0001144980-20-000130.txt : 20200728 0001144980-20-000130.hdr.sgml : 20200728 20200728070711 ACCESSION NUMBER: 0001144980-20-000130 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 16 CONFORMED PERIOD OF REPORT: 20200728 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20200728 DATE AS OF CHANGE: 20200728 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: 201051735 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 abg-20200728.htm FORM 8-K abg-20200728
0001144980false00011449802020-07-282020-07-28

 
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): July 28, 2020 
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:
 Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:
Trading
Title of each classSymbol(s)Name of each exchange on which registered
Common stock, $0.01 par value per shareABGNew York Stock Exchange



Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
























        




Item 2.02 Results of Operations and Financial Condition.
Asbury Automotive Group, Inc. (the “Company”) issued an earnings release on July 28, 2020, announcing its financial results for the three and six months ended June 30, 2020. 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 exhibits are furnished as part of this report.
Exhibit No.  Description
  Press Release dated July 28, 2020.
 



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: July 28, 2020By: /s/ Patrick J. Guido
Name: Patrick J Guido
Title: Senior Vice President and Chief Financial Officer


EX-99.1 2 a2020q2ex991.htm EXHIBIT 99.1 Document

Exhibit 99.1
companylogoa2711.jpg
Investors & Reporters May Contact:
Matt Pettoni
VP of Finance & Treasurer
(770) 418-8219
ir@asburyauto.com

 
ASBURY AUTOMOTIVE GROUP ANNOUNCES
RECORD SECOND QUARTER 2020 FINANCIAL RESULTS

Record operating margin of 5.7%

Record low SG&A as a percentage of gross profit of 62.7%

Record 20% of used sales transacted online

DULUTH, GA, July 28, 2020 - Asbury Automotive Group, Inc. (NYSE: ABG), one of the largest automotive retail and service companies in the U.S., reported net income for the second quarter 2020 of $49.6 million ($2.57 per diluted share) and adjusted net income (a non-GAAP measure) of $48.7 million ($2.52 per diluted share). This compares to net income of $54.9 million ($2.84 per diluted share) and adjusted net income of $45.9 million ($2.38 per diluted share) in the prior year quarter.
Net income for the second quarter 2020 was adjusted for a $1.2 million ($0.05 per diluted share) legal settlement gain. Net income for the second quarter 2019 was adjusted for an $11.7 million ($0.45 per diluted share) gain on a dealership divestiture and a $0.3 million ($0.01 per diluted share) gain on the sale of real estate.

"We delivered a very strong quarter and proved out the resilience and the flexibility of our business model by delivering a record operating margin of 5.7% and a record low SG&A as a percentage of gross profit of 62.7% in an 11.3 million SAAR environment," said David Hult, Asbury's President and Chief Executive Officer. "Our focus on gross profit combined with our cost restructuring efforts allowed us to remain pro-active and committed to long term growth by moving forward with acquiring 12 Park Place luxury franchises in the Dallas Fort Worth Market under more favorable terms than the prior agreement. This acquisition will add approximately $1.7 billion in expected annualized revenues and transform our total portfolio to 49% luxury stores. With the addition of Park Place, Asbury will be a stronger, more diversified company,” Hult continued.

“Finally, I want to thank our teammates across our store network for their unwavering commitment and emphasis on safety during this pandemic; our performance is a direct result of their hard work and service," Hult concluded.

Second Quarter 2020 Highlights
New gross profit per vehicle up 33% to $1,924
Used retail gross profit per vehicle up 10% to $1,717
20% of used sales transacted online
SG&A as a percentage of gross profit decreased 530 basis points to 62.7%
Income from operations as percentage of revenue increased 90 basis points to 5.7%
Adjusted EPS increased 6%
1


Entered into a definitive agreement to acquire Park Place Dealerships, one of the country’s largest and most prominent luxury dealer groups
Ended the quarter with total liquidity of $747 million and a net leverage ratio of 1.5x

Additional commentary regarding the second quarter results will be provided during the earnings conference call on July 28, 2020 at 10:00 a.m. Eastern Time. The conference call will be simulcast live on the internet and can be accessed at www.asburyauto.com/company/investor-relations. A replay will be available at this site for 30 days.

In addition, a live audio of the call will be accessible to the public by calling (866) 248-8441 (domestic), or (323) 347-3612 (international); passcode – 8703938. 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 – 8703938.

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 102 franchises, representing 31 domestic and foreign brands of vehicles. Asbury also operates 24 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, 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 complete and realize the expected benefits of the proposed 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.


2


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 June 30,Increase
(Decrease)
%
Change
 20202019
REVENUE:
New vehicle$761.8  $965.2  $(203.4) (21)%
Used vehicle:
Retail412.6  486.6  (74.0) (15)%
Wholesale34.9  47.0  (12.1) (26)%
     Total used vehicle447.5  533.6  (86.1) (16)%
Parts and service169.2  224.5  (55.3) (25)%
Finance and insurance, net66.6  80.2  (13.6) (17)%
TOTAL REVENUE1,445.1  1,803.5  (358.4) (20)%
GROSS PROFIT:
New vehicle38.6  38.3  0.3  %
Used vehicle:
Retail31.6  34.7  (3.1) (9)%
Wholesale5.5  1.2  4.3  NM
     Total used vehicle37.1  35.9  1.2  %
Parts and service100.5  140.6  (40.1) (29)%
Finance and insurance, net66.6  80.2  (13.6) (17)%
TOTAL GROSS PROFIT242.8  295.0  (52.2) (18)%
OPERATING EXPENSES:
Selling, general and administrative152.2  200.7  (48.5) (24)%
Depreciation and amortization9.7  9.0  0.7  %
Other operating income, net(1.3) (0.6) (0.7) (117)%
INCOME FROM OPERATIONS82.2  85.9  (3.7) (4)%
OTHER EXPENSES:
Floor plan interest expense4.1  10.5  (6.4) (61)%
Other interest expense, net11.8  13.6  (1.8) (13)%
Gain on divestiture—  (11.7) 11.7  100 %
Total other expenses, net15.9  12.4  3.5  28 %
INCOME BEFORE INCOME TAXES66.3  73.5  (7.2) (10)%
Income tax expense16.7  18.6  (1.9) (10)%
NET INCOME$49.6  $54.9  $(5.3) (10)%
EARNINGS PER COMMON SHARE:
Basic—
Net income$2.58  $2.87  $(0.29) (10)%
Diluted—
Net income$2.57  $2.84  $(0.27) (10)%
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
Basic19.2  19.1  0.1  %
Restricted stock—  0.1  (0.1) (100)%
Performance share units0.1  0.1  —  — %
Diluted19.3  19.3  —  — %
______________________________
NMNot Meaningful
4


ASBURY AUTOMOTIVE GROUP, INC.
KEY OPERATING HIGHLIGHTS (In millions, except per unit data)
(Unaudited)
 For the Three Months Ended June 30,Increase
(Decrease)
%
Change
 20202019
Unit sales
New vehicle:
Luxury4,359  5,746  (1,387) (24)%
Import11,610  15,256  (3,646) (24)%
Domestic4,091  5,447  (1,356) (25)%
     Total new vehicle20,060  26,449  (6,389) (24)%
Used vehicle retail18,400  22,259  (3,859) (17)%
Used to new ratio91.7 %84.2 %750 bps
Average selling price
New vehicle$37,976  $36,493  $1,483  %
Used vehicle retail22,424  21,861  563  %
Average gross profit per unit
New vehicle:
Luxury$3,854  $3,341  $513  15 %
Import1,077  623  454  73 %
Domestic2,273  1,762  511  29 %
Total new vehicle1,924  1,448  476  33 %
Used vehicle retail1,717  1,559  158  10 %
Finance and insurance, net1,732  1,647  85  %
Front end yield (1)3,557  3,145  412  13 %
Gross margin
New vehicle:
Luxury6.9 %6.1 %80 bps
Import3.7 %2.2 %150 bps
Domestic5.3 %4.4 %90 bps
Total new vehicle5.1 %4.0 %110 bps
Used vehicle retail7.7 %7.1 %60 bps
Parts and service59.4 %62.6 %(320) bps
Total gross profit margin16.8 %16.4 %40 bps
SG&A metrics
Rent expense$5.9  $6.8  $(0.9) (13)%
Total SG&A as a percentage of gross profit62.7 %68.0 %(530) bps
SG&A, excluding rent expense as a percentage of gross profit60.3 %65.7 %(540) bps
Operating metrics
Income from operations as a percentage of revenue5.7 %4.8 %90 bps
Income from operations as a percentage of gross profit33.9 %29.1 %480 bps
Adjusted income from operations as a percentage of revenue5.6 %4.7 %90 bps
Adjusted income from operations as a percentage of gross profit33.4 %29.0 %440 bps
Revenue mix
New vehicle52.7 %53.5 %
Used vehicle retail28.6 %27.1 %
Used vehicle wholesale2.4 %2.6 %
Parts and service11.7 %12.4 %
Finance and insurance4.6 %4.4 %
     Total revenue100.0 %100.0 %
Gross profit mix
New vehicle15.9 %13.0 %
Used vehicle retail13.0 %11.7 %
Used vehicle wholesale2.3 %0.4 %
Parts and service41.4 %47.7 %
Finance and insurance27.4 %27.2 %
     Total gross profit100.0 %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.
5


ASBURY AUTOMOTIVE GROUP, INC.
SAME STORE OPERATING HIGHLIGHTS (In millions)
(Unaudited)
 For the Three Months Ended June 30,Increase
(Decrease)
%
Change
 20202019
Revenue
New vehicle:
Luxury$243.5  $315.5  $(72.0) (23)%
Import319.7  392.8  (73.1) (19)%
Domestic158.3  200.7  (42.4) (21)%
     Total new vehicle721.5  909.0  (187.5) (21)%
Used Vehicle:
Retail399.8  454.8  (55.0) (12)%
Wholesale34.0  45.1  (11.1) (25)%
     Total used vehicle433.8  499.9  (66.1) (13)%
Parts and service162.4  213.1  (50.7) (24)%
Finance and insurance63.8  75.3  (11.5) (15)%
Total revenue$1,381.5  $1,697.3  $(315.8) (19)%
Gross profit
New vehicle:
Luxury$16.8  $19.2  $(2.4) (13)%
Import11.3  8.7  2.6  30 %
Domestic8.1  8.5  (0.4) (5)%
     Total new vehicle36.2  36.4  (0.2) (1)%
Used Vehicle:
Retail30.0  32.9  (2.9) (9)%
Wholesale5.5  1.3  4.2  NM
     Total used vehicle35.5  34.2  1.3  %
Parts and service:
Customer pay52.1  76.4  (24.3) (32)%
Warranty16.5  21.5  (5.0) (23)%
Wholesale parts4.7  5.3  (0.6) (11)%
     Parts and service, excluding reconditioning and preparation73.3  103.2  (29.9) (29)%
Reconditioning and preparation23.3  30.3  (7.0) (23)%
Total parts and service96.6  133.5  (36.9) (28)%
Finance and insurance63.8  75.3  (11.5) (15)%
Total gross profit$232.1  $279.4  $(47.3) (17)%
SG&A expense$146.8  $190.0  $(43.2) (23)%
SG&A expense as a percentage of gross profit63.2 %68.0 %(480) 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 June 30,Increase
(Decrease)
%
Change
 20202019
Unit sales
New vehicle:
Luxury4,359  5,731  (1,372) (24)%
Import10,915  14,011  (3,096) (22)%
Domestic3,710  5,007  (1,297) (26)%
     Total new vehicle18,984  24,749  (5,765) (23)%
Used vehicle retail17,753  20,696  (2,943) (14)%
Used to new ratio93.5 %83.6 %990 bps
Average selling price
New vehicle$38,006  $36,729  $1,277  %
Used vehicle retail22,520  21,975  545  %
Average gross profit per unit
New vehicle:
Luxury$3,854  $3,350  $504  15 %
Import1,035  621  414  67 %
Domestic2,183  1,698  485  29 %
Total new vehicle1,907  1,471  436  30 %
Used vehicle retail1,690  1,590  100  %
Finance and insurance, net1,737  1,657  80  %
Front end yield (1)3,539  3,182  357  11 %
Gross margin
New vehicle:
Luxury6.9 %6.1 %80 bps
Import3.5 %2.2 %130 bps
Domestic5.1 %4.2 %90  bps
Total new vehicle5.0 %4.0 %100 bps
Used vehicle retail7.5 %7.2 %30  bps
Parts and service:
Parts and service, excluding reconditioning and preparation45.1 %48.4 %(330) bps
Parts and service, including reconditioning and preparation59.5 %62.6 %(310) bps
Total gross profit margin16.8 %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 unit sales.
7


ASBURY AUTOMOTIVE GROUP, INC.
CONSOLIDATED STATEMENTS OF INCOME (In millions, except per share data)
(Unaudited)
 For the Six Months Ended June 30,Increase
(Decrease)
%
Change
 20202019
REVENUE:
New vehicle$1,583.9  $1,837.0  $(253.1) (14)%
Used vehicle:
Retail858.6  944.8  (86.2) (9)%
Wholesale82.1  98.7  (16.6) (17)%
     Total used vehicle940.7  1,043.5  (102.8) (10)%
Parts and service390.8  442.1  (51.3) (12)%
Finance and insurance, net137.0  151.7  (14.7) (10)%
TOTAL REVENUE3,052.4  3,474.3  (421.9) (12)%
GROSS PROFIT:
New vehicle75.0  76.2  (1.2) (2)%
Used vehicle:
Retail62.8  68.3  (5.5) (8)%
Wholesale5.0  2.1  2.9  138 %
     Total used vehicle67.8  70.4  (2.6) (4)%
Parts and service235.4  275.9  (40.5) (15)%
Finance and insurance, net137.0  151.7  (14.7) (10)%
TOTAL GROSS PROFIT515.2  574.2  (59.0) (10)%
OPERATING EXPENSES:
Selling, general and administrative346.9  391.7  (44.8) (11)%
Depreciation and amortization19.2  17.6  1.6  %
Franchise rights impairment23.0  —  23.0  — %
Other operating expense, net8.9  1.2  7.7  NM
INCOME FROM OPERATIONS117.2  163.7  (46.5) (28)%
OTHER EXPENSES (INCOME):
Floor plan interest expense11.1  20.7  (9.6) (46)%
Other interest expense, net28.8  27.5  1.3  %
Loss on extinguishment of long-term debt, net20.6  —  20.6  — %
Gain on dealership divestitures, net(33.7) (11.7) (22.0) (188)%
Total other expenses, net26.8  36.5  (9.7) (27)%
INCOME BEFORE INCOME TAXES90.4  127.2  (36.8) (29)%
Income tax expense21.3  31.4  (10.1) (32)%
NET INCOME$69.1  $95.8  $(26.7) (28)%
EARNINGS PER COMMON SHARE:
Basic—
Net income$3.60  $4.99  $(1.39) (28)%
Diluted—
Net income$3.58  $4.96  $(1.38) (28)%
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
Basic19.2  19.2  —  — %
Restricted stock—  —  —  — %
Performance share units0.1  0.1  —  — %
Diluted19.3  19.3  —  — %
______________________________
NMNot Meaningful




8


ASBURY AUTOMOTIVE GROUP, INC.
KEY OPERATING HIGHLIGHTS (In millions, except per unit data)
(Unaudited)
 For the Six Months Ended June 30,Increase
(Decrease)
%
Change
 20202019
Unit sales
New vehicle:
Luxury9,351  10,908  (1,557) (14)%
Import24,068  29,699  (5,631) (19)%
Domestic8,618  9,951  (1,333) (13)%
     Total new vehicle42,037  50,558  (8,521) (17)%
Used vehicle retail38,687  43,342  (4,655) (11)%
Used to new ratio92.0 %85.7 %630 bps
Average selling price
New vehicle$37,679  $36,335  $1,344  %
Used vehicle retail22,194  21,799  395  %
Average gross profit per unit
New vehicle:
Luxury$3,604  $3,511  $93  %
Import964  717  247  34 %
Domestic2,100  1,668  432  26 %
Total new vehicle1,784  1,507  277  18 %
Used vehicle retail1,623  1,576  47  %
Finance and insurance, net1,697  1,616  81  %
Front end yield (1)3,404  3,154  250  %
Gross margin
New vehicle:
Luxury6.5 %6.3 %20 bps
Import3.3 %2.6 %70 bps
Domestic5.0 %4.2 %80 bps
Total new vehicle4.7 %4.1 %60 bps
Used vehicle retail7.3 %7.2 %10 bps
Parts and service60.2 %62.4 %(220) bps
Total gross profit margin16.9 %16.5 %40 bps
SG&A metrics
Rent expense$12.7  $13.6  $(0.9) (7)%
Total SG&A as a percentage of gross profit67.3 %68.2 %(90) bps
SG&A, excluding rent expense as a percentage of gross profit64.9 %65.8 %(90) bps
Operating metrics
Income from operations as a percentage of revenue3.8 %4.7 %(90) bps
Income from operations as a percentage of gross profit22.7 %28.5 %(580) bps
Adjusted income from operations as a percentage of revenue4.9 %4.8 %10  bps
Adjusted income from operations as a percentage of gross profit29.0 %28.9 %10 bps
Revenue mix
New vehicle51.9 %52.9 %
Used vehicle retail28.1 %27.2 %
Used vehicle wholesale2.7 %2.8 %
Parts and service12.8 %12.7 %
Finance and insurance4.5 %4.4 %
     Total revenue100.0 %100.0 %
Gross profit mix
New vehicle14.6 %13.3 %
Used vehicle retail12.1 %11.9 %
Used vehicle wholesale1.0 %0.4 %
Parts and service45.7 %48.0 %
Finance and insurance26.6 %26.4 %
     Total gross profit100.0 %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.
9


ASBURY AUTOMOTIVE GROUP, INC.
SAME STORE OPERATING HIGHLIGHTS (In millions)
(Unaudited)
 For the Six Months Ended June 30,Increase
(Decrease)
%
Change
 20202019
Revenue
New vehicle:
Luxury$519.2  $603.0  $(83.8) (14)%
Import643.0  752.4  (109.4) (15)%
Domestic304.7  356.4  (51.7) (15)%
     Total new vehicle1,466.9  1,711.8  (244.9) (14)%
Used Vehicle:
Retail804.3  881.4  (77.1) (9)%
Wholesale77.4  92.3  (14.9) (16)%
     Total used vehicle881.7  973.7  (92.0) (9)%
Parts and service365.9  417.7  (51.8) (12)%
Finance and insurance, net128.2  141.5  (13.3) (9)%
Total revenue$2,842.7  $3,244.7  $(402.0) (12)%
Gross profit
New vehicle:
Luxury$33.8  $38.3  $(4.5) (12)%
Import20.6  19.1  1.5  %
Domestic15.0  14.9  0.1  %
     Total new vehicle69.4  72.3  (2.9) (4)%
Used Vehicle:
Retail58.3  64.7  (6.4) (10)%
Wholesale5.0  2.1  2.9  138 %
     Total used vehicle63.3  66.8  (3.5) (5)%
Parts and service:
Customer pay124.5  149.7  (25.2) (17)%
Warranty36.2  42.1  (5.9) (14)%
Wholesale parts9.3  10.8  (1.5) (14)%
     Parts and service, excluding reconditioning and preparation170.0  202.6  (32.6) (16)%
Reconditioning and preparation50.7  58.3  (7.6) (13)%
Total parts and service220.7  260.9  (40.2) (15)%
Finance and insurance128.2  141.5  (13.3) (9)%
Total gross profit$481.6  $541.5  $(59.9) (11)%
SG&A expense$325.3  $369.1  $(43.8) (12)%
SG&A expense as a percentage of gross profit67.5 %68.2 %(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.










10


ASBURY AUTOMOTIVE GROUP, INC.
SAME STORE OPERATING HIGHLIGHTS (Continued)
(Unaudited)
 For the Six Months Ended June 30,Increase
(Decrease)
%
Change
 20202019
Unit sales
New vehicle:
Luxury9,336  10,863  (1,527) (14)%
Import22,255  26,853  (4,598) (17)%
Domestic7,306  8,959  (1,653) (18)%
     Total new vehicle38,897  46,675  (7,778) (17)%
Used vehicle retail35,983  40,206  (4,223) (11)%
Used to new ratio92.5 %86.1 %640 bps
Average selling price
New vehicle$37,712  $36,675  $1,037  %
Used vehicle retail22,352  21,922  430  %
Average gross profit per unit
New vehicle:
Luxury$3,620  $3,526  $94  %
Import926  711  215  30 %
Domestic2,053  1,663  390  23 %
Total new vehicle1,784  1,549  235  15 %
Used vehicle retail1,620  1,609  11  %
Finance and insurance, net1,712  1,629  83  %
Front end yield (1)3,417  3,206  211  %
Gross margin
New vehicle:
Luxury6.5 %6.4 %10 bps
Import3.2 %2.5 %70 bps
Domestic4.9 %4.2 %70 bps
Total new vehicle4.7 %4.2 %50 bps
Used vehicle retail7.2 %7.3 %(10) bps
Parts and service:
Parts and service, excluding reconditioning and preparation46.5 %48.5 %(200) bps
Parts and service, including reconditioning and preparation60.3 %62.5 %(220) bps
Total gross profit margin16.9 %16.7 %20 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.

11


ASBURY AUTOMOTIVE GROUP, INC.
Additional Disclosures (In millions)
(Unaudited)
 
 June 30, 2020December 31, 2019Increase
(Decrease)
 % Change
SELECTED BALANCE SHEET DATA     
Cash and cash equivalents$613.2    $3.5    $609.7   17,420 %
New vehicle inventory474.1  802.6  (a)  (328.5)  (41)%
Used vehicle inventory125.2  140.1  (b)(14.9)  (11)%
Parts inventory37.1  42.3  (c)  (5.2)  (12)%
Total current assets1,591.7  1,602.6    (10.9)  (1)%
Floor plan notes payable526.2  788.0  (d)(261.8)  (33)%
Total current liabilities893.2  1,247.0    (353.8)  (28)%
CAPITALIZATION:   
Long-term debt (including current portion)$1,233.5  *$939.4  (e)  $294.1   31 %
Shareholders' equity713.1    646.3    66.8   10 %
Total$1,946.6    $1,585.7    $360.9   23 %
_____________________________
*Includes $237.0 million drawn on the Revolver as of March 31, 2020

(a) Excluding $56.3 million of new vehicle inventory classified as Assets held for sale as of December 31, 2019
(b) Excluding $8.6 million of used vehicle inventory classified as Assets held for sale as of December 31, 2019
(c) Excluding $2.8 million of parts inventory classified as Assets held for sale as of December 31, 2019
(d) Excluding $62.8 million of Floor plan notes payable classified as Liabilities associated with assets held for sale as of December 31, 2019
(e) Excluding $28.1 million of Long-term debt classified as Liabilities associated with assets held for sale as of December 31, 2019

 June 30, 2020December 31, 2019
DAYS SUPPLY
New vehicle inventory52    66  
Used vehicle inventory26    29  
_____________________________
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 Six Months Ended June 30,
 2020 2019
Luxury: 
Mercedes-Benz% %
Lexus% %
BMW% %
Acura% %
Infiniti% %
Other luxury% %
Total luxury33 % 33 %
Imports: 
Honda18 % 19 %
Toyota13 %12 %
Nissan%%
Other imports% %
Total imports44 % 45 %
Domestic: 
Ford10 % 10 %
Chevrolet%%
Dodge% %
Other domestics% %
Total domestic23 % 22 %
Total New Vehicle Revenue100 % 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 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.


















14


The following tables provide reconciliations for our non-GAAP metrics:
For the Twelve Months Ended
June 30, 2020March 31, 2020
(Dollars in millions)
Adjusted leverage ratio:
Long-term debt$1,233.5  $1,164.9  
Calculation of earnings before interest, taxes, depreciation and amortization ("EBITDA"):
Net Income$157.7  $163.0  
Add:
Depreciation and amortization37.7  37.1  
Income tax expense49.5  51.5  
Swap and other interest expense57.0  58.5  
Earnings before interest, taxes, depreciation and amortization ("EBITDA")$301.9  $310.1  
Non-core items - expense (income):
Gain on dealership divestitures$(33.7) $(45.4) 
Legal settlements(2.7) $(1.5) 
Gain on sale of real estate(0.3) (0.6) 
Franchise rights impairment30.1  30.1  
Real estate-related charges0.6  0.6  
Park Place deal termination costs11.6  11.6  
Loss on debt extinguishment20.7  20.7  
  Total non-core items26.3  15.5  
Adjusted EBITDA$328.2  $325.6  
Adjusted leverage ratio3.8  3.6  








15


 For the Three Months Ended June 30,
 20202019
(In millions, except per share data)
Adjusted income from operations:
Income from operations$82.2  $85.9  
Legal settlements(1.2) —  
Gain on sale of real estate—  (0.3) 
Adjusted income from operations$81.0  $85.6  
Adjusted net income:
Net income$49.6  $54.9  
Non-core items - (income) expense:  
Gain on dealership divestiture—  (11.7) 
Legal settlements(1.2) —  
Gain on sale of real estate—  (0.3) 
Income tax effect on non-core items above0.3  3.0  
Total non-core items(0.9)   (9.0) 
Adjusted net income $48.7    $45.9  
Adjusted diluted earnings per share (EPS):
Diluted EPS$2.57  $2.84  
Total non-core items(0.05) (0.46) 
Adjusted diluted EPS$2.52  $2.38  
Weighted average common shares outstanding - diluted19.319.3
16


 For the Six Months Ended June 30,
 20202019
(In millions, except per share data)
Adjusted income from operations:
Income from operations$117.2  $163.7  
Legal settlements(2.1) —  
Gain on sale of real estate(0.3) (0.3) 
Park Place deal termination costs11.6  —  
Franchise rights impairment23.0  —  
Fixed assets write-off—  2.4  
Adjusted income from operations$149.4  $165.8  
Adjusted net income:
Net income$69.1  $95.8  
Non-core items - (income) expense:  
Gain on dealership divestitures(33.7) (11.7) 
Legal settlements(2.1) —  
Gain on sale of real estate(0.3) (0.3) 
Park Place deal termination costs11.6  —  
Loss on extinguishment of debt20.7  —  
Franchise rights impairment23.0  —  
Fixed assets write-off—  2.4  
Income tax effect on non-core items above(4.9) 2.4  
Total non-core items14.3    (7.2) 
Adjusted net income$83.4    $88.6  
Adjusted diluted earnings per share (EPS):
Diluted EPS$3.58  $4.96  
Total non-core items0.74  (0.37) 
Adjusted diluted EPS$4.32  $4.59  
Weighted average common shares outstanding - diluted19.319.3

17
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MO/+-U!9CEF.2:]E'W(_J*6/H/K_2@"0*%[4444 ?_9 end XML 9 abg-20200728_htm.xml IDEA: XBRL DOCUMENT 0001144980 2020-07-28 2020-07-28 0001144980 false 8-K 2020-07-28 Asbury Automotive Group, Inc. DE 001-31262 01-0609375 2905 Premiere Parkway NW Suite 300 Duluth, GA 30097 770 418-8200 false false false false Common stock, $0.01 par value per share ABG NYSE false XML 10 R1.htm IDEA: XBRL DOCUMENT v3.20.2
Cover Page
Jul. 28, 2020
Cover [Abstract]  
Document Type 8-K
Document Period End Date Jul. 28, 2020
Entity Registrant Name Asbury Automotive Group, Inc.
Entity Incorporation, State or Country Code DE
Entity File Number 001-31262
Entity Tax Identification Number 01-0609375
Entity Address, Address Line One 2905 Premiere Parkway NW Suite 300
Entity Address, City or Town Duluth,
Entity Address, State or Province GA
Entity Address, Postal Zip Code 30097
City Area Code 770
Local Phone Number 418-8200
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Title of 12(b) Security Common stock, $0.01 par value per share
Trading Symbol ABG
Security Exchange Name NYSE
Entity Emerging Growth Company false
Entity Central Index Key 0001144980
Amendment Flag false
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