- Reports Net Income from Continuing Operations of $0.44 Per Share -

STAMFORD, Conn., July 31 /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 second quarter and six months ended June 30, 2003.

Net income from continuing operations for the second quarter was $14.3 million compared with $14.9 million in the corresponding period a year ago. Basic and diluted earnings per share from continuing operations were $0.44 per share in both periods.

Net income for the second quarter was $12.3 million compared with $12.8 million a year ago. Net income includes the results of discontinued operations, the majority of which ($0.05 per share) consists of certain now closed non-core businesses including the Company's Price 1 pilot program as well as its six 'Thomason Select' used car stores. Basic earnings per share, including discontinued operations, were $0.38 in both periods, while diluted earnings per share were $0.38 for 2003 versus $0.37 for 2002.

Financial highlights for the second quarter of 2003 included:

* The Company's total revenues were approximately $1.2 billion, up 11.0 percent from a year ago. On a same-store basis, retail sales (excluding fleet and wholesale business) were up 7.8 percent.

* Total gross profit dollars rose 7.6 percent, while same-store retail gross profit was up 3.5 percent.

* New vehicle retail unit sales increased 7.7 percent (4.2 percent same-store), while the related gross profit was up 0.5 percent (down 3.3 percent same-store).

* Used vehicle retail unit sales increased 4.3 percent (1.3 percent same-store), while the related gross profit was essentially flat (down 2.4 percent same-store).

* Parts and service revenues increased 11.3 percent (7.1 percent same-store), with the related gross profits increasing 11.1 percent (6.0 percent same-store).

* Net finance and insurance (F&I) income was up 18.8 percent from a year ago (15.9 percent same-store), while F&I per vehicle retailed (PVR) rose 11.7 percent to $815.

Commenting on its expense reduction initiatives, the Company reported that for the second quarter of 2003, selling, general and administrative (SG&A) expenses were 11.9 percent of revenues versus 12.0 percent a year ago. As a percentage of gross profit, SG&A expenses in the quarter were 77.4 percent, a notable improvement from 80.6 percent in the first quarter but still higher than a year ago (76.0 percent).

In addition, during the quarter the Company incurred $1.2 million of severance expenses related to management changes at its Oregon platform, and approximately $1 million of increased legal fees associated with litigation and acquisition activity.

President and CEO Kenneth B. Gilman commented, "Directionally, our expense trends are positive. We initiated our expense reduction program in the first quarter, achieved traction in the second quarter and anticipate a fully implemented program by the third quarter. This should allow us to convert increased gross profit dollars in the second half of this year into higher profit levels when compared to prior periods."

For the first six months of 2003, net income from continuing operations was $22.4 million, or $0.68 per basic and diluted share; for the corresponding period last year, the Company's pro forma net income from continuing operations was $26.7 million, or $0.78 per diluted share. Net income for the six months was $19.4 million or $0.59 per basic and diluted share as compared to $17.9 million, or $0.56 per basic and diluted share from a year ago. (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 period 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.

Mr. Gilman continued, "We are pleased with the improving trends that are apparent in Asbury's financial results for the second quarter, particularly our ability to generate meaningful increases in gross profit on a comparable store basis. Earnings from continuing operations were essentially flat to a year ago because of higher expense rates, which while now declining are still elevated relative to historical levels. Thanks to the expense reduction initiatives implemented in the first half of the year, our year-over-year increases in operating expenses were much better aligned with our rate of revenue and gross profit growth than in either the first quarter of this year or the fourth quarter of last year. As a result, Asbury's earnings per share from continuing operations were flat to a year ago -- a notable improvement from the 30 percent decline for the first quarter.

"In terms of both new and used vehicle sales, Asbury continued to outperform the industry during the second quarter. Our 4 percent same-store increase in new retail unit sales was much stronger than the industry's slight decline; similarly, we experienced a same-store increase in used retail unit sales while the overall performance of franchised dealers was down for the quarter. Tactically, as noted previously, we remained focused during the quarter on sustaining unit sales - partly to strengthen our relationships with our manufacturers, and partly in the knowledge that increased unit sales have a very profitable carryover effect on other key segments of Asbury's business."

Mr. Gilman concluded, "The key to the quarter was getting back to basics -- focusing on the core elements of our business that make our model successful. To that end, we made several difficult decisions during the quarter that allowed us to maintain that focus, including closing certain non-core businesses. We believe this is one of the reasons we were able to continue growing our higher margin businesses. Specifically, during the quarter, our F&I income per vehicle retailed grew 12 percent, for our sixth consecutive quarter of double-digit increases, while our parts and service gross profit was up 11 percent. We intend to maintain this focus so that our core businesses continue to perform well, demonstrating to investors that our diversified automotive retail and services business model is working very much as planned."

The Company has revised its earnings per share guidance for 2003 slightly, primarily to reflect the discontinuation of the Price 1 pilot program, to a range of $1.55 to $1.60. The assumptions underlying this guidance range continue to include new U.S. light vehicle sales of approximately 16 million units. Potential acquisitions that may be completed in the second half of 2003 are not included in this range.

Asbury will host a conference call to discuss its 2003 second 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 (888) 855-5428; international callers, please dial (719) 457-2665; no access code is required. A conference call replay will be available one hour following the call for 14 days and can be accessed by calling (888) 203-1112 (domestic), or (719) 457- 0820 (international); access code 749849.

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 92 retail auto stores, encompassing 132 franchises for the sale and servicing of 35 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/

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