NEW YORK, Oct. 30 /PRNewswire-FirstCall/ -- Asbury Automotive Group, Inc. (NYSE: ABG), one of the largest automotive retail and service companies in the U.S., today reported financial results for the third quarter and nine months ended September 30, 2008.
Income from continuing operations for the third quarter was $7.1 million, or $0.22 per diluted share, compared to $19.3 million, or $0.58 per diluted share, a year ago. The results for the third quarter of 2008 included charges associated with terminating a prior credit facility, as well as charges incurred and a favorable tax adjustment related to the Company's corporate restructuring. Collectively, these items reduced earnings by $0.03 per diluted share in this year's third quarter. The quarterly results a year ago included a $0.01 per diluted share increase in the Company's reserves for legal claims arising prior to 2003. Net income for the third quarter totaled $6.0 million, or $0.19 per diluted share, compared with $19.0 million, or $0.57 per diluted share, a year ago, including the non-core items discussed above.
For the first nine months of 2008, income from continuing operations was $29.9 million, or $0.93 per diluted share, compared with $42.7 million, or $1.27 per diluted share, in the corresponding period last year. Non-core items, as disclosed in the attached tables, reduced earnings by $0.07 per diluted share in the first nine months of 2008, and by $0.42 per diluted share in the nine-month period a year ago. Net income for the first nine months of 2008 totaled $27.4 million, or $0.85 per diluted share, compared with $40.0 million, or $1.19 per diluted share, a year ago, including the non-core items discussed above.
President and CEO Charles R. Oglesby said, 'The headwinds facing Asbury and the auto retailing industry intensified during the third quarter, as consumer confidence sagged under the weight of further declines in the housing and equity markets. In addition, due to the unprecedented turmoil in the credit markets, many lenders -- both captives and independents -- significantly tightened their standards for automotive financing. Not surprisingly, our retail vehicle sales for the quarter were very soft, especially in our key Florida markets, and we were unable to reduce expenses quickly enough to prevent a significant decline in our bottom line.'
Mr. Oglesby continued, 'We are making the difficult but necessary decisions to preserve capital, improve liquidity and reduce costs during these exceptionally challenging times. The Board of Directors has elected to suspend the dividend, effective immediately. In addition, we are dramatically reducing our capital expenditures, and will not consider any additional acquisitions until the financial and economic environment has improved significantly.'
Mr. Oglesby added, 'We have substantially broadened the scope of our ongoing restructuring and cost-reduction programs. We are making progress with the move of Asbury's headquarters from New York to Atlanta, and now expect our corporate restructuring program to produce annualized savings of approximately $4.5 million, up from our previous estimate of $3.5 million. We are consolidating our four regional organizations into two, which is expected to save $8 million annually. In total, we expect to incur $7 million in restructuring costs over the next six months associated with these programs. Finally, we are expanding our store-level productivity initiatives -- reducing personnel and advertising expenses, improving inventory management, and making selected technology investments to enhance our efficiency. Taken together, these restructuring and store-level programs are targeted to deliver annualized savings of $25 million by March of 2009.'
As announced last month, the Company's new credit facilities have significantly enhanced its financial flexibility and expanded its borrowing capacity. These facilities, which include a $600 million new vehicle floor plan facility and a $200 million revolver, offer competitive borrowing rates and more favorable covenants compared to the Company's prior credit facility. Furthermore, over the past week, the Company has secured over $100 million in additional inventory-based financing -- $29 million in new floor plan financing and $75 million in used vehicle borrowing facilities.
The Company also announced that it was in compliance with all of its debt covenants as of September 30, 2008.
Mr. Oglesby concluded, 'Clearly, there are many uncertainties facing the auto industry in the months ahead and, accordingly, we are not providing guidance for the remainder of 2008. However, we will continue to move aggressively to cut costs, generate cash and use our financial flexibility to manage through the current challenging retail environment.'
In connection with the corporate restructuring, the Company announced the appointment of Keith R. Style as Vice President of Finance, and the appointment of Bryan Hanlon as Controller and Chief Accounting Officer, effective November 1, 2008. In his new role, Mr. Hanlon will report to Mr. Style.
Asbury will host a conference call to discuss its third quarter results this morning at 10:00 a.m. Eastern Time. The call will be simulcast live on the Internet and can be accessed by logging onto http://www.asburyauto.com or http://www.ccbn.com. In addition, a live audio of the call will be accessible to the public by calling (866) 454-4208 (domestic), or (913) 312-0946 (international); passcode - 3769146. Callers should dial in approximately 5 to 10 minutes before the call begins.
About Asbury Automotive Group
Asbury Automotive Group, Inc. ('Asbury'), headquartered in Duluth, Georgia, a suburb of Atlanta, is one of the largest automobile retailers in the U.S. Built through a combination of organic growth and a series of strategic acquisitions, Asbury currently operates 89 retail auto stores, encompassing 122 franchises for the sale and servicing of 36 different brands of American, European and Asian automobiles. 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' as that term is defined in the Private Securities Litigation Reform Act of 1995. The forward-looking statements include statements relating to goals, plans, market conditions and projections regarding the Company's financial position, results of operations, market position, estimated expenses and future cost savings resulting from the Company's restructuring program and store-level productivity initiatives, our plans to reduce capital expenditures, future business strategy. These statements are based on management's current expectations and involve significant risks and uncertainties that may cause results to differ materially from those set forth in the statements. These risks and uncertainties include, among other things, market factors, the Company's relationships with vehicle manufacturers and other suppliers, risks associated with the Company's indebtedness, risks related to competition in the automotive retail and service industries, general economic conditions both nationally and locally, governmental regulations, legislation and the Company's ability to execute its restructuring programs and other operational strategies. There can be no guarantees that the Company's plans for future operations will be successfully implemented or that they will prove to be commercially successful. These and other risk factors are discussed in the Company's annual report on Form 10-K and in its other filings with the Securities and Exchange Commission. We undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future events or otherwise.
Asbury Automotive Group, Inc.
Consolidated Statements of Income
(In millions, except per share data)
(Unaudited)
For the Three Months For the Nine Months
Ended September 30, Ended September 30,
--------------------- ---------------------
2008 2007 2008 2007
---- ---- ---- ----
REVENUES:
New vehicle $726.5 $882.7 $2,248.3 $2,578.2
Used vehicle 277.9 370.8 916.6 1,130.7
Parts and service 182.0 174.7 548.1 521.0
Finance and
insurance, net 34.2 41.7 111.7 122.8
---- ---- ----- -----
Total revenues 1,220.6 1,469.9 3,824.7 4,352.7
COST OF SALES:
New vehicle 676.9 819.1 2,097.9 2,394.1
Used vehicle 255.7 341.6 839.4 1,031.9
Parts and service 89.7 83.4 268.5 250.3
---- ---- ----- -----
Total cost of
sales 1,022.3 1,244.1 3,205.8 3,676.3
------- ------- ------- -------
GROSS PROFIT 198.3 225.8 618.9 676.4
OPERATING
EXPENSES:
Selling, general
and
administrative 162.2 173.5 498.5 515.2
Depreciation and
amortization 6.5 5.3 17.7 15.9
Other operating
(income) expense,
net (0.1) (0.3) 1.6 2.2
----- ----- --- ---
Income from
operations 29.7 47.3 101.1 143.1
OTHER INCOME (EXPENSE):
Floor plan
interest expense (7.5) (10.4) (24.6) (32.5)
Other interest
expense (10.9) (9.1) (29.4) (30.1)
Interest income 0.1 0.9 1.4 3.9
Loss on
extinguishment of
long-term debt (1.7) - (1.7) (18.5)
----- - ----- ------
Total other
expense, net (20.0) (18.6) (54.3) (77.2)
------ ------ ------ ------
Income before
income taxes 9.7 28.7 46.8 65.9
INCOME TAX EXPENSE 2.6 9.4 16.9 23.2
--- --- ---- ----
INCOME FROM
CONTINUING
OPERATIONS 7.1 19.3 29.9 42.7
DISCONTINUED
OPERATIONS, net
of tax (1.1) (0.3) (2.5) (2.7)
----- ----- ----- -----
NET INCOME $6.0 $19.0 $27.4 $40.0
==== ===== ===== =====
EARNINGS PER COMMON SHARE:
Basic-
Continuing
operations $0.22 $0.59 $0.94 $1.30
Discontinued
operations (0.03) (0.01) (0.08) (0.08)
------ ------ ------ ------
Net income $0.19 $0.58 $0.86 $1.22
===== ===== ===== =====
Diluted-
Continuing
operations $0.22 $0.58 $0.93 $1.27
Discontinued
operations (0.03) (0.01) (0.08) (0.08)
------ ------ ------ ------
Net income $0.19 $0.57 $0.85 $1.19
===== ===== ===== =====
WEIGHTED AVERAGE
COMMON SHARES
OUTSTANDING:
Basic 31.7 32.5 31.8 32.8
==== ==== ==== ====
Diluted 32.1 33.2 32.3 33.7
==== ==== ==== ====
Asbury Automotive Group, Inc.
Selected Data
(Dollars in millions, except per vehicle data)
(Unaudited)
As Reported for the Three
Months Ended September 30,
--------------------------
Increase
2008 2007 (Decrease) % Change
---- ---- ---------- --------
REVENUE:
New light vehicles $675.3 $823.8 $(148.5) (18%)
New heavy trucks 51.2 58.9 (7.7) (13%)
---- ----
Total new vehicle 726.5 882.7 (156.2) (18%)
Used retail 213.5 278.0 (64.5) (23%)
Used wholesale 64.4 92.8 (28.4) (31%)
---- ----
Total used vehicle 277.9 370.8 (92.9) (25%)
Parts and service 182.0 174.7 7.3 4%
Finance and insurance, net 34.2 41.7 (7.5) (18%)
---- ----
Total revenue $1,220.6 $1,469.9 $(249.3) (17%)
======== ======== ======== =====
GROSS PROFIT:
New light vehicles $47.6 $61.4 $(13.8) (22%)
New heavy trucks 2.0 2.2 (0.2) (9%)
--- ---
Total new vehicle 49.6 63.6 (14.0) (22%)
Used retail 23.8 30.5 (6.7) (22%)
Used wholesale (1.6) (1.3) (0.3) (23%)
----- -----
Total used vehicle 22.2 29.2 (7.0) (24%)
Parts and service 92.3 91.3 1.0 1%
Finance and insurance, net 34.2 41.7 (7.5) (18%)
---- ----
Total gross profit $198.3 $225.8 $(27.5) (12%)
====== ====== ======= =====
VEHICLES SOLD:
New light retail vehicles 21,749 26,017 (4,268) (16%)
New fleet vehicles 920 1,906 (986) (52%)
--- -----
Total light vehicles 22,669 27,923 (5,254) (19%)
New heavy trucks 798 964 (166) (17%)
--- ---
Total new vehicle 23,467 28,887 (5,420) (19%)
====== ====== ======= =====
Used retail units 12,196 15,107 (2,911) (19%)
====== ====== ======= =====
REVENUE PER VEHICLE SOLD:
New light vehicles $29,790 $29,503 $287 1%
New heavy trucks 64,160 61,100 3,060 5%
Used retail 17,506 18,402 (896) (5%)
GROSS PROFIT PER VEHICLE SOLD:
New light vehicles $2,100 $2,199 $(99) (5%)
New heavy trucks 2,506 2,282 224 10%
Used retail 1,951 2,019 (68) (3%)
Finance and insurance, net 959 948 11 1%
GROSS PROFIT MARGIN:
New light vehicles 7.0% 7.5% (0.5%) (7%)
New heavy trucks 3.9% 3.7% 0.2% 5%
Used retail 11.1% 11.0% 0.1% 1%
Parts and service 50.7% 52.3% (1.6%) (3%)
Total 16.2% 15.4% 0.8% 5%
REVENUE MIX PERCENTAGES:
New light vehicles 55.3% 56.0%
New heavy trucks 4.2% 4.0%
Used retail 17.5% 19.0%
Used wholesale 5.3% 6.3%
Parts and service 14.9% 11.9%
Finance and insurance, net 2.8% 2.8%
---- ----
Total revenue 100.0% 100.0%
====== ======
GROSS PROFIT MIX PERCENTAGES:
New light vehicles 24.0% 27.2%
New heavy trucks 1.0% 1.0%
Used retail 12.1% 13.5%
Used wholesale (0.8%) (0.6%)
Parts and service 46.5% 40.4%
Finance and insurance, net 17.2% 18.5%
----- -----
Total gross profit 100.0% 100.0%
====== ======
SG&A EXPENSE AS A PERCENTAGE
OF GROSS PROFIT 81.8% 76.8% 5.0% 7%
Asbury Automotive Group, Inc.
Selected Data
(Dollars in millions, except per vehicle data)
(Unaudited)
Same Store for the Three
Months Ended September 30,
--------------------------
Increase
2008 2007 (Decrease) % Change
---- ---- ---------- --------
REVENUE:
New light vehicles $639.3 $823.8 $(184.5) (22%)
New heavy trucks 51.2 58.9 (7.7) (13%)
---- ----
Total new vehicle 690.5 882.7 (192.2) (22%)
Used retail 204.6 278.0 (73.4) (26%)
Used wholesale 60.4 92.8 (32.4) (35%)
---- ----
Total used vehicle 265.0 370.8 (105.8) (29%)
Parts and service 174.3 174.7 (0.4) -%
Finance and insurance, net 33.1 41.7 (8.6) (21%)
---- ----
Total revenue $1,162.9 1,469.9 $(307.0) (21%)
======== ======== ======== =====
GROSS PROFIT:
New light vehicles $44.4 $61.4 $(17.0) (28%)
New heavy trucks 2.0 2.2 (0.2) (9%)
--- ---
Total new vehicle 46.4 63.6 (17.2) (27%)
Used retail 23.0 30.5 (7.5) (25%)
Used wholesale (1.5) (1.3) (0.2) 15%
----- -----
Total used vehicle 21.5 29.2 (7.7) (26%)
Parts and service 88.4 91.3 (2.9) (3%)
Finance and insurance, net 33.1 41.7 (8.6) (21%)
---- ----
Total gross profit $189.4 $225.8 $(36.4) (16%)
====== ====== ======= =====
VEHICLES SOLD:
New light retail vehicles 20,516 26,017 (5,501) (21%)
New fleet vehicles 904 1,906 (1,002) (53%)
--- -----
Total light vehicles 21,420 27,923 (6,503) (23%)
New heavy trucks 798 964 (166) (17%)
--- ---
Total new vehicle 22,218 28,887 (6,669) (23%)
====== ====== ======= =====
Used retail units 11,736 15,107 (3,371) (22%)
====== ====== ======= =====
REVENUE PER VEHICLE SOLD:
New light vehicles $29,846 $29,503 $343 1%
New heavy trucks 64,160 61,100 3,060 5%
Used retail 17,434 18,402 (968) (5%)
GROSS PROFIT PER VEHICLE SOLD:
New light vehicles $2,073 $2,199 $(126) (6%)
New heavy trucks 2,506 2,282 224 10%
Used retail 1,960 2,019 (59) (3%)
Finance and insurance, net 975 948 27 3%
GROSS PROFIT MARGIN:
New light vehicles 6.9% 7.5% (0.6%) (8%)
New heavy trucks 3.9% 3.7% 0.2% 5%
Used retail 11.2% 11.0% 0.2% 2%
Parts and service 50.7% 52.3% (1.6%) (3%)
Total 16.3% 15.4% 0.9% 6%
REVENUE MIX PERCENTAGES:
New light vehicles 55.0% 56.0%
New heavy trucks 4.4% 4.0%
Used retail 17.6% 19.0%
Used wholesale 5.2% 6.3%
Parts and service 15.0% 11.9%
Finance and insurance, net 2.8% 2.8%
---- ----
Total revenue 100.0% 100.0%
====== ======
GROSS PROFIT MIX PERCENTAGES:
New light vehicles 23.4% 27.2%
New heavy trucks 1.1% 1.0%
Used retail 12.1% 13.5%
Used wholesale (0.8%) (0.6%)
Parts and service 46.7% 40.4%
Finance and insurance, net 17.5% 18.5%
----- -----
Total gross profit 100.0% 100.0%
====== ======
SG&A EXPENSE AS A PERCENTAGE
OF GROSS PROFIT 82.0% 76.8% 5.2% 7%
Asbury Automotive Group, Inc.
Selected Data
(Dollars in millions, except per vehicle data)
(Unaudited)
As Reported for the Nine
Months Ended September 30,
-------------------------
Increase
2008 2007 (Decrease) % Change
---- ---- ---------- --------
REVENUE:
New light vehicles $2,112.9 $2,403.6 $(290.7) (12%)
New heavy trucks 135.4 174.6 (39.2) (22%)
----- -----
Total new vehicle 2,248.3 2,578.2 (329.9) (13%)
Used retail 709.0 864.2 (155.2) (18%)
Used wholesale 207.6 266.5 (58.9) (22%)
----- -----
Total used vehicle 916.6 1,130.7 (214.1) (19%)
Parts and service 548.1 521.0 27.1 5%
Finance and insurance, net 111.7 122.8 (11.1) (9%)
----- -----
Total revenue $3,824.7 $4,352.7 $(528.0) (12%)
======== ======== ======== =====
GROSS PROFIT:
New light vehicles $144.7 $176.1 $(31.4) (18%)
New heavy trucks 5.7 8.0 (2.3) (29%)
--- ---
Total new vehicle 150.4 184.1 (33.7) (18%)
Used retail 79.9 99.8 (19.9) (20%)
Used wholesale (2.7) (1.0) (1.7) 170%
----- -----
Total used vehicle 77.2 98.8 (21.6) (22%)
Parts and service 279.6 270.7 8.9 3%
Finance and insurance, net 111.7 122.8 (11.1) (9%)
----- -----
Total gross profit $618.9 $676.4 $(57.5) (9%)
====== ====== ======= ====
VEHICLES SOLD:
New light retail vehicles 67,996 74,895 (6,899) (9%)
New fleet vehicles 3,513 6,318 (2,805) (44%)
----- -----
Total light vehicles 71,509 81,213 (9,704) (12%)
New heavy trucks 2,103 2,956 (853) (29%)
----- -----
Total new vehicle 73,612 84,169 (10,557) (13%)
====== ====== ======== =====
Used retail units 39,812 47,423 (7,611) (16%)
====== ====== ======= =====
REVENUE PER VEHICLE SOLD:
New light vehicles $29,547 $29,596 $(49) -%
New heavy trucks 64,384 59,066 5,318 9%
Used retail 17,809 18,223 (414) (2%)
GROSS PROFIT PER VEHICLE SOLD:
New light vehicles $2,024 $2,168 $(144) (7%)
New heavy trucks 2,710 2,706 4 -%
Used retail 2,007 2,104 (97) (5%)
Finance and insurance, net 985 933 52 6%
GROSS PROFIT MARGIN:
New light vehicles 6.8% 7.3% (0.5%) (7%)
New heavy trucks 4.2% 4.6% (0.4%) (9%)
Used retail 11.3% 11.5% (0.2%) (2%)
Parts and service 51.0% 52.0% (1.0%) (2%)
Total 16.2% 15.5% 0.7% 5%
REVENUE MIX PERCENTAGES:
New light vehicles 55.2% 55.2%
New heavy trucks 3.5% 4.0%
Used retail 18.7% 19.9%
Used wholesale 5.4% 6.1%
Parts and service 14.3% 12.0%
Finance and insurance, net 2.9% 2.8%
---- ----
Total revenue 100.0% 100.0%
====== ======
GROSS PROFIT MIX PERCENTAGES:
New light vehicles 23.4% 26.0%
New heavy trucks 0.9% 1.2%
Used retail 12.9% 14.7%
Used wholesale (0.4%) (0.1%)
Parts and service 45.2% 40.0%
Finance and insurance, net 18.0% 18.2%
----- -----
Total gross profit 100.0% 100.0%
====== ======
SG&A EXPENSE AS A PERCENTAGE
OF GROSS PROFIT 80.5% 76.2% 4.3% 6%
Asbury Automotive Group, Inc.
Selected Data
(Dollars in millions, except per vehicle data)
(Unaudited)
Same Store for the Nine
Months Ended September 30,
--------------------------
Increase
2008 2007 (Decrease) % Change
---- ---- ---------- --------
REVENUE:
New light vehicles $1,990.1 $2,403.6 $(413.5) (17%)
New heavy trucks 135.4 174.6 (39.2) (22%)
----- -----
Total new vehicle 2,125.5 2,578.2 (452.7) (18%)
Used retail 679.3 864.2 (184.9) (21%)
Used wholesale 195.5 266.5 (71.0) (27%)
----- -----
Total used vehicle 874.8 1,130.7 (255.9) (23%)
Parts and service 523.4 521.0 2.4 -%
Finance and insurance, net 107.9 122.8 (14.9) (12%)
----- -----
Total revenue $3,631.6 $4,352.7 $(721.1) (17%)
======== ======== ======== =====
GROSS PROFIT:
New light vehicles $134.8 $176.1 $(41.3) (23%)
New heavy trucks 5.7 8.0 (2.3) (29%)
--- ---
Total new vehicle 140.5 184.1 (43.6) (24%)
Used retail 76.9 99.8 (22.9) (23%)
Used wholesale (2.6) (1.0) (1.6) 160%
----- -----
Total used vehicle 74.3 98.8 (24.5) (25%)
Parts and service 266.8 270.7 (3.9) (1%)
Finance and insurance, net 107.9 122.8 (14.9) (12%)
----- -----
Total gross profit $589.5 $676.4 $(86.9) (13%)
====== ====== ======= =====
VEHICLES SOLD:
New light retail vehicles 63,993 74,895 (10,902) (15%)
New fleet vehicles 3,414 6,318 (2,904) (46%)
----- -----
Total light vehicles 67,407 81,213 (13,806) (17%)
New heavy trucks 2,103 2,956 (853) (29%)
----- -----
Total new vehicle 69,510 84,169 (14,659) (17%)
====== ====== ======== =====
Used retail units 38,254 47,423 (9,169) (19%)
====== ====== ======= =====
REVENUE PER VEHICLE SOLD:
New light vehicles $29,524 $29,596 $(72) -%
New heavy trucks 64,384 59,066 5,318 9%
Used retail 17,758 18,223 (465) (3%)
GROSS PROFIT PER VEHICLE SOLD:
New light vehicles $2,000 $2,168 $(168) (8%)
New heavy trucks 2,710 2,706 4 -%
Used retail 2,010 2,104 (94) (4%)
Finance and insurance, net 1,001 933 68 7%
GROSS PROFIT MARGIN:
New light vehicles 6.8% 7.3% (0.5%) (7%)
New heavy trucks 4.2% 4.6% (0.4%) (9%)
Used retail 11.3% 11.5% (0.2%) (2%)
Parts and service 51.0% 52.0% (1.0%) (2%)
Total 16.2% 15.5% 0.7% 5%
REVENUE MIX PERCENTAGES:
New light vehicles 54.8% 55.2%
New heavy trucks 3.7% 4.0%
Used retail 18.7% 19.9%
Used wholesale 5.4% 6.1%
Parts and service 14.4% 12.0%
Finance and insurance, net 3.0% 2.8%
---- ----
Total revenue 100.0% 100.0%
====== ======
GROSS PROFIT MIX PERCENTAGES:
New light vehicles 22.9% 26.0%
New heavy trucks 1.0% 1.2%
Used retail 12.9% 14.7%
Used wholesale (0.4%) (0.1%)
Parts and service 45.3% 40.0%
Finance and insurance, net 18.3% 18.2%
----- -----
Total gross profit 100.0% 100.0%
====== ======
SG&A EXPENSE AS A PERCENTAGE
OF GROSS PROFIT 80.9% 76.2% 4.7% 6%
Asbury Automotive Group, Inc.
Selected Data
(Dollars in millions)
(Unaudited)
September December Increase
30, 2008 31, 2007 (Decrease) % Change
---------- --------- --------- -------
BALANCE SHEET DATA
Cash and cash equivalents $21.4 $53.4 $(32.0) (59.9%)
New vehicle inventory 564.1 622.6 (58.5) (9.4%)
Used vehicle inventory 84.7 101.1 (16.4) (16.2%)
Parts inventory 48.0 46.2 1.8 3.9%
Total current assets 979.4 1,192.4 (213.0) (17.9%)
Floor plan notes payable 563.2 673.9 (110.7) (16.4%)
Revolving credit facility 40.0 - 40.0 NM
Total current liabilities 775.3 871.7 (96.4) (11.1%)
CAPITALIZATION
Long-term debt (including
current portion) $657.4 $475.6 $181.8 38.2%
Shareholders equity 590.9 584.2 6.7 1.1%
----- -----
Total $1,248.3 $1,059.8 188.5 17.8%
======== ========
BRAND MIX - NEW LIGHT VEHICLE UNITS For the Nine Months Ended
September 30,
---------------------------------
2008 2007
---- ----
Luxury:
BMW 5% 4%
Mercedes-Benz 4% 4%
Lexus 4% 4%
Acura 4% 4%
Infinity 3% 3%
Other Luxury 3% 3%
-- --
Total Luxury 23% 22%
Mid-Line Imports:
Honda 31% 29%
Toyota 11% 10%
Nissan 15% 16%
Other imports 3% 1%
-- --
Total Imports 60% 56%
Mid-Line Domestic:
Ford 7% 8%
Chevrolet 5% 8%
Other domestic 4% 3%
-- --
Total Domestic 16% 19%
Value 1% 2%
-- --
Total Light Vehicles 100% 100%
==== ====
September December September
30, 2008 31, 2007 30, 2007
--------- --------- ---------
DSI - NEW LIGHT VEHICLE(1)(2) 82 69 65
DSI - USED LIGHT VEHICLE(1) 44 45 50
(1) Calculated using trailing 30 day cost of sales
(2) Includes fleet
Asbury Automotive Group, Inc.
Supplemental Disclosures Regarding Non-GAAP Financial Information
(Dollars in millions, except per share data)
(Unaudited)
Our income from continuing operations during 2008 and 2007 included certain non-core items including (i) income related to the reversal of certain deferred tax valuation allowances, (ii) restructuring costs associated with the relocation of our corporate offices and the reorganization of our retail network, (iii) a loss on extinguishment of long-term debt, (iv) costs associated with the implementation of a new dealer management system, (v) executive separation benefits expense associated with our former CEO and CFO, (vi) expenses associated with secondary offerings for which we received no proceeds and (vii) legal settlements expense associated with cases pending prior to 2003.
As Reported for the Three Months
Ended September 30,
--------------------------------------
2008 2007
---- ----
Non-core items - (income) expense
Reversal of deferred tax
Valuation allowances $(1.1) $-
Restructuring costs, net of tax 0.9 -
Loss on extinguishment of
long-term debt, net of tax 1.0 -
Dealer management system
implementation costs, net of tax 0.1 -
Legal settlements expense, net of tax - 0.2
---- ---
Total $0.9 $0.2
==== ====
Non-core items per dilutive share $0.03 $0.01
===== =====
Weighted average common
shares outstanding (diluted) 32.1 33.2
==== ====
As Reported for the Nine Months
Ended September 30,
--------------------------------
2008 2007
---- ----
Non-core items - (income) expense
Reversal of deferred tax valuation
allowances $(1.1) $-
Executive separation benefits
expense, net of tax 1.0 1.9
Restructuring costs, net of tax 1.0 -
Loss on extinguishment of long-term
debt, net of tax 1.0 11.6
Dealer management system
implementation costs, net of tax 0.5 -
Secondary offering expenses* - 0.3
Legal settlements expense, net of tax - 0.4
---- ---
Total $2.4 $14.2
==== =====
Non-core items per dilutive share $0.07 $0.42
===== =====
Weighted average common shares
outstanding (diluted) 32.3 33.7
==== ====
* Secondary offering expenses are not deductible for tax purposes; therefore, no tax benefit has been reflected.
Asbury Automotive Group, Inc.
Summary of Debt Covenants
As of and for the Period Ended September 30, 2008
(Dollars in millions, except per vehicle data)
(Unaudited)
Wachovia BofA Credit
Mortgages Facility
Senior Leverage Ratio must be < 3.00
SECURED DEBT (numerator)
+ Mortgage notes payable (including
mortgages associated with assets held
for sale) $183.7
+ Borrowings under Revolving Credit
Facility 40.0
+ Direct reimbursement obligations under
letters of credit 7.3
+ Capital lease obligations 2.8
+ Interest rate SWAP obligations 1.3
+ Other indebtedness 1.1
---
= TOTAL SECURED DEBT (ex floorplan) $236.2
======
EBITDA (denominator)
+ Income from continuing operations -
trailing 12 months ('T12') $41.4
+ Add back Total interest expense
(ex floorplan interest) - T12 38.6
+ Add back Income tax expense - T12 24.2
+ Add back Depreciation & amortization - T12 23.3
+ Add back Other non-cash charges - T12 4.8
---
= CONSOLIDATED EBITDA 132.3
+ Add back Pro forma acquisitions EBITDA
(as defined) 0.8
+ Add back Pro forma rent savings (as defined) 10.7
----
= CONSOLIDATED PROFORMA EBITDA $143.8
======
SENIOR LEVERAGE RATIO 1.64
Total Leverage Ratio must be < 5.00
TOTAL DEBT (numerator)
+ 8.0% Sr. Subordinated Notes
(face value outstanding) $179.4 $179.4
+ 7.625% Sr. Subordinated Notes 150.0 150.0
+ 3.0% Convertible Notes 115.0 115.0
+ Mortgage notes payable (including
mortgages associated with assets held
for sale) 183.7 183.7
+ Borrowings under Revolving Credit
Facility 40.0 40.0
+ Direct reimbursement obligations under
letters of credit 7.3 7.3
+ Capital lease obligations 2.8 2.8
+ Interest rate SWAP obligations 1.3 1.3
+ Other indebtedness (as defined) 3.2 1.1
--- ---
= TOTAL DEBT (ex Floorplan) $682.7 $680.6
====== ======
EBITDA (denominator)
+ Income from continuing operations -
trailing 12 months ('T12') $41.4 $41.4
+ Add back Total interest expense
(ex floorplan) - T12 38.6 38.6
+ Add back Income tax expense - T12 24.2 24.2
+ Add back Depreciation & amortization - T12 23.3 23.3
+ Add back Other non-cash charges - T12 13.0 4.8
+ Add back Non-recurring items - T12 2.9 -
--- -
= CONSOLIDATED EBITDA 143.4 132.3
+ Add back Pro forma acquisitions EBITDA
(as defined) 0.8 0.8
+ Add back Pro forma rent savings (as defined) - 10.7
------ ----
= CONSOLIDATED PROFORMA EBITDA $144.2 $143.8
====== ======
TOTAL LEVERAGE RATIO 4.73 4.73
Fixed Charge Coverage Ratio must be > 1.2
EBITDAR (numerator)
+ Pre-tax Income from continuing
operations - trailing 12 months ('T12') $41.4 $41.4
+ Add back Total interest expense
(ex floorplan) - T12 38.6 38.6
+ Add back Income tax expense - T12 24.2 24.2
+ Add back Depreciation & amortization - T12 23.3 23.3
+ Add back Other non-cash charges - T12
(as defined) 13.0 4.8
+ Add back Non-recurring items - T12
(as defined) 2.9 -
--- -
= CONSOLIDATED EBITDA 143.4 132.3
+ PLUS Required principal payments - T12 54.7 54.7
- LESS Capital expenditures (as defined) (17.8) (13.4)
------ ------
= TOTAL EARNINGS AVAILABLE FOR FIXED CHARGES $180.3 $173.6
====== ======
FIXED CHARGES (denominator)
+ Total interest expense (ex Floorplan
Interest) - T12 $38.6 $38.6
+ PLUS Required principal payments - T12 3.5 3.5
+ PLUS Rental expense - T12 54.7 54.7
- LESS Pro forma rent savings (as defined) - (10.7)
+ PLUS Cash paid for taxes - T12 10.2 10.2
---- ----
= TOTAL FIXED CHARGES $107.0 $96.3
====== =====
FIXED CHARGE COVERAGE RATIO 1.69 1.80
Current Ratio must be > 1.2
Total current assets (numerator)
+ Total current assets $979.4 $979.4
+ PLUS Available unused commitments
under Revolving Credit Facility 121.3 121.3
----- -----
= TOTAL CURRENT ASSETS $1,100.7 $1,100.7
======== ========
Total current liabilities (denominator)
+ Total current liabilities 775.3 775.3
- LESS Debt balloon payments due within
6-12 months - -
- -
= TOTAL CURRENT LIABILITIES $775.3 $775.3
====== ======
CURRENT RATIO 1.42 1.42
Adjusted Net Worth must be > $350 million
Stockholders' equity $590.9
- LESS 50% of net income subsequent to
March 31, 2008 (8.4)
- LESS Proceeds from stock option
exercises subsequent to March 31, 2008 (0.1)
-----
= ADJUSTED NET WORTH $582.4
======
SOURCE Asbury Automotive Group, Inc.
