0001144980-16-000126.txt : 20160204 0001144980-16-000126.hdr.sgml : 20160204 20160204063405 ACCESSION NUMBER: 0001144980-16-000126 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20160204 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20160204 DATE AS OF CHANGE: 20160204 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: 161386770 BUSINESS ADDRESS: STREET 1: 2905 PREMIERE PARKWAY NW STREET 2: SUITE 300 CITY: DULUTH STATE: GA ZIP: 30097 BUSINESS PHONE: 770-418-8200 MAIL ADDRESS: STREET 1: 2905 PREMIERE PARKWAY NW STREET 2: SUITE 300 CITY: DULUTH STATE: GA ZIP: 30097 8-K 1 a2015q48-k.htm FORM 8-K 8-K


 
 
 
 
 
 
 
 
 
 
 
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): February 4, 2016
 
 
 
 
Asbury Automotive Group, Inc.
(Exact name of registrant as specified in its charter)
 
 
 
 
 
Delaware
(State or other jurisdiction of incorporation)
 
 
001-31262
 
01-0609375
 
 
(Commission File Number)
 
(IRS Employer Identification No.)
 
 
 
 
 
 
 
2905 Premiere Parkway NW Suite 300
Duluth, GA
 
30097
 
 
(Address of principal executive offices)
 
(Zip Code)
 
 
 
 
 
 
 
(770) 418-8200
(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:
o
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o
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 Condition.
Asbury Automotive Group, Inc. (the “Company”) issued an earnings release on February 4, 2016, announcing its financial results for the three and twelve months ended December 31, 2015. A copy of the earnings release is furnished as Exhibit 99.1 to this Current Report.
The information furnished in this Current Report on Form 8-K, including Exhibit 99.1, shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liability of that section, and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
Item 9.01 Financial Statements and Exhibits.
(d)    Exhibits.
 
The following exhibit is furnished as part of this report.
 
Exhibit No.
  
Description
 
 
 
 
 
99.1
  
Press Release dated February 4, 2016.
 




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: February 4, 2016
By:
 
/s/  Keith R. Style
 
Name:
 
Keith R. Style
 
Title:
 
Senior Vice President and Chief Financial Officer





EXHIBIT INDEX
 
Exhibit No.
  
Description
 
 
99.1
  
Press Release dated February 4, 2016.




 EX-99.1 2 a2015q4ex991.htm EXHIBIT 99.1 Exhibit


Exhibit 99.1

Investors & Reporters May Contact:
Matt Pettoni
VP & Treasurer
(770) 418-8219
ir@asburyauto.com


 
 ASBURY AUTOMOTIVE GROUP ANNOUNCES RECORD
2015 FOURTH QUARTER AND FULL-YEAR FINANCIAL RESULTS


Record fourth quarter adjusted EPS from continuing operations of $1.31 per diluted share, up 22% over adjusted prior year quarter
Record full year adjusted EPS from continuing operations of $5.57 per diluted share, up 27% over adjusted prior year
 
Duluth, GA, February 4, 2016 - Asbury Automotive Group, Inc. (NYSE: ABG), one of the largest automotive retail and service companies in the U.S., today reported adjusted income from continuing operations for the fourth quarter 2015 of $32.8 million, or $1.31 per diluted share, versus adjusted income from continuing operations in the fourth quarter 2014 of $31.4 million, or $1.07 per diluted share, a 22% increase per diluted share. The fourth quarter of 2015 benefited from a favorable tax rate of 37.2% versus 39.0% during the fourth quarter of 2014. Income from continuing operations for the fourth quarter 2015 included a $13.5 million pre-tax gain on divestitures, or $0.34 per diluted share. Income from continuing operations for the fourth quarter 2014 included a $31.9 million pre-tax loss on extinguishment of long-term debt, or $0.66 per diluted share. Net income for the fourth quarter 2015 was $41.1 million, or $1.64 per diluted share, compared to $11.8 million, or $0.40 per diluted share in the prior year period. See attached reconciliation for reported adjustments related to both of these periods.
Fourth Quarter 2015 Operational Highlights (compared to the prior year period):

•
Total revenues increased 9% to $1.6 billion
•
New vehicle revenue up 9%; gross profit down 3%
•
Used vehicle retail revenue up 9%; gross profit was flat
•
Finance and insurance revenue up 13%
•
Parts and service revenue up 8%; gross profit up 9%

1


•
Total gross profit increased 6%
•
SG&A expense as a percent of gross profit increased 50 basis points to 70.5%
•
Income from operations increased 6%
•
Income from operations as a percentage of revenue was 4.2%

Strategic Highlights:

•
In October 2015, issued an additional $200 million of our 6.0% Senior Subordinated Notes due in 2024
•
Repurchased $44 million of common stock during Q4 and $304 million for the full year 2015
•
Sold two Nissan franchises, one VW franchise, and one Mazda franchise
•
In January 2016, the Board reset our total share repurchase authorization to $300 million

“Asbury is pleased to announce another record fourth quarter,” said Craig Monaghan, Asbury's President and Chief Executive Officer. “We continue to execute our two-part strategy: to drive operational excellence and to deploy capital to its highest returns. In 2015, we acquired dealerships representing over $160 million in annualized revenues, reduced our share count by approximately 13%, and grew income from operations 12%.”
“We continued to experience margin pressure on both new and used vehicles in the fourth quarter,” said Asbury's Executive Vice President and Chief Operating Officer, David Hult. “Despite this margin pressure, our diversified business model enabled us to deliver same store gross profit growth as parts and service and F&I delivered a combined 8% growth.”
For the year ended December 31, 2015, the Company reported adjusted income from continuing operations of $147.0 million, or $5.57 per diluted share, versus adjusted income from continuing operations for the full year 2014 of $131.5 million, or $4.37 per diluted share. See attached reconciliation for reported adjustments related to both of these periods. Net income for the full year 2015 was $169.2 million, or $6.41 per diluted share, compared to $111.6 million, or $3.71 per diluted share in the prior year period.
The conference call will be today at 10:00 a.m. Eastern Time and will also be simulcast live on the Internet. The simulcast can be accessed by logging onto www.asburyauto.com or www.ccbn.com.  A replay will be available at these sites for 30 days. In addition, a live audio of the call will be accessible to the public by calling (800) 768-6544 (domestic), or (785) 830-7990 (international); passcode - 312559.  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 - 312559.
About Asbury Automotive Group, Inc.
Asbury Automotive Group, Inc. (“Asbury”), a Fortune 500 company headquartered in Duluth, Georgia, a suburb of Atlanta, is one of the largest automotive retailers in the U.S.  Built through a combination of organic growth and a series of strategic acquisitions, Asbury operated 81 dealership locations, encompassing 99 franchises for the sale and servicing of 28 domestic and foreign brands of new vehicles as of December 31, 2015.  We also operated 25 collision

2


repair centers and 3 stand-alone used vehicle stores as of December 31, 2015. 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, market position and dealership portfolio, and other initiatives and future business strategy. These statements are based on management's current expectations and beliefs and involve significant risks and uncertainties that may cause results to differ materially from those set forth in the statements. These risks and uncertainties include, among other things, market factors, Asbury's relationships with, and the financial and operational stability of, vehicle manufacturers and other suppliers, acts of God or other incidents which may adversely impact supply from vehicle manufacturers and/or present retail sales challenges, risks associated with Asbury's indebtedness (including available borrowing capacity, compliance with its financial covenants and ability to refinance or repay such indebtedness, particularly upcoming maturities, 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 U.S. 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 December 31,
 
Increase
(Decrease)
 
%
Change
 
2015
 
2014
 
 
REVENUE:
 
 
 
 
 
 
 
New vehicle
$
931.8

 
$
851.8

 
$
80.0

 
9
 %
Used vehicle:
 
 
 
 


 


Retail
407.7

 
375.0

 
32.7

 
9
 %
Wholesale
50.0

 
47.3

 
2.7

 
6
 %
     Total used vehicle
457.7

 
422.3

 
35.4

 
8
 %
Parts and service
185.2

 
170.7

 
14.5

 
8
 %
Finance and insurance, net
65.8

 
58.2

 
7.6

 
13
 %
TOTAL REVENUE
1,640.5

 
1,503.0

 
137.5

 
9
 %
GROSS PROFIT:
 
 
 
 
 
 
 
New vehicle
50.5

 
51.9

 
(1.4
)
 
(3
)%
Used vehicle:
 
 
 
 


 


Retail
30.5

 
30.5

 
—

 
—
 %
Wholesale
(1.1
)
 
(1.4
)
 
0.3

 
(21
)%
     Total used vehicle
29.4

 
29.1

 
0.3

 
1
 %
Parts and service
114.7

 
105.4

 
9.3

 
9
 %
Finance and insurance, net
65.8

 
58.2

 
7.6

 
13
 %
TOTAL GROSS PROFIT
260.4

 
244.6

 
15.8

 
6
 %
OPERATING EXPENSES:
 
 
 
 
 
 
 
Selling, general and administrative
183.5

 
171.1

 
12.4

 
7
 %
Depreciation and amortization
7.5

 
7.0

 
0.5

 
7
 %
Other operating (income) expense, net
(0.3
)
 
0.8

 
(1.1
)
 
(138
)%
INCOME FROM OPERATIONS
69.7

 
65.7

 
4.0

 
6
 %
OTHER (INCOME) EXPENSES:
 
 
 
 
 
 
 
Floor plan interest expense
4.1

 
3.1

 
1.0

 
32
 %
Other interest expense, net
12.5

 
10.7

 
1.8

 
17
 %
Swap interest expense
1.0

 
0.5

 
0.5

 
100
 %
Loss on extinguishment of long-term debt, net
—

 
31.9

 
(31.9
)
 
(100
)%
Gain on divestitures
(13.5
)
 
—

 
(13.5
)
 
NM

Total other (income) expenses, net
4.1

 
46.2

 
(42.1
)
 
(91
)%
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES
65.6

 
19.5

 
46.1

 
236
 %
Income tax expense
24.4

 
7.6

 
16.8

 
221
 %
INCOME FROM CONTINUING OPERATIONS
41.2

 
11.9

 
29.3

 
246
 %
Discontinued operations, net of tax
(0.1
)
 
(0.1
)
 
—

 
—
 %
NET INCOME
$
41.1

 
$
11.8

 
$
29.3

 
248
 %
EARNINGS PER COMMON SHARE:
 
 
 
 
 
 
 
Basic—
 
 
 
 
 
 
 
Continuing operations
$
1.65

 
$
0.41

 
$
1.24

 
302
 %
Discontinued operations
—

 
—

 
—

 
—
 %
Net income
$
1.65

 
$
0.41

 
$
1.24

 
302
 %
Diluted—
 
 
 
 
 
 
 
Continuing operations
$
1.65

 
$
0.41

 
$
1.24

 
302
 %
Discontinued operations
(0.01
)
 
(0.01
)
 
—

 
—
 %
Net income
$
1.64

 
$
0.40

 
$
1.24

 
310
 %
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
 
 
 
 
 
 
 
Basic
24.9

 
29.0

 
(4.1
)
 
(14
)%
Restricted stock
—

 
0.1

 
(0.1
)
 
(100
)%
Performance share units
0.1

 
0.2

 
(0.1
)
 
(50
)%
Diluted
25.0

 
29.3

 
(4.3
)
 
(15
)%
______________________________
NM—Not Meaningful

4


ASBURY AUTOMOTIVE GROUP, INC.
KEY OPERATING HIGHLIGHTS (In millions, except per unit data)
(Unaudited)
 
For the Three Months Ended December 31,
 
Increase
(Decrease)
 
%
Change
 
2015
 
2014
 
 
Unit sales
 
 
 
 
 
 
 
New vehicle:
 
 
 
 
 
 
 
Luxury
6,809

 
6,984

 
(175
)
 
(3
)%
Import
14,581

 
14,039

 
542

 
4
 %
Domestic
4,770

 
3,194

 
1,576

 
49
 %
     Total new vehicle
26,160

 
24,217

 
1,943

 
8
 %
Used vehicle retail
19,425

 
18,205

 
1,220

 
7
 %
Used to new ratio
74.3
 %
 
75.2
 %
 
(90) bps

 

Average selling price
 
 
 
 
 
 


New vehicle
$
35,619

 
$
35,174

 
$
445

 
1
 %
Used vehicle retail
20,988

 
20,599

 
389

 
2
 %
Average gross profit per unit
 
 
 
 
 
 
 
New vehicle:
 
 
 
 


 


Luxury
$
3,466

 
$
3,823

 
$
(357
)
 
(9
)%
Import
1,228

 
1,268

 
(40
)
 
(3
)%
Domestic
1,887

 
2,317

 
(430
)
 
(19
)%
     Total new vehicle
1,930

 
2,143

 
(213
)
 
(10
)%
Used vehicle
1,570

 
1,675

 
(105
)
 
(6
)%
Finance and insurance, net
1,443

 
1,372

 
71

 
5
 %
Front end yield (1)
3,220

 
3,314

 
(94
)
 
(3
)%
Gross margin
 
 
 
 
 
 
 
New vehicle:
 
 
 
 
 
 
 
Luxury
6.7
 %
 
7.4
 %
 
(70) bps

 
 
Import
4.5
 %
 
4.7
 %
 
(20) bps

 
 
Domestic
5.1
 %
 
6.6
 %
 
(150) bps

 
 
     Total new vehicle
5.4
 %
 
6.1
 %
 
(70) bps

 
 
Used vehicle retail
7.5
 %
 
8.1
 %
 
(60) bps

 
 
Parts and service
61.9
 %
 
61.7
 %
 
20 bps

 
 
Gross profit margin
15.9
 %
 
16.3
 %
 
(40) bps

 
 
SG&A metrics
 
 
 
 
 
 
 
Rent expense
$
7.8

 
$
7.7

 
$
0.1

 
1
 %
SG&A, excluding rent expense as a percent of gross profit
67.5
 %
 
66.8
 %
 
70 bps

 
 
Total SG&A as a percentage of gross profit
70.5
 %
 
70.0
 %
 
50 bps

 
 
Operating metrics
 
 
 
 
 
 
 
Income from operations as a percentage of revenue
4.2
 %
 
4.4
 %
 
(20) bps

 
 
Income from operations as a percentage of gross profit
26.8
 %
 
26.9
 %
 
(10) bps

 
 
Revenue mix
 
 
 
 
 
 
 
New vehicle
56.8
 %
 
56.7
 %
 
 
 
 
Used vehicle retail
24.9
 %
 
24.9
 %
 
 
 
 
Used vehicle wholesale
3.0
 %
 
3.1
 %
 
 
 
 
Parts and service
11.3
 %
 
11.4
 %
 
 
 
 
Finance and insurance
4.0
 %
 
3.9
 %
 
 
 
 
     Total revenue
100.0
 %
 
100.0
 %
 
 
 
 
Gross profit mix
 
 
 
 
 
 
 
New vehicle
19.4
 %
 
21.2
 %
 
 
 
 
Used vehicle retail
11.7
 %
 
12.5
 %
 
 
 
 
Used vehicle wholesale
(0.4
)%
 
(0.6
)%
 
 
 
 
Parts and service
44.0
 %
 
43.1
 %
 
 
 
 
Finance and insurance
25.3
 %
 
23.8
 %
 
 
 
 
     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 sales.

5


ASBURY AUTOMOTIVE GROUP, INC.
SAME STORE OPERATING HIGHLIGHTS (In millions)
(Unaudited)
 
For the Three Months Ended December 31,
 
Increase
(Decrease)
 
%
Change
 
2015
 
2014
 
 
Revenue
 
 
 
 
 
 
 
New vehicle:
 
 
 
 
 
 
 
Luxury
$
353.9

 
$
348.0

 
$
5.9

 
2
 %
Import
383.0

 
358.0

 
25.0

 
7
 %
Domestic
134.5

 
112.9

 
21.6

 
19
 %
     Total new vehicle
871.4

 
818.9

 
52.5

 
6
 %
Used Vehicle:
 
 
 
 


 


Retail
384.3

 
361.3

 
23.0

 
6
 %
Wholesale
47.0

 
45.1

 
1.9

 
4
 %
     Total used vehicle
431.3

 
406.4

 
24.9

 
6
 %
Parts and service
175.8

 
163.8

 
12.0

 
7
 %
Finance and insurance
60.7

 
55.9

 
4.8

 
9
 %
Total revenue
$
1,539.2

 
$
1,445.0

 
$
94.2

 
7
 %
 
 
 
 
 
 
 
 
Gross profit
 
 
 
 
 
 
 
New vehicle:
 
 
 
 
 
 
 
Luxury
$
23.6

 
$
25.7

 
$
(2.1
)
 
(8
)%
Import
17.0

 
16.7

 
0.3

 
2
 %
Domestic
7.0

 
7.4

 
(0.4
)
 
(5
)%
     Total new vehicle
47.6

 
49.8

 
(2.2
)
 
(4
)%
Used Vehicle:
 
 
 
 
 
 
 
Retail
28.8

 
29.6

 
(0.8
)
 
(3
)%
Wholesale
(0.9
)
 
(1.3
)
 
0.4

 
31
 %
     Total used vehicle
27.9

 
28.3

 
(0.4
)
 
(1
)%
Parts and service:
 
 
 
 
 
 
 
Customer pay
60.0

 
56.9

 
3.1

 
5
 %
Reconditioning and preparation
27.3

 
24.3

 
3.0

 
12
 %
Warranty
16.5

 
15.3

 
1.2

 
8
 %
Wholesale parts
5.0

 
4.8

 
0.2

 
4
 %
     Total parts and service
108.8

 
101.3

 
7.5

 
7
 %
Finance and insurance
60.7

 
55.9

 
4.8

 
9
 %
Total gross profit
$
245.0

 
$
235.3

 
$
9.7

 
4
 %
 
 
 
 
 
 
 
 
SG&A expense
$
172.9

 
$
164.5

 
$
8.4

 
5
 %
SG&A expense as a percentage of gross profit
70.6
%
 
69.9
%
 
70 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.


6


ASBURY AUTOMOTIVE GROUP, INC.
SAME STORE OPERATING HIGHLIGHTS (Continued)
(Unaudited)
 
For the Three Months Ended December 31,
 
Increase
(Decrease)
 
%
Change
 
2015
 
2014
 
 
Unit sales
 
 
 
 
 
 
 
New vehicle:
 
 
 
 
 
 
 
Luxury
6,809

 
6,751

 
58

 
1
 %
Import
13,891

 
13,304

 
587

 
4
 %
Domestic
3,662

 
3,194

 
468

 
15
 %
     Total new vehicle
24,362

 
23,249

 
1,113

 
5
 %
Used vehicle retail
18,191

 
17,511

 
680

 
4
 %
Used to new ratio
74.7
%
 
75.3
%
 
(60) bps

 
 
 
 
 
 
 
 
 
 
Average selling price
 
 
 
 
 
 
 
New vehicle
$
35,769

 
$
35,223

 
$
546

 
2
 %
Used vehicle retail
21,126

 
20,633

 
493

 
2
 %
 
 
 
 
 
 
 
 
Average gross profit per unit
 
 
 
 
 
 
 
New vehicle:
 
 
 
 


 


Luxury
$
3,466

 
$
3,807

 
$
(341
)
 
(9
)%
Import
1,224

 
1,255

 
(31
)
 
(2
)%
Domestic
1,912

 
2,317

 
(405
)
 
(17
)%
     Total new vehicle
1,954

 
2,142

 
(188
)
 
(9
)%
Used vehicle
1,583

 
1,690

 
(107
)
 
(6
)%
Finance and insurance, net
1,426

 
1,371

 
55

 
4
 %
Front end yield (1)
3,222

 
3,319

 
(97
)
 
(3
)%
 
 
 
 
 
 
 
 
Gross margin
 
 
 
 
 
 
 
New vehicle:
 
 
 
 
 
 
 
Luxury
6.7
%
 
7.4
%
 
(70) bps

 
 
Import
4.4
%
 
4.7
%
 
(30) bps

 
 
Domestic
5.2
%
 
6.6
%
 
(140) bps

 
 
     Total new vehicle
5.5
%
 
6.1
%
 
(60) bps

 
 
Used vehicle retail
7.5
%
 
8.2
%
 
(70) bps

 
 
Parts and service
61.9
%
 
61.8
%
 
10 bps

 
 
Gross profit margin
15.9
%
 
16.3
%
 
(40) 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 sales.

7


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
 
2015
 
2014
 
 
REVENUE:
 
 
 
 
 
 
 
New vehicle
$
3,652.5

 
$
3,230.6

 
$
421.9

 
13
 %
Used vehicle:
 
 
 
 


 


Retail
1,717.5

 
1,534.9

 
182.6

 
12
 %
Wholesale
214.2

 
206.6

 
7.6

 
4
 %
     Total used vehicle
1,931.7

 
1,741.5

 
190.2

 
11
 %
Parts and service
740.7

 
666.6

 
74.1

 
11
 %
Finance and insurance, net
263.4

 
229.0

 
34.4

 
15
 %
TOTAL REVENUE
6,588.3

 
5,867.7

 
720.6

 
12
 %
GROSS PROFIT:
 
 
 
 
 
 
 
New vehicle
203.0

 
198.3

 
4.7

 
2
 %
Used vehicle:
 
 
 
 


 


Retail
136.1

 
130.0

 
6.1

 
5
 %
Wholesale
(4.3
)
 
(2.3
)
 
(2.0
)
 
87
 %
     Total used vehicle
131.8

 
127.7

 
4.1

 
3
 %
Parts and service
462.6

 
412.2

 
50.4

 
12
 %
Finance and insurance, net
263.4

 
229.0

 
34.4

 
15
 %
TOTAL GROSS PROFIT
1,060.8

 
967.2

 
93.6

 
10
 %
OPERATING EXPENSES:
 
 
 
 
 
 
 
Selling, general and administrative
729.9

 
671.6

 
58.3

 
9
 %
Depreciation and amortization
29.5

 
26.4

 
3.1

 
12
 %
Other operating (income) expense, net
(0.2
)
 
1.0

 
(1.2
)
 
(120
)%
INCOME FROM OPERATIONS
301.6

 
268.2

 
33.4

 
12
 %
OTHER (INCOME) EXPENSES:
 
 
 
 
 
 
 
Floor plan interest expense
16.1

 
12.4

 
3.7

 
30
 %
Other interest expense, net
44.0

 
38.9

 
5.1

 
13
 %
Swap interest expense
3.0

 
2.0

 
1.0

 
50
 %
Loss on extinguishment of long-term debt, net
—

 
31.9

 
(31.9
)
 
(100
)%
Gain on divestitures
(34.9
)
 
—

 
(34.9
)
 
NM

Total other (income) expenses, net
28.2

 
85.2

 
(57.0
)
 
(67
)%
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES
273.4

 
183.0

 
90.4

 
49
 %
Income tax expense
104.0

 
71.0

 
33.0

 
46
 %
INCOME FROM CONTINUING OPERATIONS
169.4

 
112.0

 
57.4

 
51
 %
Discontinued operations, net of tax
(0.2
)
 
(0.4
)
 
0.2

 
(50
)%
NET INCOME
$
169.2

 
$
111.6

 
$
57.6

 
52
 %
EARNINGS PER COMMON SHARE:
 
 
 
 
 
 
 
Basic—
 
 
 
 
 
 
 
Continuing operations
$
6.44

 
$
3.75

 
$
2.69

 
72
 %
Discontinued operations
(0.01
)
 
(0.02
)
 
0.01

 
(50
)%
Net income
$
6.43

 
$
3.73

 
$
2.70

 
72
 %
Diluted—
 
 
 
 
 
 
 
Continuing operations
$
6.42

 
$
3.72

 
$
2.70

 
73
 %
Discontinued operations
(0.01
)
 
(0.01
)
 
—

 
—
 %
Net income
$
6.41

 
$
3.71

 
$
2.70

 
73
 %
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
 
 
 
 
 
 
 
Basic
26.3

 
29.9

 
(3.6
)
 
(12
)%
Restricted stock
—

 
0.1

 
(0.1
)
 
(100
)%
Performance share units
0.1

 
0.1

 
—

 
—
 %
Diluted
26.4

 
30.1

 
(3.7
)
 
(12
)%
______________________________
NM—Not Meaningful

8


ASBURY AUTOMOTIVE GROUP, INC.
KEY OPERATING HIGHLIGHTS (In millions, except per unit data)
(Unaudited)
 
For the Twelve Months Ended December 31,
 
Increase
(Decrease)
 
%
Change
 
2015
 
2014
 
 
Unit sales
 
 
 
 
 
 
 
New vehicle:
 
 
 
 
 
 
 
Luxury
25,441

 
24,275

 
1,166

 
5
 %
Import
61,633

 
57,980

 
3,653

 
6
 %
Domestic
18,907

 
13,309

 
5,598

 
42
 %
     Total new vehicle
105,981

 
95,564

 
10,417

 
11
 %
Used vehicle retail
82,589

 
75,173

 
7,416

 
10
 %
Used to new ratio
77.9
 %
 
78.7
 %
 
(80) bps

 
 
Average selling price
 
 
 
 
 
 
 
New vehicle
$
34,464

 
$
33,806

 
$
658

 
2
 %
Used vehicle retail
20,796

 
20,418

 
378

 
2
 %
Average gross profit per unit
 
 
 
 
 
 
 
New vehicle:
 
 
 
 


 


Luxury
$
3,428

 
$
3,736

 
$
(308
)
 
(8
)%
Import
1,254

 
1,368

 
(114
)
 
(8
)%
Domestic
2,036

 
2,126

 
(90
)
 
(4
)%
     Total new vehicle
1,915

 
2,075

 
(160
)
 
(8
)%
Used vehicle
1,648

 
1,729

 
(81
)
 
(5
)%
Finance and insurance, net
1,397

 
1,341

 
56

 
4
 %
Front end yield (1)
3,195

 
3,264

 
(69
)
 
(2
)%
Gross margin
 
 
 
 
 
 
 
New vehicle:
 
 
 
 
 
 
 
Luxury
6.7
 %
 
7.3
 %
 
(60) bps

 
 
Import
4.6
 %
 
5.2
 %
 
(60) bps

 
 
Domestic
5.6
 %
 
6.3
 %
 
(70) bps

 
 
     Total new vehicle
5.6
 %
 
6.1
 %
 
(50) bps

 
 
Used vehicle retail
7.9
 %
 
8.5
 %
 
(60) bps

 
 
Parts and service
62.5
 %
 
61.8
 %
 
70 bps

 
 
Gross profit margin
16.1
 %
 
16.5
 %
 
(40) bps

 
 
SG&A metrics
 
 
 
 
 
 
 
Rent expense
$
31.3

 
$
30.8

 
$
0.5

 
2
 %
SG&A, excluding rent expense as a percent of gross profit
65.9
 %
 
66.3
 %
 
(40) bps

 
 
Total SG&A as a percentage of gross profit
68.8
 %
 
69.4
 %
 
(60) bps

 
 
Operating metrics
 
 
 
 
 
 
 
Income from operations as a percentage of revenue
4.6
 %
 
4.6
 %
 
—

 
 
Income from operations as a percentage of gross profit
28.4
 %
 
27.7
 %
 
70 bps

 
 
Revenue mix
 
 
 
 
 
 
 
New vehicle
55.4
 %
 
55.1
 %
 
 
 
 
Used vehicle retail
26.1
 %
 
26.1
 %
 
 
 
 
Used vehicle wholesale
3.3
 %
 
3.5
 %
 
 
 
 
Parts and service
11.2
 %
 
11.4
 %
 
 
 
 
Finance and insurance
4.0
 %
 
3.9
 %
 
 
 
 
     Total revenue
100.0
 %
 
100.0
 %
 
 
 
 
Gross profit mix
 
 
 
 
 
 
 
New vehicle
19.1
 %
 
20.5
 %
 
 
 
 
Used vehicle retail
12.9
 %
 
13.4
 %
 
 
 
 
Used vehicle wholesale
(0.4
)%
 
(0.2
)%
 
 
 
 
Parts and service
43.6
 %
 
42.6
 %
 
 
 
 
Finance and insurance
24.8
 %
 
23.7
 %
 
 
 
 
     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 sales.

9


ASBURY AUTOMOTIVE GROUP, INC.
SAME STORE OPERATING HIGHLIGHTS (In millions)
(Unaudited)
 
For the Twelve Months Ended December 31,
 
Increase
(Decrease)
 
%
Change
 
2015
 
2014
 
 
Revenue
 
 
 
 
 
 
 
New vehicle:
 
 
 
 
 
 
 
Luxury
$
1,281.9

 
$
1,195.7

 
$
86.2

 
7
 %
Import
1,556.9

 
1,451.5

 
105.4

 
7
 %
Domestic
508.1

 
450.1

 
58.0

 
13
 %
     Total new vehicle
3,346.9

 
3,097.3

 
249.6

 
8
 %
Used Vehicle:
 
 
 
 
 
 
 
Retail
1,564.9

 
1,470.2

 
94.7

 
6
 %
Wholesale
194.7

 
194.9

 
(0.2
)
 
—
 %
     Total used vehicle
1,759.6

 
1,665.1

 
94.5

 
6
 %
Parts and service
693.8

 
638.8

 
55.0

 
9
 %
Finance and insurance
237.8

 
219.3

 
18.5

 
8
 %
Total revenue
$
6,038.1

 
$
5,620.5

 
$
417.6

 
7
 %
 
 
 
 
 
 
 
 
Gross profit
 
 
 
 
 
 
 
New vehicle:
 
 
 
 
 
 
 
Luxury
$
86.1

 
$
87.4

 
$
(1.3
)
 
(1
)%
Import
72.3

 
74.9

 
(2.6
)
 
(3
)%
Domestic
28.9

 
28.3

 
0.6

 
2
 %
     Total new vehicle
187.3

 
190.6

 
(3.3
)
 
(2
)%
Used Vehicle:
 
 
 
 
 
 
 
Retail
125.2

 
124.9

 
0.3

 
—
 %
Wholesale
(3.4
)
 
(2.1
)
 
(1.3
)
 
62
 %
     Total used vehicle
121.8

 
122.8

 
(1.0
)
 
(1
)%
Parts and service:
 
 
 
 
 
 
 
Customer pay
237.3

 
225.5

 
11.8

 
5
 %
Reconditioning and preparation
110.4

 
97.7

 
12.7

 
13
 %
Warranty
64.9

 
52.9

 
12.0

 
23
 %
Wholesale parts
19.8

 
19.4

 
0.4

 
2
 %
     Total parts and service
432.4

 
395.5

 
36.9

 
9
 %
Finance and insurance
237.8

 
219.3

 
18.5

 
8
 %
Total gross profit
$
979.3

 
$
928.2

 
$
51.1

 
6
 %
 
 
 
 
 
 
 
 
SG&A expense
$
675.0

 
$
644.5

 
$
30.5

 
5
 %
SG&A expense as a percentage of gross profit
68.9
%
 
69.4
%
 
(50) 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.











10


ASBURY AUTOMOTIVE GROUP, INC.
SAME STORE OPERATING HIGHLIGHTS (Continued)
(Unaudited)
 
For the Twelve Months Ended December 31,
 
Increase
(Decrease)
 
%
Change
 
2015
 
2014
 
 
Unit sales
 
 
 
 
 
 
 
New vehicle:
 
 
 
 
 
 
 
Luxury
25,063

 
23,418

 
1,645

 
7
 %
Import
57,562

 
54,636

 
2,926

 
5
 %
Domestic
14,162

 
13,309

 
853

 
6
 %
     Total new vehicle
96,787

 
91,363

 
5,424

 
6
 %
Used vehicle retail
74,715

 
71,833

 
2,882

 
4
 %
Used to new ratio
77.2
%
 
78.6
%
 
(140) bps

 
 
 
 
 
 
 
 
 
 
Average selling price
 
 
 
 
 
 
 
New vehicle
$
34,580

 
$
33,901

 
$
679

 
2
 %
Used vehicle retail
20,945

 
20,467

 
478

 
2
 %
 
 
 
 
 
 
 
 
Average gross profit per unit
 
 
 
 
 
 
 
New vehicle:
 
 
 
 


 


Luxury
$
3,435

 
$
3,732

 
$
(297
)
 
(8
)%
Import
1,256

 
1,371

 
(115
)
 
(8
)%
Domestic
2,041

 
2,126

 
(85
)
 
(4
)%
     Total new vehicle
1,935

 
2,086

 
(151
)
 
(7
)%
Used vehicle
1,676

 
1,739

 
(63
)
 
(4
)%
Finance and insurance, net
1,387

 
1,344

 
43

 
3
 %
Front end yield (1)
3,209

 
3,277

 
(68
)
 
(2
)%
 
 
 
 
 
 
 
 
Gross margin
 
 
 
 
 
 
 
New vehicle:
 
 
 
 
 
 
 
Luxury
6.7
%
 
7.3
%
 
(60) bps

 
 
Import
4.6
%
 
5.2
%
 
(60) bps

 
 
Domestic
5.7
%
 
6.3
%
 
(60) bps

 
 
     Total new vehicle
5.6
%
 
6.2
%
 
(60) bps

 
 
Used vehicle retail
8.0
%
 
8.5
%
 
(50) bps

 
 
Parts and service
62.3
%
 
61.9
%
 
40 bps

 
 
Gross profit margin
16.2
%
 
16.5
%
 
(30) 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 sales.


11


ASBURY AUTOMOTIVE GROUP, INC.
Additional Disclosures (In millions)
(Unaudited)
 
 
December 31, 2015
 
December 31, 2014
 
Increase
(Decrease)
 
% Change
SELECTED BALANCE SHEET DATA
 
  
 
  
 
 
 
Cash and cash equivalents
$
2.8

  
$
2.9

  
$
(0.1
)
 
(3
)%
New vehicle inventory
739.2

  
699.5

  
39.7

 
6
 %
Used vehicle inventory
134.1

  
141.7

  
(7.6
)
 
(5
)%
Parts inventory
43.9

  
44.8

  
(0.9
)
 
(2
)%
Total current assets
1,343.0

  
1,275.4

  
67.6

 
5
 %
Floor plan notes payable
712.2

  
766.8

  
(54.6
)
 
(7
)%
Total current liabilities
1,007.8

  
1,039.8

  
(32.0
)
 
(3
)%
 
 
 
 
 
 
 
 
CAPITALIZATION:
 
  
 
  
 
 
 
Long-term debt (including current portion)
$
954.3

  
$
697.4

  
$
256.9

 
37
 %
Shareholders' equity
314.5

  
444.9

  
(130.4
)
 
(29
)%
Total
$
1,268.8

  
$
1,142.3

  
$
126.5

 
11
 %

 
December 31, 2015
 
December 31, 2014
DAYS SUPPLY
 
 
 
New vehicle inventory
62

  
63

Used vehicle inventory
30

  
35

_____________________________
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











12


Brand Mix - New Vehicle Revenue by Brand-  
 
For the Year Ended December 31,
 
2015
 
2014
Luxury:
 
 
 
BMW
8
%
 
9
%
Mercedes-Benz
7
%
 
8
%
Lexus
7
%
 
7
%
Acura
5
%
 
5
%
Infiniti
3
%
 
4
%
Other luxury
6
%
 
5
%
Total luxury
36
%
 
38
%
Imports:
 
 
 
Honda
16
%
 
17
%
Nissan
12
%
 
12
%
Toyota
12
%
 
13
%
Other imports
6
%
 
6
%
Total imports
46
%
 
48
%
Domestic:
 
 
 
Ford
11
%
 
7
%
Dodge
2
%
 
2
%
Chevrolet
3
%
 
2
%
Other domestics
2
%
 
3
%
Total domestic
18
%
 
14
%
Total New Vehicle Revenue
100
%
 
100
%
 








 

13


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," and "Adjusted diluted earnings per share ("EPS") from continuing operations." 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.






















14



The following tables are reconciliations for our non-core operating items:
 
For the Three Months Ended December 31,
 
2015
 
2014
 
(In millions, except per share data)
Adjusted income from continuing operations:
 
 
 
Net income
$
41.1

 
$
11.8

Discontinued operations, net of tax
0.1

 
0.1

Income from continuing operations
41.2

 
11.9

 
 
 
 
Non-core items - income:
 
  
 
Gain on divestitures (net of $5.1 million of tax)
(8.4
)
 
—

Loss on extinguishment of long-term debt
—

 
31.9

Income tax benefit
—

 
(12.4
)
Total non-core items
(8.4
)
  
19.5

Adjusted income from continuing operations
$
32.8

  
$
31.4

 
 
 
 
Adjusted diluted earnings per share (EPS) from continuing operations:
 
 
 
Net income
$
1.64

 
$
0.40

Discontinued operations, net of tax
0.01

 
0.01

Income from continuing operations
$
1.65

 
$
0.41

 
 
 
 
Total non-core items
(0.34
)
 
0.66

Adjusted diluted EPS from continuing operations
$
1.31

 
$
1.07

 
 
 
 
Weighted average common shares outstanding - diluted
25.0
 
29.3




15


 
For the Twelve Months Ended December 31,
 
2015
 
2014
 
(In millions, except per share data)
Adjusted income from continuing operations:
 
 
 
Net income
$
169.2

 
$
111.6

Discontinued operations, net of tax
0.2

 
0.4

Income from continuing operations
169.4

 
112.0

 
 
 
 
Non-core items - income:
 
  
 
Gain on divestitures (net of $13.3 million of tax)
(21.6
)
 
—

Loss on extinguishment of long-term debt
—

 
31.9

Income tax benefit
(0.8
)
 
(12.4
)
Total non-core items
(22.4
)
  
19.5

Adjusted income from continuing operations
$
147.0

  
$
131.5

 
 
 
 
Adjusted diluted earnings per share (EPS) from continuing operations:
 
 
 
Net income
$
6.41

 
$
3.71

Discontinued operations, net of tax
0.01

 
0.01

Income from continuing operations
$
6.42

 
$
3.72

 
 
 
 
Total non-core items
(0.85
)
 
0.65

Adjusted diluted EPS from continuing operations
$
5.57

 
$
4.37

 
 
 
 
Weighted average common shares outstanding - diluted
26.4
 
30.1



16
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