PR Newswire | Jul 28, 2020 07:01AM EDT

07/28 06:00 CDT

Asbury Automotive Group Announces Record Second Quarter 2020 Financial ResultsRecord operating margin of 5.7%Record low SG&A as a percentage of gross profit of 62.7%Record 20% of used sales transacted online DULUTH, Ga., July 28, 2020

DULUTH, Ga., July 28, 2020 /PRNewswire/ -- Asbury Automotive Group, Inc. (NYSE: ABG), one of the largest automotive retail and service companies in the U.S., reported net income for the second quarter 2020 of $49.6 million ($2.57 per diluted share) and adjusted net income (a non-GAAP measure) of $48.7 million ($2.52 per diluted share). This compares to net income of $54.9 million ($2.84 per diluted share) and adjusted net income of $45.9 million ($2.38 per diluted share) in the prior year quarter.

Net income for the second quarter 2020 was adjusted for a $1.2 million ($0.05 per diluted share) legal settlement gain. Net income for the second quarter 2019 was adjusted for an $11.7 million ($0.45 per diluted share) gain on a dealership divestiture and a $0.3 million ($0.01 per diluted share) gain on the sale of real estate.

"We delivered a very strong quarter and proved out the resilience and the flexibility of our business model by delivering a record operating margin of 5.7% and a record low SG&A as a percentage of gross profit of 62.7% in an 11.3 million SAAR environment," said David Hult, Asbury's President and Chief Executive Officer. "Our focus on gross profit combined with our cost restructuring efforts allowed us to remain pro-active and committed to long term growth by moving forward with acquiring 12 Park Place luxury franchises in the Dallas Fort Worth Market under more favorable terms than the prior agreement. This acquisition will add approximately $1.7 billion in expected annualized revenues and transform our total portfolio to 49% luxury stores. With the addition of Park Place, Asbury will be a stronger, more diversified company," Hult continued.

"Finally, I want to thank our teammates across our store network for their unwavering commitment and emphasis on safety during this pandemic; our performance is a direct result of their hard work and service," Hult concluded.

Second Quarter 2020 Highlights

* New gross profit per vehicle up 33% to $1,924 * Used retail gross profit per vehicle up 10% to $1,717 * 20% of used sales transacted online * SG&A as a percentage of gross profit decreased 530 basis points to 62.7% * Income from operations as percentage of revenue increased 90 basis points to 5.7% * Adjusted EPS increased 6% * Entered into a definitive agreement to acquire Park Place Dealerships, one of the country's largest and most prominent luxury dealer groups * Ended the quarter with total liquidity of $747 million and a net leverage ratio of 1.5x

Additional commentary regarding the second quarter results will be provided during the earnings conference call on July 28, 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 (866) 248-8441 (domestic), or (323) 347-3612 (international); passcode - 8703938. 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 - 8703938.

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 83 dealerships, consisting of 102 franchises, representing 31 domestic and foreign brands of vehicles. Asbury also operates 24 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 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 complete and realize the expected benefits of the proposed 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.

ASBURY AUTOMOTIVE GROUP, INC.

CONSOLIDATED STATEMENTS OF INCOME (In millions, except per share data)

(Unaudited)



For the Three Months Ended June 30, Increase % (Decrease) Change 2020 2019

REVENUE:

New vehicle $761.8 $965.2 $(203.4) (21) %

Used vehicle:

Retail 412.6 486.6 (74.0) (15) %

Wholesale 34.9 47.0 (12.1) (26) %

Total used vehicle 447.5 533.6 (86.1) (16) %

Parts and service 169.2 224.5 (55.3) (25) %

Finance and insurance, net 66.6 80.2 (13.6) (17) %

TOTAL REVENUE 1,445.1 1,803.5 (358.4) (20) %

GROSS PROFIT:

New vehicle 38.6 38.3 0.3 1 %

Used vehicle:

Retail 31.6 34.7 (3.1) (9) %

Wholesale 5.5 1.2 4.3 NM

Total used vehicle 37.1 35.9 1.2 3 %

Parts and service 100.5 140.6 (40.1) (29) %

Finance and insurance, net 66.6 80.2 (13.6) (17) %

TOTAL GROSS PROFIT 242.8 295.0 (52.2) (18) %

OPERATING EXPENSES:

Selling, general and administrative 152.2 200.7 (48.5) (24) %

Depreciation and amortization 9.7 9.0 0.7 8 %

Other operating income, net (1.3) (0.6) (0.7) (117) %

INCOME FROM OPERATIONS 82.2 85.9 (3.7) (4) %

OTHER EXPENSES:

Floor plan interest expense 4.1 10.5 (6.4) (61) %

Other interest expense, net 11.8 13.6 (1.8) (13) %

Gain on divestiture - (11.7) 11.7 100 %

Total other expenses, net 15.9 12.4 3.5 28 %

INCOME BEFORE INCOME TAXES 66.3 73.5 (7.2) (10) %

Income tax expense 16.7 18.6 (1.9) (10) %

NET INCOME $49.6 $54.9 $(5.3) (10) %

EARNINGS PER COMMON SHARE:

Basic-

Net income $2.58 $2.87 $(0.29) (10) %

Diluted-

Net income $2.57 $2.84 $(0.27) (10) %

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:

Basic 19.2 19.1 0.1 1 %

Restricted stock - 0.1 (0.1) (100) %

Performance share units 0.1 0.1 - - %

Diluted 19.3 19.3 - - %



______________________________

NM-Not Meaningful

ASBURY AUTOMOTIVE GROUP, INC.

KEY OPERATING HIGHLIGHTS (In millions, except per unit data)

(Unaudited)



For the Three Months Ended June 30, Increase % (Decrease)Change 2020 2019

Unit sales

New vehicle:

Luxury 4,359 5,746 (1,387) (24)%

Import 11,610 15,256 (3,646) (24)%

Domestic 4,091 5,447 (1,356) (25)%

Total new vehicle 20,060 26,449 (6,389) (24)%

Used vehicle retail 18,400 22,259 (3,859) (17)%

Used to new ratio 91.7 %84.2 %750 bps

Average selling price

New vehicle $37,976 $36,493 $ 1,483 4 %

Used vehicle retail 22,424 21,861 563 3 %

Average gross profit per unit

New vehicle:

Luxury $3,854 $3,341 $ 513 15 %

Import 1,077 623 454 73 %

Domestic 2,273 1,762 511 29 %

Total new vehicle 1,924 1,448 476 33 %

Used vehicle retail 1,717 1,559 158 10 %

Finance and insurance, net 1,732 1,647 85 5 %

Front end yield (1) 3,557 3,145 412 13 %

Gross margin

New vehicle:

Luxury 6.9 %6.1 %80 bps

Import 3.7 %2.2 %150 bps

Domestic 5.3 %4.4 %90 bps

Total new vehicle 5.1 %4.0 %110 bps

Used vehicle retail 7.7 %7.1 %60 bps

Parts and service 59.4 %62.6 %(320) bps

Total gross profit margin 16.8 %16.4 %40 bps

SG&A metrics

Rent expense $5.9 $6.8 $ (0.9) (13)%

Total SG&A as a percentage of gross profit 62.7 %68.0 %(530) bps

SG&A, excluding rent expense as a percentage of gross profit 60.3 %65.7 %(540) bps

Operating metrics

Income from operations as a percentage of revenue 5.7 %4.8 %90 bps

Income from operations as a percentage of gross profit 33.9 %29.1 %480 bps

Adjusted income from operations as a percentage of revenue 5.6 %4.7 %90 bps

Adjusted income from operations as a percentage of gross profit33.4 %29.0 %440 bps

Revenue mix

New vehicle 52.7 %53.5 %

Used vehicle retail 28.6 %27.1 %

Used vehicle wholesale 2.4 %2.6 %

Parts and service 11.7 %12.4 %

Finance and insurance 4.6 %4.4 %

Total revenue 100.0 %100.0 %

Gross profit mix

New vehicle 15.9 %13.0 %

Used vehicle retail 13.0 %11.7 %

Used vehicle wholesale 2.3 %0.4 %

Parts and service 41.4 %47.7 %

Finance and insurance 27.4 %27.2 %

Total gross profit 100.0 %100.0 %



_____________________________

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

ASBURY AUTOMOTIVE GROUP, INC.

SAME STORE OPERATING HIGHLIGHTS (In millions)

(Unaudited)



For the Three Months Ended June 30, Increase % (Decrease)Change 2020 2019

Revenue

New vehicle:

Luxury $243.5 $315.5 $(72.0) (23)%

Import 319.7 392.8 (73.1) (19)%

Domestic 158.3 200.7 (42.4) (21)%

Total new vehicle 721.5 909.0 (187.5) (21)%

Used Vehicle:

Retail 399.8 454.8 (55.0) (12)%

Wholesale 34.0 45.1 (11.1) (25)%

Total used vehicle 433.8 499.9 (66.1) (13)%

Parts and service 162.4 213.1 (50.7) (24)%

Finance and insurance 63.8 75.3 (11.5) (15)%

Total revenue $1,381.5 $1,697.3 $(315.8)(19)%



Gross profit

New vehicle:

Luxury $16.8 $19.2 $(2.4) (13)%

Import 11.3 8.7 2.6 30 %

Domestic 8.1 8.5 (0.4) (5) %

Total new vehicle 36.2 36.4 (0.2) (1) %

Used Vehicle:

Retail 30.0 32.9 (2.9) (9) %

Wholesale 5.5 1.3 4.2 NM

Total used vehicle 35.5 34.2 1.3 4 %

Parts and service:

Customer pay 52.1 76.4 (24.3) (32)%

Warranty 16.5 21.5 (5.0) (23)%

Wholesale parts 4.7 5.3 (0.6) (11)%

Parts and service, excluding reconditioning and preparation73.3 103.2 (29.9) (29)%

Reconditioning and preparation 23.3 30.3 (7.0) (23)%

Total parts and service 96.6 133.5 (36.9) (28)%

Finance and insurance 63.8 75.3 (11.5) (15)%

Total gross profit $232.1 $279.4 $(47.3) (17)%



SG&A expense $146.8 $190.0 $(43.2) (23)%

SG&A expense as a percentage of gross profit 63.2 %68.0 %(480) 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.

ASBURY AUTOMOTIVE GROUP, INC.

SAME STORE OPERATING HIGHLIGHTS (Continued)

(Unaudited)



For the Three Months Ended June 30, Increase % (Decrease) Change 2020 2019

Unit sales

New vehicle:

Luxury 4,359 5,731 (1,372) (24)%

Import 10,915 14,011 (3,096) (22)%

Domestic 3,710 5,007 (1,297) (26)%

Total new vehicle 18,984 24,749 (5,765) (23)%

Used vehicle retail 17,753 20,696 (2,943) (14)%

Used to new ratio 93.5 %83.6 %990 bps



Average selling price

New vehicle $38,006 $36,729 $1,277 3 %

Used vehicle retail 22,520 21,975 545 2 %



Average gross profit per unit

New vehicle:

Luxury $3,854 $3,350 $504 15 %

Import 1,035 621 414 67 %

Domestic 2,183 1,698 485 29 %

Total new vehicle 1,907 1,471 436 30 %

Used vehicle retail 1,690 1,590 100 6 %

Finance and insurance, net 1,737 1,657 80 5 %

Front end yield (1) 3,539 3,182 357 11 %



Gross margin

New vehicle:

Luxury 6.9 %6.1 %80 bps

Import 3.5 %2.2 %130 bps

Domestic 5.1 %4.2 %90 bps

Total new vehicle 5.0 %4.0 %100 bps

Used vehicle retail 7.5 %7.2 %30 bps

Parts and service:

Parts and service, excluding reconditioning and preparation45.1 %48.4 %(330) bps

Parts and service, including reconditioning and preparation59.5 %62.6 %(310) bps

Total gross profit margin 16.8 %16.5 %30 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.



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

ASBURY AUTOMOTIVE GROUP, INC.

CONSOLIDATED STATEMENTS OF INCOME (In millions, except per share data)

(Unaudited)



For the Six Months Ended June 30, Increase % (Decrease)Change 2020 2019

REVENUE:

New vehicle $1,583.9$1,837.0$(253.1)(14) %

Used vehicle:

Retail 858.6 944.8 (86.2) (9) %

Wholesale 82.1 98.7 (16.6) (17) %

Total used vehicle 940.7 1,043.5 (102.8) (10) %

Parts and service 390.8 442.1 (51.3) (12) %

Finance and insurance, net 137.0 151.7 (14.7) (10) %

TOTAL REVENUE 3,052.4 3,474.3 (421.9) (12) %

GROSS PROFIT:

New vehicle 75.0 76.2 (1.2) (2) %

Used vehicle:

Retail 62.8 68.3 (5.5) (8) %

Wholesale 5.0 2.1 2.9 138 %

Total used vehicle 67.8 70.4 (2.6) (4) %

Parts and service 235.4 275.9 (40.5) (15) %

Finance and insurance, net 137.0 151.7 (14.7) (10) %

TOTAL GROSS PROFIT 515.2 574.2 (59.0) (10) %

OPERATING EXPENSES:

Selling, general and administrative 346.9 391.7 (44.8) (11) %

Depreciation and amortization 19.2 17.6 1.6 9 %

Franchise rights impairment 23.0 - 23.0 - %

Other operating expense, net 8.9 1.2 7.7 NM

INCOME FROM OPERATIONS 117.2 163.7 (46.5) (28) %

OTHER EXPENSES (INCOME):

Floor plan interest expense 11.1 20.7 (9.6) (46) %

Other interest expense, net 28.8 27.5 1.3 5 %

Loss on extinguishment of long-term debt, net20.6 - 20.6 - %

Gain on dealership divestitures, net (33.7) (11.7) (22.0) (188)%

Total other expenses, net 26.8 36.5 (9.7) (27) %

INCOME BEFORE INCOME TAXES 90.4 127.2 (36.8) (29) %

Income tax expense 21.3 31.4 (10.1) (32) %

NET INCOME $69.1 $95.8 $(26.7) (28) %

EARNINGS PER COMMON SHARE:

Basic-

Net income $3.60 $4.99 $(1.39) (28) %

Diluted-

Net income $3.58 $4.96 $(1.38) (28) %

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:

Basic 19.2 19.2 - - %

Restricted stock - - - - %

Performance share units 0.1 0.1 - - %

Diluted 19.3 19.3 - - %



______________________________

NM-Not Meaningful

ASBURY AUTOMOTIVE GROUP, INC.

KEY OPERATING HIGHLIGHTS (In millions, except per unit data)

(Unaudited)



For the Six Months Ended June 30, Increase % (Decrease) Change 2020 2019

Unit sales

New vehicle:

Luxury 9,351 10,908 (1,557) (14)%

Import 24,068 29,699 (5,631) (19)%

Domestic 8,618 9,951 (1,333) (13)%

Total new vehicle 42,037 50,558 (8,521) (17)%

Used vehicle retail 38,687 43,342 (4,655) (11)%

Used to new ratio 92.0 %85.7 %630 bps

Average selling price

New vehicle $37,679 $36,335 $1,344 4 %

Used vehicle retail 22,194 21,799 395 2 %

Average gross profit per unit

New vehicle:

Luxury $3,604 $3,511 $93 3 %

Import 964 717 247 34 %

Domestic 2,100 1,668 432 26 %

Total new vehicle 1,784 1,507 277 18 %

Used vehicle retail 1,623 1,576 47 3 %

Finance and insurance, net 1,697 1,616 81 5 %

Front end yield (1) 3,404 3,154 250 8 %

Gross margin

New vehicle:

Luxury 6.5 %6.3 %20 bps

Import 3.3 %2.6 %70 bps

Domestic 5.0 %4.2 %80 bps

Total new vehicle 4.7 %4.1 %60 bps

Used vehicle retail 7.3 %7.2 %10 bps

Parts and service 60.2 %62.4 %(220) bps

Total gross profit margin 16.9 %16.5 %40 bps

SG&A metrics

Rent expense $12.7 $13.6 $(0.9) (7) %

Total SG&A as a percentage of gross profit 67.3 %68.2 %(90) bps

SG&A, excluding rent expense as a percentage of gross profit 64.9 %65.8 %(90) bps

Operating metrics

Income from operations as a percentage of revenue 3.8 %4.7 %(90) bps

Income from operations as a percentage of gross profit 22.7 %28.5 %(580) bps

Adjusted income from operations as a percentage of revenue 4.9 %4.8 %10 bps

Adjusted income from operations as a percentage of gross profit29.0 %28.9 %10 bps

Revenue mix

New vehicle 51.9 %52.9 %

Used vehicle retail 28.1 %27.2 %

Used vehicle wholesale 2.7 %2.8 %

Parts and service 12.8 %12.7 %

Finance and insurance 4.5 %4.4 %

Total revenue 100.0 %100.0 %

Gross profit mix

New vehicle 14.6 %13.3 %

Used vehicle retail 12.1 %11.9 %

Used vehicle wholesale 1.0 %0.4 %

Parts and service 45.7 %48.0 %

Finance and insurance 26.6 %26.4 %

Total gross profit 100.0 %100.0 %



_____________________________

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

ASBURY AUTOMOTIVE GROUP, INC.

SAME STORE OPERATING HIGHLIGHTS (In millions)

(Unaudited)



For the Six Months Ended June 30, Increase % (Decrease)Change 2020 2019

Revenue

New vehicle:

Luxury $519.2 $603.0 $(83.8) (14)%

Import 643.0 752.4 (109.4) (15)%

Domestic 304.7 356.4 (51.7) (15)%

Total new vehicle 1,466.9 1,711.8 (244.9) (14)%

Used Vehicle:

Retail 804.3 881.4 (77.1) (9) %

Wholesale 77.4 92.3 (14.9) (16)%

Total used vehicle 881.7 973.7 (92.0) (9) %

Parts and service 365.9 417.7 (51.8) (12)%

Finance and insurance, net 128.2 141.5 (13.3) (9) %

Total revenue $2,842.7 $3,244.7 $(402.0)(12)%



Gross profit

New vehicle:

Luxury $33.8 $38.3 $(4.5) (12)%

Import 20.6 19.1 1.5 8 %

Domestic 15.0 14.9 0.1 1 %

Total new vehicle 69.4 72.3 (2.9) (4) %

Used Vehicle:

Retail 58.3 64.7 (6.4) (10)%

Wholesale 5.0 2.1 2.9 138 %

Total used vehicle 63.3 66.8 (3.5) (5) %

Parts and service:

Customer pay 124.5 149.7 (25.2) (17)%

Warranty 36.2 42.1 (5.9) (14)%

Wholesale parts 9.3 10.8 (1.5) (14)%

Parts and service, excluding reconditioning and preparation170.0 202.6 (32.6) (16)%

Reconditioning and preparation 50.7 58.3 (7.6) (13)%

Total parts and service 220.7 260.9 (40.2) (15)%

Finance and insurance 128.2 141.5 (13.3) (9) %

Total gross profit $481.6 $541.5 $(59.9) (11)%



SG&A expense $325.3 $369.1 $(43.8) (12)%

SG&A expense as a percentage of gross profit 67.5 %68.2 %(70) 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.

ASBURY AUTOMOTIVE GROUP, INC.

SAME STORE OPERATING HIGHLIGHTS (Continued)

(Unaudited)



For the Six Months Ended June 30, Increase % (Decrease)Change 2020 2019

Unit sales

New vehicle:

Luxury 9,336 10,863 (1,527) (14)%

Import 22,255 26,853 (4,598) (17)%

Domestic 7,306 8,959 (1,653) (18)%

Total new vehicle 38,897 46,675 (7,778) (17)%

Used vehicle retail 35,983 40,206 (4,223) (11)%

Used to new ratio 92.5 %86.1 %640 bps



Average selling price

New vehicle $37,712 $36,675 $ 1,037 3 %

Used vehicle retail 22,352 21,922 430 2 %



Average gross profit per unit

New vehicle:

Luxury $3,620 $3,526 $ 94 3 %

Import 926 711 215 30 %

Domestic 2,053 1,663 390 23 %

Total new vehicle 1,784 1,549 235 15 %

Used vehicle retail 1,620 1,609 11 1 %

Finance and insurance, net 1,712 1,629 83 5 %

Front end yield (1) 3,417 3,206 211 7 %



Gross margin

New vehicle:

Luxury 6.5 %6.4 %10 bps

Import 3.2 %2.5 %70 bps

Domestic 4.9 %4.2 %70 bps

Total new vehicle 4.7 %4.2 %50 bps

Used vehicle retail 7.2 %7.3 %(10) bps

Parts and service:

Parts and service, excluding reconditioning and preparation46.5 %48.5 %(200) bps

Parts and service, including reconditioning and preparation60.3 %62.5 %(220) bps

Total gross profit margin 16.9 %16.7 %20 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.



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

ASBURY AUTOMOTIVE GROUP, INC.

Additional Disclosures (In millions)

(Unaudited)



June 30, December 31, Increase % Change 2020 2019 (Decrease)

SELECTED BALANCE SHEET DATA

Cash and cash equivalents $613.2 $3.5 $609.7 17,420%

New vehicle inventory 474.1 802.6 (a) (328.5) (41) %

Used vehicle inventory 125.2 140.1 (b) (14.9) (11) %

Parts inventory 37.1 42.3 (c) (5.2) (12) %

Total current assets 1,591.7 1,602.6 (10.9) (1) %

Floor plan notes payable 526.2 788.0 (d) (261.8) (33) %

Total current liabilities 893.2 1,247.0 (353.8) (28) %



CAPITALIZATION:

Long-term debt (including current portion)$1,233.5*$939.4 (e) $294.1 31 %

Shareholders' equity 713.1 646.3 66.8 10 %

Total $1,946.6 $1,585.7 $360.9 23 %



*Includes $237.0 million drawn on the Revolver as of March 31, 2020



(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 $28.1 million of Long-term debt classified as Liabilities associated with assets held for sale as of December 31, 2019

June 30, 2020 December 31, 2019

DAYS SUPPLY

New vehicle inventory 52 66

Used vehicle inventory 26 29



_____________________________

Days supply of inventory is calculated based on new and used inventory levelsat the end of each reporting period and a 30-day historical cost of sales.

Brand Mix - New Vehicle Revenue by Brand-

For the Six Months Ended June 30,

2020 2019

Luxury:

Mercedes-Benz 8 % 7 %

Lexus 6 % 6 %

BMW 6 % 6 %

Acura 4 % 4 %

Infiniti 2 % 3 %

Other luxury 7 % 7 %

Total luxury 33 % 33 %

Imports:

Honda 18 % 19 %

Toyota 13 % 12 %

Nissan 6 % 9 %

Other imports 7 % 5 %

Total imports 44 % 45 %

Domestic:

Ford 10 % 10 %

Chevrolet 6 % 6 %

Dodge 4 % 3 %

Other domestics 3 % 3 %

Total domestic 23 % 22 %

Total New Vehicle Revenue100 % 100 %

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.

The following tables provide reconciliations for our non-GAAP metrics:

For the Twelve Months Ended

June 30, 2020March 31, 2020

(Dollars in millions)

Adjusted leverage ratio:

Long-term debt $ 1,233.5 $ 1,164.9



Calculation of earnings before interest, taxes, depreciation and amortization ("EBITDA"):

Net Income $ 157.7 $ 163.0



Add:

Depreciation and amortization 37.7 37.1

Income tax expense 49.5 51.5

Swap and other interest expense 57.0 58.5

Earnings before interest, taxes, depreciation and amortization $ 301.9 $ 310.1 ("EBITDA")



Non-core items - expense (income):

Gain on dealership divestitures $ (33.7) $ (45.4)

Legal settlements (2.7) $ (1.5)

Gain on sale of real estate (0.3) (0.6)

Franchise rights impairment 30.1 30.1

Real estate-related charges 0.6 0.6

Park Place deal termination costs 11.6 11.6

Loss on debt extinguishment 20.7 20.7

Total non-core items 26.3 15.5



Adjusted EBITDA $ 328.2 $ 325.6



Adjusted leverage ratio 3.8 3.6



For the Three Months Ended June 30,

2020 2019

(In millions, except per share data)

Adjusted income from operations:

Income from operations $82.2 $85.9

Legal settlements (1.2) -

Gain on sale of real estate - (0.3)

Adjusted income from operations $81.0 $85.6





Adjusted net income:

Net income $49.6 $54.9



Non-core items - (income) expense:

Gain on dealership divestiture - (11.7)

Legal settlements (1.2) -

Gain on sale of real estate - (0.3)

Income tax effect on non-core items above 0.3 3.0

Total non-core items (0.9) (9.0)

Adjusted net income $48.7 $45.9



Adjusted diluted earnings per share (EPS):

Diluted EPS $2.57 $2.84



Total non-core items (0.05) (0.46)

Adjusted diluted EPS $2.52 $2.38



Weighted average common shares outstanding - diluted19.3 19.3

For the Six Months Ended June 30,

2020 2019

(In millions, except per share data)

Adjusted income from operations:

Income from operations $117.2 $ 163.7

Legal settlements (2.1) -

Gain on sale of real estate (0.3) (0.3)

Park Place deal termination costs 11.6 -

Franchise rights impairment 23.0 -

Fixed assets write-off - 2.4

Adjusted income from operations $149.4 $ 165.8



Adjusted net income:

Net income $69.1 $ 95.8



Non-core items - (income) expense:

Gain on dealership divestitures (33.7) (11.7)

Legal settlements (2.1) -

Gain on sale of real estate (0.3) (0.3)

Park Place deal termination costs 11.6 -

Loss on extinguishment of debt 20.7 -

Franchise rights impairment 23.0 -

Fixed assets write-off - 2.4

Income tax effect on non-core items above (4.9) 2.4

Total non-core items 14.3 (7.2)

Adjusted net income $83.4 $ 88.6



Adjusted diluted earnings per share (EPS):

Diluted EPS $3.58 $ 4.96



Total non-core items 0.74 (0.37)

Adjusted diluted EPS $4.32 $ 4.59



Weighted average common shares outstanding - diluted 19.3 19.3



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SOURCE Asbury Automotive Group, Inc.