Asbury Automotive Group Announces Record Financial Results for Fourth Quarter and Full Year 2021 and Increase in Share Repurchase Authorization

Rhea-AI Summary

Asbury Automotive Group (NYSE: ABG) reported a strong fourth quarter with net income of $141 million ($6.44 per diluted share), a 40% increase year-over-year. Adjusted EPS rose 68% to $7.46. Revenue grew 19% to $2.7 billion, while gross profit surged 46%. The company successfully integrated several acquisitions, contributing to a robust operating margin of 8.9%. Full-year results showed a 38% rise in revenue and 55% growth in gross profit. Additionally, the share repurchase authorization was increased by $100 million, totaling $200 million.

Positive

• Fourth quarter EPS increased 40% to $6.44 per diluted share.
• Fourth quarter adjusted EPS rose 68% to $7.46.
• Revenue for Q4 grew 19% to $2.7 billion.
• Gross profit for Q4 surged 46%, with gross margin at 20.4%.
• Full year revenue increased 38%, reaching $9.8 billion.
• Full year adjusted EBITDA rose 94% to $828 million.
• Share repurchase authorization raised by $100 million to $200 million.

Negative

• New vehicle unit volume decreased 8% in Q4.
• New vehicle revenue dropped 9% on a same-store basis.

• Fourth quarter EPS of $6.44 per diluted share, up 40% over prior year EPS
• Fourth quarter adjusted EPS of $7.46 per diluted share (a non-GAAP measure), up 68% over prior year adjusted EPS
• Fourth quarter revenue increased 19% and gross profit increased 46% over prior year quarter; operating margin of 8.9%
• Fourth quarter SG&A as a percentage of gross profit decreased 690 bps over prior year to 54.5%, while adjusted SG&A decreased 710 bps to 54.3%
• Full year revenue increased 38% and gross profit increased 55% over prior year and adjusted EBITDA (a non-GAAP measure) increased 94% to $828 million
• Increase in the Company’s share repurchase authorization by $100 million, to $200 million

DULUTH, Ga.--(BUSINESS WIRE)-- Asbury Automotive Group, Inc. (NYSE: ABG), one of the largest automotive retail and service companies in the U.S., reported record net income for the fourth quarter 2021 of $141 million ($6.44 per diluted share). This result compares to net income of $89 million ($4.59 per diluted share) in the prior year quarter.

“In the fourth quarter, we closed on the transformative acquisitions of:

• Larry H. Miller Dealerships and Total Care Auto, Powered by Landcar (“TCA”, collectively, “LHM Acquisition”), in seven Western states,
• Stevinson Automotive Group in Colorado,
• Arapahoe Hyundai-Genesis in the Denver market and
• Kahlo CDJR in the Indianapolis market.

“We established a coast-to-coast presence and built scale in several strategic high-growth markets through these acquisitions. More importantly, all of these dealerships share Asbury's vision of being the most guest-centric auto retailer in the country. While we acquired approximately $6.6 billion in annualized revenue, we still ended the year with a strong balance sheet with an adjusted net leverage ratio of 2.7x,” said David Hult, Asbury’s President and Chief Executive Officer. “We’ll be working together with our new team members to integrate these acquisitions over the next few quarters.

“Though a supply/demand imbalance remains ongoing with vehicle sales, our incredible team members outperformed once again, achieving record fourth quarter levels in revenue, operating margins, SG&A as a percentage of gross profit, net income and EPS. As we continue to excel on our same store results and we’re pleased with the progress of Clicklane, we will update our strategic five-year plan after we close the first quarter of 2022.”

The financial measures discussed below include both GAAP and adjusted (non-GAAP) financial measures. Please see reconciliations for non-GAAP metrics included in the accompanying financial tables.

The Company reported adjusted net income (a non-GAAP measure) for the fourth quarter 2021 of $163 million ($7.46 per diluted share) compared to $86 million ($4.44 per diluted share) in the prior year quarter.

Net income for the fourth quarter 2021 was adjusted for acquisition expenses and acquisition financing expenses of $28.9 million ($1.02 per diluted share).

Net income for the fourth quarter 2020 was adjusted for a $3.9 million ($0.15 per diluted share) gain from a divestiture.

Fourth Quarter 2021 Operational Summary

Total company vs. 4^th Quarter 2020:

• Revenue of $2.7 billion, an increase of 19%
• Gross profit increased 46%
• Gross margin increased 370 bps to 20.4%
• New vehicle unit volume decreased 8%; new vehicle revenue increased 5%; gross profit increased 99%
• Used vehicle retail unit volume increased 27%; used vehicle retail revenue increased 53%; gross profit increased 84%
• Finance and insurance revenue increased 25%
• Parts and service revenue increased 27%; gross profit increased 20%
• Adjusted SG&A as a percentage of gross profit fell to 54.3%, a decrease of 710 bps
• Operating income increased 76%; adjusted operating income increased 77%
• Operating margin increased 290 bps to 8.9%; adjusted operating margin also increased 290 bps to 8.9%
• Adjusted EPS increased 68% to $7.46

Same store (dealership only) vs. 4^th Quarter 2020:

• Revenue increased 5%
• Gross profit increased 29%
• Gross margin increased 380 bps to 20.5%
• New vehicle unit volume decreased 21%; new vehicle revenue decreased 9%; gross profit increased 74%
• Used vehicle retail unit volume increased 15%; used vehicle retail revenue increased 40%; gross profit increased 64%
• Finance and insurance revenue increased 6%; gross profit per unit increased 12%
• Parts and service revenue increased 13%; gross profit increased 8%; customer pay gross profit increased 17%

Full Year 2021 Results

For the full year 2021, the Company reported record net income of $532 million ($26.49 per diluted share) compared to $254 million ($13.18 per diluted share) in the prior year, a 101% increase in EPS. Adjusted net income (a non-GAAP measure) for 2021 was $549 million ($27.29 per diluted share) compared to $249 million ($12.90 per diluted share) in the prior year, a 112% increase in adjusted EPS.

Total revenue for the full year 2021 was $9.8 billion, up 38% from the prior year; total revenue on a same-store basis was up 20% from the prior year. Total Adjusted EBITDA for the full year 2021 was a record $828 million, up 94% from the prior year.

Liquidity and Leverage

As of December 31, 2021, the company had approximately $437 million of liquidity, including cash of $63 million (which excludes $127 million of cash at TCA), floorplan offset accounts of $84 million and availability under the used vehicle floorplan line and revolver of $291 million. The company’s adjusted net leverage ratio was 2.7x at quarter end.

Financing

During the fourth quarter, to finance the Company’s acquisitions and the related growth of the business, the Company upsized its credit facility, entered into a mortgage facility and completed debt and equity offerings. If the financings had closed simultaneously with the LHM Acquisition, our adjusted EPS for the fourth quarter would have been positively impacted by $0.87 as a result of lower interest expense and fewer outstanding shares.

Share Repurchase Authorization Increase

The Company announced that its Board of Directors increased the Company's common stock share repurchase authorization by $100.0 million, to $200.0 million. The shares may be purchased from time to time in the open market, in privately negotiated transactions or in other manners as permitted by federal securities laws and other legal and contractual requirements. The extent to which the Company repurchases its shares, the number of shares and the timing of any repurchase will depend on such factors as Asbury’s stock price, general economic and market conditions, the potential impact on its capital structure, the expected return on competing uses of capital such as strategic dealership acquisitions and capital investments and other considerations.

Earnings Call

Additional commentary regarding the third quarter results will be provided during the earnings conference call on Tuesday, February 15, 2022, at 10:00 a.m. ET.

The conference call will be simulcast live on the internet and can be accessed by logging onto www.asburyauto.com/company/investor-relations. A replay will be available on this site for 30 days.

In addition, live audio of the call will be accessible to the public by calling (888) 220-8474 (domestic) or (646) 828-8193 (international); confirmation code – 3116958. 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 – 3116958.

About Asbury Automotive Group, Inc.

Asbury Automotive Group, Inc. (NYSE: ABG), a Fortune 500 company headquartered in Duluth, GA, is one of the largest automotive retailers in the U.S. In late 2020, Asbury embarked on a five-year plan to increase revenue and profitability strategically through organic and acquisitive growth as well as their innovative Clicklane digital vehicle purchasing platform, with its guest-centric approach as Asbury’s constant North Star. Asbury currently operates 154 new vehicle dealerships in 15 states, consisting of 204 franchises, representing 31 brands of vehicles, and seven stand-alone used vehicle dealerships. Asbury also operates 35 collision repair centers, an auto auction, a used vehicle wholesale business and Total Care Auto, Powered by Landcar, a leading provider of service contracts and other vehicle protection products. Asbury offers an extensive range of automotive products and services, including new and used vehicles; parts and service, which includes vehicle repair and maintenance services, replacement parts and collision repair services; and finance and insurance products, including arranging vehicle financing through third parties and aftermarket products, such as extended service contracts, guaranteed asset protection debt cancellation and prepaid maintenance.

For additional information, visit www.asburyauto.com.

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, the expected benefits of Clicklane, and other initiatives and future business strategy, including the expected terms or timeline of currently anticipated or recently completed acquisitions or dispositions, such as the LHM acquisition, the anticipated cost savings, run-rate synergies, revenue enhancement strategies, operational improvements and other benefits of such currently anticipated or recently completed acquisitions or dispositions. 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, our inability to realize the benefits expected from recently completed transactions; our inability to promptly and effectively integrate recently completed transactions and the diversion of management’s attention from ongoing business and regular business responsibilities; our inability to complete future acquisitions or divestitures and the risks resulting thereto; the impact of the ongoing COVID-19 pandemic on our industry and business, market factors, Asbury's relationships with, and the financial and operational stability of, vehicle manufacturers and other suppliers, acts of God or other incidents and the shortage of semiconductor chips, which may adversely impact supply from vehicle manufacturers and/or present retail sales challenges; risks associated with Asbury's indebtedness and our ability to comply with applicable covenants in our various financing agreements, or to obtain waivers of these covenants as necessary; 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 strategic and operational strategies and initiatives, including its five-year strategic plan, Asbury's ability to leverage gains from its dealership portfolio, 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 December 31,								Increase (Decrease)				% Change
	2021				2020
REVENUE:
New vehicle	$	1,284.5			$	1,225.6			$	58.9			5	%
Used vehicle:
Retail		865.3				564.0				301.3			53	%
Wholesale		64.2				95.3				(31.1	)		(33	)%
Total used vehicle		929.5				659.3				270.2			41	%
Parts and service		331.4				261.8				69.6			27	%
Finance and insurance		109.4				87.3				22.1			25	%
TOTAL REVENUE		2,654.8				2,234.0				420.8			19	%
COST OF SALES:
New vehicle		1,119.6				1,142.7				(23.1	)		(2	)%
Used vehicle:
Retail		793.0				524.8				268.2			51	%
Wholesale		59.7				94.9				(35.2	)		(37	)%
Total used vehicle		852.7				619.7				233.0			38	%
Parts and service		136.6				99.3				37.3			38	%
Finance and insurance		3.6				—				3.6			—	%
TOTAL COST OF SALES		2,112.5				1,861.7				250.8			13	%
GROSS PROFIT		542.3				372.3				170.0			46	%
OPERATING EXPENSES:
Selling, general and administrative		295.7				228.5				67.2			29	%
Depreciation and amortization		11.3				9.5				1.8			19	%
Other operating (income) expense, net		(0.8	)			(0.2	)			(0.6	)		(300	)%
INCOME FROM OPERATIONS		236.1				134.5				101.6			76	%
OTHER EXPENSES (INCOME):
Floor plan interest expense		1.7				3.6				(1.9	)		(53	)%
Other interest expense, net		50.7				15.0				35.7			238	%
Gain on dealership divestitures, net		—				(3.9	)			3.9			100	%
Total other expenses (income), net		52.4				14.7				37.7			256	%
INCOME BEFORE INCOME TAXES		183.7				119.8				63.9			53	%
Income tax expense		43.2				30.7				12.5			41	%
NET INCOME	$	140.5			$	89.1			$	51.4			58	%
EARNINGS PER COMMON SHARE:
Basic—
Net income	$	6.47			$	4.64			$	1.83			39	%
Diluted—
Net income	$	6.44			$	4.59			$	1.85			40	%
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
Basic		21.7				19.2				2.5
Restricted stock		0.1				0.1				—
Performance share units		—				0.1				(0.1	)
Diluted		21.8				19.4				2.4

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
	2021				2020
REVENUE:
New vehicle	$	4,934.1			$	3,767.4			$	1,166.7			31	%
Used vehicle:
Retail		3,055.9				1,930.0				1,125.9			58	%
Wholesale		259.7				239.5				20.2			8	%
Total used vehicle		3,315.6				2,169.5				1,146.1			53	%
Parts and service		1,182.9				889.8				293.1			33	%
Finance and insurance		405.1				305.1				100.0			33	%
TOTAL REVENUE		9,837.7				7,131.8				2,705.9			38	%
COST OF SALES:
New vehicle		4,443.6				3,548.9				894.7			25	%
Used vehicle:
Retail		2,793.9				1,784.7				1,009.2			57	%
Wholesale		233.4				228.2				5.2			2	%
Total used vehicle		3,027.3				2,012.9				1,014.4			50	%
Parts and service		461.0				346.6				114.4			33	%
Finance and insurance		3.6				—				3.6			—	%
TOTAL COST OF SALES		7,935.5				5,908.4				2,027.1			34	%
GROSS PROFIT		1,902.2				1,223.4				678.8			55	%
OPERATING EXPENSES:
Selling, general and administrative		1,073.9				781.9				292.0			37	%
Depreciation and amortization		41.9				38.5				3.4			9	%
Franchise rights impairment		—				23.0				(23.0	)		(100	)%
Other operating (income) expense, net		(5.4	)			9.2				(14.6	)		(159	)%
INCOME FROM OPERATIONS		791.8				370.8				421.0			114	%
OTHER EXPENSES:
Floor plan interest expense		8.2				17.7				(9.5	)		(54	)%
Other interest expense, net		93.9				56.7				37.2			66	%
Loss on extinguishment of long-term debt, net		—				20.6				(20.6	)		(100	)%
Gain on dealership divestitures, net		(8.0	)			(62.3	)			54.3			87	%
Total other expenses, net		94.1				32.7				61.4			188	%
INCOME BEFORE INCOME TAXES		697.7				338.1				359.6			106	%
Income tax expense		165.3				83.7				81.6			97	%
NET INCOME	$	532.4			$	254.4			$	278.0			109	%
EARNINGS PER COMMON SHARE:
Basic—
Net income	$	26.75			$	13.25			$	13.50			102	%
Diluted—
Net income	$	26.49			$	13.18			$	13.31			101	%
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
Basic		19.9				19.2				0.7
Restricted stock		0.1				—				0.1
Performance share units		0.1				0.1				—
Diluted		20.1				19.3				0.8

ASBURY AUTOMOTIVE GROUP, INC. Additional Disclosures-Consolidated (In millions) (Unaudited)
	December 31, 2021			December 31, 2020			Increase (Decrease)				% Change
SELECTED BALANCE SHEET DATA
Cash and cash equivalents	$	189.4		$	1.4		$	188.0			NM
New vehicle inventory (a)		206.5			640.0			(433.5	)		(68	)%
Used vehicle inventory (b)		402.0			188.5			213.5			113	%
Parts inventory (c)		109.9			46.7			63.2			135	%
Total current assets		2,051.5			1,405.7			645.8			46	%
Floor plan notes payable (d)		564.5			702.2			(137.7	)		(20	)%
Total current liabilities		1,598.0			1,223.4			374.6			31	%
CAPITALIZATION:
Long-term debt (including current portion) (e)	$	3,582.6		$	1,201.8		$	2,380.8			198	%
Shareholders' equity		2,115.5			905.5			1,210.0			134	%
Total	$	5,698.1		$	2,107.3		$	3,590.8			170	%

_____________________________

NM—Not Meaningful

(a) Excluding $4.3 million of new vehicle inventory classified as Assets held for sale as of December 31, 2021

(b) Excluding $16.0 million of used vehicle inventory classified as Assets held for sale as of December 31, 2021

(c) Excluding $3.8 million of parts inventory classified as Assets held for sale as of December 31, 2021

(d) Excluding $9.1 million of Floor plan notes payable classified as Liabilities associated with assets held for sale as of December 31, 2021

(e) Excluding $8.9 million of Long-term debt classified as Liabilities associated with assets held for sale as of December 31, 2020

	December 31, 2021		September 30, 2021		December 31, 2020
Day Supply
New vehicle inventory	8		12		40
Used vehicle inventory	34		28		31

_____________________________

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.

Brand Mix - New Vehicle Revenue by Brand
	For the Three Months Ended December 31,
	2021			2020
Luxury
Mercedes-Benz	12	%		13	%
Lexus	11	%		13	%
BMW	6	%		6	%
Acura	3	%		3	%
Land Rover	2	%		3	%
Porsche	2	%		2	%
Audi	1	%		2	%
Other luxury	6	%		6	%
Total luxury	43	%		48	%
Imports
Toyota	13	%		11	%
Honda	12	%		13	%
Nissan	4	%		4	%
Other imports	8	%		7	%
Total imports	37	%		35	%
Domestic
Ford	7	%		6	%
Dodge	5	%		3	%
Chevrolet	3	%		4	%
Jeep	3	%		2	%
Other domestics	2	%		2	%
Total domestic	20	%		17	%
Total New Vehicle Revenue	100	%		100	%

ASBURY AUTOMOTIVE GROUP, INC. STATEMENTS OF INCOME-CONSOLIDATED (In millions) (Unaudited)
	For the Three Months Ended December 31,								Increase (Decrease)				% Change
	2021				2020
Revenue
New vehicle	$	1,284.5			$	1,225.6			$	58.9			5	%
Used vehicle:
Retail		865.3				564.0				301.3			53	%
Wholesale		64.2				95.3				(31.1	)		(33	)%
Total used vehicle		929.5				659.3				270.2			41	%
Parts and service		331.4				261.8				69.6			27	%
Finance and insurance		109.4				87.3				22.1			25	%
Total Revenue		2,654.8				2,234.0				420.8			19	%
Gross profit
New vehicle		164.9				82.9				82.0			99	%
Used vehicle:
Retail		72.3				39.2				33.1			84	%
Wholesale		4.5				0.4				4.1			NM
Total used vehicle		76.8				39.6				37.2			94	%
Parts and service		194.8				162.5				32.3			20	%
Finance and insurance		105.8				87.3				18.5			21	%
Total gross profit		542.3				372.3				170.0			46	%
Operating expenses
Selling, general and administrative		295.7				228.5				67.2			29	%
Operating metrics
SG&A as a percentage of gross profit		54.5	%			61.4	%		(690) bps
Adjusted SG&A as a percentage of gross profit		54.3	%			61.4	%		(710) bps
Income from operations as a percentage of revenue		8.9	%			6.0	%		290 bps
Income from operations as a percentage of gross profit		43.5	%			36.1	%		740 bps
Adjusted income from operations as a percentage of revenue		8.9	%			6.0	%		290 bps
Adjusted income from operations as a percentage of gross profit		43.8	%			36.1	%		770 bps
Revenue mix
New vehicle		48.4	%			54.9	%
Used vehicle retail		32.6	%			25.2	%
Used vehicle wholesale		2.4	%			4.3	%
Parts and service		12.5	%			11.7	%
Finance and insurance		4.1	%			3.9	%
Total revenue		100.0	%			100.0	%
Gross profit mix
New vehicle		30.4	%			22.3	%
Used vehicle retail		13.4	%			10.6	%
Used vehicle wholesale		0.8	%			0.1	%
Parts and service		35.9	%			43.6	%
Finance and insurance		19.5	%			23.4	%
Total gross profit		100.0	%			100.0	%
____________________________
NM—Not Meaningful

ASBURY AUTOMOTIVE GROUP, INC. STATEMENTS OF INCOME-DEALERSHIPS (In millions) (Unaudited)
	For the Three Months Ended December 31,								Increase (Decrease)				% Change
	2021				2020
Revenue
New vehicle	$	1,284.5			$	1,225.6			$	58.9			5	%
Used vehicle:
Retail		865.3				564.0				301.3			53	%
Wholesale		64.2				95.3				(31.1	)		(33	)%
Total used vehicle		929.5				659.3				270.2			41	%
Parts and service		332.8				261.8				71.0			27	%
Finance and insurance, net		107.0				87.3				19.7			23	%
Total Revenue		2,653.8				2,234.0				419.8			19	%
Gross profit
New vehicle		164.9				82.9				82.0			99	%
Used vehicle:
Retail		72.3				39.2				33.1			84	%
Wholesale		4.5				0.4				4.1			NM
Total used vehicle		76.8				39.6				37.2			94	%
Parts and service		193.1				162.5				30.6			19	%
Finance and insurance, net		107.0				87.3				19.7			23	%
Total gross profit		541.8				372.3				169.5			46	%
Operating expenses
Selling, general and administrative		298.7				228.5				70.2			31	%
SG&A as a percentage of gross profit		55.1	%			61.4	%		(630) bps
_____________________________
NM—Not Meaningful

ASBURY AUTOMOTIVE GROUP, INC. KEY OPERATING HIGHLIGHTS-DEALERSHIPS (In millions, except per unit data) (Unaudited)
	For the Three Months Ended December 31,								Increase (Decrease)				% Change
	2021				2020
Unit sales
New vehicle:
Luxury		8,080				9,751				(1,671	)		(17	)%
Import		13,288				14,315				(1,027	)		(7	)%
Domestic		4,795				4,507				288			6	%
Total new vehicle		26,163				28,573				(2,410	)		(8	)%
Used vehicle retail		27,070				21,386				5,684			27	%
Used to new ratio		103.5	%			74.8	%			NM
Average selling price
New vehicle	$	49,096			$	42,894			$	6,202			14	%
Used vehicle retail		31,965				26,372				5,593			21	%
Average gross profit per unit
New vehicle:
Luxury	$	9,196			$	5,292			$	3,904			74	%
Import		4,749				1,202				3,547			295	%
Domestic		5,735				3,128				2,607			83	%
Total new vehicle		6,303				2,901				3,402			117	%
Used vehicle retail		2,671				1,833				838			46	%
Finance and insurance		2,010				1,747				263			15	%
Front end yield (1)		6,466				4,191				2,275			54	%
Gross margin
New vehicle:
Luxury		13.5	%			8.8	%		470 bps
Import		13.1	%			3.9	%		920 bps
Domestic		10.8	%			6.9	%		390 bps
Total new vehicle		12.8	%			6.8	%		600 bps
Used vehicle retail		8.4	%			7.0	%		140 bps
Parts and service		58.0	%			62.1	%		(410) bps
Total gross profit margin		20.4	%			16.7	%		370 bps

_____________________________
NM—Not Meaningful
(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.

ASBURY AUTOMOTIVE GROUP, INC. SAME STORE OPERATING HIGHLIGHTS-DEALERSHIPS (In millions) (Unaudited)
	For the Three Months Ended December 31,								Increase (Decrease)				% Change
	2021				2020
Revenue
New vehicle:
Luxury	$	532.6			$	579.5			$	(46.9	)		(8	)%
Import		404.0				436.5				(32.5	)		(7	)%
Domestic		174.2				202.1				(27.9	)		(14	)%
Total new vehicle		1,110.8				1,218.1				(107.3	)		(9	)%
Used Vehicle:
Retail		784.8				560.4				224.4			40	%
Wholesale		47.2				94.8				(47.6	)		(50	)%
Total used vehicle		832.0				655.2				176.8			27	%
Parts and service		294.5				259.9				34.6			13	%
Finance and insurance		92.4				86.9				5.5			6	%
Total revenue	$	2,329.7			$	2,220.1			$	109.6			5	%
Gross profit
New vehicle:
Luxury	$	72.0			$	51.2			$	20.8			41	%
Import		52.4				17.2				35.2			205	%
Domestic		18.5				13.9				4.6			33	%
Total new vehicle		142.9				82.3				60.6			74	%
Used Vehicle:
Retail		64.4				39.2				25.2			64	%
Wholesale		3.6				0.4				3.2			NM
Total used vehicle		68.0				39.6				28.4			72	%
Parts and service:
Customer pay		110.4				94.1				16.3			17	%
Warranty		20.6				26.8				(6.2	)		(23	)%
Wholesale parts		8.6				6.4				2.2			34	%
Parts and service, excluding reconditioning and preparation		139.6				127.3				12.3			10	%
Reconditioning and preparation		35.0				34.1				0.9			3	%
Total parts and service		174.6				161.4				13.2			8	%
Finance and insurance		92.4				86.9				5.5			6	%
Total gross profit	$	477.9			$	370.2			$	107.7			29	%
SG&A expense	$	266.5			$	227.0			$	39.5			17	%
SG&A expense as a percentage of gross profit		55.8	%			61.3	%		(550) bps

_____________________________

NM—Not Meaningful

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-DEALERSHIPS (Continued) (Unaudited)
	For the Three Months Ended December 31,								Increase (Decrease)				% Change
	2021				2020
Unit sales
New vehicle:
Luxury		7,852				9,675				(1,823	)		(19	)%
Import		11,342				14,315				(2,973	)		(21	)%
Domestic		3,363				4,451				(1,088	)		(24	)%
Total new vehicle		22,557				28,441				(5,884	)		(21	)%
Used vehicle retail		24,553				21,260				3,293			15	%
Used to new ratio		108.8	%			74.8	%			NM
Average selling price
New vehicle	$	49,244			$	42,829			$	6,415			15	%
Used vehicle retail		31,964				26,359				5,605			21	%
Average gross profit per unit
New vehicle:
Luxury	$	9,170			$	5,292			$	3,878			73	%
Import		4,620				1,202				3,418			284	%
Domestic		5,501				3,123				2,378			76	%
Total new vehicle		6,335				2,894				3,441			119	%
Used vehicle retail		2,623				1,844				779			42	%
Finance and insurance		1,961				1,748				213			12	%
Front end yield (1)		6,362				4,193				2,169			52	%
Gross margin
New vehicle:
Luxury		13.5	%			8.8	%		470 bps
Import		13.0	%			3.9	%		910 bps
Domestic		10.6	%			6.9	%		370 bps
Total new vehicle		12.9	%			6.8	%		610 bps
Used vehicle retail		8.2	%			7.0	%		120 bps
Parts and service:
Parts and service, excluding reconditioning and preparation		47.4	%			49.0	%		(160) bps
Parts and service, including reconditioning and preparation		59.3	%			62.1	%		(280) bps
Total gross profit margin		20.5	%			16.7	%		380 bps

_____________________________
NM—Not Meaningful
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.

ASBURY AUTOMOTIVE GROUP, INC. STATEMENTS OF INCOME-CONSOLIDATED (In millions) (Unaudited)
	For the Twelve Months Ended December 31,								Increase (Decrease)			% Change
	2021				2020
Revenue
New vehicle	$	4,934.1			$	3,767.4			$	1,166.7		31	%
Used vehicle:
Retail		3,055.9				1,930.0				1,125.9		58	%
Wholesale		259.7				239.5				20.2		8	%
Total used vehicle		3,315.6				2,169.5				1,146.1		53	%
Parts and service		1,182.9				889.8				293.1		33	%
Finance and insurance		405.1				305.1				100.0		33	%
Total Revenue		9,837.7				7,131.8				2,705.9		38	%
Gross profit
New vehicle		490.5				218.5				272.0		124	%
Used vehicle:
Retail		262.0				145.3				116.7		80	%
Wholesale		26.3				11.3				15.0		133	%
Total used vehicle		288.3				156.6				131.7		84	%
Parts and service		721.9				543.2				178.7		33	%
Finance and insurance		401.5				305.1				96.4		32	%
Total gross profit		1,902.2				1,223.4				678.8		55	%
Operating expenses
Selling, general and administrative		1,073.9				781.9				292.0		37	%
Operating metrics
SG&A as a percentage of gross profit		56.5	%			63.9	%		(740) bps
Adjusted SG&A as a percentage of gross profit		56.2	%			63.8	%		(760) bps
Income from operations as a percentage of revenue		8.0	%			5.2	%		280 bps
Income from operations as a percentage of gross profit		41.6	%			30.3	%		1,130 bps
Adjusted income from operations as a percentage of revenue		8.1	%			5.7	%		240 bps
Adjusted income from operations as a percentage of gross profit		41.7	%			33.1	%		860 bps
Revenue mix
New vehicle		50.2	%			52.8	%
Used vehicle retail		31.1	%			27.0	%
Used vehicle wholesale		2.6	%			3.4	%
Parts and service		12.0	%			12.5	%
Finance and insurance		4.1	%			4.3	%
Total revenue		100.0	%			100.0	%
Gross profit mix
New vehicle		25.8	%			17.9	%
Used vehicle retail		13.7	%			11.9	%
Used vehicle wholesale		1.4	%			0.9	%
Parts and service		38.0	%			44.4	%
Finance and insurance		21.1	%			24.9	%
Total gross profit		100.0	%			100.0	%

ASBURY AUTOMOTIVE GROUP, INC. STATEMENTS OF INCOME-DEALERSHIPS (In millions) (Unaudited)
	For the Twelve Months Ended December 31,								Increase (Decrease)			% Change
	2021				2020
Revenue
New vehicle	$	4,934.1			$	3,767.4			$	1,166.7		31	%
Used vehicle:
Retail		3,055.9				1,930.0				1,125.9		58	%
Wholesale		259.7				239.5				20.2		8	%
Total used vehicle		3,315.6				2,169.5				1,146.1		53	%
Parts and service		1,184.3				889.8				294.5		33	%
Finance and insurance, net		402.7				305.1				97.6		32	%
Total Revenue		9,836.7				7,131.8				2,704.9		38	%
Gross profit
New vehicle		490.5				218.5				272.0		124	%
Used vehicle:
Retail		262.0				145.3				116.7		80	%
Wholesale		26.3				11.3				15.0		133	%
Total used vehicle		288.3				156.6				131.7		84	%
Parts and service		720.2				543.2				177.0		33	%
Finance and insurance, net		402.7				305.1				97.6		32	%
Total gross profit		1,901.7				1,223.4				678.3		55	%
Operating expenses
Selling, general and administrative		1,076.9				781.9				295.0		38	%
SG&A as a percentage of gross profit		56.6	%			63.9	%		(730) bps

ASBURY AUTOMOTIVE GROUP, INC. KEY OPERATING HIGHLIGHTS-DEALERSHIPS (In millions, except per unit data) (Unaudited)
	For the Twelve Months Ended December 31,								Increase (Decrease)				% Change
	2021				2020
Unit sales
New vehicle:
Luxury		34,648				25,259				9,389			37	%
Import		58,413				52,201				6,212			12	%
Domestic		16,849				17,705				(856	)		(5	)%
Total new vehicle		109,910				95,165				14,745			15	%
Used vehicle retail		105,206				80,537				24,669			31	%
Used to new ratio		95.7	%			84.6	%			NM
Average selling price
New vehicle	$	44,892			$	39,588			$	5,304			13	%
Used vehicle retail		29,047				23,964				5,083			21	%
Average gross profit per unit
New vehicle:
Luxury	$	6,959			$	4,501			$	2,458			55	%
Import		3,001				1,144				1,857			162	%
Domestic		4,398				2,547				1,851			73	%
Total new vehicle		4,463				2,296				2,167			94	%
Used vehicle retail		2,490				1,804				686			38	%
Finance and insurance		1,872				1,736				136			8	%
Front end yield (1)		5,370				3,807				1,563			41	%
Gross margin
New vehicle:
Luxury		11.0	%			7.8	%		320 bps
Import		9.1	%			3.9	%		520 bps
Domestic		9.1	%			5.9	%		320 bps
Total new vehicle		9.9	%			5.8	%		410 bps
Used vehicle retail		8.6	%			7.5	%		110 bps
Parts and service		60.8	%			61.0	%		(20) bps
Total gross profit margin		19.3	%			17.2	%		210 bps

_____________________________
NM—Not Meaningful
(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.

ASBURY AUTOMOTIVE GROUP, INC. SAME STORE OPERATING HIGHLIGHTS-DEALERSHIPS (In millions) (Unaudited)
	For the Twelve Months Ended December 31,								Increase (Decrease)				% Change
	2021				2020
Revenue
New vehicle:
Luxury	$	1,597.4			$	1,409.3			$	188.1			13	%
Import		1,847.6				1,534.8				312.8			20	%
Domestic		730.2				734.8				(4.6	)		(1	)%
Total new vehicle		4,175.2				3,678.9				496.3			13	%
Used Vehicle:
Retail		2,621.9				1,872.1				749.8			40	%
Wholesale		175.1				235.2				(60.1	)		(26	)%
Total used vehicle		2,797.0				2,107.3				689.7			33	%
Parts and service		994.5				867.8				126.7			15	%
Finance and insurance		364.0				299.1				64.9			22	%
Total revenue	$	8,330.7			$	6,953.1			$	1,377.6			20	%
Gross profit
New vehicle:
Luxury	$	175.2			$	110.6			$	64.6			58	%
Import		163.8				59.4				104.4			176	%
Domestic		64.8				43.2				21.6			50	%
Total new vehicle		403.8				213.2				190.6			89	%
Used Vehicle:
Retail		226.5				141.9				84.6			60	%
Wholesale		18.9				11.4				7.5			66	%
Total used vehicle		245.4				153.3				92.1			60	%
Parts and service:
Customer pay		363.0				303.2				59.8			20	%
Warranty		78.4				90.2				(11.8	)		(13	)%
Wholesale parts		28.7				21.6				7.1			33	%
Parts and service, excluding reconditioning and preparation		470.1				415.0				55.1			13	%
Reconditioning and preparation		135.8				114.7				21.1			18	%
Total parts and service		605.9				529.7				76.2			14	%
Finance and insurance		364.0				299.1				64.9			22	%
Total gross profit	$	1,619.1			$	1,195.3			$	423.8			35	%
SG&A expense	$	931.2			$	762.9			$	168.3			22	%
SG&A expense as a percentage of gross profit		57.5	%			63.8	%		(630) 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-DEALERSHIPS (Continued) (Unaudited)
	For the Twelve Months Ended December 31,								Increase (Decrease)				% Change
	2021				2020
Unit sales
New vehicle:
Luxury		25,647				24,526				1,121			5	%
Import		56,227				51,698				4,529			9	%
Domestic		15,316				17,009				(1,693	)		(10	)%
Total new vehicle		97,190				93,233				3,957			4	%
Used vehicle retail		93,803				78,144				15,659			20	%
Used to new ratio		96.5	%			83.8	%			NM
Average selling price
New vehicle	$	42,959			$	39,459			$	3,500			9	%
Used vehicle retail		27,951				23,957				3,994			17	%
Average gross profit per unit
New vehicle:
Luxury	$	6,831			$	4,510			$	2,321			51	%
Import		2,913				1,149				1,764			154	%
Domestic		4,231				2,540				1,691			67	%
Total new vehicle		4,155				2,287				1,868			82	%
Used vehicle retail		2,415				1,816				599			33	%
Finance and insurance		1,906				1,745				161			9	%
Front end yield (1)		5,206				3,817				1,389			36	%
Gross margin
New vehicle:
Luxury		11.0	%			7.8	%		320 bps
Import		8.9	%			3.9	%		500 bps
Domestic		8.9	%			5.9	%		300 bps
Total new vehicle		9.7	%			5.8	%		390 bps
Used vehicle retail		8.6	%			7.6	%		100 bps
Parts and service:
Parts and service, excluding reconditioning and preparation		47.3	%			47.8	%		(50) bps
Parts and service, including reconditioning and preparation		60.9	%			61.0	%		(10) bps
Total gross profit margin		19.4	%			17.2	%		220 bps

_____________________________
NM—Not Meaningful
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.

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.

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

	For the Twelve Months Ended
	December 31, 2021				September 30, 2021
	(Dollars in millions)
Adjusted leverage ratio:
Long-term debt (including current portion)	$	3,582.6			$	1,371.0
Cash and floor plan offset		(272.9	)			(377.4	)
TCA restricted cash		127.3				—
Availability under our used vehicle revolving floor plan facility		(20.6	)			(160.0	)
Adjusted long-term net debt	$	3,416.4			$	833.6
Calculation of earnings before interest, taxes, depreciation and amortization ("EBITDA"):
Net Income	$	532.4			$	481.0
Depreciation and amortization		41.9				40.1
Income tax expense		165.3				153.0
Swap and other interest expense		94.5				58.4
Earnings before interest, taxes, depreciation and amortization ("EBITDA")	$	834.1			$	732.5
Non-core items - expense (income):
Gain on dealership divestitures	$	(8.0	)		$	(11.9	)
Legal settlements		(3.5	)			(3.5	)
Gain on sale of real estate		(1.9	)			(1.9	)
Professional fees associated with acquisitions		4.9				3.5
Real estate-related charges		2.1				2.1
Total non-core items		(6.4	)			(11.7	)
Adjusted EBITDA	$	827.7			$	720.8
Pro forma impact of acquisition and divestitures on EBITDA	$	440.4			$	—
Pro forma Adjusted EBITDA	$	1,268.1			$	720.8
Pro forma Adjusted net leverage ratio		2.7				1.2

	For the Three Months Ended December 31,
	2021				2020
	(In millions, except per share data)
Adjusted income from operations:
Income from operations	$	236.1			$	134.5
Professional fees associated with acquisitions		1.4				—
Adjusted income from operations	$	237.5			$	134.5
Adjusted operating margin:
Total revenue	$	2,654.8			$	2,234.0
Operating margin		8.9	%			6.0	%
Adjusted operating margin		8.9	%			6.0	%
Adjusted net income:
Net income	$	140.5			$	89.1
Non-core items - (income) expense:
Bridge commitment fee		27.5				—
Professional fees associated with acquisitions		1.4				—
Gain on dealership divestiture		—				(3.9	)
Income tax effect on non-core items above		(6.8	)			1.0
Total non-core items		22.1				(2.9	)
Adjusted net income	$	162.6			$	86.2
Adjusted diluted earnings per share (EPS):
Diluted EPS	$	6.44			$	4.59
Total non-core items		1.02				(0.15	)
Adjusted diluted EPS	$	7.46			$	4.44
Weighted average common shares outstanding - diluted		21.8				19.4
Adjusted selling, general, and administrative expense:
Selling, general, and administrative expense	$	295.7			$	228.5
Professional fees associated with acquisitions		(1.4	)			—
Adjusted selling, general, and administrative expense:	$	294.3			$	228.5
Adjusted selling, general, and administrative expense as a percentage of gross profit:
Total gross profit	$	542.3			$	372.3
Selling, general, and administrative expense as a percentage of gross profit		54.5	%			61.4	%
Adjusted selling, general, and administrative expense as a percentage of gross profit		54.3	%			61.4	%

	For the Twelve Months Ended December 31,
	2021				2020
	(In millions, except per share data)
Adjusted income from operations:
Income from operations	$	791.8			$	370.8
Legal settlements		(3.5	)			(2.1	)
Gain on sale of real estate		(1.9	)			(0.3	)
Real estate-related charges		2.1				0.7
Professional fees associated with acquisitions		4.9				1.3
Park Place related costs		—				11.6
Franchise rights impairment		—				23.0
Adjusted income from operations	$	793.4			$	405.0
Adjusted operating margin:
Total revenue	$	9,837.7			$	7,131.8
Operating margin		8.0	%			5.2	%
Adjusted operating margin		8.1	%			5.7	%
Adjusted net income:
Net income	$	532.4			$	254.4
Non-core items - (income) expense:
Gain on dealership divestitures		(8.0	)			(62.3	)
Legal settlements		(3.5	)			(2.1	)
Gain on sale of real estate		(1.9	)			(0.3	)
Bridge commitment fee		27.5				—
Professional fees associated with acquisitions		4.9				1.3
Real estate related charges		2.1				0.7
Park Place related costs		—				11.6
Loss on extinguishment of debt		—				20.7
Franchise rights impairment		—				23.0
Income tax effect on non-core items above		(5.0	)			1.9
Total non-core items		16.1				(5.5	)
Adjusted net income	$	548.5			$	248.9
Adjusted diluted earnings per share (EPS):
Diluted EPS	$	26.49			$	13.18
Total non-core items		0.80				(0.28	)
Adjusted diluted EPS	$	27.29			$	12.90
Weighted average common shares outstanding - diluted		20.1				19.3
Adjusted Selling, general, and administrative expense:
Selling, general, and administrative expense	$	1,073.9			$	781.9
Professional fees associated with acquisitions		(4.9	)			(1.3	)
Adjusted Selling, general, and administrative expense:	$	1,069.0			$	780.6
Adjusted selling, general, and administrative expense as a percentage of gross profit:
Total gross profit	$	1,902.2			$	1,223.4
Selling, general, and administrative expense as a percentage of gross profit		56.5	%			63.9	%
Adjusted selling, general, and administrative expense as a percentage of gross profit		56.2	%			63.8	%

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20220215005156/en/

Investors & Reporters May Contact:

Karen Reid

VP & Treasurer

(770) 418-8211

ir@asburyauto.com

Source: Asbury Automotive Group, Inc.

FAQ

What were Asbury Automotive Group's fourth quarter earnings results for 2021?

Asbury Automotive Group reported a fourth quarter net income of $141 million, or $6.44 per diluted share, representing a 40% increase from the prior year.

How much did Asbury Automotive's revenue increase in Q4 2021?

Revenue for the fourth quarter of 2021 increased by 19% to $2.7 billion.

What is the adjusted EPS for Asbury Automotive in Q4 2021?

The adjusted EPS for Asbury Automotive in the fourth quarter of 2021 was $7.46, a 68% increase compared to the previous year.

What was the annual revenue growth for Asbury Automotive Group in 2021?

For the full year 2021, Asbury Automotive Group's revenue increased by 38%, totaling $9.8 billion.

What changes were made to Asbury Automotive's share repurchase program?

Asbury Automotive increased its share repurchase authorization by $100 million to a total of $200 million.