Asbury Automotive Group Inc. (ABG) filed Quarterly Report for the period ended 2009-09-30.
Asbury Automotive Group is one of the largest automotive retailers in the United States. They sell finance and service a diverse range of foreign and domestic automobile brands. Asbury Automotive Group Inc. has a market cap of $363.1 million; its shares were traded at around $11.26 with a P/E ratio of 24.4 and P/S ratio of 0.1. Asbury Automotive Group Inc. had an annual average earning growth of 7.6% over the past 5 years.
Highlight of Business Operations:
These conditions were partially offset in the third quarter of 2009 by the federal government’s Car Allowance Rebate System (“CARS”) program, otherwise known as “Cash for Clunkers”. This program provided consumers a rebate between $3,500 and $4,500
In response to the weakening U.S. automotive retail environment in 2008 and our expectation for continued weakness in U.S. automotive sales in 2009, we took a number of actions designed to reduce our overhead and more closely align the expense structure of our dealerships to current business levels. These actions, which were initiated during the third quarter of 2008, include the relocation of our corporate offices, the elimination of our regional management structure and store-level productivity initiatives. The relocation of our corporate offices has delivered annualized cost savings of approximately $3.5 million resulting principally from staffing reductions, and expected rent savings would increase annualized savings to approximately $4.5 million. Beginning in the third quarter of 2009, we began to recognize virtually all of the approximately $10.0 million of annualized rent and personnel savings related to the elimination of the regional management structure. We began to experience the benefit from our restructuring plans in January 2009, and we expect to begin to receive the full recurring benefit beginning in 2010. Our restructuring plans, store-level productivity initiatives and variable cost structure delivered $17.9 million in same store operating expense reduction during the third quarter of 2009, when compared to the prior year quarter.
Since the beginning of the fourth quarter of 2008, we have temporarily suspended our strategy of growing our business through acquisitions, eliminated our dividend payments, significantly reduced our capital expenditure plans and generated $12.9 million in net proceeds from the sale of assets and paid down $75 million (12%) of our non-floor plan debt. Also during this period, we have focused on improving our working capital by (i) increasing our floor plan notes payable related to our loaner vehicles and new vehicles obtained from third-party dealerships, (ii) continuing to lower our inventory balances and (iii) improving our collection of contracts-in-transit and accounts receivable.
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