissan

5



%

8

%

Other imports

8



%

6

%

Total imports

41



%

45

%

Domestic:

Ford



8

%

9

%

Chevrolet



5

%

6

%

Dodge



4

%

3

%

Other domestics



3

%

3

%

Total domestic



20

%

21

%

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 “Pro forma adjusted leverage ratio,” “Adjusted income from operations,” “Adjusted net income,” ” Adjusted operating margins,” and “Adjusted diluted earnings per share (“EPS”).” 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



December 31, 2020

September 30, 2020

(Dollars in millions)

Adjusted leverage ratio:

Long-term debt  (including current portion)



$

1,201.8

$

1,223.8

Debt included in Liabilities held for sale



8.9

16.6

Cash and floor plan offset

(86.8)

(43.9)



Availability under our used vehicle revolving floor plan facility

(137.8)

(103.7)

 Adjusted long-term net debt

$



986.1

$

1,092.8

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

Net Income



$

254.4

$

208.9

Depreciation and amortization



38.5

38.5

Income tax expense

83.7

66.7



Swap and other interest expense

57.6

56.3

Earnings before interest, taxes, depreciation and amortization
(“EBITDA”)

$



434.2

$

370.4

Non-core items – expense (income):

Gain on dealership divestitures



$

(62.3)

$

(58.4)

Legal settlements



(2.1)

(2.7)

Gain on sale of real estate

(0.3)

(0.3)



Franchise rights impairment

23.0

30.1

Real estate-related charges

0.7



1.3

Park Place related costs

12.9

12.9

Loss on debt extinguishment



20.7

20.7

  Total non-core items

(7.4)

3.6



Adjusted EBITDA

$

426.8

$

374.0



Pro forma impact of acquisitions and divestitures on EBITDA

$

53.1

$

77.5



Pro forma Adjusted EBITDA

$

479.9

$

451.5



Pro forma Adjusted net leverage ratio

2.1

2.4

For the Three Months Ended
December 31,

2020



2019

(In millions, except per share data)

Adjusted income from operations:

Income from operations

$



134.5

$

79.1

Franchise rights impairment



7.1

Legal settlements

(0.6)

Real estate-related charges



0.6

Adjusted income from operations

$

134.5



$

86.2

Adjusted net income:

Net income

$



89.1

$

43.6

Non-core items – (income) expense:

Franchise rights impairment



7.1

Gain on dealership divestiture

(3.9)



Legal settlements

(0.6)

Real estate-related charges



0.6

Income tax effect on non-core items above

1.0

(1.8)

Total non-core items



(2.9)

5.3

Adjusted net income

$

86.2



$

48.9

Adjusted diluted earnings per share (EPS):

Diluted EPS

$



4.59

$

2.26

Total non-core items

(0.15)



0.27

Adjusted diluted EPS

$

4.44

$



2.53

Weighted average common shares outstanding – diluted

19.4

19.3

For the Twelve  Months
Ended December 31,



2020

2019

(In millions, except per share data)

Adjusted income from operations:

Income from operations



$

370.8

$

325.0

Legal settlements



(2.1)

(0.6)

Gain on sale of real estate

(0.3)

(0.3)



Real estate-related charges

0.7

0.6

Park Place related costs

11.6



Park Place acquisition costs

1.3

Franchise rights impairment



23.0

7.1

Fixed assets write-off

2.4



Adjusted income from operations

$

405.0

$

334.2



Adjusted net income:

Net income

$

254.4

$



184.4

Non-core items – (income) expense:

Gain on dealership divestitures

(62.3)

(11.7)



Legal settlements

(2.1)

(0.6)

Gain on sale of real estate

(0.3)



(0.3)

Real estate-related charges

0.7

0.6

Park Place related costs



11.6

Park Place acquisition costs

1.3



Loss on extinguishment of debt

20.7

Franchise rights impairment

23.0



7.1

Fixed assets write-off

2.4

Income tax effect on non-core items above



1.9

0.6

Total non-core items

(5.5)

(1.9)



Adjusted net income

$

248.9

$

182.5



Adjusted diluted earnings per share (EPS):

Diluted EPS

$

13.18

$



9.55

Total non-core items

(0.28)

(0.09)

Adjusted diluted EPS



$

12.90

$

9.46

Weighted average common shares outstanding – diluted



19.3

19.3

Adjusted Selling, general, and administrative expense:

Selling, general, and administrative expense

$



781.9

$

799.8

Park Place related acquisition costs

(1.3)



Adjusted Selling, general, and administrative expense:

$

780.6

$



799.8

 

 

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SOURCE Asbury Automotive Group, Inc.