Asbury Automotive Group, Inc., one of the largest automotive retail and service companies in the U.S., reported net income for the third quarter 2018 of $44.3 million ($2.18 per diluted share) and adjusted net income (a non-GAAP measure) of $44.9 million ($2.21 per diluted share). This compares to net income of $30.7 million ($1.48 per diluted share) in the prior year quarter. Net income for the third quarter 2018 was adjusted $0.6 million ($0.03 per diluted share) as a result of a discrete tax item associated with the Tax Cuts and Jobs Act from December 2017.

On January 1, 2018, the company adopted ASC 606 for revenue recognition which impacted F&I and parts and service revenue and gross profit. The net impact of adopting ASC 606 in the third quarter was to increase net income by $0.2 million or $0.01 per diluted share.

As a result of tax legislation passed in December 2017, the tax rate in the third quarter of 2018 was 25% compared to 39% in the third quarter of 2017.

"In a slightly declining SAAR environment, we grew revenue 10% and operating profit 16%, thanks to the team's hard work and dedication," said David Hult, Asbury's President and Chief Executive Officer. "This, coupled with the benefit of tax reform, led to the achievement of 49% adjusted EPS growth.  In addition, from January 1, 2018 through October 22, we have repurchased approximately 7% of our company's stock and invested $70 million in strategic acquisitions."

Third Quarter 2018 Operational Summary

Total company:

• Total revenue increased 10%; gross profit increased 7%

• SG&A as a percentage of gross profit decreased 220 basis points to 67.9%

• Income from operations as a percentage of revenue was 4.6%, an increase of 20 basis points from the prior year period

• Adjusted EPS from operations increased 49%

Same store:

• Total revenue increased 6%; gross profit increased 4%

• New vehicle revenue increased 7%; gross profit was flat

• Used vehicle retail revenue increased 9%; gross profit increased 10%

• Finance and insurance revenue and gross profit increased 5%

• Parts and service revenue increased 2%; gross profit increased 3%

Strategic Highlights:

• In Q3 2018, we repurchased $17 million of common stock

• In October 2018, the Board reset total share repurchase authorization to $100 million

• Omni-channel initiatives helped drive results, reduce costs, and improve efficiencies

The Company's revenues for the nine-months ended September 30, 2018, totaled $5.1 billion, an increase of 6% compared to $4.8 billion in the prior year period.

For the nine-months ended September 30, 2018, the Company reported net income of $127.6 million, or $6.22 per diluted share, compared to reported net income of $96.6 million, or $4.60 per diluted share in the prior year period.  For the nine-months ended September 30, 2018 the Company reported adjusted net income of $127.7 million, or $6.23 per diluted share, compared to $97.3 million, or $4.63 per diluted share, for the prior year period.  See attached reconciliation for reported adjustments.