STAMFORD, Conn., April 30 /PRNewswire-FirstCall/ -- Asbury Automotive Group, Inc. (NYSE: ABG), one of the largest automotive retail and service companies in the U.S., today reported financial results for the first quarter ended March 31, 2003.

Net income for the quarter was $7.1 million, or $0.21 per share, while in the prior year quarter, the Company reported pro forma net income from continuing operations of $11.4 million, or $0.33 per share (a reconciliation of pro forma net income from continuing operations to GAAP net income from continuing operations is provided on the Consolidated Statement of Income accompanying this release). The pro forma results for the prior-year quarter exclude a non-recurring deferred income tax provision required by SFAS 109 related to Asbury's change in tax status from a limited liability company to a "C" corporation in conjunction with its March 2002 initial public offering, and assume that the Company was a publicly traded "C" corporation for the entire period.

President and CEO Kenneth B. Gilman said, "As anticipated, earnings were down on a year-over-year basis, due to increased operating expenses, which we discussed in our year-end results call. At that time, we shared with investors specific expense reduction initiatives we were taking in certain of our platforms, with the anticipation of seeing the effects of those changes in the second quarter. I am pleased to be able to report that we were able to realize some of the benefits of those initiatives in March. Specifically, our SG&A expenses, as a percent of total revenue, were 12.2% in March versus 13.2% for the first two months of the quarter. While expenses are still high by historical standards, early indications are encouraging, as we still anticipate that most of the intended effects of our expense control initiatives will be fully realized in the second quarter.

"The strategy during the quarter, in terms of new vehicle sales, was primarily volume-driven. The new vehicle environment was particularly difficult, especially in the first two months of the quarter. By taking a volume-driven approach, and foregoing a small amount of new vehicle margin, we were able to sustain unit sales -- thereby fostering good relations with our manufacturer partners. On a same-store basis, our new vehicle retail unit sales were down only 1.5 percent, while the industry was down 4.4 percent.

"An area of notable strength for Asbury during the quarter was our used car business, despite what many had perceived to be a difficult used vehicle environment. This has been a key initiative for us, an area of considerable focus, with our Tampa platform being our most recent and notable success story. Tampa simply had an outstanding used car first quarter, increasing used retail unit sales by 36 percent, growing used vehicle retail gross profit margin to 12.9 percent from 10.2 percent, and increasing total used vehicle gross profit by 54 percent. Clearly, Tampa's focus on used vehicles is working, and demonstrates the value of our approach to sharing best practices.

"Our higher margin businesses -- parts and service operations, and finance and insurance -- remained strong during the quarter," Mr. Gilman added. "These businesses, which together account for well over half of Asbury's gross profit, have continued to grow in the face of a challenging environment for new vehicle sales."

Financial highlights for the quarter included:

• The Company's total revenues were approximately $1.1 billion, up 4.9 percent from a year ago. On a same-store basis, retail sales (excluding fleet and wholesale business) were up 1.3 percent.
• Total gross profit dollars rose 3.4 percent, while same-store retail gross profit was up marginally, in spite of a difficult pricing environment in both the new and used car markets.
• On a same-store basis, new vehicle retail unit sales declined 1.5 percent, while new vehicle same-store retail gross profit dollars decreased 10.5 percent.
• Used vehicle retail unit sales were flat on a same-store basis, as was retail gross profit margin at 12.2 percent of used retail sales.
• Parts and service revenues increased 7.6 percent (4.8 percent same-store), with the related gross profit increasing 6.7 percent (3.4 percent same-store).
• Net finance and insurance (F&I) income was up 13.7 percent (9.8 percent same-store) from a year ago, while F&I per vehicle retailed rose 10.4 percent to $783.

Commenting on the Company's Price 1 used car pilot program, Mr. Gilman said, "We have seen a steady improvement in Price 1's performance on a sequential, month-to-month basis, starting with January, and continue to believe the potential upside of developing a stand-alone used car business is well worth our modest incremental investment at this point. For the first quarter, the loss from Price 1 was $1.5 million on a pre-tax basis, and we still expect the year-over-year losses to come down by approximately $3 million."

The Company's earnings per share guidance for 2003 remains unchanged in a range between $1.50 and $1.60, based on new U.S. light vehicle sales of about 16 million units. This guidance does not include the potential impact of any acquisitions that may be completed in 2003.

Mr. Gilman concluded, "Ongoing manufacturer incentive programs, encouraging trends in new vehicle affordability, as well as the industry's strong new product pipeline, should continue to keep new car sales at a relatively strong level. Given our diverse income streams, and with more stringent cost controls now in place, we remain optimistic about Asbury's growth prospects in 2003 and beyond."

Asbury will host a conference call to discuss its 2003 first quarter results this morning at 10:00 a.m. Eastern Time. The call will be simulcast live on the Internet and can be accessed by logging onto http://www.asburyauto.com or http://www.ccbn.com. In addition, a live audio of the call will be accessible to the public by calling (800) 818-5264; international callers, please dial (913) 981-4910; no access code is required.

About Asbury Automotive Group

Asbury Automotive Group, Inc., headquartered in Stamford, Connecticut, is one of the largest automobile retailers in the U.S., with 2002 revenues of $4.5 billion. Built through a combination of organic growth and a series of strategic acquisitions, Asbury now operates through nine geographically concentrated, individually branded "platforms." These platforms currently operate 94 retail auto stores, encompassing 133 franchises for the sale and servicing of 36 different brands of American, European and Asian automobiles. Asbury believes that its product mix includes one of the highest proportions of luxury and mid-line import brands among leading public U.S. automotive retailers. The Company 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" as that term is defined in the Private Securities Litigation Reform Act of 1995. The forward-looking statements include statements relating to goals, plans, projections and guidance regarding the Company's financial position, results of operations, market position, product development, pending and potential future acquisitions and business strategy. These statements are based on management's current expectations 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, the Company's relationships with vehicle manufacturers and other suppliers, risks associated with the Company's substantial indebtedness, risks related to pending and potential future acquisitions, general economic conditions both nationally and locally and governmental regulations and legislation. There can be no guarantees that the Company's plans for future operations will be successfully implemented or that they will prove to be commercially successful. These and other risk factors are discussed in the Company's annual report on Form 10-K and in its other filings with the Securities and Exchange Commission. We undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future events or otherwise.

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SOURCE Asbury Automotive Group, Inc.

CONTACT: Stacey Yonkus of Asbury Automotive, +1-203-356-4424, investor@asburyauto.com