Used, New Sales Help Push Asbury to Strong 1Q Growth
DULUTH, Ga. — A "blowout March" spurred by pent-up demand and hefty automaker incentives helped Asbury Automotive Group increase its first-quarter income from continuing operations by more than $6 million from the year-ago period, the auto retailer announced Thursday.
Specifically, Asbury earned $8.9 million from continuing operations, up from income from continuing operations of $2.6 million in the first quarter of 2009.
The company said double-digit gains in revenue and gross profits from new-vehicle and used-vehicle sales, as well as F&I — along with improvements in the company's cost structure — were the major factors leading to the upswing.
Meanwhile, net income for the period was $7.4 million, up substantially from $300,000 in the prior-year period.
"Pent-up demand combined with the return of aggressive manufacturer incentives delivered a blowout March," commented Charles Oglesby, the company's president and chief executive officer.
"Our improved operating leverage from the cost reduction initiatives we have implemented has positioned Asbury to capture more profit from the rising tide of consumer demand," he added.
Asbury said it generated $960 million in revenue, a 17.1-percent improvement from the previous year.
Used-vehicle revenue came in at $252.2 million, compared with $208.2 million the prior year. Asbury took in $528.8 million in new-vehicle revenue, a year-over-year gain of 22.2 percent.
F&I revenue totaled $26 million, up from $20.5 million in the first quarter of 2009.
Parts and service revenue dipped 3.8 percent to $152.8 million.
The company's gross profits were $162.9 million, up just over 12 percent from a year ago. Executives said gross profits saw jumped "in all major categories of the business."
Offering some perspective on the company's liquidity, Asbury senior vice president and chief financial officer Craig Monaghan stated: "With over $200 million of liquidity, we have strengthened our financial position and enhanced our financial flexibility for the future."
Wrapping up the earnings report, Oglesby added: "While we are pleased with delivering a strong quarter, our challenge is to retain as much of our lean cost structure as possible, while remaining focused on the incremental sales opportunities the strengthening marketplace is providing."
Asbury Names New HR VP
In other news from the company, Asbury also revealed that vice president of human resources Philip Johnson is retiring on July 1. Filling the position will be Joseph Parham Jr.
Oglesby stated: "On behalf of everyone at Asbury, we would like to thank Phil for his 10 years of service, and the tremendous value he has brought to the company during this time.
"Over the next couple of months, Phil will work with Joe to ensure a seamless transition of leadership for the company," Oglesby added. "We will miss Phil, and wish him all the best in his future endeavors."
Johnson noted: "Over the last decade, few companies have faced as many different challenges as we have at Asbury. The opportunity to be a part of these changes was a once-in-a-lifetime experience.
"Because our future is so bright, I am excited to pass the HR leadership baton to Joe Parham, who will bring a new set of ideas, enthusiasm and optimism to our company," he continued. "I leave Asbury with not only a great sense of accomplishment, but also many cherished friendships."
Parham's previous post was a senior vice president of human resources for Acuity Brands Inc., an Atlanta-based lighting fixtures and specialty cleaning chemicals company. He held a similar post with National Service Industries, Inc., before that.
Parham worked for Polaroid Corp. in various roles from 1983 to 2000.
"We are fortunate to have a leader such as Joe Parham taking over the chief HR position, and to build on the company's great track record of employee engagement," Oglesby said. "He brings to Asbury tremendous experience in the human resources field, and has a broad background that will no doubt benefit the company in many different ways. We look forward to the fresh ideas Joe will bring to us in the near future."
Parham shared: "I am very excited about the opportunity to augment the human resource organization Phil and his team have developed. One of HR's major responsibilities is to facilitate and enable the achievement of Asbury Automotive Group's strategic objectives while maintaining that ever-important entrepreneurial spirit.
"I look forward to partnering and collaborating with the great dealership and corporate staff Asbury has built," he concluded.