STAMFORD, Conn., Feb. 27 /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 fourth quarter and year ended December 31, 2002.

Net income from continuing operations for the quarter was $6.2 million, or $0.18 per share. Asbury's quarterly net income totals for 2002 are not comparable with those from 2001 due to Asbury's conversion from a partnership to a "C" corporation in conjunction with the Company's initial public offering in 2002. Income from continuing operations before taxes and minority interest was $10.2 million for the fourth quarter of 2002, compared with $12.9 million in the fourth quarter of 2001 (adjusted to exclude goodwill amortization). The decline reflects lower new and used retail vehicle sales and increased expenses.

The Company's total revenues for the quarter were approximately $1.1 billion, down 2% from the same period a year ago. On a same-store basis, total retail revenues were down 5.7%, while same-store retail gross profit was down 3.7%. As a percent of revenue, gross profit for the quarter increased to 15.8% as compared to 15.6% a year ago, both on a same-store and GAAP basis. New vehicle retail revenues decreased 4.4%, while the related gross profit decreased 11.7%. Used vehicle retail revenue decreased 5.2%, while the related gross profit decreased 5.5%. Parts and service revenues increased 6.1%, while the related gross profit increased 8.3%. Net finance and insurance (F&I) revenue increased 5.4%, while F&I profit per vehicle retailed rose 14.7% to $765.

President and CEO Kenneth B. Gilman said, "Although our retail vehicle sales were down for the quarter, roughly in-line with industry trends, we were very pleased with the continued robust performance in our parts and service operations and our finance and insurance business. These businesses truly provide a strong element of stability to our bottom line. An 8% increase in parts and service gross profit and a 15% gain in finance and insurance profit per vehicle retailed are real accomplishments. The increased contributions from these areas enabled us to achieve a higher gross margin overall for the quarter."

For the full year 2002, pro-forma net income from continuing operations was $46.1 million, or $1.36 per share. This excludes 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, and assumes that the Company was a publicly traded "C" corporation for the entire period. On a GAAP basis, without giving effect to these adjustments, income from continuing operations for 2002 was $39.9 million, or $1.21 per share. Income from continuing operations before taxes, minority interest and extraordinary loss was $76.6 million, up 29% from 2001 after adjusting for goodwill amortization. Revenues for the year were approximately $4.5 billion, up 7% from 2001.

Pro-forma net income from continuing operations for the full year 2002 included $0.13 per share in net costs attributable to the Company's Price 1 used car pilot program. Mr. Gilman said, "Price 1's impact on the fourth quarter was approximately $0.03 per share, in-line with our projections. We continue to believe the upside potential of Price 1 offers an attractive risk/reward trade-off."

The Company also reported that Deloitte & Touche L.L.P. has completed its previously announced re-audit of the Company's financial statements for 2001 and 2000 for inclusion in the Company's 2002 filing on Form 10-K to be filed in March 2003. No prior year restatements will be required as a result of this re-audit. The re-audit was required based on guidance by the Auditing Standards Board for companies with both discontinued operations and previously issued financial statements that were audited by a firm that has ceased to exist.

Mr. Gilman continued, "For 2003, we are still fundamentally optimistic about the industry sales outlook. Notwithstanding the obvious geopolitical factors beyond our control, there are powerful forces at work that we believe should help sustain auto sales at a relatively high level. These include ongoing manufacturer incentives, affordability and demographic trends, and the industry's exceptional new product pipeline. Based on new light vehicle sales for 2003 of about 16 million units, and in view of our diverse income streams (excluding the potential contribution from acquisitions), we are now targeting 2003 earnings per share in a range between $1.50 and $1.60."

The Company noted that its 2003 earnings guidance does not include the impact of the pending Bob Baker Auto Group acquisition or any additional 2003 acquisitions. On a pro-forma annual basis, the full impact of the Baker acquisition is expected to add earnings of approximately $0.13 to $0.15 per share. Although Asbury continues to move forward with the expectation that this transaction will close, the Company can make no assurances as to the timing or completion of this transaction.

"Longer term," Mr. Gilman concluded, "we continue to believe that Asbury is capable of increasing its earnings at least 15% annually, on average, over the next several years -- 8% organically and 7% through acquisitions. Our franchises are weighted toward luxury and mid-line import brands, and are well-positioned in attractive regional markets across the United States. With a business model geared toward making Asbury an 'acquirer of choice,' our primary operating goal this year will be on maintaining a strong level of discipline across our platforms and throughout the Company, focusing on expenses, new vehicle market share and overall customer satisfaction. During 2003 we will be working with our platform management on these objectives, driving results in a consistent manner to enable us to meet the earnings guidance we are announcing today."

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 over the past six years, Asbury now operates through nine geographically concentrated, individually branded "platforms." These platforms operate 93 retail auto stores, encompassing 131 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 registration statement on Form S-1 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 or
investor@asburyauto.com/