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Asbury Reports Parts, Service Revenue Up 6 Percent in Q2 2017

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July 24, 2017—Asbury Automotive Group reported net income for the second quarter 2017 of $31.9 million, or $1.52 per diluted share, compared to $36.7 million, or $1.65 per diluted share in the prior year quarter. Parts and service revenue and gross profit increased 6 percent.

It also reported adjusted income from continuing operations for the second quarter 2017 of $33.2 million, or $1.58 per diluted share, compared to $36.6 million, or $1.65 per diluted share, in the prior year quarter, a 4 percent decrease in adjusted earnings per share.

Income from continuing operations for the second quarter 2017 was adjusted for $2.9 million of pre-tax real estate related charges, or $0.08 per diluted share and $0.8 million of pre-tax investment income, or $0.02 per diluted share. There were no adjustments for the second quarter 2016. See attached reconciliation for reported adjustments related to both of these periods.

Total revenue for the second quarter remained flat at $1.6 billion compared to the prior year period; total revenue on a same-store basis (a non-GAAP measure) was up 2 percent from the prior year period.

Second Quarter 2017 Operational Summary

Same store:

  • Total revenues increased 2 percent; gross profit increased 2 percent
  • New vehicle revenue remained flat; gross profit decreased 14 percent
  • Used vehicle retail revenue increased 5 percent; gross profit decreased 6 percent
  • Finance and insurance revenue increased 8 percent
  • Parts and service revenue increased 6 percent; gross profit increased 6 percent

All store:

  • SG&A as a percentage of gross profit increased 140 basis points to 69.5 percent
  • Total company adjusted income from operations (a non-GAAP measure) as a percentage of revenue was 4.5 percent, down 30 bps from the prior year
  • Adjusted EPS from continuing operations decreased 4 percent

"In a softening automotive retail environment, we are pleased to have increased our same store revenue and gross profit by 2 percent this quarter compared to the prior year," said Craig Monaghan, Asbury's president and CEO. "Despite market pressures, we believe we can deliver low to mid-single digit EPS growth in the back half of the year."

"Even though we experienced margin pressure, our ability to drive incremental used sales, enhance F&I PVR, and grow parts and service enabled us to deliver industry leading operating margins," said Asbury's executive vice president and chief operating officer, David Hult. "Our investments in digital technologies and lead management initiatives are yielding solid results and we will continue to invest in this area in the future."

For the six-month period ended June 30, 2017, the Company reported total revenue of $3.2 billion, flat with the prior year period. Total revenue on a same-store basis was up 2 percent.

For the six-month period ended June 30, 2017, the Company reported net income from continuing operations of $65.9 million, or $3.12 per diluted share, compared to net income from continuing operations of $67.7 million, or $2.91 per diluted share in the prior year period.  For the six-month period ended June 30, 2017, the Company reported adjusted net income from continuing operations (a non-GAAP measure) of $66.6 million, or $3.16 per diluted share, compared to adjusted net income from continuing operations of $69.8 million, or $3.00 per diluted share in the prior year period.

 

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