-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, ONgpjvWNPqQ3RPOMo88Vi6G7gYCvlbWLdT8Fo9tka1hU6yRnTF+aE7LqHwbJLigl Od8Saw0xnL4wH5PlH5VH/g== 0001144980-04-000019.txt : 20040225 0001144980-04-000019.hdr.sgml : 20040225 20040225125911 ACCESSION NUMBER: 0001144980-04-000019 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20040225 ITEM INFORMATION: Other events FILED AS OF DATE: 20040225 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ASBURY AUTOMOTIVE GROUP INC CENTRAL INDEX KEY: 0001144980 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-AUTO DEALERS & GASOLINE STATIONS [5500] IRS NUMBER: 010609375 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-31262 FILM NUMBER: 04626880 BUSINESS ADDRESS: STREET 1: 3 LANDMARK SQ STREET 2: STE 500 CITY: STAMFORD STATE: CT ZIP: 06901 BUSINESS PHONE: 2033564400 MAIL ADDRESS: STREET 1: 3 LANDMARK SQ STREET 2: STE 500 CITY: STAMFORD STATE: CT ZIP: 06901 8-K 1 form8kfeb252004earnings.txt 4TH QUARTER EARNINGS RELEASE SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported): February 25, 2004 ------------------------------------------------- Asbury Automotive Group, Inc. ------------------------------------------------------ (Exact name of registrant as specified in its charter) Delaware ----------------------------------------------------------------------- (State or other jurisdiction of incorporation) 5511 01-0609375 - ------------------------ ----------------------------------- (Commission File Number) (IRS Employer Identification No.) Three Landmark Square, Suite 500, Stamford, CT 06901 - ------------------------------------------------------ ------------------ (Address of principal executive offices) (Zip Code) (203) 356-4400 --------------------------------------------------- (Registrant's telephone number, including area code) None ------------------------------------------------------------- (Former name or former address, if changed since last report) Item 7. Financial Statements and Exhibits. (c) Exhibits Exhibit No. Description 99.1 Press Release dated February 25, 2004. Item 12. Results of Operations and Financial Condition. The registrant issued a press release on February 25, 2004, announcing its earnings for the fourth quarter and year ended December 31, 2003, which press release is attached hereto as Exhibit 99.1. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. ASBURY AUTOMOTIVE GROUP, INC. Date: February 24, 2004 By: /s/ Kenneth B. Gilman ----------------------------------- Name: Kenneth B. Gilman Title: Chief Executive Officer EXHIBIT INDEX Exhibit No. Description 99.1 Press Release dated February 25, 2004 EX-99.1 3 ex991earningsrelfeb2004.txt 4TH QUARTER 2003 EARNINGS PRESS RELEASE Investors May Contact: Stacey Yonkus Director, Investor Relations (203) 356-4424 syonkus@asburyauto.com Reporters May Contact: David Shein RFBinder Partners (212) 994-7514 david.shein@rfbinder.com Asbury Automotive Group Reports Fourth Quarter and 2003 Financial Results Stamford, Conn., February 25, 2004 - Asbury Automotive Group, Inc. (NYSE: ABG), one of the largest automotive retail and service companies in the U.S., today reported financial results for the fourth quarter and year ended December 31, 2003. For the year, net income from continuing operations was $50.5 million, or $1.55 per share, before taking into account the impact of a previously announced after tax charge related to the termination of the Bob Baker acquisition agreement, and a non-cash goodwill impairment charge related to the Company's Oregon platform. Including the recognition of the charge related to the Baker transaction and the goodwill impairment charge, net income from continuing operations for the year was $19.8 million, or $0.61 per share. Net income for the year was $15.2 million, or $0.47 per share, which includes a $0.14 loss per share from discontinued operations, as well as the aforementioned charge related to the Baker transaction of $0.05 per share and the goodwill impairment charge of $0.89 per share. For the fourth quarter of 2003, net income from continuing operations was $10.9 million, or $0.34 per share, excluding the charges related to the Baker transaction and the goodwill impairment, a 44 percent increase over the prior year quarter. Including the charges related to the Baker transaction and the goodwill impairment the Company's net loss from continuing operations for the fourth quarter of 2003 was $19.8 million, or $0.61 per share. The net loss for the fourth quarter of 2003 was $20.4 million, or $0.63 per share, which includes a $0.02 loss per share from discontinued operations, as well as the charges related to the Baker transaction and the goodwill impairment. The non-cash goodwill impairment charge of $37.9 million ($29.2 million after-tax) was recorded after the completion of the Company's annual assessment of goodwill and other intangible assets as required by Statement of Financial Accounting Standard No. 142. As previously announced and discussed with investors, this charge reduces the carrying value of goodwill associated with Asbury's Oregon platform. The Company anticipates that based upon management changes in 2003 and the implementation of its operational improvement plan, financial performance in its Oregon platform should improve in 2004. In the event that the turnaround called for by this plan takes longer than anticipated or is only partially successful, the Company believes that Oregon's current performance run rate, which includes the impact of expense reduction initiatives already implemented, is sufficient to sustain the remaining goodwill. Other financial highlights for the year and fourth quarter, as compared to the corresponding periods in 2002, included: o The Company's total revenues for the year increased 8.2 percent, while same-store retail sales (excluding fleet and wholesale business) rose 3.5 percent. For the fourth quarter, total revenues increased 9.8 percent, while same-store retail sales rose 1.4 percent. o Total retail gross profit dollars for the year increased 6.2 percent, while same-store retail gross profit rose 1.4 percent. For the fourth quarter, gross profit increased 7.0 percent, and decreased 0.7 percent on a same-store basis. o For the year, new vehicle retail sales increased 10.0 percent in dollars (5.1 percent same-store), and increased 3.6 percent in units (down 0.7 percent same-store). For the fourth quarter, new vehicle retail sales increased 13.8 percent in dollars (5.2 percent same-store) and rose 6.0 percent in units (down 0.9 percent same-store). o For the year, used vehicle retail sales increased 1.5 percent in dollars (down 3.1 percent same-store), and increased 2.0 percent in units (down 2.1 percent same-store). For the fourth quarter, used vehicle retail sales decreased 5.1 percent in dollars (12.8 percent same-store) and declined 3.9 percent in units (10.0 percent same-store). Consistent with prior announcements, the Company noted that the used vehicle retail environment remained challenging during the quarter, which was due in large part to the highly promotional new vehicle market. o Parts, service and collision repair revenues and gross profit for the year increased 10.9 percent and 10.2 percent (5.5 percent and 4.5 percent same-store), respectively. For the fourth quarter, revenues and gross profit increased 13.5 percent and 9.3 percent (4.7 percent and 0.9 percent same-store), respectively. The Company noted that the increase in gross profit during the quarter was lower than the rate of sales increase primarily due to a shift in the business mix. o For the year, net finance and insurance (F&I) income rose 14.2 percent (10.2 percent same-store), with a 10.9 percent increase in F&I per vehicle retailed (PVR), and a 8.7 percent increase in F&I PVR generated at the platform level. For the quarter, net F&I income rose 12.9 percent (6.6 percent same-store), with a 10.4 percent increase in F&I PVR, and a 5.5 percent increase in F&I PVR generated at the platform level. o During the fourth quarter, the Company continued to make progress with its productivity initiatives, as selling, general and administrative expenses declined 40 basis points as a percentage of gross profit, and 70 basis points on a same-store basis. o The Company's effective tax rate for the full year was 38.0 percent, before taking into account the impact of the goodwill impairment charge. Including the charge, the Company's effective tax rate for the year was 51.8 percent. The Company noted that in 2003 it had completed acquisitions representing $415 million in annualized revenues, of which $150 million was reflected in its 2003 results. Thus far in 2004, the Company completed acquisitions to acquire three franchises with annual revenues of $170 million, with approximately $155 million to be reflected in 2004 results. In addition, the Company noted that it had executed contracts to acquire three additional franchises with annual revenues of $160 million. These pending transactions are subject in all cases to manufacturer consent. Commenting on expectations for 2004, the Company noted that it was comfortable with the analysts' consensus earnings estimate of $1.76 per share from continuing operations for the full year. About Asbury Automotive Group Asbury Automotive Group, Inc., headquartered in Stamford, Connecticut, is one of the largest automobile retailers in the U.S., with 2003 revenues of $4.8 billion. Built through a combination of organic growth and a series of strategic acquisitions, Asbury now operates through nine geographically concentrated, individually branded "platforms." These platforms currently operate 100 retail auto stores, encompassing 142 franchises for the sale and servicing of 35 different brands of American, European and Asian automobiles. Asbury believes that its product mix contains a higher proportion of the more desirable luxury and mid-line import brands than most public automotive retailers. The Company offers customers an extensive range of automotive products and services, including new and used vehicle sales and related financing and insurance, vehicle maintenance and repair services, replacement parts and service contracts. Forward Looking Statements This press release contains "forward-looking statements" as that term is defined in the Private Securities Litigation Reform Act of 1995. The forward- looking statements include statements relating to goals, plans, projections and guidance regarding the Company's financial position, results of operations, market position, product development, pending and potential future acquisitions and business strategy. These statements are based on management's current expectations and involve significant risks and uncertainties that may cause results to differ materially from those set forth in the statements. These risks and uncertainties include, among other things, market factors, the Company's relationships with vehicle manufacturers and other suppliers which could cause among other things acquisitions under contract or letters of intent to fail, risks associated with the Company's substantial indebtedness, risks related to pending and potential future acquisitions, general economic conditions both nationally and locally and governmental regulations and legislation. There can be no guarantees that the Company's plans for future operations will be successfully implemented or that they will prove to be commercially successful. These and other risk factors are discussed in the Company's annual report on Form 10-K and in its other filings with the Securities and Exchange Commission. We undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future events or otherwise. ASBURY AUTOMOTIVE GROUP, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands)
December 31, December 31, ASSETS 2003 2002 ------------ ------------ (unaudited) CURRENT ASSETS: Cash and cash equivalents ..................................... $ 106,711 $ 22,613 Contracts-in-transit .......................................... 93,881 91,190 Accounts receivable, net ...................................... 114,201 96,090 Inventories ................................................... 650,397 591,839 Prepaid and other current assets .............................. 46,819 47,857 ---------- ---------- Total current assets .................................... 1,012,009 849,589 PROPERTY AND EQUIPMENT, net ...................................... 266,991 257,305 GOODWILL ......................................................... 404,143 402,133 OTHER ASSETS ..................................................... 101,603 66,758 ASSETS HELD FOR SALE ............................................. 29,533 29,859 ---------- ---------- Total assets ............................................ $1,814,279 $1,605,644 ========== ========== LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Floor plan notes payable ...................................... $ 602,167 $ 528,591 Current maturities of long-term debt .......................... 33,250 36,412 Accounts payable and accrued liabilities ...................... 121,609 117,445 ---------- ---------- Total current liabilities ............................... 757,026 682,448 LONG-TERM DEBT ................................................... 559,128 438,740 OTHER LIABILITIES ................................................ 39,686 45,552 LIABILITIES ASSOCIATED WITH ASSETS HELD FOR SALE ................. 24,732 11,953 STOCKHOLDERS' EQUITY ............................................. 433,707 426,951 ---------- ---------- Total liabilities and stockholders' equity .............. $1,814,279 $1,605,644 ========== ==========
ASBURY AUTOMOTIVE GROUP, INC. CONSOLIDATED STATEMENTS OF INCOME (dollars in thousands except per share data) - (unaudited)
For the Years Ended For the Three Months Ended ------------------------------------------- --------------------------- December 31, December 31, December 31, December 31, 2002 Pro December 31, 2003 2002 2003 Forma (a) 2002 Actual ------------ ------------ ------------ ------------ ------------ REVENUES: New vehicle ......................................... $ 724,412 $ 637,546 $ 2,909,641 $ 2,644,798 $ 2,644,798 Used vehicle ........................................ 268,057 270,897 1,183,901 1,158,144 1,158,144 Parts, service and collision repair ................. 141,373 124,547 551,498 497,164 497,164 Finance and insurance, net .......................... 30,968 27,439 131,465 115,159 115,159 ------------ ------------ ------------ ------------ ----------- Total revenues ................................ 1,164,810 1,060,429 4,776,505 4,415,265 4,415,265 COST OF SALES: New vehicle ......................................... 670,757 587,567 2,694,777 2,430,494 2,430,494 Used vehicle ........................................ 246,150 247,336 1,079,314 1,053,878 1,053,878 Parts, service and collision repair ................. 68,414 57,783 262,110 234,575 234,575 ------------ ------------ ------------ ------------ ----------- Total cost of sales ........................... 985,321 892,686 4,036,201 3,718,947 3,718,947 ------------ ------------ ------------ ------------ ----------- GROSS PROFIT ........................................... 179,489 167,743 740,304 696,318 696,318 OPERATING EXPENSES: Selling, general and administrative ................. 144,541 135,764 580,938 537,846 537,846 Depreciation and amortization ....................... 5,243 4,835 20,212 19,062 19,062 Impairment of goodwill .............................. 37,930 -- 37,930 -- -- ------------ ------------ ------------ ------------ ----------- (Loss) income from operations ....................... (8,225) 27,144 101,224 139,410 139,410 OTHER INCOME (EXPENSE): Floor plan interest expense ......................... (4,537) (4,801) (18,800) (17,860) (17,860) Other interest expense .............................. (10,200) (9,674) (40,238) (38,423) (38,423) Interest income ..................................... 49 255 499 1,200 1,200 Net losses from unconsolidated entities ............. -- -- -- (100) (100) Other expense ....................................... (1,197) (340) (1,619) (499) (499) ------------ ------------ ------------ ------------ ----------- Total other expense, net ...................... (15,885) (14,560) (60,158) (55,682) (55,682) ------------ ------------ ------------ ------------ ----------- (Loss) income before income taxes and discontinued operations ..................... (24,110) 12,584 41,066 83,728 83,728 INCOME TAX PROVISION: Income tax (benefit) expense ........................ (4,294) 5,016 21,268 33,324 27,765 Tax adjustment upon conversion from an L.L.C. to a corporation .................................. -- -- -- -- 11,553 ------------ ------------ ------------ ------------ ----------- (Loss) income from continuing operations ...... (19,816) 7,568 19,798 50,404 44,410 DISCONTINUED OPERATIONS, net of tax .................... (611) (2,070) (4,611) (6,325) (6,325) ------------ ------------ ------------ ------------ ----------- Net (loss) income ............................. $ (20,427) $ 5,498 $ 15,187 $ 44,079(b) $ 38,085 ============ ============ ============ ============ =========== EARNINGS PER COMMON SHARE: Basic: (Loss) income from continuing operations .......... $ (0.61) $ 0.22 $ 0.61 $ 1.48 $ 1.34 ============ ============ ============ ============ =========== Net (loss) income ................................. $ (0.63) $ 0.16 $ 0.47 $ 1.30 $ 1.15 ============ ============ ============ ============ =========== Diluted: (Loss) income from continuing operations .......... $ (0.61) $ 0.22 $ 0.61 $ 1.48 $ 1.34 ============ ============ ============ ============ =========== Net (loss) income ................................. $ (0.62) $ 0.16 $ 0.46 $ 1.30 $ 1.15 ============ ============ ============ ============ =========== WEIGHTED AVERAGE SHARES OUTSTANDING: Basic ............................................... 32,431 33,810 32,648 33,952 33,065 ============ ============ ============ ============ =========== Diluted ............................................. 32,686 33,810 32,715 33,960 33,073 ============ ============ ============ ============ ===========
(a) Pro forma column includes a tax provision as if the Company were a "C" corporation for the entire period as well as assumes that all shares were outstanding for the full period. This column excludes a one-time charge to establish a net deferred tax liability upon the Company's conversion to a "C" corporation as required by SFAS 109. (b) Reconciliation of net income to pro forma net income: GAAP net income from continuing operations $38,085 Tax adjustment upon conversion from an L.L.C. to a corporation 11,553 Pro forma income tax charge (5,559) (c) ------- Pro forma net income from continuing operations $44,079 ======= (c) Represents the pro forma tax charge from continuing operations for the time during the period that the company was an L.L.C. ASBURY AUTOMOTIVE GROUP, INC. SELECTED DATA (in thousands except unit data) (unaudited)
GAAP Results for the Three Same Store Results for the Months Ended December 31, Three Months Ended December 31, ---------------------------- ------------------------------- 2003 2002 2003 2002 ----------- ----------- ----------- ----------- RETAIL UNITS: New .................................................... 23,460 22,125 21,893 22,100 Used ................................................... 13,066 13,597 12,208 13,564 ----------- ----------- ----------- ----------- Total ................................................ 36,526 35,722 34,101 35,664 =========== =========== =========== =========== REVENUE: New retail ............................................. $ 713,535 $ 627,190 $ 659,271 $ 626,519 Used retail ............................................ 199,555 210,370 183,017 209,917 Parts, service and collision repair .................... 141,373 124,547 130,268 124,400 Finance and insurance, net ............................. 30,968 27,439 29,175 27,368 Fleet .................................................. 10,877 10,356 10,550 10,356 Wholesale .............................................. 68,502 60,527 62,183 60,493 ----------- ----------- ----------- ----------- Total ............................................ $ 1,164,810 $ 1,060,429 $ 1,074,464 $ 1,059,053 =========== =========== =========== =========== GROSS PROFIT: New retail ............................................. $ 47,116 $ 44,051 $ 43,065 $ 44,015 Used retail ............................................ 23,023 24,478 21,427 24,412 Parts, service and collision repair .................... 72,959 66,764 67,266 66,654 Finance and insurance, net ............................. 30,968 27,439 29,175 27,368 Fleet .................................................. 421 446 416 446 Wholesale .............................................. (1,116) (917) (868) (920) Floor plan interest credits ............................ 6,118 5,482 5,789 5,469 ----------- ----------- ----------- ----------- Total ............................................ $ 179,489 $ 167,743 $ 166,270 $ 167,444 =========== =========== =========== =========== GROSS MARGIN %: New retail (including floor plan interest credits) ..... 7.5% 7.9% 7.4% 7.9% Used retail ............................................ 11.5% 11.6% 11.7% 11.6% Parts, service and collision repair .................... 51.6% 53.6% 51.6% 53.6% Finance and insurance, net ............................. 100.0% 100.0% 100.0% 100.0% Total gross margin ..................................... 15.4% 15.8% 15.5% 15.8% GROSS PROFIT PER UNIT: New retail (including floor plan interest credits) ..... $ 2,269 $ 2,239 $ 2,231 $ 2,239 Used retail ............................................ 1,762 1,800 1,755 1,800 Weighted average total for new and used retail ......... 2,088 2,072 2,061 2,072 RECONCILIATION OF FINANCE AND INSURANCE GROSS PROFIT TO PLATFORM FINANCE AND INSURANCE (a): Finance and insurance, net ............................. $ 30,968 $ 27,439 $ 29,175 $ 27,368 Less: corporate finance and insurance ................. (1,393) -- (1,393) -- ----------- ----------- ----------- ----------- Platform finance and insurance, net ............... $ 29,575 $ 27,439 $ 27,782 $ 27,368 =========== =========== =========== =========== Platform finance and insurance per vehicle retailed ....... $ 810 $ 768 $ 815 $ 767 =========== =========== =========== =========== RECONCILIATION OF NET (LOSS) INCOME TO ADJUSTED EBITDA (b): Net (loss) income .................................... $ (20,427) $ 5,498 Add: Depreciation and amortization ................... 5,243 4,835 Impairment of goodwill .......................... 37,930 -- Other interest expense .......................... 10,200 9,674 Income tax (benefit) expense .................... (4,294) 5,016 ----------- ----------- Adjusted EBITDA ........................................... $ 28,652 $ 25,023 =========== ===========
GAAP Results for the Three Months Ended December 31 -------------------------- 2003 2002 ------------ ----------- RECONCILIATION OF NET (LOSS) INCOME TO ADJUSTED INCOME FROM CONTINUING OPERATIONS: Net (loss) income .......................................................... $(20,427) $ 5,498 Discontinued operations .................................................... 611 2,070 --------- ------- (Loss) income from continuing operations ................................... (19,816) 7,568 Tax affected impairment of goodwill (c) ....................................... 29,180 -- Tax affected charge for Bob Baker (d) ......................................... 1,552 -- --------- ------- Adjusted income from continuing operations .................................... $ 10,916 $ 7,568 ========= ======= RECONCILIATION OF NET (LOSS) INCOME PER COMMON SHARE (BASIC) TO ADJUSTED INCOME FROM CONTINUING OPERATIONS PER COMMON SHARE (BASIC): Net (loss) income .......................................................... $ (0.63) $ 0.16 Discontinued operations .................................................... 0.02 0.06 --------- ------- (Loss) income from continuing operations ................................... (0.61) 0.22 Tax affected impairment of goodwill (c) .................................... 0.90 -- Tax affected charge for Bob Baker (d) ...................................... 0.05 -- --------- ------- Adjusted income from continuing operations ................................. $ 0.34 $ 0.22 ========= ======= WEIGHTED AVERAGE SHARES OUTSTANDING: Basic ...................................................................... 32,431 33,810 ========= =======
GAAP Results for the Year Same Store Results for the Ended December 31, Year Ended December 31, --------------------------- --------------------------- 2003 2002 2003 2002 ----------- ----------- ------------ ----------- RETAIL UNITS: New ...................................................... 98,601 95,197 94,531 95,160 Used ..................................................... 59,211 58,076 56,824 58,027 ----------- ----------- ------------ ----------- Total ............................................... 157,812 153,273 151,355 153,187 =========== =========== ============ =========== REVENUE: New retail ............................................... $ 2,861,746 $ 2,601,487 $ 2,731,889 $ 2,600,506 Used retail .............................................. 903,113 889,579 861,175 888,858 Parts, service and collision repair ...................... 551,498 497,164 524,416 496,928 Finance and insurance, net ............................... 131,465 115,159 126,860 115,069 Fleet .................................................... 47,895 43,311 47,372 43,311 Wholesale ................................................ 280,788 268,565 266,539 268,530 ----------- ----------- ------------ ----------- Total .............................................. $ 4,776,505 $ 4,415,265 $ 4,558,251 $ 4,413,202 =========== =========== ============ =========== GROSS PROFIT: New retail ............................................... $ 189,381 189,755 $ 180,443 189,699 Used retail .............................................. 106,568 107,281 102,424 107,183 Parts, service and collision repair ...................... 289,388 262,589 274,344 262,421 Finance and insurance, net ............................... 131,465 115,159 126,860 115,069 Fleet .................................................... 1,296 1,426 1,293 1,426 Wholesale ................................................ (1,981) (3,015) (1,661) (3,018) Floor plan interest credits .............................. 24,187 23,123 23,462 23,109 ----------- ----------- ------------ ----------- Total .............................................. $ 740,304 696,318 $ 707,165 695,889 =========== =========== ============ =========== GROSS MARGIN %: New retail (including floor plan interest credits) ....... 7.5% 8.2% 7.5% 8.2% Used retail .............................................. 11.8% 12.1% 11.9% 12.1% Parts, service and collision repair ...................... 52.5% 52.8% 52.3% 52.8% Finance and insurance, net ............................... 100.0% 100.0% 100.0% 100.0% Total gross margin ....................................... 15.5% 15.8% 15.5% 15.8% GROSS PROFIT PER UNIT: New retail (including floor plan interest credits) ....... 2,166 2,236 2,157 2,236 Used retail .............................................. 1,800 1,847 1,802 1,847 Weighted average total for new and used retail ........... 2,029 2,089 2,024 2,089 FREE CASH FLOW (e): Net cash provided by operating activities ................ $ 95,344 $ 65,121 Less- Capital expenditures ............................... (54,633) (57,477) Add- Financial capital expenditures ....................... 11,026 5,447 Proceeds from sale-leaseback transactions, including amounts paid directly to the Company's lenders ....... 5,457 -- ------------ ------------ Total .............................................. $ 57,194 $ 13,091 ============ =========== As of As of December 31, December 31, 2003 2002 ------------ ------------ CAPITALIZATION: Long-term debt (including current portion) ............... $ 592,378 $ 475,152 Stockholders' equity ..................................... 433,707 426,951 ----------- ----------- Total .................................................... $ 1,026,085 $ 902,103 =========== =========== GAAP Results for the Year Same Store Results for the Ended December 31, Year Ended December 31, --------------------------- --------------------------- 2003 2002 2003 2002 ----------- ----------- ------------ ----------- RECONCILIATION OF FINANCE AND INSURANCE GROSS PROFIT TO PLATFORM FINANCE AND INSURANCE (a): Finance and insurance, net $ 131,465 $ 115,159 $ 126,860 $ 115,069 Less: corporate finance and insurance (2,693) - (2,693) - ----------- ----------- ------------ ----------- Platform finance and insurance, net $ 128,772 $ 115,159 $ 124,167 $ 115,069 =========== =========== ============ =========== Platform finance and insurance per vehicle retailed $816 $751 $820 $751 =========== =========== ============ ===========
GAAP Results for the Year Ended December 31 -------------------------- 2003 2002 ------------ ----------- RECONCILIATION OF NET INCOME TO ADJUSTED EBITDA (b): Net income ............................................................. $ 15,187 $ 38,085 Add: Depreciation and amortization ..................................... 20,212 19,062 Impairment of goodwill ............................................ 37,930 -- Other interest expense ............................................ 40,238 38,423 Income tax expense ................................................ 21,268 39,318 ------------ ----------- Adjusted EBITDA ............................................................. $ 134,835 $ 134,888 RECONCILIATION OF NET INCOME TO ADJUSTED INCOME FROM CONTINUING OPERATIONS: Net income ............................................................... $ 15,187 $ 38,085 Discontinued operations .................................................. 4,611 6,325 ----------- ----------- Income from continuing operations ........................................ 19,798 44,410 Tax affected impairment of goodwill (c) ................................. 29,180 -- Tax affected charge for Bob Baker (d) .................................... 1,552 -- ----------- ----------- Adjusted income from continuing operations ............................... $ 50,530 $ 44,410 RECONCILIATION OF NET INCOME PER COMMON SHARE (BASIC) TO ADJUSTED INCOME FROM CONTINUING OPERATIONS PER COMMON SHARE (BASIC): Net income ............................................................... $ 0.47 $ 1.15 Discontinued operations .................................................. 0.14 0.19 ------------ ----------- Income from continuing operations ........................................ 0.61 1.34 Tax affected impairment of goodwill (c) .................................. 0.89 -- Tax affected charge for Bob Baker (d) .................................... 0.05 -- ------------ ----------- Adjusted income from continuing operations .................................. $ 1.55 $ 1.34 ============ =========== WEIGHTED AVERAGE SHARES OUTSTANDING: Basic .................................................................... 32,648 33,065 ============ ===========
(a) The Company believes that platform finance and insurance gross profit provides a more accurate measure of the Company's finance and insurance performance than finance and insurance PVR, as it excludes revenue resulting from corporate negotiated contracts, which is not attributable to retail units sold. (b) The Company defines adjusted EBITDA as earnings before income taxes, other interest expense, depreciation and amortization and the charge associated with the impairment of goodwill. Adjusted EBITDA, which excludes the charge associated with the impairment of goodwill, provides a basis to measure the performance of the Company's operations and the Company's ability to meet its fixed charges, including interest. Adjusted EBITDA is not a measure of financial performance under accounting principles generally accepted in the United States and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with accounting principles generally accepted in the United States. The Company's definition of adjusted EBITDA may not be comparable to similarly titled measures of other companies. (c) In connection with the Company's annual impairment test of goodwill conducted in the fourth quarter of 2003, the Company recorded a non-cash goodwill impairment charge of $37,930 (after tax charge of $29,180) associated with the Company's Oregon platform. The goodwill impairment charge is added back to arrive at adjusted net income from continuing operations to provide a basis to measure the Company's operating performance apart from the non-cash impairment charge. (d) In connection with the proposed acquisition of the Bob Baker Auto Group, the Company incurred $2,503 of costs, including certain costs capitalized in prior periods. In the fourth quarter of 2004, the Company determined that the acquisition was no longer probable and wrote-off such expenses. The corresponding $1,552 after tax charge (tax affected for the year and the quarter at 38%) is added back to arrive at adjusted net income from continuing operations, as the Company views costs related to acquisition activity as investments in the related acquisition not expenses associate with the continuing operations of the Company. (e) Free cash flow is defined as net cash provided by operating activities less capital expenditures plus proceeds from financing activities associated with the related period's capital projects. -----END PRIVACY-ENHANCED MESSAGE-----