-----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, PxG5UvUHp2AcEAJtvDX3mz6fHfLXJDnFJKVIYgLZ+9NRZENjSwfR1pmzLZbsaDOG 3RYrF7NrBC35lf5YYQZoOw== 0001144980-05-000132.txt : 20050426 0001144980-05-000132.hdr.sgml : 20050426 20050425183638 ACCESSION NUMBER: 0001144980-05-000132 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20050425 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Regulation FD Disclosure ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20050426 DATE AS OF CHANGE: 20050425 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: 05771239 BUSINESS ADDRESS: STREET 1: 622 THIRD AVENUE STREET 2: 37TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10017 BUSINESS PHONE: 2128852500 MAIL ADDRESS: STREET 1: 622 THIRD AVENUE STREET 2: 37TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10017 8-K 1 form8kearnings2005.txt UNITED STATES 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): April 26, 2005 ------------------------------------------------- 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.) 622 Third Avenue, 37th Floor, New York, NY 10017 ---------------------------------------------- ------------------ (Address of principal executive offices) (Zip Code) (212) 885-2500 --------------------------------------------------- (Registrant's telephone number, including area code) None ------------------------------------------------------------- (Former name or former address, if changed since last report) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: [ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) [ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) [ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) [ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) Item 2.02 Results of Operations and Financial Conditions. The registrant issued a press release on April 26, 2005 announcing its financial results for the first quarter ended March 31, 2005, which press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference. Item 7.01 Regulation FD Disclosure. The registrant hereby furnishes the press release identified under Item 2.02 and attached hereto as Exhibit 99.1. Item 9.01 Financial Statements and Exhibits. (c) Exhibits. Exhibit No. Description 99.1 Press Release dated April 26, 2005. SIGNATURE 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: April 26, 2005 By: /s/ Kenneth B. Gilman ------------------------------------- Name: Kenneth B. Gilman Title: President and Chief Executive Officer EXHIBIT INDEX Exhibit No. Description 99.1 Press Release dated April 26, 2005. EX-99.1 2 earnings.txt 1ST QUARTER 2005 EARNINGS RELEASE Investors May Contact: Stacey Yonkus Director, Investor Relations (212) 885-2512 investor@asburyauto.com Reporters May Contact: Connie Lee RF|Binder Partners (212) 994-7542 Connie.Lee@RFBinder.com Asbury Automotive Group Reports First Quarter Financial Results -- Excluding Previously Announced Restructuring Costs, Income from Continuing Operations Rose 12% -- -- Same-Store Retail Gross Profit Increased 7% -- New York, NY, April 26, 2005 - 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 first quarter ended March 31, 2005. Income from continuing operations for the first quarter was $9.7 million, or $0.30 per diluted share, which includes $3.6 million ($2.2 million after-tax) of costs related to the previously announced regional restructuring. Excluding the restructuring costs, income from continuing operations increased 12 percent to $11.9 million, or $0.36 per diluted share, from $10.7 million, or $0.33 per diluted share, in the prior year period. Financial highlights for the first quarter of 2005, as compared to the corresponding prior year period, included: o Total revenue for the quarter was approximately $1.4 billion, up 14 percent. Total gross profit was $210.5 million, a 13 percent increase. o Same-store retail revenue and gross profit (excluding fleet and wholesale revenue) both increased 7 percent. o New vehicle retail revenue rose 13 percent (6 percent same-store), and unit sales increased 10 percent (3 percent same-store). New vehicle retail gross profit increased 7 percent (flat on a same-store basis). o Used vehicle retail revenue increased 12 percent (7 percent same-store), and unit sales rose 5 percent (flat on a same-store basis). Used vehicle retail gross profit increased 11 percent (7 percent same-store). o Parts, service and collision repair revenue and gross profit both increased 15 percent (10 percent same-store). o Net finance and insurance (F&I) revenue rose 17 percent (11 percent same-store). F&I per vehicle retailed (PVR) increased 9 percent to $923, and platform F&I PVR rose 9 percent to $894. o As a percentage of gross profit, selling, general and administrative (SG&A) expenses for the quarter, excluding the restructuring costs and rent expense, were 74.2 percent, down 120 basis points compared to the prior year. Rent expense in 2005 is higher due to a sale-leaseback transaction in July 2004 that had the effect of increasing rent while reducing interest and depreciation expense. President and CEO Kenneth B. Gilman said, "Our business model turned in another well balanced performance during the first quarter. Operationally, the quarter was solid - with many outstanding aspects, as all four business lines posted upper single to double-digit same-store sales increases. Results again were strongest in our service businesses, led by a 10 percent same-store gross profit increase in our parts and service business, which truly reflects a concerted effort in this area. About two years ago, we formed a view that new vehicle margins would be coming under sustained pressure, and therefore set very aggressive growth goals for our parts and service operations. With a focused approach to training and investments in equipment and capacity expansion, we're seeing our efforts pay off. "The retail side of the business also performed well, as our new vehicle unit volume outperformed the industry during the quarter. By virtue of our strong brand mix, focused on luxury and mid-line import brands, we were able to capitalize on an improved environment at the end of the quarter. We're also confident that our seven percent increase in same-store used vehicle gross profit is industry leading as well." J. Gordon Smith, Senior Vice President and CFO said, "During the quarter we made significant progress in reorganizing the Company into regions and attaining our targeted annual cost savings. Consistent with our original estimates, we continue to expect the restructuring will reduce earnings by approximately $0.02 to $0.04 per share on a net basis this year, and will increase earnings by approximately $0.10 per share next year." Mr. Smith continued, "It is important to note, however, that the goal of the restructuring is not simply cost reduction. We have already begun to reap the operational benefits of our new structure, and are pleased with the performance of most of our regional operations during the quarter, especially Florida. Our Florida management team has done an excellent job of integrating the operations of our former Jacksonville and Tampa platforms, as well as strengthening the dealership teams of several of our largest Florida stores." Mr. Gilman concluded, "While pleased with the quarter's results, we still need to maintain our sales momentum. In addition, the continued implementation of our regional structure and a vigilant focus on expense control will be key in meeting our objectives for the balance of the year." Commenting on guidance for 2005, the Company noted that it remains comfortable with estimates for earnings per share from continuing operations between $1.70 and $1.78. This range does not reflect the net costs resulting from the regional reorganization nor the potential adoption of Statement of Financial Accounting Standard 123(R). Asbury will host a conference call to discuss its first quarter results this morning at 10:00 a.m. Eastern Time. The call will be simulcast live on the Internet and can be accessed by logging onto http://www.asburyauto.com or http://www.ccbn.com. In addition, a live audio of the call will be accessible to the public by calling 800-357-9448; international callers, please dial 312-461-9409. No access code is required. A conference call replay will be available approximately two hours following the call for 14 days and can be accessed by calling 888-203-1112 (domestic), or 719-457-0820 (international); access code 4704293. About Asbury Automotive Group Asbury Automotive Group, Inc., headquartered in New York City, is one of the largest automobile retailers in the U.S., with 2004 revenue of approximately $5.3 billion. Built through a combination of organic growth and a series of strategic acquisitions, the Company currently operates 95 retail auto stores, encompassing 131 franchises for the sale and servicing of 33 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, risks related to competition in the automotive retail and service industries, 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. Consolidated Statements of Income (In thousands, except per share data) (Unaudited)
For the Three Months Ended March 31, -------------------------- 2005 2004 ----------- ----------- REVENUES: New vehicle ......................................... $ 806,490 $ 706,759 Used vehicle ........................................ 345,472 306,924 Parts, service and collision repair ................. 161,709 140,856 Finance and insurance, net .......................... 38,290 32,687 ----------- ----------- Total revenues ................................. 1,351,961 1,187,226 COST OF SALES New vehicle ......................................... 750,065 654,053 Used vehicle ........................................ 314,237 279,939 Parts, service and collision repair ................. 77,165 67,349 ----------- ----------- Total cost of sales ............................ 1,141,467 1,001,341 ----------- ----------- GROSS PROFIT ............................................ 210,494 185,885 OPERATING EXPENSES: Selling, general and administrative ................. 173,084 148,959 Depreciation and amortization ....................... 5,250 5,071 ----------- ----------- Income from operations ......................... 32,160 31,855 OTHER INCOME (EXPENSE): Floor plan interest expense ......................... (7,412) (4,514) Other interest expense .............................. (9,490) (10,321) Interest income ..................................... 258 273 Other expense ....................................... (22) (202) ----------- ----------- Total other expense, net ....................... (16,666) (14,764) ----------- ----------- Income from continuing operations before income taxes 15,494 17,091 INCOME TAX EXPENSE ...................................... 5,810 6,409 ----------- ----------- INCOME FROM CONTINUING OPERATIONS ....................... 9,684 10,682 DISCONTINUED OPERATIONS, net of tax ..................... (44) (318) ----------- ----------- Net income ..................................... $ 9,640 $ 10,364 =========== =========== BASIC EARNINGS PER COMMON SHARE: Continuing operations ............................... $ 0.30 $ 0.33 Discontinued operations ............................. - (0.01) ----------- ----------- Net income .......................................... $ 0.30 $ 0.32 =========== =========== DILUTED EARNINGS PER COMMON SHARE: Continuing operations ............................... $ 0.30 $ 0.33 Discontinued operations ............................. (0.01) (0.01) ----------- ----------- Net income .......................................... $ 0.29 $ 0.32 =========== =========== WEIGHTED AVERAGE COMMON SHARES OUTSTANDING: Basic ............................................... 32,588 32,435 =========== =========== Diluted ............................................. 32,781 32,721 =========== ===========
Asbury Automotive Group, Inc. Selected Data (Dollars in thousands except per share data) (Unaudited)
As Reported for the Same Store for the Three Months Ended March 31, Three Months Ended March 31, ----------------------------------------- ----------------------------------------- 2005 2004 2005 2004 ----------- ----------- ----------- ----------- RETAIL VEHICLES SOLD: New units .............................. 25,604 61.7% 23,312 60.6% 23,911 61.1% 23,312 60.6% Used units ............................. 15,862 38.3% 15,158 39.4% 15,202 38.9% 15,158 39.4% ----------- ------ ----------- ------ ----------- ------ ----------- ------ Total units ....................... 41,466 100.0% 38,470 100.0% 39,113 100.0% 38,470 100.0% =========== ====== =========== ====== =========== ====== =========== ====== REVENUE: New retail ............................. $ 779,577 57.7% $ 692,744 58.3% $ 734,111 57.3% $ 692,744 58.3% Used retail ............................ 258,198 19.1% 230,573 19.4% 247,201 19.3% 230,573 19.4% Parts, service and collision repair .... 161,709 12.0% 140,856 11.9% 154,622 12.1% 140,856 11.9% Finance and insurance, net ............. 38,290 2.8% 32,687 2.8% 36,437 2.8% 32,687 2.8% ----------- ----------- ----------- ----------- Total retail revenue .............. 1,237,774 1,096,860 1,172,371 1,096,860 Fleet .................................. 26,913 2.0% 14,015 1.2% 26,640 2.1% 14,016 1.2% Wholesale .............................. 87,274 6.4% 76,351 6.4% 82,066 6.4% 76,060 6.4% ----------- ------ ----------- ------ ----------- ------ ----------- ------ Total revenue ..................... $ 1,351,961 100.0% $ 1,187,226 100.0% $ 1,281,077 100.0% $ 1,186,936 100.0% =========== ====== =========== ====== =========== ====== =========== ====== GROSS PROFIT New retail ............................. $ 55,838 26.5% $ 52,348 28.2% $ 52,608 26.2% $ 52,348 28.2% Used retail ............................ 30,110 14.3% 27,053 14.5% 28,990 14.5% 27,053 14.5% Parts, service and collision repair .... 84,544 40.2% 73,507 39.5% 80,906 40.3% 73,507 39.5% Finance and insurance, net ............. 38,290 18.2% 32,687 17.6% 36,437 18.2% 32,687 17.6% ----------- ----------- ----------- ----------- Total retail gross profit ......... 208,782 185,595 198,941 185,595 Fleet .................................. 587 0.3% 358 0.2% 583 0.3% 358 0.2% Wholesale .............................. 1,125 0.5% (68) -% 1,083 0.5% (68) -% ----------- ------ ----------- ------ ----------- ------ ----------- ------ Total gross profit ................ $ 210,494 100.0% $ 185,885 100.0% $ 200,607 100.0% $ 185,885 100.0% =========== ====== =========== ====== =========== ====== =========== ====== SG&A expenses excluding reorganization costs and rent ....................... 156,101 140,250 147,248 140,250 SG&A (excluding reorganization costs and rent) as a percent of gross profit ... 74.2% 75.4% 73.4% 75.4% GROSS PROFIT PER VEHICLE RETAILED: New retail ............................. $ 2,181 $ 2,246 $ 2,200 $ 2,246 Used retail ............................ 1,898 1,785 1,907 1,785 Finance and insurance, net ............. 923 850 932 850 Platform finance and insurance, net .... 894 817 901 817
As of As of March 31, 2005 December 31, 2004 -------------- ----------------- BALANCE SHEET HIGHLIGHTS: Cash and cash equivalents .............. $ 39,253 $ 28,093 Inventories ............................ 800,479 761,557 Total current assets ................... 1,174,008 1,143,506 Floor plan notes payable ............... 690,319 650,948 Total current liabilities .............. 889,628 847,510 CAPITALIZATION: Long-term debt (including current portion) $ 504,492 $ 526,415 Stockholders' equity ............ 493,608 481,733 ---------- ---------- Total ...................... $ 998,100 $1,008,148 ========== ==========
ASBURY AUTOMOTIVE GROUP, INC. SUPPLEMENTAL DISCLOSURES REGARDING NON-GAAP FINANCIAL INFORMATION (In thousands, except vehicle data) (Unaudited) The Company evaluates finance and insurance gross profit performance on a per-vehicle retailed basis by dividing total finance and insurance gross profit by the number of retail vehicles sold. During 2003, the Company renegotiated a contract with a third party finance and insurance product provider, which resulted in the recognition of income that was not attributable to retail vehicles sold during the year. The Company believes that platform finance and insurance, which excludes the additional revenue derived from contracts negotiated by the corporate office, provides a more accurate measure of the Company's finance and insurance operating performance. The following table reconciles finance and insurance gross profit to platform finance and insurance gross profit, and provides necessary components to calculate platform finance and insurance gross profit per vehicle retailed.
As Reported For the Three Same Store For the Three Months Ended March 31, Months Ended March 31, ------------------------- ------------------------- 2005 2004 2005 2004 -------- -------- -------- -------- RECONCILIATION OF FINANCE AND INSURANCE GROSS PROFIT TO PLATFORM FINANCE AND INSURANCE: Finance and insurance, net .................... $ 38,290 $ 32,687 $ 36,437 $ 32,687 Less: corporate finance and insurance ........ (1,203) (1,243) (1,203) (1,243) -------- -------- -------- -------- Platform finance and insurance, net ...... $ 37,087 $ 31,444 $ 35,234 $ 31,444 ======== ======== ======== ======== RETAIL VEHICLES SOLD: New retail units ............................. 25,604 23,312 23,911 23,312 Used retail units ............................ 15,862 15,158 15,202 15,158 -------- -------- -------- -------- Total units ............................. 41,466 38,470 39,113 38,470 ======== ======== ======== ========
The Company's operating income was largely impacted by restructuring costs incurred during the first quarter of 2005 and an incremental rent expense associated with a sale-leaseback transaction that was entered into in the third quarter of 2004. The Company believes that excluding the restructuring costs and rent expense from the selling, general and administrative expenses provides a more meaningful basis to measure the results of the Company's operations compared to that of the prior year period. A reconciliation of the Company's adjusted selling, general and administrative expenses is presented below.
As Reported for the As Reported for the Three Months Ended Three Months Ended March 31, 2005 March 31, 2004 Variance ------------------- ------------------- ---------- SG&A expenses ............ $ 173,084 $ 148,959 $ 24,125 Less: Restructuring costs (3,624) -- (3,624) Rent expense ...... (13,359) (8,709) (4,650) --------- --------- --------- Adjusted SG&A expenses ... $ 156,101 $ 140,250 $ 15,851 ========= ========= =========
Same Store Results Same Store Results for the Three for the Three Months Ended Months Ended March 31, 2005 March 31, 2004 Variance ------------------- ------------------- ---------- SG&A expenses ............ $ 162,888 $ 148,959 $ 13,929 Less: Restructuring costs (3,624) -- (3,624) Rent expense ...... (12,016) (8,709) (3,307) --------- --------- --------- Adjusted SG&A expenses ... $ 147,248 $ 140,250 $ 6,998 ========= ========= =========
The Company defines income from continuing operations as net income less discontinued operations. We believe that excluding certain items from income from continuing operations for the three months ended March 31, 2005 provides a more meaningful basis to measure the results of our operations. A reconciliation of our net income to adjusted income from continuing operations is presented below.
For the Three Months Ended March 31, -------------------- 2005 2004 ------- ------- RECONCILIATION OF NET INCOME TO ADJUSTED INCOME FROM CONTINUING OPERATIONS: Net income ............................................................... $ 9,640 $10,364 Discontinued operations .................................................. 44 318 ------- ------- Income from continuing operations ........................................ 9,684 10,682 Tax affected reorganization costs (a) ....................................... 2,265 -- ------- ------- Adjusted income from continuing operations .................................. $11,949 $10,682 ======= ======= RECONCILIATION OF NET INCOME PER DILUTED COMMON SHARE TO ADJUSTED INCOME FROM CONTINUING OPERATIONS PER DILUTED COMMON SHARE: Net income ............................................................... $ 0.29 $ 0.32 Discontinued operations .................................................. 0.01 0.01 Income from continuing operations ........................................ 0.30 0.33 Tax affected reorganization costs (a) .................................... 0.06 -- ------- ------- Adjusted income from continuing operations ............................... $ 0.36 $ 0.33 ======= ======= Weighted average common shares outstanding (diluted): ....................... 32,781 32,721 ======= =======
(a) During the first quarter of 2005, the Company incurred severance costs of $3,624 ($2,265 net of tax) associated with our previously announced reorganization.
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