Asbury Automotive Group Reports All-Time Record EPS of $10.38, for First Quarter 2022, up 117% Over Prior Year, and Announces Update to Strategic Growth Plan

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 first quarter 2022 net income of $237.7 million ($10.38 per diluted share), an increase of 156% from $92.8 million ($4.78 per diluted share) in the prior year quarter.

“In the first quarter, our legacy Asbury and recently acquired stores contributed to the Company generating all-time record adjusted EBITDA, which increased 139% to $336 million. We are excited about our expanded dealership portfolio and our team members, all of whom have done an outstanding job. The strategic fit of the acquisitions we made in 2021 is clear and we believe that we are now on pace to generate $16 billion in revenue in 2022, a 63% increase over 2021. We have updated our strategic growth plan to reflect our new target of $32 billion in revenue in 2025. Our first quarter results reaffirm our belief that we can achieve our updated 2025 plan,” said David Hult, Asbury’s President and Chief Executive Officer.

“We see tremendous opportunity ahead of us as we roll out Clicklane to our acquired dealerships and integrate Total Care Auto, Powered by Landcar, or TCA, into the legacy Asbury stores. We expect these actions, along with a more optimized dealership portfolio, will allow Asbury to expand its market share, increase productivity and improve the purchasing, servicing and ownership experience of our guests.”

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.

First quarter 2022 adjusted net income, a non-GAAP measure, increased 134% year-over-year to $212.2 million ($9.27 per diluted share) compared to adjusted net income of $90.7 million ($4.68 per diluted share) in first quarter 2021. Adjusted net income for first quarter 2022 excludes gains, net of tax, of $25.5 million ($1.11 per diluted share) related to a $33.1 million ($1.08 per diluted share) gain on the sale of four dealerships and a $0.9 million ($0.03 per diluted share) sale-leaseback real estate gain.

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).

First Quarter 2022 Operational Summary

Total company vs. 1st Quarter 2021:

  • Revenue of $3.9 billion, an increase of 78%
  • Gross profit increased 107%
  • Gross margin increased 270 bps to 20.2%
  • New vehicle unit volume increased 44%; new vehicle revenue increased 61%; gross profit increased 197%
  • Used vehicle retail unit volume increased 63%; used vehicle retail revenue increased 100%; gross profit increased 102%
  • Finance and insurance revenue increased 130%; gross profit increased 118%
  • Parts and service revenue increased 92%; gross profit increased 70%
  • SG&A as a percentage of gross profit fell to 57.5%, a decrease of 520 bps
  • Operating income increased 135%; adjusted
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Asbury Automotive Group Completes the Transformative Acquisition of Larry H. Miller Dealerships and Total Care Auto, Powered by Landcar

DULUTH, Ga.–(BUSINESS WIRE)–Asbury Automotive Group, Inc. (NYSE: ABG), one of the largest automotive retail and service companies in the U.S., completed the previously announced acquisition (the LHM Acquisition), which includes Larry H. Miller Dealerships (LHM Dealerships) and Total Care Auto, Powered by Landcar (TCA ) from the Larry H. Miller Group of Companies (LHM Group), adding 54 new vehicle dealerships, seven used vehicle dealerships, 11 collision centers, a used vehicle wholesale business and an F&I product provider. The LHM Acquisition will add approximately $5.7 billion in annualized revenues.

“We are excited to complete the transformative acquisition of Larry H. Miller Dealerships. With its strong culture and stewardship mentality, coupled with the ability to rapidly expand Asbury’s presence into these desirable, high-growth Western markets, it is a rare opportunity,” said David Hult, Asbury’s President and Chief Executive Officer. “Larry H. Miller Dealerships is a well-run operation with a rich history, and we are honored to be the stewards of Larry and Gail’s vision. We have enjoyed getting to know the Larry H. Miller team members during this acquisition process and look forward to working together to continue the journey.”

“Our family expresses deep gratitude to the employees of Larry H. Miller Dealerships for their ongoing commitment to our organization over the past 42 years,” said Gail Miller, Owner, LHM Group. “Our employees have continually exemplified our values of hard work, stewardship, integrity and service. Their dedication to our customers and our communities has allowed us to become the second largest privately held automotive group in the nation. We treasure them, our loyal customers, many partners and deep friendships built during four decades in the automobile business. David Hult and his team have been exceptional to work with and we appreciate their approach and care during this transaction. Our family looks forward to continuing our mission of enriching lives through reinvestments in new business opportunities and continued philanthropy.”

“We couldn’t be more pleased with the approach and stewardship Asbury Automotive Group has taken during this process,” said Steve Starks, Chief Executive Officer, LHM Group. “We know they are people-focused, which includes their associates and customers. Our employees now have an opportunity to continue building an exciting future with a leading automotive group that will have coast-to-coast operations. We want to thank Dean Fitzpatrick and the LHM Dealerships leadership team for their incredible work and tenacity throughout this transaction, as well as their constant efforts over the decades to grow the automotive business. Moving forward, the LHM Group expects to further diversify and grow our portfolio of operating businesses and investments.”

This acquisition diversifies Asbury’s geographic mix, with entry into six Western states: Arizona, Utah, New Mexico, Idaho, California and Washington, and adds to its growing Colorado footprint. LHM Dealerships portfolio mix of largely domestic brands has historically delivered strong and stable margins in these markets.

LHM Dealerships sold approximately 120,000 new and used vehicles in the 12 months ended September 30, 2021.

In addition to the dealerships, Asbury acquired TCA,

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Asbury Automotive to buy Larry H. Miller Dealerships for $3.2 billion

Editor’s note: An earlier version of this story incorreclty characterized Asbury’s new-vehicle dealership growth under the deal.

Asbury Automotive Group Inc. will expand its new-vehicle dealership count by nearly two-thirds and grow its annual revenues by more than 70 percent in the planned $3.2 billion acquisition of the Larry H. Miller Dealerships group.

Asbury, the nation’s sixth-largest new-vehicle retailer, said Wednesday that it will become the fourth-largest new-vehicle retailer when measured by annual revenues when it buys the Miller group.

Miller Dealerships is now the country’s eighth-largest new-vehicle retailer and one of the nation’s largest privately held groups.

“This is a strong, very profitable group and we know it further diversifies us extremely well” and positions the company to continue to grow, Asbury CEO David Hult told investors and analysts in a call Wednesday.

Asbury said that the deal, expected to close in the fourth quarter, includes 54 new-vehicle dealerships, seven used-vehicle dealerships and 11 collision centers. Once combined, Asbury’s store count will grow to more than 150 and annual revenues combined will reach $13.7 billion.

The Duluth, Ga., auto retailer will enter six new Western states and largely add domestic-brand stores to its lineup, as it expects to add $5.7 billion in annual revenues.

Asbury also said Wednesday it has deals to buy dealerships representing another $900 million in annual revenue under contract, which it expects would close before the Miller dealerships.

Asked if the sale would cause framework agreement problems with any automakers, Hult said one brand might pose an issue but otherwise characterized it as a matter of seeking automaker approvals with conversations. He didn’t identify the brand.

Framework agreements govern the relationships between automakers and their largest franchised dealers and may limit the number of stores one owner can have of the same brand or in a certain region.

Asbury also obtains a finance and insurance provider, Total Care Auto, which allowed Larry H. Miller to sell its own F&I products and then turn around and pay itself back when customers use the products for free vehicle repairs and service.

About 90 percent of Total Care Auto’s overall claims wind up with the work done at the dealership group.

Total Care Auto produces about $240 million in revenue, has about 2 million contracts open, and delivers earnings before interest, taxes, depreciation and amortization, or EBITDA, margins of more than 20 percent, according to Asbury.

“It’s really a great business model,” Hult said.

The deal allows Asbury to expand the reach of its online retailing service Clicklane coast-to-coast, the company said.

The supersized deal follows several other megadeals by the publics in the buy-sell industry this year, including Lithia Motors Inc.’s April purchase of Michigan’s Suburban Collection and the announcements this month by Group 1 Automotive Inc. to acquire 30 dealerships from Prime Automotive Group by late November and Sonic Automotive Inc.’s acquisition of RFJ Auto Partners Holdings Inc., planned to close in December.

“This transaction, coupled with the other two major transactions announced by

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