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): February 2, 2021
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of incorporation)
| (Commission File Number) | (IRS Employer Identification No.) | |||||||||||||
| (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:
Securities registered pursuant to Section 12(b) of the Act:
| Trading | ||||||||||||||
| Title of each class | Symbol(s) | Name of each exchange on which registered | ||||||||||||
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 February 2, 2021, announcing its financial results for the three and twelve months ended December 31, 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 February 2, 2021. | |||||||||||
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) | ||||||||||
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: February 2, 2021 | By: | /s/ Patrick J. Guido | |||||||||
| Name: | Patrick J Guido | ||||||||||
| Title: | Senior Vice President and Chief Financial Officer | ||||||||||
Exhibit 99.1
Investors & Reporters May Contact:
Matt Pettoni
VP of Finance & Treasurer
(770) 418-8219
ir@asburyauto.com
ASBURY AUTOMOTIVE GROUP ANNOUNCES
FOURTH QUARTER FINANCIAL RESULTS
Record fourth quarter EPS of $4.59 per diluted share,
up 103% over prior year quarter
Record full year EPS of $13.18, up 38% over prior year
Fourth quarter revenue increased 18% and gross profit increased 23% over prior year quarter
DULUTH, GA, February 2, 2021 - Asbury Automotive Group, Inc. (NYSE: ABG), one of the largest automotive retail and service companies in the U.S., reported net income for the fourth quarter 2020 of $89.1 million ($4.59 per diluted share). This compares to net income of $43.6 million ($2.26 per diluted share) in the prior year quarter, a 104% increase.
The financial measures discussed below include both GAAP and adjusted (non-GAAP) financial measures. Please see reconciliations for our non-GAAP metrics included in the accompanying financial tables.
“The fourth quarter of 2020 was a pivotal period for us where we launched our online car buying platform Clicklane and also unveiled our five year strategic plan to reach $20 billion of revenue by 2025,” said David Hult, Asbury’s President and Chief Executive Officer. “On top of this, we posted the best quarterly results in our company’s history with adjusted earnings of $4.44 per share, up 76%.”
The Company reported adjusted net income (a non-GAAP measure) for the fourth quarter 2020 of $86.2 million ($4.44 per diluted share) compared to $48.9 million ($2.53 per diluted share) in the prior year quarter, a 76% increase.
Net income for the fourth quarter 2020 was adjusted for a $3.9 million pre-tax gain from a dealership divestiture ($0.15 per diluted share). Net income for the fourth quarter 2019 was adjusted for a $7.1 million pre-tax charge for franchise rights impairments ($0.27 per diluted share), a $0.6 million pre-tax charge for real estate related charges ($0.03 per diluted share), and a $0.6 million pre-tax gain from a legal settlement ($0.03 per diluted share).
1
The Company reported total revenue for the fourth quarter of $2.2 billion, up 18% from the prior year period; total revenue on a same-store basis was up 1% from the prior year period.
Fourth Quarter 2020 Operational Summary
Total company:
•Total revenue increased 18%; gross profit increased 23%
•Gross margin increased 80 basis points to 16.7%
•EPS increased 103%
•SG&A as a percentage of gross profit decreased 690 basis points to 61.4%
•Operating margin increased 180 basis points to 6.0%
•Adjusted EPS increased 76%
Same store (non-GAAP measure):
•Total revenue increased 1%; gross profit increased 4%
•Gross margin increased 60 basis points to 16.6%
•New vehicle revenue was flat; gross profit increased 40%
•Used vehicle retail revenue was flat; gross profit increased 10%
•Finance and insurance revenue and gross profit was flat
•Parts and service revenue decreased 4%; gross profit decreased 4%
•New gross profit per vehicle increased 49% to $2,385
•Used retail gross profit per vehicle increased 21% to $1,741
•Finance and insurance gross profit per vehicle increased 7% to $1,817
Strategic Highlights:
•Launched the innovative platform Clicklane, which is an evolution of Asbury's PushStart tool and allows for consumers to complete the entire car-buying transaction online within 15 minutes
•Unveiled a five-year strategic plan to reach $20 billion of revenue by 2025 (20% compound annual growth), expand operating margins, and grow EPS in excess of revenue growth
•Divested a Ford dealership with approximately $50 million in annual revenues
•Ended the quarter with total liquidity of $462 million and a pro forma net leverage ratio of 2.1x
For the full year 2020, the Company reported net income of $254.4 million ($13.18 per diluted share) compared to $184.4 million ($9.55 per diluted share) in the prior year period. Adjusted net income (a non-GAAP measure) for 2020 was $248.8 million ($12.90 per diluted share) compared to $182.5 million ($9.46 per diluted share) in the prior year period, a 36% increase in adjusted EPS.
Total revenue for the full year 2020 was $7.1 billion, down 1% from the prior year period; total revenue on a same-store basis was down 7% from the prior year period.
Additional commentary regarding the fourth quarter results will be provided during the earnings conference call on February 2, 2021 at 10:00 a.m. The conference call will be simulcast live on the internet and can be accessed at www.asburyauto.com. A replay will be available at these sites for 30 days.
In addition, a live audio of the call will be accessible to the public by calling (866) 248-8441 (domestic), or (323) 347-3278 (international); passcode – 1603957. 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 – 1603957.
2
About Asbury Automotive Group, Inc.
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 91 dealerships, consisting of 112 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, expectations, projections regarding the expected benefits of Clicklane, management's plans, projections and objectives for future operations, scale and performance, integration plans and expected synergies from acquisitions, our financial position, results of operations, market position, capital allocation strategy, business strategy and expectations of our management with respect to, among other things: changes in general economic and business conditions, including the impact of COVID-19 on the automotive industry in general, the automotive retail industry in particular and our customers, suppliers, vendors and business partners; our relationships with vehicle manufacturers; our ability to improve our margins; operating cash flows and availability of capital; capital expenditures; the amount of our indebtedness; the completion of any pending and future acquisitions and divestitures; future return targets; future annual savings; general economic trends, including consumer confidence levels, interest rates, and fuel prices; and automotive retail industry trends. The following are some but not all of the factors that could cause actual results or events to differ materially from those anticipated, including: 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 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 risks, uncertainties and other factors are disclosed in Asbury's Annual Report on Form 10-K, subsequent quarterly reports on Form 10-Q and other periodic and current reports filed with the Securities and Exchange Commission from time to time. These forward-looking statements and such risks, uncertainties and other factors speak only as of the date of this press release. We expressly disclaim any obligation or undertaking to disseminate any updates or revisions to any forward-looking statement contained herein, 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 December 31, | Increase (Decrease) | % Change | |||||||||||||||||||||
| 2020 | 2019 | ||||||||||||||||||||||
| REVENUE: | |||||||||||||||||||||||
| New vehicle | $ | 1,225.6 | $ | 1,039.4 | $ | 186.2 | 18 | % | |||||||||||||||
| Used vehicle: | |||||||||||||||||||||||
| Retail | 564.0 | 491.5 | 72.5 | 15 | % | ||||||||||||||||||
| Wholesale | 95.3 | 49.7 | 45.6 | 92 | % | ||||||||||||||||||
| Total used vehicle | 659.3 | 541.2 | 118.1 | 22 | % | ||||||||||||||||||
| Parts and service | 261.8 | 229.7 | 32.1 | 14 | % | ||||||||||||||||||
| Finance and insurance, net | 87.3 | 83.7 | 3.6 | 4 | % | ||||||||||||||||||
| TOTAL REVENUE | 2,234.0 | 1,894.0 | 340.0 | 18 | % | ||||||||||||||||||
| GROSS PROFIT: | |||||||||||||||||||||||
| New vehicle | 82.9 | 44.7 | 38.2 | 85 | % | ||||||||||||||||||
| Used vehicle: | |||||||||||||||||||||||
| Retail | 39.2 | 30.9 | 8.3 | 27 | % | ||||||||||||||||||
| Wholesale | 0.4 | 0.4 | — | — | % | ||||||||||||||||||
| Total used vehicle | 39.6 | 31.3 | 8.3 | 27 | % | ||||||||||||||||||
| Parts and service | 162.5 | 141.9 | 20.6 | 15 | % | ||||||||||||||||||
| Finance and insurance, net | 87.3 | 83.7 | 3.6 | 4 | % | ||||||||||||||||||
| TOTAL GROSS PROFIT | 372.3 | 301.6 | 70.7 | 23 | % | ||||||||||||||||||
| OPERATING EXPENSES: | |||||||||||||||||||||||
| Selling, general and administrative | 228.5 | 206.1 | 22.4 | 11 | % | ||||||||||||||||||
| Depreciation and amortization | 9.5 | 9.5 | — | — | % | ||||||||||||||||||
| Franchise rights impairment | — | 7.1 | (7.1) | (100) | % | ||||||||||||||||||
| Other operating (income) expense, net | (0.2) | (0.2) | — | — | % | ||||||||||||||||||
| INCOME FROM OPERATIONS | 134.5 | 79.1 | 55.4 | 70 | % | ||||||||||||||||||
| OTHER EXPENSES (INCOME): | |||||||||||||||||||||||
| Floor plan interest expense | 3.6 | 8.2 | (4.6) | (56) | % | ||||||||||||||||||
| Other interest expense, net | 15.0 | 13.7 | 1.3 | 9 | % | ||||||||||||||||||
| Gain on dealership divestitures, net | (3.9) | — | (3.9) | — | % | ||||||||||||||||||
| Total other expenses, net | 14.7 | 21.9 | (7.2) | (33) | % | ||||||||||||||||||
| INCOME BEFORE INCOME TAXES | 119.8 | 57.2 | 62.6 | 109 | % | ||||||||||||||||||
| Income tax expense | 30.7 | 13.6 | 17.1 | 126 | % | ||||||||||||||||||
| NET INCOME | $ | 89.1 | $ | 43.6 | $ | 45.5 | 104 | % | |||||||||||||||
| EARNINGS PER COMMON SHARE: | |||||||||||||||||||||||
| Basic— | |||||||||||||||||||||||
| Net income | $ | 4.64 | $ | 2.28 | $ | 2.36 | 104 | % | |||||||||||||||
| Diluted— | |||||||||||||||||||||||
| Net income | $ | 4.59 | $ | 2.26 | $ | 2.33 | 103 | % | |||||||||||||||
| WEIGHTED AVERAGE COMMON SHARES OUTSTANDING: | |||||||||||||||||||||||
| Basic | 19.2 | 19.1 | 0.1 | ||||||||||||||||||||
| Restricted stock | 0.1 | 0.1 | — | ||||||||||||||||||||
| Performance share units | 0.1 | 0.1 | — | ||||||||||||||||||||
| Diluted | 19.4 | 19.3 | 0.1 | ||||||||||||||||||||
______________________________
NM—Not Meaningful
4
ASBURY AUTOMOTIVE GROUP, INC.
KEY OPERATING HIGHLIGHTS (In millions, except per unit data)
(Unaudited)
| For the Three Months Ended December 31, | Increase (Decrease) | % Change | |||||||||||||||||||||
| 2020 | 2019 | ||||||||||||||||||||||
| Unit sales | |||||||||||||||||||||||
| New vehicle: | |||||||||||||||||||||||
| Luxury | 9,751 | 7,055 | 2,696 | 38 | % | ||||||||||||||||||
| Import | 14,315 | 15,723 | (1,408) | (9) | % | ||||||||||||||||||
| Domestic | 4,507 | 4,829 | (322) | (7) | % | ||||||||||||||||||
| Total new vehicle | 28,573 | 27,607 | 966 | 3 | % | ||||||||||||||||||
| Used vehicle retail | 21,386 | 22,272 | (886) | (4) | % | ||||||||||||||||||
| Used to new ratio | 74.8 | % | 80.7 | % | (590) bps | ||||||||||||||||||
| Average selling price | |||||||||||||||||||||||
| New vehicle | $ | 42,894 | $ | 37,650 | $ | 5,244 | 14 | % | |||||||||||||||
| Used vehicle retail | 26,372 | 22,068 | 4,304 | 20 | % | ||||||||||||||||||
| Average gross profit per unit | |||||||||||||||||||||||
| New vehicle: | |||||||||||||||||||||||
| Luxury | $ | 5,292 | $ | 3,586 | $ | 1,706 | 48 | % | |||||||||||||||
| Import | 1,202 | 674 | 528 | 78 | % | ||||||||||||||||||
| Domestic | 3,128 | 1,822 | 1,306 | 72 | % | ||||||||||||||||||
| Total new vehicle | 2,901 | 1,619 | 1,282 | 79 | % | ||||||||||||||||||
| Used vehicle retail | 1,833 | 1,387 | 446 | 32 | % | ||||||||||||||||||
| Finance and insurance, net | 1,747 | 1,678 | 69 | 4 | % | ||||||||||||||||||
| Front end yield (1) | 4,191 | 3,194 | 997 | 31 | % | ||||||||||||||||||
| Gross margin | |||||||||||||||||||||||
| New vehicle: | |||||||||||||||||||||||
| Luxury | 8.8 | % | 6.5 | % | 230 bps | ||||||||||||||||||
| Import | 3.9 | % | 2.3 | % | 160 bps | ||||||||||||||||||
| Domestic | 6.9 | % | 4.4 | % | 250 bps | ||||||||||||||||||
| Total new vehicle | 6.8 | % | 4.3 | % | 250 bps | ||||||||||||||||||
| Used vehicle retail | 7.0 | % | 6.3 | % | 70 bps | ||||||||||||||||||
| Parts and service | 62.1 | % | 61.8 | % | 30 bps | ||||||||||||||||||
| Total gross profit margin | 16.7 | % | 15.9 | % | 80 bps | ||||||||||||||||||
| SG&A metrics | |||||||||||||||||||||||
| Rent expense | $ | 11.4 | $ | 6.8 | $ | 4.6 | 68 | % | |||||||||||||||
| SG&A as a percentage of gross profit | 61.4 | % | 68.3 | % | (690) bps | ||||||||||||||||||
| SG&A, excluding rent expense as a percentage of gross profit | 58.3 | % | 66.1 | % | (780) bps | ||||||||||||||||||
| Operating metrics | |||||||||||||||||||||||
| Income from operations as a percentage of revenue | 6.0 | % | 4.2 | % | 180 bps | ||||||||||||||||||
| Income from operations as a percentage of gross profit | 36.1 | % | 26.2 | % | 990 bps | ||||||||||||||||||
| Adjusted income from operations as a percentage of revenue | 6.0 | % | 4.6 | % | 140 bps | ||||||||||||||||||
| Adjusted income from operations as a percentage of gross profit | 36.1 | % | 28.6 | % | 750 bps | ||||||||||||||||||
| Revenue mix | |||||||||||||||||||||||
| New vehicle | 54.9 | % | 54.9 | % | |||||||||||||||||||
| Used vehicle retail | 25.2 | % | 26.0 | % | |||||||||||||||||||
| Used vehicle wholesale | 4.3 | % | 2.6 | % | |||||||||||||||||||
| Parts and service | 11.7 | % | 12.1 | % | |||||||||||||||||||
| Finance and insurance | 3.9 | % | 4.4 | % | |||||||||||||||||||
| Total revenue | 100.0 | % | 100.0 | % | |||||||||||||||||||
| Gross profit mix | |||||||||||||||||||||||
| New vehicle | 22.3 | % | 14.8 | % | |||||||||||||||||||
| Used vehicle retail | 10.6 | % | 10.3 | % | |||||||||||||||||||
| Used vehicle wholesale | 0.1 | % | 0.1 | % | |||||||||||||||||||
| Parts and service | 43.6 | % | 47.0 | % | |||||||||||||||||||
| Finance and insurance | 23.4 | % | 27.8 | % | |||||||||||||||||||
| Total gross profit | 100.0 | % | 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 December 31, | Increase (Decrease) | % Change | |||||||||||||||||||||
| 2020 | 2019 | ||||||||||||||||||||||
| Revenue | |||||||||||||||||||||||
| New vehicle: | |||||||||||||||||||||||
| Luxury | $ | 356.3 | $ | 375.1 | $ | (18.8) | (5) | % | |||||||||||||||
| Import | 435.1 | 427.1 | 8.0 | 2 | % | ||||||||||||||||||
| Domestic | 182.6 | 173.4 | 9.2 | 5 | % | ||||||||||||||||||
| Total new vehicle | 974.0 | 975.6 | (1.6) | — | % | ||||||||||||||||||
| Used Vehicle: | |||||||||||||||||||||||
| Retail | 452.3 | 450.2 | 2.1 | — | % | ||||||||||||||||||
| Wholesale | 64.0 | 46.4 | 17.6 | 38 | % | ||||||||||||||||||
| Total used vehicle | 516.3 | 496.6 | 19.7 | 4 | % | ||||||||||||||||||
| Parts and service | 207.7 | 215.5 | (7.8) | (4) | % | ||||||||||||||||||
| Finance and insurance | 78.2 | 78.3 | (0.1) | — | % | ||||||||||||||||||
| Total revenue | $ | 1,776.2 | $ | 1,766.0 | $ | 10.2 | 1 | % | |||||||||||||||
| Gross profit | |||||||||||||||||||||||
| New vehicle: | |||||||||||||||||||||||
| Luxury | $ | 28.5 | $ | 24.4 | $ | 4.1 | 17 | % | |||||||||||||||
| Import | 17.4 | 10.0 | 7.4 | 74 | % | ||||||||||||||||||
| Domestic | 12.5 | 7.3 | 5.2 | 71 | % | ||||||||||||||||||
| Total new vehicle | 58.4 | 41.7 | 16.7 | 40 | % | ||||||||||||||||||
| Used Vehicle: | |||||||||||||||||||||||
| Retail | 32.3 | 29.3 | 3.0 | 10 | % | ||||||||||||||||||
| Wholesale | (0.8) | 0.7 | (1.5) | NM | |||||||||||||||||||
| Total used vehicle | 31.5 | 30.0 | 1.5 | 5 | % | ||||||||||||||||||
| Parts and service: | |||||||||||||||||||||||
| Customer pay | 73.5 | 76.0 | (2.5) | (3) | % | ||||||||||||||||||
| Warranty | 20.3 | 21.3 | (1.0) | (5) | % | ||||||||||||||||||
| Wholesale parts | 5.4 | 5.7 | (0.3) | (5) | % | ||||||||||||||||||
| Parts and service, excluding reconditioning and preparation | 99.2 | 103.0 | (3.8) | (4) | % | ||||||||||||||||||
| Reconditioning and preparation | 28.3 | 30.1 | (1.8) | (6) | % | ||||||||||||||||||
| Total parts and service | 127.5 | 133.1 | (5.6) | (4) | % | ||||||||||||||||||
| Finance and insurance | 78.2 | 78.3 | (0.1) | — | % | ||||||||||||||||||
| Total gross profit | $ | 295.6 | $ | 283.1 | $ | 12.5 | 4 | % | |||||||||||||||
| SG&A expense | $ | 188.2 | $ | 194.3 | $ | (6.1) | (3) | % | |||||||||||||||
| SG&A expense as a percentage of gross profit | 63.7 | % | 68.6 | % | (490) 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 December 31, | Increase (Decrease) | % Change | |||||||||||||||||||||
| 2020 | 2019 | ||||||||||||||||||||||
| Unit sales | |||||||||||||||||||||||
| New vehicle: | |||||||||||||||||||||||
| Luxury | 6,146 | 6,792 | (646) | (10) | % | ||||||||||||||||||
| Import | 14,287 | 14,932 | (645) | (4) | % | ||||||||||||||||||
| Domestic | 4,058 | 4,247 | (189) | (4) | % | ||||||||||||||||||
| Total new vehicle | 24,491 | 25,971 | (1,480) | (6) | % | ||||||||||||||||||
| Used vehicle retail | 18,551 | 20,346 | (1,795) | (9) | % | ||||||||||||||||||
| Used to new ratio | 75.7 | % | 78.3 | % | (260) bps | ||||||||||||||||||
| Average selling price | |||||||||||||||||||||||
| New vehicle | $ | 39,770 | $ | 37,565 | $ | 2,205 | 6 | % | |||||||||||||||
| Used vehicle retail | 24,381 | 22,127 | 2,254 | 10 | % | ||||||||||||||||||
| Average gross profit per unit | |||||||||||||||||||||||
| New vehicle: | |||||||||||||||||||||||
| Luxury | $ | 4,637 | $ | 3,592 | $ | 1,045 | 29 | % | |||||||||||||||
| Import | 1,218 | 670 | 548 | 82 | % | ||||||||||||||||||
| Domestic | 3,080 | 1,719 | 1,361 | 79 | % | ||||||||||||||||||
| Total new vehicle | 2,385 | 1,606 | 779 | 49 | % | ||||||||||||||||||
| Used vehicle retail | 1,741 | 1,440 | 301 | 21 | % | ||||||||||||||||||
| Finance and insurance, net | 1,817 | 1,691 | 126 | 7 | % | ||||||||||||||||||
| Front end yield (1) | 3,924 | 3,223 | 701 | 22 | % | ||||||||||||||||||
| Gross margin | |||||||||||||||||||||||
| New vehicle: | |||||||||||||||||||||||
| Luxury | 8.0 | % | 6.5 | % | 150 bps | ||||||||||||||||||
| Import | 4.0 | % | 2.3 | % | 170 bps | ||||||||||||||||||
| Domestic | 6.8 | % | 4.2 | % | 260 | bps | |||||||||||||||||
| Total new vehicle | 6.0 | % | 4.3 | % | 170 bps | ||||||||||||||||||
| Used vehicle retail | 7.1 | % | 6.5 | % | 60 | bps | |||||||||||||||||
| Parts and service: | |||||||||||||||||||||||
| Parts and service, excluding reconditioning and preparation | 47.8 | % | 47.8 | % | — bps | ||||||||||||||||||
| Parts and service, including reconditioning and preparation | 61.4 | % | 61.8 | % | (40) bps | ||||||||||||||||||
| Total gross profit margin | 16.6 | % | 16.0 | % | 60 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 Twelve Months Ended December 31, | Increase (Decrease) | % Change | |||||||||||||||||||||
| 2020 | 2019 | ||||||||||||||||||||||
| REVENUE: | |||||||||||||||||||||||
| New vehicle | $ | 3,767.4 | $ | 3,863.3 | $ | (95.9) | (2) | % | |||||||||||||||
| Used vehicle: | |||||||||||||||||||||||
| Retail | 1,930.0 | 1,941.3 | (11.3) | (1) | % | ||||||||||||||||||
| Wholesale | 239.5 | 190.3 | 49.2 | 26 | % | ||||||||||||||||||
| Total used vehicle | 2,169.5 | 2,131.6 | 37.9 | 2 | % | ||||||||||||||||||
| Parts and service | 889.8 | 899.4 | (9.6) | (1) | % | ||||||||||||||||||
| Finance and insurance, net | 305.1 | 316.0 | (10.9) | (3) | % | ||||||||||||||||||
| TOTAL REVENUE | 7,131.8 | 7,210.3 | (78.5) | (1) | % | ||||||||||||||||||
| GROSS PROFIT: | |||||||||||||||||||||||
| New vehicle | 218.5 | 159.5 | 59.0 | 37 | % | ||||||||||||||||||
| Used vehicle: | |||||||||||||||||||||||
| Retail | 145.3 | 133.1 | 12.2 | 9 | % | ||||||||||||||||||
| Wholesale | 11.3 | 1.0 | 10.3 | NM | |||||||||||||||||||
| Total used vehicle | 156.6 | 134.1 | 22.5 | 17 | % | ||||||||||||||||||
| Parts and service | 543.2 | 559.3 | (16.1) | (3) | % | ||||||||||||||||||
| Finance and insurance, net | 305.1 | 316.0 | (10.9) | (3) | % | ||||||||||||||||||
| TOTAL GROSS PROFIT | 1,223.4 | 1,168.9 | 54.5 | 5 | % | ||||||||||||||||||
| OPERATING EXPENSES: | |||||||||||||||||||||||
| Selling, general and administrative | 781.9 | 799.8 | (17.9) | (2) | % | ||||||||||||||||||
| Depreciation and amortization | 38.5 | 36.2 | 2.3 | 6 | % | ||||||||||||||||||
| Franchise rights impairment | 23.0 | 7.1 | 15.9 | NM | |||||||||||||||||||
| Other operating expense, net | 9.2 | 0.8 | 8.4 | NM | |||||||||||||||||||
| INCOME FROM OPERATIONS | 370.8 | 325.0 | 45.8 | 14 | % | ||||||||||||||||||
| OTHER EXPENSES (INCOME): | |||||||||||||||||||||||
| Floor plan interest expense | 17.7 | 37.9 | (20.2) | (53) | % | ||||||||||||||||||
| Other interest expense, net | 56.7 | 54.9 | 1.8 | 3 | % | ||||||||||||||||||
| Loss on extinguishment of long-term debt, net | 20.6 | — | 20.6 | — | % | ||||||||||||||||||
| Gain on dealership divestitures, net | (62.3) | (11.7) | (50.6) | NM | |||||||||||||||||||
| Total other expenses, net | 32.7 | 81.1 | (48.4) | (60) | % | ||||||||||||||||||
| INCOME BEFORE INCOME TAXES | 338.1 | 243.9 | 94.2 | 39 | % | ||||||||||||||||||
| Income tax expense | 83.7 | 59.5 | 24.2 | 41 | % | ||||||||||||||||||
| NET INCOME | $ | 254.4 | $ | 184.4 | $ | 70.0 | 38 | % | |||||||||||||||
| EARNINGS PER COMMON SHARE: | |||||||||||||||||||||||
| Basic— | |||||||||||||||||||||||
| Net income | $ | 13.25 | $ | 9.65 | $ | 3.60 | 37 | % | |||||||||||||||
| Diluted— | |||||||||||||||||||||||
| Net income | $ | 13.18 | $ | 9.55 | $ | 3.63 | 38 | % | |||||||||||||||
| WEIGHTED AVERAGE COMMON SHARES OUTSTANDING: | |||||||||||||||||||||||
| Basic | 19.2 | 19.1 | 0.1 | ||||||||||||||||||||
| Restricted stock | — | 0.1 | (0.1) | ||||||||||||||||||||
| Performance share units | 0.1 | 0.1 | — | ||||||||||||||||||||
| Diluted | 19.3 | 19.3 | — | ||||||||||||||||||||
______________________________
NM—Not Meaningful
8
ASBURY AUTOMOTIVE GROUP, INC.
KEY OPERATING HIGHLIGHTS (In millions, except per unit data)
(Unaudited)
| For the Twelve Months Ended December 31, | Increase (Decrease) | % Change | |||||||||||||||||||||
| 2020 | 2019 | ||||||||||||||||||||||
| Unit sales | |||||||||||||||||||||||
| New vehicle: | |||||||||||||||||||||||
| Luxury | 25,259 | 23,988 | 1,271 | 5 | % | ||||||||||||||||||
| Import | 52,201 | 61,420 | (9,219) | (15) | % | ||||||||||||||||||
| Domestic | 17,705 | 19,835 | (2,130) | (11) | % | ||||||||||||||||||
| Total new vehicle | 95,165 | 105,243 | (10,078) | (10) | % | ||||||||||||||||||
| Used vehicle retail | 80,537 | 88,602 | (8,065) | (9) | % | ||||||||||||||||||
| Used to new ratio | 84.6 | % | 84.2 | % | 40 bps | ||||||||||||||||||
| Average selling price | |||||||||||||||||||||||
| New vehicle | $ | 39,588 | $ | 36,708 | $ | 2,880 | 8 | % | |||||||||||||||
| Used vehicle retail | 23,964 | 21,910 | 2,054 | 9 | % | ||||||||||||||||||
| Average gross profit per unit | |||||||||||||||||||||||
| New vehicle: | |||||||||||||||||||||||
| Luxury | $ | 4,501 | $ | 3,473 | $ | 1,028 | 30 | % | |||||||||||||||
| Import | 1,144 | 685 | 459 | 67 | % | ||||||||||||||||||
| Domestic | 2,547 | 1,719 | 828 | 48 | % | ||||||||||||||||||
| Total new vehicle | 2,296 | 1,516 | 780 | 51 | % | ||||||||||||||||||
| Used vehicle retail | 1,804 | 1,502 | 302 | 20 | % | ||||||||||||||||||
| Finance and insurance, net | 1,736 | 1,630 | 106 | 7 | % | ||||||||||||||||||
| Front end yield (1) | 3,807 | 3,140 | 667 | 21 | % | ||||||||||||||||||
| Gross margin | |||||||||||||||||||||||
| New vehicle: | |||||||||||||||||||||||
| Luxury | 7.8 | % | 6.3 | % | 150 bps | ||||||||||||||||||
| Import | 3.9 | % | 2.4 | % | 150 bps | ||||||||||||||||||
| Domestic | 5.9 | % | 4.3 | % | 160 bps | ||||||||||||||||||
| Total new vehicle | 5.8 | % | 4.1 | % | 170 bps | ||||||||||||||||||
| Used vehicle retail | 7.5 | % | 6.9 | % | 60 bps | ||||||||||||||||||
| Parts and service | 61.0 | % | 62.2 | % | (120) bps | ||||||||||||||||||
| Total gross profit margin | 17.2 | % | 16.2 | % | 100 bps | ||||||||||||||||||
| SG&A metrics | |||||||||||||||||||||||
| Rent expense | $ | 32.2 | $ | 27.1 | $ | 5.1 | 19 | % | |||||||||||||||
| SG&A as a percentage of gross profit | 63.9 | % | 68.4 | % | (450) bps | ||||||||||||||||||
| SG&A, excluding rent expense as a percentage of gross profit | 61.3 | % | 66.1 | % | (480) bps | ||||||||||||||||||
| Adjusted SG&A as a percentage of gross profit | 63.8 | % | 68.4 | % | (460) bps | ||||||||||||||||||
| Operating metrics | |||||||||||||||||||||||
| Income from operations as a percentage of revenue | 5.2 | % | 4.5 | % | 70 | bps | |||||||||||||||||
| Income from operations as a percentage of gross profit | 30.3 | % | 27.8 | % | 250 | bps | |||||||||||||||||
| Adjusted income from operations as a percentage of revenue | 5.7 | % | 4.6 | % | 110 | bps | |||||||||||||||||
| Adjusted income from operations as a percentage of gross profit | 33.1 | % | 28.6 | % | 450 bps | ||||||||||||||||||
| Revenue mix | |||||||||||||||||||||||
| New vehicle | 52.8 | % | 53.6 | % | |||||||||||||||||||
| Used vehicle retail | 27.0 | % | 26.9 | % | |||||||||||||||||||
| Used vehicle wholesale | 3.4 | % | 2.6 | % | |||||||||||||||||||
| Parts and service | 12.5 | % | 12.5 | % | |||||||||||||||||||
| Finance and insurance | 4.3 | % | 4.4 | % | |||||||||||||||||||
| Total revenue | 100.0 | % | 100.0 | % | |||||||||||||||||||
| Gross profit mix | |||||||||||||||||||||||
| New vehicle | 17.9 | % | 13.6 | % | |||||||||||||||||||
| Used vehicle retail | 11.9 | % | 11.5 | % | |||||||||||||||||||
| Used vehicle wholesale | 0.9 | % | 0.1 | % | |||||||||||||||||||
| Parts and service | 44.4 | % | 47.8 | % | |||||||||||||||||||
| Finance and insurance | 24.9 | % | 27.0 | % | |||||||||||||||||||
| Total gross profit | 100.0 | % | 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 Twelve Months Ended December 31, | Increase (Decrease) | % Change | |||||||||||||||||||||
| 2020 | 2019 | ||||||||||||||||||||||
| Revenue | |||||||||||||||||||||||
| New vehicle: | |||||||||||||||||||||||
| Luxury | $ | 1,126.3 | $ | 1,271.2 | $ | (144.9) | (11) | % | |||||||||||||||
| Import | 1,472.7 | 1,602.5 | (129.8) | (8) | % | ||||||||||||||||||
| Domestic | 648.1 | 690.5 | (42.4) | (6) | % | ||||||||||||||||||
| Total new vehicle | 3,247.1 | 3,564.2 | (317.1) | (9) | % | ||||||||||||||||||
| Used Vehicle: | |||||||||||||||||||||||
| Retail | 1,685.8 | 1,772.4 | (86.6) | (5) | % | ||||||||||||||||||
| Wholesale | 190.7 | 175.5 | 15.2 | 9 | % | ||||||||||||||||||
| Total used vehicle | 1,876.5 | 1,947.9 | (71.4) | (4) | % | ||||||||||||||||||
| Parts and service | 775.4 | 840.0 | (64.6) | (8) | % | ||||||||||||||||||
| Finance and insurance, net | 279.4 | 292.3 | (12.9) | (4) | % | ||||||||||||||||||
| Total revenue | $ | 6,178.4 | $ | 6,644.4 | $ | (466.0) | (7) | % | |||||||||||||||
| Gross profit | |||||||||||||||||||||||
| New vehicle: | |||||||||||||||||||||||
| Luxury | $ | 81.8 | $ | 80.1 | $ | 1.7 | 2 | % | |||||||||||||||
| Import | 56.3 | 39.1 | 17.2 | 44 | % | ||||||||||||||||||
| Domestic | 37.8 | 28.8 | 9.0 | 31 | % | ||||||||||||||||||
| Total new vehicle | 175.9 | 148.0 | 27.9 | 19 | % | ||||||||||||||||||
| Used Vehicle: | |||||||||||||||||||||||
| Retail | 127.4 | 124.1 | 3.3 | 3 | % | ||||||||||||||||||
| Wholesale | 9.1 | 1.6 | 7.5 | NM | |||||||||||||||||||
| Total used vehicle | 136.5 | 125.7 | 10.8 | 9 | % | ||||||||||||||||||
| Parts and service: | |||||||||||||||||||||||
| Customer pay | 269.5 | 298.7 | (29.2) | (10) | % | ||||||||||||||||||
| Warranty | 76.7 | 83.4 | (6.7) | (8) | % | ||||||||||||||||||
| Wholesale parts | 19.7 | 21.8 | (2.1) | (10) | % | ||||||||||||||||||
| Parts and service, excluding reconditioning and preparation | 365.9 | 403.9 | (38.0) | (9) | % | ||||||||||||||||||
| Reconditioning and preparation | 104.9 | 118.4 | (13.5) | (11) | % | ||||||||||||||||||
| Total parts and service | 470.8 | 522.3 | (51.5) | (10) | % | ||||||||||||||||||
| Finance and insurance | 279.4 | 292.3 | (12.9) | (4) | % | ||||||||||||||||||
| Total gross profit | $ | 1,062.6 | $ | 1,088.3 | $ | (25.7) | (2) | % | |||||||||||||||
| SG&A expense | $ | 692.3 | $ | 746.9 | $ | (54.6) | (7) | % | |||||||||||||||
| SG&A expense as a percentage of gross profit | 65.2 | % | 68.6 | % | (340) 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 Twelve Months Ended December 31, | Increase (Decrease) | % Change | |||||||||||||||||||||
| 2020 | 2019 | ||||||||||||||||||||||
| Unit sales | |||||||||||||||||||||||
| New vehicle: | |||||||||||||||||||||||
| Luxury | 20,009 | 23,085 | (3,076) | (13) | % | ||||||||||||||||||
| Import | 49,744 | 56,707 | (6,963) | (12) | % | ||||||||||||||||||
| Domestic | 15,156 | 17,205 | (2,049) | (12) | % | ||||||||||||||||||
| Total new vehicle | 84,909 | 96,997 | (12,088) | (12) | % | ||||||||||||||||||
| Used vehicle retail | 72,468 | 80,717 | (8,249) | (10) | % | ||||||||||||||||||
| Used to new ratio | 85.3 | % | 83.2 | % | 210 bps | ||||||||||||||||||
| Average selling price | |||||||||||||||||||||||
| New vehicle | $ | 38,242 | $ | 36,745 | $ | 1,497 | 4 | % | |||||||||||||||
| Used vehicle retail | 23,263 | 21,958 | 1,305 | 6 | % | ||||||||||||||||||
| Average gross profit per unit | |||||||||||||||||||||||
| New vehicle: | |||||||||||||||||||||||
| Luxury | $ | 4,088 | $ | 3,470 | $ | 618 | 18 | % | |||||||||||||||
| Import | 1,132 | 690 | 442 | 64 | % | ||||||||||||||||||
| Domestic | 2,494 | 1,674 | 820 | 49 | % | ||||||||||||||||||
| Total new vehicle | 2,072 | 1,526 | 546 | 36 | % | ||||||||||||||||||
| Used vehicle retail | 1,758 | 1,537 | 221 | 14 | % | ||||||||||||||||||
| Finance and insurance, net | 1,775 | 1,645 | 130 | 8 | % | ||||||||||||||||||
| Front end yield (1) | 3,703 | 3,176 | 527 | 17 | % | ||||||||||||||||||
| Gross margin | |||||||||||||||||||||||
| New vehicle: | |||||||||||||||||||||||
| Luxury | 7.3 | % | 6.3 | % | 100 bps | ||||||||||||||||||
| Import | 3.8 | % | 2.4 | % | 140 bps | ||||||||||||||||||
| Domestic | 5.8 | % | 4.2 | % | 160 bps | ||||||||||||||||||
| Total new vehicle | 5.4 | % | 4.2 | % | 120 bps | ||||||||||||||||||
| Used vehicle retail | 7.6 | % | 7.0 | % | 60 bps | ||||||||||||||||||
| Parts and service: | |||||||||||||||||||||||
| Parts and service, excluding reconditioning and preparation | 47.2 | % | 48.1 | % | (90) bps | ||||||||||||||||||
| Parts and service, including reconditioning and preparation | 60.7 | % | 62.2 | % | (150) bps | ||||||||||||||||||
| Total gross profit margin | 17.2 | % | 16.4 | % | 80 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)
| December 31, 2020 | December 31, 2019 | Increase (Decrease) | % Change | ||||||||||||||||||||
| SELECTED BALANCE SHEET DATA | |||||||||||||||||||||||
| Cash and cash equivalents | $ | 1.4 | $ | 3.5 | $ | (2.1) | (60) | % | |||||||||||||||
| New vehicle inventory (a) | 640.0 | 802.6 | (162.6) | (20) | % | ||||||||||||||||||
| Used vehicle inventory (b) | 188.5 | 140.1 | 48.4 | 35 | % | ||||||||||||||||||
| Parts inventory (c) | 46.7 | 42.3 | 4.4 | 10 | % | ||||||||||||||||||
| Total current assets | 1,405.7 | 1,602.6 | (196.9) | (12) | % | ||||||||||||||||||
| Floor plan notes payable (d) | 702.2 | 788.0 | (85.8) | (11) | % | ||||||||||||||||||
| Total current liabilities | 1,223.4 | 1,247.0 | (23.6) | (2) | % | ||||||||||||||||||
| CAPITALIZATION: | |||||||||||||||||||||||
| Long-term debt (including current portion) (e) | $ | 1,201.8 | $ | 939.4 | $ | 262.4 | 28 | % | |||||||||||||||
| Shareholders' equity | 905.5 | 646.3 | 259.2 | 40 | % | ||||||||||||||||||
| Total | $ | 2,107.3 | $ | 1,585.7 | $ | 521.6 | 33 | % | |||||||||||||||
_____________________________
(a) Excluding $56.3 million of new vehicle inventory classified as Assets held for sale as of December 31, 2019
(b) Excluding $8.6 million of used vehicle inventory classified as Assets held for sale as of December 31, 2019
(c) Excluding $2.8 million of parts inventory classified as Assets held for sale as of December 31, 2019
(d) Excluding $62.8 million of Floor plan notes payable classified as Liabilities associated with assets held for sale as of December 31, 2019
(e) Excluding $8.9 million and $28.1 million of Long-term debt classified as Liabilities associated with assets held for sale as of December 31, 2020 and December 31, 2019, respectively
| December 31, 2020 | September 30, 2020 | December 31, 2019 | |||||||||||||||
| DAYS SUPPLY | |||||||||||||||||
| New vehicle inventory | 40 | 47 | 66 | ||||||||||||||
| Used vehicle inventory | 31 | 35 | 29 | ||||||||||||||
_____________________________
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 Twelve Months Ended December 31, | |||||||||||
| 2020 | 2019 | ||||||||||
| Luxury: | |||||||||||
| Mercedes-Benz | 10 | % | 7 | % | |||||||
| Lexus | 9 | % | 7 | % | |||||||
| BMW | 6 | % | 6 | % | |||||||
| Acura | 4 | % | 4 | % | |||||||
| Infiniti | 2 | % | 3 | % | |||||||
| Other luxury | 8 | % | 7 | % | |||||||
| Total luxury | 39 | % | 34 | % | |||||||
| Imports: | |||||||||||
| Honda | 16 | % | 18 | % | |||||||
| Toyota | 12 | % | 13 | % | |||||||
| Nissan | 5 | % | 8 | % | |||||||
| Other imports | 8 | % | 6 | % | |||||||
| Total imports | 41 | % | 45 | % | |||||||
| Domestic: | |||||||||||
| Ford | 8 | % | 9 | % | |||||||
| Chevrolet | 5 | % | 6 | % | |||||||
| Dodge | 4 | % | 3 | % | |||||||
| Other domestics | 3 | % | 3 | % | |||||||
| Total domestic | 20 | % | 21 | % | |||||||
| Total New Vehicle Revenue | 100 | % | 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 "Pro forma 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 | |||||||||||
| December 31, 2020 | September 30, 2020 | ||||||||||
| (Dollars in millions) | |||||||||||
| Adjusted leverage ratio: | |||||||||||
| Long-term debt (including current portion) | $ | 1,201.8 | $ | 1,223.8 | |||||||
| Debt included in Liabilities held for sale | 8.9 | 16.6 | |||||||||
| Cash and floor plan offset | (86.8) | (43.9) | |||||||||
| Availability under our used vehicle revolving floor plan facility | (137.8) | (103.7) | |||||||||
| Adjusted long-term net debt | $ | 986.1 | $ | 1,092.8 | |||||||
| Calculation of earnings before interest, taxes, depreciation and amortization ("EBITDA"): | |||||||||||
| Net Income | $ | 254.4 | $ | 208.9 | |||||||
| Depreciation and amortization | 38.5 | 38.5 | |||||||||
| Income tax expense | 83.7 | 66.7 | |||||||||
| Swap and other interest expense | 57.6 | 56.3 | |||||||||
| Earnings before interest, taxes, depreciation and amortization ("EBITDA") | $ | 434.2 | $ | 370.4 | |||||||
| Non-core items - expense (income): | |||||||||||
| Gain on dealership divestitures | $ | (62.3) | $ | (58.4) | |||||||
| Legal settlements | (2.1) | (2.7) | |||||||||
| Gain on sale of real estate | (0.3) | (0.3) | |||||||||
| Franchise rights impairment | 23.0 | 30.1 | |||||||||
| Real estate-related charges | 0.7 | 1.3 | |||||||||
| Park Place related costs | 12.9 | 12.9 | |||||||||
| Loss on debt extinguishment | 20.7 | 20.7 | |||||||||
| Total non-core items | (7.4) | 3.6 | |||||||||
| Adjusted EBITDA | $ | 426.8 | $ | 374.0 | |||||||
| Pro forma impact of acquisitions and divestitures on EBITDA | $ | 53.1 | $ | 77.5 | |||||||
| Pro forma Adjusted EBITDA | $ | 479.9 | $ | 451.5 | |||||||
| Pro forma Adjusted net leverage ratio | 2.1 | 2.4 | |||||||||
15
| For the Three Months Ended December 31, | |||||||||||
| 2020 | 2019 | ||||||||||
| (In millions, except per share data) | |||||||||||
| Adjusted income from operations: | |||||||||||
| Income from operations | $ | 134.5 | $ | 79.1 | |||||||
| Franchise rights impairment | — | 7.1 | |||||||||
| Legal settlements | — | (0.6) | |||||||||
| Real estate-related charges | — | 0.6 | |||||||||
| Adjusted income from operations | $ | 134.5 | $ | 86.2 | |||||||
| Adjusted net income: | |||||||||||
| Net income | $ | 89.1 | $ | 43.6 | |||||||
| Non-core items - (income) expense: | |||||||||||
| Franchise rights impairment | — | 7.1 | |||||||||
| Gain on dealership divestiture | (3.9) | — | |||||||||
| Legal settlements | — | (0.6) | |||||||||
| Real estate-related charges | — | 0.6 | |||||||||
| Income tax effect on non-core items above | 1.0 | (1.8) | |||||||||
| Total non-core items | (2.9) | 5.3 | |||||||||
| Adjusted net income | $ | 86.2 | $ | 48.9 | |||||||
| Adjusted diluted earnings per share (EPS): | |||||||||||
| Diluted EPS | $ | 4.59 | $ | 2.26 | |||||||
| Total non-core items | (0.15) | 0.27 | |||||||||
| Adjusted diluted EPS | $ | 4.44 | $ | 2.53 | |||||||
| Weighted average common shares outstanding - diluted | 19.4 | 19.3 | |||||||||
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| For the Twelve Months Ended December 31, | |||||||||||
| 2020 | 2019 | ||||||||||
| (In millions, except per share data) | |||||||||||
| Adjusted income from operations: | |||||||||||
| Income from operations | $ | 370.8 | $ | 325.0 | |||||||
| Legal settlements | (2.1) | (0.6) | |||||||||
| Gain on sale of real estate | (0.3) | (0.3) | |||||||||
| Real estate-related charges | 0.7 | 0.6 | |||||||||
| Park Place related costs | 11.6 | — | |||||||||
| Park Place acquisition costs | 1.3 | — | |||||||||
| Franchise rights impairment | 23.0 | 7.1 | |||||||||
| Fixed assets write-off | — | 2.4 | |||||||||
| Adjusted income from operations | $ | 405.0 | $ | 334.2 | |||||||
| Adjusted net income: | |||||||||||
| Net income | $ | 254.4 | $ | 184.4 | |||||||
| Non-core items - (income) expense: | |||||||||||
| Gain on dealership divestitures | (62.3) | (11.7) | |||||||||
| Legal settlements | (2.1) | (0.6) | |||||||||
| Gain on sale of real estate | (0.3) | (0.3) | |||||||||
| Real estate-related charges | 0.7 | 0.6 | |||||||||
| Park Place related costs | 11.6 | — | |||||||||
| Park Place acquisition costs | 1.3 | — | |||||||||
| Loss on extinguishment of debt | 20.7 | — | |||||||||
| Franchise rights impairment | 23.0 | 7.1 | |||||||||
| Fixed assets write-off | — | 2.4 | |||||||||
| Income tax effect on non-core items above | 1.9 | 0.6 | |||||||||
| Total non-core items | (5.5) | (1.9) | |||||||||
| Adjusted net income | $ | 248.9 | $ | 182.5 | |||||||
| Adjusted diluted earnings per share (EPS): | |||||||||||
| Diluted EPS | $ | 13.18 | $ | 9.55 | |||||||
| Total non-core items | (0.28) | (0.09) | |||||||||
| Adjusted diluted EPS | $ | 12.90 | $ | 9.46 | |||||||
| Weighted average common shares outstanding - diluted | 19.3 | 19.3 | |||||||||
| Adjusted Selling, general, and administrative expense: | |||||||||||
| Selling, general, and administrative expense | $ | 781.9 | $ | 799.8 | |||||||
| Park Place related acquisition costs | (1.3) | — | |||||||||
| Adjusted Selling, general, and administrative expense: | $ | 780.6 | $ | 799.8 | |||||||
17