Asbury Automotive Group Reports Record EPS of $9.07 for Second Quarter 2022, up 16% Over Prior Year Quarter, and Adjusted EPS (a non-GAAP measure) of $10.04, up 29% Over Prior Year Quarter, and an All-Time Record

Rhea-AI Summary

Asbury Automotive Group (NYSE: ABG) reported a robust second quarter with net income of $201 million, a 32% increase year-over-year. Adjusted net income rose 47% to $223 million, while revenue surged 53% to $4.0 billion. Record adjusted EBITDA amounted to $352 million, a 56% increase. The company showcased strong performance in its dealership operations, with significant growth in both new and used vehicle sales. However, same-store revenue declined 7%. As of June 30, 2022, liquidity stood at $1.0 billion.

Positive

• Net income increased 32% to $201 million.
• Adjusted net income rose 47% to $223 million.
• Record adjusted EBITDA of $352 million, up 56%.
• Revenue jumped 53% to $4.0 billion.
• New vehicle unit volume grew 22%, with revenue up 36%.
• Used vehicle retail unit volume increased 48%, with revenue up 68%.
• Finance and insurance PVR increased 31%.

Negative

• Same-store revenue decreased 7%.
• New vehicle unit volume dropped 31%.

• Second quarter net income of $201 million, an increase of 32% over prior year quarter, and adjusted net income (a non-GAAP measure) of $223 million, an increase of 47% over prior year quarter
• Second quarter adjusted EBITDA (a non-GAAP measure) increased 56% over prior year quarter to $352 million, an all-time record
• Second quarter revenue of $4.0 billion, an increase of 53% over prior year quarter, and gross profit of $803 million, an increase of 61% over prior year quarter
• Second quarter same store F&I PVR of $2,409, a 32% increase over prior year quarter
• Second quarter operating margin of 8.5%

DULUTH, Ga.--(BUSINESS WIRE)-- Asbury Automotive Group, Inc. (NYSE: ABG) (the “Company”), one of the largest automotive retail and service companies in the U.S., reported record second quarter 2022 net income of $201 million ($9.07 per diluted share), an increase of 32% from $152 million ($7.80 per diluted share) in the prior year quarter. Second quarter 2022 adjusted net income, a non-GAAP measure, increased 47% year-over-year to $223 million ($10.04 per diluted share) compared to adjusted net income of $152 million ($7.78 per diluted share) in second quarter 2021.

“The Company generated an all-time record adjusted EPS of $10.04 and all-time record adjusted EBITDA of $352 million. With two full quarters with our expanded dealership portfolio, our incredible team across the nation delivered a sequential increase in adjusted EBITDA of 5% and adjusted EPS of 8% over the first quarter of 2022. We are impressed with the strides that our team members are making to integrate our recent acquisitions and deliver value to our shareholders through this organic quarter over quarter growth,” said David Hult, Asbury’s President and Chief Executive Officer.

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.

Adjusted net income for second quarter 2022 excludes losses, net of tax, of $29 million ($0.97 per diluted share) related to losses on the sale of dealerships and a collision center.

Net income for the second quarter 2021 excluded real estate net gains of $0.5 million ($0.02 per diluted share).

Second Quarter 2022 Operational Summary

Total company vs. 2^nd Quarter 2021:

• Revenue of $4.0 billion, an increase of 53%
• Gross profit increased 61%
• Gross margin increased 110 bps to 20.3%
• New vehicle unit volume increased 22%; new vehicle revenue increased 36%; gross profit increased 78%
• Used vehicle retail unit volume increased 48%; used vehicle retail revenue increased 68%; gross profit increased 37%
• Finance and insurance (F&I) per vehicle retailed (PVR) increased 31%
• Parts and service revenue increased 78%; gross profit increased 59%
• SG&A as a percentage of gross profit increased to 55.8%, an increase of 160 bps
• Operating income and adjusted operating income both increased 54%
• Operating margin was flat at 8.5% and adjusted operating margin increased 10 bps to 8.5%
• EPS increased 16% to $9.07; adjusted EPS increased 29% to $10.04

Same store (dealership only) vs. 2^nd Quarter 2021:

• Revenue decreased 7%
• Gross profit was flat
• Gross margin increased 140 bps to 20.6%
• New vehicle unit volume decreased 31%; new vehicle revenue decreased 22%; new vehicle gross profit increased 3%
• Used vehicle retail unit volume decreased 2%; used vehicle retail revenue increased 12%; used vehicle retail gross profit decreased 21%; used to new ratio increased to 120% (from 84%)
• F&I PVR increased 32%
• Parts and service revenue increased 10%; gross profit increased 6%; customer pay gross profit increased 16%
• SG&A as a percentage of gross profit increased to 55.9%, an increase of 160 bps

Clicklane metrics:

• Almost 6,600 vehicles sold; an increase of 55% over prior year quarter and 17% sequentially
• 92% of transactions were customers incremental to Asbury Automotive
• 44% of Clicklane sales had a trade-in and 71% of those utilized the payoff tool
• Total front-end PVR of $3,765 and F&I PVR of $2,166, resulting in total front-end yield of $5,927
• Conversion rate nearly double that of traditional internet leads and growing sequentially
• 95% of deliveries within a 50-mile radius of an Asbury dealership
• Average transaction time of ~8 minutes for cash deals and ~14 minutes for financed deals

Liquidity and Leverage

As of June 30, 2022, the Company had cash and floorplan offset accounts of $244 million (which excludes $160 million of cash at TCA) and availability under the used vehicle floorplan line and revolver of $765 million for a total of approximately $1.0 billion in liquidity. The Company’s adjusted net leverage ratio was 2.1x at quarter end compared to 2.7x at the end of 2021.

Earnings Call

Additional commentary regarding the second quarter results will be provided during the earnings conference call on Thursday, July 28, 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 +1 (646) 828-8193 (international); confirmation code – 9867232. 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 +1 (719) 457-0820 (international); passcode – 9867232.

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 148 new vehicle dealerships in 15 states, consisting of 198 franchises, representing 31 brands of vehicles, and 7 stand-alone used vehicle stores. Asbury also operates 34 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, objectives, projections regarding Asbury's financial position, liquidity, results of operations, cash flows, leverage, market position and dealership portfolio, revenue enhancement strategies, operational improvements, projections regarding the expected benefits of Clicklane, management’s plans, projections and objectives for future operations, scale and performance, integration plans and expected synergies from acquisitions, capital allocation strategy, business strategy and expectations of our management with respect to, among other things: changes in general economic and business conditions, including increases in interest rates and rising fuel prices, any impact of COVID-19 on the automotive industry in general, the automotive retail industry in particular and our customers, suppliers, vendors and business partners; our relationships with vehicle manufacturers; our ability to maintain our margins; operating cash flows and availability of capital; capital expenditures; the amount of our indebtedness; the completion of any future acquisitions and divestitures; future return targets; future annual savings; general economic trends, including consumer confidence levels, interest rates, inflation, and fuel prices; and automotive retail industry trends. 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 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 therefrom; any impact from the 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, acts of war or other incidents and the shortage of semiconductor chips and other components, 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, including changes in automotive state franchise laws, 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. These forward-looking statements and such risks, uncertainties and other factors speak only as of the date of this press release. 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,							% Change			For the Six Months Ended June 30,								% Change
	2022			2021							2022				2021
REVENUE:
New vehicle	$	1,864.5		$	1,368.4			36	%		$	3,720.1			$	2,520.1			48	%
Used vehicle:
Retail		1,272.8			759.4			68	%			2,489.7				1,366.9			82	%
Wholesale		89.7			56.8			58	%			223.7				140.2			60	%
Total used vehicle		1,362.5			816.2			67	%			2,713.4				1,507.1			80	%
Parts and service		520.2			292.4			78	%			1,022.1				554.4			84	%
Finance and insurance		203.0			107.0			90	%			406.4				195.3			108	%
TOTAL REVENUE		3,950.2			2,584.0			53	%			7,862.0				4,776.9			65	%
COST OF SALES:
New vehicle		1,644.1			1,244.3			32	%			3,275.7				2,320.5			41	%
Used vehicle:
Retail		1,172.0			685.9			71	%			2,293.1				1,245.9			84	%
Wholesale		86.3			46.8			84	%			216.8				121.9			78	%
Total used vehicle		1,258.3			732.7			72	%			2,509.9				1,367.8			83	%
Parts and service		229.8			109.8			109	%			455.2				208.7			118	%
Finance and insurance		15.3			—			—	%			26.5				—			—	%
TOTAL COST OF SALES		3,147.5			2,086.8			51	%			6,267.3				3,897.0			61	%
GROSS PROFIT		802.7			497.2			61	%			1,594.7				879.9			81	%
OPERATING EXPENSES:
Selling, general and administrative		448.3			269.7			66	%			903.8				509.5			77	%
Depreciation and amortization		18.1			10.1			79	%			36.5				19.9			83	%
Other operating expense (income), net		0.8			(1.0	)		180	%			(1.9	)			(4.2	)		(55	) %
INCOME FROM OPERATIONS		335.5			218.4			54	%			656.3				354.7			85	%
OTHER EXPENSES:
Floor plan interest expense		1.5			2.1			(29	) %			4.1				5.0			(18	) %
Other interest expense, net		37.6			14.4			161	%			75.2				28.4			165	%
(Gain) loss on dealership divestitures, net		28.7			—			—	%			(4.4	)			—			—	%
Total other expenses, net		67.8			16.5			311	%			74.9				33.4			124	%
INCOME BEFORE INCOME TAXES		267.7			201.9			33	%			581.4				321.3			81	%
Income tax expense		66.3			49.8			33	%			142.3				76.4			86	%
NET INCOME	$	201.4		$	152.1			32	%		$	439.1			$	244.9			79	%
EARNINGS PER COMMON SHARE:
Basic—
Net income	$	9.11		$	7.88			16	%		$	19.60			$	12.69			54	%
Diluted—
Net income	$	9.07		$	7.80			16	%		$	19.52			$	12.56			55	%
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
Basic		22.1			19.3							22.4				19.3
Restricted stock		—			0.1							—				0.1
Performance share units		0.1			0.1							0.1				0.1
Diluted		22.2			19.5							22.5				19.5

ASBURY AUTOMOTIVE GROUP, INC. Additional Disclosures-Consolidated (In millions) (Unaudited)
	June 30, 2022			December 31, 2021			Increase (Decrease)				% Change
SELECTED BALANCE SHEET DATA
Cash and cash equivalents	$	100.1		$	178.9		$	(78.8	)		(44	) %
Inventory, net (a)		783.2			718.4			64.8			9	%
Total current assets		1,601.5			1,929.4			(327.9	)		(17	) %
Floor plan notes payable (b)		44.4			564.5			(520.1	)		(92	) %
Total current liabilities		1,156.9			1,598.0			(441.1	)		(28	) %
CAPITALIZATION:
Long-term debt (including current portion) (c)	$	3,385.1		$	3,582.6		$	(197.5	)		(6	) %
Shareholders' equity		2,410.4			2,115.5			294.9			14	%
Total	$	5,795.5		$	5,698.1		$	97.4			2	%

_____________________________
(a)		Excludes $5.6 million and $24.1 million of Inventory classified as Assets held for sale as of June 30, 2022 and December 31, 2021, respectively
(b)		Excluding $1.1 million and $9.1 million of Floor plan notes payable classified as Liabilities associated with assets held for sale as of June 30, 2022 and December 31, 2021, respectively
(c)		Excluding $2.8 million of Debt classified as Liabilities associated with assets held for sale as of June 30, 2022

	June 30, 2022		December 31, 2021		June 30, 2021
Day Supply
New vehicle inventory	13		8		17
Used vehicle inventory	34		34		37

_____________________________

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 June 30,
	2022		2021
Luxury
Lexus	9 %		12 %
Mercedes-Benz	8 %		11 %
BMW	3 %		6 %
Porsche	3 %		2 %
Acura	2 %		4 %
Land Rover	1 %		3 %
Audi	1 %		2 %
Other luxury	5 %		4 %
Total luxury	32 %		44 %
Imports
Toyota	16 %		11 %
Honda	8 %		17 %
Hyundai	5 %		2 %
Nissan	4 %		5 %
Other imports	5 %		6 %
Total imports	38 %		41 %
Domestic
Chrysler, Dodge, Jeep, Ram	16 %		5 %
Ford	9 %		5 %
Chevrolet, Buick, GMC	5 %		5 %
Total domestic	30 %		15 %
Total New Vehicle Revenue	100 %		100 %

	For the Three Months Ended June 30,
	2022		2021
Revenue mix
New vehicle	47.2 %		53.0 %
Used vehicle retail	32.2 %		29.4 %
Used vehicle wholesale	2.3 %		2.2 %
Parts and service	13.2 %		11.3 %
Finance and insurance	5.1 %		4.1 %
Total revenue	100.0 %		100.0 %
Gross profit mix
New vehicle	27.5 %		25.0 %
Used vehicle retail	12.5 %		14.8 %
Used vehicle wholesale	0.4 %		2.0 %
Parts and service	36.2 %		36.7 %
Finance and insurance	23.4 %		21.5 %
Total gross profit	100.0 %		100.0 %

ASBURY AUTOMOTIVE GROUP, INC. STATEMENTS OF INCOME-CONSOLIDATED (In millions) (Unaudited)
	For the Three Months Ended June 30,								% Change			For the Six Months Ended June 30,								% Change
	2022				2021							2022				2021
Revenue
New vehicle	$	1,864.5			$	1,368.4			36	%		$	3,720.1			$	2,520.1			48	%
Used vehicle:
Retail		1,272.8				759.4			68	%			2,489.7				1,366.9			82	%
Wholesale		89.7				56.8			58	%			223.7				140.2			60	%
Total used vehicle		1,362.5				816.2			67	%			2,713.4				1,507.1			80	%
Parts and service		520.2				292.4			78	%			1,022.1				554.4			84	%
Finance and insurance		203.0				107.0			90	%			406.4				195.3			108	%
Total Revenue		3,950.2				2,584.0			53	%			7,862.0				4,776.9			65	%
Gross profit
New vehicle	$	220.4			$	124.1			78	%		$	444.4			$	199.6			123	%
Used vehicle:
Retail		100.8				73.5			37	%			196.6				121.0			62	%
Wholesale		3.4				10.0			(66	) %			6.9				18.3			(62	) %
Total used vehicle		104.2				83.5			25	%			203.5				139.3			46	%
Parts and service		290.4				182.6			59	%			566.9				345.7			64	%
Finance and insurance		187.7				107.0			75	%			379.9				195.3			95	%
Total gross profit		802.7				497.2			61	%			1,594.7				879.9			81	%
Operating expenses
Selling, general and administrative	$	448.3			$	269.7			66	%		$	903.8			$	509.5			77	%
Operating metrics
SG&A as a % of gross profit		55.8	%			54.2	%		160 bps				56.7	%			57.9	%		(120) bps
Adjusted SG&A as a % of gross profit		55.8	%			54.2	%		160 bps				56.7	%			57.9	%		(120) bps
Income from operations as a % of revenue		8.5	%			8.5	%		— bps				8.3	%			7.4	%		90 bps
Income from operations as a % of gross profit		41.8	%			43.9	%		(210) bps				41.2	%			40.3	%		90 bps
Adjusted income from operations as a % of revenue		8.5	%			8.4	%		10 bps				8.3	%			7.4	%		90 bps
Adjusted income from operations as a % of gross profit		41.8	%			43.8	%		(200) bps				41.1	%			39.9	%		120 bps
Finance and insurance average gross profit per unit	$	2,390			$	1,827			31	%		$	2,435			$	1,786			36	%
Total parts and service gross margin		55.8	%			62.4	%		(660) bps				55.5	%			62.4	%		(690) bps
Total gross profit margin		20.3	%			19.2	%		110 bps				20.3	%			18.4	%		190 bps

ASBURY AUTOMOTIVE GROUP, INC. STATEMENTS OF INCOME-DEALERSHIPS (In millions) (unaudited)
	For the Three Months Ended June 30,								% Change			For the Six Months Ended June 30,								% Change
	2022				2021							2022				2021
Revenue
New vehicle	$	1,864.5			$	1,368.4			36	%		$	3,720.1			$	2,520.1			48	%
Used vehicle:
Retail		1,272.8				759.4			68	%			2,489.7				1,366.9			82	%
Wholesale		89.7				56.8			58	%			223.7				140.2			60	%
Total used vehicle		1,362.5				816.2			67	%			2,713.4				1,507.1			80	%
Parts and service		528.3				292.4			81	%			1,038.1				554.4			87	%
Finance and insurance, net		174.7				107.0			63	%			352.6				195.3			81	%
Total Revenue		3,930.0				2,584.0			52	%			7,824.2				4,776.9			64	%
Gross profit
New vehicle	$	220.4			$	124.1			78	%		$	444.4			$	199.6			123	%
Used vehicle:
Retail		100.8				73.5			37	%			196.6				121.0			62	%
Wholesale		3.4				10.0			(66	) %			6.9				18.3			(62	) %
Total used vehicle		104.2				83.5			25	%			203.5				139.3			46	%
Parts and service		294.4				182.6			61	%			574.6				345.7			66	%
Finance and insurance, net		174.7				107.0			63	%			352.6				195.3			81	%
Total gross profit		793.7				497.2			60	%			1,575.1				879.9			79	%
Unit sales
New vehicle:
Luxury		8,899				10,085			(12	) %			17,156				18,596			(8	) %
Import		19,564				17,257			13	%			40,242				31,634			27	%
Domestic		10,234				4,383			133	%			20,473				8,754			134	%
Total new vehicle		38,697				31,725			22	%			77,871				58,984			32	%
Used vehicle retail		39,848				26,856			48	%			78,154				50,375			55	%
Used to new ratio		103.0	%			84.7	%						100.4	%			85.4	%
Average selling price
New vehicle	$	48,182			$	43,133			12	%		$	47,773			$	42,725			12	%
Used vehicle retail	$	31,941			$	28,277			13	%		$	31,856			$	27,134			17	%
Average gross profit per unit
New vehicle:
Luxury	$	8,596			$	6,138			40	%		$	8,586			$	5,732			50	%
Import		4,483				2,550			76	%			4,552				1,963			132	%
Domestic		5,491				4,152			32	%			5,563				3,530			58	%
Total new vehicle		5,696				3,912			46	%			5,707				3,384			69	%
Used vehicle retail		2,530				2,737			(8	) %			2,516				2,402			5	%
Finance and insurance		2,224				1,827			22	%			2,260				1,786			27	%
Front end yield (1)		6,314				5,200			21	%			6,368				4,717			35	%
Gross margin
New vehicle		11.8	%			9.1	%		270 bps				11.9	%			7.9	%		400 bps
Used vehicle retail		7.9	%			9.7	%		(180) bps				7.9	%			8.9	%		(100) bps
Parts and service		55.7	%			62.4	%		(670) bps				55.4	%			62.4	%		(700) bps
Total gross profit margin		20.2	%			19.2	%		100 bps				20.1	%			18.4	%		170 bps
Operating expenses
Selling, general and administrative	$	455.1			$	269.7			69	%		$	917.2			$	509.5			80	%
Adjusted Selling, general and administrative	$	455.1			$	269.7			69	%		$	917.2			$	509.5			80	%
SG&A as a % of gross profit		57.3	%			54.2	%		310 bps				58.2	%			57.9	%		30 bps
Adjusted SG&A as a % of gross profit		57.3	%			54.2	%		310 bps				58.2	%			57.9	%		30 bps

_____________________________
(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 June 30,								% Change			For the Six Months Ended June 30,								% Change
	2022				2021							2022				2021
Revenue
New vehicle	$	1,058.1			$	1,351.0			(22	) %		$	2,086.5			$	2,488.3			(16	) %
Used Vehicle:
Retail		837.2				748.6			12	%			1,627.1				1,346.2			21	%
Wholesale		38.6				56.5			(32	) %			91.1				139.4			(35	) %
Total used vehicle		875.8				805.1			9	%			1,718.2				1,485.6			16	%
Parts and service		317.8				288.7			10	%			612.9				547.4			12	%
Finance and insurance		114.4				106.0			8	%			224.3				193.4			16	%
Total revenue		2,366.1				2,550.8			(7	) %			4,641.9				4,714.7			(2	) %
Gross profit
New vehicle	$	125.1			$	121.9			3	%		$	249.6			$	196.3			27	%
Used Vehicle:
Retail		57.3				72.7			(21	) %			112.1				119.5			(6	) %
Wholesale		1.3				9.9			(87	) %			2.0				18.1			(89	) %
Total used vehicle		58.6				82.6			(29	) %			114.1				137.6			(17	) %
Parts and service		190.2				180.2			6	%			366.5				341.0			7	%
Finance and insurance		114.4				106.0			8	%			224.3				193.4			16	%
Total gross profit		488.3				490.7			—	%			954.5				868.3			10	%
Unit sales
New vehicle:
Luxury		7,703				9,780			(21	) %			14,570				18,039			(19	) %
Import		10,741				17,257			(38	) %			22,379				31,634			(29	) %
Domestic		3,150				4,383			(28	) %			6,296				8,754			(28	) %
Total new vehicle		21,594				31,420			(31	) %			43,245				58,427			(26	) %
Used vehicle retail		25,891				26,505			(2	) %			50,488				49,680			2	%
Used to new ratio		119.9	%			84.4	%						116.7	%			85.0	%
Average selling price
New vehicle	$	49,000			$	42,998			14	%		$	48,248			$	42,588			13	%
Used vehicle retail	$	32,336			$	28,244			14	%		$	32,227			$	27,097			19	%
Average gross profit per unit
New vehicle:
Luxury	$	8,231			$	6,104			35	%		$	8,332			$	5,726			46	%
Import		4,394				2,550			72	%			4,375				1,963			123	%
Domestic		4,603				4,152			11	%			4,813				3,530			36	%
Total new vehicle		5,793				3,880			49	%			5,772				3,360			72	%
Used vehicle retail		2,213				2,743			(19	) %			2,220				2,405			(8	) %
Finance and insurance		2,409				1,830			32	%			2,393				1,789			34	%
Front end yield (1)		6,250				5,189			20	%			6,252				4,710			33	%
Gross margin
Total new vehicle		11.8	%			9.0	%		280 bps				12.0	%			7.9	%		410 bps
Used vehicle retail		6.8	%			9.7	%		(290) bps				6.9	%			8.9	%		(200) bps
Parts and service		59.8	%			62.4	%		(260) bps				59.8	%			62.3	%		(250) bps
Total gross profit margin		20.6	%			19.2	%		140 bps				20.6	%			18.4	%		220 bps
Operating expenses
Selling, general and administrative	$	273.2			$	266.4			3	%		$	542.7			$	503.4			8	%
Adjusted Selling, general and administrative	$	273.2			$	266.4			3	%		$	542.7			$	503.4			8	%
SG&A as a % of gross profit		55.9	%			54.3	%		160 bps				56.9	%			58.0	%		(110) bps
Adjusted SG&A as a % of gross profit		55.9	%			54.3	%		160 bps				56.9	%			58.0	%		(110) bps

_____________________________
(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. SEGMENT REPORTING (Unaudited)
	Three Months Ended June 30, 2022
	Dealerships			TCA After Eliminations				Total Company
	(In millions)
Revenue
New	$	1,864.5		$	—			$	1,864.5
Used		1,362.5			—				1,362.5
Parts and service		528.3			(8.1	)			520.2
Finance and insurance		174.7			28.3				203.0
Total revenue		3,930.0			20.2				3,950.2
Cost of sales
New	$	1,644.1		$	—			$	1,644.1
Used		1,258.3			—				1,258.3
Parts and service		233.9			(4.1	)			229.8
Finance and insurance		—			15.3				15.3
Total cost of sales		3,136.3			11.2				3,147.5
Gross profit
New	$	220.4		$	—			$	220.4
Used		104.2			—				104.2
Parts and service		294.4			(4.0	)			290.4
Finance and insurance		174.7			13.0				187.7
Total gross profit		793.7			9.0				802.7
Selling, general and administrative	$	455.1		$	(6.8	)		$	448.3
Income from operations	$	321.8		$	13.7			$	335.5

	Six Months Ended June 30, 2022
	Dealerships			TCA After Eliminations				Total Company
	(In millions)
Revenue
New	$	3,720.1		$	—			$	3,720.1
Used		2,713.4			—				2,713.4
Parts and service		1,038.1			(16.0	)			1,022.1
Finance and insurance		352.6			53.8				406.4
Total revenue		7,824.2			37.8				7,862.0
Cost of sales
New	$	3,275.7		$	—			$	3,275.7
Used		2,509.9			—				2,509.9
Parts and service		463.5			(8.3	)			455.2
Finance and insurance		—			26.5				26.5
Total cost of sales		6,249.1			18.2				6,267.3
Gross profit
New	$	444.4		$	—			$	444.4
Used		203.5			—				203.5
Parts and service		574.6			(7.7	)			566.9
Finance and insurance		352.6			27.3				379.9
Total gross profit		1,575.1			19.6				1,594.7
Selling, general and administrative	$	917.2		$	(13.4	)		$	903.8
Income from operations	$	626.7		$	29.6			$	656.3

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," "Adjusted EBITDA" 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 Three Months Ended							For the Twelve Months Ended
	June 30, 2022			June 30, 2021				June 30, 2022				March 31, 2022
	(Dollars in millions)
Adjusted leverage ratio:
Long-term debt (including current portion and held for sale)								$	3,387.9			$	3,406.6
Cash and floor plan offset									(404.4	)			(310.9	)
TCA cash									160.3				137.7
Availability under our used vehicle revolving floor plan facility									(327.8	)			(192.8	)
Adjusted long-term net debt								$	2,816.0			$	3,040.6
Calculation of earnings before interest, taxes, depreciation and amortization ("EBITDA"):
Net Income	$	201.4		$	152.1			$	726.6			$	677.3
Depreciation and amortization		18.1			10.1				58.5				50.5
Income tax expense		66.3			49.8				231.2				214.7
Swap and other interest expense		37.7			14.4				141.4				118.2
Earnings before interest, taxes, depreciation and amortization ("EBITDA")	$	323.5		$	226.4			$	1,157.7			$	1,060.7
Non-core items - expense (income):
(Gain) loss on dealership divestitures, net	$	28.6		$	—			$	(12.4	)		$	(41.0	)
Gain on sale of real estate		—			(0.8	)			(0.9	)			(1.7	)
Professional fees associated with acquisitions		—			—				4.9				4.9
Real estate-related charges		—			0.3				—				0.3
Total non-core items		28.6			(0.5	)			(8.4	)			(37.5	)
Adjusted EBITDA	$	352.1		$	225.9			$	1,149.3			$	1,023.2
Pro forma impact of acquisition and divestitures on EBITDA								$	214.2			$	330.7
Pro forma Adjusted EBITDA								$	1,363.5			$	1,353.9
Pro forma Adjusted net leverage ratio									2.1				2.2

	Three Months Ended June 30, 2022
	GAAP				(Gain) loss on divestiture				Real estate related gain				Income tax effect				Non-GAAP adjusted
	(In millions, except per share data)
Selling, general and administrative	$	448.3			$	—			$	—			$	—			$	448.3
Income from operations	$	335.5			$	—			$	—			$	—			$	335.5
Net income	$	201.4			$	28.6			$	—			$	(7.1	)		$	222.9
Weighted average common share outstanding - diluted		22.2																22.2
Diluted EPS	$	9.07			$	1.29			$	—			$	(0.32	)		$	10.04
SG&A as a % of gross profit		55.8	%															55.8	%
Income from operations as a % of revenue		8.5	%			—	%			—	%			—	%			8.5	%
Dealerships:
Selling, general and administrative	$	455.1			$	—			$	—			$	—			$	455.1
SG&A as a % of gross profit		57.3	%															57.3	%

	Three Months Ended June 30, 2021
	GAAP				Legal settlements				Real estate related gain				Real estate related charges				Income tax effect				Non-GAAP adjusted
	(In millions, except per share data)
Selling, general and administrative	$	269.7			$	—			$	—			$	—			$	—			$	269.7
Income from operations	$	218.4			$	—			$	(0.8	)		$	0.3			$	—			$	217.9
Net income	$	152.1			$	—			$	(0.8	)		$	0.3			$	0.1			$	151.7
Weighted average common share outstanding - diluted		19.5																				19.5
Diluted EPS	$	7.80			$	—			$	(0.05	)		$	0.02			$	0.01			$	7.78
SG&A as a % of gross profit		54.2	%																			54.2	%
Income from operations as a % of revenue		8.5	%			—	%			(0.1	) %			—	%			—	%			8.4	%
Dealerships:
Selling, general and administrative	$	269.7			$	—			$	—			$	—			$	—			$	269.7
SG&A as a % of gross profit		54.2	%																			54.2	%

	Six Months Ended June 30, 2022
	GAAP				(Gain) loss on divestiture				Real estate related gain				Income tax effect				Non-GAAP adjusted
	(In millions, except per share data)
Selling, general and administrative	$	903.8			$	—			$	—			$	—			$	903.8
Income from operations	$	656.3			$	—			$	(0.9	)		$	—			$	655.4
Net income	$	439.1			$	(4.4	)		$	(0.9	)		$	1.3			$	435.1
Weighted average common share outstanding - diluted		22.5																22.5
Diluted EPS	$	19.52			$	(0.21	)		$	(0.04	)		$	0.05			$	19.32
SG&A as a % of gross profit		56.7	%															56.7	%
Income from operations as a % of revenue		8.3	%			—	%			—	%			—	%			8.3	%
Dealerships:
Selling, general and administrative	$	917.2			$	—			$	—			$	—			$	917.2
SG&A as a % of gross profit		58.2	%															58.2	%

	Six Months Ended June 30, 2021
	GAAP				Legal settlements				Real estate related gain				Real estate related charges				Income tax effect				Non-GAAP adjusted
	(In millions, except per share data)
Selling, general and administrative	$	509.5			$	—			$	—			$	—			$	—			$	509.5
Income from operations	$	354.7			$	(3.5	)		$	(1.9	)		$	2.1			$	—			$	351.4
Net income	$	244.9			$	(3.5	)		$	(1.9	)		$	2.1			$	0.8			$	242.4
Weighted average common share outstanding - diluted		19.5																				19.5
Diluted EPS	$	12.56			$	(0.18	)		$	(0.10	)		$	0.11			$	0.04				12.43
SG&A as a % of gross profit		57.9	%																			57.9	%
Income from operations as a % of revenue		7.4	%			—	%			—	%			—	%			—	%			7.4	%
Dealerships:
Selling, general and administrative	$	509.5			$	—			$	—			$	—			$	—			$	509.5
SG&A as a % of gross profit		57.9	%																			57.9	%

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20220728005166/en/

Karen Reid

VP & Treasurer

(770) 418-8211

ir@asburyauto.com

Source: Asbury Automotive Group, Inc.

FAQ

What were Asbury Automotive's Q2 2022 earnings results?

Asbury Automotive reported a net income of $201 million, a 32% increase from the prior year.

How much did Asbury's revenue increase in Q2 2022?

Asbury's revenue increased by 53% to $4.0 billion in the second quarter of 2022.

What was Asbury's adjusted EBITDA for Q2 2022?

Asbury reported a record adjusted EBITDA of $352 million, reflecting a 56% year-over-year increase.

How did Asbury's same-store revenue perform in Q2 2022?

Same-store revenue decreased by 7% compared to the second quarter of 2021.

What is the current liquidity position of Asbury Automotive as of June 2022?

Asbury Automotive had approximately $1.0 billion in liquidity as of June 30, 2022.