abg-20201027
0001144980false00011449802020-10-272020-10-27

 
UNITED STATES
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): October 27, 2020 
Asbury Automotive Group, Inc.
(Exact name of registrant as specified in its charter)  
Delaware
(State or other jurisdiction of incorporation)  
001-31262 01-0609375
(Commission File Number) (IRS Employer Identification No.)
2905 Premiere Parkway NW Suite 300
Duluth,GA 30097
(Address of principal executive offices)(Zip Code)
 
(770) 418-8200
(Registrant's telephone number, including area code)
None
(Former name or former address, if changed since last report)  
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
    Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
    Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
    Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
    Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:
Trading
Title of each classSymbol(s)Name of each exchange on which registered
Common stock, $0.01 par value per shareABGNew York Stock Exchange



Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
























    




Item 2.02 Results of Operations and Financial Condition.
Asbury Automotive Group, Inc. (the “Company”) issued an earnings release on October 27, 2020, announcing its financial results for the three and nine months ended September 30, 2020. A copy of the earnings release is furnished as Exhibit 99.1 to this Current Report.
The information furnished in this Current Report on Form 8-K, including Exhibit 99.1, shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liability of that section, and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.


Item 9.01 Financial Statements and Exhibits.
(d)    Exhibits.
 
The following exhibits are furnished as part of this report.
Exhibit No.  Description
  Press Release dated October 27, 2020.
 



SIGNATURE
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.
Date: October 27, 2020By: /s/ Patrick J. Guido
Name: Patrick J Guido
Title: Senior Vice President and Chief Financial Officer


Document

Exhibit 99.1
https://cdn.kscope.io/b3e4516c9f8c9e30cb41ab77f4173871-companylogoa271.jpg
Investors & Reporters May Contact:
Matt Pettoni
VP of Finance & Treasurer
(770) 418-8219
ir@asburyauto.com

 

ASBURY AUTOMOTIVE GROUP ANNOUNCES
ALL TIME RECORD THIRD QUARTER 2020 FINANCIAL RESULTS

Third quarter EPS of $4.96 per diluted share,
up 113% over prior year EPS

Record third quarter adjusted EPS of $4.08 per diluted share
(a non-GAAP measure), up 75% over prior year adjusted EPS

Record adjusted operating margin of 6.6%

Record low adjusted SG&A as a percentage of gross profit of 61.1%

Pro forma adjusted net leverage at 2.4x post acquisition

DULUTH, GA, October 27, 2020 - Asbury Automotive Group, Inc. (NYSE: ABG), one of the largest automotive retail and service companies in the U.S., reported net income for the third quarter 2020 of $96.2 million ($4.96 per diluted share) and adjusted net income (a non-GAAP measure) of $79.2 million ($4.08 per diluted share). This compares to net income of $45.0 million ($2.33 per diluted share) in the prior year quarter.
Net income for the third quarter 2020 was adjusted for a $24.7 million ($0.96 per diluted share) gain on a dealership divestiture, $1.3 million ($0.05 per diluted share) of acquisition related costs and a $0.7 million ($0.03 per diluted share) real estate related charge. There were no adjustments in the prior year quarter.
Total revenue for the third quarter was $1.8 billion, flat from the prior year period; total revenue on a same-store basis was down 5% from the prior year period.
"In addition to closing on the largest acquisition in the company’s history and increasing our size by 25%, we delivered another very strong quarter reflecting the resilience and the flexibility of our business model. We delivered a record adjusted operating margin of 6.6% and a record low adjusted SG&A as a percentage of gross profit of 61.1% in a 15.4 million SAAR environment," said David Hult, Asbury's President and Chief Executive Officer. "Our continued focus on gross profit combined with disciplined expense management enabled us to deliver the best quarterly results in our company’s history with adjusted earnings of $4.08 per share, up 75%,” Hult concluded.

1


Third Quarter 2020 Highlights
New gross profit per vehicle up 73% to $2,468
Used retail gross profit per vehicle up 43% to $2,116
Finance and Insurance gross profit per vehicle up 11% to $1,795
Adjusted SG&A as a percentage of gross profit decreased 780 basis points to 61.1%
Adjusted Income from operations as percentage of revenue increased 210 basis points to 6.6%
Adjusted EPS increased 75%
Closed on the acquisition of Park Place Dealerships, adding $1.7 billion of annualized revenue
Divested a Lexus dealership with approximately $90 million in annual revenues, as we reached our regional ownership cap due to acquiring two Park Place Lexus stores
Ended the quarter with total liquidity of $385 million and a pro forma net leverage ratio of 2.4x

For the nine-month period ended September 30, 2020, the Company reported net income of $165.3 million, or $8.56 per diluted share, compared to net income of $140.8 million, or $7.30 per diluted share in the prior year period. Adjusted net income for the nine-month period ended September 30, 2020 was $162.7 million, or $8.43 per diluted share, compared to $133.6 million, or $6.92 per diluted share in the prior year, a 22% increase in adjusted earnings per share.
Additional commentary regarding the third quarter results will be provided during the earnings conference call on October 27, 2020 at 10:00 a.m. Eastern Time. The conference call will be simulcast live on the internet and can be accessed at www.asburyauto.com/company/investor-relations. A replay will be available at this site for 30 days.
In addition, a live audio of the call will be accessible to the public by calling (800) 430-8332 (domestic), or (323) 289-6581 (international); passcode – 1504679. Callers should dial in approximately 5 to 10 minutes before the call begins.
A conference call replay will be available two hours following the call for seven days, and can be accessed by calling (888) 203-1112 (domestic), or (719) 457-0820 (international); passcode – 1504679.
About Asbury Automotive Group
Asbury Automotive Group, Inc. ("Asbury"), a Fortune 500 company headquartered in Duluth, GA, is one of the largest automotive retailers in the U.S. Asbury currently operates 90 dealerships, consisting of 113 franchises, representing 31 domestic and foreign brands of vehicles. Asbury also operates 25 collision repair centers. Asbury 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” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are statements other than historical fact, and may include statements relating to goals, plans, market conditions and projections regarding Asbury's financial position, liquidity, results of operations, market position and dealership portfolio, and other initiatives and future business strategy. These statements are based on management's current expectations and beliefs 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, the impact of the COVID-19 pandemic, market factors, Asbury's relationships with, and the financial and operational stability of, vehicle manufacturers and other suppliers, acts of God or other incidents which may adversely
2


impact supply from vehicle manufacturers and/or present retail sales challenges, risks associated with Asbury's indebtedness (including available borrowing capacity, compliance with its financial covenants and ability to refinance or repay such indebtedness, on favorable terms), Asbury's relationships with, and the financial stability of, its lenders and lessors, risks related to competition in the automotive retail and service industries, general economic conditions both nationally and locally, governmental regulations, legislation, adverse results in litigation and other proceedings, and Asbury's ability to execute its technology initiatives and other operational strategies, Asbury's ability to leverage gains from its dealership portfolio, including its ability to realize the expected benefits of the acquisition of the Park Place dealership group. Asbury's ability to capitalize on opportunities to repurchase its debt and equity securities or purchase properties that it currently leases, and Asbury's ability to stay within its targeted range for capital expenditures. There can be no guarantees that Asbury's plans for future operations will be successfully implemented or that they will prove to be commercially successful.
These and other risk factors that could cause actual results to differ materially from those expressed or implied in our forward-looking statements are and will be discussed in Asbury's filings with the U.S. Securities and Exchange Commission from time to time, including its most recent annual report on Form 10-K and any subsequently filed quarterly reports on Form 10-Q. We undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future events or otherwise.
3


ASBURY AUTOMOTIVE GROUP, INC.
CONSOLIDATED STATEMENTS OF INCOME (In millions, except per share data)
(Unaudited)
 For the Three Months Ended September 30,Increase
(Decrease)
%
Change
 20202019
REVENUE:
New vehicle$957.9 $986.9 $(29.0)(3)%
Used vehicle:
Retail507.4 505.0 2.4 — %
Wholesale62.1 41.9 20.2 48 %
     Total used vehicle569.5 546.9 22.6 %
Parts and service237.2 227.6 9.6 %
Finance and insurance, net80.8 80.6 0.2 — %
TOTAL REVENUE1,845.4 1,842.0 3.4 — %
GROSS PROFIT:
New vehicle60.6 38.6 22.0 57 %
Used vehicle:
Retail43.3 33.9 9.4 28 %
Wholesale5.9 (1.5)7.4 NM
     Total used vehicle49.2 32.4 16.8 52 %
Parts and service145.3 141.5 3.8 %
Finance and insurance, net80.8 80.6 0.2 — %
TOTAL GROSS PROFIT335.9 293.1 42.8 15 %
OPERATING EXPENSES:
Selling, general and administrative206.5 202.0 4.5 %
Depreciation and amortization9.8 9.1 0.7 %
Other operating expense (income), net0.5 (0.2)0.7 NM
INCOME FROM OPERATIONS119.1 82.2 36.9 45 %
OTHER EXPENSES (INCOME):
Floor plan interest expense3.0 9.0 (6.0)(67)%
Other interest expense, net12.9 13.7 (0.8)(6)%
Gain on divestiture(24.7)— (24.7)— %
Total other (income) expenses, net(8.8)22.7 (31.5)(139)%
INCOME BEFORE INCOME TAXES127.9 59.5 68.4 115 %
Income tax expense31.7 14.5 17.2 119 %
NET INCOME$96.2 $45.0 $51.2 114 %
EARNINGS PER COMMON SHARE:
Basic—
Net income$5.01 $2.36 $2.65 112 %
Diluted—
Net income$4.96 $2.33 $2.63 113 %
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
Basic19.2 19.1 0.1 %
Restricted stock0.1 0.1 — — %
Performance share units0.1 0.1 — — %
Diluted19.4 19.3 0.1 %
______________________________
NMNot Meaningful
4


ASBURY AUTOMOTIVE GROUP, INC.
KEY OPERATING HIGHLIGHTS (In millions, except per unit data)
(Unaudited)
 For the Three Months Ended September 30,Increase
(Decrease)
%
Change
 20202019
Unit sales
New vehicle:
Luxury6,157 6,025 132 %
Import13,818 15,998 (2,180)(14)%
Domestic4,580 5,055 (475)(9)%
     Total new vehicle24,555 27,078 (2,523)(9)%
Used vehicle retail20,464 22,988 (2,524)(11)%
Used to new ratio83.3 %84.9 %(160) bps
Average selling price
New vehicle$39,010 $36,447 $2,563 %
Used vehicle retail24,795 21,968 2,827 13 %
Average gross profit per unit
New vehicle:
Luxury$4,613 $3,270 $1,343 41 %
Import1,397 638 759 119 %
Domestic2,817 1,721 1,096 64 %
Total new vehicle2,468 1,426 1,042 73 %
Used vehicle retail2,116 1,475 641 43 %
Finance and insurance, net1,795 1,610 185 11 %
Front end yield (1)4,103 3,058 1,045 34 %
Gross margin
New vehicle:
Luxury8.2 %6.1 %210 bps
Import4.7 %2.2 %250 bps
Domestic6.5 %4.2 %230 bps
Total new vehicle6.3 %3.9 %240 bps
Used vehicle retail8.5 %6.7 %180 bps
Parts and service61.3 %62.2 %(90) bps
Total gross profit margin18.2 %15.9 %230 bps
SG&A metrics
Rent expense$8.1 $6.7 $1.4 21 %
SG&A as a percentage of gross profit61.5 %68.9 %(740) bps
SG&A, excluding rent expense as a percentage of gross profit59.1 %66.6 %(750) bps
Adjusted SG&A as a percentage of gross profit61.1 %68.9 %(780) bps
Operating metrics
Income from operations as a percentage of revenue6.5 %4.5 %200 bps
Income from operations as a percentage of gross profit35.5 %28.0 %750 bps
Adjusted income from operations as a percentage of revenue6.6 %4.5 %210 bps
Adjusted income from operations as a percentage of gross profit36.1 %28.0 %810 bps
Revenue mix
New vehicle51.9 %53.6 %
Used vehicle retail27.4 %27.3 %
Used vehicle wholesale3.4 %2.3 %
Parts and service12.9 %12.4 %
Finance and insurance4.4 %4.4 %
     Total revenue100.0 %100.0 %
Gross profit mix
New vehicle18.0 %13.2 %
Used vehicle retail12.8 %11.5 %
Used vehicle wholesale1.8 %(0.5)%
Parts and service43.3 %48.3 %
Finance and insurance24.1 %27.5 %
     Total gross profit100.0 %100.0 %
_____________________________
(1)Front end yield is calculated as gross profit from new vehicles, used retail vehicles and finance and insurance (net), divided by combined new and used retail unit sales.
5


ASBURY AUTOMOTIVE GROUP, INC.
SAME STORE OPERATING HIGHLIGHTS (In millions)
(Unaudited)
 For the Three Months Ended September 30,Increase
(Decrease)
%
Change
 20202019
Revenue
New vehicle:
Luxury$267.0 $312.2 $(45.2)(14)%
Import394.6 422.9 (28.3)(7)%
Domestic179.2 187.0 (7.8)(4)%
     Total new vehicle840.8 922.1 (81.3)(9)%
Used Vehicle:
Retail451.6 464.2 (12.6)(3)%
Wholesale50.7 39.0 11.7 30 %
     Total used vehicle502.3 503.2 (0.9)— %
Parts and service209.0 214.8 (5.8)(3)%
Finance and insurance75.1 75.2 (0.1)— %
Total revenue$1,627.2 $1,715.3 $(88.1)(5)%
Gross profit
New vehicle:
Luxury$20.6 $18.9 $1.7 %
Import18.2 9.9 8.3 84 %
Domestic11.6 7.6 4.0 53 %
     Total new vehicle50.4 36.4 14.0 38 %
Used Vehicle:
Retail38.3 31.7 6.6 21 %
Wholesale4.9 (1.3)6.2 NM
     Total used vehicle43.2 30.4 12.8 42 %
Parts and service:
Customer pay74.0 75.8 (1.8)(2)%
Warranty21.1 21.1 — — %
Wholesale parts5.2 5.4 (0.2)(4)%
     Parts and service, excluding reconditioning and preparation100.3 102.3 (2.0)(2)%
Reconditioning and preparation26.8 31.1 (4.3)(14)%
Total parts and service127.1 133.4 (6.3)(5)%
Finance and insurance75.1 75.2 (0.1)— %
Total gross profit$295.8 $275.4 $20.4 %
SG&A expense$185.3 $190.8 $(5.5)(3)%
SG&A expense as a percentage of gross profit62.6 %69.3 %(670) bps
_____________________________
Same store amounts consist of information from dealerships for identical months in each comparative period, commencing with the first month we owned the dealership. Additionally, amounts related to divested dealerships are excluded from each comparative period.

6


ASBURY AUTOMOTIVE GROUP, INC.
SAME STORE OPERATING HIGHLIGHTS (Continued)
(Unaudited)
 For the Three Months Ended September 30,Increase
(Decrease)
%
Change
 20202019
Unit sales
New vehicle:
Luxury4,834 5,790 (956)(17)%
Import13,202 14,922 (1,720)(12)%
Domestic4,181 4,592 (411)(9)%
     Total new vehicle22,217 25,304 (3,087)(12)%
Used vehicle retail18,815 21,070 (2,255)(11)%
Used to new ratio84.7 %83.3 %140 bps
Average selling price
New vehicle$37,845 $36,441 $1,404 %
Used vehicle retail24,002 22,031 1,971 %
Average gross profit per unit
New vehicle:
Luxury$4,261 $3,264 $997 31 %
Import1,379 663 716 108 %
Domestic2,774 1,655 1,119 68 %
Total new vehicle2,269 1,439 830 58 %
Used vehicle retail2,036 1,505 531 35 %
Finance and insurance, net1,830 1,622 208 13 %
Front end yield (1)3,992 3,090 902 29 %
Gross margin
New vehicle:
Luxury7.7 %6.1 %160 bps
Import4.6 %2.3 %230 bps
Domestic6.5 %4.1 %240  bps
Total new vehicle6.0 %3.9 %210 bps
Used vehicle retail8.5 %6.8 %170  bps
Parts and service:
Parts and service, excluding reconditioning and preparation48.0 %47.6 %40 bps
Parts and service, including reconditioning and preparation60.8 %62.1 %(130) bps
Total gross profit margin18.2 %16.1 %210 bps
_____________________________
Same store amounts consist of information from dealerships for identical months in each comparative period, commencing with the first month we owned the dealership. Additionally, amounts related to divested dealerships are excluded from each comparative period.

(1)Front end yield is calculated as gross profit from new vehicles, used retail vehicles and finance and insurance (net), divided by combined new and used retail unit sales.
7


ASBURY AUTOMOTIVE GROUP, INC.
CONSOLIDATED STATEMENTS OF INCOME (In millions, except per share data)
(Unaudited)
 For the Nine Months Ended September 30,Increase
(Decrease)
%
Change
 20202019
REVENUE:
New vehicle$2,541.8 $2,823.9 $(282.1)(10)%
Used vehicle:
Retail1,366.0 1,449.8 (83.8)(6)%
Wholesale144.2 140.6 3.6 %
     Total used vehicle1,510.2 1,590.4 (80.2)(5)%
Parts and service628.0 669.7 (41.7)(6)%
Finance and insurance, net217.8 232.3 (14.5)(6)%
TOTAL REVENUE4,897.8 5,316.3 (418.5)(8)%
GROSS PROFIT:
New vehicle135.6 114.8 20.8 18 %
Used vehicle:
Retail106.1 102.2 3.9 %
Wholesale10.9 0.6 10.3 NM
     Total used vehicle117.0 102.8 14.2 14 %
Parts and service380.7 417.4 (36.7)(9)%
Finance and insurance, net217.8 232.3 (14.5)(6)%
TOTAL GROSS PROFIT851.1 867.3 (16.2)(2)%
OPERATING EXPENSES:
Selling, general and administrative553.4 593.7 (40.3)(7)%
Depreciation and amortization29.0 26.7 2.3 %
Franchise rights impairment23.0 — 23.0 — %
Other operating expense, net9.4 1.0 8.4 NM
INCOME FROM OPERATIONS236.3 245.9 (9.6)(4)%
OTHER EXPENSES (INCOME):
Floor plan interest expense14.1 29.7 (15.6)(53)%
Other interest expense, net41.7 41.2 0.5 %
Loss on extinguishment of long-term debt, net20.6 — 20.6 — %
Gain on dealership divestitures, net(58.4)(11.7)(46.7)NM
Total other expenses, net18.0 59.2 (41.2)(70)%
INCOME BEFORE INCOME TAXES218.3 186.7 31.6 17 %
Income tax expense53.0 45.9 7.1 15 %
NET INCOME$165.3 $140.8 $24.5 17 %
EARNINGS PER COMMON SHARE:
Basic—
Net income$8.61 $7.37 $1.24 17 %
Diluted—
Net income$8.56 $7.30 $1.26 17 %
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
Basic19.2 19.1 0.1 %
Restricted stock— 0.1 (0.1)(100)%
Performance share units0.1 0.1 — — %
Diluted19.3 19.3 — — %
______________________________
NMNot Meaningful




8


ASBURY AUTOMOTIVE GROUP, INC.
KEY OPERATING HIGHLIGHTS (In millions, except per unit data)
(Unaudited)
 For the Nine Months Ended September 30,Increase
(Decrease)
%
Change
 20202019
Unit sales
New vehicle:
Luxury15,508 16,933 (1,425)(8)%
Import37,886 45,697 (7,811)(17)%
Domestic13,198 15,006 (1,808)(12)%
     Total new vehicle66,592 77,636 (11,044)(14)%
Used vehicle retail59,151 66,330 (7,179)(11)%
Used to new ratio88.8 %85.4 %340 bps
Average selling price
New vehicle$38,170 $36,374 $1,796 %
Used vehicle retail23,093 21,857 1,236 %
Average gross profit per unit
New vehicle:
Luxury$4,004 $3,425 $579 17 %
Import1,122 689 433 63 %
Domestic2,349 1,686 663 39 %
Total new vehicle2,036 1,479 557 38 %
Used vehicle retail1,794 1,541 253 16 %
Finance and insurance, net1,732 1,614 118 %
Front end yield (1)3,654 3,121 533 17 %
Gross margin
New vehicle:
Luxury7.2 %6.2 %100 bps
Import3.8 %2.4 %140 bps
Domestic5.5 %4.2 %130 bps
Total new vehicle5.3 %4.1 %120 bps
Used vehicle retail7.8 %7.0 %80 bps
Parts and service60.6 %62.3 %(170) bps
Total gross profit margin17.4 %16.3 %110 bps
SG&A metrics
Rent expense$20.8 $20.3 $0.5 %
SG&A as a percentage of gross profit65.0 %68.5 %(350) bps
SG&A, excluding rent expense as a percentage of gross profit62.6 %66.1 %(350) bps
Adjusted SG&A as a percentage of gross profit64.9 %68.5 %(360) bps
Operating metrics
Income from operations as a percentage of revenue4.8 %4.6 %20  bps
Income from operations as a percentage of gross profit27.8 %28.4 %(60) bps
Adjusted income from operations as a percentage of revenue5.5 %4.7 %80  bps
Adjusted income from operations as a percentage of gross profit31.8 %28.6 %320 bps
Revenue mix
New vehicle51.9 %53.1 %
Used vehicle retail28.0 %27.3 %
Used vehicle wholesale2.9 %2.6 %
Parts and service12.8 %12.6 %
Finance and insurance4.4 %4.4 %
     Total revenue100.0 %100.0 %
Gross profit mix
New vehicle15.9 %13.2 %
Used vehicle retail12.5 %11.8 %
Used vehicle wholesale1.3 %0.1 %
Parts and service44.7 %48.1 %
Finance and insurance25.6 %26.8 %
     Total gross profit100.0 %100.0 %
_____________________________
(1)Front end yield is calculated as gross profit from new vehicles, used retail vehicles and finance and insurance (net), divided by combined new and used retail unit sales.
9


ASBURY AUTOMOTIVE GROUP, INC.
SAME STORE OPERATING HIGHLIGHTS (In millions)
(Unaudited)
 For the Nine Months Ended September 30,Increase
(Decrease)
%
Change
 20202019
Revenue
New vehicle:
Luxury$770.0 $896.1 $(126.1)(14)%
Import1,037.5 1,175.3 (137.8)(12)%
Domestic484.0 543.4 (59.4)(11)%
     Total new vehicle2,291.5 2,614.8 (323.3)(12)%
Used Vehicle:
Retail1,241.9 1,332.5 (90.6)(7)%
Wholesale127.5 130.2 (2.7)(2)%
     Total used vehicle1,369.4 1,462.7 (93.3)(6)%
Parts and service571.0 628.8 (57.8)(9)%
Finance and insurance, net202.2 215.6 (13.4)(6)%
Total revenue$4,434.1 $4,921.9 $(487.8)(10)%
Gross profit
New vehicle:
Luxury$53.2 $55.6 $(2.4)(4)%
Import38.9 29.1 9.8 34 %
Domestic26.6 22.5 4.1 18 %
     Total new vehicle118.7 107.2 11.5 11 %
Used Vehicle:
Retail95.7 95.4 0.3 — %
Wholesale9.9 0.8 9.1 NM
     Total used vehicle105.6 96.2 9.4 10 %
Parts and service:
Customer pay124.5 149.7 (25.2)(17)%
Warranty36.2 42.1 (5.9)(14)%
Wholesale parts133.8 141.9 (8.1)(6)%
     Parts and service, excluding reconditioning and preparation294.5 333.7 (39.2)(12)%
Reconditioning and preparation50.7 58.3 (7.6)(13)%
Total parts and service345.2 392.0 (46.8)(12)%
Finance and insurance202.2 215.6 (13.4)(6)%
Total gross profit$771.7 $811.0 $(39.3)(5)%
SG&A expense$507.7 $556.8 $(49.1)(9)%
SG&A expense as a percentage of gross profit65.8 %68.7 %(290) bps
_____________________________
Same store amounts consist of information from dealerships for identical months in each comparative period, commencing with the first month we owned the dealership. Additionally, amounts related to divested dealerships are excluded from each comparative period.










10


ASBURY AUTOMOTIVE GROUP, INC.
SAME STORE OPERATING HIGHLIGHTS (Continued)
(Unaudited)
 For the Nine Months Ended September 30,Increase
(Decrease)
%
Change
 20202019
Unit sales
New vehicle:
Luxury13,863 16,293 (2,430)(15)%
Import35,457 41,775 (6,318)(15)%
Domestic11,487 13,551 (2,064)(15)%
     Total new vehicle60,807 71,619 (10,812)(15)%
Used vehicle retail54,299 60,826 (6,527)(11)%
Used to new ratio89.3 %84.9 %440 bps
Average selling price
New vehicle$37,685 $36,510 $1,175 %
Used vehicle retail22,872 21,907 965 %
Average gross profit per unit
New vehicle:
Luxury$3,838 $3,413 $425 12 %
Import1,097 697 400 57 %
Domestic2,316 1,660 656 40 %
Total new vehicle1,952 1,497 455 30 %
Used vehicle retail1,762 1,568 194 12 %
Finance and insurance, net1,757 1,628 129 %
Front end yield (1)3,619 3,158 461 15 %
Gross margin
New vehicle:
Luxury6.9 %6.2 %70 bps
Import3.7 %2.5 %120 bps
Domestic5.5 %4.1 %140 bps
Total new vehicle5.2 %4.1 %110 bps
Used vehicle retail7.7 %7.2 %50 bps
Parts and service:
Parts and service, excluding reconditioning and preparation51.6 %53.1 %(150) bps
Parts and service, including reconditioning and preparation60.5 %62.3 %(180) bps
Total gross profit margin17.4 %16.5 %90 bps
_____________________________
Same store amounts consist of information from dealerships for identical months in each comparative period, commencing with the first month we owned the dealership. Additionally, amounts related to divested dealerships are excluded from each comparative period.

(1)Front end yield is calculated as gross profit from new vehicles, used retail vehicles and finance and insurance (net), divided by combined new and used retail unit sales.

11


ASBURY AUTOMOTIVE GROUP, INC.
Additional Disclosures (In millions)
(Unaudited)
 
 September 30, 2020December 31, 2019Increase
(Decrease)
 % Change
SELECTED BALANCE SHEET DATA     
Cash and cash equivalents$4.1   $3.5   $0.6  17 %
New vehicle inventory (a)578.5 802.6 (224.1) (28)%
Used vehicle inventory (b)203.9 140.1 63.8  46 %
Parts inventory (c)46.3 42.3 4.0  %
Total current assets1,298.0 1,602.6   (304.6) (19)%
Floor plan notes payable (d)695.6 788.0 (92.4) (12)%
Total current liabilities1,212.7 1,247.0   (34.3) (3)%
CAPITALIZATION:   
Long-term debt (including current portion) (e)$1,223.8 $939.4 $284.4  30 %
Shareholders' equity811.9   646.3   165.6  26 %
Total$2,035.7   $1,585.7   $450.0  28 %
_____________________________
(a) Excluding $5.1 million and $56.3 million of new vehicle inventory classified as Assets held for sale as of September 30, 2020 and December 31, 2019, respectively
(b) Excluding $1.4 million and $8.6 million of used vehicle inventory classified as Assets held for sale as of September 30, 2020 and December 31, 2019, respectively
(c) Excluding $0.4 million and $2.8 million of parts inventory classified as Assets held for sale as of September 30, 2020 and December 31, 2019, respectively
(d) Excluding $5.8 million and $62.8 million of Floor plan notes payable classified as Liabilities associated with assets held for sale as of September 30, 2020 and December 31, 2019, respectively
(e) Excluding $16.6 million and $28.1 million of Long-term debt classified as Liabilities associated with assets held for sale as of September 30, 2020 and December 31, 2019, respectively

 September 30, 2020December 31, 2019September 30, 2019
DAYS SUPPLY
New vehicle inventory47 66 76 
Used vehicle inventory35 29 36 
_____________________________
Days supply of inventory is calculated based on new and used inventory levels at the end of each reporting period and a 30-day historical cost of sales.






12


Brand Mix - New Vehicle Revenue by Brand-  
 For the Nine Months Ended September 30,
 2020 2019
Luxury: 
Mercedes-Benz% %
Lexus% %
BMW% %
Acura% %
Infiniti% %
Other luxury% %
Total luxury34 % 33 %
Imports: 
Honda18 % 19 %
Toyota13 %13 %
Nissan%%
Other imports% %
Total imports44 % 46 %
Domestic: 
Ford% %
Chevrolet%%
Dodge% %
Other domestics% %
Total domestic22 % 21 %
Total New Vehicle Revenue100 % 100 %
 








 
13


ASBURY AUTOMOTIVE GROUP INC.
Supplemental Disclosures
(Unaudited)


Non-GAAP Financial Disclosure and Reconciliation

In addition to evaluating the financial condition and results of our operations in accordance with GAAP, from time to time management evaluates and analyzes results and any impact on the Company of strategic decisions and actions relating to, among other things, cost reduction, growth, and profitability improvement initiatives, and other events outside of normal, or "core," business and operations, by considering certain alternative financial measures not prepared in accordance with GAAP. These measures include "Adjusted leverage ratio," "Adjusted income from operations," "Adjusted net income," " Adjusted operating margins," and "Adjusted diluted earnings per share ("EPS")." Further, management assesses the organic growth of our revenue and gross profit on a same store basis. We believe that our assessment on a same store basis represents an important indicator of comparative financial performance and provides relevant information to assess our performance at our existing locations. Same store amounts consist of information from dealerships for identical months in each comparative period, commencing with the first month we owned the dealership. Additionally, amounts related to divested dealerships are excluded from each comparative period. Non-GAAP measures do not have definitions under GAAP and may be defined differently by and not be comparable to similarly titled measures used by other companies. As a result, any non-GAAP financial measures considered and evaluated by management are reviewed in conjunction with a review of the most directly comparable measures calculated in accordance with GAAP. Management cautions investors not to place undue reliance on such non-GAAP measures, but also to consider them with the most directly comparable GAAP measures. In their evaluation of results from time to time, management excludes items that do not arise directly from core operations, or are otherwise of an unusual or non-recurring nature. Because these non-core, unusual or non-recurring charges and gains materially affect Asbury's financial condition or results in the specific period in which they are recognized, management also evaluates, and makes resource allocation and performance evaluation decisions based on, the related non-GAAP measures excluding such items. In addition to using such non-GAAP measures to evaluate results in a specific period, management believes that such measures may provide more complete and consistent comparisons of operational performance on a period-over-period historical basis and a better indication of expected future trends. Management discloses these non-GAAP measures, and the related reconciliations, because it believes investors use these metrics in evaluating longer-term period-over-period performance, and to allow investors to better understand and evaluate the information used by management to assess operating performance.


















14


The following tables provide reconciliations for our non-GAAP metrics:
For the Twelve Months Ended
September 30, 2020June 30, 2020
(Dollars in millions)
Adjusted leverage ratio:
Long-term debt (including current portion)$1,223.8 $1,233.5 
Debt included in Liabilities held for sale16.6 — 
Cash and floor plan offset(43.9)(729.9)
Availability under our used vehicle revolving floor plan facility(103.7)(17.0)
 Adjusted long-term net debt$1,092.8 $486.6 
Calculation of earnings before interest, taxes, depreciation and amortization ("EBITDA"):
Net Income$208.9 $157.7 
Depreciation and amortization38.5 37.7 
Income tax expense66.7 49.5 
Swap and other interest expense56.3 57.0 
Earnings before interest, taxes, depreciation and amortization ("EBITDA")$370.4 $301.9 
Non-core items - expense (income):
Gain on dealership divestitures$(58.4)$(33.7)
Legal settlements(2.7)(2.7)
Gain on sale of real estate(0.3)(0.3)
Franchise rights impairment30.1 30.1 
Real estate-related charges1.3 0.6 
Park Place related acquisition costs12.9 11.6 
Loss on debt extinguishment20.7 20.7 
  Total non-core items