NEW YORK — Asbury Automotive Group Inc., one of the largest automotive retail and service companies in the U.S., has reported financial results for the fourth quarter and year ended December 31, 2006.
Income from continuing operations for the fourth quarter increased 8 percent to $15.6 million, or $0.45 per diluted share, from $14.4 million, or $0.44 per diluted share, in last year's fourth quarter. On a comparable basis, adjusting for the non-operational items and stock-based compensation, income from continuing operations increased 25 percent.
Net income for the fourth quarter of 2006 was $12.0 million, or $0.35 per diluted share, including a $0.10 per diluted share loss from discontinued operations. In the fourth quarter of 2005, net income was $20.5 million, or $0.62 per diluted share, including income from discontinued operations of $0.18 per diluted share, as a result of gains on the sale of certain of our dealerships in Oregon.
For the full year, income from continuing operations was $67.2 million, or $1.97 per diluted share, up 15 percent from $58.2 million, or $1.77 per diluted share, in 2005. On a comparable basis, adjusting for the non-operational items and stock-based compensation, income from continuing operations increased 18 percent.
Net income for 2006 was $60.7 million, or $1.78 per diluted share, compared to $61.1 million, or $1.86 per diluted share, in 2005. Net income for 2006 includes a loss of $0.19 per diluted share from discontinued operations, compared with $0.09 per diluted share of income from discontinued operations in 2005.
Additional financial highlights for the fourth quarter of 2006, as compared to last year's fourth quarter, included:
- Total revenue for the quarter was approximately $1.4 billion, a 5 percent increase. Total gross profit was $215.1 million, up 6 percent.
- Same-store retail revenue and gross profit (excluding fleet and wholesale businesses) rose 5 percent and 6 percent, respectively.
- New vehicle retail revenue increased 3 percent (total and same-store), and unit sales were flat (total and same-store). New vehicle retail gross profit rose 5 percent (total and same-store). New vehicle retail gross margin percentage improved to 7.5 percent, up 20 basis points.
- Used vehicle retail revenue (total and same-store) increased 10 percent, and unit sales (total and same-store) were up 7 percent. Used vehicle retail gross profit increased 13 percent (12 percent same-store). Used vehicle retail gross margin percentage improved to 12.1 percent, up 30 basis points.
- Parts, service and collision repair (fixed operations) revenue increased 3 percent (total and same-store), and gross profit increased 5 percent (total and same-store). Fixed operations gross margin percentage improved to 51.2 percent, up 70 basis points.
- Net F&I revenue was up 7 percent (total and same-store), and dealership-generated F&I revenue rose 11 percent (total and same-store). Dealership-generated F&I per vehicle retailed (PVR) increased 8 percent to $975 (total and same-store).
- Selling, general and administrative expenses (SG&A) were 77.0 percent of gross profit for the quarter, a 160 basis point improvement, excluding non-operating items and a stock-based compensation charge, compared to 78.6 percent a year ago.
President and CEO Kenneth B. Gilman said, "Asbury's strong financial results were achieved predominantly through strategic programs designed to accelerate the growth of our higher-margin businesses, used vehicles and fixed operations, as well as our ability to leverage our expense structure. The combination of these efforts delivered 25 percent growth in income from continuing operations, on an adjusted and comparable basis, for the fourth quarter and 18 percent for the full year. This performance, especially in light of the industry- wide decline in new vehicle sales in 2006, underscores the strength of our balanced retailing and services business model, as well as Asbury's exceptionally strong brand mix."
J. Gordon Smith, Senior Vice President and CFO, said, "In the fourth quarter of 2006 Asbury combined strong same-store gross profit growth with our ninth consecutive quarter of SG&A expense leverage improvement. On an adjusted basis, SG&A as a percentage of gross profit declined 160 and 170 basis points for the fourth quarter and the year, respectively. With our focused initiatives, opportunities to further leverage our expense structure remain available in 2007 and beyond."
Charles R. Oglesby, Senior Vice President and Chief Operating Officer, added, "Throughout 2006, we continued to move our dealership portfolio toward luxury and mid-line import brands, which now constitute 80 percent of our new light vehicle unit sales. Looking forward to 2007, I am confident that our portfolio of dealerships, coupled with our current momentum and focused operational initiatives, will continue to result in strong same-store sales gains."
Gilman concluded, "Our balance sheet is well-positioned for strategic acquisitions and we are excited about the prospects for organic growth in the year ahead. I am pleased to establish an initial earnings guidance range for 2007 of $2.05 to $2.15 per diluted share from continuing operations."
The company also announced that its Board of Directors has authorized a 1.3 million share repurchase program with the objective of offsetting earnings per share dilution resulting from employee stock-based compensation programs.