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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934 for the quarterly period ended March 31, 2003
Commission file number: 001-31262
ASBURY AUTOMOTIVE GROUP, INC.
(Exact name of registrant as specified in its charter)
Delaware 01-0609375
- ------------------------------- -------------------------------------
(State or Other Jurisdiction of (I.R.S. Employer Identification No.)
Incorporation or Organization)
Three Landmark Square, Suite 500, Stamford, Connecticut 06901, (203) 356-4400
- --------------------------------------------------------------------------------
(Address of, Including Zip Code, and Telephone Number, Including
Area Code, of Registrant's Principal Executive Offices
- -------------------------------------------------------------------------------
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 3 months (or for such shorter period that the registrant was
required to file such reports) and (2) has been subject to such filing
requirements for the past 90 days. Yes v No
Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act). Yes No v
Indicate the number of shares outstanding of each of the registrant's classes of
common stock, as of the latest practicable date (applicable only to corporate
registrants).
The number of shares of common stock outstanding as of May 9, 2003 was
32,840,476 (net of 1,159,524 treasury shares).
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ASBURY AUTOMOTIVE GROUP, INC.
March 31, 2003 Form 10-Q Quarterly Report
Table of Contents
Part I - Financial Information
Page
Item 1. Financial Statements
Consolidated Balance Sheets as of
March 31, 2003 and December 31, 2002.................................1
Consolidated Statements of Income -
Three Months Ended March 31, 2003 and 2002...........................2
Consolidated Statements of Cash Flows -
Three Months Ended March 31, 2003 and 2002...........................3
Notes to Consolidated Financial Statements...........................4
Independent Accountants' Review Report ..............................8
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations............................................9
Item 3. Quantitative and Qualitative Disclosures About Market Risk..........15
Item 4. Controls and Procedures.............................................15
Part II - Other Information
Item 4. Submission of Matters to a Vote of Security Holders.................16
Item 6. Exhibits and Reports on Form 8-K....................................16
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
ASBURY AUTOMOTIVE GROUP, INC.
CONSOLIDATED BALANCE SHEETS
(dollars in thousands, except for share data)
March 31, December 31,
ASSETS 2003 2002
----------- ------------
(unaudited)
CURRENT ASSETS:
Cash and cash equivalents ............................................ $ 38,077 $ 22,613
Contracts-in-transit ................................................. 88,936 91,190
Current portion of restricted marketable securities .................. 1,545 1,499
Accounts receivable (net of allowance of $2,103 and $2,122) .......... 93,275 96,090
Inventories .......................................................... 622,436 604,791
Deferred income taxes ................................................ 7,353 9,044
Prepaid and other current assets ..................................... 21,912 24,556
----------- -----------
Total current assets .................................... 873,534 849,783
PROPERTY AND EQUIPMENT, net .............................................. 277,735 286,930
GOODWILL ................................................................. 400,666 402,133
RESTRICTED CASH AND MARKETABLE SECURITIES ................................ 5,383 4,892
OTHER ASSETS ............................................................. 61,850 61,906
----------- -----------
Total assets ............................................ $ 1,619,168 $ 1,605,644
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Floor plan notes payable ............................................. $ 559,783 $ 540,419
Current maturities of long-term debt ................................. 30,609 35,009
Accounts payable ..................................................... 41,303 40,120
Accrued liabilities .................................................. 77,226 77,325
----------- ---------
Total current liabilities ............................... 708,921 692,873
LONG-TERM DEBT ........................................................... 436,241 440,143
DEFERRED INCOME TAXES .................................................... 26,450 29,972
OTHER LIABILITIES ........................................................ 15,367 15,705
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Preferred stock, $.01 par value, 10,000,000 shares authorized
Common stock, $.01 par value, 90,000,000 shares authorized, 34,000,000
issued ............................................................ 340 340
Additional paid-in capital ........................................... 410,740 410,718
Retained earnings .................................................... 29,742 22,645
Treasury stock, at cost; 980,124 and 772,824 shares .................. (8,544) (6,630)
Accumulated other comprehensive (loss) ............................... (89) (122)
----------- -----------
Total stockholders' equity .............................. 432,189 426,951
----------- -----------
Total liabilities and stockholders' equity .............. $ 1,619,168 $ 1,605,644
=========== ===========
See Notes to Consolidated Financial Statements.
1
ASBURY AUTOMOTIVE GROUP, INC.
CONSOLIDATED STATEMENTS OF INCOME
(dollars in thousands, except per share data)
(unaudited)
For the Three Months Ended March 31,
2003 2002
REVENUES:
New vehicle .................................................. $ 636,109 $ 621,018
Used vehicle ................................................. 304,307 280,856
Parts, service and collision repair .......................... 131,207 121,968
Finance and insurance, net ................................... 29,649 26,085
----------- -----------
Total revenues ........................................... 1,101,272 1,049,927
----------- -----------
COST OF SALES:
New vehicle .................................................. 588,691 569,471
Used vehicle ................................................. 275,458 253,933
Parts, service and collision repair .......................... 62,343 57,439
----------- -----------
Total cost of sales ...................................... 926,492 880,843
----------- -----------
GROSS PROFIT .................................................... 174,780 169,084
OPERATING EXPENSES:
Selling, general and administrative .......................... 142,164 130,308
Depreciation and amortization ................................ 5,947 5,756
----------- -----------
Income from operations ................................... 26,669 33,020
----------- -----------
OTHER INCOME (EXPENSE):
Floor plan interest expense .................................. (4,570) (4,182)
Other interest expense ....................................... (9,954) (9,748)
Interest income .............................................. 181 314
Net losses from unconsolidated affiliates .................... -- (100)
Loss on sale of assets ....................................... (313) --
Other, net ................................................... (546) (392)
----------- -----------
Total other expense, net ................................. (15,202) (14,108)
----------- -----------
Income before income taxes ............................... 11,467 18,912
INCOME TAX EXPENSE:
Income tax expense ........................................... 4,564 2,228
Tax adjustment upon conversion from an L.L.C. to a corporation -- 11,553
----------- -----------
Total income tax expense ................................. 4,564 13,781
----------- -----------
Income from continuing operations ........................ 6,903 5,131
DISCONTINUED OPERATIONS ......................................... 194 31
----------- -----------
Net income ............................................... $ 7,097 5,162
===========
PRO FORMA TAX (BENEFIT) EXPENSE:
Pro forma income tax expense ................................. 5,299
Tax adjustment upon conversion from an L.L.C. to a corporation (11,553)
-----------
Tax affected pro forma net income ........................ $ 11,416
===========
EARNINGS PER SHARE:
Basic ........................................................ $ 0.21 $ 0.17
=========== ===========
Diluted ...................................................... $ 0.21 $ 0.17
=========== ===========
PRO FORMA EARNINGS PER SHARE:
Basic ........................................................ $ 0.37
===========
Diluted ...................................................... $ 0.37
===========
WEIGHTED AVERAGE SHARES OUTSTANDING (in thousands):
Basic 33,052 30,400
========== ===========
Diluted 33,053 30,434
========== ===========
See Notes to Consolidated Financial Statements.
2
ASBURY AUTOMOTIVE GROUP, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(dollars in thousands)
(unaudited)
For the Three Months Ended
March 31,
2003 2002
CASH FLOW FROM OPERATING ACTIVITIES:
Net income ...................................................................... $ 7,097 $ 5,162
Adjustments to reconcile net income to net cash provided by operating activities-
Depreciation and amortization ................................................ 5,947 5,756
Gain on sale of discontinued operations, net of related taxes ................ (617) (559)
Deferred income taxes ........................................................ (1,807) 11,115
Loss from unconsolidated affiliates, net ..................................... -- 100
Loss on sale of assets ....................................................... 313 --
Amortization of deferred finance fees ........................................ 1,278 1,044
Change in operating assets and liabilities, net of effects from
acquisitions and divestitures-
Contracts-in-transit ......................................................... 2,254 6,827
Accounts receivable, net ..................................................... (1,504) (6,403)
Proceeds from the sale of accounts receivable ................................ 4,319 4,448
Inventories .................................................................. (26,696) (17,233)
Floor plan notes payable ..................................................... 30,607 4,865
Accounts payable and accrued liabilities ..................................... 3,015 3,355
Other ........................................................................ 5,032 (2,077)
--------- --------
Net cash provided by operating activities .............................. 29,238 16,400
--------- --------
CASH FLOW FROM INVESTING ACTIVITIES:
Capital expenditures ............................................................ (15,223) (8,593)
Proceeds from the sale of assets ................................................ 376 --
Proceeds from sale of discontinued operations ................................... 5,776 3,377
Acquisitions (net of cash acquired) ............................................. (250) --
Proceeds from restricted marketable securities .................................. 913 913
Purchase of restricted investments .............................................. (1,450) --
Net (issuance) of finance contracts ............................................. (1,464) (850)
Other investing activities ...................................................... -- (1,901)
--------- --------
Net cash used in investing activities .................................. (11,322) (7,054)
--------- --------
CASH FLOW FROM FINANCING ACTIVITIES:
Distributions to members ........................................................ (3,010) (4,202)
Contributions ................................................................... -- 800
Repayments of debt .............................................................. (34,265) (58,211)
Proceeds from borrowings ........................................................ 21,379 2,509
Proceeds from initial public offering, net ...................................... -- 67,364
Payment of debt issuance costs .................................................. (263) --
Proceeds from sale/leaseback transactions ....................................... 16,887 --
Purchase of treasury stock ...................................................... (3,180) --
-------- --------
Net cash provided by (used in) financing activities .................... (2,452) 8,260
-------- --------
Net increase in cash and cash equivalents .............................. 15,464 17,606
CASH AND CASH EQUIVALENTS, beginning of period ...................................... 22,613 60,506
-------- --------
CASH AND CASH EQUIVALENTS, end of period ............................................ $ 38,077 $ 78,112
======== ========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for-
Interest (net of amounts capitalized) ......................................... $ 8,604 $ 12,880
======== ========
Income taxes .................................................................. $ 52 $ 67
======== ========
See Notes to Consolidated Financial Statements.
3
ASBURY AUTOMOTIVE GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in thousands, except share data)
(unaudited)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation:
- ----------------------
The consolidated balance sheet at March 31, 2003, the consolidated statements of
income for the three-month periods ended March 31, 2003 and 2002, and the
consolidated statements of cash flows for the three-month periods ended March
31, 2003 and 2002, are unaudited. In the opinion of management, all adjustments
necessary to present fairly the financial position, results of operations and
cash flows for the interim periods were made. Certain items in the March 31,
2002 financial statements were reclassified to conform to the classification of
the March 31, 2003 financial statements. Due to seasonality and other factors,
the results of operations for interim periods are not necessarily indicative of
the results that would be realized for the entire year.
Certain information and footnote disclosures, normally included in financial
statements prepared in accordance with generally accepted accounting principles,
were omitted. Accordingly, these consolidated financial statements should be
read in conjunction with the consolidated financial statements and notes thereto
included in the Company's annual report on Form 10-K for the year ended December
31, 2002.
All significant intercompany balances and transactions have been eliminated in
consolidation.
2. INVENTORIES:
Inventories consisted of the following:
March 31, 2003 December 31, 2002
-------------- -----------------
New vehicles $488,950 $477,453
Used vehicles 92,906 86,392
Parts, accessories and other 40,580 40,946
-------- --------
$622,436 $604,791
======== ========
3. EARNINGS PER SHARE:
Basic earnings per share is computed by dividing net income by the
weighted-average common shares outstanding during the period. Diluted earnings
per share is computed by dividing net income by the weighted-average common
shares and common share equivalents outstanding during the period.
The following table sets forth the computation of basic and diluted earnings per
share:
For the Three Months
Ended March 31,
---------------
2003 2002
---- ----
Net income applicable to common shares:
Continuing operations .............. $6,903 $5,131
Discontinued operations ............ 194 31
------ ------
$7,097 $5,162
====== ======
4
For the Three Months
Ended March 31,
---------------
2003 2002
---- ----
Earnings per share:
Basic-
Continuing operations $.21 $.17
Discontinued operations - -
---- ----
$.21 $.17
==== ====
Diluted-
Continuing operations $.21 $.17
Discontinued operations - -
---- ----
$.21 $.17
==== ====
Common shares and common share equivalents:
Weighted-average shares outstanding 33,052 30,400
------ ------
Basic shares 33,052 30,400
Shares issuable with respect to additional
common share equivalents (stock options) 1 34
------ ------
Diluted equivalent shares 33,053 30,434
====== ======
4. INTANGIBLE ASSETS AND GOODWILL:
Intangible assets consist of the following (included in other assets on the
accompanying consolidated balance sheets):
March 31, December 31,
2003 2002
---- ----
Amortizable intangible assets:
Noncompete agreements ........................ $ 5,331 $ 5,331
Licensing agreements ......................... 1,750 1,750
Lease agreements (amortization is
included in rent expense) .................. 6,523 6,527
-------- --------
Total ................................... 13,604 13,608
Less - Accumulated amortization ............. (9,223) (8,546)
-------- --------
Intangible assets, net ........................... $ 4,381 $ 5,062
======== ========
Unamortizable intangible assets - franchise rights $ 8,000 $ 8,000
======== ========
Amortization expense for the three-month periods ended March 31, 2003 and 2002
was $569 and $598, respectively.
Estimated amortization expense - for the years ended December 31:
2004 $488
2005 105
2006 101
2007 101
2008 100
5
The changes in the carrying amounts of goodwill for the period ended March 31,
2003 are as follows:
Balance as of December 31, 2002 $402,133
Additions related to current year acquisitions 126
Goodwill associated with discontinued operations (1,593)
--------
Balance as of March 31, 2003 $400,666
========
5. COMPREHENSIVE INCOME:
For the Three Months
Ended March 31,
---------------
2003 2002
---- ----
Net income ...................................... $ 7,097 $ 5,162
Other comprehensive income, net of tax:
Change in fair value of interest rate swaps . -- 1,487
Income tax expense .......................... -- (1,230)
------- -------
-- 257
Reclassification adjustment of loss on
interest rate swaps included in net income 57 --
Income tax benefit .......................... (24) --
------- -------
Comprehensive income ............................ $ 7,130 $ 5,419
======= =======
6. EQUITY-BASED COMPENSATION:
The Company accounts for equity-based compensation issued to employees in
accordance with Accounting Principles Board ("APB") Opinion No. 25 "Accounting
for Stock Issued to Employees." APB No. 25 requires the use of the intrinsic
value method, which measures compensation cost as the excess, if any, of the
quoted market price of the stock at the measurement date over the amount an
employee must pay to acquire the stock. The Company makes disclosures of pro
forma net earnings and earnings per share as if the fair-value-based method of
accounting had been applied as required by SFAS No. 123 "Accounting for
Stock-Based Compensation" and as amended by SFAS No. 148 "Accounting for
Stock-Based Compensation - Transition Disclosure."
A reconciliation of the Company's net earnings to pro forma net earnings, and
the related pro forma earnings per share amounts, is as follows:
For the Three Months
Ended March 31,
------------------------
2003 2002
------- -------
Net income $7,097 $5,162
Adjustment to net earnings for:
Stock-based compensation expense included
in net earnings, net of tax 14 66
Pro forma stock-based compensation expense,
net of tax (923) (1,193)
------ ------
Pro forma net income $6,188 $4,035
====== ======
Earnings per share:
Basic - as reported $.21 $.17
====== ======
Basic - pro forma $.19 $.13
====== ======
Diluted - as reported $.21 $.17
====== ======
Diluted - pro forma $.19 $.13
====== ======
6
7. DISCONTINUED OPERATIONS:
During the first quarter of 2003, the Company classified as discontinued
operations three dealerships; two of which were divested, and one of which was
held for sale as of March 31, 2003. The results of operations are accounted for
as discontinued operations in the consolidated statements of income. A summary
statement of income information relating to the discontinued operations is as
follows:
For the Three Months
Ended March 31,
---------------------
2003 2002
--------- --------
Revenues ...................................... $ 4,593 $ 20,980
Cost of sales ................................. 3,913 17,897
-------- --------
Gross profit ......................... 680 3,083
Operating expenses ............................ 1,307 3,431
-------- --------
Loss from operations ................. (627) (348)
Other, net .................................... 204 (180)
-------- --------
Net loss ............................. (423) (528)
Gain on disposition of discontinued operations,
net of related taxes ....................... 617 559
-------- --------
Discontinued operations .............. $ 194 $ 31
======== ========
8. PROPERTY AND EQUIPMENT:
During the first quarter of 2003, the Company sold, under four sale/leaseback
agreements with an independent third party, certain land and buildings for $16.9
million; a $0.1 million loss was recognized on the sales. Under the agreements,
the Company will leaseback the properties from the purchaser over a 20-year
period. The Company is accounting for the leasebacks as operating leases. The
estimated annual rental expense under these agreements will be approximately
$1.6 million.
9. SUBSEQUENT EVENTS:
During the second quarter of 2003, the Company made two acquisitions (three
franchises) for approximately $40 million in cash, which was funded under the
Company's existing credit facility. The acquisitions' purchase price will be
allocated to the underlying assets and liabilities based upon their estimated
fair values. The resulting goodwill and intangibles assets from these
transactions are estimated to be approximately $ 34 million. The results of
operations for these acquisitions will be included in the Company's consolidated
results from the date of acquisition.
During the second quarter of 2003, the Company sold land and building, under a
sale/leaseback transaction with an independent third party, for $8.5 million, of
which $6.4 million was used to repay the current portion of long-term debt.
Under the agreement, the Company will leaseback the property from the purchaser
over a 22-year period. The Company will account for the leaseback as an
operating lease. The estimated annual rental expense under this agreement will
be approximately $0.8 million.
7
INDEPENDENT ACCOUNTANTS' REVIEW REPORT
To Asbury Automotive Group, Inc.:
We have reviewed the accompanying condensed consolidated balance sheet of Asbury
Automotive Group, Inc. and subsidiaries ("the Company") as of March 31, 2003,
and the related condensed consolidated statements of income and cash flows for
the three-month periods ended March 31, 2003 and 2002. These financial
statements are the responsibility of the Company's management.
We conducted our review in accordance with standards established by the American
Institute of Certified Public Accountants. A review of interim financial
information consists principally of applying analytical procedures to financial
data and of making inquiries of persons responsible for financial and accounting
matters. It is substantially less in scope than an audit conducted in accordance
with auditing standards generally accepted in the United States of America, the
objective of which is the expression of an opinion regarding the financial
statements taken as a whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that should
be made to such condensed consolidated financial statements for them to be in
conformity with accounting principles generally accepted in the United States of
America.
We have previously audited, in accordance with auditing standards generally
accepted in the United States of America, the consolidated balance sheet of
Asbury Automotive Group, Inc. and subsidiaries as of December 31, 2002, and the
related consolidated statements of income, shareholders' equity, and cash flows
for the year then ended (not presented herein); and in our report dated February
25, 2003 (which includes an explanatory paragraph regarding the adoption of
Statement of Financial Accounting Standards No. 142, "Goodwill and Other
Intangible Assets"), we expressed an unqualified opinion on those consolidated
financial statements.
/s/ Deloitte & Touche LLP
Stamford, Connecticut
April 28, 2003
8
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
The following discussion should be read in conjunction with the unaudited
consolidated financial statements and notes thereto included in Item 1 of this
report.
RESULTS OF OPERATIONS
Three Months Ended March 31, 2003, Compared to Three Months Ended March 31, 2002
Net income for the three months ended March 31, 2003 was $7.1 million or $0.21
per basic and diluted share, including $194,000 of income from discontinued
operations. For the three months ended March 31, 2002, pro forma net income from
continuing operations was $11.4 million or $0.33 per share The pro forma results
for the prior year quarter exclude a nonrecurring deferred income tax provision
required by SFAS 109 related to our change in tax status from a limited
liability company to a "C" corporation in conjunction with our March 2002
initial public offering ("IPO"), and assumes that we were a publicly traded "C"
corporation for the entire period. A reconciliation of pro forma net income from
continuing operations to GAAP net income from continuing operations follows -
see "Reconciliation of Non-GAAP Financial Information".
Income from continuing operations before income taxes totaled $11.5 million for
the three months ended March 31, 2003, down 39% from $18.9 million for the same
period last year. The decrease can primarily be attributed to the competitive
new car environment, increased margin pressure, deterioration of our expense
structure, the poor performance of our Oregon platform as well as operating
losses of $1.5 million incurred with the Price 1 used vehicle program.
Revenues-
(dollars in thousands, except for unit For the Three Months
and per vehicle data) Ended March 31, Increase %
2003 2002 (Decrease) Change
---------- ---------- ----------- -------
New Vehicle Data:
Retail revenues - same store (1) .............. $ 611,673 $ 609,841 $ 1,832 0%
Retail revenues - acquisitions ................ 10,974 --
---------- ----------
Total new retail ......................... 622,647 609,841 12,806 2%
Fleet revenues - same store (1) ............... 13,457 11,177 2,280 20%
Fleet revenues - acquisitions ................. 5 --
---------- ----------
Total new fleet revenues ................. 13,462 11,177 2,285 20%
---------- ----------
New vehicle revenue, as reported ......... $ 636,109 $ 621,018 $ 15,091 2%
========== ==========
Retail units - same store (1) ................. 21,888 22,211 (323) (1%)
Retail units - actual ........................ 22,283 22,211 72 0%
Used Vehicle Data:
Retail revenues - same store (1) .............. $ 220,007 $ 217,546 $ 2,461 1%
Retail revenues - acquisitions ................ 12,569 --
---------- ----------
Total used retail revenues ............... 232,576 217,546 15,030 7%
Wholesale revenues - same store (1) ........... 62,300 63,310 (1,010) (2%)
Wholesale revenues - acquisitions ............. 9,431 --
---------- ----------
Total wholesale revenues ................. 71,731 63,310 8,421 13%
---------- ----------
Used vehicle revenue, as reported ........ $ 304,307 $ 280,856 $ 23,451 8%
========== ==========
Retail units - same store (1) ................. 14,569 14,579 (10) 0%
Retail units - actual ......................... 15,602 14,579 1,023 7%
9
(dollars in thousands, except for unit For the Three Months
and per vehicle data) Ended March 31, Increase %
2003 2002 (Decrease) Change
---------- ---------- ----------- -------
Parts, Service and Collision Repair:
Revenues - same store (1) ..................... $ 127,871 $ 121,968 $ 5,903 5%
Revenues - acquisitions ....................... 3,336 --
---------- ----------
Parts, service and collision repair
revenue, as reported .................. $ 131,207 $ 121,968 $ 9,239 8%
========== ==========
Finance and Insurance:
Revenues - same store (1) ..................... $ 28,638 $ 26,085 $ 2,553 10%
Revenues - acquisitions ....................... 1,011 --
---------- ----------
Finance and insurance revenue, as reported $ 29,649 $ 26,085 $ 3,564 14%
========== ==========
Total Revenue:
Same store (1) ................................ $1,063,946 $1,049,927 $ 14,019 1%
Acquisitions .................................. 37,326 --
---------- ----------
Total revenue, as reported ............... $1,101,272 $1,049,927 $ 51,345 5%
========== ==========
(1) Same store amounts include the results of dealerships for the identical
months for each period presented in the comparison, commencing with the first
full month in which the dealership was owned by the Company.
Revenues of $1.1 billion for the three months ended March 31, 2003, represented
a $51.3 million or 5% increase over the three months ended March 31, 2002. Same
store revenue growth accounted for $14.0 million or 1% of the increase with the
remainder derived from acquisitions. On a same store basis our new retail units
were down 1% despite a difficult economic and political environment which caused
the industry to be down 4%. Used retail vehicle unit sales remained flat versus
the prior year quarter with a notable 36% increase in our Tampa platform offset
by weaknesses in our Arkansas and Oregon platforms. Fixed operations revenues
were up 5% on a same store basis, primarily due to continued emphasis on
customer retention and expanded product offerings. Same store finance and
insurance revenues grew 10% and gross profit per vehicle retailed ("PVR")
increased 11%. Contributing to this success was continued strength in product
sales, strong penetration rates and the maturing of our preferred provider
programs.
Gross Profit-
(dollars in thousands, except for unit For the Three Months
and per vehicle data) Ended March 31, Increase %
2003 2002 (Decrease) Change
--------- ---------- -------- ------
New Vehicle Data:
Retail gross profit - same store (1) ............... $ 46,363 $ 51,286 $ (4,923) (10%)
Retail gross profit - acquisitions ................. 712 --
--------- ---------
Total new retail gross profit ................. 47,075 51,286 (4,211) (8%)
Fleet gross profit - same store (1) ................ 337 261 76 29%
Fleet gross profit - acquisitions .................. 6 --
--------- ---------
Total new fleet gross profit .................. 343 261 82 31%
--------- ---------
New vehicle gross profit, as reported ......... $ 47,418 $ 51,547 $ (4,129) (8%)
========= =========
Retail units - same store (1) ...................... 21,888 22,211 (323) (1%)
Retail units - actual ............................. 22,283 22,211 72 0%
10
(dollars in thousands, except for unit For the Three Months
and per vehicle data) Ended March 31, Increase %
2003 2002 (Decrease) Change
--------- ---------- ---------- ------
Used Vehicle Data:
Retail gross profit - same store (1) ............... $ 26,887 $ 26,483 $ 404 2%
Retail gross profit - acquisitions ................. 1,723 --
--------- ---------
Total used retail gross profit ................ 28,610 26,483 2,127 8%
Wholesale gross profit - same store (1) ............ 392 440 (48) (11%)
Wholesale gross profit - acquisitions .............. (153) --
--------- ---------
Total wholesale gross profit .................. 239 440 (201) (46%)
--------- ---------
Used vehicle gross profit, as reported ........ $ 28,849 $ 26,923 $ 1,926 7%
========= =========
Retail units - same store (1) ...................... 14,569 14,579 (10) 0%
Retail units - actual .............................. 15,602 14,579 1,023 7%
Parts, Service and Collision Repair:
Gross profit - same store (1) ...................... $ 66,712 $ 64,529 $ 2,183 3%
Gross profit - acquisitions ........................ 2,152 --
--------- ---------
Parts, service and collision repair
gross profit, as reported .................. $ 68,864 $ 64,529 $ 4,335 7%
========= =========
Finance and Insurance:
Gross profit - same store (1) ...................... $ 28,638 $ 26,085 $ 2,553 10%
Gross profit - acquisitions ........................ 1,011 --
--------- ---------
Finance and insurance gross profit, as reported $ 29,649 $ 26,085 $ 3,564 14%
========= =========
Gross profit per vehicle retailed - same store (1) . $ 786 $ 709 $ 77 11%
Gross profit per vehicle retailed - actual ......... $ 783 $ 709 $ 74 10%
Total Gross Profit:
Gross profit - same store (1) ...................... $ 169,329 $ 169,084 $ 245 0%
Gross profit - acquisitions ........................ 5,451 --
--------- ---------
Total gross profit, as reported ............... $ 174,780 $ 169,084 $ 5,696 3%
========= =========
(1) Same store amounts include the results of dealerships for the identical
months for each period presented in the comparison, commencing with the
first full month in which the dealership was owned by the Company.
Gross profit for the quarter ended March 31, 2003, increased $5.7 million or 3%
over the quarter ended March 31, 2002. Same store retail gross profit was flat
year over year. We achieved significant same store growth (10%) in finance and
insurance and moderate increases in fixed operation (3%) and used vehicle gross
profit (2%); however, this was offset by a 11% same store decline in new retail
gross profit as a result of our volume focus and margin pressure.
Operating Expenses-
Selling, general and administrative ("SG&A") expenses for the quarter ended
March 31, 2003, increased $11.9 million or 9% over the quarter ended March
31, 2002. Incremental expenses from acquisitions and the Price 1 used car
program, higher personnel both in dollars and as a percentage of gross
profit, increased outside services and rising insurance costs all
contributed to the overall increase in SG&A. As a result, SG&A expenses as
a percentage of revenues increased to 12.9% from 12.4% for the quarter
ended March 31, 2003, compared to the same period in 2002.
Depreciation and Amortization-
Depreciation and amortization expense increased $191,000 to $5.9 million
for the quarter ended March 31, 2003, as compared to the same period in
2002. The increase is primarily related to the Price 1 used car stores.
11
Other Income (Expense)-
Floor plan interest expense increased to $4.6 million for the three months
ended March 31, 2003. This 9% increase was primarily due to higher
inventory levels in the current quarter and our decision to floor a greater
percentage of our vehicles. Non-floor plan interest expense increased by
$206,000 from the prior year's first quarter as a result of the incremental
interest expense of our Senior Subordinated Notes issuance in June 2002
being mostly offset from the benefits of our consolidated cash management
system. Net losses from the sale of assets for the three months ended March
31, 2003 were related primarily to the disposal of certain fixed assets.
Income Tax Provision-
Income tax expense was $4.6 million for the three months ended March 31,
2003 versus $13.8 million for the prior year quarter. For the time period
from January 1, 2002 through the date of our IPO, we were structured as a
limited liability company and only provided a tax provision in accordance
with SFAS 109 for the nine "C" corporations that we owned directly or
indirectly during that period. Effective with our IPO, which closed March
19, 2002, we converted to a corporation and became subject to federal,
state and local income taxes. During the quarter ended March 31, 2002, we
recorded, in accordance with SFAS No. 109, a one-time non-recurring charge
of $11.6 million related to the establishment of a net deferred tax
liability, in connection with our conversion. This liability represented
the difference between the financial statement and tax basis of our assets
and liabilities at the conversion date. Our tax rate for the three months
ended March 31, 2003, was 39.8% and was based on the estimated effective
tax rate for the year.
Discontinued Operations-
Income from discontinued operations for the three months ended March 31,
2003, represented the gain on the sale of two dealerships sold during the
quarter offset by the net operating losses of those dealerships as well as
the losses of one dealership pending sale as of March 31, 2003.
Income from discontinued operations for the three months ended March 31,
2002 represented the net gain on the sale of dealerships sold during that
quarter offset by the operating losses of dealerships, sold or pending sale
as of March 31, 2002.
LIQUIDITY AND CAPITAL RESOURCES
We require cash to fund working capital needs, finance acquisitions of new
dealerships and fund capital expenditures. These requirements are met
principally from cash flow from operations, borrowings under the Committed
Credit Facility and the Floor Plan Facility (as defined below), and
mortgage notes. As of March 31, 2003 we had cash and cash equivalents of
$38.1 million.
Credit Facilities-
On January 17, 2001, we entered into a committed financing agreement (the
"Committed Credit Facility") with Ford Motor Credit Company, General Motors
Acceptance Corporation and DaimlerChrysler Services North America, LLC (the
"Lenders") with total availability of $550 million. The Committed Credit
Facility is used for acquisition financing and working capital purposes. At
March 31, 2003, $477.8 million was available for borrowings. All borrowings
under the Committed Credit Facility bear interest at variable rates based
on 1-month LIBOR plus a specified percentage that is dependent upon our
adjusted level of debt leverage as of the end of each calendar quarter.
During January 2003, we reported to the Lenders that we did not meet our
fixed charge coverage ratio requirement as of December 31, 2002.
Non-financed capital expenditures are deducted from the numerator of our
fixed charge coverage covenant calculation. The fixed charge coverage ratio
default would therefore not have occurred had we obtained financing for two
large self-funded real estate projects by the end of 2002. At the end of
the first quarter of 2003, we obtained financing for both properties and we
are now in full compliance with all of our financial covenants as required
under our various financing arrangements.
During the third quarter of 2002, we obtained consent from the Lenders for
a cash management sublimit of $75 million under our Committed Credit
Facility. The cash management sublimit allows us to repay up to $75 million
of debt outstanding under our Committed Credit facility using cash that has
been centrally collected by our cash management system. The net amount
repaid under the cash management sublimit may be borrowed by us on
12
short-term notice for general corporate purposes. As of March 31, 2003, we
had $18 million available for borrowings under the cash management
sublimit.
Floor Plan Financing-
We finance substantially all of our new vehicle inventory and a portion of
our used vehicle inventory under the floor plan financing credit facilities
(the "Floor Plan Facilities"). The Floor Plan Facilities also provide used
vehicle financing up to a fixed percentage of the value of each financed
used vehicle. Total availability under the Floor Plan Facilities is $750
million. Amounts financed under the floor plan arrangements bear interest
at variable rates, which are typically tied to LIBOR or the prime rate. As
of March 31, 2003, we had $559.8 million outstanding under all of our floor
plan financing agreements.
Sale/Leaseback Agreements-
During the first quarter of 2003, we sold, under four sale/leaseback
agreements with an independent third party, certain land and buildings for
$16.9 million; a $0.1 million loss was recognized on the sales. Under the
agreements, we will leaseback the properties from the purchaser over a
20-year period. We are accounting for the leasebacks as operating leases.
The estimated annual rental expense under these agreements will be
approximately $1.6 million.
Subsequent to March 31, 2003, we sold, under a sale back agreement with an
independent third party, certain land and building for $8.5 million, of
which $6.4 million was used to repay current portion of long-term debt.
Under the terms of the agreement, we will leaseback the property from the
purchaser for a 22-year period. We will account for the leaseback as an
operating lease. The estimated annual rental expense under this agreement
will be approximately $800,000.
Acquisitions and Acquisition Financing-
Subsequent to March 31, 2003, we completed the acquisitions of two
dealerships (three franchises) for an aggregate purchase price of
approximately $40.0 million, all funded through borrowings under our
Committed Credit Facility.
Cash Flow
Operating Activities-
Cash flow from operations totaled $29.2 million for the three months ended
March 31, 2003 consisting of net income of $7.1 million, non-cash items of
$5.1 million (primarily depreciation and amortization) and a $17.0 million
net change in operating assets and liabilities. This change is the result
of higher floor plan notes payable caused by higher inventories and our
decision to floor a greater percentage of our vehicles, increased accounts
payable and accrued liabilities due to the timing of payments and decreased
net receivables, including contracts-in-transit.
Cash flow from operations totaled $16.4 million for the three months ended
March 31, 2002 as net income of $5.2 million plus non-cash items of $17.5
million (primarily depreciation and amortization and deferred income taxes)
offset a $6.3 million net change in operating assets and liabilities. This
net decrease was due to higher used vehicle inventories without the related
increases in floor plan notes payable.
Investing Activities-
Net cash flow used in investing activities for the three months ended March
31, 2003 was $11.3 million, as capital expenditures of $15.2 million, the
purchase of restricted investments of $1.5 million, and the net issuance of
finance contracts of $1.5 million was offset by proceeds from the sale of
discontinued operations of $5.8 million.
Net cash flow used in investing activities for the three months ended March
31, 2002 was $7.1 million, as capital expenditures of $8.6 million and
other investing activities of $1.9 million were offset by proceeds from the
sale of discontinued operations of $3.4 million.
Financing Activities-
Net cash flow used in financing activities for the three months ended March
31, 2003 was $2.5 million, as net proceeds from borrowings of $21.4 million
and proceeds from sale/leaseback transactions of $16.9 million, offset the
repayments of debt of $34.3 million, distributions to members, and the
repurchase of treasury stock.
13
Net cash flow provided by financing activities for the three months ended
March 31, 2002 was $8.3 million, as proceeds from our initial public
offering of $67.4 million and net proceeds from borrowing were offset by
repayments of debt of $58.2 million and distributions to members.
Capital Expenditures
Capital spending for the three months ended March 31, 2003 and 2002 was
$15.2 million and $8.6 million, respectively. Capital spending other than
from acquisitions is expected to be approximately $45 to $50 million for
the year ended December 31, 2003 and will be primarily related to
operational improvements and manufacturer-required spending to upgrade
existing dealership facilities.
Stock Repurchase
In November 2002, the Lenders consented to allow us the ability to repurchase
our shares provided that no events of default exist or continue. During 2002,
we repurchased 772,824 shares of our common stock for a purchase price of
$6.6 million. During January 2003, we repurchased an additional 207,300 shares
for an aggregate purchase price of $1.9 million before we suspended our stock
repurchase program in connection with the Waiver Agreement with the Lenders.
Subsequent to us reporting to the Lenders that we were in compliance with our
fixed charge coverage ratio, we resumed our stock repurchase program. From
April 1, 2003, to May 9, 2003, we repurchased an additional 179,400 shares for
approximately $1.7 million.
Reconciliation of "Non-GAAP" Financial Information
For analysis purposes, in Management's Discussion and Analysis we discuss
pro forma net income from continuing operations and related earnings per
share for the three months ended March 31, 2002, because that is the
measurement favored by analysts. The consolidated statement of income
reconciles GAAP net income to tax affected pro forma net income by assuming
that we were taxed as a "C" corporation for all twelve months of 2002 and
excluding the one-time charge for our conversion from a limited liability
company to a corporation. The following table assumes that all discontinued
entities were sold prior to 2002 and all shares issued in our IPO were
outstanding on January 1, 2002.
(in thousands, except for per share data)
For the Three Months
Ended March 31, 2002
--------------------
Tax affected pro forma net income ............................ $11,416
Discontinued operations ...................................... 31
-------
Pro forma net income from continuing operations .............. $11,385
=======
Pro forma earnings per share:
Basic ..................................................... $ 0.33
=======
Diluted ................................................... $ 0.33
=======
Pro forma common shares and share equivalents:
Weighted average shares outstanding-
Basic .................................................. 30,400
Adjustment for 4,500 shares offered March 14, 2002 as if
offered on January 1, 2002 ......................... 3,600
------
Pro forma basic shares ................................. 34,000
Shares issuable with respect to additional common share
equivalents (stock options) ........................ 34
------
Pro forma diluted shares ............................... 34,034
======
14
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Interest Rate Risk
We are exposed to market risk from changes in interest rates on a
significant portion of our outstanding indebtedness. Given amounts
outstanding at March 31, 2003, a 1% change in the LIBOR rate would result
in a change of approximately $2.1 million to our annual non-floor plan
interest expense. Based on floor plan amounts outstanding at March 31,
2003, a 1% change in the LIBOR rate would result in a $5.6 million change
to annual floor plan interest expense.
Item 4. Controls and Procedures
EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES
As of a date (the "Evaluation Date") within 90 days prior to the date of
this report, the Company conducted an evaluation (under the supervision and
with the participation of the Company's management, including the chief
executive officer and chief financial officer), pursuant to Rule 13a-15
promulgated under the Securities Exchange Act of 1934, as amended (the
"Exchange Act") of the effectiveness of the design and operation of the
Company's disclosure controls and procedures. Based on this evaluation, the
Company's chief executive officer and chief financial officer concluded
that as of the Evaluation Date: such disclosure controls and procedures
were reasonably designed to ensure that information required to be
disclosed by the Company in reports it files or submits under the Exchange
Act is recorded, processed, summarized and reported within the time periods
specified in the rules and forms of the Securities and Exchange Commission.
CHANGES IN INTERNAL CONTROLS
Since the Evaluation Date (last evaluation by the Company's management of
the Company's internal controls), there have not been any significant
changes in the internal controls or in other factors that could
significantly affect the internal controls.
. . .
Forward Looking Information
This report contains "forward-looking statements" as that term is defined
in the Private Securities Litigation Reform Act of 1995. The
forward-looking statements include statements relating to goals, plans and
projections regarding the Company's financial position, results of
operations, market position, product development and business strategy.
These statements are based on management's current expectations 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, market factors, the Company's
relationships with vehicle manufacturers and other suppliers, risks
associated with the Company's substantial indebtedness, risks related to
pending and potential future acquisitions, general economic conditions both
nationally and locally and governmental regulations and legislation. There
can be no guarantees the Company's plans for future operations will be
successfully implemented or that they will prove to be commercially
successful. These and other risk factors are discussed in the Company's
annual report on Form 10-K for the year ended December 31, 2002. We
undertake no obligation to publicly update any forward-looking statement,
whether as a result of new information, future events
or otherwise.
15
PART II - OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
The results of the votes cast at the Company's Annual Meeting on May 8, 2003
were as follows:
Election of Class I Directors:
For Withheld
Michael J. Durham 30,839,205 71,184
Thomas R. Gibson 30,809,680 100,709
Thomas C. Israel 30,839,205 71,184
Ben David McDavid 30,794,604 115,785
Ratification of appointment of Deloitte & Touche L.L.P. as independent public
accountants for 2003:
For 30,889,331
Against 19,425
Abstain 1,633
Approval of 2002 stock option plan, as amended:
For 26,832,269
Against 556,030
Abstain 6,561
Broker No Vote 3,515,529
Item 6. Exhibits and Reports on Form 8-K
a. Exhibits
99.1 -- Certificate pursuant to 18 U.S.C. Section 1350, as adopted pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002 (Chief Executive Officer)
99.1 -- Certificate pursuant to 18 U.S.C. Section 1350, as adopted pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002 (Chief Financial Officer)
b. Reports on Form 8-K
Report filed February 28, 2003, under Item 9, related to a press release
announcing the Company's financial results for the fourth quarter and year
ended December 31, 2002.
Report filed April 17, 2003, under Item 5, related to issuance of a press
release announcing the Company would release its first quarter financial
results before the market opens on April 30, 2003, and that it met the
fixed charge coverage requirement under its credit facility as of March 31,
2003.
Report filed April 30, 2003, under Item 9, related to a press release
announcing the Company's earnings for the first quarter ended March 31,
2003.
16
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Asbury Automotive Group, Inc.
--------------------------------------------
(Registrant)
Date: May 13, 2003 /s/ Kenneth B. Gilman
-------------------------------------------
Kenneth B. Gilman
Chief Executive Officer
17
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.
Asbury Automotive Group, Inc.
-----------------------------------------------------
(Registrant)
Date: May 13, 2003 /s/ Thomas F. Gilman
----------------------------------------------------
Thomas F. Gilman
Senior Vice President and Chief Financial Officer
18
CERTIFICATION PURSUANT TO
RULE 13a-14 OF THE SECURITIES EXCHANGE ACT OF 1934
AS ADOPTED PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Kenneth B. Gilman, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Asbury Automotive
Group, Inc.;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of circumstances under which such
statements were made, not misleading with respect to the period covered by
this quarterly report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this
quarterly report;
4. The registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
(a) Designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities,
particularly during the period in which this quarterly report is being
prepared;
(b) Evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
quarterly report (the "Evaluation Date"); and
(c) Presented in this quarterly report our conclusions about the effectiveness
of the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;
5. The registrant's other certifying officer and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit
committee of the registrant's board of directors (or persons performing the
equivalent function):
(a) All significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to record,
process, summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls; and
(b) Any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
controls; and
6. The registrant's other certifying officer and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including
any corrective actions with regard to significant deficiencies and material
weaknesses.
/s/ Kenneth B. Gilman
- ---------------------------------
Kenneth B. Gilman
Chief Executive Officer
May 13, 2003
19
CERTIFICATION PURSUANT TO
RULE 13a-14 OF THE SECURITIES EXCHANGE ACT OF 1934
AS ADOPTED PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Thomas F. Gilman, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Asbury Automotive
Group, Inc.;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of circumstances under which such
statements were made, not misleading with respect to the period covered by
this quarterly report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this
quarterly report;
4. The registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
(a) Designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities,
particularly during the period in which this quarterly report is being
prepared;
(b) Evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
quarterly report (the "Evaluation Date"); and
(c) Presented in this quarterly report our conclusions about the effectiveness
of the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;
5. The registrant's other certifying officer and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit
committee of the registrant's board of directors (or persons performing
the equivalent function):
(a) All significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to record,
process, summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls; and
(b) Any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
controls; and
6. The registrant's other certifying officer and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including
any corrective actions with regard to significant deficiencies and material
weaknesses.
/s/ Thomas F. Gilman
- ---------------------------------
Thomas F. Gilman
Chief Financial Officer
May 13, 2003
20
Exhibit 99.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Asbury Automotive Group, Inc. (the
"Company") on Form 10-Q for the period ending March 31, 2003 as filed with the
Securities and Exchange Commission on the date hereof (the "Report"), I,
Kenneth B. Gilman, Chief Executive Officer of the Company, certify, pursuant to
18 U.S.C. ss 1350, as adopted pursuant to ss 906 of the Sarbanes-Oxley Act of
2002, that, to the best of my knowledge:
(1) The Report fully complies with the requirements of section 13(a)
or 15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all
material respects, the financial condition and result of operations of the
Company.
/s/ Kenneth B. Gilman
Kenneth B. Gilman
Chief Executive Officer
May 13, 2003
21
Exhibit 99.2
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Asbury Automotive Group, Inc. (the
"Company") on Form 10-Q for the period ending March 31, 2003 as filed with the
Securities and Exchange Commission on the date hereof (the "Report"), I, Thomas
F. Gilman, Chief Financial Officer of the Company, certify, pursuant to 18
U.S.C. ss 1350, as adopted pursuant to ss 906 of the Sarbanes-Oxley Act of 2002,
that, to the best of my knowledge:
(1) The Report fully complies with the requirements of section 13(a)
or 15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all
material respects, the financial condition and result of operations of the
Company.
/s/ Thomas F. Gilman
Thomas F. Gilman
Chief Financial Officer
May 13, 2003
22
Index to Exhibits
Exhibit
Number Description
99.1 Certificate pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002 (Chief Executive Officer)
99.1 Certificate pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002 (Chief Financial Officer)
23