Asbury Automotive Group, Inc. (NYSE:ABG), one of the largest automotive retail and service companies in the U.S., today reported net income for the third quarter 2016 of $32.4 million, or $1.47 per diluted share, compared to $51.1 million, or $1.96 per diluted share in the prior year quarter. Adjusted net income (a non-GAAP measure) for the third quarter 2016 was $33.5 million, or $1.52 per diluted share, compared to adjusted net income of $37.2 million, or $1.43 per diluted share in the prior year quarter, a 6% increase in adjusted earnings per share. Adjusted net income for the third quarter 2016 excluded $1.8 million in pre-tax real estate related charges, or $0.05 per diluted share. Adjusted net income for the third quarter 2015 excluded a $21.4 million pre-tax gain on divestitures, or $0.50 per diluted share, and a $0.8 million benefit from a lower effective tax rate, or $0.03 per diluted share. See attached reconciliation for reported adjustments. Total revenue for the third quarter was $1.7 billion, down 2% from the prior year period principally attributable to strategic divestitures over the past year; total revenue on a same-store basis (a non-GAAP measure) was up 1% from the prior year period.
Third Quarter 2016 Operational Summary (compared to prior year period):
Same store:
- New vehicle revenue was flat; gross profit down 7%
- Used vehicle retail revenue down 1%; gross profit down 6%
- Finance and insurance revenue down 3%
- Parts and service revenue up 8%; gross profit up 7%
- Parts and service customer pay gross profit up 7%
Total store:
- SG&A as a percentage of gross profit was up 70 basis points to 69.9%
- Total company adjusted income from operations (a non-GAAP measure) as a percentage of revenue was 4.3%
“Despite a very competitive market for vehicle sales and margins, our strong parts and service customer pay performance combined with capital deployment enabled us to deliver 6% EPS growth.” said Craig Monaghan, Asbury’s President and Chief Executive Officer.
“We continue to grow our parts and service business, with gross profit up 7% from last year on a same store basis.” said Asbury’s Executive Vice President and Chief Operating Officer, David Hult. “This was a direct result of our team’s commitment to improve our high margin parts and service business. Their hard work helped offset the pressure in other areas of the business to deliver flat same store gross profit.”
For the nine-month period ended September 30, 2016, the Company reported net income of $100.1 million, or $4.37 per diluted share, compared to net income of $128.1 million, or $4.76 per diluted share in the prior year period. Adjusted net income for the nine-month period ended September 30, 2016 was $103.3 million, or $4.51 per diluted share, compared to $114.2 million, or $4.25 per diluted share in the prior year quarter, a 6% increase in adjusted earnings per share.
The conference call will be today at 10:00 a.m. Eastern Time and will also be simulcast live on the Internet. The simulcast can be accessed by logging onto www.asburyauto.com or www.ccbn.com. A replay will be available at these sites for 30 days. In addition, a live audio of the call will be accessible to the public by calling (719) 325-2118 (domestic), or (800) 311-6662 (international); passcode – 2712732. 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 – 2712732.
About Asbury Automotive Group, Inc.
Asbury Automotive Group, Inc. (“Asbury”), a Fortune 500 company headquartered in Duluth, Georgia, a suburb of Atlanta, is one of the largest automotive retailers in the U.S. Built through a combination of organic growth and a series of strategic acquisitions, Asbury operated 81 dealership locations, encompassing 98 franchises for the sale and servicing of 28 domestic and foreign brands of new vehicles as of September 30, 2016. Asbury also operated 25 collision repair centers and 4 stand-alone used vehicle stores. 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.