Asbury automotive group announces record financial results for fourth quarter and full year 2021 and increase in share repurchase authorization
Duluth, ga.--(business wire)--asbury automotive group, inc. (nyse: abg), one of the largest automotive retail and service companies in the u.s., reported record net income for the fourth quarter 2021 of $141 million ($6.44 per diluted share). this result compares to net income of $89 million ($4.59 per diluted share) in the prior year quarter. “in the fourth quarter, we closed on the transformative acquisitions of: larry h. miller dealerships and total care auto, powered by landcar (“tca”, collectively, “lhm acquisition”), in seven western states, stevinson automotive group in colorado, arapahoe hyundai-genesis in the denver market and kahlo cdjr in the indianapolis market. “we established a coast-to-coast presence and built scale in several strategic high-growth markets through these acquisitions. more importantly, all of these dealerships share asbury's vision of being the most guest-centric auto retailer in the country. while we acquired approximately $6.6 billion in annualized revenue, we still ended the year with a strong balance sheet with an adjusted net leverage ratio of 2.7x,” said david hult, asbury’s president and chief executive officer. “we’ll be working together with our new team members to integrate these acquisitions over the next few quarters. “though a supply/demand imbalance remains ongoing with vehicle sales, our incredible team members outperformed once again, achieving record fourth quarter levels in revenue, operating margins, sg&a as a percentage of gross profit, net income and eps. as we continue to excel on our same store results and we’re pleased with the progress of clicklane, we will update our strategic five-year plan after we close the first quarter of 2022.” 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. the company reported adjusted net income (a non-gaap measure) for the fourth quarter 2021 of $163 million ($7.46 per diluted share) compared to $86 million ($4.44 per diluted share) in the prior year quarter. net income for the fourth quarter 2021 was adjusted for acquisition expenses and acquisition financing expenses of $28.9 million ($1.02 per diluted share). net income for the fourth quarter 2020 was adjusted for a $3.9 million ($0.15 per diluted share) gain from a divestiture. fourth quarter 2021 operational summary total company vs. 4th quarter 2020: revenue of $2.7 billion, an increase of 19% gross profit increased 46% gross margin increased 370 bps to 20.4% new vehicle unit volume decreased 8%; new vehicle revenue increased 5%; gross profit increased 99% used vehicle retail unit volume increased 27%; used vehicle retail revenue increased 53%; gross profit increased 84% finance and insurance revenue increased 25% parts and service revenue increased 27%; gross profit increased 20% adjusted sg&a as a percentage of gross profit fell to 54.3%, a decrease of 710 bps operating income increased 76%; adjusted operating income increased 77% operating margin increased 290 bps to 8.9%; adjusted operating margin also increased 290 bps to 8.9% adjusted eps increased 68% to $7.46 same store (dealership only) vs. 4th quarter 2020: revenue increased 5% gross profit increased 29% gross margin increased 380 bps to 20.5% new vehicle unit volume decreased 21%; new vehicle revenue decreased 9%; gross profit increased 74% used vehicle retail unit volume increased 15%; used vehicle retail revenue increased 40%; gross profit increased 64% finance and insurance revenue increased 6%; gross profit per unit increased 12% parts and service revenue increased 13%; gross profit increased 8%; customer pay gross profit increased 17% full year 2021 results for the full year 2021, the company reported record net income of $532 million ($26.49 per diluted share) compared to $254 million ($13.18 per diluted share) in the prior year, a 101% increase in eps. adjusted net income (a non-gaap measure) for 2021 was $549 million ($27.29 per diluted share) compared to $249 million ($12.90 per diluted share) in the prior year, a 112% increase in adjusted eps. total revenue for the full year 2021 was $9.8 billion, up 38% from the prior year; total revenue on a same-store basis was up 20% from the prior year. total adjusted ebitda for the full year 2021 was a record $828 million, up 94% from the prior year. liquidity and leverage as of december 31, 2021, the company had approximately $437 million of liquidity, including cash of $63 million (which excludes $127 million of cash at tca), floorplan offset accounts of $84 million and availability under the used vehicle floorplan line and revolver of $291 million. the company’s adjusted net leverage ratio was 2.7x at quarter end. financing during the fourth quarter, to finance the company’s acquisitions and the related growth of the business, the company upsized its credit facility, entered into a mortgage facility and completed debt and equity offerings. if the financings had closed simultaneously with the lhm acquisition, our adjusted eps for the fourth quarter would have been positively impacted by $0.87 as a result of lower interest expense and fewer outstanding shares. share repurchase authorization increase the company announced that its board of directors increased the company's common stock share repurchase authorization by $100.0 million, to $200.0 million. the shares may be purchased from time to time in the open market, in privately negotiated transactions or in other manners as permitted by federal securities laws and other legal and contractual requirements. the extent to which the company repurchases its shares, the number of shares and the timing of any repurchase will depend on such factors as asbury’s stock price, general economic and market conditions, the potential impact on its capital structure, the expected return on competing uses of capital such as strategic dealership acquisitions and capital investments and other considerations. earnings call additional commentary regarding the third quarter results will be provided during the earnings conference call on tuesday, february 15, 2022, at 10:00 a.m. et. the conference call will be simulcast live on the internet and can be accessed by logging onto www.asburyauto.com/company/investor-relations. a replay will be available on this site for 30 days. in addition, live audio of the call will be accessible to the public by calling (888) 220-8474 (domestic) or (646) 828-8193 (international); confirmation code – 3116958. 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 – 3116958. about asbury automotive group, inc. asbury automotive group, inc. (nyse: abg), a fortune 500 company headquartered in duluth, ga, is one of the largest automotive retailers in the u.s. in late 2020, asbury embarked on a five-year plan to increase revenue and profitability strategically through organic and acquisitive growth as well as their innovative clicklane digital vehicle purchasing platform, with its guest-centric approach as asbury’s constant north star. asbury currently operates 154 new vehicle dealerships in 15 states, consisting of 204 franchises, representing 31 brands of vehicles, and seven stand-alone used vehicle dealerships. asbury also operates 35 collision repair centers, an auto auction, a used vehicle wholesale business and total care auto, powered by landcar, a leading provider of service contracts and other vehicle protection products. asbury offers an extensive range of automotive products and services, including new and used vehicles; parts and service, which includes vehicle repair and maintenance services, replacement parts and collision repair services; and finance and insurance products, including arranging vehicle financing through third parties and aftermarket products, such as extended service contracts, guaranteed asset protection debt cancellation and prepaid maintenance. for additional information, visit www.asburyauto.com. forward-looking statements this press release contains “forward-looking statements” within the meaning of the private securities litigation reform act of 1995. forward-looking statements are statements other than historical fact, and may include statements relating to goals, plans, market conditions and projections regarding asbury's financial position, liquidity, results of operations, market position and dealership portfolio, the expected benefits of clicklane, and other initiatives and future business strategy, including the expected terms or timeline of currently anticipated or recently completed acquisitions or dispositions, such as the lhm acquisition, the anticipated cost savings, run-rate synergies, revenue enhancement strategies, operational improvements and other benefits of such currently anticipated or recently completed acquisitions or dispositions. these statements are based on management's current expectations and beliefs and involve significant risks and uncertainties that may cause results to differ materially from those set forth in the statements. these risks and uncertainties include, among other things, our inability to realize the benefits expected from recently completed transactions; our inability to promptly and effectively integrate recently completed transactions and the diversion of management’s attention from ongoing business and regular business responsibilities; our inability to complete future acquisitions or divestitures and the risks resulting thereto; the impact of the ongoing covid-19 pandemic on our industry and business, market factors, asbury's relationships with, and the financial and operational stability of, vehicle manufacturers and other suppliers, acts of god or other incidents and the shortage of semiconductor chips, which may adversely impact supply from vehicle manufacturers and/or present retail sales challenges; risks associated with asbury's indebtedness and our ability to comply with applicable covenants in our various financing agreements, or to obtain waivers of these covenants as necessary; risks related to competition in the automotive retail and service industries, general economic conditions both nationally and locally, governmental regulations, legislation, adverse results in litigation and other proceedings, and asbury's ability to execute its strategic and operational strategies and initiatives, including its five-year strategic plan, asbury's ability to leverage gains from its dealership portfolio, asbury's ability to capitalize on opportunities to repurchase its debt and equity securities or purchase properties that it currently leases, and asbury's ability to stay within its targeted range for capital expenditures. there can be no guarantees that asbury's plans for future operations will be successfully implemented or that they will prove to be commercially successful. these and other risk factors that could cause actual results to differ materially from those expressed or implied in our forward-looking statements are and will be discussed in asbury's filings with the u.s. securities and exchange commission from time to time, including its most recent annual report on form 10-k and any subsequently filed quarterly reports on form 10-q. we undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future events or otherwise. asbury automotive group, inc. consolidated statements of income (in millions, except per share data) (unaudited) for the three months ended december 31, increase (decrease) % change 2021 2020 revenue: new vehicle $ 1,284.5 $ 1,225.6 $ 58.9 5 % used vehicle: retail 865.3 564.0 301.3 53 % wholesale 64.2 95.3 (31.1 ) (33 )% total used vehicle 929.5 659.3 270.2 41 % parts and service 331.4 261.8 69.6 27 % finance and insurance 109.4 87.3 22.1 25 % total revenue 2,654.8 2,234.0 420.8 19 % cost of sales: new vehicle 1,119.6 1,142.7 (23.1 ) (2 )% used vehicle: retail 793.0 524.8 268.2 51 % wholesale 59.7 94.9 (35.2 ) (37 )% total used vehicle 852.7 619.7 233.0 38 % parts and service 136.6 99.3 37.3 38 % finance and insurance 3.6 — 3.6 — % total cost of sales 2,112.5 1,861.7 250.8 13 % gross profit 542.3 372.3 170.0 46 % operating expenses: selling, general and administrative 295.7 228.5 67.2 29 % depreciation and amortization 11.3 9.5 1.8 19 % other operating (income) expense, net (0.8 ) (0.2 ) (0.6 ) (300 )% income from operations 236.1 134.5 101.6 76 % other expenses (income): floor plan interest expense 1.7 3.6 (1.9 ) (53 )% other interest expense, net 50.7 15.0 35.7 238 % gain on dealership divestitures, net — (3.9 ) 3.9 100 % total other expenses (income), net 52.4 14.7 37.7 256 % income before income taxes 183.7 119.8 63.9 53 % income tax expense 43.2 30.7 12.5 41 % net income $ 140.5 $ 89.1 $ 51.4 58 % earnings per common share: basic— net income $ 6.47 $ 4.64 $ 1.83 39 % diluted— net income $ 6.44 $ 4.59 $ 1.85 40 % weighted average common shares outstanding: basic 21.7 19.2 2.5 restricted stock 0.1 0.1 — performance share units — 0.1 (0.1 ) diluted 21.8 19.4 2.4 asbury automotive group, inc. consolidated statements of income (in millions, except per share data) (unaudited) for the twelve months ended december 31, increase (decrease) % change 2021 2020 revenue: new vehicle $ 4,934.1 $ 3,767.4 $ 1,166.7 31 % used vehicle: retail 3,055.9 1,930.0 1,125.9 58 % wholesale 259.7 239.5 20.2 8 % total used vehicle 3,315.6 2,169.5 1,146.1 53 % parts and service 1,182.9 889.8 293.1 33 % finance and insurance 405.1 305.1 100.0 33 % total revenue 9,837.7 7,131.8 2,705.9 38 % cost of sales: new vehicle 4,443.6 3,548.9 894.7 25 % used vehicle: retail 2,793.9 1,784.7 1,009.2 57 % wholesale 233.4 228.2 5.2 2 % total used vehicle 3,027.3 2,012.9 1,014.4 50 % parts and service 461.0 346.6 114.4 33 % finance and insurance 3.6 — 3.6 — % total cost of sales 7,935.5 5,908.4 2,027.1 34 % gross profit 1,902.2 1,223.4 678.8 55 % operating expenses: selling, general and administrative 1,073.9 781.9 292.0 37 % depreciation and amortization 41.9 38.5 3.4 9 % franchise rights impairment — 23.0 (23.0 ) (100 )% other operating (income) expense, net (5.4 ) 9.2 (14.6 ) (159 )% income from operations 791.8 370.8 421.0 114 % other expenses: floor plan interest expense 8.2 17.7 (9.5 ) (54 )% other interest expense, net 93.9 56.7 37.2 66 % loss on extinguishment of long-term debt, net — 20.6 (20.6 ) (100 )% gain on dealership divestitures, net (8.0 ) (62.3 ) 54.3 87 % total other expenses, net 94.1 32.7 61.4 188 % income before income taxes 697.7 338.1 359.6 106 % income tax expense 165.3 83.7 81.6 97 % net income $ 532.4 $ 254.4 $ 278.0 109 % earnings per common share: basic— net income $ 26.75 $ 13.25 $ 13.50 102 % diluted— net income $ 26.49 $ 13.18 $ 13.31 101 % weighted average common shares outstanding: basic 19.9 19.2 0.7 restricted stock 0.1 — 0.1 performance share units 0.1 0.1 — diluted 20.1 19.3 0.8 asbury automotive group, inc. additional disclosures-consolidated (in millions) (unaudited) december 31, 2021 december 31, 2020 increase (decrease) % change selected balance sheet data cash and cash equivalents $ 189.4 $ 1.4 $ 188.0 nm new vehicle inventory (a) 206.5 640.0 (433.5 ) (68 )% used vehicle inventory (b) 402.0 188.5 213.5 113 % parts inventory (c) 109.9 46.7 63.2 135 % total current assets 2,051.5 1,405.7 645.8 46 % floor plan notes payable (d) 564.5 702.2 (137.7 ) (20 )% total current liabilities 1,598.0 1,223.4 374.6 31 % capitalization: long-term debt (including current portion) (e) $ 3,582.6 $ 1,201.8 $ 2,380.8 198 % shareholders' equity 2,115.5 905.5 1,210.0 134 % total $ 5,698.1 $ 2,107.3 $ 3,590.8 170 % _____________________________ nm—not meaningful (a) excluding $4.3 million of new vehicle inventory classified as assets held for sale as of december 31, 2021 (b) excluding $16.0 million of used vehicle inventory classified as assets held for sale as of december 31, 2021 (c) excluding $3.8 million of parts inventory classified as assets held for sale as of december 31, 2021 (d) excluding $9.1 million of floor plan notes payable classified as liabilities associated with assets held for sale as of december 31, 2021 (e) excluding $8.9 million of long-term debt classified as liabilities associated with assets held for sale as of december 31, 2020 december 31, 2021 september 30, 2021 december 31, 2020 day supply new vehicle inventory 8 12 40 used vehicle inventory 34 28 31 _____________________________ days supply of inventory is calculated based on new and used inventory levels at the end of each reporting period and a 30-day historical cost of sales. brand mix - new vehicle revenue by brand for the three months ended december 31, 2021 2020 luxury mercedes-benz 12 % 13 % lexus 11 % 13 % bmw 6 % 6 % acura 3 % 3 % land rover 2 % 3 % porsche 2 % 2 % audi 1 % 2 % other luxury 6 % 6 % total luxury 43 % 48 % imports toyota 13 % 11 % honda 12 % 13 % nissan 4 % 4 % other imports 8 % 7 % total imports 37 % 35 % domestic ford 7 % 6 % dodge 5 % 3 % chevrolet 3 % 4 % jeep 3 % 2 % other domestics 2 % 2 % total domestic 20 % 17 % total new vehicle revenue 100 % 100 % asbury automotive group, inc. statements of income-consolidated (in millions) (unaudited) for the three months ended december 31, increase (decrease) % change 2021 2020 revenue new vehicle $ 1,284.5 $ 1,225.6 $ 58.9 5 % used vehicle: retail 865.3 564.0 301.3 53 % wholesale 64.2 95.3 (31.1 ) (33 )% total used vehicle 929.5 659.3 270.2 41 % parts and service 331.4 261.8 69.6 27 % finance and insurance 109.4 87.3 22.1 25 % total revenue 2,654.8 2,234.0 420.8 19 % gross profit new vehicle 164.9 82.9 82.0 99 % used vehicle: retail 72.3 39.2 33.1 84 % wholesale 4.5 0.4 4.1 nm total used vehicle 76.8 39.6 37.2 94 % parts and service 194.8 162.5 32.3 20 % finance and insurance 105.8 87.3 18.5 21 % total gross profit 542.3 372.3 170.0 46 % operating expenses selling, general and administrative 295.7 228.5 67.2 29 % operating metrics sg&a as a percentage of gross profit 54.5 % 61.4 % (690) bps adjusted sg&a as a percentage of gross profit 54.3 % 61.4 % (710) bps income from operations as a percentage of revenue 8.9 % 6.0 % 290 bps income from operations as a percentage of gross profit 43.5 % 36.1 % 740 bps adjusted income from operations as a percentage of revenue 8.9 % 6.0 % 290 bps adjusted income from operations as a percentage of gross profit 43.8 % 36.1 % 770 bps revenue mix new vehicle 48.4 % 54.9 % used vehicle retail 32.6 % 25.2 % used vehicle wholesale 2.4 % 4.3 % parts and service 12.5 % 11.7 % finance and insurance 4.1 % 3.9 % total revenue 100.0 % 100.0 % gross profit mix new vehicle 30.4 % 22.3 % used vehicle retail 13.4 % 10.6 % used vehicle wholesale 0.8 % 0.1 % parts and service 35.9 % 43.6 % finance and insurance 19.5 % 23.4 % total gross profit 100.0 % 100.0 % ____________________________ nm—not meaningful asbury automotive group, inc. statements of income-dealerships (in millions) (unaudited) for the three months ended december 31, increase (decrease) % change 2021 2020 revenue new vehicle $ 1,284.5 $ 1,225.6 $ 58.9 5 % used vehicle: retail 865.3 564.0 301.3 53 % wholesale 64.2 95.3 (31.1 ) (33 )% total used vehicle 929.5 659.3 270.2 41 % parts and service 332.8 261.8 71.0 27 % finance and insurance, net 107.0 87.3 19.7 23 % total revenue 2,653.8 2,234.0 419.8 19 % gross profit new vehicle 164.9 82.9 82.0 99 % used vehicle: retail 72.3 39.2 33.1 84 % wholesale 4.5 0.4 4.1 nm total used vehicle 76.8 39.6 37.2 94 % parts and service 193.1 162.5 30.6 19 % finance and insurance, net 107.0 87.3 19.7 23 % total gross profit 541.8 372.3 169.5 46 % operating expenses selling, general and administrative 298.7 228.5 70.2 31 % sg&a as a percentage of gross profit 55.1 % 61.4 % (630) bps _____________________________ nm—not meaningful asbury automotive group, inc. key operating highlights-dealerships (in millions, except per unit data) (unaudited) for the three months ended december 31, increase (decrease) % change 2021 2020 unit sales new vehicle: luxury 8,080 9,751 (1,671 ) (17 )% import 13,288 14,315 (1,027 ) (7 )% domestic 4,795 4,507 288 6 % total new vehicle 26,163 28,573 (2,410 ) (8 )% used vehicle retail 27,070 21,386 5,684 27 % used to new ratio 103.5 % 74.8 % nm average selling price new vehicle $ 49,096 $ 42,894 $ 6,202 14 % used vehicle retail 31,965 26,372 5,593 21 % average gross profit per unit new vehicle: luxury $ 9,196 $ 5,292 $ 3,904 74 % import 4,749 1,202 3,547 295 % domestic 5,735 3,128 2,607 83 % total new vehicle 6,303 2,901 3,402 117 % used vehicle retail 2,671 1,833 838 46 % finance and insurance 2,010 1,747 263 15 % front end yield (1) 6,466 4,191 2,275 54 % gross margin new vehicle: luxury 13.5 % 8.8 % 470 bps import 13.1 % 3.9 % 920 bps domestic 10.8 % 6.9 % 390 bps total new vehicle 12.8 % 6.8 % 600 bps used vehicle retail 8.4 % 7.0 % 140 bps parts and service 58.0 % 62.1 % (410) bps total gross profit margin 20.4 % 16.7 % 370 bps (1) front end yield is calculated as gross profit from new vehicles, used retail vehicles and finance and insurance (net), divided by combined new and used retail unit sales. asbury automotive group, inc. same store operating highlights-dealerships (in millions) (unaudited) for the three months ended december 31, increase (decrease) % change 2021 2020 revenue new vehicle: luxury $ 532.6 $ 579.5 $ (46.9 ) (8 )% import 404.0 436.5 (32.5 ) (7 )% domestic 174.2 202.1 (27.9 ) (14 )% total new vehicle 1,110.8 1,218.1 (107.3 ) (9 )% used vehicle: retail 784.8 560.4 224.4 40 % wholesale 47.2 94.8 (47.6 ) (50 )% total used vehicle 832.0 655.2 176.8 27 % parts and service 294.5 259.9 34.6 13 % finance and insurance 92.4 86.9 5.5 6 % total revenue $ 2,329.7 $ 2,220.1 $ 109.6 5 % gross profit new vehicle: luxury $ 72.0 $ 51.2 $ 20.8 41 % import 52.4 17.2 35.2 205 % domestic 18.5 13.9 4.6 33 % total new vehicle 142.9 82.3 60.6 74 % used vehicle: retail 64.4 39.2 25.2 64 % wholesale 3.6 0.4 3.2 nm total used vehicle 68.0 39.6 28.4 72 % parts and service: customer pay 110.4 94.1 16.3 17 % warranty 20.6 26.8 (6.2 ) (23 )% wholesale parts 8.6 6.4 2.2 34 % parts and service, excluding reconditioning and preparation 139.6 127.3 12.3 10 % reconditioning and preparation 35.0 34.1 0.9 3 % total parts and service 174.6 161.4 13.2 8 % finance and insurance 92.4 86.9 5.5 6 % total gross profit $ 477.9 $ 370.2 $ 107.7 29 % sg&a expense $ 266.5 $ 227.0 $ 39.5 17 % sg&a expense as a percentage of gross profit 55.8 % 61.3 % (550) bps _____________________________ nm—not meaningful same store amounts consist of information from dealerships for identical months in each comparative period, commencing with the first month we owned the dealership. additionally, amounts related to divested dealerships are excluded from each comparative period. asbury automotive group, inc. same store operating highlights-dealerships (continued) (unaudited) for the three months ended december 31, increase (decrease) % change 2021 2020 unit sales new vehicle: luxury 7,852 9,675 (1,823 ) (19 )% import 11,342 14,315 (2,973 ) (21 )% domestic 3,363 4,451 (1,088 ) (24 )% total new vehicle 22,557 28,441 (5,884 ) (21 )% used vehicle retail 24,553 21,260 3,293 15 % used to new ratio 108.8 % 74.8 % nm average selling price new vehicle $ 49,244 $ 42,829 $ 6,415 15 % used vehicle retail 31,964 26,359 5,605 21 % average gross profit per unit new vehicle: luxury $ 9,170 $ 5,292 $ 3,878 73 % import 4,620 1,202 3,418 284 % domestic 5,501 3,123 2,378 76 % total new vehicle 6,335 2,894 3,441 119 % used vehicle retail 2,623 1,844 779 42 % finance and insurance 1,961 1,748 213 12 % front end yield (1) 6,362 4,193 2,169 52 % gross margin new vehicle: luxury 13.5 % 8.8 % 470 bps import 13.0 % 3.9 % 910 bps domestic 10.6 % 6.9 % 370 bps total new vehicle 12.9 % 6.8 % 610 bps used vehicle retail 8.2 % 7.0 % 120 bps parts and service: parts and service, excluding reconditioning and preparation 47.4 % 49.0 % (160) bps parts and service, including reconditioning and preparation 59.3 % 62.1 % (280) bps total gross profit margin 20.5 % 16.7 % 380 bps (1) front end yield is calculated as gross profit from new vehicles, used retail vehicles and finance and insurance (net), divided by combined new and used retail unit sales. asbury automotive group, inc. statements of income-consolidated (in millions) (unaudited) for the twelve months ended december 31, increase (decrease) % change 2021 2020 revenue new vehicle $ 4,934.1 $ 3,767.4 $ 1,166.7 31 % used vehicle: retail 3,055.9 1,930.0 1,125.9 58 % wholesale 259.7 239.5 20.2 8 % total used vehicle 3,315.6 2,169.5 1,146.1 53 % parts and service 1,182.9 889.8 293.1 33 % finance and insurance 405.1 305.1 100.0 33 % total revenue 9,837.7 7,131.8 2,705.9 38 % gross profit new vehicle 490.5 218.5 272.0 124 % used vehicle: retail 262.0 145.3 116.7 80 % wholesale 26.3 11.3 15.0 133 % total used vehicle 288.3 156.6 131.7 84 % parts and service 721.9 543.2 178.7 33 % finance and insurance 401.5 305.1 96.4 32 % total gross profit 1,902.2 1,223.4 678.8 55 % operating expenses selling, general and administrative 1,073.9 781.9 292.0 37 % operating metrics sg&a as a percentage of gross profit 56.5 % 63.9 % (740) bps adjusted sg&a as a percentage of gross profit 56.2 % 63.8 % (760) bps income from operations as a percentage of revenue 8.0 % 5.2 % 280 bps income from operations as a percentage of gross profit 41.6 % 30.3 % 1,130 bps adjusted income from operations as a percentage of revenue 8.1 % 5.7 % 240 bps adjusted income from operations as a percentage of gross profit 41.7 % 33.1 % 860 bps revenue mix new vehicle 50.2 % 52.8 % used vehicle retail 31.1 % 27.0 % used vehicle wholesale 2.6 % 3.4 % parts and service 12.0 % 12.5 % finance and insurance 4.1 % 4.3 % total revenue 100.0 % 100.0 % gross profit mix new vehicle 25.8 % 17.9 % used vehicle retail 13.7 % 11.9 % used vehicle wholesale 1.4 % 0.9 % parts and service 38.0 % 44.4 % finance and insurance 21.1 % 24.9 % total gross profit 100.0 % 100.0 % asbury automotive group, inc. statements of income-dealerships (in millions) (unaudited) for the twelve months ended december 31, increase (decrease) % change 2021 2020 revenue new vehicle $ 4,934.1 $ 3,767.4 $ 1,166.7 31 % used vehicle: retail 3,055.9 1,930.0 1,125.9 58 % wholesale 259.7 239.5 20.2 8 % total used vehicle 3,315.6 2,169.5 1,146.1 53 % parts and service 1,184.3 889.8 294.5 33 % finance and insurance, net 402.7 305.1 97.6 32 % total revenue 9,836.7 7,131.8 2,704.9 38 % gross profit new vehicle 490.5 218.5 272.0 124 % used vehicle: retail 262.0 145.3 116.7 80 % wholesale 26.3 11.3 15.0 133 % total used vehicle 288.3 156.6 131.7 84 % parts and service 720.2 543.2 177.0 33 % finance and insurance, net 402.7 305.1 97.6 32 % total gross profit 1,901.7 1,223.4 678.3 55 % operating expenses selling, general and administrative 1,076.9 781.9 295.0 38 % sg&a as a percentage of gross profit 56.6 % 63.9 % (730) bps asbury automotive group, inc. key operating highlights-dealerships (in millions, except per unit data) (unaudited) for the twelve months ended december 31, increase (decrease) % change 2021 2020 unit sales new vehicle: luxury 34,648 25,259 9,389 37 % import 58,413 52,201 6,212 12 % domestic 16,849 17,705 (856 ) (5 )% total new vehicle 109,910 95,165 14,745 15 % used vehicle retail 105,206 80,537 24,669 31 % used to new ratio 95.7 % 84.6 % nm average selling price new vehicle $ 44,892 $ 39,588 $ 5,304 13 % used vehicle retail 29,047 23,964 5,083 21 % average gross profit per unit new vehicle: luxury $ 6,959 $ 4,501 $ 2,458 55 % import 3,001 1,144 1,857 162 % domestic 4,398 2,547 1,851 73 % total new vehicle 4,463 2,296 2,167 94 % used vehicle retail 2,490 1,804 686 38 % finance and insurance 1,872 1,736 136 8 % front end yield (1) 5,370 3,807 1,563 41 % gross margin new vehicle: luxury 11.0 % 7.8 % 320 bps import 9.1 % 3.9 % 520 bps domestic 9.1 % 5.9 % 320 bps total new vehicle 9.9 % 5.8 % 410 bps used vehicle retail 8.6 % 7.5 % 110 bps parts and service 60.8 % 61.0 % (20) bps total gross profit margin 19.3 % 17.2 % 210 bps (1) front end yield is calculated as gross profit from new vehicles, used retail vehicles and finance and insurance (net), divided by combined new and used retail unit sales. asbury automotive group, inc. same store operating highlights-dealerships (in millions) (unaudited) for the twelve months ended december 31, increase (decrease) % change 2021 2020 revenue new vehicle: luxury $ 1,597.4 $ 1,409.3 $ 188.1 13 % import 1,847.6 1,534.8 312.8 20 % domestic 730.2 734.8 (4.6 ) (1 )% total new vehicle 4,175.2 3,678.9 496.3 13 % used vehicle: retail 2,621.9 1,872.1 749.8 40 % wholesale 175.1 235.2 (60.1 ) (26 )% total used vehicle 2,797.0 2,107.3 689.7 33 % parts and service 994.5 867.8 126.7 15 % finance and insurance 364.0 299.1 64.9 22 % total revenue $ 8,330.7 $ 6,953.1 $ 1,377.6 20 % gross profit new vehicle: luxury $ 175.2 $ 110.6 $ 64.6 58 % import 163.8 59.4 104.4 176 % domestic 64.8 43.2 21.6 50 % total new vehicle 403.8 213.2 190.6 89 % used vehicle: retail 226.5 141.9 84.6 60 % wholesale 18.9 11.4 7.5 66 % total used vehicle 245.4 153.3 92.1 60 % parts and service: customer pay 363.0 303.2 59.8 20 % warranty 78.4 90.2 (11.8 ) (13 )% wholesale parts 28.7 21.6 7.1 33 % parts and service, excluding reconditioning and preparation 470.1 415.0 55.1 13 % reconditioning and preparation 135.8 114.7 21.1 18 % total parts and service 605.9 529.7 76.2 14 % finance and insurance 364.0 299.1 64.9 22 % total gross profit $ 1,619.1 $ 1,195.3 $ 423.8 35 % sg&a expense $ 931.2 $ 762.9 $ 168.3 22 % sg&a expense as a percentage of gross profit 57.5 % 63.8 % (630) bps _____________________________ same store amounts consist of information from dealerships for identical months in each comparative period, commencing with the first month we owned the dealership. additionally, amounts related to divested dealerships are excluded from each comparative period. asbury automotive group, inc. same store operating highlights-dealerships (continued) (unaudited) for the twelve months ended december 31, increase (decrease) % change 2021 2020 unit sales new vehicle: luxury 25,647 24,526 1,121 5 % import 56,227 51,698 4,529 9 % domestic 15,316 17,009 (1,693 ) (10 )% total new vehicle 97,190 93,233 3,957 4 % used vehicle retail 93,803 78,144 15,659 20 % used to new ratio 96.5 % 83.8 % nm average selling price new vehicle $ 42,959 $ 39,459 $ 3,500 9 % used vehicle retail 27,951 23,957 3,994 17 % average gross profit per unit new vehicle: luxury $ 6,831 $ 4,510 $ 2,321 51 % import 2,913 1,149 1,764 154 % domestic 4,231 2,540 1,691 67 % total new vehicle 4,155 2,287 1,868 82 % used vehicle retail 2,415 1,816 599 33 % finance and insurance 1,906 1,745 161 9 % front end yield (1) 5,206 3,817 1,389 36 % gross margin new vehicle: luxury 11.0 % 7.8 % 320 bps import 8.9 % 3.9 % 500 bps domestic 8.9 % 5.9 % 300 bps total new vehicle 9.7 % 5.8 % 390 bps used vehicle retail 8.6 % 7.6 % 100 bps parts and service: parts and service, excluding reconditioning and preparation 47.3 % 47.8 % (50) bps parts and service, including reconditioning and preparation 60.9 % 61.0 % (10) bps total gross profit margin 19.4 % 17.2 % 220 bps (1) front end yield is calculated as gross profit from new vehicles, used retail vehicles and finance and insurance (net), divided by combined new and used retail unit sales. asbury automotive group inc. supplemental disclosures (unaudited) non-gaap financial disclosure and reconciliation in addition to evaluating the financial condition and results of our operations in accordance with gaap, from time to time management evaluates and analyzes results and any impact on the company of strategic decisions and actions relating to, among other things, cost reduction, growth, and profitability improvement initiatives, and other events outside of normal, or "core," business and operations, by considering certain alternative financial measures not prepared in accordance with gaap. these measures include "pro forma adjusted leverage ratio," "adjusted income from operations," "adjusted net income," " adjusted operating margins," and "adjusted diluted earnings per share ("eps")." further, management assesses the organic growth of our revenue and gross profit on a same store basis. we believe that our assessment on a same store basis represents an important indicator of comparative financial performance and provides relevant information to assess our performance at our existing locations. same store amounts consist of information from dealerships for identical months in each comparative period, commencing with the first month we owned the dealership. additionally, amounts related to divested dealerships are excluded from each comparative period. non-gaap measures do not have definitions under gaap and may be defined differently by and not be comparable to similarly titled measures used by other companies. as a result, any non-gaap financial measures considered and evaluated by management are reviewed in conjunction with a review of the most directly comparable measures calculated in accordance with gaap. management cautions investors not to place undue reliance on such non-gaap measures, but also to consider them with the most directly comparable gaap measures. in their evaluation of results from time to time, management excludes items that do not arise directly from core operations, or are otherwise of an unusual or non-recurring nature. because these non-core, unusual or non-recurring charges and gains materially affect asbury's financial condition or results in the specific period in which they are recognized, management also evaluates, and makes resource allocation and performance evaluation decisions based on, the related non-gaap measures excluding such items. in addition to using such non-gaap measures to evaluate results in a specific period, management believes that such measures may provide more complete and consistent comparisons of operational performance on a period-over-period historical basis and a better indication of expected future trends. management discloses these non-gaap measures, and the related reconciliations, because it believes investors use these metrics in evaluating longer-term period-over-period performance, and to allow investors to better understand and evaluate the information used by management to assess operating performance. the following tables provide reconciliations for our non-gaap metrics: for the twelve months ended december 31, 2021 september 30, 2021 (dollars in millions) adjusted leverage ratio: long-term debt (including current portion) $ 3,582.6 $ 1,371.0 cash and floor plan offset (272.9 ) (377.4 ) tca restricted cash 127.3 — availability under our used vehicle revolving floor plan facility (20.6 ) (160.0 ) adjusted long-term net debt $ 3,416.4 $ 833.6 calculation of earnings before interest, taxes, depreciation and amortization ("ebitda"): net income $ 532.4 $ 481.0 depreciation and amortization 41.9 40.1 income tax expense 165.3 153.0 swap and other interest expense 94.5 58.4 earnings before interest, taxes, depreciation and amortization ("ebitda") $ 834.1 $ 732.5 non-core items - expense (income): gain on dealership divestitures $ (8.0 ) $ (11.9 ) legal settlements (3.5 ) (3.5 ) gain on sale of real estate (1.9 ) (1.9 ) professional fees associated with acquisitions 4.9 3.5 real estate-related charges 2.1 2.1 total non-core items (6.4 ) (11.7 ) adjusted ebitda $ 827.7 $ 720.8 pro forma impact of acquisition and divestitures on ebitda $ 440.4 $ — pro forma adjusted ebitda $ 1,268.1 $ 720.8 pro forma adjusted net leverage ratio 2.7 1.2 for the three months ended december 31, 2021 2020 (in millions, except per share data) adjusted income from operations: income from operations $ 236.1 $ 134.5 professional fees associated with acquisitions 1.4 — adjusted income from operations $ 237.5 $ 134.5 adjusted operating margin: total revenue $ 2,654.8 $ 2,234.0 operating margin 8.9 % 6.0 % adjusted operating margin 8.9 % 6.0 % adjusted net income: net income $ 140.5 $ 89.1 non-core items - (income) expense: bridge commitment fee 27.5 — professional fees associated with acquisitions 1.4 — gain on dealership divestiture — (3.9 ) income tax effect on non-core items above (6.8 ) 1.0 total non-core items 22.1 (2.9 ) adjusted net income $ 162.6 $ 86.2 adjusted diluted earnings per share (eps): diluted eps $ 6.44 $ 4.59 total non-core items 1.02 (0.15 ) adjusted diluted eps $ 7.46 $ 4.44 weighted average common shares outstanding - diluted 21.8 19.4 adjusted selling, general, and administrative expense: selling, general, and administrative expense $ 295.7 $ 228.5 professional fees associated with acquisitions (1.4 ) — adjusted selling, general, and administrative expense: $ 294.3 $ 228.5 adjusted selling, general, and administrative expense as a percentage of gross profit: total gross profit $ 542.3 $ 372.3 selling, general, and administrative expense as a percentage of gross profit 54.5 % 61.4 % adjusted selling, general, and administrative expense as a percentage of gross profit 54.3 % 61.4 % for the twelve months ended december 31, 2021 2020 (in millions, except per share data) adjusted income from operations: income from operations $ 791.8 $ 370.8 legal settlements (3.5 ) (2.1 ) gain on sale of real estate (1.9 ) (0.3 ) real estate-related charges 2.1 0.7 professional fees associated with acquisitions 4.9 1.3 park place related costs — 11.6 franchise rights impairment — 23.0 adjusted income from operations $ 793.4 $ 405.0 adjusted operating margin: total revenue $ 9,837.7 $ 7,131.8 operating margin 8.0 % 5.2 % adjusted operating margin 8.1 % 5.7 % adjusted net income: net income $ 532.4 $ 254.4 non-core items - (income) expense: gain on dealership divestitures (8.0 ) (62.3 ) legal settlements (3.5 ) (2.1 ) gain on sale of real estate (1.9 ) (0.3 ) bridge commitment fee 27.5 — professional fees associated with acquisitions 4.9 1.3 real estate related charges 2.1 0.7 park place related costs — 11.6 loss on extinguishment of debt — 20.7 franchise rights impairment — 23.0 income tax effect on non-core items above (5.0 ) 1.9 total non-core items 16.1 (5.5 ) adjusted net income $ 548.5 $ 248.9 adjusted diluted earnings per share (eps): diluted eps $ 26.49 $ 13.18 total non-core items 0.80 (0.28 ) adjusted diluted eps $ 27.29 $ 12.90 weighted average common shares outstanding - diluted 20.1 19.3 adjusted selling, general, and administrative expense: selling, general, and administrative expense $ 1,073.9 $ 781.9 professional fees associated with acquisitions (4.9 ) (1.3 ) adjusted selling, general, and administrative expense: $ 1,069.0 $ 780.6 adjusted selling, general, and administrative expense as a percentage of gross profit: total gross profit $ 1,902.2 $ 1,223.4 selling, general, and administrative expense as a percentage of gross profit 56.5 % 63.9 % adjusted selling, general, and administrative expense as a percentage of gross profit 56.2 % 63.8 %
