Tue Oct 27 2020
Asbury Automotive Group Announces All Time Record Third Quarter 2020 Financial Results
Net income for the third quarter 2020 was adjusted for a
Total revenue for the third quarter was
"In addition to closing on the largest acquisition in the company's history and increasing our size by 25%, we delivered another very strong quarter reflecting the resilience and the flexibility of our business model. We delivered a record adjusted operating margin of 6.6% and a record low adjusted SG&A as a percentage of gross profit of 61.1% in a 15.4 million SAAR environment," said
Third Quarter 2020 Highlights
- New gross profit per vehicle up 73% to
$2,468 - Used retail gross profit per vehicle up 43% to
$2,116 - Finance and Insurance gross profit per vehicle up 11% to
$1,795 - Adjusted SG&A as a percentage of gross profit decreased 780 basis points to 61.1%
- Adjusted Income from operations as percentage of revenue increased 210 basis points to 6.6%
- Adjusted EPS increased 75%
- Closed on the acquisition of
Park Place Dealerships , adding$1.7 billion of annualized revenue - Divested a Lexus dealership with approximately
$90 million in annual revenues, as we reached our regional ownership cap due to acquiring twoPark Place Lexus stores - Ended the quarter with total liquidity of
$385 million and a pro forma net leverage ratio of 2.4x
For the nine-month period ended
Additional commentary regarding the third quarter results will be provided during the earnings conference call on
In addition, a live audio of the call will be accessible to the public by calling (800) 430-8332 (domestic), or (323) 289-6581 (international); passcode – 1504679. 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 – 1504679.
About
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, the impact of the COVID-19 pandemic, 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 technology initiatives and other operational strategies, Asbury's ability to leverage gains from its dealership portfolio, including its ability to realize the expected benefits of the acquisition of the Park Place dealership group. 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
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||||||||||||||
|
CONSOLIDATED STATEMENTS OF INCOME (In millions, except per share data) |
||||||||||||||
|
(Unaudited) |
||||||||||||||
|
For the Three Months Ended |
Increase (Decrease) |
% |
||||||||||||
|
2020 |
2019 |
|||||||||||||
|
REVENUE: |
||||||||||||||
|
New vehicle |
$ |
957.9 |
$ |
986.9 |
$ |
(29.0) |
(3) |
% |
||||||
|
Used vehicle: |
||||||||||||||
|
Retail |
507.4 |
505.0 |
2.4 |
— |
% |
|||||||||
|
Wholesale |
62.1 |
41.9 |
20.2 |
48 |
% |
|||||||||
|
Total used vehicle |
569.5 |
546.9 |
22.6 |
4 |
% |
|||||||||
|
Parts and service |
237.2 |
227.6 |
9.6 |
4 |
% |
|||||||||
|
Finance and insurance, net |
80.8 |
80.6 |
0.2 |
— |
% |
|||||||||
|
TOTAL REVENUE |
1,845.4 |
1,842.0 |
3.4 |
— |
% |
|||||||||
|
GROSS PROFIT: |
||||||||||||||
|
New vehicle |
60.6 |
38.6 |
22.0 |
57 |
% |
|||||||||
|
Used vehicle: |
||||||||||||||
|
Retail |
43.3 |
33.9 |
9.4 |
28 |
% |
|||||||||
|
Wholesale |
5.9 |
(1.5) |
7.4 |
NM |
||||||||||
|
Total used vehicle |
49.2 |
32.4 |
16.8 |
52 |
% |
|||||||||
|
Parts and service |
145.3 |
141.5 |
3.8 |
3 |
% |
|||||||||
|
Finance and insurance, net |
80.8 |
80.6 |
0.2 |
— |
% |
|||||||||
|
TOTAL GROSS PROFIT |
335.9 |
293.1 |
42.8 |
15 |
% |
|||||||||
|
OPERATING EXPENSES: |
||||||||||||||
|
Selling, general and administrative |
206.5 |
202.0 |
4.5 |
2 |
% |
|||||||||
|
Depreciation and amortization |
9.8 |
9.1 |
0.7 |
8 |
% |
|||||||||
|
Other operating expense (income), net |
0.5 |
(0.2) |
0.7 |
NM |
||||||||||
|
INCOME FROM OPERATIONS |
119.1 |
82.2 |
36.9 |
45 |
% |
|||||||||
|
OTHER EXPENSES (INCOME): |
||||||||||||||
|
Floor plan interest expense |
3.0 |
9.0 |
(6.0) |
(67) |
% |
|||||||||
|
Other interest expense, net |
12.9 |
13.7 |
(0.8) |
(6) |
% |
|||||||||
|
Gain on divestiture |
(24.7) |
— |
(24.7) |
— |
% |
|||||||||
|
Total other (income) expenses, net |
(8.8) |
22.7 |
(31.5) |
(139) |
% |
|||||||||
|
INCOME BEFORE INCOME TAXES |
127.9 |
59.5 |
68.4 |
115 |
% |
|||||||||
|
Income tax expense |
31.7 |
14.5 |
17.2 |
119 |
% |
|||||||||
|
NET INCOME |
$ |
96.2 |
$ |
45.0 |
$ |
51.2 |
114 |
% |
||||||
|
EARNINGS PER COMMON SHARE: |
||||||||||||||
|
Basic— |
||||||||||||||
|
Net income |
$ |
5.01 |
$ |
2.36 |
$ |
2.65 |
112 |
% |
||||||
|
Diluted— |
||||||||||||||
|
Net income |
$ |
4.96 |
$ |
2.33 |
$ |
2.63 |
113 |
% |
||||||
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WEIGHTED AVERAGE COMMON SHARES OUTSTANDING: |
||||||||||||||
|
Basic |
19.2 |
19.1 |
0.1 |
1 |
% |
|||||||||
|
Restricted stock |
0.1 |
0.1 |
— |
— |
% |
|||||||||
|
Performance share units |
0.1 |
0.1 |
— |
— |
% |
|||||||||
|
Diluted |
19.4 |
19.3 |
0.1 |
1 |
% |
|||||||||
|
NM—Not Meaningful |
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KEY OPERATING HIGHLIGHTS (In millions, except per unit data) |
||||||||||||||
|
(Unaudited) |
||||||||||||||
|
For the Three Months Ended |
Increase (Decrease) |
% Change |
||||||||||||
|
2020 |
2019 |
|||||||||||||
|
Unit sales |
||||||||||||||
|
New vehicle: |
||||||||||||||
|
Luxury |
6,157 |
6,025 |
132 |
2 |
% |
|||||||||
|
Import |
13,818 |
15,998 |
(2,180) |
(14) |
% |
|||||||||
|
Domestic |
4,580 |
5,055 |
(475) |
(9) |
% |
|||||||||
|
Total new vehicle |
24,555 |
27,078 |
(2,523) |
(9) |
% |
|||||||||
|
Used vehicle retail |
20,464 |
22,988 |
(2,524) |
(11) |
% |
|||||||||
|
Used to new ratio |
83.3 |
% |
84.9 |
% |
(160) bps |
|||||||||
|
Average selling price |
||||||||||||||
|
New vehicle |
$ |
39,010 |
$ |
36,447 |
$ |
2,563 |
7 |
% |
||||||
|
Used vehicle retail |
24,795 |
21,968 |
2,827 |
13 |
% |
|||||||||
|
Average gross profit per unit |
||||||||||||||
|
New vehicle: |
||||||||||||||
|
Luxury |
$ |
4,613 |
$ |
3,270 |
$ |
1,343 |
41 |
% |
||||||
|
Import |
1,397 |
638 |
759 |
119 |
% |
|||||||||
|
Domestic |
2,817 |
1,721 |
1,096 |
64 |
% |
|||||||||
|
Total new vehicle |
2,468 |
1,426 |
1,042 |
73 |
% |
|||||||||
|
Used vehicle retail |
2,116 |
1,475 |
641 |
43 |
% |
|||||||||
|
Finance and insurance, net |
1,795 |
1,610 |
185 |
11 |
% |
|||||||||
|
Front end yield (1) |
4,103 |
3,058 |
1,045 |
34 |
% |
|||||||||
|
Gross margin |
||||||||||||||
|
New vehicle: |
||||||||||||||
|
Luxury |
8.2 |
% |
6.1 |
% |
210 bps |
|||||||||
|
Import |
4.7 |
% |
2.2 |
% |
250 bps |
|||||||||
|
Domestic |
6.5 |
% |
4.2 |
% |
230 bps |
|||||||||
|
Total new vehicle |
6.3 |
% |
3.9 |
% |
240 bps |
|||||||||
|
Used vehicle retail |
8.5 |
% |
6.7 |
% |
180 bps |
|||||||||
|
Parts and service |
61.3 |
% |
62.2 |
% |
(90) bps |
|||||||||
|
Total gross profit margin |
18.2 |
% |
15.9 |
% |
230 bps |
|||||||||
|
SG&A metrics |
||||||||||||||
|
Rent expense |
$ |
8.1 |
$ |
6.7 |
$ |
1.4 |
21 |
% |
||||||
|
SG&A as a percentage of gross profit |
61.5 |
% |
68.9 |
% |
(740) bps |
|||||||||
|
SG&A, excluding rent expense as a percentage of gross profit |
59.1 |
% |
66.6 |
% |
(750) bps |
|||||||||
|
Adjusted SG&A as a percentage of gross profit |
61.1 |
% |
68.9 |
% |
(780) bps |
|||||||||
|
Operating metrics |
||||||||||||||
|
Income from operations as a percentage of revenue |
6.5 |
% |
4.5 |
% |
200 bps |
|||||||||
|
Income from operations as a percentage of gross profit |
35.5 |
% |
28.0 |
% |
750 bps |
|||||||||
|
Adjusted income from operations as a percentage of revenue |
6.6 |
% |
4.5 |
% |
210 bps |
|||||||||
|
Adjusted income from operations as a percentage of gross profit |
36.1 |
% |
28.0 |
% |
810 bps |
|||||||||
|
Revenue mix |
||||||||||||||
|
New vehicle |
51.9 |
% |
53.6 |
% |
||||||||||
|
Used vehicle retail |
27.4 |
% |
27.3 |
% |
||||||||||
|
Used vehicle wholesale |
3.4 |
% |
2.3 |
% |
||||||||||
|
Parts and service |
12.9 |
% |
12.4 |
% |
||||||||||
|
Finance and insurance |
4.4 |
% |
4.4 |
% |
||||||||||
|
Total revenue |
100.0 |
% |
100.0 |
% |
||||||||||
|
Gross profit mix |
||||||||||||||
|
New vehicle |
18.0 |
% |
13.2 |
% |
||||||||||
|
Used vehicle retail |
12.8 |
% |
11.5 |
% |
||||||||||
|
Used vehicle wholesale |
1.8 |
% |
(0.5) |
% |
||||||||||
|
Parts and service |
43.3 |
% |
48.3 |
% |
||||||||||
|
Finance and insurance |
24.1 |
% |
27.5 |
% |
||||||||||
|
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. |
|||||||||
|
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|
SAME STORE OPERATING HIGHLIGHTS (In millions) |
||||||||||||||
|
(Unaudited) |
||||||||||||||
|
For the Three Months Ended |
Increase (Decrease) |
% Change |
||||||||||||
|
2020 |
2019 |
|||||||||||||
|
Revenue |
||||||||||||||
|
New vehicle: |
||||||||||||||
|
Luxury |
$ |
267.0 |
$ |
312.2 |
$ |
(45.2) |
(14) |
% |
||||||
|
Import |
394.6 |
422.9 |
(28.3) |
(7) |
% |
|||||||||
|
Domestic |
179.2 |
187.0 |
(7.8) |
(4) |
% |
|||||||||
|
Total new vehicle |
840.8 |
922.1 |
(81.3) |
(9) |
% |
|||||||||
|
Used Vehicle: |
||||||||||||||
|
Retail |
451.6 |
464.2 |
(12.6) |
(3) |
% |
|||||||||
|
Wholesale |
50.7 |
39.0 |
11.7 |
30 |
% |
|||||||||
|
Total used vehicle |
502.3 |
503.2 |
(0.9) |
— |
% |
|||||||||
|
Parts and service |
209.0 |
214.8 |
(5.8) |
(3) |
% |
|||||||||
|
Finance and insurance |
75.1 |
75.2 |
(0.1) |
— |
% |
|||||||||
|
Total revenue |
$ |
1,627.2 |
$ |
1,715.3 |
$ |
(88.1) |
(5) |
% |
||||||
|
Gross profit |
||||||||||||||
|
New vehicle: |
||||||||||||||
|
Luxury |
$ |
20.6 |
$ |
18.9 |
$ |
1.7 |
9 |
% |
||||||
|
Import |
18.2 |
9.9 |
8.3 |
84 |
% |
|||||||||
|
Domestic |
11.6 |
7.6 |
4.0 |
53 |
% |
|||||||||
|
Total new vehicle |
50.4 |
36.4 |
14.0 |
38 |
% |
|||||||||
|
Used Vehicle: |
||||||||||||||
|
Retail |
38.3 |
31.7 |
6.6 |
21 |
% |
|||||||||
|
Wholesale |
4.9 |
(1.3) |
6.2 |
NM |
||||||||||
|
Total used vehicle |
43.2 |
30.4 |
12.8 |
42 |
% |
|||||||||
|
Parts and service: |
||||||||||||||
|
Customer pay |
74.0 |
75.8 |
(1.8) |
(2) |
% |
|||||||||
|
Warranty |
21.1 |
21.1 |
— |
— |
% |
|||||||||
|
Wholesale parts |
5.2 |
5.4 |
(0.2) |
(4) |
% |
|||||||||
|
Parts and service, excluding reconditioning and preparation |
100.3 |
102.3 |
(2.0) |
(2) |
% |
|||||||||
|
Reconditioning and preparation |
26.8 |
31.1 |
(4.3) |
(14) |
% |
|||||||||
|
Total parts and service |
127.1 |
133.4 |
(6.3) |
(5) |
% |
|||||||||
|
Finance and insurance |
75.1 |
75.2 |
(0.1) |
— |
% |
|||||||||
|
Total gross profit |
$ |
295.8 |
$ |
275.4 |
$ |
20.4 |
7 |
% |
||||||
|
SG&A expense |
$ |
185.3 |
$ |
190.8 |
$ |
(5.5) |
(3) |
% |
||||||
|
SG&A expense as a percentage of gross profit |
62.6 |
% |
69.3 |
% |
(670) 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. |
||||||||||||
|
|
||||||||||||||
|
SAME STORE OPERATING HIGHLIGHTS (Continued) |
||||||||||||||
|
(Unaudited) |
||||||||||||||
|
For the Three Months Ended |
Increase (Decrease) |
% Change |
||||||||||||
|
2020 |
2019 |
|||||||||||||
|
Unit sales |
||||||||||||||
|
New vehicle: |
||||||||||||||
|
Luxury |
4,834 |
5,790 |
(956) |
(17) |
% |
|||||||||
|
Import |
13,202 |
14,922 |
(1,720) |
(12) |
% |
|||||||||
|
Domestic |
4,181 |
4,592 |
(411) |
(9) |
% |
|||||||||
|
Total new vehicle |
22,217 |
25,304 |
(3,087) |
(12) |
% |
|||||||||
|
Used vehicle retail |
18,815 |
21,070 |
(2,255) |
(11) |
% |
|||||||||
|
Used to new ratio |
84.7 |
% |
83.3 |
% |
140 bps |
|||||||||
|
Average selling price |
||||||||||||||
|
New vehicle |
$ |
37,845 |
$ |
36,441 |
$ |
1,404 |
4 |
% |
||||||
|
Used vehicle retail |
24,002 |
22,031 |
1,971 |
9 |
% |
|||||||||
|
Average gross profit per unit |
||||||||||||||
|
New vehicle: |
||||||||||||||
|
Luxury |
$ |
4,261 |
$ |
3,264 |
$ |
997 |
31 |
% |
||||||
|
Import |
1,379 |
663 |
716 |
108 |
% |
|||||||||
|
Domestic |
2,774 |
1,655 |
1,119 |
68 |
% |
|||||||||
|
Total new vehicle |
2,269 |
1,439 |
830 |
58 |
% |
|||||||||
|
Used vehicle retail |
2,036 |
1,505 |
531 |
35 |
% |
|||||||||
|
Finance and insurance, net |
1,830 |
1,622 |
208 |
13 |
% |
|||||||||
|
Front end yield (1) |
3,992 |
3,090 |
902 |
29 |
% |
|||||||||
|
Gross margin |
||||||||||||||
|
New vehicle: |
||||||||||||||
|
Luxury |
7.7 |
% |
6.1 |
% |
160 bps |
|||||||||
|
Import |
4.6 |
% |
2.3 |
% |
230 bps |
|||||||||
|
Domestic |
6.5 |
% |
4.1 |
% |
240 bps |
|||||||||
|
Total new vehicle |
6.0 |
% |
3.9 |
% |
210 bps |
|||||||||
|
Used vehicle retail |
8.5 |
% |
6.8 |
% |
170 bps |
|||||||||
|
Parts and service: |
||||||||||||||
|
Parts and service, excluding reconditioning and preparation |
48.0 |
% |
47.6 |
% |
40 bps |
|||||||||
|
Parts and service, including reconditioning and preparation |
60.8 |
% |
62.1 |
% |
(130) bps |
|||||||||
|
Total gross profit margin |
18.2 |
% |
16.1 |
% |
210 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. |
|
|
||||||||||||||
|
CONSOLIDATED STATEMENTS OF INCOME (In millions, except per share data) |
||||||||||||||
|
(Unaudited) |
||||||||||||||
|
For the Nine Months Ended |
Increase (Decrease) |
% Change |
||||||||||||
|
2020 |
2019 |
|||||||||||||
|
REVENUE: |
||||||||||||||
|
New vehicle |
$ |
2,541.8 |
$ |
2,823.9 |
$ |
(282.1) |
(10) |
% |
||||||
|
Used vehicle: |
||||||||||||||
|
Retail |
1,366.0 |
1,449.8 |
(83.8) |
(6) |
% |
|||||||||
|
Wholesale |
144.2 |
140.6 |
3.6 |
3 |
% |
|||||||||
|
Total used vehicle |
1,510.2 |
1,590.4 |
(80.2) |
(5) |
% |
|||||||||
|
Parts and service |
628.0 |
669.7 |
(41.7) |
(6) |
% |
|||||||||
|
Finance and insurance, net |
217.8 |
232.3 |
(14.5) |
(6) |
% |
|||||||||
|
TOTAL REVENUE |
4,897.8 |
5,316.3 |
(418.5) |
(8) |
% |
|||||||||
|
GROSS PROFIT: |
||||||||||||||
|
New vehicle |
135.6 |
114.8 |
20.8 |
18 |
% |
|||||||||
|
Used vehicle: |
||||||||||||||
|
Retail |
106.1 |
102.2 |
3.9 |
4 |
% |
|||||||||
|
Wholesale |
10.9 |
0.6 |
10.3 |
NM |
||||||||||
|
Total used vehicle |
117.0 |
102.8 |
14.2 |
14 |
% |
|||||||||
|
Parts and service |
380.7 |
417.4 |
(36.7) |
(9) |
% |
|||||||||
|
Finance and insurance, net |
217.8 |
232.3 |
(14.5) |
(6) |
% |
|||||||||
|
TOTAL GROSS PROFIT |
851.1 |
867.3 |
(16.2) |
(2) |
% |
|||||||||
|
OPERATING EXPENSES: |
||||||||||||||
|
Selling, general and administrative |
553.4 |
593.7 |
(40.3) |
(7) |
% |
|||||||||
|
Depreciation and amortization |
29.0 |
26.7 |
2.3 |
9 |
% |
|||||||||
|
Franchise rights impairment |
23.0 |
— |
23.0 |
— |
% |
|||||||||
|
Other operating expense, net |
9.4 |
1.0 |
8.4 |
NM |
||||||||||
|
INCOME FROM OPERATIONS |
236.3 |
245.9 |
(9.6) |
(4) |
% |
|||||||||
|
OTHER EXPENSES (INCOME): |
||||||||||||||
|
Floor plan interest expense |
14.1 |
29.7 |
(15.6) |
(53) |
% |
|||||||||
|
Other interest expense, net |
41.7 |
41.2 |
0.5 |
1 |
% |
|||||||||
|
Loss on extinguishment of long-term debt, net |
20.6 |
— |
20.6 |
— |
% |
|||||||||
|
Gain on dealership divestitures, net |
(58.4) |
(11.7) |
(46.7) |
NM |
||||||||||
|
Total other expenses, net |
18.0 |
59.2 |
(41.2) |
(70) |
% |
|||||||||
|
INCOME BEFORE INCOME TAXES |
218.3 |
186.7 |
31.6 |
17 |
% |
|||||||||
|
Income tax expense |
53.0 |
45.9 |
7.1 |
15 |
% |
|||||||||
|
NET INCOME |
$ |
165.3 |
$ |
140.8 |
$ |
24.5 |
17 |
% |
||||||
|
EARNINGS PER COMMON SHARE: |
||||||||||||||
|
Basic— |
||||||||||||||
|
Net income |
$ |
8.61 |
$ |
7.37 |
$ |
1.24 |
17 |
% |
||||||
|
Diluted— |
||||||||||||||
|
Net income |
$ |
8.56 |
$ |
7.30 |
$ |
1.26 |
17 |
% |
||||||
|
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING: |
||||||||||||||
|
Basic |
19.2 |
19.1 |
0.1 |
1 |
% |
|||||||||
|
Restricted stock |
— |
0.1 |
(0.1) |
(100) |
% |
|||||||||
|
Performance share units |
0.1 |
0.1 |
— |
— |
% |
|||||||||
|
Diluted |
19.3 |
19.3 |
— |
— |
% |
|||||||||
|
NM—Not Meaningful |
||
|
|
||||||||||||||
|
KEY OPERATING HIGHLIGHTS (In millions, except per unit data) |
||||||||||||||
|
(Unaudited) |
||||||||||||||
|
For the Nine Months Ended |
Increase (Decrease) |
% Change |
||||||||||||
|
2020 |
2019 |
|||||||||||||
|
Unit sales |
||||||||||||||
|
New vehicle: |
||||||||||||||
|
Luxury |
15,508 |
16,933 |
(1,425) |
(8) |
% |
|||||||||
|
Import |
37,886 |
45,697 |
(7,811) |
(17) |
% |
|||||||||
|
Domestic |
13,198 |
15,006 |
(1,808) |
(12) |
% |
|||||||||
|
Total new vehicle |
66,592 |
77,636 |
(11,044) |
(14) |
% |
|||||||||
|
Used vehicle retail |
59,151 |
66,330 |
(7,179) |
(11) |
% |
|||||||||
|
Used to new ratio |
88.8 |
% |
85.4 |
% |
340 bps |
|||||||||
|
Average selling price |
||||||||||||||
|
New vehicle |
$ |
38,170 |
$ |
36,374 |
$ |
1,796 |
5 |
% |
||||||
|
Used vehicle retail |
23,093 |
21,857 |
1,236 |
6 |
% |
|||||||||
|
Average gross profit per unit |
||||||||||||||
|
New vehicle: |
||||||||||||||
|
Luxury |
$ |
4,004 |
$ |
3,425 |
$ |
579 |
17 |
% |
||||||
|
Import |
1,122 |
689 |
433 |
63 |
% |
|||||||||
|
Domestic |
2,349 |
1,686 |
663 |
39 |
% |
|||||||||
|
Total new vehicle |
2,036 |
1,479 |
557 |
38 |
% |
|||||||||
|
Used vehicle retail |
1,794 |
1,541 |
253 |
16 |
% |
|||||||||
|
Finance and insurance, net |
1,732 |
1,614 |
118 |
7 |
% |
|||||||||
|
Front end yield (1) |
3,654 |
3,121 |
533 |
17 |
% |
|||||||||
|
Gross margin |
||||||||||||||
|
New vehicle: |
||||||||||||||
|
Luxury |
7.2 |
% |
6.2 |
% |
100 bps |
|||||||||
|
Import |
3.8 |
% |
2.4 |
% |
140 bps |
|||||||||
|
Domestic |
5.5 |
% |
4.2 |
% |
130 bps |
|||||||||
|
Total new vehicle |
5.3 |
% |
4.1 |
% |
120 bps |
|||||||||
|
Used vehicle retail |
7.8 |
% |
7.0 |
% |
80 bps |
|||||||||
|
Parts and service |
60.6 |
% |
62.3 |
% |
(170) bps |
|||||||||
|
Total gross profit margin |
17.4 |
% |
16.3 |
% |
110 bps |
|||||||||
|
SG&A metrics |
||||||||||||||
|
Rent expense |
$ |
20.8 |
$ |
20.3 |
$ |
0.5 |
2 |
% |
||||||
|
SG&A as a percentage of gross profit |
65.0 |
% |
68.5 |
% |
(350) bps |
|||||||||
|
SG&A, excluding rent expense as a percentage of gross profit |
62.6 |
% |
66.1 |
% |
(350) bps |
|||||||||
|
Adjusted SG&A as a percentage of gross profit |
64.9 |
% |
68.5 |
% |
(360) bps |
|||||||||
|
Operating metrics |
||||||||||||||
|
Income from operations as a percentage of revenue |
4.8 |
% |
4.6 |
% |
20 bps |
|||||||||
|
Income from operations as a percentage of gross profit |
27.8 |
% |
28.4 |
% |
(60) bps |
|||||||||
|
Adjusted income from operations as a percentage of revenue |
5.5 |
% |
4.7 |
% |
80 bps |
|||||||||
|
Adjusted income from operations as a percentage of gross profit |
31.8 |
% |
28.6 |
% |
320 bps |
|||||||||
|
Revenue mix |
||||||||||||||
|
New vehicle |
51.9 |
% |
53.1 |
% |
||||||||||
|
Used vehicle retail |
28.0 |
% |
27.3 |
% |
||||||||||
|
Used vehicle wholesale |
2.9 |
% |
2.6 |
% |
||||||||||
|
Parts and service |
12.8 |
% |
12.6 |
% |
||||||||||
|
Finance and insurance |
4.4 |
% |
4.4 |
% |
||||||||||
|
Total revenue |
100.0 |
% |
100.0 |
% |
||||||||||
|
Gross profit mix |
||||||||||||||
|
New vehicle |
15.9 |
% |
13.2 |
% |
||||||||||
|
Used vehicle retail |
12.5 |
% |
11.8 |
% |
||||||||||
|
Used vehicle wholesale |
1.3 |
% |
0.1 |
% |
||||||||||
|
Parts and service |
44.7 |
% |
48.1 |
% |
||||||||||
|
Finance and insurance |
25.6 |
% |
26.8 |
% |
||||||||||
|
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 unit sales. |
||||||||
|
|
||||||||||||||
|
SAME STORE OPERATING HIGHLIGHTS (In millions) |
||||||||||||||
|
(Unaudited) |
||||||||||||||
|
For the Nine Months Ended |
Increase (Decrease) |
% Change |
||||||||||||
|
2020 |
2019 |
|||||||||||||
|
Revenue |
||||||||||||||
|
New vehicle: |
||||||||||||||
|
Luxury |
$ |
770.0 |
$ |
896.1 |
$ |
(126.1) |
(14) |
% |
||||||
|
Import |
1,037.5 |
1,175.3 |
(137.8) |
(12) |
% |
|||||||||
|
Domestic |
484.0 |
543.4 |
(59.4) |
(11) |
% |
|||||||||
|
Total new vehicle |
2,291.5 |
2,614.8 |
(323.3) |
(12) |
% |
|||||||||
|
Used Vehicle: |
||||||||||||||
|
Retail |
1,241.9 |
1,332.5 |
(90.6) |
(7) |
% |
|||||||||
|
Wholesale |
127.5 |
130.2 |
(2.7) |
(2) |
% |
|||||||||
|
Total used vehicle |
1,369.4 |
1,462.7 |
(93.3) |
(6) |
% |
|||||||||
|
Parts and service |
571.0 |
628.8 |
(57.8) |
(9) |
% |
|||||||||
|
Finance and insurance, net |
202.2 |
215.6 |
(13.4) |
(6) |
% |
|||||||||
|
Total revenue |
$ |
4,434.1 |
$ |
4,921.9 |
$ |
(487.8) |
(10) |
% |
||||||
|
Gross profit |
||||||||||||||
|
New vehicle: |
||||||||||||||
|
Luxury |
$ |
53.2 |
$ |
55.6 |
$ |
(2.4) |
(4) |
% |
||||||
|
Import |
38.9 |
29.1 |
9.8 |
34 |
% |
|||||||||
|
Domestic |
26.6 |
22.5 |
4.1 |
18 |
% |
|||||||||
|
Total new vehicle |
118.7 |
107.2 |
11.5 |
11 |
% |
|||||||||
|
Used Vehicle: |
||||||||||||||
|
Retail |
95.7 |
95.4 |
0.3 |
— |
% |
|||||||||
|
Wholesale |
9.9 |
0.8 |
9.1 |
NM |
||||||||||
|
Total used vehicle |
105.6 |
96.2 |
9.4 |
10 |
% |
|||||||||
|
Parts and service: |
||||||||||||||
|
Customer pay |
124.5 |
149.7 |
(25.2) |
(17) |
% |
|||||||||
|
Warranty |
36.2 |
42.1 |
(5.9) |
(14) |
% |
|||||||||
|
Wholesale parts |
133.8 |
141.9 |
(8.1) |
(6) |
% |
|||||||||
|
Parts and service, excluding reconditioning and preparation |
294.5 |
333.7 |
(39.2) |
(12) |
% |
|||||||||
|
Reconditioning and preparation |
50.7 |
58.3 |
(7.6) |
(13) |
% |
|||||||||
|
Total parts and service |
345.2 |
392.0 |
(46.8) |
(12) |
% |
|||||||||
|
Finance and insurance |
202.2 |
215.6 |
(13.4) |
(6) |
% |
|||||||||
|
Total gross profit |
$ |
771.7 |
$ |
811.0 |
$ |
(39.3) |
(5) |
% |
||||||
|
SG&A expense |
$ |
507.7 |
$ |
556.8 |
$ |
(49.1) |
(9) |
% |
||||||
|
SG&A expense as a percentage of gross profit |
65.8 |
% |
68.7 |
% |
(290) 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. |
||||||
|
|
||||||||||||||
|
SAME STORE OPERATING HIGHLIGHTS (Continued) |
||||||||||||||
|
(Unaudited) |
||||||||||||||
|
For the Nine Months Ended |
Increase (Decrease) |
% Change |
||||||||||||
|
2020 |
2019 |
|||||||||||||
|
Unit sales |
||||||||||||||
|
New vehicle: |
||||||||||||||
|
Luxury |
13,863 |
16,293 |
(2,430) |
(15) |
% |
|||||||||
|
Import |
35,457 |
41,775 |
(6,318) |
(15) |
% |
|||||||||
|
Domestic |
11,487 |
13,551 |
(2,064) |
(15) |
% |
|||||||||
|
Total new vehicle |
60,807 |
71,619 |
(10,812) |
(15) |
% |
|||||||||
|
Used vehicle retail |
54,299 |
60,826 |
(6,527) |
(11) |
% |
|||||||||
|
Used to new ratio |
89.3 |
% |
84.9 |
% |
440 bps |
|||||||||
|
Average selling price |
||||||||||||||
|
New vehicle |
$ |
37,685 |
$ |
36,510 |
$ |
1,175 |
3 |
% |
||||||
|
Used vehicle retail |
22,872 |
21,907 |
965 |
4 |
% |
|||||||||
|
Average gross profit per unit |
||||||||||||||
|
New vehicle: |
||||||||||||||
|
Luxury |
$ |
3,838 |
$ |
3,413 |
$ |
425 |
12 |
% |
||||||
|
Import |
1,097 |
697 |
400 |
57 |
% |
|||||||||
|
Domestic |
2,316 |
1,660 |
656 |
40 |
% |
|||||||||
|
Total new vehicle |
1,952 |
1,497 |
455 |
30 |
% |
|||||||||
|
Used vehicle retail |
1,762 |
1,568 |
194 |
12 |
% |
|||||||||
|
Finance and insurance, net |
1,757 |
1,628 |
129 |
8 |
% |
|||||||||
|
Front end yield (1) |
3,619 |
3,158 |
461 |
15 |
% |
|||||||||
|
Gross margin |
||||||||||||||
|
New vehicle: |
||||||||||||||
|
Luxury |
6.9 |
% |
6.2 |
% |
70 bps |
|||||||||
|
Import |
3.7 |
% |
2.5 |
% |
120 bps |
|||||||||
|
Domestic |
5.5 |
% |
4.1 |
% |
140 bps |
|||||||||
|
Total new vehicle |
5.2 |
% |
4.1 |
% |
110 bps |
|||||||||
|
Used vehicle retail |
7.7 |
% |
7.2 |
% |
50 bps |
|||||||||
|
Parts and service: |
||||||||||||||
|
Parts and service, excluding reconditioning and preparation |
51.6 |
% |
53.1 |
% |
(150) bps |
|||||||||
|
Parts and service, including reconditioning and preparation |
60.5 |
% |
62.3 |
% |
(180) bps |
|||||||||
|
Total gross profit margin |
17.4 |
% |
16.5 |
% |
90 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. |
|
|
||||||||||||||
|
Additional Disclosures (In millions) |
||||||||||||||
|
(Unaudited) |
||||||||||||||
|
|
|
Increase (Decrease) |
% Change |
|||||||||||
|
SELECTED BALANCE SHEET DATA |
||||||||||||||
|
Cash and cash equivalents |
$ |
4.1 |
$ |
3.5 |
$ |
0.6 |
17 |
% |
||||||
|
New vehicle inventory (a) |
578.5 |
802.6 |
(224.1) |
(28) |
% |
|||||||||
|
Used vehicle inventory (b) |
203.9 |
140.1 |
63.8 |
46 |
% |
|||||||||
|
Parts inventory (c) |
46.3 |
42.3 |
4.0 |
9 |
% |
|||||||||
|
Total current assets |
1,298.0 |
1,602.6 |
(304.6) |
(19) |
% |
|||||||||
|
Floor plan notes payable (d) |
695.6 |
788.0 |
(92.4) |
(12) |
% |
|||||||||
|
Total current liabilities |
1,212.7 |
1,247.0 |
(34.3) |
(3) |
% |
|||||||||
|
CAPITALIZATION: |
||||||||||||||
|
Long-term debt (including current portion) (e) |
$ |
1,223.8 |
$ |
939.4 |
$ |
284.4 |
30 |
% |
||||||
|
Shareholders' equity |
811.9 |
646.3 |
165.6 |
26 |
% |
|||||||||
|
Total |
$ |
2,035.7 |
$ |
1,585.7 |
$ |
450.0 |
28 |
% |
||||||
|
(a) |
Excluding |
|||||||||
|
(b) |
Excluding |
|||||||||
|
(c) |
Excluding |
|||||||||
|
(d) |
Excluding |
|||||||||
|
(e) |
Excluding |
|||||||||
|
|
|
|
||||||
|
DAYS SUPPLY |
||||||||
|
New vehicle inventory |
47 |
66 |
76 |
|||||
|
Used vehicle inventory |
35 |
29 |
36 |
|||||
|
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 Nine Months Ended |
|||||
|
2020 |
2019 |
||||
|
Luxury: |
|||||
|
Mercedes-Benz |
8 |
% |
7 |
% |
|
|
Lexus |
8 |
% |
6 |
% |
|
|
BMW |
6 |
% |
6 |
% |
|
|
Acura |
4 |
% |
4 |
% |
|
|
Infiniti |
2 |
% |
3 |
% |
|
|
Other luxury |
6 |
% |
7 |
% |
|
|
Total luxury |
34 |
% |
33 |
% |
|
|
Imports: |
|||||
|
Honda |
18 |
% |
19 |
% |
|
|
|
13 |
% |
13 |
% |
|
|
Nissan |
6 |
% |
9 |
% |
|
|
Other imports |
7 |
% |
5 |
% |
|
|
Total imports |
44 |
% |
46 |
% |
|
|
Domestic: |
|||||
|
Ford |
9 |
% |
9 |
% |
|
|
Chevrolet |
6 |
% |
6 |
% |
|
|
Dodge |
4 |
% |
3 |
% |
|
|
Other domestics |
3 |
% |
3 |
% |
|
|
Total domestic |
22 |
% |
21 |
% |
|
|
Total New Vehicle Revenue |
100 |
% |
100 |
% |
|
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 |
|||||||
|
|
|
||||||
|
(Dollars in millions) |
|||||||
|
Adjusted leverage ratio: |
|||||||
|
Long-term debt (including current portion) |
$ |
1,223.8 |
$ |
1,233.5 |
|||
|
Debt included in Liabilities held for sale |
16.6 |
— |
|||||
|
Cash and floor plan offset |
(43.9) |
(729.9) |
|||||
|
Availability under our used vehicle revolving floor plan facility |
(103.7) |
(17.0) |
|||||
|
Adjusted long-term net debt |
$ |
1,092.8 |
$ |
486.6 |
|||
|
Calculation of earnings before interest, taxes, depreciation and amortization ("EBITDA"): |
|||||||
|
Net Income |
$ |
208.9 |
$ |
157.7 |
|||
|
Depreciation and amortization |
38.5 |
37.7 |
|||||
|
Income tax expense |
66.7 |
49.5 |
|||||
|
Swap and other interest expense |
56.3 |
57.0 |
|||||
|
Earnings before interest, taxes, depreciation and amortization |
$ |
370.4 |
$ |
301.9 |
|||
|
Non-core items - expense (income): |
|||||||
|
Gain on dealership divestitures |
$ |
(58.4) |
$ |
(33.7) |
|||
|
Legal settlements |
(2.7) |
(2.7) |
|||||
|
Gain on sale of real estate |
(0.3) |
(0.3) |
|||||
|
Franchise rights impairment |
30.1 |
30.1 |
|||||
|
Real estate-related charges |
1.3 |
0.6 |
|||||
|
Park Place related acquisition costs |
12.9 |
11.6 |
|||||
|
Loss on debt extinguishment |
20.7 |
20.7 |
|||||
|
Total non-core items |
3.6 |
26.3 |
|||||
|
Adjusted EBITDA |
$ |
374.0 |
$ |
328.2 |
|||
|
Pro forma EBITDA for Acquisitions and Divestitures |
$ |
77.5 |
$ |
— |
|||
|
Pro forma Adjusted EBITDA |
$ |
451.5 |
$ |
328.2 |
|||
|
Pro forma Adjusted net leverage ratio |
2.4 |
1.5 |
|||||
|
For the Three Months Ended |
|||||||
|
2020 |
2019 |
||||||
|
(In millions, except per share |
|||||||
|
Adjusted income from operations: |
|||||||
|
Income from operations |
$ |
119.1 |
$ |
82.2 |
|||
|
Park Place related acquisition costs |
1.3 |
— |
|||||
|
Real estate-related charges |
0.7 |
— |
|||||
|
Adjusted income from operations |
$ |
121.1 |
$ |
82.2 |
|||
|
Adjusted net income: |
|||||||
|
Net income |
$ |
96.2 |
$ |
45.0 |
|||
|
Non-core items - (income) expense: |
|||||||
|
Gain on dealership divestiture |
(24.7) |
— |
|||||
|
Real estate-related charges |
0.7 |
— |
|||||
|
Park Place related acquisition costs |
1.3 |
— |
|||||
|
Income tax effect on non-core items above |
5.7 |
— |
|||||
|
Total non-core items |
(17.0) |
— |
|||||
|
Adjusted net income |
$ |
79.2 |
$ |
45.0 |
|||
|
Adjusted diluted earnings per share (EPS): |
|||||||
|
Diluted EPS |
$ |
4.96 |
$ |
2.33 |
|||
|
Total non-core items |
(0.88) |
— |
|||||
|
Adjusted diluted EPS |
$ |
4.08 |
$ |
2.33 |
|||
|
Weighted average common shares outstanding - diluted |
19.4 |
19.3 |
|||||
|
Adjusted Selling, general, and administrative expense: |
|||||||
|
Selling, general, and administrative expense |
$ |
206.5 |
$ |
202.0 |
|||
|
Park Place related acquisition costs |
(1.3) |
— |
|||||
|
Adjusted Selling, general, and administrative expense: |
$ |
205.2 |
$ |
202.0 |
|||
|
For the Nine Months |
|||||||
|
2020 |
2019 |
||||||
|
(In millions, except per |
|||||||
|
Adjusted income from operations: |
|||||||
|
Income from operations |
$ |
236.3 |
$ |
245.9 |
|||
|
Legal settlements |
(2.1) |
— |
|||||
|
Gain on sale of real estate |
(0.3) |
(0.3) |
|||||
|
Real estate-related charges |
0.7 |
— |
|||||
|
Park Place related costs |
11.6 |
— |
|||||
|
Park Place acquisition costs |
1.3 |
— |
|||||
|
Franchise rights impairment |
23.0 |
— |
|||||
|
Fixed assets write-off |
— |
2.4 |
|||||
|
Adjusted income from operations |
$ |
270.5 |
$ |
248.0 |
|||
|
Adjusted net income: |
|||||||
|
Net income |
$ |
165.3 |
$ |
140.8 |
|||
|
Non-core items - (income) expense: |
|||||||
|
Gain on dealership divestitures |
(58.4) |
(11.7) |
|||||
|
Legal settlements |
(2.1) |
— |
|||||
|
Gain on sale of real estate |
(0.3) |
(0.3) |
|||||
|
Real estate-related charges |
0.7 |
— |
|||||
|
Park Place related costs |
11.6 |
— |
|||||
|
Park Place acquisition costs |
1.3 |
— |
|||||
|
Loss on extinguishment of debt |
20.7 |
— |
|||||
|
Franchise rights impairment |
23.0 |
— |
|||||
|
Fixed assets write-off |
— |
2.4 |
|||||
|
Income tax effect on non-core items above |
0.9 |
2.4 |
|||||
|
Total non-core items |
(2.6) |
(7.2) |
|||||
|
Adjusted net income |
$ |
162.7 |
$ |
133.6 |
|||
|
Adjusted diluted earnings per share (EPS): |
|||||||
|
Diluted EPS |
$ |
8.56 |
$ |
7.30 |
|||
|
Total non-core items |
(0.13) |
(0.38) |
|||||
|
Adjusted diluted EPS |
$ |
8.43 |
$ |
6.92 |
|||
|
Weighted average common shares outstanding - diluted |
19.3 |
19.3 |
|||||
|
Adjusted Selling, general, and administrative expense: |
|||||||
|
Selling, general, and administrative expense |
$ |
553.4 |
$ |
593.7 |
|||
|
Park Place related acquisition costs |
(1.3) |
— |
|||||
|
Adjusted Selling, general, and administrative expense: |
$ |
552.1 |
$ |
593.7 |
|||
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