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Asbury Automotive Group Announces Record First Quarter 2021 Financial Results

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Asbury Automotive Group (NYSE: ABG) reported net income of $92.8 million ($4.78 per diluted share) for Q1 2021, a significant increase from $19.5 million ($1.01) in Q1 2020. Adjusted net income was $90.7 million ($4.68), up from $34.7 million ($1.80). Total revenue reached $2.2 billion, a 36% increase year-over-year. Key performance metrics included a 24% rise in new vehicle unit volume and a 40% increase in gross profit.

The company expressed confidence in its growth strategy following the launch of its online platform, Clicklane.

Positive
  • Net income increased from $19.5 million to $92.8 million year-over-year.
  • Total revenue rose by 36% to $2.2 billion.
  • Adjusted EPS increased by 160%, reaching $4.68.
  • New vehicle unit volume was up 24%.
  • Strong liquidity of $551 million with a pro forma adjusted net leverage of 1.7x.
Negative
  • None.

Asbury Automotive Group, Inc. (NYSE: ABG), one of the largest automotive retail and service companies in the U.S., reported net income for the first quarter 2021 of $92.8 million ($4.78 per diluted share). This compares to net income of $19.5 million ($1.01 per diluted share) in the prior year quarter.

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

“The first quarter of 2021 was very active for us. In addition to posting record performance, we successfully launched our online car buying platform, Clicklane, across our entire store base. Although we are only one quarter into our five-year plan, we feel more confident than ever in our strategic direction and the future growth of Asbury,” said David Hult, Asbury’s President and Chief Executive Officer.

The Company reported adjusted net income (a non-GAAP measure) for the first quarter 2021 of $90.7 million ($4.68 per diluted share) compared to $34.7 million ($1.80 per diluted share) in the prior year quarter.

Net income for the first quarter 2021 was adjusted for the following pre-tax items: gain on legal settlements of $3.5 million ($0.14 per diluted share), gain on sale of real estate of $1.1 million ($0.03 per diluted share) and other real estate related charges of $1.8 million ($0.07 per diluted share).

Net income for the first quarter 2020 was adjusted for the following pre-tax items: gain on dealership divestitures of $33.7 million ($1.30 per diluted share), legal settlement gain of $0.9 million ($0.03 per diluted share), gain on the sale of vacant property of $0.3 million or ($0.01 per diluted share), franchise rights impairment of $23.0 million ($0.89 per diluted share), loss on debt extinguishment of $20.7 million ($0.79 per diluted share), and Park Place deal termination costs of $11.6 million ($0.45 per diluted share).

The Company reported total revenue for the first quarter of $2.2 billion, up 36% from the prior year period; total revenue on a same-store basis was up 18% from the prior year period.

First Quarter 2021 Operational Summary

Total company:

  • Total revenue increased 36%; total gross profit increased 40%
  • New vehicle unit volume increased 24%; used vehicle retail unit volume increased 16%
  • Finance and insurance revenue and gross profit increased 25%
  • Parts and service revenue increased 18% and gross profit increased 21%
  • SG&A as a percentage of gross profit decreased 880 basis points to 62.7%
  • Adjusted operating margin of 6.1%, up 180 bps
  • Adjusted EPS increased 160%
  • Strong balance sheet, ending the quarter with $551 million of available liquidity (including cash, floor plan offsets, used line and revolver) and pro forma adjusted net leverage of 1.7x

Same store:

  • Total revenue increased 18%; gross profit increased 21%
  • New vehicle revenue increased 22%; gross profit increased 60%
  • Used vehicle retail revenue increased 20%; gross profit increased 36%
  • Finance and insurance revenue and gross profit increased 20%
  • Parts and service revenue and gross profit increased 1%

Additional commentary regarding the first quarter results will be provided during the earnings conference call on April 27, 2021 at 10:00 a.m. The conference call will be simulcast live on the internet and can be accessed at www.asburyauto.com. A replay will be available at these sites for 30 days.

In addition, live audio of the call will be accessible to the public by calling (800) 353-6461 (domestic), or (334) 323-0501 (international); passcode – 8517555. 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 – 8517555.

About Asbury Automotive Group, Inc.

Asbury Automotive Group, Inc. ("Asbury"), a Fortune 500 company headquartered in Duluth, GA, is one of the largest automotive retailers in the U.S. Asbury currently operates 91 dealerships, consisting of 112 franchises, representing 31 domestic and foreign brands of vehicles. Asbury also operates 25 collision repair centers. Asbury offers customers an extensive range of automotive products and services, including new and used vehicle sales and related financing and insurance, vehicle maintenance and repair services, replacement parts, and service contracts.

Forward-Looking Statements

This press release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are statements other than historical fact, and may include statements relating to goals, plans, 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, 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 semi-conductor chips and rubber-based products, 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 IT initiatives and other operational strategies, 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 March 31,

 

Increase

(Decrease)

 

%
Change

 

2021

 

2020

 

 

REVENUE:

 

 

 

 

 

 

 

New vehicle

$

1,151.7

 

 

$

822.1

 

 

$

329.6

 

 

40

%

Used vehicle:

 

 

 

 

 

 

 

Retail

607.5

 

 

446.0

 

 

161.5

 

 

36

%

Wholesale

83.4

 

 

47.2

 

 

36.2

 

 

77

%

Total used vehicle

690.9

 

 

493.2

 

 

197.7

 

 

40

%

Parts and service

262.0

 

 

221.6

 

 

40.4

 

 

18

%

Finance and insurance, net

88.3

 

 

70.4

 

 

17.9

 

 

25

%

TOTAL REVENUE

2,192.9

 

 

1,607.3

 

 

585.6

 

 

36

%

GROSS PROFIT:

 

 

 

 

 

 

 

New vehicle

75.5

 

 

36.4

 

 

39.1

 

 

107

%

Used vehicle:

 

 

 

 

 

 

 

Retail

47.5

 

 

31.2

 

 

16.3

 

 

52

%

Wholesale

8.3

 

 

(0.5)

 

 

8.8

 

 

NM

Total used vehicle

55.8

 

 

30.7

 

 

25.1

 

 

82

%

Parts and service

163.1

 

 

134.9

 

 

28.2

 

 

21

%

Finance and insurance, net

88.3

 

 

70.4

 

 

17.9

 

 

25

%

TOTAL GROSS PROFIT

382.7

 

 

272.4

 

 

110.3

 

 

40

%

OPERATING EXPENSES:

 

 

 

 

 

 

 

Selling, general and administrative

239.8

 

 

194.7

 

 

45.1

 

 

23

%

Depreciation and amortization

9.8

 

 

9.5

 

 

0.3

 

 

3

%

Franchise rights impairment

—

 

 

23.0

 

 

(23.0)

 

 

(100)

%

Other operating (income) expense, net

(3.2)

 

 

10.2

 

 

(13.4)

 

 

(131)

%

INCOME FROM OPERATIONS

136.3

 

 

35.0

 

 

101.3

 

 

289

%

OTHER EXPENSES (INCOME):

 

 

 

 

 

 

 

Floor plan interest expense

2.9

 

 

7.0

 

 

(4.1)

 

 

(59)

%

Other interest expense, net

14.0

 

 

17.0

 

 

(3.0)

 

 

(18)

%

Loss on extinguishment of long-term debt, net

—

 

 

20.6

 

 

(20.6)

 

 

(100)

%

Gain on dealership divestitures, net

—

 

 

(33.7)

 

 

33.7

 

 

100

%

Total other expenses, net

16.9

 

 

10.9

 

 

6.0

 

 

55

%

INCOME BEFORE INCOME TAXES

119.4

 

 

24.1

 

 

95.3

 

 

395

%

Income tax expense

26.6

 

 

4.6

 

 

22.0

 

 

478

%

NET INCOME

$

92.8

 

 

$

19.5

 

 

$

73.3

 

 

376

%

EARNINGS PER COMMON SHARE:

 

 

 

 

 

 

 

Basic—

 

 

 

 

 

 

 

Net income

$

4.81

 

 

$

1.02

 

 

$

3.79

 

 

372

%

Diluted—

 

 

 

 

 

 

 

Net income

$

4.78

 

 

$

1.01

 

 

$

3.77

 

 

373

%

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:

 

 

 

 

 

 

 

Basic

19.3

 

 

19.1

 

 

0.2

 

 

 

Restricted stock

0.1

 

 

0.1

 

 

—

 

 

 

Performance share units

—

 

 

0.1

 

 

(0.1)

 

 

 

Diluted

19.4

 

 

19.3

 

 

0.1

 

 

 

______________________________

NM—Not Meaningful

 

ASBURY AUTOMOTIVE GROUP, INC.

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

(Unaudited)

 

 

For the Three Months
Ended March 31,

 

Increase

(Decrease)

 

%

Change

 

2021

 

2020

 

 

Unit sales

 

 

 

 

 

 

 

New vehicle:

 

 

 

 

 

 

 

Luxury

8,511

 

 

4,992

 

 

3,519

 

 

70

%

Import

14,377

 

 

12,458

 

 

1,919

 

 

15

%

Domestic

4,371

 

 

4,527

 

 

(156)

 

 

(3)

%

Total new vehicle

27,259

 

 

21,977

 

 

5,282

 

 

24

%

Used vehicle retail

23,519

 

 

20,287

 

 

3,232

 

 

16

%

Used to new ratio

86.3

%

 

92.3

%

 

(600) bps

 

 

Average selling price

 

 

 

 

 

 

 

New vehicle

$

42,250

 

 

$

37,407

 

 

$

4,843

 

 

13

%

Used vehicle retail

25,830

 

 

21,985

 

 

3,845

 

 

17

%

Average gross profit per unit

 

 

 

 

 

 

 

New vehicle:

 

 

 

 

 

 

 

Luxury

$

5,252

 

 

$

3,385

 

 

$

1,867

 

 

55

%

Import

1,259

 

 

851

 

 

408

 

 

48

%

Domestic

2,906

 

 

1,966

 

 

940

 

 

48

%

Total new vehicle

2,770

 

 

1,656

 

 

1,114

 

 

67

%

Used vehicle retail

2,020

 

 

1,538

 

 

482

 

 

31

%

Finance and insurance, net

1,739

 

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FAQ

What were Asbury Automotive's earnings for Q1 2021?

Asbury Automotive reported a net income of $92.8 million, or $4.78 per diluted share, for Q1 2021.

How did Asbury Automotive's total revenue perform in Q1 2021?

The total revenue for Q1 2021 was $2.2 billion, marking a 36% increase from the prior year.

What is Asbury Automotive's adjusted EPS for Q1 2021?

Asbury Automotive's adjusted EPS for Q1 2021 was $4.68, compared to $1.80 in Q1 2020.

What strategic initiatives did Asbury Automotive launch in 2021?

Asbury launched its online car buying platform, Clicklane, across its entire store base.

When is the Asbury Automotive earnings conference call?

The earnings conference call is scheduled for April 27, 2021, at 10:00 a.m.

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