Asbury Automotive Group Inc.: Asbury Automotive Group Announces Third Quarter 2017 Financial Results

Tickers: ABG
DULUTH, Ga., Oct. 24, 2017 /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 third quarter 2017 of $30.7 million, or $1.48 per diluted share.

During the quarter, we had two non-recurring events that negatively impacted our results. First, our dealerships in Florida, Georgia, and Houston, Texas had various levels of business interruption due to Hurricanes Irma and Harvey. We believe the net impact of the hurricanes was a reduction in earnings of at least $0.10 per diluted share. Second, the CEO transition announced in August resulted in an accounting charge of $0.05 per diluted share. We did not adjust our earnings for the above events.

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'Our team did an outstanding job managing through the tragic storms that we experienced this quarter. Due to their efforts we were able to limit the storms' impact on our business,' said Craig Monaghan, Asbury's President and Chief Executive Officer.

'Despite the hurricanes, we were able to grow our F&I and parts and service business,' said Asbury's Executive Vice President and Chief Operating Officer, David Hult. 'This together with strong expense control helped us improve our industry-leading operating margin to 4.4% for the quarter.'

For the nine-month period ended September 30, 2017, the Company reported net income of $96.6 million, or $4.60 per diluted share.

Additional commentary regarding the third quarter results will be provided during the earnings conference call on October 24 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 (800) 239-9838 (domestic), or (323) 794-2551 (international); passcode - 6516255. 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 - 6516255.

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 80 dealerships, consisting of 94 franchises, representing 29 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, 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
September 30,

Increase
(Decrease)

%
Change

2017

2016

REVENUE:

New vehicle

$

881.6

$

940.9

$

(59.3)

(6)

%

Used vehicle:

Retail

400.1

423.3

(23.2)

(5)

%

Wholesale

55.5

53.1

2.4

5

%

Total used vehicle

455.6

476.4

(20.8)

(4)

%

Parts and service

197.2

200.4

(3.2)

(2)

%

Finance and insurance, net

67.7

65.4

2.3

4

%

TOTAL REVENUE

1,602.1

1,683.1

(81.0)

(5)

%

GROSS PROFIT:

New vehicle

41.0

47.5

(6.5)

(14)

%

Used vehicle:

Retail

28.9

31.9

(3.0)

(9)

%

Wholesale

(0.1)

(2.1)

2.0

95

%

Total used vehicle

28.8

29.8

(1.0)

(3)

%

Parts and service

122.8

123.0

(0.2)

-

%

Finance and insurance, net

67.7

65.4

2.3

4

%

TOTAL GROSS PROFIT

260.3

265.7

(5.4)

(2)

%

OPERATING EXPENSES:

Selling, general and administrative

182.5

185.7

(3.2)

(2)

%

Depreciation and amortization

8.1

7.8

0.3

4

%

Other operating expenses, net

-

1.5

(1.5)

(100)

%

INCOME FROM OPERATIONS

69.7

70.7

(1.0)

(1)

%

OTHER EXPENSES:

Floor plan interest expense

5.8

5.0

0.8

16

%

Other interest expense, net

13.4

13.2

0.2

2

%

Swap interest expense

0.4

0.8

(0.4)

(50)

%

Total other expenses, net

19.6

19.0

0.6

3

%

INCOME BEFORE INCOME TAXES

50.1

51.7

(1.6)

(3)

%

Income tax expense

19.4

19.3

0.1

1

%

NET INCOME

$

30.7

$

32.4

$

(1.7)

(5)

%

EARNINGS PER COMMON SHARE:

Basic-

Net income

$

1.49

$

1.47

$

0.02

1

%

Diluted-

Net income

$

1.48

$

1.47

$

0.01

1

%

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:

Basic

20.6

22.0

(1.4)

(6)

%

Restricted stock

0.1

-

0.1

-

%

Performance share units

0.1

0.1

-

-

%

Diluted

20.8

22.1

(1.3)

(6)

%

ASBURY AUTOMOTIVE GROUP, INC.

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

(Unaudited)

For the Three Months Ended
September 30,

Increase
(Decrease)

%
Change

2017

2016

Unit sales

New vehicle:

Luxury

5,499

6,061

(562)

(9)

%

Import

14,997

15,522

(525)

(3)

%

Domestic

4,691

5,232

(541)

(10)

%

Total new vehicle

25,187

26,815

(1,628)

(6)

%

Used vehicle retail

18,777

20,030

(1,253)

(6)

%

Used to new ratio

74.6

%

74.7

%

(10)

bps

Average selling price

New vehicle

$

35,002

$

35,089

$

(87)

-

%

Used vehicle retail

21,308

21,133

175

1

%

Average gross profit per unit

New vehicle:

Luxury

$

3,364

$

3,432

$

(68)

(2)

%

Import

960

1,179

(219)

(19)

%

Domestic

1,727

1,606

121

8

%

Total new vehicle

1,628

1,771

(143)

(8)

%

Used vehicle

1,539

1,593

(54)

(3)

%

Finance and insurance, net

1,540

1,396

144

10

%

Front end yield (1)

3,130

3,091

39

1

%

Gross margin

New vehicle:

Luxury

6.4

%

6.5

%

(10)

bps

Import

3.5

%

4.3

%

(80)

bps

Domestic

4.5

%

4.3

%

20

bps

Total new vehicle

4.7

%

5.0

%

(30)

bps

Used vehicle retail

7.2

%

7.5

%

(30)

bps

Parts and service

62.3

%

61.4

%

90

bps

Total gross profit margin

16.2

%

15.8

%

40

bps

SG&A metrics

Rent expense

$

6.5

$

7.6

$

(1.1)

(14)

%

Total SG&A as a percentage of gross profit

70.1

%

69.9

%

20

bps

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

67.6

%

67.0

%

60

bps

Operating metrics

Income from operations as a percentage of revenue

4.4

%

4.2

%

20

bps

Income from operations as a percentage of gross profit

26.8

%

26.6

%

20

bps

Adjusted income from operations as a percentage of revenue

4.4

%

4.3

%

10

bps

Adjusted income from operations as a percentage of gross profit

26.8

%

27.3

%

(50)

bps

Revenue mix

New vehicle

55.0

%

55.9

%

Used vehicle retail

25.0

%

25.1

%

Used vehicle wholesale

3.5

%

3.2

%

Parts and service

12.3

%

11.9

%

Finance and insurance

4.2

%

3.9

%

Total revenue

100.0

%

100.0

%

Gross profit mix

New vehicle

15.8

%

17.9

%

Used vehicle retail

11.0

%

12.0

%

Used vehicle wholesale

-

%

(0.8)

%

Parts and service

47.2

%

46.3

%

Finance and insurance

26.0

%

24.6

%

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
September 30,

Increase
(Decrease)

%
Change

2017

2016

Revenue

New vehicle:

Luxury

$

288.3

$

310.3

$

(22.0)

(7)

%

Import

406.7

410.8

(4.1)

(1)

%

Domestic

159.1

183.6

(24.5)

(13)

%

Total new vehicle

854.1

904.7

(50.6)

(6)

%

Used Vehicle:

Retail

386.0

396.9

(10.9)

(3)

%

Wholesale

52.8

50.2

2.6

5

%

Total used vehicle

438.8

447.1

(8.3)

(2)

%

Parts and service

193.6

191.4

2.2

1

%

Finance and insurance

65.5

62.3

3.2

5

%

Total revenue

$

1,552.0

$

1,605.5

$

(53.5)

(3)

%

Gross profit

New vehicle:

Luxury

$

18.5

$

20.2

$

(1.7)

(8)

%

Import

14.5

17.8

(3.3)

(19)

%

Domestic

6.9

8.0

(1.1)

(14)

%

Total new vehicle

39.9

46.0

(6.1)

(13)

%

Used Vehicle:

Retail

27.5

30.4

(2.9)

(10)

%

Wholesale

-

(2.1)

2.1

100

%

Total used vehicle

27.5

28.3

(0.8)

(3)

%

Parts and service:

Customer pay

66.8

64.2

2.6

4

%

Warranty

20.3

19.3

1.0

5

%

Wholesale parts

5.2

4.8

0.4

8

%

Parts and service, excluding reconditioning and preparation

92.3

88.3

4.0

5

%

Reconditioning and preparation

28.1

29.3

(1.2)

(4)

%

Total parts and service

120.4

117.6

2.8

2

%

Finance and insurance

65.5

62.3

3.2

5

%

Total gross profit

$

253.3

$

254.2

$

(0.9)

-

%

SG&A expense

$

177.1

$

176.6

$

0.5

-

%

SG&A expense as a percentage of gross profit

69.9

%

69.5

%

40

bps

_____________________________

Same store amounts consist of information from dealerships for identical months in each comparative period, commencing with the first month we owned the dealership. Additionally, amounts related to divested dealerships are excluded from each comparative period.

ASBURY AUTOMOTIVE GROUP, INC.

SAME STORE OPERATING HIGHLIGHTS (Continued)

(Unaudited)

For the Three Months Ended
September 30,

Increase
(Decrease)

%
Change

2017

2016

Unit sales

New vehicle:

Luxury

5,499

5,913

(414)

(7)

%

Import

14,753

14,969

(216)

(1)

%

Domestic

4,103

4,899

(796)

(16)

%

Total new vehicle

24,355

25,781

(1,426)

(6)

%

Used vehicle retail

17,993

18,558

(565)

(3)

%

Used to new ratio

73.9

%

72.0

%

190

bps

Average selling price

New vehicle

$

35,069

$

35,092

$

(23)

-

%

Used vehicle retail

21,453

21,387

66

-

%

Average gross profit per unit

New vehicle:

Luxury

$

3,364

$

3,416

$

(52)

(2)

%

Import

983

1,189

(206)

(17)

%

Domestic

1,682

1,633

49

3

%

Total new vehicle

1,638

1,784

(146)

(8)

%

Used vehicle retail

1,528

1,638

(110)

(7)

%

Finance and insurance, net

1,547

1,405

142

10

%

Front end yield (1)

3,138

3,128

10

-

%

Gross margin

New vehicle:

Luxury

6.4

%

6.5

%

(10)

bps

Import

3.6

%

4.3

%

(70)

bps

Domestic

4.3

%

4.4

%

(10)

bps

Total new vehicle

4.7

%

5.1

%

(40)

bps

Used vehicle retail

7.1

%

7.7

%

(60)

bps

Parts and service:

Parts and service, excluding reconditioning and preparation

47.7

%

46.1

%

160

bps

Parts and service, including reconditioning and preparation

62.2

%

61.4

%

80

bps

Total gross profit margin

16.3

%

15.8

%

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.

(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 Nine Months Ended
September 30,

Increase
(Decrease)

%
Change

2017

2016

REVENUE:

New vehicle

$

2,597.0

$

2,676.3

$

(79.3)

(3)

%

Used vehicle:

Retail

1,245.7

1,254.7

(9.0)

(1)

%

Wholesale

150.9

152.8

(1.9)

(1)

%

Total used vehicle

1,396.6

1,407.5

(10.9)

(1)

%

Parts and service

589.5

584.9

4.6

1

%

Finance and insurance, net

202.5

192.6

9.9

5

%

TOTAL REVENUE

4,785.6

4,861.3

(75.7)

(2)

%

GROSS PROFIT:

New vehicle

122.4

139.7

(17.3)

(12)

%

Used vehicle:

Retail

94.4

101.4

(7.0)

(7)

%

Wholesale

1.0

(1.6)

2.6

163

%

Total used vehicle

95.4

99.8

(4.4)

(4)

%

Parts and service

367.2

362.0

5.2

1

%

Finance and insurance, net

202.5

192.6

9.9

5

%

TOTAL GROSS PROFIT

787.5

794.1

(6.6)

(1)

%

OPERATING EXPENSES:

Selling, general and administrative

549.2

549.2

-

-

%

Depreciation and amortization

24.0

23.0

1.0

4

%

Other operating expenses, net

0.7

4.2

(3.5)

(83)

%

INCOME FROM OPERATIONS

213.6

217.7

(4.1)

(2)

%

OTHER EXPENSES:

Floor plan interest expense

17.1

14.4

2.7

19

%

Other interest expense, net

40.2

40.0

0.2

1

%

Swap interest expense

1.6

2.4

(0.8)

(33)

%

Total other expenses, net

58.9

56.8

2.1

4

%

INCOME BEFORE INCOME TAXES

154.7

160.9

(6.2)

(4)

%

Income tax expense

58.1

60.8

(2.7)

(4)

%

NET INCOME

$

96.6

$

100.1

$

(3.5)

(3)

%

EARNINGS PER COMMON SHARE:

Basic-

Net income

$

4.64

$

4.39

$

0.25

6

%

Diluted-

Net income

$

4.60

$

4.37

$

0.23

5

%

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:

Basic

20.8

22.8

(2.0)

(9)

%

Restricted stock

0.1

-

0.1

-

%

Performance share units

0.1

0.1

-

-

%

Diluted

21.0

22.9

(1.9)

(8)

%


ASBURY AUTOMOTIVE GROUP, INC.

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

(Unaudited)

For the Nine Months Ended
September 30,

Increase
(Decrease)

%
Change

2017

2016

Unit sales

New vehicle:

Luxury

16,117

17,469

(1,352)

(8)

%

Import

43,504

43,814

(310)

(1)

%

Domestic

14,163

15,326

(1,163)

(8)

%

Total new vehicle

73,784

76,609

(2,825)

(4)

%

Used vehicle retail

59,107

59,378

(271)

-

%

Used to new ratio

80.1

%

77.5

%

260

bps

Average selling price

New vehicle

$

35,197

$

34,935

$

262

1

%

Used vehicle retail

21,075

21,131

(56)

-

%

Average gross profit per unit

New vehicle:

Luxury

$

3,394

$

3,515

$

(121)

(3)

%

Import

984

1,207

(223)

(18)

%

Domestic

1,758

1,657

101

6

%

Total new vehicle

1,659

1,824

(165)

(9)

%

Used vehicle

1,597

1,708

(111)

(6)

%

Finance and insurance, net

1,524

1,416

108

8

%

Front end yield (1)

3,155

3,189

(34)

(1)

%

Gross margin

New vehicle:

Luxury

6.4

%

6.7

%

(30)

bps

Import

3.5

%

4.4

%

(90)

bps

Domestic

4.6

%

4.5

%

10

bps

Total new vehicle

4.7

%

5.2

%

(50)

bps

Used vehicle retail

7.6

%

8.1

%

(50)

bps

Parts and service

62.3

%

61.9

%

40

bps

Total gross profit margin

16.5

%

16.3

%

20

bps

SG&A metrics

Rent expense

$

20.2

$

23.0

$

(2.8)

(12)

%

Total SG&A as a percentage of gross profit

69.7

%

69.2

%

50

bps

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

67.2

%

66.3

%

90

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

27.1

%

27.4

%

(30)

bps

Adjusted income from operations as a percentage of revenue

4.5

%

4.6

%

(10)

bps

Adjusted income from operations as a percentage of gross profit

27.3

%

28.1

%

(80)

bps

Revenue mix

New vehicle

54.3

%

55.1

%

Used vehicle retail

26.0

%

25.8

%

Used vehicle wholesale

3.2

%

3.1

%

Parts and service

12.3

%

12.0

%

Finance and insurance

4.2

%

4.0

%

Total revenue

100.0

%

100.0

%

Gross profit mix

New vehicle

15.5

%

17.6

%

Used vehicle retail

12.1

%

12.7

%

Used vehicle wholesale

0.1

%

(0.2)

%

Parts and service

46.6

%

45.6

%

Finance and insurance

25.7

%

24.3

%

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 Nine Months Ended
September 30,

Increase
(Decrease)

%
Change

2017

2016

Revenue

New vehicle:

Luxury

$

852.3

$

889.9

$

(37.6)

(4)

%

Import

1,186.8

1,154.7

32.1

3

%

Domestic

487.2

524.1

(36.9)

(7)

%

Total new vehicle

2,526.3

2,568.7

(42.4)

(2)

%

Used Vehicle:

Retail

1,200.9

1,170.5

30.4

3

%

Wholesale

144.8

145.2

(0.4)

-

%

Total used vehicle

1,345.7

1,315.7

30.0

2

%

Parts and service

579.6

556.1

23.5

4

%

Finance and insurance

196.2

182.5

13.7

8

%

Total revenue

$

4,647.8

$

4,623.0

$

24.8

1

%

Gross profit

New vehicle:

Luxury

$

54.8

$

59.9

$

(5.1)

(9)

%

Import

42.5

51.3

(8.8)

(17)

%

Domestic

21.6

23.8

(2.2)

(9)

%

Total new vehicle

118.9

135.0

(16.1)

(12)

%

Used Vehicle:

Retail

90.0

94.7

(4.7)

(5)

%

Wholesale

1.2

(1.4)

2.6

NM

Total used vehicle

91.2

93.3

(2.1)

(2)

%

Parts and service:

Customer pay

199.9

192.4

7.5

4

%

Warranty

60.8

52.5

8.3

16

%

Wholesale parts

15.6

14.5

1.1

8

%

Parts and service, excluding reconditioning and preparation

276.3

259.4

16.9

7

%

Reconditioning and preparation

84.1

85.6

(1.5)

(2)

%

Total parts and service

360.4

345.0

15.4

4

%

Finance and insurance

196.2

182.5

13.7

8

%

Total gross profit

$

766.7

$

755.8

$

10.9

1

%

SG&A expense

$

533.2

$

521.0

$

12.2

2

%

SG&A expense as a percentage of gross profit

69.5

%

68.9

%

60

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.

NM - Not Meaningful

ASBURY AUTOMOTIVE GROUP, INC.

SAME STORE OPERATING HIGHLIGHTS (Continued)

(Unaudited)

For the Nine Months Ended
September 30,

Increase
(Decrease)

%
Change

2017

2016

Unit sales

New vehicle:

Luxury

16,117

17,102

(985)

(6)

%

Import

42,891

42,049

842

2

%

Domestic

12,677

14,256

(1,579)

(11)

%

Total new vehicle

71,685

73,407

(1,722)

(2)

%

Used vehicle retail

56,623

54,674

1,949

4

%

Used to new ratio

79.0

%

74.5

%

450

bps

Average selling price

New vehicle

$

35,242

$

34,993

$

249

1

%

Used vehicle retail

21,209

21,409

(200)

(1)

%

Average gross profit per unit

New vehicle:

Luxury

$

3,400

$

3,503

$

(103)

(3)

%

Import

991

1,220

(229)

(19)

%

Domestic

1,704

1,669

35

2

%

Total new vehicle

1,659

1,839

(180)

(10)

%

Used vehicle retail

1,589

1,732

(143)

(8)

%

Finance and insurance, net

1,529

1,425

104

7

%

Front end yield (1)

3,157

3,218

(61)

(2)

%

Gross margin

New vehicle:

Luxury

6.4

%

6.7

%

(30)

bps

Import

3.6

%

4.4

%

(80)

bps

Domestic

4.4

%

4.5

%

(10)

bps

Total new vehicle

4.7

%

5.3

%

(60)

bps

Used vehicle retail

7.5

%

8.1

%

(60)

bps

Parts and service:

Parts and service, excluding reconditioning and preparation

47.7

%

46.6

%

110

bps

Parts and service, including reconditioning and preparation

62.2

%

62.0

%

20

bps

Total gross profit margin

16.5

%

16.3

%

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.

ASBURY AUTOMOTIVE GROUP, INC.

Additional Disclosures (In millions)

(Unaudited)

September 30,
2017

December 31,
2016

Increase

(Decrease)

% Change

SELECTED BALANCE SHEET DATA

Cash and cash equivalents

$

2.8

$

3.4

$

(0.6)

(18)

%

New vehicle inventory

673.7

720.6

(46.9)

(7)

%

Used vehicle inventory

128.2

132.7

(4.5)

(3)

%

Parts inventory

41.6

41.6

-

-

%

Total current assets

1,220.7

1,332.4

(111.7)

(8)

%

Floor plan notes payable

688.3

781.8

(93.5)

(12)

%

Total current liabilities

980.4

1,104.9

(124.5)

(11)

%

CAPITALIZATION:

Long-term debt (including current portion)

$

915.7

$

926.7

$

(11.0)

(1)

%

Shareholders' equity

347.3

279.7

67.6

24

%

Total

$

1,263.0

$

1,206.4

$

56.6

5

%

September 30, 2017

December 31, 2016

DAYS SUPPLY

New vehicle inventory

72

61

Used vehicle inventory

35

30

_____________________________

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
September 30,

2017

2016

Luxury:

Mercedes-Benz

7

%

7

%

Lexus

7

%

7

%

BMW

5

%

6

%

Acura

4

%

4

%

Infiniti

3

%

3

%

Other luxury

7

%

7

%

Total luxury

33

%

34

%

Imports:

Honda

18

%

17

%

Nissan

12

%

11

%

Toyota

12

%

12

%

Other imports

4

%

5

%

Total imports

46

%

45

%

Domestic:

Ford

11

%

13

%

Chevrolet

4

%

2

%

Dodge

3

%

2

%

Other domestics

3

%

4

%

Total domestic

21

%

21

%

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 income from continuing operations,' ' Adjusted operating margins,' and 'Adjusted diluted earnings per share ('EPS') from continuing operations.' 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

September 30, 2017

June 30, 2017

(Dollars in millions)

Adjusted leverage ratio:

Long-term debt (including current portion)

$

915.7

$

919.4

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

Income from operations

$

163.7

$

165.4

Add:

Depreciation and amortization

31.7

31.5

Income tax expense

97.8

97.8

Swap and other interest expense

55.8

55.9

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

$

349.0

$

350.6

Non-core items - (income) expense:

Legal settlements

$

(7.5)

$

(7.5)

Real estate-related charges

3.4

5.2

Gain on divestitures

(45.5)

(45.5)

Investment income

(0.8)

(0.8)

Total non-core items

(50.4)

(48.6)

Adjusted EBITDA

$

298.6

$

302.0

Adjusted leverage ratio

3.1

3.0

For the Three Months Ended
September 30,

2017

2016

(In millions, except per share
data)

Adjusted income from operations:

Income from operations

$

69.7

$

70.7

Real estate-related charges

-

1.8

Adjusted income from operations

$

69.7

$

72.5

Adjusted net income:

Net income

$

30.7

$

32.4

Non-core items - (income) expense:

Real estate-related charges

-

1.8

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

-

(0.7)

Total non-core items

-

1.1

Adjusted net income

$

30.7

$

33.5

Adjusted diluted earnings per share (EPS) from operations:

Net income

$

1.48

$

1.47

Total non-core items

-

0.05

Adjusted diluted EPS from operations

$

1.48

$

1.52

Weighted average common shares outstanding - diluted

20.8

22.1

For the Nine Months Ended
September 30,

2017

2016

(In millions, except per share
data)

Adjusted income from operations:

Income from operations

$

213.6

$

217.7

Real estate-related charges

2.9

5.2

Investment income

(0.8)

-

Legal settlements

(0.9)

-

Adjusted income from operations

$

214.8

$

222.9

Adjusted net income:

Net income

$

96.6

$

100.1

Non-core items - (income) expense:

Real estate-related charges

2.9

5.2

Investment income

(0.8)

-

Legal settlements

(0.9)

-

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

(0.5)

(2.0)

Total non-core items

0.7

3.2

Adjusted net income

$

97.3

$

103.3

Adjusted diluted earnings per share (EPS) from operations:

Net income

$

4.60

$

4.37

Total non-core items

0.03

0.14

Adjusted diluted EPS from operations

$

4.63

$

4.51

Weighted average common shares outstanding - diluted

21.0

22.9

View original content:http://www.prnewswire.com/news-releases/asbury-automotive-group-announces-third-quarter-2017-financial-results-300541687.html

SOURCE Asbury Automotive Group, Inc.

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

Asbury Automotive Group Inc. published this content on 24 October 2017 and is solely responsible for the information contained herein.
Distributed by Public, unedited and unaltered, on 24 October 2017 11:10:06 UTC.

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