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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): April 10, 2002
ASBURY AUTOMOTIVE GROUP, INC.
(Exact Name of Registrant as Specified in its Charter)
| Delaware | 5511 | 58-2241119 | ||
| (State or Other Jurisdiction of Identification Incorporation) | (Primary Standard Industrial Classification Code Number) | (IRS Employer Number) |
3 Landmark Square
Suite 500
Stamford, CT 06901
(Address of Principal Executive Office)
Registrant's telephone number, including area code: (203) 356-4400
Item 7. Financial Statements and Exhibits
- (c)
- Exhibits
| Exhibit No. |
Description |
|
|---|---|---|
| 99.1 | Press Release dated April 10, 2002 | |
99.2 |
Slide Presentation (given by Asbury at the Banc of America Securities Consumer and Retail Conference on April 10, 2002) |
Item 9. Regulation FD Disclosure
Attached hereto, and incorporated herein by reference in its entirety, as Exhibit 99.1 is a copy of a press release which provides earnings guidance for Asbury Automotive Group, Inc. In addition, attached hereto, and incorporated herein by reference in its entirety, as Exhibit 99.2 is a copy of a slide presentation given by Asbury at the Banc of America Securities Consumer and Retail Conference on April 10, 2002.
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Asbury Automotive Group, Inc. | ||||||
By: |
/s/ THOMAS F. GILMAN |
|||||
| Name: | Thomas F. Gilman | |||||
| Title: | Chief Financial Officer | |||||
| Date: April 10, 2002 | ||||||
| Exhibit No. |
Description |
|
|---|---|---|
| 99.1 | Press Release dated April 10, 2002 | |
99.2 |
Slide Presentation (given by Asbury at the Banc of America Securities Consumer and Retail Conference on April 10, 2002) |
SIGNATURES
EXHIBIT INDEX
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Exhibit 99.1
|
Contact Information: Magda Gagliano RFBinder Partners 212-994-7549 magda.gagliano@rfbinder.com |
ASBURY AUTOMOTIVE EXPECTS TO EXCEED ANALYSTS' CONSENSUS
ESTIMATE BY APPROXIMATELY 10% FOR THE FIRST QUARTER
Presentation at Banc of America Consumer Conference to be Webcast
STAMFORD, CT—April 10, 2002—Asbury Automotive Group, Inc. (NYSE: ABG), one of the nation's largest automotive retailers, today announced that on April 25, 2002, it expects to report earnings that exceed analysts' consensus estimate for the first quarter ended March 31, 2002 by approximately 10%. In addition, the company confirmed it is comfortable with earnings estimates for the balance of 2002 that were included in analysts' recent reports.
Asbury completed its initial public offering (IPO) on March 14, 2002. Initial research reports on Asbury were issued by 5 brokerage firms earlier this week. The reports included earnings estimates of $1.51 to $1.53 per share for 2002, and $0.29 per share for the first quarter.
In conjunction with its IPO, Asbury converted from a limited liability company to a "C" corporation. Therefore, in accordance with Generally Accepted Accounting Principles (GAAP), Asbury's reported results for the first quarter of 2002 will include a non-recurring deferred income tax provision related to the conversion. This is a one-time, non-cash item and is excluded from the amounts cited above.
Kenneth B. Gilman, Asbury's president and CEO, will be presenting on behalf of Asbury Automotive Group at the annual Banc of America Securities Consumer and Retail Conference today, April 10, 2002, at 2:40 p.m. Eastern Time in New York City. The presentation will be webcast live via the company's website (www.asburyauto.com). The archived webcast will be available for a period of 30 days following the conference.
As previously announced, the company plans to report its complete first-quarter financial results on April 25, 2002. Management also will host a conference call and webcast to discuss the results at 10 AM EST that day.
About Asbury Automotive Group
Asbury Automotive Group, Inc. (www.asburyauto.com), headquartered in Stamford, Connecticut, is one of the largest automobile retailers in the U.S., with 2001 revenues of $4.3 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 91 retail auto stores, encompassing 127 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 U.S. public 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 and projections regarding the company's financial position, results of operations, market
position, product development 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 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. We undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future events, or otherwise.
# # #
ASBURY AUTOMOTIVE EXPECTS TO EXCEED ANALYSTS' CONSENSUS ESTIMATE BY APPROXIMATELY 10% FOR THE FIRST QUARTER Presentation at Banc of America Consumer Conference to be Webcast
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Exhibit 99.2
ASBURY
AUTOMOTIVE GROUP
AUTOMOTIVE RETAILING
Ken Gilman
CEO
This presentation contains certain forward-looking statements within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934, which are subject to known and unknown risks, uncertainties or other factors not under Asbury's control that may cause the actual results, performance or achievements of Asbury to be materially different from the results, performance or other expectations implied by these forward-looking statements. Some of these risks, uncertainties and other factors include those disclosed in Asbury's registration statement with the Securities and Exchange Commission.
Founded in 1995
4th Largest Auto Retailer
$4.3 Billion Revenue in 2001
o Automotive retailing is a huge fragmented industry
o Diversified revenue streams
o Experienced and incentivized management
o Advantageous brand mix
o Regional concentration and strong branding of our platforms
o Growth through organic and acquisition opportunities
o Strong financial performance
Tremendous Growth Potential in Fragmented Industry
| |
Industry Size |
Market Share of Top 10 Companies |
|||
|---|---|---|---|---|---|
| |
($ billions) |
|
|||
| Auto Retailing | $ | 1,000 | 10% | ||
| Discount Stores | $ | 250 | 75% | ||
| Home Improvement | $ | 175 | 40% | ||
| Office Supply | $ | 140 | 20% | ||
| Consumer Electronics | $ | 95 | 45% | ||
Consistent Performance Through Economic Cycles
| |
1978 |
1979 |
1980 |
1981 |
1982 |
1983 |
1984 |
1985 |
1986 |
1987 |
1988 |
1989 |
1990 |
1991 |
1992 |
1993 |
1994 |
1995 |
1996 |
1997 |
1998 |
1999 |
2000 |
|||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Big 3 Pre-Tax Margin | 7.80% | 4.50% | -4.95% | -1.65% | -0.41% | 4.92% | 8.81% | 6.82% | 5.33% | 6.52% | 6.70% | 5.04% | -0.27% | -3.92% | -0.98% | 3.59% | 6.89% | 5.58% | 5.29% | 6.03% | 5.27% | 6.38% | 5.34% | |||||||||||||||||||||||
| Average Dealerships Pre-Tax Margin | 1.96% | 1.26% | 0.61% | 1.16% | 1.30% | 2.14% | 2.18% | 2.20% | 2.16% | 1.88% | 1.71% | 1.00% | 1.00% | 1.00% | 1.39% | 1.60% | 1.80% | 1.30% | 1.53% | 1.37% | 1.70% | 1.80% | 1.60% | |||||||||||||||||||||||
| Consumer Confidence Index | 106.0 | 91.9 | 73.8 | 77.4 | 59.0 | 85.7 | 102.3 | 100.0 | 94.7 | 102.6 | 115.2 | 116.8 | 91.5 | 68.5 | 61.6 | 65.9 | 90.6 | 100.0 | 104.6 | 125.4 | 131.7 | 135.3 | 139.0 |
Increasing Sales Volume Per Dealership
| |
Franchised Dealerships |
Franchised Units Sold |
||
|---|---|---|---|---|
| 1990 | 22.6 | 24.8 | ||
| 1991 | 21.2 | 24.2 | ||
| 1992 | 22.1 | 23.5 | ||
| 1993 | 23.8 | 23.0 | ||
| 1994 | 26.0 | 22.9 | ||
| 1995 | 26.2 | 22.8 | ||
| 1996 | 27.0 | 22.8 | ||
| 1997 | 27.1 | 22.7 | ||
| 1998 | 27.6 | 22.6 | ||
| 1999 | 29.2 | 22.4 | ||
| 2000 | 30.0 | 22.3 | ||
| 2001 | 30.5 | 22.2 |
Experienced and Incentivized Management
Ken
Gilman
Chief Executive Officer
Tom
Gilman
SVP,CFO
Bob
Frank
SVP, Operations
9 Platform CEOs
Average of 27 Years Auto Retail Experience
Average of 22 Years In Local Market
| |
Brand Mix Relative to Comparables |
|
|---|---|---|
| Asbury Automotive Group | 56% | |
| Public Comparables | 43% | |
| Industry Average | 24% |
Luxury/Mid-Line Omport (% of total franchises)
Luxury and Mid-Line Imports Gain Share
| |
Change in Market Share, (1980-2001) |
||
|---|---|---|---|
| Luxury | 5 | % | |
| Mid-Line Import | 4 | % | |
| Mid-Line Domestic | (13 | )% | |
| Value | 4 | % |
Large
Equity Ownership by Frontline Dealer Management*
Small
Low
Percentage of Luxury/Mid-Line Import Franchises**
High
- *
- Company
Estimate
- **
- As of 12/31/01
- o
- Leverage best practices
- o
- Focus on higher margin opportunities by selling additive products and services—Parts & Service and F&I
- o
- Capitalize on mega trends
- •
- Favorable human and machine demographics mean that more cars will be sold and on the road
- •
- Luxury and mid-line imports are gaining share and we are well positioned
When a Brand Goes Soft: The [Dodge Logo] Example
| |
% Change from 2000 to 2001 |
|
|---|---|---|
| New Unit Sales | -13.7% | |
| New Unit Sales | 1.0% | |
| Used Unit Sales | 24.1% | |
| Net Operating Profit of Store | 51.3% |
The Asbury Acquisition Strategy
- o
- ENTER NEW MARKETS
- •
- Economies of scale
- •
- Financial and operational leverage
- •
- Base for tuck-in acquisitions
- o
- SELECTION CRITERIA
- •
- Highly capable platform management
- •
- Leading position in local market
- •
- Strong local brand name
- •
- Attractive growth markets
- •
- Luxury and mid-line import franchises
- •
- Geographic concentration (avoid orphans)
- o
- SOURCED AT THE CORPORATE LEVEL
Advantageous Geographic Locations
Desirable Expansion States
Asbury
Targeting Criteria: Under-Dealered States 5 Yr. Population Increase
The Asbury Acquisition Strategy
- o
- SOLIDIFY POSITIONS IN EXISTING MARKETS
- •
- Immediate and longer term cost synergies
- •
- Increase market position of existing platforms
- •
- Build sufficient mass to split off additional platforms
- o
- SELECTION CRITERIA
- •
- Strengthen brand mix (luxury and mid-line imports)
- •
- Opportunities to improve profitability
- •
- Retention of dealership management not a determining factor
- o
- SOURCED AT THE PLATFORM LEVEL
Acquisition Tuck-In Performance
18 Tuck-Ins Representing 44 Franchises from 1999 to Date
| |
12 Months Prior to Acquisition |
12 Months After Acquisition |
|
|||||
|---|---|---|---|---|---|---|---|---|
| Acquisition Revenues | $ | 1,389 | $ | 1,474 | 6.2% | |||
| Parts & Service Gross Profit ($mm) | $ | 47 | $ | 59 | 25.5% | |||
| Acquisition Gross Profit ($mm) | $ | 184 | $ | 210 | 14.1% | |||
| F&I Per Vehicle Revenue | $ | 411 | $ | 499 | 21.5% | |||
ASBURY
AUTOMOTIVE GROUP
FINANCIAL PERFORMANCE
Strong Historical Revenue Growth
| |
Revenues ($bn) |
||
|---|---|---|---|
| 1998 | $ | 1.1 | |
| 1999 | $ | 3.0 | |
| 2000 | $ | 4.0 | |
| 2001 | $ | 4.3 | |
| |
Same Store Revenue Growth* |
Same Store Gross Profit Growth* |
||
|---|---|---|---|---|
| 2000 | 0.8% | 2.7% | ||
| 2001 | -0.5% | 4.8% |
- *
- Excludes Fleet and Wholesale
| |
Gross Margin |
Operating Margin (% of Revenues) |
||
|---|---|---|---|---|
| 1998 | 14.3% | 2.0% | ||
| 1999 | 14.6% | 2.7% | ||
| 2000 | 14.8% | 3.0% | ||
| 2001 | 15.6% | 3.1% |
| |
December 31, 2001 |
||||
|---|---|---|---|---|---|
| ($ in millions) |
|
||||
| Mortgages | $ | 122 | |||
Other Non-Floorplan Debt |
$ |
368 |
|||
Total Non-Floorplan Debt |
$ |
490 |
|||
Stockholders' Equity |
$ |
407 |
|||
Total Capitalization |
$ |
897 |
|||
Non-Floorplan Debt to Capitalization |
55 |
% |
|||
* Adjusted for acquisitions, divestitures and IPO
| |
5-Year Annual Targets |
|
|---|---|---|
| EPS Growth Rate | 15% | |
F&I Per Vehicle Revenue Increase |
2-4% |
|
Same Store Parts and Service Sales Increase |
2-4% |
|
Acquisition Revenues |
$300 - $500 million |
Disclaimer
Asbury: Leading Auto Retailer
Investment Highlights
Tremendous Growth Potential in Fragmented Industry
Consistent Performance Through Economic Cycles
Increasing Sales Volume Per Dealership
Experienced and Incentivized Management
Advantageous Brand Mix
Luxury and Mid-Line Imports Gain Share
Competitive Advantages
Organic Growth Strategy
When a Brand Goes Soft: The [Dodge Logo] Example
The Asbury Acquisition Strategy
Platform Acquisitions
Advantageous Geographic Locations
The Asbury Acquisition Strategy
"Tuck-In" Acquisitions
Acquisition Tuck-In Performance
Strong Historical Revenue Growth
Key Performance Drivers
Same Store Metrics
Improving Profitability
Asbury Capitalization
Financial Performance Targets