Asbury Automotive Group (NYSE: ABG) is a Fortune 500 company based in [Atlanta], and was founded in 1995 by who also The company operates auto dealerships in various parts of the United States. In 2006 it ranked 364 out of 500 [1]
As of First Quarter 2008, it is one of the largest automobile retailers in the U.S. 2006 revenues were reported to be approximately $5.7 billion.[2] There are 120 franchises selling and serving 33 different automotive brands.
Asbury Automotive Group, Inc. (Asbury), incorporated on February 15, 2002, is an automotive retailer in the United States. It offers a range of automotive products and services, including new and used vehicles, vehicle maintenance and repair services, replacement parts, new and used vehicle financing, and aftermarket products, such as insurance, warranty and service contracts. As of December 31, 2009, the Company operated 106 franchises at 81 dealership locations. As of December 31, 2009, Asbury operated dealerships in 21 metropolitan markets throughout the United States. The Company’s retail network consists of nine locally branded dealership groups. In January 2010, the Company was awarded two Sprinter franchises, which were added to its Mercedes-Benz locations in St. Louis, Missouri and Tampa, Florida. In March 2011, the Company completed the sale of its International, Hino, Isuzu, UD, IC Bus and Workhorse franchises to Rush Truck Centers of Georgia, Inc.
New Vehicle Sales
As of December 31, 2009, the Company had a diverse portfolio of 37 American, European and Asian brands. The new vehicle unit sales consists of the sale of new vehicles to individual retail customers (new light vehicle retail), the sale of new vehicle to commercial customers (fleet) and the sale of new heavy trucks (heavy trucks). The franchises include a portfolio of 37 American, European and Asian brands. During the year ended December 31, 2009, Asbury sold 64,618 new vehicles through its dealerships. Its new vehicle revenues include new vehicle sale and lease transactions arranged by its dealerships with third parties.
Used Vehicle Sales
Asbury sells used vehicles at all of its dealership locations. Used vehicle sales include the sale of used vehicles to individual retail customers (used retail) and the sale of used vehicles to other dealers at auction (wholesale). In 2009, the Company sold 39,972 used retail vehicles through its dealerships. The Company also purchases a portion of its used vehicle inventory at auctions restricted to new vehicle dealers (offering off-lease, rental and fleet vehicles) and open auctions that offer vehicles sold by other dealers and repossessed vehicles. Used vehicle inventory is typically sold as wholesale if a vehicle is not sold at retail within 60 days, except for used vehicles that do not fit within its inventory mix, which are sold as wholesale almost immediately.
Parts and Service
The Company sells parts and provides maintenance and repair service at all of its franchised dealerships, for the vehicle brands sold at those dealerships. The Company operates approximately 2,700 service bays at its dealerships. In addition, as of December 31, 2009, it maintained 25 free-standing collision repair centers either on the premises of, or in close proximity to, its dealerships.
Finance and Insurance
Asbury, through finance and insurance (F&I), arranges for third party financing of the sale or lease of new and used vehicles to customers, and offers a number of aftermarket products, such as extended service contracts, guaranteed asset protection (GAP) debt cancellation, prepaid maintenance, credit life and disability insurance, and similar products. Its F&I product offerings include extended service contracts, which covers certain repair work after the expiration of the manufacturer warranty; GAP debt cancellation, which covers the difference in value between the actual value of the car and the amount on an auto loan or a lease after the payment from the insurance company at the time of a total loss; prepaid maintenance, which covers certain routine maintenance work, such as oil changes, cleaning and adjusting of brakes, multi-point vehicle inspections and tire rotations, and credit life and disability, which covers the remaining amounts due on an auto loan or a lease in the event of death or disability.
The Company earns sales-based commissions on substantially all of the financing that it arranges on behalf of its customers. It may be charged back (chargebacks) for these commissions in the event a finance contract is cancelled, typically within the first 90 days of such contract or if a non-finance contract is canceled prior to its maturity. The Company arranged customer financing on approximately 70% of the vehicles it sold in 2009. These transactions resulted in commissions being paid to the Company by the third-party lenders, including manufacturer captive finance subsidiaries. It does not bear any risk related to insurance payments, which are borne by third parties.
Asbury Automotive Group Inc. is the fifth largest automobile retailer in the United States. Its ten regional "platforms," or groups of dealerships, work to achieve economies of scale on such items as newspaper advertising. The company markets 36 different brands of new cars; luxury cars and mid-line imports accounted for a little less than two-thirds of sales. The company operates approximately 100 dealerships in ten states (Arkansas, California, Florida, Georgia, Mississippi, Missouri, North Carolina, Oregon, Virginia, and Texas) and is looking to continue its growth by acquiring more multi-location dealers in booming metro areas.
Origins
Tom Gibson, a former president of Subaru of America Inc., formed Asbury Automotive Group in January 1995. The venture, which was backed by the Toronto investment group Onex Corporation, was a means to build a chain of "megadealers," or automobile retailers with annual sales of $150 million or more. Onex's holdings were diversified and included Sky Chefs, Purolator Courier, and three leading auto suppliers (Automotive Industries, Dura Mechanical, and R.J. Tower Corporation). Asbury was originally based in Conshohocken, Pennsylvania.
Asbury allowed the owners of the dealerships it bought to keep an equity share (between 30 and 49 percent) of the businesses while they continued to manage them. It also sought to identify their "best practices" and share them with its other dealers. "By Merging Visions," according to the company's online vision statement, "we're all better off." Asbury's offers had appeal for retiring owners whose dealerships were too large to sell to local competitors. Asbury sometimes bought single stores to add to its existing chains, buying all the shares of these units.
In February 1995, Asbury formed a joint venture with Jim Nalley Auto Group, which owned 11 dealerships in the Atlanta area. The purchase of Plaza Motors, a luxury auto mall in St. Louis, followed the next month. In August, Asbury acquired a 70 percent interest in the David McDavid Auto Group, a $500 million business in Dallas with 14 dealerships and 17 branches. This brought Asbury's annual sales to $1.3 billion. McDavid Auto, which was officially renamed Asbury Automotive of Texas Ltd. after the acquisition, had been formed in Houston in 1936 and had been family-owned for three generations.
Later in 1995, Timothy Collins, the investment manager in charge of Asbury at Onex Corporation, formed his own company, Ripplewood Holdings L.L.C. (later named Ripplewood Investments L.L.C.), bringing Asbury with him. Asbury's CEO Tom Gibson owned a minority interest in the company; leveraged buyout firm Freeman Spogli & Company Inc. also invested in the business in 1997. Asbury sold 12,000 new cars that year.
By February 1998, Asbury had added deals to buy two leading Florida car dealers, Coggin Automotive Group of Jacksonville and Courtesy Automotive Group of Tampa. Arkansas's McLarty Automotive Group (later renamed North Point), North Carolina's Crown Automotive, and Oregon's Thomason Auto Group were also acquired during the year.
Gibson told Automotive News that Asbury was building infrastructures called platform groups as a basis for achieving economies of scale on things such as newspaper advertising in local markets. The shared costs allowed the company to consider acquiring dealers with margins as small as 1 percent, versus the typical 4 percent.
Kendrick Becomes President and CEO in 1999
Brian E. Kendrick was named president and CEO of Asbury Automotive Group in November 1999. He had previously led DFS Group Limited, a luxury goods distributor controlled by LVMH Moët Hennessy Louis Vuitton. He had also been chief operating officer of Sak's Holdings during that company's initial public offering (IPO). Gibson remained on as Asbury's chairman.
Automotive News ranked Asbury the country's second largest dealer chain in 1999. It was the 39th largest private company in the United States. Asbury added four stores in 2000 for a total of 84, reported Automotive News. It sold 154,422 new and used cars in that year for revenues of $4.03 billion, up from $1.08 billion the previous year. Profits of $28 million were more than nine times the $3 million the company netted in 1999.
Corporate Structure Streamlined in 2000
In April 2000, Asbury streamlined its corporate structure from eight individual companies to just one, as the Oregon platform changed its name to Asbury Automotive Group, L.L.C. and became the parent company. A depressed stock market led Asbury to keep its plans for an IPO, always considered an eventual possibility, on hold.
Two dealerships in the Jackson, Mississippi, market, Gray-Daniels Ford and Metro Mazda-Hyundai-Suzuki-Isuzu, were added in the first half of 2001. Asbury created its ninth regional platform to include these with its nearby Mark Escude dealerships, which had previously been part of the Arkansas platform. The Jackson dealers were re-branded under the Gray-Daniels Auto Family name. Tom Wimberley Auto World was added later in the year. Asbury also acquired Kelly Pontiac-GMC of Jacksonville, Florida, in late 2001; it became part of the Coggin Automotive Group.
The threat of car lots losing business to Internet auto retailers was perceived as less of a threat after the collapse of tech stocks. In August 2001, Asbury's leadership felt the time was right to bring their shares to market. It was the first IPO from a brick-and-mortar car dealership since 1998. Company executives described the auto dealer business as resistant to down cycles in the economy, since they also provided auto repairs, parts, and used cars for people concerned with saving money.
OVERALL
Beta: 2.84
Market Cap (Mil.): $568.73
Shares Outstanding (Mil.): 32.87
Annual Dividend: --
Yield (%): --
FINANCIALS
ABG Industry Sector
P/E (TTM): 17.28 4.62 13.52
EPS (TTM): 4.51 -- --
ROI: 3.91 4.25 1.28
ROE: 11.78 4.90 2.12
Statistics:
Public Company
Incorporated: 2002
Employees: 7,900
Sales: $4.48 billion (2002)
Stock Exchanges: New York
Ticker Symbol: ABG
NAIC: 44111 New Car Dealers; 44112 Used Car Dealers; 441229 All Other Motor Vehicle Dealers
Key Dates:
1994: Asbury Automotive Group is formed with backing from Onex Corporation.
1995: An Onex portfolio manager forms Ripplewood Holdings L.L.C., which includes Asbury Automotive.
1997: Freeman Spogli invests in Asbury.
1999: Former luxury goods executive Brian Kendrick succeeds Tom Gibson as CEO.
2000: Asbury Automotive's corporate structure is streamlined.
2002: Former Limited Inc. COO Kenneth Gilman is named CEO; Asbury goes public.Asbury's own online marketing strategy
Name Age Since Current Position
Oglesby, Charles 64 2011 Executive Chairman of the Board
Monaghan, Craig 54 2011 President, Chief Executive Officer, Principal Financial Officer
Kearney, Michael 59 2011 Chief Operating Officer, Executive Vice President
Style, Keith 38 2011 Vice President - Operations
Chandler, Elizabeth 47 2009 Vice President, General Counsel, Secretary
Parham, Joseph 61 2010 Vice President, Chief Human Resources Officer
DeLoach, Thomas 63 2011 Lead Independent Director
Wooley, Jeffrey 66 2003 Director
Jordan, Vernon 75 2002 Independent Director
Maritz, Philip 50 2002 Independent Director
Durham, Michael 60 2011 Independent Director
Clarke, Janet 58 2005 Independent Director
Clements, Dennis 66 2006 Independent Director
Katz, Eugene 65 2007 Independent Director
James, Juanita 58 2007 Independent Director
Address:
Three Landmark Square, Suite 500
Stamford, Connecticut 06901
U.S.A.
As of First Quarter 2008, it is one of the largest automobile retailers in the U.S. 2006 revenues were reported to be approximately $5.7 billion.[2] There are 120 franchises selling and serving 33 different automotive brands.
Asbury Automotive Group, Inc. (Asbury), incorporated on February 15, 2002, is an automotive retailer in the United States. It offers a range of automotive products and services, including new and used vehicles, vehicle maintenance and repair services, replacement parts, new and used vehicle financing, and aftermarket products, such as insurance, warranty and service contracts. As of December 31, 2009, the Company operated 106 franchises at 81 dealership locations. As of December 31, 2009, Asbury operated dealerships in 21 metropolitan markets throughout the United States. The Company’s retail network consists of nine locally branded dealership groups. In January 2010, the Company was awarded two Sprinter franchises, which were added to its Mercedes-Benz locations in St. Louis, Missouri and Tampa, Florida. In March 2011, the Company completed the sale of its International, Hino, Isuzu, UD, IC Bus and Workhorse franchises to Rush Truck Centers of Georgia, Inc.
New Vehicle Sales
As of December 31, 2009, the Company had a diverse portfolio of 37 American, European and Asian brands. The new vehicle unit sales consists of the sale of new vehicles to individual retail customers (new light vehicle retail), the sale of new vehicle to commercial customers (fleet) and the sale of new heavy trucks (heavy trucks). The franchises include a portfolio of 37 American, European and Asian brands. During the year ended December 31, 2009, Asbury sold 64,618 new vehicles through its dealerships. Its new vehicle revenues include new vehicle sale and lease transactions arranged by its dealerships with third parties.
Used Vehicle Sales
Asbury sells used vehicles at all of its dealership locations. Used vehicle sales include the sale of used vehicles to individual retail customers (used retail) and the sale of used vehicles to other dealers at auction (wholesale). In 2009, the Company sold 39,972 used retail vehicles through its dealerships. The Company also purchases a portion of its used vehicle inventory at auctions restricted to new vehicle dealers (offering off-lease, rental and fleet vehicles) and open auctions that offer vehicles sold by other dealers and repossessed vehicles. Used vehicle inventory is typically sold as wholesale if a vehicle is not sold at retail within 60 days, except for used vehicles that do not fit within its inventory mix, which are sold as wholesale almost immediately.
Parts and Service
The Company sells parts and provides maintenance and repair service at all of its franchised dealerships, for the vehicle brands sold at those dealerships. The Company operates approximately 2,700 service bays at its dealerships. In addition, as of December 31, 2009, it maintained 25 free-standing collision repair centers either on the premises of, or in close proximity to, its dealerships.
Finance and Insurance
Asbury, through finance and insurance (F&I), arranges for third party financing of the sale or lease of new and used vehicles to customers, and offers a number of aftermarket products, such as extended service contracts, guaranteed asset protection (GAP) debt cancellation, prepaid maintenance, credit life and disability insurance, and similar products. Its F&I product offerings include extended service contracts, which covers certain repair work after the expiration of the manufacturer warranty; GAP debt cancellation, which covers the difference in value between the actual value of the car and the amount on an auto loan or a lease after the payment from the insurance company at the time of a total loss; prepaid maintenance, which covers certain routine maintenance work, such as oil changes, cleaning and adjusting of brakes, multi-point vehicle inspections and tire rotations, and credit life and disability, which covers the remaining amounts due on an auto loan or a lease in the event of death or disability.
The Company earns sales-based commissions on substantially all of the financing that it arranges on behalf of its customers. It may be charged back (chargebacks) for these commissions in the event a finance contract is cancelled, typically within the first 90 days of such contract or if a non-finance contract is canceled prior to its maturity. The Company arranged customer financing on approximately 70% of the vehicles it sold in 2009. These transactions resulted in commissions being paid to the Company by the third-party lenders, including manufacturer captive finance subsidiaries. It does not bear any risk related to insurance payments, which are borne by third parties.
Asbury Automotive Group Inc. is the fifth largest automobile retailer in the United States. Its ten regional "platforms," or groups of dealerships, work to achieve economies of scale on such items as newspaper advertising. The company markets 36 different brands of new cars; luxury cars and mid-line imports accounted for a little less than two-thirds of sales. The company operates approximately 100 dealerships in ten states (Arkansas, California, Florida, Georgia, Mississippi, Missouri, North Carolina, Oregon, Virginia, and Texas) and is looking to continue its growth by acquiring more multi-location dealers in booming metro areas.
Origins
Tom Gibson, a former president of Subaru of America Inc., formed Asbury Automotive Group in January 1995. The venture, which was backed by the Toronto investment group Onex Corporation, was a means to build a chain of "megadealers," or automobile retailers with annual sales of $150 million or more. Onex's holdings were diversified and included Sky Chefs, Purolator Courier, and three leading auto suppliers (Automotive Industries, Dura Mechanical, and R.J. Tower Corporation). Asbury was originally based in Conshohocken, Pennsylvania.
Asbury allowed the owners of the dealerships it bought to keep an equity share (between 30 and 49 percent) of the businesses while they continued to manage them. It also sought to identify their "best practices" and share them with its other dealers. "By Merging Visions," according to the company's online vision statement, "we're all better off." Asbury's offers had appeal for retiring owners whose dealerships were too large to sell to local competitors. Asbury sometimes bought single stores to add to its existing chains, buying all the shares of these units.
In February 1995, Asbury formed a joint venture with Jim Nalley Auto Group, which owned 11 dealerships in the Atlanta area. The purchase of Plaza Motors, a luxury auto mall in St. Louis, followed the next month. In August, Asbury acquired a 70 percent interest in the David McDavid Auto Group, a $500 million business in Dallas with 14 dealerships and 17 branches. This brought Asbury's annual sales to $1.3 billion. McDavid Auto, which was officially renamed Asbury Automotive of Texas Ltd. after the acquisition, had been formed in Houston in 1936 and had been family-owned for three generations.
Later in 1995, Timothy Collins, the investment manager in charge of Asbury at Onex Corporation, formed his own company, Ripplewood Holdings L.L.C. (later named Ripplewood Investments L.L.C.), bringing Asbury with him. Asbury's CEO Tom Gibson owned a minority interest in the company; leveraged buyout firm Freeman Spogli & Company Inc. also invested in the business in 1997. Asbury sold 12,000 new cars that year.
By February 1998, Asbury had added deals to buy two leading Florida car dealers, Coggin Automotive Group of Jacksonville and Courtesy Automotive Group of Tampa. Arkansas's McLarty Automotive Group (later renamed North Point), North Carolina's Crown Automotive, and Oregon's Thomason Auto Group were also acquired during the year.
Gibson told Automotive News that Asbury was building infrastructures called platform groups as a basis for achieving economies of scale on things such as newspaper advertising in local markets. The shared costs allowed the company to consider acquiring dealers with margins as small as 1 percent, versus the typical 4 percent.
Kendrick Becomes President and CEO in 1999
Brian E. Kendrick was named president and CEO of Asbury Automotive Group in November 1999. He had previously led DFS Group Limited, a luxury goods distributor controlled by LVMH Moët Hennessy Louis Vuitton. He had also been chief operating officer of Sak's Holdings during that company's initial public offering (IPO). Gibson remained on as Asbury's chairman.
Automotive News ranked Asbury the country's second largest dealer chain in 1999. It was the 39th largest private company in the United States. Asbury added four stores in 2000 for a total of 84, reported Automotive News. It sold 154,422 new and used cars in that year for revenues of $4.03 billion, up from $1.08 billion the previous year. Profits of $28 million were more than nine times the $3 million the company netted in 1999.
Corporate Structure Streamlined in 2000
In April 2000, Asbury streamlined its corporate structure from eight individual companies to just one, as the Oregon platform changed its name to Asbury Automotive Group, L.L.C. and became the parent company. A depressed stock market led Asbury to keep its plans for an IPO, always considered an eventual possibility, on hold.
Two dealerships in the Jackson, Mississippi, market, Gray-Daniels Ford and Metro Mazda-Hyundai-Suzuki-Isuzu, were added in the first half of 2001. Asbury created its ninth regional platform to include these with its nearby Mark Escude dealerships, which had previously been part of the Arkansas platform. The Jackson dealers were re-branded under the Gray-Daniels Auto Family name. Tom Wimberley Auto World was added later in the year. Asbury also acquired Kelly Pontiac-GMC of Jacksonville, Florida, in late 2001; it became part of the Coggin Automotive Group.
The threat of car lots losing business to Internet auto retailers was perceived as less of a threat after the collapse of tech stocks. In August 2001, Asbury's leadership felt the time was right to bring their shares to market. It was the first IPO from a brick-and-mortar car dealership since 1998. Company executives described the auto dealer business as resistant to down cycles in the economy, since they also provided auto repairs, parts, and used cars for people concerned with saving money.
OVERALL
Beta: 2.84
Market Cap (Mil.): $568.73
Shares Outstanding (Mil.): 32.87
Annual Dividend: --
Yield (%): --
FINANCIALS
ABG Industry Sector
P/E (TTM): 17.28 4.62 13.52
EPS (TTM): 4.51 -- --
ROI: 3.91 4.25 1.28
ROE: 11.78 4.90 2.12
Statistics:
Public Company
Incorporated: 2002
Employees: 7,900
Sales: $4.48 billion (2002)
Stock Exchanges: New York
Ticker Symbol: ABG
NAIC: 44111 New Car Dealers; 44112 Used Car Dealers; 441229 All Other Motor Vehicle Dealers
Key Dates:
1994: Asbury Automotive Group is formed with backing from Onex Corporation.
1995: An Onex portfolio manager forms Ripplewood Holdings L.L.C., which includes Asbury Automotive.
1997: Freeman Spogli invests in Asbury.
1999: Former luxury goods executive Brian Kendrick succeeds Tom Gibson as CEO.
2000: Asbury Automotive's corporate structure is streamlined.
2002: Former Limited Inc. COO Kenneth Gilman is named CEO; Asbury goes public.Asbury's own online marketing strategy
Name Age Since Current Position
Oglesby, Charles 64 2011 Executive Chairman of the Board
Monaghan, Craig 54 2011 President, Chief Executive Officer, Principal Financial Officer
Kearney, Michael 59 2011 Chief Operating Officer, Executive Vice President
Style, Keith 38 2011 Vice President - Operations
Chandler, Elizabeth 47 2009 Vice President, General Counsel, Secretary
Parham, Joseph 61 2010 Vice President, Chief Human Resources Officer
DeLoach, Thomas 63 2011 Lead Independent Director
Wooley, Jeffrey 66 2003 Director
Jordan, Vernon 75 2002 Independent Director
Maritz, Philip 50 2002 Independent Director
Durham, Michael 60 2011 Independent Director
Clarke, Janet 58 2005 Independent Director
Clements, Dennis 66 2006 Independent Director
Katz, Eugene 65 2007 Independent Director
James, Juanita 58 2007 Independent Director
Address:
Three Landmark Square, Suite 500
Stamford, Connecticut 06901
U.S.A.