EX-99.1 2 a2012q3ex991.htm PRESS RELEASE 2012 Q3 Ex 99.1


Exhibit 99.1

Investors May Contact:
Ryan Marsh
VP & Treasurer
(770) 418-8211
ir@asburyauto.com

Reporters May Contact:
Melissa Corey
Public Relations & Communications Manager
(770) 418-8231
mcorey@asburyauto.com
 
 
ASBURY AUTOMOTIVE GROUP REPORTS ALL-TIME RECORD QUARTERLY EPS FROM CONTINUING OPERATIONS
 
Third quarter EPS from continuing operations of $0.72 per diluted share, up 71% over prior period quarter
 
Duluth, GA, October 23, 2012 - Asbury Automotive Group, Inc. (NYSE: ABG), one of the largest automotive retail and service companies in the U.S., today reported income from continuing operations for the third quarter 2012 of $22.8 million, or $0.72 per diluted share, versus adjusted income from continuing operations in the third quarter 2011 of $13.8 million, or $0.42 per diluted share, a 71% increase per diluted share. On a GAAP-basis, income from continuing operations in the third quarter 2011 was $12.3 million, or $0.38 per diluted share. Net income for the third quarter 2012 was $20.7 million, or $0.66 per diluted share, compared to $12.3 million, or $0.38 per diluted share in the prior year period. See attached reconciliation for reported adjustments.
 
Third Quarter 2012 Highlights (compared to the prior year period):
 
•
Total revenues increased 14% to $1.2 billion
•
New vehicle retail revenues up 22%
•
Used vehicle retail revenues up 5%
•
Finance and insurance revenues up 22%
•
Parts and service revenues up 1%
•
SG&A expense as a percent of gross profit improved 480 basis points to 72.3%
•
Repaid remaining $15 million of outstanding convertible notes and completed $34 million of mortgages; third quarter leverage at 2.3x Total Debt/Adjusted EBITDA
•
Repurchased $6 million of Asbury common stock during the quarter
 


1


“Asbury is pleased to announce all-time record quarterly results from continuing operations,” said Craig T. Monaghan, Asbury's President and Chief Executive Officer. “Operational excellence combined with disciplined spending produced these record results. With our core infrastructure in place, we look forward to building a stronger Company through both top-line and bottom-line growth.”
Asbury's Executive Vice President and Chief Operating Officer, Michael S. Kearney, added, “Our stores continue to generate phenomenal results. Record operating profits were driven by a balanced contribution from all business areas recording higher revenues and gross profits. These results reflect the impressive benefits from our focus on best processes enabled by technology and executed by motivated employees.”

For the nine-month period ended September 30, 2012, the Company reported income from continuing operations of $61.2 million, or $1.94 per diluted share, compared to adjusted income from continuing operations of $40.9 million, or $1.24 per diluted share, in the prior year period. Last year's results included a net charge of $11.1 million, net of taxes, for non-core items in SG&A and Other operating expense, or $0.34 per diluted share. The Company's revenues totaled $3.4 billion, an increase of 11% compared to $3.1 billion in the prior year period. Net income for the nine-month period ended September 30, 2012 was $59.4 million, or $1.88 per diluted share compared to $46.4 million or $1.41 per diluted share for the prior year period.

Asbury will host a conference call to discuss its third 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 (888) 428-9480 (domestic), or (719) 325-2420 (international); passcode - 7139904. Callers should dial in approximately 5 to 10 minutes before the call begins.

 
About Asbury Automotive Group, Inc.
 
Asbury Automotive Group, Inc. (“Asbury”), headquartered in Duluth, Georgia, a suburb of Atlanta, is one of the largest automobile retailers in the U.S. Built through a combination of organic growth and a series of strategic acquisitions, Asbury currently operates 77 retail auto stores, encompassing 97 franchises for the sale and servicing of 28 different brands of American, European and Asian automobiles. Asbury offers customers an extensive range of automotive products and services, including new and used vehicle sales and related financing and insurance, vehicle maintenance and repair services, replacement parts and service contracts.



Forward-Looking Statements
 
This press release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are statements other than historical fact, and may include statements relating to goals, plans, market conditions and projections regarding Asbury's financial position, liquidity, results of operations,

2


market position and dealership portfolio, the benefits of its restructuring program and other initiatives and future business strategy. These statements are based on management's current expectations and beliefs and involve significant risks and uncertainties that may cause results to differ materially from those set forth in the statements. These risks and uncertainties include, among other things, market factors, Asbury's relationships with, and the financial and operational stability of, vehicle manufacturers and other suppliers, acts of God or other incidents which may adversely impact supply from vehicle manufacturers and/or present retail sales challenges, risks associated with Asbury's indebtedness (including available borrowing capacity, compliance with its financial covenants and ability to refinance or repay such indebtedness on favorable terms), Asbury's relationships with, and the financial stability of, its lenders and lessors, risks related to competition in the automotive retail and service industries, general economic conditions both nationally and locally, governmental regulations, legislation, adverse results in litigation and other proceedings, and Asbury's ability to execute its IT initiatives and other operational strategies, Asbury's ability to leverage gains from its dealership portfolio, Asbury's ability to capitalize on opportunities to repurchase its debt and equity securities or purchase properties that it currently leases, and Asbury's ability to stay within its targeted range for capital expenditures. There can be no guarantees that Asbury's plans for future operations will be successfully implemented or that they will prove to be commercially successful.
 
These and other risk factors that could cause actual results to differ materially from those expressed or implied in our forward-looking statements are and will be discussed in Asbury's filings with the Securities and Exchange Commission from time to time, including its most recent annual report on Form 10-K and any subsequently filed quarterly reports on Form 10-Q. We undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future events or otherwise.




























3


ASBURY AUTOMOTIVE GROUP, INC.
CONSOLIDATED STATEMENTS OF INCOME
(In millions, except per share data)
(Unaudited)

 
For the Three Months Ended September 30,
 
For the Nine Months Ended September 30,
 
2012
 
2011
 
2012
 
2011
REVENUES:
 
 
 
 
 
 
 
New vehicle
$
674.7

 
$
550.8

 
$
1,902.7

 
$
1,659.4

Used vehicle
335.6

 
318.5

 
988.6

 
922.9

Parts and service
143.5

 
141.8

 
429.2

 
423.8

Finance and insurance, net
44.1

 
36.1

 
123.6

 
102.0

Total revenues
1,197.9

 
1,047.2

 
3,444.1

 
3,108.1

COST OF SALES:
 
 
 
 
 
 
 
New vehicle
633.1

 
512.1

 
1,780.6

 
1,547.4

Used vehicle
309.4

 
294.3

 
908.9

 
844.4

Parts and service
60.3

 
61.9

 
181.0

 
187.5

Total cost of sales
1,002.8

 
868.3

 
2,870.5

 
2,579.3

GROSS PROFIT
195.1

 
178.9

 
573.6

 
528.8

OPERATING EXPENSES:
 
 
 
 
 
 
 
Selling, general and administrative
141.1

 
137.9

 
419.3

 
405.9

Depreciation and amortization
5.5

 
5.8

 
16.9

 
16.8

Other operating (income) expense, net
(0.9
)
 
1.7

 
(1.0
)
 
15.2

Income from operations
49.4

 
33.5

 
138.4

 
90.9

OTHER EXPENSES:
 
 
 
 
 
 
 
Floor plan interest expense
(3.0
)
 
(2.0
)
 
(8.6
)
 
(6.7
)
Other interest expense, net
(8.6
)
 
(9.9
)
 
(26.6
)
 
(30.7
)
Swap interest expense
(1.3
)
 
(1.4
)
 
(3.8
)
 
(4.2
)
Convertible debt discount amortization
(0.1
)
 
(0.1
)
 
(0.4
)
 
(0.6
)
Loss on extinguishment of long-term debt
—

 
(0.4
)
 
—

 
(0.4
)
Total other expenses, net
(13.0
)
 
(13.8
)
 
(39.4
)
 
(42.6
)
Income before income taxes
36.4

 
19.7

 
99.0

 
48.3

INCOME TAX EXPENSE
13.6

 
7.4

 
37.8

 
18.5

INCOME FROM CONTINUING OPERATIONS
22.8

 
12.3

 
61.2

 
29.8

DISCONTINUED OPERATIONS, net of tax
(2.1
)
 
—

 
(1.8
)
 
16.6

NET INCOME
$
20.7

 
$
12.3

 
$
59.4

 
$
46.4

EARNINGS PER COMMON SHARE:
 
 
 
 
 
 
 
Basic—
 
 
 
 
 
 
 
Continuing operations
$
0.73

 
$
0.39

 
$
1.97

 
$
0.93

Discontinued operations
(0.06
)
 
—

 
(0.06
)
 
0.52

Net income
$
0.67

 
$
0.39

 
$
1.91

 
$
1.45

Diluted—
 
 
 
 
 
 
 
Continuing operations
$
0.72

 
$
0.38

 
$
1.94

 
$
0.90

Discontinued operations
(0.06
)
 
—

 
(0.06
)
 
0.51

Net income
$
0.66

 
$
0.38

 
$
1.88

 
$
1.41

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
 
 
 
 
 
 
 
Basic
31.1

 
31.7

 
31.1

 
32.1

Stock options
0.1

 
0.6

 
0.2

 
0.6

Restricted stock
0.2

 
0.1

 
0.2

 
0.2

Performance share units
0.1

 
0.1

 
0.1

 
0.1

Diluted
31.5

 
32.5

 
31.6

 
33.0



4


New Vehicle-
 
For the Three Months Ended September 30,
  
Increase
(Decrease) 
 
%
Change
 
2012
  
2011
  
 
 
(Dollars in millions, except for per vehicle data)
Revenue:
 
  
 
  
 
 
 
New vehicle revenue—same store(1)
 
  
 
  
 
 
 
Luxury
$
246.8

 
$
198.9

  
$
47.9

 
24
 %
Mid-line import
332.1

 
255.3

  
76.8

 
30
 %
Mid-line domestic
94.3

 
96.6

  
(2.3
)
 
(2
)%
Total new vehicle revenue—same store(1)
673.2

  
550.8

  
122.4

 
22
 %
New vehicle revenue—acquisitions
1.5

 
—

  
 
 
 
New vehicle revenue, as reported
$
674.7

  
$
550.8

  
$
123.9

 
22
 %
Gross profit:
 
  
 
  
 
 
 
New vehicle gross profit—same store(1)
 
  
 
  
 
 
 
Luxury
$
18.3

 
$
15.2

  
$
3.1

 
20
 %
Mid-line import
16.6

 
17.1

  
(0.5
)
 
(3
)%
Mid-line domestic
6.5

 
6.4

  
0.1

 
2
 %
Total new vehicle gross profit—same store(1)
41.4

  
38.7

  
2.7

 
7
 %
New vehicle gross profit—acquisitions
0.2

 
—

  
 
 
 
New vehicle gross profit, as reported
$
41.6

  
$
38.7

  
$
2.9

 
7
 %
 
 
 
 
 
For the Three Months Ended September 30,
  
Increase
(Decrease) 
 
%
Change
 
2012
 
2011
  
 
New vehicle units:
 
  
 
  
 
 
 
New vehicle retail units—same store(1)
 
  
 
  
 
 
 
Luxury
5,074

 
4,046

  
1,028

 
25
 %
Mid-line import
12,642

 
9,622

  
3,020

 
31
 %
Mid-line domestic
2,595

 
2,469

  
126

 
5
 %
Total new vehicle retail units—same store(1)
20,311

  
16,137

  
4,174

 
26
 %
Fleet vehicles
537

 
700

  
(163
)
 
(23
)%
Total new vehicle units—same store(1)
20,848

  
16,837

  
4,011

 
24
 %
         New vehicle units—acquisitions
20

 
—

  
 
 
 
New vehicle units—actual
20,868

  
16,837

  
4,031

 
24
 %
 

New Vehicle Metrics-
 
 
For the Three Months Ended September 30,
 
(Decrease) 
 
%
Change
 
2012
 
2011
 
 
Revenue per new vehicle sold—same store(1)
$
32,291

 
$
32,714

 
$
(423
)
 
(1
)%
Gross profit per new vehicle sold—same store(1)
$
1,986

 
$
2,299

 
$
(313
)
 
(14
)%
New vehicle gross margin—same store(1)
6.1
%
 
7.0
%
 
(0.9
)%
 
(13
)%

______________________________
(1)
 Same store amounts consist of information from dealerships for the identical months of each period presented in the comparison, commencing with the first full month in which the dealership was owned by us.




5



Used Vehicle-
 
 
For the Three Months Ended September 30,
 
Increase
 
%
Change
 
2012
 
2011
 
 
 
(Dollars in millions, except for per vehicle data)
Revenue:
 
 
 
 
 
 
 
Used vehicle retail revenues—same store(1)
$
281.2

 
$
268.4

 
$
12.8

 
5
%
Used vehicle retail revenues—acquisitions
0.6

 
—

 
 
 
 
Total used vehicle retail revenues
281.8

 
268.4

 
13.4

 
5
%
 
 
 
 
 
 
 
 
Used vehicle wholesale revenues—same store(1)
53.8

 
50.1

 
3.7

 
7
%
Used vehicle wholesale revenues—acquisitions
—

 
—

 
 
 
 
Total used vehicle wholesale revenues
53.8

 
50.1

 
3.7

 
7
%
Used vehicle revenue, as reported
$
335.6

 
$
318.5

 
$
17.1

 
5
%
Gross profit:
 
 
 
 
 
 
 
Used vehicle retail gross profit—same store(1)
$
26.7

 
$
25.5

 
$
1.2

 
5
%
Used vehicle retail gross profit—acquisitions
0.2

 
—

 
 
 
 
Total used vehicle retail gross profit
26.9

 
25.5

 
1.4

 
5
%
 
 
 
 
 
 
 
 
Used vehicle wholesale gross profit—same store(1)
(0.6
)
 
(1.3
)
 
0.7

 
54
%
Used vehicle wholesale gross profit—acquisitions
(0.1
)
 
—

 
 
 
 
Total used vehicle wholesale gross profit
(0.7
)
 
(1.3
)
 
0.6

 
46
%
Used vehicle gross profit, as reported
$
26.2

 
$
24.2

 
$
2.0

 
8
%
Used vehicle retail units:
 
 
 
 
 
 
 
Used vehicle retail units—same store(1)
14,566

 
14,053

 
513

 
4
%
Used vehicle retail units—acquisitions
19

 
—

 
 
 
 
Used vehicle retail units—actual
14,585

 
14,053

 
532

 
4
%
 

Used Vehicle Metrics-
 
For the Three Months Ended September 30,
 
Increase
 
%
Change
 
2012
 
2011
 
 
Revenue per used vehicle retailed—same store(1)
$
19,305

 
$
19,099

 
$
206

 
1
%
Gross profit per used vehicle retailed—same store(1)
$
1,833

 
$
1,815

 
$
18

 
1
%
Used vehicle retail gross margin—same store(1)
9.5
%
 
9.5
%
 
—
%
 
—
%
______________________________
(1)
 Same store amounts consist of information from dealerships for the identical months of each period presented in the comparison, commencing with the first full month in which the dealership was owned by us.








6



Parts and Service-
 
 
For the Three Months Ended September 30,
 
Increase
(Decrease)
 
%
Change
 
2012
 
2011
 
 
 
(Dollars in millions)
Revenue:
 
 
 
 
 
 
 
Parts and service revenue—same store(1)
$
143.2

 
$
141.8

 
$
1.4

 
1
 %
Parts and service revenues—acquisitions
0.3

 
—

 
 
 
 
Parts and service revenue, as reported
$
143.5

 
$
141.8

 
$
1.7

 
1
 %
 
 
 
 
 
 
 
 
Gross profit:
 
 
 
 
 
 
 
Parts and service gross profit—same store(1)
 
 
 
 
 
 
 
Customer pay
$
51.5

 
$
50.1

 
$
1.4

 
3
 %
Reconditioning and preparation
17.2

 
14.7

 
2.5

 
17
 %
Warranty
9.6

 
10.3

 
(0.7
)
 
(7
)%
Wholesale parts
4.8

 
4.8

 
—

 
—
 %
Total parts and service gross profit—same store(1)
83.1

 
79.9

 
3.2

 
4
 %
Parts and service gross profit—acquisitions
0.1

 
—

 
 
 
 
Parts and service gross profit, as reported
$
83.2

 
$
79.9

 
$
3.3

 
4
 %
Parts and service gross margin—same store(1)
58.0
%

56.3
%
 
1.7
%
 
3
 %
 _____________________________
(1)
 Same store amounts consist of information from dealerships for the identical months of each period presented in the comparison, commencing with the first full month in which the dealership was owned by us.


Finance and Insurance, net-  
 
For the Three Months Ended September 30,
  
Increase
 
%
Change
 
2012
  
2011
  
 
 
(Dollars in millions, except for per vehicle data)
 
 
  
 
  
 
 
 
Finance and insurance, net—same store(1)
$
44.0

 
$
36.1

  
$
7.9

 
22
%
Finance and insurance, net—acquisitions
0.1

 
—

  
 
 
 
Finance and insurance, net as reported
$
44.1

  
$
36.1

  
$
8.0

 
22
%
Finance and insurance, net per vehicle sold—same store(1)
$
1,242

 
$
1,169

  
$
73

 
6
%
______________________________
(1)
 Same store amounts consist of information from dealerships for the identical months of each period presented in the comparison, commencing with the first full month in which the dealership was owned by us.



7


 
For the Three Months Ended September 30,
 
2012
 
2011
REVENUE MIX PERCENTAGES:
 
 
 
New vehicles
56.3
 %
 
52.6
 %
Used retail vehicles
23.5
 %
 
25.7
 %
Used vehicle wholesale
4.5
 %
 
4.8
 %
Parts and service
12.0
 %
 
13.5
 %
Finance and insurance, net
3.7
 %
 
3.4
 %
Total revenue
100.0
 %
 
100.0
 %
GROSS PROFIT MIX PERCENTAGES:
 
 
 
New vehicles
21.3
 %
 
21.6
 %
Used retail vehicles
13.9
 %
 
14.2
 %
Used vehicle wholesale
(0.4
)%
 
(0.7
)%
Parts and service
42.6
 %
 
44.7
 %
Finance and insurance, net
22.6
 %
 
20.2
 %
Total gross profit
100.0
 %
 
100.0
 %
SG&A EXPENSES AS A PERCENTAGE OF GROSS PROFIT
72.3
 %
 
77.1
 %







































8


New Vehicle-
 
For the Nine Months Ended September 30,
  
Increase
 
%
Change
 
2012
  
2011
  
 
 
(Dollars in millions, except for per vehicle data)
Revenue:
 
  
 
  
 
 
 
New vehicle revenue—same store(1)
 
  
 
  
 
 
 
Luxury
$
680.3

  
$
602.2

  
$
78.1

 
13
 %
Mid-line import
945.0

  
796.8

  
148.2

 
19
 %
Mid-line domestic
275.9

  
260.4

  
15.5

 
6
 %
Total new vehicle revenue—same store(1)
1,901.2

  
1,659.4

  
241.8

 
15
 %
New vehicle revenue—acquisitions
1.5

  
—

  
 
 
 
New vehicle revenue, as reported
$
1,902.7

  
$
1,659.4

  
$
243.3

 
15
 %
Gross profit:
 
  
 
  
 
 
 
New vehicle gross profit—same store(1)
 
  
 
  
 
 
 
Luxury
$
51.9

  
$
45.4

  
$
6.5

 
14
 %
Mid-line import
51.4

  
49.1

  
2.3

 
5
 %
Mid-line domestic
18.6

  
17.5

  
1.1

 
6
 %
Total new vehicle gross profit—same store(1)
121.9

  
112.0

  
9.9

 
9
 %
New vehicle gross profit—acquisitions
0.2

  
—

  
 
 
 
New vehicle gross profit, as reported
$
122.1

  
$
112.0

  
$
10.1

 
9
 %
 
 
 
 
 
For the Nine Months Ended September 30,
  
Increase
(Decrease) 
 
%
Change
 
2012
 
2011
  
 
New vehicle units:
 
  
 
  
 
 
 
New vehicle retail units—same store(1)
 
  
 
  
 
 
 
Luxury
13,834

  
12,221

  
1,613

 
13
 %
Mid-line import
35,969

  
30,767

  
5,202

 
17
 %
Mid-line domestic
7,564

  
7,000

  
564

 
8
 %
Total new vehicle retail units—same store(1)
57,367

  
49,988

  
7,379

 
15
 %
Fleet vehicles
1,810

  
2,007

  
(197
)
 
(10
)%
Total new vehicle units—same store(1)
59,177

  
51,995

  
7,182

 
14
 %
         New vehicle units—acquisitions
20

  
—

  
 
 
 
New vehicle units—actual
59,197

  
51,995

  
7,202

 
14
 %
 

New Vehicle Metrics-  
 
For the Nine Months Ended September 30,
 
Increase
(Decrease) 
 
%
Change
 
2012
 
2011
 
 
Revenue per new vehicle sold—same store(1)
$
32,127

 
$
31,915

 
$
212

 
1
 %
Gross profit per new vehicle sold—same store(1)
$
2,060

 
$
2,154

 
$
(94
)
 
(4
)%
New vehicle gross margin—same store(1)
6.4
%
 
6.7
%
 
(0.3
)%
 
(4
)%
______________________________
(1)
 Same store amounts consist of information from dealerships for the identical months of each period presented in the comparison, commencing with the first full month in which the dealership was owned by us.


9


Used Vehicle-
 
 
For the Nine Months Ended September 30,
 
Increase
 
%
Change
 
2012
 
2011
 
 
 
(Dollars in millions, except for per vehicle data)
Revenue:
 
 
 
 
 
 
 
Used vehicle retail revenues—same store(1)
$
839.1

 
$
775.2

 
$
63.9

 
8
%
Used vehicle retail revenues—acquisitions
0.6

 
—

 
 
 
 
Total used vehicle retail revenues
839.7

 
775.2

 
64.5

 
8
%
 
 
 
 
 
 
 
 
Used vehicle wholesale revenues—same store(1)
148.9

 
147.7

 
1.2

 
1
%
Used vehicle wholesale revenues—acquisitions
—

 
—

 
 
 
 
Total used vehicle wholesale revenues
148.9

 
147.7

 
1.2

 
1
%
Used vehicle revenue, as reported
$
988.6

 
$
922.9

 
$
65.7

 
7
%
Gross profit:
 
 
 
 
 
 
 
Used vehicle retail gross profit—same store(1)
$
79.9

 
$
79.0

 
$
0.9

 
1
%
Used vehicle retail gross profit—acquisitions
0.2

 
—

 
 
 
 
Total used vehicle retail gross profit
80.1

 
79.0

 
1.1

 
1
%
 
 
 
 
 
 
 
 
Used vehicle wholesale gross profit—same store(1)
(0.3
)
 
(0.5
)
 
0.2

 
40
%
Used vehicle wholesale gross profit—acquisitions
(0.1
)
 
—

 
 
 
 
Total used vehicle wholesale gross profit
(0.4
)
 
(0.5
)
 
0.1

 
20
%
Used vehicle gross profit, as reported
$
79.7

 
$
78.5

 
$
1.2

 
2
%
Used vehicle retail units:
 
 
 
 
 
 
 
Used vehicle retail units—same store(1)
44,133

 
41,014

 
3,119

 
8
%
Used vehicle retail units—acquisitions
19

 
—

 
 
 
 
Used vehicle retail units—actual
44,152

 
41,014

 
3,138

 
8
%
 

Used Vehicle Metrics-  
 
For the Nine Months Ended September 30,
 
Increase
(Decrease) 
 
%
Change
 
2012
 
2011
 
 
Revenue per used vehicle retailed—same store(1)
$
19,013

 
$
18,901

 
$
112

 
1
 %
Gross profit per used vehicle retailed—same store(1)
$
1,810

 
$
1,926

 
$
(116
)
 
(6
)%
Used vehicle retail gross margin—same store(1)
9.5
%
 
10.2
%
 
(0.7
)%
 
(7
)%
______________________________
(1)
 Same store amounts consist of information from dealerships for the identical months of each period presented in the comparison, commencing with the first full month in which the dealership was owned by us.



10


Parts and Service-
 
 
For the Nine Months Ended September 30,
 
Increase
(Decrease)
 
%
Change
 
2012
 
2011
 
 
 
(Dollars in millions)
Revenue:
 
 
 
 
 
 
 
Parts and service revenue—same store(1)
$
428.9

 
$
423.8

 
$
5.1

 
1
 %
Parts and service revenues—acquisitions
0.3

 
—

 
 
 
 
Parts and service revenue, as reported
$
429.2

 
$
423.8

 
$
5.4

 
1
 %
 
 
 
 
 
 
 
 
Gross profit:
 
 
 
 
 
 
 
Parts and service gross profit—same store(1)
 
 
 
 
 
 
 
Customer pay
$
153.3

 
$
146.7

 
$
6.6

 
4
 %
Reconditioning and preparation
50.8

 
41.6

 
9.2

 
22
 %
Warranty
29.3

 
33.7

 
(4.4
)
 
(13
)%
Wholesale parts
14.7

 
14.3

 
0.4

 
3
 %
Total parts and service gross profit—same store(1)
248.1

 
236.3

 
11.8

 
5
 %
Parts and service gross profit—acquisitions
0.1

 
—

 
 
 
 
Parts and service gross profit, as reported
$
248.2

 
$
236.3

 
$
11.9

 
5
 %
Parts and service gross margin—same store(1)
57.8
%
 
55.8
%
 
2.0
%
 
4
 %
 _____________________________
(1)
Same store amounts consist of information from dealerships for the identical months of each period presented in the comparison, commencing with the first full month in which the dealership was owned by us.

Finance and Insurance, net-  
 
For the Nine Months Ended September 30,
  
Increase
 
%
Change
 
2012
  
2011
  
 
 
(Dollars in millions, except for per vehicle data)
 
 
  
 
  
 
 
 
Finance and insurance, net—same store(1)
$
123.5

  
$
102.0

  
$
21.5

 
21
%
Finance and insurance, net—acquisitions
0.1

  
—

  
 
 
 
Finance and insurance, net as reported
$
123.6

  
$
102.0

  
$
21.6

 
21
%
Finance and insurance, net per vehicle sold—same store(1)
$
1,195

  
$
1,097

  
$
98

 
9
%
______________________________
(1)
 Same store amounts consist of information from dealerships for the identical months of each period presented in the comparison, commencing with the first full month in which the dealership was owned by us.




11


 
For the Nine Months Ended September 30,
 
2012
 
2011
REVENUE MIX PERCENTAGES:
 
 
 
New vehicles
55.2
 %
 
53.4
 %
Used retail vehicles
24.4
 %
 
24.9
 %
Used vehicle wholesale
4.3
 %
 
4.8
 %
Parts and service
12.5
 %
 
13.6
 %
Finance and insurance, net
3.6
 %
 
3.3
 %
Total revenue
100.0
 %
 
100.0
 %
GROSS PROFIT MIX PERCENTAGES:
 
 
 
New vehicles
21.3
 %
 
21.2
 %
Used retail vehicles
14.0
 %
 
14.9
 %
Used vehicle wholesale
(0.1
)%
 
(0.1
)%
Parts and service
43.3
 %
 
44.7
 %
Finance and insurance, net
21.5
 %
 
19.3
 %
Total gross profit
100.0
 %
 
100.0
 %
SG&A EXPENSES AS A PERCENTAGE OF GROSS PROFIT
73.1
 %
 
76.8
 %


12


ASBURY AUTOMOTIVE GROUP, INC.
Additional Disclosures
(In millions)
(Unaudited)
 
 
September 30, 2012
 
December 31, 2011
 
Increase
(Decrease)
 
% Change
SELECTED BALANCE SHEET DATA
 
  
 
  
 
 
 
Cash and cash equivalents
$
5.9

  
$
11.4

  
$
(5.5
)
 
(48
)%
New vehicle inventory
465.7

  
400.0

  
65.7

 
16
 %
Used vehicle inventory
86.2

  
82.0

  
4.2

 
5
 %
Parts inventory
36.5

  
37.5

  
(1.0
)
 
(3
)%
Total current assets
864.9

  
792.5

  
72.4

 
9
 %
Floor plan notes payable
463.5

  
434.0

  
29.5

 
7
 %
Total current liabilities
655.4

  
636.3

  
19.1

 
3
 %
 
 
 
 
 
 
 
 
CAPITALIZATION:
 
  
 
  
 
 
 
Long-term debt (including current portion)
$
434.7

  
$
458.6

  
$
(23.9
)
 
(5
)%
Shareholders' equity
385.4

  
326.6

  
58.8

 
18
 %
Total
$
820.1

  
$
785.2

  
$
34.9

 
4
 %
Brand Mix - New Vehicle Revenue by Brand-
 
 
For the Nine Months Ended September 30,
 
2012
 
2011
Luxury
 
 
 
BMW
8
%
 
9
%
Mercedes-Benz
7
%
 
7
%
Lexus
6
%
 
6
%
Acura
5
%
 
4
%
Infiniti
5
%
 
5
%
Other luxury
5
%
 
5
%
Total luxury
36
%
 
36
%
Mid-Line Imports:
 
 
 
Honda
21
%
 
19
%
Nissan
13
%
 
13
%
Toyota
12
%
 
11
%
Other imports
4
%
 
5
%
Total imports
50
%
 
48
%
Mid-Line Domestic:
 
 
 
Ford
8
%
 
9
%
Chevrolet
2
%
 
3
%
Other domestics
4
%
 
4
%
Total domestic
14
%
 
16
%
Total New Vehicle Revenue
100
%
 
100
%
 







13


Selling, General and Administrative Expense (“SG&A”)-
 
For the Three Months Ended September 30,
 
Increase
  
% of  Gross
Profit
Decrease
 
2012
  
% of Gross
Profit
 
2011
  
% of Gross
Profit
 
  
 
                                                  (Dollars in millions)
SG&A, excluding rent expense
$
132.0

  
67.6
%
 
$
129.0

  
72.1
%
 
$
3.0

  
(4.5
)%
Rent expense
9.1

  
4.7
%
 
8.9

  
5.0
%
 
0.2

  
(0.3
)%
SG&A-total
$
141.1

  
72.3
%
 
$
137.9

  
77.1
%
 
$
3.2

  
(4.8
)%
Gross profit
$
195.1

  
 
 
$
178.9

  
 
 
 
  
 


 
For the Nine Months Ended September 30,
 
Increase
(Decrease)
  
% of  Gross
Profit
Decrease
 
2012
  
% of Gross
Profit
 
2011
  
% of Gross
Profit
 
  
 
                                                  (Dollars in millions)
SG&A, excluding rent expense
$
392.6

  
68.4
%
 
$
377.5

  
71.4
%
 
$
15.1

  
(3.0
)%
Rent expense
26.7

  
4.7
%
 
28.4

  
5.4
%
 
(1.7
)
  
(0.7
)%
SG&A-total
$
419.3

  
73.1
%
 
$
405.9

  
76.8
%
 
$
13.4

  
(3.7
)%
Gross profit
$
573.6

  
 
 
$
528.8

  
 
 
 
  
 




 

14


ASBURY AUTOMOTIVE GROUP INC.
Supplemental Disclosures
(Unaudited)


Non-GAAP Financial Disclosure and Reconciliation

In addition to evaluating the financial condition and results of our operations in accordance with GAAP, from time to time management evaluates and analyzes results and any impact on the Company of strategic decisions and actions relating to, among other things, cost reduction, growth, and profitability improvement initiatives, and other events outside of normal, or "core," business and operations, by considering certain alternative financial measures not prepared in accordance with GAAP. These measures include "Adjusted income from continuing operations," "Adjusted diluted earnings per share ("EPS") from continuing operations," "Adjusted EBITDA," "Adjusted leverage ratio," and "Adjusted SG&A expense." Non-GAAP measures do not have definitions under GAAP and may be defined differently by and not be comparable to similarly titled measures used by other companies. As a result, any non-GAAP financial measures considered and evaluated by management are reviewed in connection with a review of the most directly comparable measures calculated in accordance with GAAP. Management cautions investors not to place undue reliance on such non-GAAP measures, but also to consider them with the most directly comparable GAAP measures. In its evaluation of results from time to time, management excludes items that do not arise directly from core operations, or are otherwise of an unusual or non-recurring nature. Because these non-core, unusual or non-recurring charges and gains materially affect Asbury's financial condition or results in the specific period in which they are recognized, management also evaluates, and makes resource allocation and performance evaluation decisions based on, the related non-GAAP measures excluding such items. In addition to using such non-GAAP measures to evaluate results in a specific period, management believes that such measures may provide more complete and consistent comparisons of operational performance on a period-over-period historical basis and a better indication of expected future trends. Management discloses these non-GAAP measures, and the related reconciliations, because it believes investors use these metrics in evaluating longer-term period-over-period performance, and to allow investors to better understand and evaluate the information used by management to assess operating performance.




15


 
For the Twelve Months Ended
 
September 30, 2012
 
June 30, 2012
 
(Dollars in millions)
Adjusted leverage ratio:
 
 
 
Book value of long-term debt (including current portion)
$
434.7

 
$
416.1

 
 
 
 
Calculation of adjusted earnings before interest, taxes, depreciation and amortization ("Adjusted EBITDA"):
 
 
 
Income from continuing operations
$
78.5

 
$
68.1

 
 
 
 
Add:
 
 
 
Depreciation and amortization
22.7

 
22.9

Income tax expense
48.6

 
42.3

Convertible debt discount amortization
0.5

 
0.6

Swap and other interest expense
40.6

 
42.0

Earnings before interest, taxes, depreciation and amortization ("EBITDA")
190.9

 
175.9

 
 
 
 
Non-core items - expense:
 
 
 
Loss on extinguishment of long-term debt
0.4

 
0.8

Real estate related losses
—

 
0.4

Executive separation cost
—

 
1.6

  Total non-core items
0.4

 
2.8

 
 
 
 
Adjusted EBITDA
$
191.3

 
$
178.7

 
 
 
 
Adjusted leverage ratio
2.3

 
2.3


















16


The non-core operating items shown in the table below are (i) legal claims related to operations from 2000 to 2006, (ii) expenses related to executive separation benefits and (iii) expenses related to real estate transactions.
 
For the Three Months Ended September 30,
 
2012
 
2011
 
(In millions, except per share data)
Adjusted income from continuing operations:
 
 
 
Net income
$
20.7

 
$
12.3

Discontinued operations, net of tax
2.1

 
—

Income from continuing operations
22.8

 
12.3

 
 
 
 
Non-core items - expense (income):
 
  
 
Executive separation costs
—

 
1.6

Real estate-related charges
—

 
0.4

Loss on extinguishment of long-term debt
—

 
0.4

Tax benefit on non-core items above
—

  
(0.9
)
Total non-core items
—

  
1.5

Adjusted income from continuing operations
$
22.8

  
$
13.8

 
 
 
 
Adjusted diluted earnings per share (EPS) from continuing operations:
 
 
 
Net income
$
0.66

 
$
0.38

Discontinued operations, net of tax
0.06

 
—

Income from continuing operations
0.72

 
0.38

 
 
 
 
Total non-core items
—

 
0.04

Adjusted diluted EPS from continuing operations
$
0.72

 
$
0.42

 
 
 
 
Weighted average common shares outstanding - diluted
31.5

 
32.5















17


 
For the Nine Months Ended September 30,
 
2012
 
2011
 
(In millions, except per share data)
Adjusted income from continuing operations:
 
 
 
Net income
$
59.4

 
$
46.4

Discontinued operations, net of tax
1.8

 
(16.6
)
Income from continuing operations
61.2

 
29.8

 
 
 
 
Non-core items - expense (income):
 
  
 
Litigation related expense
—

 
9.0

Executive separation costs
—

 
6.6

Real estate-related charges
—

 
1.9

Loss on extinguishment of long-term debt
—

 
0.4

Tax benefit on non-core items above
—

  
(6.8
)
Total non-core items
—

  
11.1

Adjusted income from continuing operations
$
61.2

  
$
40.9

 
 
 
 
Adjusted diluted earnings per share (EPS) from continuing operations:
 
 
 
Net income
$
1.88

 
$
1.41

Discontinued operations, net of tax
0.06

 
(0.51
)
Income from continuing operations
1.94

 
0.90

 
 
 
 
Total non-core items
—

 
0.34

Adjusted diluted EPS from continuing operations
$
1.94

 
$
1.24

 
 
 
 
Weighted average common shares outstanding - diluted
31.6

 
33.0



18