As with most companies, Georgia-based Asbury Automotive Group Inc. saw its first quarter 2020 results melt in comparison to prior year numbers, but it took no shortage of action to deal with the problem.
Asbury, a massive automotive retail and service company, saw net income for the first quarter 2020 of $19.5 million ($1.01 per diluted share) and adjusted net income (a non-GAAP measure) of $34.7 million ($1.80 per diluted share).
That compares to net income of $40.9 million ($2.11 per diluted share) and adjusted net income of $42.7 million ($2.20 per diluted share) in the prior year quarter.
“The quarter started off very strong with February year-to-date revenue, gross profit, and adjusted EPS up 10 percent, 12 percent, and 31 percent, respectively; however, our March results were significantly impacted by the Covid-19 pandemic,” says David Hult, Asbury’s president and CEO.
“Our team acted decisively to right-size our business, reduced expenses, deferred most capital expenditures, and focused on our omni-channel sales initiatives,” he says. “In addition, we also drew down our credit facilities to maximize our liquidity.”
Among its strategic moves, the company:
- Terminated its agreement to acquire 20 Park Place luxury franchises.
- Acquired a Chrysler Jeep Dodge Ram store in the Denver market in January 2020, expected to generate approximately $124 million in annual revenues.
- Divested all five dealerships in the Mississippi market in March 2020, which generated approximately $334 million in annualized revenue.
- Divested its Nissan Atlanta store in February 2020, which generated approximately $77 million in annualized revenue.
- Refinanced its $600 million 6 percent notes due in 2024, lowering the average rate to 4.63 percent, and extending maturities to 2028 and 2030.
Asbury Automotive Group, a Fortune 500 company headquartered in Duluth, Georgia, is one of the largest automotive retailers in the U.S. It operates 83 dealerships, consisting of 102 franchises, representing 31 domestic and foreign brands of vehicles. The company also operates 24 collision repair centers.