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Wed Feb 06 2019

Asbury Automotive Group Announces 2018 Fourth Quarter And Full-Year Financial Results

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Fourth quarter EPS of $2.06 per diluted share and full year EPS of $8.28 per diluted share
Record fourth quarter adjusted EPS of $2.20 per diluted share (a non-GAAP measure), up 22% over prior year adjusted EPS
Record full year 2018 adjusted EPS of $8.41 per diluted share (a non-GAAP measure), up 31% over prior year adjusted EPS

DULUTH, Ga., Feb. 6, 2019 /PRNewswire/ -- Asbury Automotive Group, Inc. (NYSE: ABG), one of the largest automotive retail and service companies in the U.S., reported net income for the fourth quarter 2018 of $40.4 million ($2.06 per diluted share) compared to $42.5 million  ($2.03 per diluted share) in the prior year quarter. It also reported adjusted net income (a non-GAAP measure) for the fourth quarter 2018 of $43.2 million ($2.20 per diluted share) compared to $37.8 million ($1.81 per diluted share) in the prior year quarter, a 22% increase in adjusted earnings per share.

Net income for the fourth quarter 2018 was adjusted for a $3.7 million pre-tax charge for franchise rights impairments ($0.14 per diluted share). Net income for the fourth quarter 2017 was adjusted for a $5.1 million pre-tax charge for franchise rights impairments ($0.15 per diluted share) and a $7.9 million benefit ($0.37 per diluted share) related to adjustments to deferred tax balances as a result of changes to the tax law.

On January 1, 2018, the company adopted ASC 606 for revenue recognition which impacted F&I and parts and service revenue and gross profit. The net impact of adopting ASC 606 in the fourth quarter was to increase net income by $1.2 million or $0.06 per diluted share.

"We closed out 2018 with a strong performance delivering 22% adjusted EPS growth in the quarter," said David Hult, Asbury's President and Chief Executive Officer. "During 2018, we acquired three dealerships, repurchased approximately $105 million of our shares, and further developed our omni-channel capabilities.  In a relatively flat SAAR environment we maintained our industry leading operating margins and grew adjusted EPS 31%. This performance is a direct result of our team's hard work, dedication, and commitment to continuous improvement.  Going forward, we will continue to execute our two-part strategy: drive operational excellence and deploy capital to its highest returns."

Fourth Quarter 2018 Operational Summary

All stores:

  • Revenue increased 7%; gross profit increased 5%
  • New vehicle revenue increased 6%; gross profit decreased 6%
  • Used vehicle retail revenue increased 10%; gross profit increased 10%
  • Finance and insurance revenue and gross profit increased 6%
  • Parts and service revenue increased 7%; gross profit increased 7%
  • SG&A as a percentage of gross profit increased 90 basis points to 68.2%
  • Adjusted income from operations as a percentage of revenue was 4.5%
  • Adjusted EPS from continuing operations increased 22%

Same store:

  • Revenue increased 4%; gross profit increased 2%
  • New vehicle revenue increased 3%; gross profit decreased 7%
  • Used vehicle retail revenue increased 7%; gross profit increased 7%
  • Finance and insurance revenue and gross profit increased 3%
  • Parts and service revenue increased 5%; gross profit increased 5%

Strategic Highlights:

  • In Q4 2018, we repurchased $48 million of common stock
  • Signed an agreement to acquire four stores in the Indianapolis market that we expect to close in Q1 2019, subject to customary closing conditions. We expect these dealerships will generate approximately $250 million in annualized revenue.
  • Omni-channel initiatives helped drive results, reduce costs, and improve efficiencies

For the full year 2018, the Company reported net income of $168.0 million ($8.28 per diluted share) compared to $139.1 million ($6.62 per diluted share) in the prior year period. Adjusted net income (a non-GAAP measure) for 2018 was $170.8 million ($8.41 per diluted share) compared to $135.1 million ($6.43 per diluted share) in the prior year period, a 31% increase in adjusted EPS.

Additional commentary regarding the fourth quarter and full-year results will be provided during the earnings conference call on February 6, 2019 at 10:00 a.m.  The conference call will be simulcast live on the internet and can be accessed at 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 (323) 994-2131 (domestic), or (800) 347-6311 (international); passcode - 1070155.  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 - 1070155.

About Asbury Automotive Group, Inc.

Asbury Automotive Group, Inc. ("Asbury"), a Fortune 500 company headquartered in Duluth, GA, is one of the largest automotive retailers in the U.S.  Asbury currently operates 83 dealerships, consisting of 97 franchises, representing 29 domestic and foreign brands of vehicles.  Asbury also operates 25 collision repair centers.  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, 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.

 

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


2018


2017



REVENUE:








New vehicle

$

1,022.4



$

964.1



$

58.3



6

%

Used vehicle:








Retail

427.9



389.6



38.3



10

%

Wholesale

45.5



47.9



(2.4)



(5)

%

     Total used vehicle

473.4



437.5



35.9



8

%

Parts and service

211.1



196.6



14.5



7

%

Finance and insurance, net

77.3



72.7



4.6



6

%

TOTAL REVENUE

1,784.2



1,670.9



113.3



7

%

GROSS PROFIT:








New vehicle

43.9



46.6



(2.7)



(6)

%

Used vehicle:








Retail

29.3



26.7



2.6



10

%

Wholesale



(0.2)



0.2



100

%

     Total used vehicle

29.3



26.5



2.8



11

%

Parts and service

131.3



122.6



8.7



7

%

Finance and insurance, net

77.3



72.7



4.6



6

%

TOTAL GROSS PROFIT

281.8



268.4



13.4



5

%

OPERATING EXPENSES:








Selling, general and administrative

192.2



180.5



11.7



6

%

Depreciation and amortization

8.5



8.1



0.4



5

%

Franchise rights impairment

3.7



5.1



(1.4)



(27)

%

Other operating (income) expenses, net

0.1



0.6



(0.5)



(83)

%

INCOME FROM OPERATIONS

77.3



74.1



3.2



4

%

OTHER EXPENSES:








Floor plan interest expense

9.5



5.5



4.0



73

%

Other interest expense, net

13.7



13.8



(0.1)



(1)

%

Swap interest expense



0.4



(0.4)



(100)

%

Total other expenses, net

23.2



19.7



3.5



18

%

INCOME BEFORE INCOME TAXES

54.1



54.4



(0.3)



(1)

%

Income tax expense

13.7



11.9



1.8



15

%

NET INCOME

$

40.4



$

42.5



$

(2.1)



(5)

%

EARNINGS PER COMMON SHARE:








Basic—








Net income

$

2.09



$

2.06



$

0.03



1

%

Diluted—








Net income

$

2.06



$

2.03



$

0.03



1

%

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:








Basic

19.3



20.6



(1.3)



(6)

%

Restricted stock

0.1



0.1





%

Performance share units

0.2



0.2





%

Diluted

19.6



20.9



(1.3)



(6)

%




 

ASBURY AUTOMOTIVE GROUP, INC.

KEY OPERATING HIGHLIGHTS (In millions, except per unit data)

(Unaudited)



For the Three Months
Ended December 31,


Increase
(Decrease)


%
Change


2018


2017



Unit sales








New vehicle:








Luxury

6,452



6,408



44



1

%

Import

16,394



15,181



1,213



8

%

Domestic

4,951



4,602



349



8

%

     Total new vehicle

27,797



26,191



1,606



6

%

Used vehicle retail

19,298



17,822



1,476



8

%

Used to new ratio

69.4

%


68.0

%


140 bps




Average selling price








New vehicle

$

36,781



$

36,810



$

(29)



%

Used vehicle retail

22,173



21,861



312



1

%

Average gross profit per unit








New vehicle:








Luxury

$

3,487



$

3,777



$

(290)



(8)

%

Import

830



922



(92)



(10)

%

Domestic

1,575



1,825



(250)



(14)

%

Total new vehicle

1,579



1,779



(200)



(11)

%

Used vehicle retail

1,518



1,498



20



1

%

Finance and insurance, net

1,641



1,652



(11)



(1)

%

Front end yield (1)

3,196



3,317



(121)



(4)

%

Gross margin








New vehicle:








Luxury

6.4

%


7.0

%


(60) bps




Import

2.9

%


3.2

%


(30) bps




Domestic

3.9

%


4.6

%


(70) bps




Total new vehicle

4.3

%


4.8

%


(50) bps




Used vehicle retail

6.8

%


6.9

%


(10) bps




Parts and service

62.2

%


62.4

%


(20) bps




Total gross profit margin

15.8

%


16.1

%


(30) bps




SG&A metrics








Rent expense

$

6.5



$

6.5



$



%

Total SG&A as a percentage of gross profit

68.2

%


67.3

%


90 bps




SG&A, excluding rent expense as a percentage of gross profit

65.9

%


64.8

%


110 bps




Operating metrics








Income from operations as a percentage of revenue

4.3

%


4.4

%


(10) bps




Income from operations as a percentage of gross profit

27.4

%


27.6

%


(20) bps




Adjusted income from operations as a percentage of revenue

4.5

%


4.7

%


(20) bps




Adjusted income from operations as a percentage of gross profit

28.7

%


29.5

%


(80) bps




Revenue mix








New vehicle

57.3

%


57.7

%





Used vehicle retail

24.0

%


23.2

%





Used vehicle wholesale

2.6

%


2.9

%





Parts and service

11.8

%


11.8

%





Finance and insurance

4.3

%


4.4

%





     Total revenue

100.0

%


100.0

%





Gross profit mix








New vehicle

15.6

%


17.4

%





Used vehicle retail

10.4

%


9.9

%





Used vehicle wholesale

%


(0.1)

%





Parts and service

46.6

%


45.7

%





Finance and insurance

27.4

%


27.1

%





     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.

 

ASBURY AUTOMOTIVE GROUP, INC.

SAME STORE OPERATING HIGHLIGHTS (In millions)

(Unaudited)



For the Three Months
Ended December 31,


Increase
(Decrease)


%
Change


2018


2017



Revenue








New vehicle:








Luxury

$

351.5



$

347.9



$

3.6



1

%

Import

447.4



431.5



15.9



4

%

Domestic

193.6



184.6



9.0



5

%

     Total new vehicle

992.5



964.0



28.5



3

%

Used Vehicle:








Retail

415.8



389.6



26.2



7

%

Wholesale

44.8



47.9



(3.1)



(6)

%

     Total used vehicle

460.6



437.5



23.1



5

%

Parts and service

205.9



196.6



9.3



5

%

Finance and insurance

74.8



72.8



2.0



3

%

Total revenue

$

1,733.8



$

1,670.9



$

62.9



4

%









Gross profit








New vehicle:








Luxury

$

22.5



$

24.2



$

(1.7)



(7)

%

Import

12.9



13.9



(1.0)



(7)

%

Domestic

7.7



8.4



(0.7)



(8)

%

     Total new vehicle

43.1



46.5



(3.4)



(7)

%

Used Vehicle:








Retail

28.7



26.7



2.0



7

%

Wholesale



(0.1)



0.1



100

%

     Total used vehicle

28.7



26.6



2.1



8

%

Parts and service:








Customer pay

72.4



68.6



3.8



6

%

Warranty

19.9



20.0



(0.1)



(1)

%

Wholesale parts

5.8



5.4



0.4



7

%

     Parts and service, excluding reconditioning and preparation

98.1



94.0



4.1



4

%

Reconditioning and preparation

30.1



28.6



1.5



5

%

Total parts and service

128.2



122.6



5.6



5

%

Finance and insurance

74.8



72.8



2.0



3

%

Total gross profit

$

274.8



$

268.5



$

6.3



2

%









SG&A expense

$

187.0



$

180.4



$

6.6



4

%

SG&A expense as a percentage of gross profit

68.0

%


67.2

%


80 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.

 

ASBURY AUTOMOTIVE GROUP, INC.

SAME STORE OPERATING HIGHLIGHTS (Continued)

(Unaudited)



For the Three Months
Ended December 31,


Increase
(Decrease)


%
Change


2018


2017



Unit sales








New vehicle:








Luxury

6,452



6,408



44



1

%

Import

15,572



15,181



391



3

%

Domestic

4,753



4,602



151



3

%

     Total new vehicle

26,777



26,191



586



2

%

Used vehicle retail

18,624



17,822



802



5

%

Used to new ratio

69.6

%


68.0

%


160 bps












Average selling price








New vehicle

$

37,065



$

36,807



$

258



1

%

Used vehicle retail

22,326



21,861



465



2

%









Average gross profit per unit








New vehicle:








Luxury

$

3,487



$

3,777



$

(290)



(8)

%

Import

828



916



(88)



(10)

%

Domestic

1,620



1,825



(205)



(11)

%

Total new vehicle

1,610



1,775



(165)



(9)

%

Used vehicle retail

1,541



1,498



43



3

%

Finance and insurance, net

1,648



1,654



(6)



%

Front end yield (1)

3,229



3,317



(88)



(3)

%









Gross margin








New vehicle:








Luxury

6.4

%


7.0

%


(60) bps




Import

2.9

%


3.2

%


(30) bps




Domestic

4.0

%


4.6

%


(60) bps




Total new vehicle

4.3

%


4.8

%


(50) bps




Used vehicle retail

6.9

%


6.9

%


— bps




Parts and service:








Parts and service, excluding reconditioning and preparation

47.6

%


47.8

%


(20) bps




Parts and service, including reconditioning and preparation

62.3

%


62.4

%


(10) bps




Total gross profit margin

15.8

%


16.1

%


(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 unit sales.

 

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


2018


2017



REVENUE:








New vehicle

$

3,788.7



$

3,561.1



$

227.6



6

%

Used vehicle:








Retail

1,783.3



1,635.3



148.0



9

%

Wholesale

189.1



198.8



(9.7)



(5)

%

     Total used vehicle

1,972.4



1,834.1



138.3



8

%

Parts and service

821.0



786.1



34.9



4

%

Finance and insurance, net

292.3



275.2



17.1



6

%

TOTAL REVENUE

6,874.4



6,456.5



417.9



6

%

GROSS PROFIT:








New vehicle

165.2



169.0



(3.8)



(2)

%

Used vehicle:








Retail

127.8



121.1



6.7



6

%

Wholesale

1.9



0.8



1.1



138

%

     Total used vehicle

129.7



121.9



7.8



6

%

Parts and service

515.8



489.8



26.0



5

%

Finance and insurance, net

292.3



275.2



17.1



6

%

TOTAL GROSS PROFIT

1,103.0



1,055.9



47.1



4

%

OPERATING EXPENSES:








Selling, general and administrative

755.8



729.7



26.1



4

%

Depreciation and amortization

33.7



32.1



1.6



5

%

Franchise rights impairment

3.7



5.1



(1.4)



(27)

%

Other operating (income) expenses, net

(1.1)



1.3



(2.4)



(185)

%

INCOME FROM OPERATIONS

310.9



287.7



23.2



8

%

OTHER EXPENSES:








Floor plan interest expense

32.5



22.7



9.8



43

%

Other interest expense, net

53.1



53.9



(0.8)



(1)

%

Swap interest expense

0.5



2.0



(1.5)



(75)

%

Total other expenses, net

86.1



78.6



7.5



10

%

INCOME BEFORE INCOME TAXES

224.8



209.1



15.7



8

%

Income tax expense

56.8



70.0



(13.2)



(19)

%

NET INCOME

$

168.0



$

139.1



$

28.9



21

%

EARNINGS PER COMMON SHARE:








Basic—








Net income

$

8.36



$

6.69



$

1.67



25

%

Diluted—








Net income

$

8.28



$

6.62



$

1.66



25

%

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:








Basic

20.1



20.8



(0.7)



(3)

%

Restricted stock

0.1



0.1





%

Performance share units

0.1



0.1





%

Diluted

20.3



21.0



(0.7)



(3)

%




 

ASBURY AUTOMOTIVE GROUP, INC.

KEY OPERATING HIGHLIGHTS (In millions, except per unit data)

(Unaudited)



For the Twelve Months
Ended December 31,


Increase
(Decrease)


%
Change


2018


2017



Unit sales








New vehicle:








Luxury

22,979



22,525



454



2

%

Import

62,939



58,685



4,254



7

%

Domestic

19,357



18,765



592



3

%

     Total new vehicle

105,275



99,975



5,300



5

%

Used vehicle retail

82,377



76,929



5,448



7

%

Used to new ratio

78.2

%


76.9

%


130 bps




Average selling price








New vehicle

$

35,989



$

35,620



$

369



1

%

Used vehicle retail

21,648



21,257



391



2

%

Average gross profit per unit








New vehicle:








Luxury

$

3,481



$

3,503



$

(22)



(1)

%

Import

836



968



(132)



(14)

%

Domestic

1,684



1,775



(91)



(5)

%

Total new vehicle

1,569



1,690



(121)



(7)

%

Used vehicle retail

1,551



1,574



(23)



(1)

%

Finance and insurance, net

1,558



1,556



2



%

Front end yield (1)

3,119



3,196



(77)



(2)

%

Gross margin








New vehicle:








Luxury

6.5

%


6.6

%


(10) bps




Import

2.9

%


3.5

%


(60) bps




Domestic

4.3

%


4.6

%


(30) bps




Total new vehicle

4.4

%


4.7

%


(30) bps




Used vehicle retail

7.2

%


7.4

%


(20) bps




Parts and service

62.8

%


62.3

%


50 bps




Total gross profit margin

16.0

%


16.4

%


(40) bps




SG&A metrics








Rent expense

$

25.6



$

26.7



$

(1.1)



(4)

%

Total SG&A as a percentage of gross profit

68.5

%


69.1

%


(60) bps




SG&A, excluding rent expense as a percentage of gross profit

66.2

%


66.6

%


(40) bps




Operating metrics








Income from operations as a percentage of revenue

4.5

%


4.5

%


— bps




Income from operations as a percentage of gross profit

28.2

%


27.2

%


100 bps




Adjusted income from operations as a percentage of revenue

4.6

%


4.6

%


— bps




Adjusted income from operations as a percentage of gross profit

28.5

%


27.8

%


70 bps




Revenue mix








New vehicle

55.1

%


55.2

%





Used vehicle retail

25.9

%


25.2

%





Used vehicle wholesale

2.8

%


3.1

%





Parts and service

11.9

%


12.2

%





Finance and insurance

4.3

%


4.3

%





     Total revenue

100.0

%


100.0

%





Gross profit mix








New vehicle

15.0

%


16.0

%





Used vehicle retail

11.5

%


11.4

%





Used vehicle wholesale

0.2

%


0.1

%





Parts and service

46.8

%


46.4

%





Finance and insurance

26.5

%


26.1

%





     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.

 

ASBURY AUTOMOTIVE GROUP, INC.

SAME STORE OPERATING HIGHLIGHTS (In millions)

(Unaudited)



For the Twelve Months
Ended December 31,


Increase
(Decrease)


%
Change


2018


2017



Revenue








New vehicle:








Luxury

$

1,235.3



$

1,200.2



$

35.1



3

%

Import

1,706.7



1,636.2



70.5



4

%

Domestic

740.3



722.2



18.1



3

%

     Total new vehicle

3,682.3



3,558.6



123.7



3

%

Used Vehicle:








Retail

1,737.2



1,625.0



112.2



7

%

Wholesale

185.8



197.7



(11.9)



(6)

%

     Total used vehicle

1,923.0



1,822.7



100.3



6

%

Parts and service

804.1



785.6



18.5



2

%

Finance and insurance, net

284.9



274.3



10.6



4

%

Total revenue

$

6,694.3



$

6,441.2



$

253.1



4

%









Gross profit








New vehicle:








Luxury

$

80.0



$

78.9



$

1.1



1

%

Import

49.7



56.7



(7.0)



(12)

%

Domestic

31.7



33.2



(1.5)



(5)

%

     Total new vehicle

161.4



168.8



(7.4)



(4)

%

Used Vehicle:








Retail

124.5



120.4



4.1



3

%

Wholesale

2.1



1.2



0.9



75

%

     Total used vehicle

126.6



121.6



5.0



4

%

Parts and service:








Customer pay

286.2



272.1



14.1



5

%

Warranty

75.5



81.7



(6.2)



(8)

%

Wholesale parts

22.3



21.1



1.2



6

%

     Parts and service, excluding reconditioning and preparation

384.0



374.9



9.1



2

%

Reconditioning and preparation

121.1



114.3



6.8



6

%

Total parts and service

505.1



489.2



15.9



3

%

Finance and insurance

284.9



274.3



10.6



4

%

Total gross profit

$

1,078.0



$

1,053.9



$

24.1



2

%









SG&A expense

$

737.7



$

726.5



$

11.2



2

%

SG&A expense as a percentage of gross profit

68.4

%


68.9

%


(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.

 

ASBURY AUTOMOTIVE GROUP, INC.

SAME STORE OPERATING HIGHLIGHTS (Continued)

(Unaudited)



For the Twelve Months
Ended December 31,


Increase
(Decrease)


%
Change


2018


2017



Unit sales








New vehicle:








Luxury

22,979



22,525



454



2

%

Import

60,010



58,648



1,362



2

%

Domestic

18,676



18,727



(51)



%

     Total new vehicle

101,665



99,900



1,765



2

%

Used vehicle retail

79,789



76,285



3,504



5

%

Used to new ratio

78.5

%


76.4

%


210 bps












Average selling price








New vehicle

$

36,220



$

35,622



$

598



2

%

Used vehicle retail

21,772



21,302



470



2

%









Average gross profit per unit








New vehicle:








Luxury

$

3,481



$

3,503



$

(22)



(1)

%

Import

828



967



(139)



(14)

%

Domestic

1,697



1,773



(76)



(4)

%

Total new vehicle

1,588



1,690



(102)



(6)

%

Used vehicle retail

1,560



1,578



(18)



(1)

%

Finance and insurance, net

1,570



1,557



13



1

%

Front end yield (1)

3,146



3,198



(52)



(2)

%









Gross margin








New vehicle:








Luxury

6.5

%


6.6

%


(10) bps




Import

2.9

%


3.5

%


(60) bps




Domestic

4.3

%


4.6

%


(30) bps




Total new vehicle

4.4

%


4.7

%


(30) bps




Used vehicle retail

7.2

%


7.4

%


(20) bps




Parts and service:








Parts and service, excluding reconditioning and preparation

47.8

%


47.7

%


10 bps




Parts and service, including reconditioning and preparation

62.8

%


62.3

%


50 bps




Total gross profit margin

16.1

%


16.4

%


(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 unit sales.

 

ASBURY AUTOMOTIVE GROUP, INC.

Additional Disclosures (In millions)

(Unaudited)



December 31,
2018


December 31,
2017


Increase
(Decrease)


% Change

SELECTED BALANCE SHEET DATA








Cash and cash equivalents

$

8.3



$

4.7



$

3.6



77

%

New vehicle inventory

866.2



646.5



219.7



34

%

Used vehicle inventory

158.9



135.9



23.0



17

%

Parts inventory

41.5



43.6



(2.1)



(5)

%

Total current assets

1,552.0



1,302.1



249.9



19

%

Floor plan notes payable

965.1



732.1



233.0



32

%

Total current liabilities

1,277.1



1,058.2



218.9



21

%









CAPITALIZATION:








Long-term debt (including current portion)

$

905.3



$

875.5



$

29.8



3

%

Shareholders' equity

473.2



394.2



79.0



20

%

Total

$

1,378.5



$

1,269.7



$

108.8



9

%




December 31,
2018


December 31,
2017

DAYS SUPPLY




New vehicle inventory

67



53


Used vehicle inventory

34



31



_____________________________

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.

 

Brand Mix - New Vehicle Revenue by Brand-








For the Twelve Months
Ended December 31,


2018


2017

Luxury:




Mercedes-Benz

6

%


7

%

Lexus

7

%


7

%

BMW

5

%


6

%

Acura

4

%


4

%

Infiniti

3

%


3

%

Other luxury

8

%


7

%

Total luxury

33

%


34

%

Imports:




Honda

19

%


18

%

Nissan

11

%


12

%

Toyota

12

%


11

%

Other imports

5

%


5

%

Total imports

47

%


46

%

Domestic:




Ford

10

%


11

%

Chevrolet

5

%


4

%

Dodge

3

%


3

%

Other domestics

2

%


2

%

Total domestic

20

%


20

%

Total New Vehicle Revenue

100

%


100

%

 

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 leverage ratio," "Adjusted income from operations," "Adjusted net income," " Adjusted operating margins," and "Adjusted diluted earnings per share ("EPS")." Further, management assesses the organic growth of our revenue and gross profit on a same store basis. We believe that our assessment on a same store basis represents an important indicator of comparative financial performance and provides relevant information to assess our performance at our existing locations. 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. 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.

The following tables provide reconciliations for our non-GAAP metrics:


For the Twelve Months Ended


December 31,
2018


September 30,
2018


(Dollars in millions)

Adjusted leverage ratio:




Long-term debt (including current portion)

$

905.3



$

865.2






Calculation of earnings before interest, taxes, depreciation and amortization ("EBITDA"):




Net Income

$

168.0



$

170.1






Add:




Depreciation and amortization

33.7



33.4


Income tax expense

56.8



54.9


Swap and other interest expense

53.6



54.1


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

$

312.1



$

312.5






Non-core items - expense (income):




Franchise rights impairment

$

3.7



$

5.1


Legal settlements

(0.7)



(0.7)


  Total non-core items

3.0



4.4






Adjusted EBITDA

$

315.1



$

316.9






Adjusted leverage ratio

2.9



2.7





For the Three Months
Ended December 31,


2018


2017


(In millions, except per share data)

Adjusted income from operations:




Income from operations

$

77.3



$

74.1


Franchise  Right Impairment

3.7



5.1


Adjusted income from operations

$

81.0



$

79.2










Adjusted net income:




Net income

$

40.4



$

42.5






Non-core items - (income) expense:




Franchise rights impairment

3.7



5.1


Income tax expense (benefit) on non-core items above

(0.9)



(1.9)


2017 Tax Act related adjustments



(7.9)


Total non-core items

2.8



(4.7)


Adjusted net income

$

43.2



$

37.8






Adjusted diluted earnings per share (EPS):




Diluted EPS

$

2.06



$

2.03






Total non-core items

0.14



(0.22)


Adjusted diluted EPS

$

2.20



$

1.81






Weighted average common shares outstanding - diluted

19.6



20.9





For the Twelve Months
Ended December 31,


2018


2017


(In millions, except per share data)

Adjusted income from operations:




Income from operations

$

310.9



$

287.7


Franchise  Right Impairment

3.7



5.1


Real estate-related charges



2.9


Investment income



(0.8)


Legal settlements

(0.7)



(0.9)


Adjusted income from operations

$

313.9



$

294.0






Adjusted net income:




Net income

$

168.0



$

139.1






Non-core items - (income) expense:




Franchise rights impairment

3.7



5.1


Real estate-related charges



2.9


Investment income



(0.8)


Legal settlements

(0.7)



(0.9)


Income tax expense (benefit) on non-core items above

(0.8)



(2.4)


2017 Tax Act related adjustments

0.6



(7.9)


Total non-core items

2.8



(4.0)


Adjusted net income

$

170.8



$

135.1






Adjusted diluted earnings per share (EPS):




Diluted EPS

$

8.28



$

6.62






Total non-core items

0.13



(0.19)


Adjusted diluted EPS

$

8.41



$

6.43






Weighted average common shares outstanding - diluted

20.3



21.0


 

Cision View original content:http://www.prnewswire.com/news-releases/asbury-automotive-group-announces-2018-fourth-quarter-and-full-year-financial-results-300790402.html

SOURCE Asbury Automotive Group, Inc.

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