Asbury ahead of planned acquisition pace
2nd-quarter net rises 28 percent
ATLANTA -- Asbury Automotive Group Inc. is well ahead of the acquisition pace its executives expected when they laid out a three-year plan in late 2012.
The company today announced the purchase of Toyota, Hyundai and Kia dealerships in Lithonia and Conyers, Ga., outside of Atlanta. The three stores, acquired from Phil Smith Automotive Group, are expected to contribute $115 million of additional annual revenues to Asbury. They bring the dealership group's total store count to 79.
In December, Asbury bought two Atlanta dealerships that it said at the time would add $60 million to annual revenues. Asbury has said it wants to acquire stores representing $400 million to $600 million of additional annual revenue through the end of 2015.
"We're very happy with what we've been able to do on the acquisition side," Asbury CEO Craig Monaghan said today after the nation's seventh-largest dealership group said it posted a 28 percent increase in net income for the second quarter.
'The $100 million check'
Asbury leaders are looking for sizable deals and are open to expanding the company's footprint into new markets in the Southeast that are near its existing operations. Monaghan mentioned Tennessee, Kentucky, Alabama and South Florida as possibilities.
No other deals are imminent, but Asbury is talking to interested sellers all the time, executives said.
"One of the advantages we bring is we can write the $100 million check," Monaghan told Automotive News. "There just aren't as many people who can do that."
Improvements in gross profits in all operating sectors contributed to Asbury's second-quarter gains.
"Asbury is pleased to once again announce record quarterly results," Monaghan said in a prepared statement. "As the automotive market continues to recover, our associates are demonstrating continued success in maximizing sales and service opportunities while maintaining disciplined expense control."
Revenues, profit rise
Asbury reported net income of $27.0 million in the second quarter, up 28 percent from the year-earlier period. When adjusted for after-tax real estate charges of $3.2 million, Asbury said its adjusted income from continuing operations was $30.4 million for the quarter, a 45 percent jump. The charges primarily arose from the purchase of two previously leased properties.
Total gross profit rose 16 percent to $221.9 million, as revenues for the quarter increased 16 percent to $1.34 billion.
Asbury's new-vehicle revenues jumped 15 percent, while gross profit in that category rose 6 percent. Used-vehicle revenues rose 20 percent, with a 19 percent jump in gross profit. Finance and insurance revenues soared 27 percent. Parts-and-service revenue rose 9 percent with a 14 percent increase in gross profit.
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