Asbury Automotive Group Announces Record Financial Results for Fourth Quarter and Full Year 2021 and Increase in Share Repurchase Authorization

• Fourth quarter EPS of $6.44 per diluted share, up 40% over prior year EPS
• Fourth quarter adjusted EPS of $7.46 per diluted share (a non-GAAP measure), up 68% over prior year adjusted EPS
• Fourth quarter revenue increased 19% and gross profit increased 46% over prior year quarter; operating margin of 8.9%
• Fourth quarter SG&A as a percentage of gross profit decreased 690 bps over prior year to 54.5%, while adjusted SG&A decreased 710 bps to 54.3%
• Full year revenue increased 38% and gross profit increased 55% over prior year and adjusted EBITDA (a non-GAAP measure) increased 94% to $828 million
• Increase in the Company’s share repurchase authorization by $100 million, to $200 million

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.