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) | |||
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)) |
Exhibit No. | Description | ||
99.1 | Press Release dated April 27, 2017. |
ASBURY AUTOMOTIVE GROUP, INC. | |||
Date: April 27, 2017 | By: | /s/ William F. Stax | |
Name: | William F. Stax | ||
Title: | Interim Principal Financial Officer, Controller and Chief Accounting Officer |
Exhibit No. | Description | |
99.1 | Press Release dated April 27, 2017. |
• | Total revenues increased 3%; gross profit increased 3% |
• | New vehicle revenue increased 1%; gross profit decreased 9% |
• | Used vehicle retail revenue increased 4%; gross profit decreased 2% |
• | Finance and insurance gross profit increased 9% |
• | Parts and service revenue increased 5%; gross profit increased 5% |
• | SG&A as a percentage of gross profit increased 10 basis points to 69.6% |
• | Total company adjusted income from operations (a non-GAAP measure) as a percentage of revenue was 4.6% down 10 basis points from the prior year |
• | Adjusted EPS from continuing operations increased 16% |
• | Acquired a Chevrolet franchise and an Isuzu truck franchise in Indianapolis, Indiana |
• | Opened a Nissan add point in Cumming, Georgia |
• | Repurchased $15 million of common stock |
For the Three Months Ended March 31, | Increase (Decrease) | % Change | ||||||||||||
2017 | 2016 | |||||||||||||
REVENUE: | ||||||||||||||
New vehicle | $ | 832.5 | $ | 838.4 | $ | (5.9 | ) | (1 | )% | |||||
Used vehicle: | ||||||||||||||
Retail | 415.4 | 413.1 | 2.3 | 1 | % | |||||||||
Wholesale | 46.4 | 47.8 | (1.4 | ) | (3 | )% | ||||||||
Total used vehicle | 461.8 | 460.9 | 0.9 | — | % | |||||||||
Parts and service | 191.5 | 189.2 | 2.3 | 1 | % | |||||||||
Finance and insurance, net | 65.9 | 62.3 | 3.6 | 6 | % | |||||||||
TOTAL REVENUE | 1,551.7 | 1,550.8 | 0.9 | — | % | |||||||||
GROSS PROFIT: | ||||||||||||||
New vehicle | 40.4 | 44.7 | (4.3 | ) | (10 | )% | ||||||||
Used vehicle: | ||||||||||||||
Retail | 33.0 | 34.7 | (1.7 | ) | (5 | )% | ||||||||
Wholesale | 0.9 | 1.1 | (0.2 | ) | 18 | % | ||||||||
Total used vehicle | 33.9 | 35.8 | (1.9 | ) | (5 | )% | ||||||||
Parts and service | 119.9 | 118.0 | 1.9 | 2 | % | |||||||||
Finance and insurance, net | 65.9 | 62.3 | 3.6 | 6 | % | |||||||||
TOTAL GROSS PROFIT | 260.1 | 260.8 | (0.7 | ) | — | % | ||||||||
OPERATING EXPENSES: | ||||||||||||||
Selling, general and administrative | 181.1 | 181.2 | (0.1 | ) | — | % | ||||||||
Depreciation and amortization | 7.9 | 7.5 | 0.4 | 5 | % | |||||||||
Other operating (income) expense, net | (1.2 | ) | 3.2 | (4.4 | ) | (138 | )% | |||||||
INCOME FROM OPERATIONS | 72.3 | 68.9 | 3.4 | 5 | % | |||||||||
OTHER EXPENSES: | ||||||||||||||
Floor plan interest expense | 5.3 | 4.4 | 0.9 | 20 | % | |||||||||
Other interest expense, net | 13.3 | 13.4 | (0.1 | ) | (1 | )% | ||||||||
Swap interest expense | 0.6 | 0.8 | (0.2 | ) | (25 | )% | ||||||||
Total other expenses, net | 19.2 | 18.6 | 0.6 | 3 | % | |||||||||
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES | 53.1 | 50.3 | 2.8 | 6 | % | |||||||||
Income tax expense | 19.1 | 19.2 | (0.1 | ) | (1 | )% | ||||||||
INCOME FROM CONTINUING OPERATIONS | 34.0 | 31.1 | 2.9 | 9 | % | |||||||||
Discontinued operations, net of tax | — | (0.1 | ) | 0.1 | 100 | % | ||||||||
NET INCOME | $ | 34.0 | $ | 31.0 | $ | 3.0 | 10 | % | ||||||
EARNINGS PER COMMON SHARE: | ||||||||||||||
Basic— | ||||||||||||||
Continuing operations | $ | 1.62 | $ | 1.28 | $ | 0.34 | 27 | % | ||||||
Discontinued operations | — | — | — | — | % | |||||||||
Net income | $ | 1.62 | $ | 1.28 | $ | 0.34 | 27 | % | ||||||
Diluted— | ||||||||||||||
Continuing operations | $ | 1.61 | $ | 1.27 | $ | 0.34 | 27 | % | ||||||
Discontinued operations | — | — | — | — | % | |||||||||
Net income | $ | 1.61 | $ | 1.27 | $ | 0.34 | 27 | % | ||||||
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING: | ||||||||||||||
Basic | 21.0 | 24.3 | (3.3 | ) | (14 | )% | ||||||||
Restricted stock | — | — | — | — | % | |||||||||
Performance share units | 0.1 | 0.1 | — | — | % | |||||||||
Diluted | 21.1 | 24.4 | (3.3 | ) | (14 | )% |
For the Three Months Ended March 31, | Increase (Decrease) | % Change | ||||||||||||
2017 | 2016 | |||||||||||||
Unit sales | ||||||||||||||
New vehicle: | ||||||||||||||
Luxury | 5,114 | 5,626 | (512 | ) | (9 | )% | ||||||||
Import | 13,674 | 13,484 | 190 | 1 | % | |||||||||
Domestic | 4,678 | 4,919 | (241 | ) | (5 | )% | ||||||||
Total new vehicle | 23,466 | 24,029 | (563 | ) | (2 | )% | ||||||||
Used vehicle retail | 20,067 | 19,736 | 331 | 2 | % | |||||||||
Used to new ratio | 85.5 | % | 82.1 | % | 340 bps | |||||||||
Average selling price | ||||||||||||||
New vehicle | $ | 35,477 | $ | 34,891 | $ | 586 | 2 | % | ||||||
Used vehicle retail | 20,701 | 20,931 | (230 | ) | (1 | )% | ||||||||
Average gross profit per unit | ||||||||||||||
New vehicle: | ||||||||||||||
Luxury | $ | 3,539 | $ | 3,519 | $ | 20 | 1 | % | ||||||
Import | 1,046 | 1,253 | (207 | ) | (17 | )% | ||||||||
Domestic | 1,710 | 1,626 | 84 | 5 | % | |||||||||
Total new vehicle | 1,722 | 1,860 | (138 | ) | (7 | )% | ||||||||
Used vehicle | 1,644 | 1,758 | (114 | ) | (6 | )% | ||||||||
Finance and insurance, net | 1,514 | 1,424 | 90 | 6 | % | |||||||||
Front end yield (1) | 3,200 | 3,238 | (38 | ) | (1 | )% | ||||||||
Gross margin | ||||||||||||||
New vehicle: | ||||||||||||||
Luxury | 6.6 | % | 6.8 | % | (20) bps | |||||||||
Import | 3.8 | % | 4.5 | % | (70) bps | |||||||||
Domestic | 4.5 | % | 4.6 | % | (10) bps | |||||||||
Total new vehicle | 4.9 | % | 5.3 | % | (40) bps | |||||||||
Used vehicle retail | 7.9 | % | 8.4 | % | (50) bps | |||||||||
Parts and service | 62.6 | % | 62.4 | % | 20 bps | |||||||||
Total gross profit margin | 16.8 | % | 16.8 | % | — | |||||||||
SG&A metrics | ||||||||||||||
Rent expense | $ | 6.9 | $ | 7.8 | $ | (0.9 | ) | (12 | )% | |||||
Total SG&A as a percentage of gross profit | 69.6 | % | 69.5 | % | 10 bps | |||||||||
SG&A, excluding rent expense as a percentage of gross profit | 67.0 | % | 66.5 | % | 50 bps | |||||||||
Operating metrics | ||||||||||||||
Income from operations as a percentage of revenue | 4.7 | % | 4.4 | % | 30 bps | |||||||||
Income from operations as a percentage of gross profit | 27.8 | % | 26.4 | % | 140 bps | |||||||||
Adjusted income from operations as a percentage of revenue | 4.6 | % | 4.7 | % | (10) bps | |||||||||
Adjusted income from operations as a percentage of gross profit | 27.5 | % | 27.7 | % | (20) bps | |||||||||
Revenue mix | ||||||||||||||
New vehicle | 53.7 | % | 54.1 | % | ||||||||||
Used vehicle retail | 26.8 | % | 26.6 | % | ||||||||||
Used vehicle wholesale | 3.0 | % | 3.1 | % | ||||||||||
Parts and service | 12.3 | % | 12.2 | % | ||||||||||
Finance and insurance | 4.2 | % | 4.0 | % | ||||||||||
Total revenue | 100.0 | % | 100.0 | % | ||||||||||
Gross profit mix | ||||||||||||||
New vehicle | 15.5 | % | 17.1 | % | ||||||||||
Used vehicle retail | 12.8 | % | 13.4 | % | ||||||||||
Used vehicle wholesale | 0.3 | % | 0.4 | % | ||||||||||
Parts and service | 46.1 | % | 45.2 | % | ||||||||||
Finance and insurance | 25.3 | % | 23.9 | % | ||||||||||
Total gross profit | 100.0 | % | 100.0 | % |
(1) | Front end yield is calculated as gross profit from new vehicles, used retail vehicles and finance and insurance (net), divided by combined new and used retail unit sales. |
For the Three Months Ended March 31, | Increase (Decrease) | % Change | ||||||||||||
2017 | 2016 | |||||||||||||
Revenue | ||||||||||||||
New vehicle: | ||||||||||||||
Luxury | $ | 272.8 | $ | 284.7 | $ | (11.9 | ) | (4 | )% | |||||
Import | 377.5 | 355.7 | 21.8 | 6 | % | |||||||||
Domestic | 164.9 | 165.0 | (0.1 | ) | — | % | ||||||||
Total new vehicle | 815.2 | 805.4 | 9.8 | 1 | % | |||||||||
Used Vehicle: | ||||||||||||||
Retail | 405.9 | 389.5 | 16.4 | 4 | % | |||||||||
Wholesale | 44.9 | 45.8 | (0.9 | ) | (2 | )% | ||||||||
Total used vehicle | 450.8 | 435.3 | 15.5 | 4 | % | |||||||||
Parts and service | 189.0 | 179.2 | 9.8 | 5 | % | |||||||||
Finance and insurance | 64.6 | 59.2 | 5.4 | 9 | % | |||||||||
Total revenue | $ | 1,519.6 | $ | 1,479.1 | $ | 40.5 | 3 | % | ||||||
Gross profit | ||||||||||||||
New vehicle: | ||||||||||||||
Luxury | $ | 18.1 | $ | 19.3 | $ | (1.2 | ) | (6 | )% | |||||
Import | 14.2 | 16.4 | (2.2 | ) | (13 | )% | ||||||||
Domestic | 7.1 | 7.5 | (0.4 | ) | (5 | )% | ||||||||
Total new vehicle | 39.4 | 43.2 | (3.8 | ) | (9 | )% | ||||||||
Used Vehicle: | ||||||||||||||
Retail | 32.0 | 32.6 | (0.6 | ) | (2 | )% | ||||||||
Wholesale | 0.9 | 1.3 | (0.4 | ) | (31 | )% | ||||||||
Total used vehicle | 32.9 | 33.9 | (1.0 | ) | (3 | )% | ||||||||
Parts and service: | ||||||||||||||
Customer pay | 65.3 | 63.1 | 2.2 | 3 | % | |||||||||
Warranty | 20.1 | 16.5 | 3.6 | 22 | % | |||||||||
Wholesale parts | 5.2 | 5.0 | 0.2 | 4 | % | |||||||||
Parts and service, excluding reconditioning and preparation | 90.6 | 84.6 | 6.0 | 7 | % | |||||||||
Reconditioning and preparation | 27.6 | 27.8 | (0.2 | ) | (1 | )% | ||||||||
Total parts and service | 118.2 | 112.4 | 5.8 | 5 | % | |||||||||
Finance and insurance | 64.6 | 59.2 | 5.4 | 9 | % | |||||||||
Total gross profit | $ | 255.1 | $ | 248.7 | $ | 6.4 | 3 | % | ||||||
SG&A expense | $ | 177.4 | $ | 172.3 | $ | 5.1 | 3 | % | ||||||
SG&A expense as a percentage of gross profit | 69.5 | % | 69.3 | % | 20 bps |
For the Three Months Ended March 31, | Increase (Decrease) | % Change | ||||||||||||
2017 | 2016 | |||||||||||||
Unit sales | ||||||||||||||
New vehicle: | ||||||||||||||
Luxury | 5,114 | 5,517 | (403 | ) | (7 | )% | ||||||||
Import | 13,566 | 12,914 | 652 | 5 | % | |||||||||
Domestic | 4,281 | 4,587 | (306 | ) | (7 | )% | ||||||||
Total new vehicle | 22,961 | 23,018 | (57 | ) | — | % | ||||||||
Used vehicle retail | 19,555 | 18,447 | 1,108 | 6 | % | |||||||||
Used to new ratio | 85.2 | % | 80.1 | % | 510 bps | |||||||||
Average selling price | ||||||||||||||
New vehicle | $ | 35,504 | $ | 34,990 | $ | 514 | 1 | % | ||||||
Used vehicle retail | 20,757 | 21,115 | (358 | ) | (2 | )% | ||||||||
Average gross profit per unit | ||||||||||||||
New vehicle: | ||||||||||||||
Luxury | $ | 3,539 | $ | 3,498 | $ | 41 | 1 | % | ||||||
Import | 1,047 | 1,270 | (223 | ) | (18 | )% | ||||||||
Domestic | 1,658 | 1,635 | 23 | 1 | % | |||||||||
Total new vehicle | 1,716 | 1,877 | (161 | ) | (9 | )% | ||||||||
Used vehicle retail | 1,636 | 1,767 | (131 | ) | (7 | )% | ||||||||
Finance and insurance, net | 1,519 | 1,428 | 91 | 6 | % | |||||||||
Front end yield (1) | 3,199 | 3,256 | (57 | ) | (2 | )% | ||||||||
Gross margin | ||||||||||||||
New vehicle: | ||||||||||||||
Luxury | 6.6 | % | 6.8 | % | (20) bps | |||||||||
Import | 3.8 | % | 4.6 | % | (80) bps | |||||||||
Domestic | 4.3 | % | 4.5 | % | (20) bps | |||||||||
Total new vehicle | 4.8 | % | 5.4 | % | (60) bps | |||||||||
Used vehicle retail | 7.9 | % | 8.4 | % | (50) bps | |||||||||
Parts and service: | ||||||||||||||
Parts and service, excluding reconditioning and preparation | 47.9 | % | 47.2 | % | 70 bps | |||||||||
Parts and service, including reconditioning and preparation | 62.5 | % | 62.7 | % | (20) bps | |||||||||
Total gross profit margin | 16.8 | % | 16.8 | % | — |
(1) | Front end yield is calculated as gross profit from new vehicles, used retail vehicles and finance and insurance (net), divided by combined new and used retail unit sales. |
March 31, 2017 | December 31, 2016 | Increase (Decrease) | % Change | |||||||||||
SELECTED BALANCE SHEET DATA | ||||||||||||||
Cash and cash equivalents | $ | 3.1 | $ | 3.4 | $ | (0.3 | ) | (9 | )% | |||||
New vehicle inventory | 780.2 | 720.6 | 59.6 | 8 | % | |||||||||
Used vehicle inventory | 146.5 | 132.7 | 13.8 | 10 | % | |||||||||
Parts inventory | 42.4 | 41.6 | 0.8 | 2 | % | |||||||||
Total current assets | 1,348.6 | 1,332.4 | 16.2 | 1 | % | |||||||||
Floor plan notes payable | 811.6 | 781.8 | 29.8 | 4 | % | |||||||||
Total current liabilities | 1,153.4 | 1,104.9 | 48.5 | 4 | % | |||||||||
CAPITALIZATION: | ||||||||||||||
Long-term debt (including current portion) | $ | 923.0 | $ | 926.7 | $ | (3.7 | ) | — | % | |||||
Shareholders' equity | 298.2 | 279.7 | 18.5 | 7 | % | |||||||||
Total | $ | 1,221.2 | $ | 1,206.4 | $ | 14.8 | 1 | % |
March 31, 2017 | December 31, 2016 | ||||
DAYS SUPPLY | |||||
New vehicle inventory | 74 | 61 | |||
Used vehicle inventory | 32 | 30 |
For the Three Months Ended March 31, | |||||
2017 | 2016 | ||||
Luxury: | |||||
Mercedes-Benz | 7 | % | 7 | % | |
Lexus | 6 | % | 7 | % | |
BMW | 5 | % | 7 | % | |
Acura | 4 | % | 4 | % | |
Infiniti | 3 | % | 4 | % | |
Other luxury | 8 | % | 6 | % | |
Total luxury | 33 | % | 35 | % | |
Imports: | |||||
Honda | 17 | % | 16 | % | |
Nissan | 13 | % | 11 | % | |
Toyota | 11 | % | 12 | % | |
Other imports | 5 | % | 5 | % | |
Total imports | 46 | % | 44 | % | |
Domestic: | |||||
Ford | 12 | % | 13 | % | |
Chevrolet | 4 | % | 2 | % | |
Dodge | 3 | % | 2 | % | |
Other domestics | 2 | % | 4 | % | |
Total domestic | 21 | % | 21 | % | |
Total New Vehicle Revenue | 100 | % | 100 | % |
For the Twelve Months Ended | |||||||
March 31, 2017 | December 31, 2016 | ||||||
(Dollars in millions) | |||||||
Adjusted leverage ratio: | |||||||
Long-term debt (including current portion) | $ | 923.0 | $ | 926.7 | |||
Calculation of earnings before interest, taxes, depreciation and amortization ("EBITDA"): | |||||||
Income from continuing operations | $ | 170.2 | $ | 167.2 | |||
Add: | |||||||
Depreciation and amortization | 31.0 | 30.7 | |||||
Income tax expense | 100.4 | 100.6 | |||||
Swap and other interest expense | 56.0 | 56.2 | |||||
Earnings before interest, taxes, depreciation and amortization ("EBITDA") | $ | 357.6 | $ | 354.7 | |||
Non-core items - (income) expense: | |||||||
Legal settlements | $ | (7.5 | ) | $ | (6.6 | ) | |
Real estate-related charges | 2.3 | 5.7 | |||||
Gain on divestitures | (45.5 | ) | (45.5 | ) | |||
Total non-core items | (50.7 | ) | (46.4 | ) | |||
Adjusted EBITDA | $ | 306.9 | $ | 308.3 | |||
Adjusted leverage ratio | 3.0 | 3.0 |
For the Three Months Ended March 31, | |||||||
2017 | 2016 | ||||||
(In millions, except per share data) | |||||||
Adjusted income from operations: | |||||||
Income from operations | $ | 72.3 | $ | 68.9 | |||
Real estate-related charges | — | 3.4 | |||||
Legal settlements | (0.9 | ) | — | ||||
Adjusted income from operations | $ | 71.4 | $ | 72.3 | |||
Adjusted income from continuing operations: | |||||||
Income from continuing operations | $ | 34.0 | $ | 31.1 | |||
Non-core items - (income) expense: | |||||||
Legal settlements | (0.9 | ) | — | ||||
Real estate-related charges | — | 3.4 | |||||
Income tax benefit | 0.3 | (1.3 | ) | ||||
Total non-core items | (0.6 | ) | 2.1 | ||||
Adjusted income from continuing operations | $ | 33.4 | $ | 33.2 | |||
Adjusted diluted earnings per share (EPS) from continuing operations: | |||||||
Net income | $ | 1.61 | $ | 1.27 | |||
Discontinued operations, net of tax | — | — | |||||
Income from continuing operations | $ | 1.61 | $ | 1.27 | |||
Total non-core items | (0.03 | ) | 0.09 | ||||
Adjusted diluted EPS from continuing operations | $ | 1.58 | $ | 1.36 | |||
Weighted average common shares outstanding - diluted | 21.1 | 24.4 |