Reports Net Income from Continuing Operations of $0.53 Per Share

STAMFORD, Conn., Oct 30, 2003 /PRNewswire-FirstCall via Comtex/ -- 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 third quarter and nine months ended September 30, 2003.

Net income from continuing operations for the third quarter was $17.2 million, or $0.53 per share (basic and diluted), compared with $16.1 million, or $0.47 per share, in the corresponding period a year ago. Net income for the quarter, including a loss from discontinued operations of $922,000, or $0.03 per share, was $16.2 million, or $0.50 per share, compared with $14.6 million, or $0.43 per share, in last year's third quarter.

Other financial highlights for the third quarter of 2003, as compared to the prior year period, were as follows:

* The Company's total revenues were approximately $1.3 billion, up 8.0 percent. On a same-store basis, retail sales (excluding fleet and wholesale business) increased 3.0 percent. * Total retail gross profit dollars rose 6.8 percent, while same-store retail gross profit was up 2.1 percent. * New vehicle retail unit sales increased 0.4 percent (down 4.3 percent same-store). Same-store new retail unit sales were flat excluding the Oregon platform, where the Company has undergone recent management changes. * Reflecting significantly higher average selling prices, new vehicle retail dollar sales rose 9.4 percent (4.1 percent same-store); as expected, however, new vehicle margins remained under pressure, as the related gross profit percentage fell 80 basis points overall and 70 basis points on a same-store basis. * Used vehicle retail unit sales increased 4.3 percent (flat on a same-store basis). Used vehicle retail dollar sales were up 2.6 percent (down 2.3 percent same-store), while the related gross profit percentage was down 50 basis points overall (down 40 basis points same-store). * Parts, service and collision repair revenues increased 11.4 percent (5.6 percent same-store), with the related gross profits increasing 13.9 percent (8.3 percent same-store). * Net finance and insurance (F&I) income was up 12.2 percent from a year ago (8.3 percent same-store), while platform F&I per vehicle retailed (PVR) rose 6.4 percent to $846. * Results for the quarter included certain expenses incurred in conjunction with management changes in Oregon, Texas and at the corporate level, which reduced after-tax income by approximately $1.3 million, or $0.04 per share. * The Company's expense reduction initiatives reduced ongoing operating expenses at the platform level. Selling, general and administrative (SG&A) expenses were 11.7 percent of revenues, the same as in the comparable quarter a year ago. Excluding the management change related expenses mentioned above, SG&A expenses were 11.6 percent of revenues in the third quarter of 2003. As a percentage of gross profit, SG&A expenses were 76.0 percent as reported and 75.0 percent excluding the management change related expenses, compared with 75.4 percent in last year's third quarter. * For the quarter the Company's effective tax rate was 38.0 percent, compared to 39.8 percent in the prior year period. The Company anticipates that its effective tax rate will fluctuate between 38 and 39 percent based upon its geographic revenue source for any given period.

President and CEO Kenneth B. Gilman commented, "Asbury's earnings per share from continuing operations rose 13 percent in the third quarter -- but almost 21 percent after adjusting for the management change related expenses noted above. These positive results reflect the balance and consistency provided by our business model in terms of its diverse income streams, as well as our successful implementation of a comprehensive expense reduction program earlier this year. Our core businesses turned in results that for the most part were consistent with the trends we saw in the second quarter, where the strength of our service businesses more than offset a continued challenging environment for retail vehicle sales. Gross profits from parts, service and collision repair and from F&I were both up at double-digit rates for the quarter, and again accounted for well over half of Asbury's overall gross profit."

Mr. Gilman continued, "We are also pleased with the results to date from our expense reduction initiatives launched at the end of last year. Adjusting for the management change related expenses outlined above, SG&A as a percentage of gross profit in the third quarter was below the year-ago level for the first time this year. Moreover, this improvement was achieved despite sharply higher insurance premiums, which added more than a full percentage point to our SG&A rate. While the initial results of our program have been excellent, we are sharpening our focus on variable costs as we head into the industry's seasonally slower months, and are working to generate further improvements."

For the first nine months of 2003, net income from continuing operations was $39.5 million, or $1.21 per share; for the corresponding period last year, the Company's pro forma net income from continuing operations was $42.8 million, or $1.26 per share. Net income for the nine months, including discontinued operations, was $35.6 million, or $1.09 per share, compared to $32.6 million, or $0.99 per share, a year ago. (A reconciliation of pro forma income from continuing operations to GAAP income from continuing operations of $36.9 million, or $1.12 per share, 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 concluded, "Asbury's improving performance over the past few quarters is a reflection of our continued focus on getting back to the basics of solid retail execution. We have eliminated non-core businesses, made a number of key management changes, and significantly reduced operating expenses. Looking ahead, we continue to target a long-term earnings growth rate of approximately 15 percent -- roughly half from organic growth and half from acquisitions."

The Company went on to note that thus far in 2003, it had completed acquisitions that will add about $330 million in annualized revenues, already within its targeted annual acquisition range of $300 million to $500 million. In addition, the Company noted that it had executed contracts to acquire three dealerships with annual revenues of $175 million and signed letters of intent to acquire three dealerships with annual revenues of $250 million. These yet to close transactions are subject in all cases to manufacturer consent and in some cases to the execution of definitive purchase agreements.

Commenting on its earnings guidance for 2003, the Company anticipates that earnings from continuing operations should come in around $1.55 per share. The Company noted that this estimate is based upon the assumption that the environment for selling new and used vehicles, as experienced at the end of the third quarter and into October, will continue to be difficult with the expectation that new and used vehicle same-store retail unit sales will be down in the mid to upper single digit range, respectively. In addition, there is an expectation of continued strength in its fixed operations and F&I businesses, consistent with third quarter results. The Company also noted that managing its variable costs during the industry's traditionally slow months of November through February will be a critically important factor in meeting its earnings expectations. Lastly, this guidance includes acquisitions that have already been completed, but not those that may be completed during the remainder of the year.

Asbury will host a conference call to discuss its 2003 third quarter results this afternoon at 2:00 p.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 (877) 234-1973; international callers, please dial (973) 582-2732; 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 (877) 519-4471 (domestic), or (973) 341-3080 (international); access code 4236413.

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 95 retail auto stores, encompassing 138 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. Additional information is available at the Company's website, www.asburyauto.com.

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.

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