Asbury Automotive Group Inc (NYSE:ABG)

On 12/2/2010 we added ABG to the GeoSpecial list @ $16.72

 
Catalyst: Strong second quarter 2010 results and the announcement of a $25 million stock buyback.

We are now removing ABG from the GeoSpeicial List @ $26.94

Current road block: Per analyst estimates, the company only has one more quarter of strong EPS growth before it enters into a period of average growth of between 6% to 16% which is much less than the 25% to 30% the GeoTeam typically looks for.

• Peak performance: Reached a high of  $29.62 on 5/01/2012 for a maiximum potential return of 77% and a return of 61% at current price.
• Current Price: $26.94

Second Quarter 2012 Results

• Total revenues increased 11% to $1.2 billion 
• Income from continuing operations for the second quarter 2012 of $21.6 million, or $0.69 per diluted share, versus adjusted income from continuing operations in the second quarter 2011 of $16.6 million, or $0.50 per diluted share, a 38% increase per diluted share.

"Asbury is pleased to announce all-time record quarterly results from continuing operations," said Craig T. Monaghan, Asbury's President and Chief Executive Officer. "Our second quarter results were achieved through solid operational performance and disciplined expense control.  We continue to build a stronger Company with the flexibility to capitalize on market opportunities."

Asbury's Executive Vice President and Chief Operating Officer, Michael S. Kearney, added, "Consistent with what we are seeing across our industry, retail margins continue to be under pressure as Japanese branded inventory levels and sales volumes recover.  However, we again demonstrated the diversity of our business by delivering growth in both F&I and parts and service gross profit."

First Quarter 2012 Results

• Total revenues increased 6% to $1.1 billion 
• Income from continuing operations for the first quarter 2012 of $18.0 million, or $0.57 per diluted share, versus adjusted income from continuing operations in the first quarter 2011 of $11.4 million, or $0.34 per diluted share, a 68% increase per diluted share.

"Asbury is pleased to announce the strongest first quarter results in our history," said Craig T. Monaghan, Asbury's President and Chief Executive Officer. "Our first quarter performance was made possible by the solid operational and financial foundation we have put in place, and these results reflect continued progress towards our goal of becoming a best-in-class automotive retailer."

Asbury's Executive Vice President and Chief Operating Officer, Michael S. Kearney, added, "The teams in our stores produced all-time record first quarter operating profits during the first quarter. With our inventory position continuing to improve and new products entering the market, we look forward to building upon the momentum we are seeing in all areas of our stores, including new, used, parts and service, and finance and insurance."

Mr. Monaghan concluded, "Over the last few years, we have reduced our leverage to a level with which we are comfortable while building out our technology infrastructure. We are now well positioned to grow shareholder value by investing in our business, pursuing acquisitions, and returning capital to our shareholders through share repurchases."

Fourth Quarter 2011 Results

• Total revenues increased 8% to $1.1 billion 
• Adjusted income from continuing operations for the fourth quarter 2011 of $17.0 million, or $0.54 per diluted share, versus adjusted income from continuing operations in the fourth quarter 2010 of $12.2 million, or $0.37 per diluted share

  Asbury is pleased to announce extremely strong results," said Craig T. Monaghan, Asbury's President and Chief Executive Officer. "These results are a culmination of the hard work and determination of the Asbury team as we continue to transform the Company into a best-in-class automotive retailer. With a strong operational and financial foundation in place, we look forward to 2012."

  Asbury's Executive Vice President and Chief Operating Officer Michael S. Kearney added, "We believe the challenges that our Japanese branded dealerships experienced over the last two quarters are largely behind us. Considering the increasing number of consumers looking for more fuel efficient vehicles, the improving availability of consumer credit, and the strong pipeline of new products coming from all of our manufacturing partners, we believe we are well positioned as we enter 2012."

  For the full year 2011, adjusted income from continuing operations was $59.3 million, or $1.82 per diluted share, versus adjusted income from continuing operations of $46.9 million, or $1.41 per diluted share, in the prior year. Net income for the full year 2011 was $67.9 million, or $2.08 per diluted share, compared to $38.1 million, or $1.14 per diluted share in the prior year. See attached reconciliation of reported amounts to adjusted amounts. Revenues for the full year 2011 totaled $4.3 billion, an increase of 10% compared to the prior year.

Third Quarter 2011 Results

• Total revenues increased 5% to $1.1 billion
• Adjusted income from continuing operations for the third quarter 2011 of $14.3 million, or $0.44 per diluted share, versus $0.39 in prior year

"Asbury is pleased to announce another quarter of double-digit growth in adjusted EPS from continuing operations," said Craig T. Monaghan, Asbury's President and CEO. "We produced these excellent results during a quarter that was significantly impacted by a limited supply of Japanese-branded new vehicle inventory. We set another Company record used-to-new sales ratio, generated strong gross profits from our new vehicle sales, and continued growing our finance and insurance profit per vehicle retailed. The third quarter provides another example of our associates' ability to increase profitability by reacting quickly to changing market dynamics and nimbly shifting business strategies. On top of our stores' excellent operating performance, we continued to aggressively strengthen our balance sheet by paying down debt in order to improve our flexibility and better prepare the Company for future growth."

Asbury's Executive Vice President and Chief Operating Officer Michael S. Kearney added, "Our Japanese-branded dealerships experienced the full impact of the inventory shortages during the third quarter, with a number of these dealerships operating on only two weeks supply of new vehicle inventory. We are now beginning to experience levels of Japanese-branded new vehicle inventory supply that are more appropriately aligned with consumer demand and we anticipate rebuilding these inventory levels through the first quarter of 2012."

Second Quarter 2011 Highlights (compared to the prior year period):

• Total revenues increased 9% to $1.1 billion 
• New vehicle revenues increased 5%, including 2% from same store revenues
• Used vehicle retail revenues and units up 22%, including 17% from same store revenues
• Finance and insurance revenues up 20%
• Total gross profit up 14% with strong increases from all business lines
• adjusted income from continuing operations for the second quarter 2011 of $16.8 million, or $0.51 per diluted share, versus income from continuing operations in the second quarter 2010 of $13.1 million, or $0.40 per diluted share, a 28% increase per diluted share.
• Adjusted SG&A expense as a percent of gross profit improved 130 basis points to 75.1%
• J6 inventories down approximately 50% versus March 2011 (see tables below)

Strategic Updates:

• Board elected Thomas C. DeLoach, Jr. as Non-Executive Chairman effective as of August 1, 2011
• Repurchased $13 million of Asbury common stock during the quarter
• Board increased share repurchase authorization in July; $45 million remaining
• Reducing leverage target to 3.0x Total Debt/EBITDA
• Acquired $13 million of previously leased properties during the quarter
• Subsequent to the end of the quarter, repurchased $9 million of the convertible notes due 2012
• 65% of the DMS conversions completed to date

"Once again, Asbury is pleased to announce double-digit growth in adjusted EPS from continuing operations, proving both the resiliency of our business model and the agility of our Company," said Craig T. Monaghan, Asbury's President and CEO. "We produced these excellent results through a dramatic 70 basis point improvement in our new vehicle margins, achieving a Company record used-to-new ratio, and setting a Company record increase in finance and insurance profit per vehicle retailed."  

Commenting on the Japanese supply challenges, Michael S. Kearney, Asbury's Executive Vice President and Chief Operating Officer stated, "We are encouraged by the speed and efficiency with which our Japanese manufacturing partners are restoring production capacity, and admire their dedication. Our Japanese dealerships are experiencing the impact of inventory shortages; we anticipate that our affected inventories will bottom-out in July or August. We believe our third quarter earnings could be adversely impacted in the range of $0.05-0.10 per diluted share as a result of disruptions in the market. Our results will depend on, amongst other things, SAAR, when production reaches normalized levels, and when we are able to receive a more favorable mix of product at our dealerships. We believe this will be a short-term issue and expect much healthier inventory levels heading into the fourth quarter."

First Quarter Results:

• Adjusted income from continuing operations for the first quarter 2011 of $11.6 million, or $0.35 per diluted share, versus income from continuing operations in the prior period of $9.0 million, or $0.27 per diluted share, which represents a 30% improvement on a per diluted share basis
• Revenues in the first quarter 2011 totaled $1.0 billion, an 18% increase compared to prior period

"Asbury is pleased to announce continued double-digit revenue growth for the first quarter, primarily as a result of growth in new and used light vehicle revenues," said Craig T. Monaghan, Asbury's President and CEO. "With the completion of the sale of our heavy truck business, we are now a focused, pure-play light vehicle retailer."

DULUTH, Ga., Feb. 22, 2011 /PRNewswire/ -- Asbury Automotive Group, Inc. today reported

• Adjusted income from continuing operations for the fourth quarter 2010 of $12.4 million, or $0.37 per diluted share, versus adjusted income from continuing operations of $6.9 million, or $0.21 per diluted share, in the corresponding period last year.  

This 76% increase is the result of growth in vehicle sales combined with benefits achieved from Asbury's continued expense discipline.  Non-core items resulting from the Company's bond refinancing and related activities, as disclosed in the attached tables, reduced fourth quarter income from continuing operations by $0.23 per diluted share.  Non-core items reduced fourth quarter 2009 income from continuing operations by $0.03 per diluted share.  

• Net income for the fourth quarter 2010 totaled $5.4 million, or $0.16 per diluted share, compared with $0.2 million, or $0.01 per diluted share, in the prior year period.  
• Revenues in the fourth quarter 2010 totaled $1.0 billion, compared to prior period revenues of $0.8 billion, with growth across all business lines.

"Asbury is pleased to announce strong results for the fourth quarter primarily as a result of growth in new and used light vehicle revenues combined with achieving benefits from our continued focus on cost structure," said Craig T. Monaghan, Asbury's President and CEO. "Our ability to generate 76% growth in adjusted EPS demonstrates the continuing benefits of our cost-savings initiatives as well as the quality of our brands and our geographies.  These results also reflect Asbury's management philosophy that empowers the entrepreneurial teams operating our stores."