ASBURY AUTOMOTIVE GROUP INC
For the period ended Mar 31, 2025. Filed Apr 30, 2025.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2025 · Filed Apr 30, 2025
ABG$202.65-2.1%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-09-30; filed 2024-10-30.
0001144980-24-000148
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-03-31; filed 2025-04-30.
0001144980-25-000103
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 199 previous paragraphs and 149 current paragraphs.
72 unchanged; 61 reworded; 14 added; 53 removed; 13 previous and 2 current paragraphs rearranged.
Tables are not compared: 23 previous and 13 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (14)
Current report
•failure of our management information systems and our ability to successfully transition between key information systems, including our ability to successfully transition from our existing dealer management systems to a new DMS;
Current report
•macroeconomic and geopolitical conditions, including global trade relations, changes to consumer and business confidence, international tensions, hostilities and instability, a slowdown in U.S. or global economic growth, higher rates of unemployment, changes in interest rates, inflation, and market volatility;
Current report
• our ability to remediate material weakness and the ongoing effectiveness of internal control over financial reporting.
Current report
Macroeconomic and geopolitical considerations
Current report
The demand and availability for and pricing of our products and services may be adversely impacted by economic conditions and financial developments, including increasing interest rates, rising inflation, high energy prices, a potential recessionary environment and other factors. The automotive retail industry is influenced by general economic conditions, particularly consumer confidence and consumer spending, interest rates, fuel prices, exchange rates, technology and business model changes, supply conditions, consumer transportation preferences, credit availability, and the unemployment rate. Consumer spending can be materially and adversely impacted by periods of economic uncertainty or by consumer concern regarding manufacturer viability. In addition, local economic, competitive and other conditions affect the performance of our dealerships. Our results of operations depend substantially on general economic conditions and consumer spending in those regions where we maintain operations.
Current report
Tariffs and trade risks
Current report
A significant portion of our business involves the sale of vehicles, parts, or vehicles composed of, or maintenance and repair services including, parts that are manufactured outside the U.S. Changes or increases in tariffs, trade restrictions, fluctuations in foreign currency exchange rates, the negotiation of new trade agreements, non-tariff trade barriers, local content requirements, uncertainty surrounding global trade policies, and the imposition of new or retaliatory tariffs against certain countries or covering certain products, including vehicles and parts, may affect our competitive position and impair our ability to sell and service vehicles and parts, and have a material adverse effect on our results of operations.
Current report
In late January 2025, the U.S. government commenced a broad review of U.S. trade relations, following which it began issuing numerous executive orders and other public policy statements imposing or threatening to impose tariffs on certain countries, materials, and industries, including the automotive industry. Such tariffs include a 25% tariff on imports of automobiles and certain automobile parts. In response, impacted countries have imposed or threatened various corresponding retaliatory tariffs and other actions. If maintained, these and other newly announced tariffs and actions and the potential escalation of trade disputes are expected to affect the automotive industry generally, including manufacturers, distributors and retailers of vehicles, parts and supplies. The extent of the tariffs and the resulting impact on general economic conditions and on our business are uncertain and depend on various factors, such as negotiations between the U.S. and affected countries, the duration of such tariffs, the responses of other countries or regions to such tariffs, the actual increases in the costs of vehicles, products and raw materials, and exemptions or exclusions that may be granted. Should tariffs increase and be sustained, our inventory acquisition and carrying costs, and the production costs for many of our manufacturer, distributor and supplier partners, may be increased, which costs may be passed on to us and consumers through higher prices for many new vehicles and certain parts we sell. These increased prices may adversely affect our new vehicle sales and related finance and insurance sales and may adversely impact demand for such vehicles and parts, and could materially and adversely affect the results of our operations.
Current report
Pending acquisition
Current report
On February 14, 2025, the Company, through one of its subsidiaries, entered into a Purchase and Sale Agreement (the "Transaction Agreement") with various entities that comprise the Herb Chambers automotive group (the "Herb Chambers Dealerships"). Pursuant to the Transaction Agreement, the Company is expected to acquire substantially all of the assets, including all real property and businesses of the Herb Chambers Dealerships (collectively, the "Businesses") for an aggregate purchase price of approximately $1.34 billion, which includes $750 million for goodwill, and approximately $590 million for the real estate and leasehold improvements. In addition, the Company will acquire new vehicles, used vehicles, service loaner vehicles, fixed assets, parts and supplies for a purchase price to be determined at the closing (the “Closing”) of the transactions set forth in the Transaction Agreement and will reimburse the Herb Chambers Dealerships for certain dealership construction and development costs incurred prior to the Closing. The Businesses include 33 dealerships, 52 franchises and three collision centers. Herb Chambers will retain ownership of the Mercedes-Benz of Boston dealership in Somerville, Massachusetts (the "MB Boston Dealership"). The Transaction Agreement includes certain restrictions and obligations regarding the sale of the MB Boston Dealership, including a put right obligating the Company to purchase the MB Boston Dealership during the five-year period following the Closing, absent certain circumstances. The Company's acquisition of the Businesses is anticipated to close in the second quarter of 2025 and is subject to various customary closing conditions, including approval from the applicable automotive manufacturers.
Current report
During the three months ended March 31, 2025, we recognized asset impairment charges of $14.3 million as compared to no impairment charges during the three months ended March 31, 2024. The asset impairment charges related to five dealerships that met the criteria to be reflected as assets held for sale as of March 31, 2025 and whose franchise rights carrying values exceeded the Company's estimate of the franchise rights fair value less costs to sell.
Current report
Other interest expense, net decreased $1.8 million (4%) from $44.1 million during the three months ended March 31, 2024 to $42.3 million during the three months ended March 31, 2025. This decrease was primarily due to the $2.1 million decrease in our credit facility interest expense resulting from lower interest rates during the three months ended March 31, 2025 as compared to the same period in the prior year.
Current report
Gain on Dealership Divestitures, net—
Current report
There were no share repurchases or retirements during the three months ended March 31, 2025. During the three months ended March 31, 2024, the Company repurchased and retired 239,790 shares of our common stock under our share repurchase program. The cash paid for these share repurchases was $50.0 million for the three months ended March 31, 2024.
Removed paragraphs (53)
Previous report
•the impact of the CDK Global cyber incident.
Previous report
•disruptions in our operations caused by, among other things, natural disasters;
Previous report
Our TCA segment revenues, reflected in F&I revenue, net, are derived from the sale of various vehicle protection products including vehicle service contracts, GAP, prepaid maintenance contracts, and appearance protection contracts. These products are sold through company-owned dealerships. TCA's F&I revenues also include investment gains or losses and income earned associated with the performance of TCA's investment portfolio.
Previous report
Our TCA segment gross profit margin can vary due to incurred claims expense and the performance of our investment portfolio. Certain F&I products may result in higher gross profit margins to TCA. Therefore, the product mix of F&I products sold by TCA can affect the gross profits earned. In addition, interest rate volatility, based on economic and market conditions outside the control of the Company, may increase or reduce TCA segment gross profit margins as well as the fair market values of certain securities within our investment portfolio. Fair market values typically fluctuate inversely to the fluctuations in interest rates.
Previous report
Selling, general, and administrative ("SG&A") expenses consist primarily of fixed and incentive-based compensation, advertising, rent, insurance, utilities, and other customary operating expenses. A significant portion of our cost structure is variable (such as sales commissions) or controllable (such as advertising), which we believe allows us to adapt to changes in the retail environment over the long-term. We evaluate commissions paid to salespeople as a percentage of retail vehicle gross profit, advertising expense on a per vehicle retailed basis, and all other SG&A expenses in the aggregate as a percentage of total gross profit.
Previous report
Hurricanes Helene and Milton
Previous report
In September 2024, Hurricane Helene affected our store operations in Florida, Georgia and South Carolina. With Hurricane Helene, stores in the path of the storm closed their doors early and many remained offline even after the storm passed due to power outages. Temporary store closures and reduced customer traffic in the days leading up to the storm and immediately afterwards resulted in fewer new and used vehicle unit sales along with lost business in fixed operations. We estimate the impact of the storm on diluted earnings per share for the quarter ended September 30, 2024 to be between $0.07 and $0.09 per share.
Previous report
As it relates to Hurricane Milton that occurred in early October, while we are still assessing the operational and financial impacts from this storm, we believe the magnitude of the impact on our business will be greater than Hurricane Helene. The size and path of the storm placed it over a larger section of our store footprint and the damage to our dealership locations was more extensive. A higher number of stores closed for a longer period compared to Helene. Additionally, several locations experienced flooding, partial loss of vehicle inventories and extended power outages. Other locations had varying degrees of wind and water damage preventing them from reopening in a timely manner.
Previous report
Stop sale orders for certain Toyota, Lexus and BMW models
Previous report
The stop sale orders for certain Toyota, Lexus and BMW models during the third quarter of 2024 impacted volumes on some of our most profitable and in-demand vehicles. A stop sale order is a notification from a manufacturer or the National Highway Traffic Safety Administration that prohibits the sale or lease of a new or used vehicle due to a safety recall, defect or noncompliance. The Toyota Grand Highlander and Lexus TX models have been popular vehicles with healthy gross profit margins. Based on the pre-stop sale trends for these models, we estimate the impact from this event resulted in nearly 1,200 fewer new units sold for the quarter. We estimate the impact of the Toyota, Lexus and BMW stop sale orders on diluted earnings per share for the quarter ended September 30, 2024 to be between $0.32 and $0.34 per share. In addition to Hurricane Milton, we are also continuing to evaluate the fourth quarter impact of the stop sales for certain Toyota, Lexus and BMW models, along with the recent Honda stop sale order for several of their more popular models.
Previous report
CDK outage
Previous report
During June 2024, one of the Company’s vendors (CDK Global) experienced a cyber-incident impacting certain services provided to the Company and many other automotive retailers, including the Company’s sales, service, inventory, customer relationship management, and accounting functions. Upon discovery of the incident, we took immediate precautionary steps to protect our systems. Beginning on June 19, 2024, the outage affected all Asbury locations, with the exception of our Koons stores which utilize a different dealer management system. All functions of CDK were not fully restored for us until July 8, 2024, with other plug-ins and bolt-on applications coming back online in the weeks thereafter.
Previous report
The CDK outage had a negative impact on our financial results during the quarter ended June 30, 2024 as a result of fewer new and used vehicle sales, which also impacted our F&I business, a reduction in parts and service volumes and certain incremental expenses related to our recovery efforts. We estimated the earnings per share for the quarter ended June 30, 2024, was negatively impacted between $0.95 and $1.15 per diluted share, without taking into account any potential recoveries related to the incident. The CDK Global cyber incident is not expected to continue to impact the Company’s operations and results in future periods.
Previous report
We have cybersecurity insurance coverage of $15.0 million, with a $2.5 million deductible. The timing of recovering some portion of our losses through insurance or other recoveries is difficult to predict. The insurance recoveries we receive, if any, may not occur for several quarters or longer.
Previous report
Acquisition of Jim Koons Dealerships
Previous report
On December 11, 2023, the Company completed the acquisition of substantially all of the assets, including all real property and businesses, of the Jim Koons Dealerships ("Koons") pursuant to a Purchase and Sale Agreement with various entities that comprise the Jim Koons automotive dealerships group (the "Koons acquisition"). The Koons acquisition comprised 20 new vehicle dealerships and six collision centers.
Previous report
•Our capital allocation priorities were supported by the repurchase of 826,340 shares for $182.1 million during the nine months ended September 30, 2024.
Previous report
The Company's operating results for the three and nine months ended September 30, 2024 include the results of the Koons dealerships acquired in the fourth quarter of 2023. Accordingly, the increases in revenue and gross profit for the three and nine months ended September 30, 2024 compared to the three and nine months ended September 30, 2023 are largely a result of this acquisition.
Previous report
Total revenue during the third quarter of 2024 increased by $570.5 million (16%) compared to the third quarter of 2023, due to a $301.6 million (16%) increase in new vehicle revenue, a $183.0 million (16%) increase in used vehicle revenue, a $66.6 million (13%) increase in parts and service revenue and a $19.3 million (12%) increase in F&I, net revenue. During the three months ended September 30, 2024, gross profit increased by $44.5 million (7%) driven by a $46.0 million (16%) increase in parts and service gross profit and a $19.2 million (13%) increase in F&I gross profit partially offset by a $17.9 million (11%) decrease in new vehicle gross profit and a $2.7 million (4%) decrease in used vehicle gross profit. The increase in revenue and gross profit is largely attributable to the Koons acquisition; however, the gross profit increase was partially offset by the declining margins for new and used vehicles.
Previous report
Income from operations during the third quarter of 2024 decreased by $32.1 million (12%) compared to the third quarter of 2023, primarily due to a $74.8 million (19%) increase in SG&A expense, partially offset by $44.5 million (7%) increase in gross profit.
Previous report
Total other expenses, net increased by $24.2 million (63%) during the third quarter of 2024 as compared to the third quarter of 2023, primarily as a result of a $22.3 million increase in floor plan interest expense, partially offset by a $5.0 million increase in gain on dealership divestitures. Income before income taxes decreased $56.3 million (25%) to $169.7 million for the three months ended September 30, 2024. Overall, net income decreased by $42.9 million (25%) during the third quarter of 2024 as compared to the third quarter of 2023.
Previous report
For the three months ended September 30, 2024, new vehicle revenue increased by $301.6 million (16%) due to a $135.2 million (18%) increase in import brands revenue, a $108.5 million (21%) increase in domestic brands revenue and a $57.9 million (10%) increase in luxury brands revenue. Same store new vehicle revenue decreased by $7.6 million, driven by a $69.5 million (14%) decrease in domestic brands revenue, partially offset by a $39.9 million (7%) increase in luxury brands revenue and a $22.0 million (3%) increase in import brands revenue.
Previous report
For the three months ended September 30, 2024, new vehicle gross profit and same store new vehicle gross profit decreased by $17.9 million (11%) and $40.8 million (24%), respectively. Same store new vehicle gross margin for the three months ended September 30, 2024 decreased 219 basis points to 6.9%. A similar decrease was seen in new vehicle gross profit margins, as reported. The decrease in our new vehicle gross profit margin was primarily attributable to the continued easing of new vehicle inventory constraints which softened the historically high new vehicle margins seen in recent years.
Previous report
Used vehicle revenue increased by $183.0 million (16%) compared to the same period of the prior year, due to a $131.6 million (13%) increase in used vehicle retail revenue and a $51.3 million (54%) increase in used vehicle wholesale revenue. Same store used vehicle revenue decreased by $72.7 million (7%), largely due to a $84.6 million (8%) decrease in used vehicle retail revenue, partially offset by a $12.0 million (13%) increase in used vehicle wholesale revenue. Total used vehicle retail unit sales increased by 16% due to the Koons acquisition while same store used vehicle retail unit sales decreased by 6% during the three months ended September 30, 2024 as compared to the three months ended September 30, 2023. Revenue per used vehicle retailed has continued to contract as seen in the third quarter of 2024, along with margins on both an all store and same store basis. Used vehicle revenue and unit volumes have been negatively impacted by the lack of inventory availability, especially in vehicles with lower mileage. For the three months ended September 30, 2024, total Company and same store used vehicle retail gross profit margins decreased by 100 basis points and 83 basis points, respectively, as compared to the three months ended September 30, 2023. Decreases in used vehicle gross margins, on both a total Company and same store basis, was largely driven by a tighter market for used vehicles during the three months ended September 30, 2024 as compared to the three months ended September 30, 2023.
Previous report
F&I revenue, net increased by $19.3 million (12%) during the third quarter of 2024 when compared to the third quarter of 2023, as a result of a 16% increase in total retail units sold offset by a $63 (3%) decrease in F&I per vehicle retailed.
Previous report
As we continue to integrate TCA, we expect a rollout of TCA products to our remaining stores in 2025. With the ownership of TCA, while the combined profitability of the transaction is higher, the timing of revenue and cost recognition isdeferred and amortized over the life of the contract. We expect that this rollout will result in lower F&I revenue and gross profit over the next two to three years due to the change in how the revenue from these contracts are earned.
Previous report
Floor plan interest expense increased by $22.3 million to $22.3 million during the three months ended September 30, 2024 as compared to no floor plan interest expense for the three months ended September 30, 2023 due to less cash held in the floor plan offset account during the three months ended September 30, 2024.
Previous report
Other interest expense increased $7.0 million (18%) during the three months ended September 30, 2024 from $38.7 million during the three months ended September 30, 2023 to $45.7 million. This increase was primarily due to a $7.2 million increase in our credit facility interest expense and a $1.0 million increase in loaner payable interest expense driven by higher loaner vehicle balances, marginally offset by a decrease of $0.6 million in amortization of capitalized interest expense.
Previous report
Gain on Dealership Divestitures —
Previous report
During the three months ended September 30, 2024, we sold one Chevrolet franchise (one dealership location) in Atlanta, Georgia and one Honda franchise (one dealership location) in Spokane, Washington. The Company recorded a pre-tax gain totaling $5.0 million, which is presented in our accompanying condensed consolidated statements of income as a gain on dealership divestitures.
Previous report
There were no divestitures during the three months ended September 30, 2023.
Previous report
CONSOLIDATED RESULTS OF OPERATIONS
Previous report
Nine Months Ended September 30, 2024 Compared to the Nine Months Ended September 30, 2023
Previous report
NM—Not Meaningful
Previous report
New Vehicle—
Previous report
New Vehicle Metrics—
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Used Vehicle—
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Used Vehicle Metrics—
Previous report
Parts and Service—
Previous report
Finance and Insurance, net—
Showing the first 40 of 53 passages. Open the source sections for the rest.
Reworded paragraphs (61)
Previous wording
•our capital allocation strategy, including as it relates to acquisitions and divestitures, stock repurchases, dividends and capital expenditures;
Current wording
•our capital allocation strategy, including as it relates to acquisitions and divestitures, stock repurchases and capital expenditures;
Previous wording
•disruptions in the production and supply of vehicles and parts from our vehicle and parts manufacturers and other suppliers, which can disrupt our operations;
Current wording
•disruptions in the production and supply of vehicles and parts from our vehicle and parts manufacturers and other suppliers, which can disrupt our operations; and
Previous wording
•our estimated future capital expenditures, which can be impacted by increasing prices and labor shortages and acquisitions and divestitures; and
Current wording
•our estimated future capital expenditures, which can be impacted by increasing prices and labor shortages and acquisitions and divestitures
Previous wording
•changes in general economic and business conditions, including the current inflationary environment, the current interest rate environment, changes in employment levels, consumer confidence levels, consumer demand and preferences, the availability and cost of credit, fuel prices and levels of discretionary personal income;
Current wording
•changes in general economic and business conditions, including the current inflationary environment, the current interest rate environment, changes in U.S. trade policy, including the imposition of tariffs, changes in employment levels, consumer confidence levels, consumer demand and preferences, the availability and cost of credit, fuel prices and levels of discretionary personal income;
Previous wording
•significant disruptions in the production and delivery of vehicles and parts for any reason, including supply shortages, natural disasters, severe weather, civil unrest, product recalls, work stoppages or other occurrences that are outside of our control;
Current wording
•significant disruptions in the production and delivery of vehicles and parts for any reason, including supply shortages, the ongoing conflict in Russia and Ukraine and any government sanctions imposed in connection therewith, natural disasters, severe weather, civil unrest, both at home and abroad, product recalls, work stoppages or other occurrences that are outside of our control;
Previous wording
•failure of our, or those of our third-party service providers, management information systems;
Current wording
•failure of management information systems used or maintained by our third-party service providers;
Previous wording
•any data security breaches occurring, including with regard to personally identifiable information ("PII");
Current wording
•any data security breaches occurring, including with regard to PII;
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•our ability to execute our initiatives and other strategies; and
Current wording
•our ability to execute our initiatives and other strategies;
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•our ability to leverage scale and cost structure to improve operating efficiencies across our dealership portfolio.
Current wording
•our ability to leverage scale and cost structure to improve operating efficiencies across our dealership portfolio; and
Previous wording
Many of these factors are beyond our ability to control or predict, and their ultimate impact could be material. Moreover, the factors set forth under "Item 1A. Risk Factors" and other cautionary statements made in this report should be read and considered as forward-looking statements subject to such uncertainties. Forward-looking statements speak only as of the date of this report. We expressly disclaim any obligation to update any forward-looking statements contained herein.
Current wording
Many of these factors are beyond our ability to control or predict, and their ultimate impact could be material. Moreover, the factors set forth under "Item 1A. Risk Factors" and other cautionary statements made in this report should be read and considered as forward-looking statements subject to such uncertainties. We urge you to carefully consider those factors.
Previous wording
We are one of the largest automotive retailers in the United States. As of September 30, 2024, through our Dealerships segment, we owned and operated 202 new vehicle franchises (153 dealership locations), representing 31 brands of automobiles, and 37 collision centers within 14 states. Our stores offer an extensive range of automotive products and services, including new and used vehicles; parts and service, which includes repair and maintenance services, replacement parts and collision repair services; and finance and insurance products. The finance and insurance products are provided by both independent third parties and TCA. The F&I products offered by TCA are sold through affiliated dealerships. For the nine months ended September 30, 2024, our new vehicle revenue brand mix consisted of 29% luxury, 41% imports and 29% domestic brands. The Company manages its operations in two reportable segments: Dealerships and TCA. Amounts presented have been calculated using non-rounded amounts for all periods presented and therefore certain amounts may not compute.
Current wording
We are one of the largest automotive retailers in the United States. As of March 31, 2025, through our Dealerships segment, we owned and operated 196 new vehicle franchises (150 dealership locations), representing 31 brands of automobiles, within 14 states. We also operated 37 collision centers, and Total Care Auto, Powered by Landcar ("TCA"), our F&I product provider. Our stores offer an extensive range of automotive products and services, including new and used vehicles; parts and service, which include repair and maintenance services, replacement parts and collision repair services; and finance and insurance products. The finance and insurance products are provided by both TCA and independent third parties. The F&I products offered by TCA are sold through affiliated dealerships. For the three months ended March 31, 2025, our new vehicle revenue brand mix consisted of 30% luxury, 41% imports and 30% domestic brands. The Company manages its operations in two reportable segments: Dealerships and TCA.
Previous wording
Our Dealerships segment revenues are derived primarily from: (i) the sale of new vehicles; (ii) the sale of used vehicles to individual retail customers ("used retail") and to other dealers at auction ("wholesale") (the terms "used retail" and "wholesale" collectively referred to as "used"); (iii) repair and maintenance services, including collision repair, the sale of automotive replacement parts, and the reconditioning of used vehicles (collectively referred to as "parts and service"); and (iv) the arrangement of third-party vehicle financing and the sale of a number of vehicle protection products. We evaluate the results of our new and used vehicle sales based on unit volumes and gross profit per vehicle sold, our parts and service operations based on aggregate gross profit, and our F&I business based on F&I gross profit per vehicle sold.
Current wording
Our Dealerships segment revenues are derived primarily from: (i) the sale of new vehicles; (ii) the sale of used vehicles to individual retail customers ("used retail") and to other dealers at auction ("wholesale") (the terms "used retail" and "wholesale" are collectively referred to as "used"); (iii) repair and maintenance services, including collision repair, the sale of automotive replacement parts, and the reconditioning of used vehicles (collectively referred to as "parts and service"); and (iv) the arrangement of third-party vehicle financing and the sale of a number of vehicle protection products. F&I products are offered by dealerships to customers in connection with the purchase of vehicles through either TCA or independent third parties. We evaluate the results of our new and used vehicle sales based on unit volumes and gross profit per vehicle sold, our parts and service operations based on aggregate gross profit, and our F&I business based on F&I gross profit per vehicle sold. Amounts presented have been calculated using non-rounded amounts for all periods presented and therefore certain amounts may not compute due to rounding.
Previous wording
•Consolidated revenue for the nine months ended September 30, 2024, was $12.68 billion, compared to $10.99 billion for the prior year.
Current wording
•Consolidated revenue for the three months ended March 31, 2025, decreased to $4.15 billion, compared to $4.20 billion for the prior year.
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•Consolidated gross profit for the nine months ended September 30, 2024, was $2.20 billion, compared to $2.08 billion for the prior year.
Current wording
•Consolidated gross profit for the three months ended March 31, 2025, decreased to $724.2 million, compared to $750.0 million for the prior year.
Previous wording
•The increase in consolidated revenue and gross profit is primarily due to the effects of the Koons acquisition, offset by lower gross profit per vehicle sold for both new and used vehicles as margins continue to shift downward from the historic highs in recent years.
Current wording
•The decrease in consolidated revenue is primarily due to a decrease in used vehicles units sold offset by an increase in new vehicle units sold, while the decrease in consolidated gross profit is primarily due to lower gross profit per vehicle sold for both new and used as margins continue to shift downward from the historic highs in recent years. The decrease in new and used vehicle gross profit was partially offset by the growth in parts and services gross profit.
Previous wording
We assess the organic growth of our revenue and gross profit on a same store basis. We believe that our assessment on a same store basis represents an important indicator of comparative financial performance and provides relevant information to assess our performance. As such, for the following discussion, same store amounts consist of information from dealerships for identical months in each comparative period, commencing with the first full month we owned the dealership. Additionally, amounts related to divested dealerships are excluded from each comparative period.
Current wording
We assess the organic growth of our revenue and gross profit on a same store basis. We believe that our assessment on a same store basis represents an important indicator of comparative financial performance and provides relevant information to assess our performance. As such, for the following discussion, same store amounts consist of information from dealerships for identical months in each comparative period, commencing with the first full month we owned the dealership. Additionally, amounts related to divested dealerships are excluded from each comparative period for same store reporting.
Previous wording
Total revenue for the nine months ended September 30, 2024 increased by $1,693.1 million (15%) compared to the nine months ended September 30, 2023, due to a $820.4 million (15%) increase in new vehicle revenue, a $614.1 million (18%) increase in used vehicle revenue, a $196.1 million (13%) increase in parts and service revenue and a $62.5 million (12%) increase in F&I, net revenue. The $116.0 million (6%) increase in gross profit during the nine months ended September 30, 2024 was driven by a $145.9 million (17%) increase in parts and service gross profit and a $51.6 million (11%) increase in F&I, net gross profit, partially offset by a $63.8 million (12%) decrease in new vehicle gross profit and a $17.6 million (8%) decrease in used vehicle gross profit. The increase in revenue and gross profit is largely attributable to the Koons acquisition; however, the gross profit increase is partially offset by declining new and used vehicle margins.
Current wording
Total revenue for the three months ended March 31, 2025 decreased by $52.8 million (1%) compared to the three months ended March 31, 2024, due to a $121.1 million (9%) decrease in used vehicle revenue, a $2.8 million (1%) decrease in F&I, net revenue, and a $2.7 million decrease in parts and service revenue, offset by a $73.8 million (4%) increase in new vehicle revenue. The $25.8 million (3%) decrease in gross profit during the three months ended March 31, 2025, compared to the three months ended March 31, 2024, was driven by a $19.8 million (12%) decrease in new vehicle gross profit, a $7.2 million (4%) decrease in F&I, net gross profit, a $7.4 million (10%) decrease in used vehicle gross profit, offset by an $8.5 million (3%) increase in parts and service gross profit.
Previous wording
Income from operations during the nine months ended September 30, 2024 decreased by $233.0 million (28%), compared to the nine months ended September 30, 2023, primarily due to a $208.3 million (17%) increase in SG&A expense, a $135.4 million increase in franchise rights impairment and a $5.3 million (10%) increase in depreciation and amortization expense, partially offset by a $116.0 million (6%) increase in gross profit.
Current wording
Income from operations during the three months ended March 31, 2025 decreased by $28.4 million (11%), compared to the three months ended March 31, 2024, primarily due to a $25.8 million (3%) decrease in gross profit, a $14.3 million increase in asset impairments, and a $0.6 million (3%) increase in depreciation and amortization expense, partially offset by a $12.2 million (3%) decrease in SG&A expense.
Previous wording
Total other expenses, net increased by $89.1 million (86%), primarily as a result of a $64.7 million increase in floor plan interest expense, an increase of $19.5 million (17%) in other interest expense, net and a $4.9 million (36%) decrease in gain on dealership divestitures, recorded during the nine months ended September 30, 2024 when compared to the same period of the prior year. Income before income taxes decreased $322.1 million (44%) to $403.6 million for the nine months ended September 30, 2024. Overall, net income decreased by $245.5 million (45%) during the nine months ended September 30, 2024 as compared to the nine months ended September 30, 2023.
Current wording
Total other expenses, net decreased by $8.0 million (12%), primarily as a result of a $4.1 million increase in gain on dealership divestitures, a $2.1 million (9%) decrease in floor plan interest expense, and a decrease of $1.8 million (4%) in other interest expense, net recorded during the three months ended March 31, 2025 when compared to the same period of the prior year. Income before income taxes decreased $20.4 million (10%) to $175.4 million for the three months ended March 31, 2025. Overall, net income decreased by $15.0 million (10%) during the three months ended March 31, 2025 as compared to the three months ended March 31, 2024.
Previous wording
For the nine months ended September 30, 2024, new vehicle revenue increased by $820.4 million (15%) as a result of a 15% increase in new vehicle units sold. Same store new vehicle revenue decreased by $132.7 million (2%) as the result of a 3% decrease in new vehicle units sold.
Current wording
For the three months ended March 31, 2025, new vehicle revenue increased by $73.8 million (4%) as a result of a 2% increase in new vehicle units sold. Same store new vehicle revenue increased by $113.4 million (6%) as the result of a 4% increase in new vehicle units sold.
Previous wording
For the nine months ended September 30, 2024, new vehicle gross profit and same store new vehicle gross profit decreased by $63.8 million (12%) and $135.3 million (26%), respectively. Same store new vehicle gross margin for the nine months ended September 30, 2024 decreased 228 basis points to 7.3% driven by the continued easing of new vehicle inventory constraints which softened the historically high new vehicle margins seen in recent years.
Current wording
For the three months ended March 31, 2025, new vehicle gross profit and same store new vehicle gross profit decreased by $19.8 million (12%) and $17.2 million (11%), respectively. Same store new vehicle gross margin for the three months ended March 31, 2025 decreased 123 basis points to 6.7% driven by the continued easing of new vehicle inventory constraints which softened the historically high new vehicle margins seen in recent years.
Previous wording
The seasonally adjusted annual rate ("SAAR") for new vehicle sales in the U.S. during the three months ended September 30, 2024, was approximately 15.6 million which increased as compared to approximately 15.5 million during the three months ended September 30, 2023. The increase in SAAR period over period reflects higher inventory supply coupled with continued consumer demand for new vehicles. We also continue to be impacted by the significant variation in new vehicle days supply among brands and models.
Current wording
The seasonally adjusted annual rate ("SAAR") for new vehicle sales in the U.S. during the three months ended March 31, 2025 was approximately 16.5 million which increased as compared to approximately 15.4 million during the three months ended March 31, 2024. The increase in SAAR period over period reflects reflects higher inventory supply and higher consumer demand for new vehicles in anticipation of increasing new vehicle selling prices due to automotive vehicle and parts tariffs. However, we continue to be impacted by the significant variation in new vehicle days supply among brands and models.
Previous wording
Used vehicle revenue increased by $614.1 million (18%) due to a $455.2 million (15%) increase in used vehicle retail revenue and a $158.8 million (54%) increase in used vehicle wholesale revenue. Same store used vehicle revenue decreased by $155.8 million (5%) due to a $205.6 million (7%) decrease in used vehicle retail revenue, partially offset by a $49.8 million (18%) increase in used vehicle wholesale revenue. Total used vehicle retail unit sales increased by 19% due to the Koons acquisition while same store used vehicle retail unit sales decreased by 4% during the nine months ended September 30, 2024 as compared to the nine months ended September 30, 2023. Revenue per used vehicle retailed has continued to contract as seen in the third quarter of 2024, along with margins on both an all store and same store basis. Used vehicle revenue and unit volumes have been negatively impacted by the lack of inventory availability, especially in vehicles with lower mileage.
Current wording
Used vehicle revenue decreased by $121.1 million (9%) due to a $112.5 million (9%) decrease in used vehicle retail revenue and an $8.6 million (5%) decrease in used vehicle wholesale revenue. Same store used vehicle revenue decreased by $93.4 million (7%) due to an $87.5 million (8%) decrease in used vehicle retail revenue and a $5.9 million (4%) decrease in used vehicle wholesale revenue. Total used vehicle retail unit sales decreased by 10% on an all store basis and by 8% on a same store basis, during the three months ended March 31, 2025 as compared to the three months ended March 31, 2024. While revenue per used vehicle retailed increased by 1% on both an all store and same store basis, respectively, the decrease in unit volumes on both an all store and same store basis, negatively impacted used vehicle revenue for the three months ended March 31, 2025 as compared to the three months ended March 31, 2024. Used vehicle revenue has also been negatively impacted by the lack of inventory availability, especially in vehicles with lower mileage.
Previous wording
For the nine months ended September 30, 2024, used vehicle retail gross profit margins decreased from 6.4% to 5.1% and 6.4% to 5.2%, respectively, for all stores and on a same store basis when compared to the same period of the prior year. Used vehicle retail gross profit decreased $18.8 million (10%) for the nine months ended September 30, 2024 as compared to the nine months ended September 30, 2023 and decreased $47.3 million (24%) on a same store basis for the same period. On a total company basis, our gross profit per used vehicle retailed for the nine months ended September 30, 2024, decreased $491 (24%), and on a same store basis, our gross profit per used vehicle retailed decreased $442 (22%) when compared to the prior year period which was primarily driven by decreases in used vehicle market prices. Decreases in used vehicle gross margins, on both a total Company and same store basis, was largely driven by a tighter market for used vehicles during the nine months ended September 30, 2024, as compared to the nine months ended September 30, 2023.
Current wording
For the three months ended March 31, 2025, used vehicle retail gross profit margins decreased from 5.5% to 5.2%, for all stores and on a same store basis, respectively, when compared to the same period of the prior year. All store used vehicle retail gross profit decreased $8.8 million (14%) for the three months ended March 31, 2025 as compared to the three months ended March 31, 2024 and decreased $8.1 million (13%) on a same store basis for the same period. On a total company basis, our gross profit per used vehicle retailed for the three months ended March 31, 2025 decreased $59 (4%), and on a same store basis, our gross profit per used vehicle retailed decreased $83 (5%) when compared to the prior year period which was primarily driven by decreases in used vehicle market prices. Decreases in used vehicle gross margins, on both a total Company and same store basis, was largely driven by a tighter market for used vehicles during the three months ended March 31, 2025, as compared to the three months ended March 31, 2024.
Previous wording
The $66.6 million (13%) increase in parts and service revenue was primarily due to a $47.9 million (18%) increase in customer pay revenue, a $15.8 million (22%) increase in warranty revenue, a $2.5 million (2%) increase in wholesale parts revenue and a $0.4 million (1%) increase in collision revenue. Same store parts and service revenue increased by $5.5 million (1%) to $524.7 million during the three months ended September 30, 2024 from $519.1 million during the three months ended September 30, 2023. The increase in same store parts and service revenue was due to a $10.8 million (4%) increase in customer pay revenue and a $7.5 million (10%) increase in warranty revenue, partially offset by a $7.7 million (11%) decrease in collision revenue and a $5.0 million (5%) decrease in wholesale parts revenue. Consumers are owning a vehicle for longer periods of time due to various factors, including the higher cost of vehicles, higher interest rates, as well as the vehicle inventory constraints experienced in the automotive industry in recent years.
Current wording
The $2.7 million decrease in parts and service revenue was primarily due to decreases of $7.8 million (6%) in wholesale parts revenue, $5.2 million (7%) in collision revenue, and $2.8 million (1%) in customer pay revenue, offset by a $13.0 million (16%) increase in warranty revenue. Same store parts and service revenue increased slightly by $8.7 million (2%) from $578.8 million for the three months ended March 31, 2024 to $587.5 million for the three months ended March 31, 2025. The increase in same store parts and service revenue was due to a $14.6 million (18%) increase in warranty revenue and a $4.7 million (2%) increase in customer pay revenue, partially offset by a $5.3 million (4%) decrease in wholesale parts revenue and a $5.2 million (7%) decrease in collision revenue. Consumers are owning a vehicle for longer periods of time due to various factors, including the higher cost of vehicles, higher interest rates, as well as the vehicle inventory constraints experienced in the automotive industry in recent years.
Previous wording
For the three months ended September 30, 2024, total parts and service gross profit increased by $46.0 million (16%) to $337.1 million and same store total parts and service gross profit increased by $10.6 million (4%) to $298.1 million when compared to the same period of the prior year. The all store increase is primarily due to the Koons acquisition and reconditioning and preparation, while the same store increase is primarily a result of increased customer pay and warranty volume, which is in line with the increasing trend of aged vehicles.
Current wording
For the three months ended March 31, 2025, total parts and service gross profit increased by $8.5 million (3%) to $342.7 million, and same store total parts and service gross profit increased by $14.9 million (5%) to $342.6 million when compared to the same period of the prior year. The all store and same store increases are primarily a result of increased customer pay and warranty volume and reconditioning and preparation, which is in line with the increasing trend of aged vehicles.
Previous wording
F&I revenue, net increased $62.5 million (12%) during the nine months ended September 30, 2024 when compared to the nine months ended September 30, 2023, as a result of a 17% increase in new and used retail unit sales, partially offset by a 5% decrease in F&I per vehicle retailed.
Current wording
F&I revenue, net decreased $2.8 million (1%) during the three months ended March 31, 2025 when compared to the three months ended March 31, 2024, as a result of a 4% decrease in new and used retail unit sales.
Previous wording
On a same store basis, F&I revenue, net decreased by $36.7 million (7%) during the nine months ended September 30, 2024 when compared to the nine months ended September 30, 2023, as a result of a 3% decrease in new and used retail unit sales and an 7% decrease in F&I per vehicle retailed. We are seeing slightly lower penetration rates in our F&I products as customers look for ways to manage lower monthly payments in a higher interest rate environment.
Current wording
On a same store basis, F&I revenue, net increased by $0.6 million during the three months ended March 31, 2025 when compared to the three months ended March 31, 2024. F&I gross profit, net, on a same store basis decreased by $3.9 million (2%) for the three months ended March 31, 2025 when compared to the three months ended March 31, 2024 as a result of a 2% decrease in new and used retail unit sales and an $11 decrease in F&I per vehicle retailed. We are seeing slightly lower penetration rates in our F&I products as customers look for ways to manage lower monthly payments in a higher interest rate environment.
Previous wording
Revenue generated by TCA is earned over the period of the related product contract. The method for recognizing revenue is assigned based on contract type and expected claim patterns. Premium revenues are supplemented with investment gains or losses and income earned associated with the performance of TCA's investment portfolio. During the nine months ended September 30, 2024, TCA generated $104.8 million of revenue, consisting primarily of earned premium and $13.3 million investment income from the investment portfolio.
Current wording
Revenue generated by TCA is earned over the period of the related product contract. The method for recognizing revenue is assigned based on contract type and expected claim patterns. Premium revenues are supplemented with investment gains or losses and income earned associated with the performance of TCA's investment portfolio. During the three months ended March 31, 2025, TCA generated $31.0 million of revenue, consisting primarily of earned premium and $4.7 million investment income from the investment portfolio.
Previous wording
Direct expenses incurred for the acquisition of F&I contracts on which revenue has not yet been recognized have been deferred and are amortized over the related contract period. During the three months ended September 30, 2024, TCA recorded $14.2 million of cost of sales consisting primarily of claims expense. Commissions expense paid by TCA to our affiliated dealerships and reflected as F&I revenue in our Dealerships segment is eliminated in the TCA segment upon consolidation.
Current wording
Direct expenses incurred for the acquisition of F&I contracts on which revenue has not yet been recognized have been deferred and are amortized over the related contract period. During the three months ended March 31, 2025, TCA recorded $13.1 million of cost of sales consisting primarily of claims expense, after the elimination of claims paid to affiliated dealerships. Commissions expense paid by TCA to our affiliated dealerships and reflected as F&I revenue in our Dealerships segment is eliminated in the TCA segment upon consolidation.
Previous wording
SG&A expense as a percentage of gross profit increased 680 basis points from 58.2% for the three months ended September 30, 2023 to 65.0% for the three months ended September 30, 2024, while same store SG&A expense as a percentage of gross profit increased 657 basis points to 64.5% over the same period in 2024. The increase in SG&A expense as a percentage of gross profit on a total company basis during the three months ended September 30, 2024 is primarily the result of higher cost in personnel and other categories in SG&A expense partially offset by higher gross profits for the three months ended September 30, 2024 as compared to the three months ended September 30, 2023. The increase in SG&A as a percentage of gross profit on the same store basis during the three months ended September 30, 2024 is primarily the result of lower gross profits for the three months ended September 30, 2024 as compared to the three months ended September 30, 2023. On a total company basis, SG&A expense increased by $74.8 million for the three months ended September 30, 2024 as compared to the three months ended September 30, 2023 primarily due to the Koons acquisition in December 2023. Additionally, during the three months ended September 30, 2024 and 2023, we incurred $4.0 million and no losses, respectively, related to hail damage at certain dealerships.
Current wording
SG&A expense as a percentage of gross profit increased 54 basis points from 62.5% for the three months ended March 31, 2024 to 63.0% for the three months ended March 31, 2025, while same store SG&A expense as a percentage of gross profit increased 71 basis points to 62.9% over the same period. The increase in SG&A as a percentage of gross profit on a total company and same store basis during the three months ended March 31, 2025 is primarily the result of lower gross profits for the three months ended March 31, 2025 as compared to the three months ended March 31, 2024. In addition, higher other costs related to an increase in professional and other outside services. Offsetting these negative impacts was the cyber insurance recovery of $10.0 million in March 2025 related to the CDK outage that occurred in June 2024. On a total company basis, SG&A expense decreased by $12.2 million for the three months ended March 31, 2025 as compared to the three months ended March 31, 2024.
Previous wording
Floor plan interest expense increased by $64.7 million to $66.1 million during the nine months ended September 30, 2024 compared to $1.5 million during the nine months ended September 30, 2023 due to higher levels of new inventory on hand and lower balances held in our floor plan offset accounts during the nine months ended September 30, 2024 as compared to the nine months ended September 30, 2023.
Current wording
Floor plan interest expense decreased by $2.1 million (9%) to $20.7 million during the three months ended March 31, 2025 compared to $22.8 million during the three months ended March 31, 2024 primarily due to higher balances held in our floor plan offset accounts during the three months ended March 31, 2025 as compared to the three months ended March 31, 2024.
Previous wording
During the nine months ended September 30, 2024, we sold one Lexus franchise (one dealership location) in Wilmington, Delaware due to OEM requirements in connection with the Koons acquisition, one Nissan franchise (one dealership location) in Denver, Colorado and one Nissan franchise (one dealership location) in Atlanta, Georgia, one Chevrolet franchise (one dealership location) in Atlanta, Georgia and one Honda franchise (one dealership location) in Spokane, Washington. The Company recorded a pre-tax gain totaling $8.6 million, which is presented in our accompanying condensed consolidated statements of income as a gain on dealership divestitures.
Current wording
During the three months ended March 31, 2025, we sold one Nissan franchise (one dealership location) in Denver, Colorado and one Volvo franchise (one dealership location) in Greenville, South Carolina. The Company recorded a pre-tax gain totaling $4.1 million, which is presented in our accompanying condensed consolidated statements of income as a gain on dealership divestitures, net.
Previous wording
The $76.6 million (43%) decrease in income tax expense was primarily the result of a $322.1 million (44%) decrease in income before income taxes. For thenine months ended September 30, 2024 and 2023, our effective income tax rate was 25.3% and 24.6%, respectively, which differed from the U.S. statutory rate primarily due to the favorable effects of the windfall component of equity compensation, a discrete item, and unfavorable effects of various permanent tax adjustments such as executive compensation. We currently estimate our effective tax rate for the year ended December 31, 2024 at approximately 25.4%.
Current wording
The $5.4 million (11%) decrease in income tax expense was primarily the result of a $20.4 million (10%) decrease in income before income taxes. For the three months ended March 31, 2025 and 2024, our effective income tax rate was 24.7% and 24.9%, respectively, which differed from the U.S. statutory rate primarily due to the favorable effects of the windfall component of equity compensation, a discrete item, and unfavorable effects of various permanent tax adjustments such as executive compensation. We currently estimate our effective tax rate for the year ended December 31, 2025 at approximately 25.2%.
Previous wording
As of September 30, 2024, we had total available liquidity of $768.2 million, which consisted of cash and cash equivalents of $4.7 million (excluding $55.6 million held by TCA), available funds in our floor plan offset accounts of $197.2 million, $256.0 million of availability under our revolving credit facility and $310.3 million of availability under our used vehicle floor plan facility. The borrowing capacities under our revolving credit facility and our used vehicle floor plan facility are limited by borrowing base calculations and, from time-to-time, may be further limited by our required compliance with certain financial covenants. As of September 30, 2024, these financial covenants did not further limit our availability under our other credit facilities.
Current wording
As of March 31, 2025, we had total available liquidity of $963.7 million, which consisted of cash and cash equivalents of $87.4 million (excluding $37.2 million held by TCA), available funds in our floor plan offset accounts of $116.7 million, $485.9 million of availability under our revolving credit facility and $273.7 million of availability under our used vehicle floor plan facility. The borrowing capacities under our revolving credit facility and our used vehicle revolving floor plan facility are limited by borrowing base calculations and, from time to time, may be further limited by our required compliance with certain financial covenants. As of March 31, 2025, these financial covenants did not further limit our availability under our other credit facilities.
Previous wording
During the three and nine months ended September 30, 2024, we repurchased 393,951 and 826,340 shares of our common stock under our repurchase program for a total of $88.9 million and $182.1 million, respectively. On May 15, 2024, the Company announced that its Board of Directors approved an increase of $256.2 million in the Company's common share repurchase authorization to $400.0 million (the "New Share Repurchase Authorization"). As of September 30, 2024, we had $276.7 million remaining under its share repurchase authorization.
Current wording
On May 15, 2024, the Company announced that its Board of Directors approved an increase of $256.2 million in the Company's common share repurchase authorization to $400.0 million (the "New Share Repurchase Authorization"). As of March 31, 2025, the Company had $275.9 million remaining on its share repurchase authorization. The extent that the Company repurchases its shares, the number of shares and the timing of any repurchases will depend on general market conditions, legal requirements and other corporate considerations. The repurchase program may be modified, suspended or terminated at any time without prior notice.
Previous wording
During the three and nine months ended September 30, 2024, we repurchased 1,050 and 46,711 shares of our common stock for $0.2 million and $10.1 million, respectively, from employees in connection with a net share settlement feature of employee equity-based awards.
Current wording
During the three months ended March 31, 2025 and 2024, the Company repurchased 42,780 and 45,399 shares of our common stock for $12.5 million and $9.8 million, respectively, from employees in connection with a net share settlement feature of employee equity-based awards.
Previous wording
Floor plan borrowings are required by all vehicle manufacturers for the purchase of new vehicles, and all floor plan lenders require amounts borrowed for the purchase of a vehicle to be repaid within a short time period after the related vehicle is sold. As a result, we believe that it is important to understand the relationship between the cash flows of all of our floor plan notes payable and new vehicle inventory in order to understand our working capital and operating cash flow and to be able to compare our operating cash flow to that of our competitors (i.e., if our competitors have a different mix of trade and non-trade floor plan financing as compared to us). In addition, we include all floor plan borrowings and repayments in our internal operating cash flow forecasts. As a result, we use the non-GAAP measure "Adjusted cash flow provided by operating activities" (defined below) to compare our results to forecasts. We believe that splitting the cash flows of floor plan notes payable between operating activities and financing activities, while all new vehicle inventory activity is included in operating activities, results in significantly different operating cash flows than if all the cash flows of floor plan notes payable were classified together in operating activities.
Current wording
Floor plan borrowings are required by all vehicle manufacturers for the purchase of new vehicles, and all floor plan lenders require amounts borrowed for the purchase of a vehicle to be repaid within a short time period after the related vehicle is sold. As a result, we believe that it is important to understand the relationship between the cash flows of all of our floor plan notes payable and new vehicle inventory in order to understand our working capital and operating cash flow and to be able to compare our operating cash flow to that of our competitors (i.e., if our competitors have a different mix of trade and non-trade floor plan financing as compared to us). In addition, we include all floor plan borrowings and repayments in our internal operating cash flow forecasts. As a result, we use the non-GAAP measure "Adjusted cash flow provided by operating activities" (defined below) to compare our results to forecasts. We believe that splitting the cash flows of floor plan notes payable between operating activities and financing activities, while all new vehicle inventory activity is included in operating activities, results in significantly different operating cash flow than if all the cash flows of floor plan notes payable were classified together in operating activities.
Previous wording
Adjusted cash flow provided by operating activities includes borrowings and repayments of floor plan notes payable non-trade and used floor plan notes payable borrowing base changes. Adjusted cash flow provided by operating activities may not be comparable to similarly titled measures of other companies and should not be considered in isolation, or as a substitute for analysis of our operating results in accordance with GAAP. In order to compensate for these potential limitations, we also review the related GAAP measures. We believe that the adjustments related to cash flows associated with our used vehicle borrowing base, floor plan offset accounts and the impact of acquisitions and divestitures eliminates cash flow volatility and provides an adjusted operating cash flow metric that best reflects our results of operations and our management of inventory and related financing activities.
Current wording
Adjusted cash flow provided by operating activities includes borrowings and repayments of floor plan notes payable non-trade and used floor plan notes payable borrowing base changes. Adjusted cash flow provided by operating activities may not be comparable to similarly titled measures of other companies and should not be considered in isolation, or as a substitute for analysis of our operating results in accordance with GAAP. In order to compensate for these potential limitations, we also review the related GAAP measures. Adjustments related to cash flows associated with our used vehicle borrowing base, floor plan offset accounts and the impact of acquisitions and divestitures eliminates cash flow volatility and provides an adjusted operating cash flow metric that best reflects our results of operations and our management of inventory and related financing activities.
Previous wording
Net cash provided by operating activities totaled $427.0 million and $239.8 million, for the nine months ended September 30, 2024 and 2023, respectively. Adjusted cash flow provided by operating activities totaled $487.2 million and $513.6 million, for the nine months ended September 30, 2024 and 2023, respectively. Adjusted cash flow provided by operating activities includes net income, adjustments to reconcile net income to net cash provided by operating activities, changes in working capital, changes in used vehicle borrowing base, changes in floor plan notes payable—non-trade and trade, excluding the impact of offsets, and excluding operating cash flows associated with acquisitions and divestitures related to loaner vehicles and new vehicle inventories financed through floor plan notes payable—trade.
Current wording
Net cash provided by operating activities totaled $225.0 million and $177.1 million, for the three months ended March 31, 2025 and 2024, respectively. Adjusted cash flow provided by operating activities totaled $187.4 million and $208.7 million, for the three months ended March 31, 2025 and 2024, respectively. Adjusted cash flow provided by operating activities includes net income, adjustments to reconcile net income to net cash provided by operating activities, changes in working capital, changes in used vehicle borrowing base, changes in floor plan notes payable—non-trade and trade, excluding the impact of offsets, and excluding operating cash flows associated with acquisitions and divestitures related to loaner vehicles and new vehicle inventories financed through floor plan notes payable—trade.
Showing the first 40 of 61 pairs. Open the source sections for the rest.
Rearranged current paragraphs (2)
Current report — wording carried from elsewhere
Forward-looking statements speak only as of the date of this report. We expressly disclaim any obligation to update any forward-looking statements contained herein.
Current report — wording carried from elsewhere
During the three months ended March 31, 2024, we sold one Lexus franchise (one dealership location) in Wilmington, Delaware due to OEM requirements in connection with the Koons acquisition. The carrying value of assets, net of liabilities sold, approximated the sales price.
Rearranged previous paragraphs (13)
Previous report — wording carried elsewhere
For the three months ended September 30, 2024, used vehicle retail gross profit margins decreased from 5.9% to 4.9% and 5.9% to 5.0% respectively, for all stores and on a same store basis when compared to the same period of the prior year. Used vehicle retail gross profit decreased $3.7 million (6%) for the three months ended September 30, 2024 as compared to the three months ended September 30, 2023 and decreased $12.6 million (21%) on a same store basis for the same periods. On a total company basis our gross profit per used vehicle retailed decreased $361 (19%), and on a same store basis, our gross profit per used vehicle retailed decreased $300 (16%) when compared to the prior year period, which was primarily driven by decreases in used vehicle market prices.
Previous report — wording carried elsewhere
Reconditioning and preparation represents the gross profit earned by our parts and service departments for internal work performed and is included as a reduction of Parts and Service Cost of Sales in the accompanying Condensed Consolidated Statements of Income upon the sale of the vehicle.
Previous report — wording carried elsewhere
On a same store basis, F&I revenue, net decreased by $12.2 million (7%) during the third quarter of 2024 when compared to the third quarter of 2023, as a result of a 3% decreasein total retail units sold and a 5% decrease in F&I per vehicle retailed. We are seeing slightly lower penetration rates in our F&I products as customers look for ways to manage lower monthly payments in a high interest rate environment.
Previous report — wording carried elsewhere
Revenue generated by TCA is earned over the period of the related product contract. The method for recognizing revenue is assigned based on contract type and expected claim patterns. Premium revenues are supplemented with investment gains or losses and income earned associated with the performance of TCA's investment portfolio. During the three months ended
Previous report — wording carried elsewhere
September 30, 2024, TCA generated $36.4 million revenue, consisting primarily of earned premiums and $4.7 million investment income from the investment portfolio.
Previous report — wording carried elsewhere
The $13.4 million (24%) decrease in income tax expense was primarily the result of a $56.3 million (25%) decrease in income before income taxes. Our effective tax rate for the three months ended September 30, 2024 was 25.6% compared to 25.1% in the prior comparative period, which differed from the U.S. statutory rate primarily due to the favorable effects of the windfall component of equity compensation, a discrete item, and unfavorable effects of various permanent tax adjustments such as executive compensation. We estimate our effective tax rate for the year ended December 31, 2024 at 25.4%.
Previous report — wording carried elsewhere
The seasonally adjusted annual rate ("SAAR") for new vehicle sales in the U.S. during the nine months ended September 30, 2024 was approximately 15.6 million which increased as compared to approximately 15.4 million during the nine months ended September 30, 2023. The increase in SAAR period over period reflects higher inventory supply coupled with continued consumer demand for new vehicles. However, we continue to be impacted by the significant variation in new vehicle days supply among brands and models.
Previous report — wording carried elsewhere
For the nine months ended September 30, 2024, and 2023, we are presenting "Collision" as a separate line item within parts and service gross profit. In periods prior to June 30, 2024, "Collision" was included within "Customer pay". We reclassified the corresponding amounts for the nine months ended September 30, 2023 to conform to current year presentation.
Previous report — wording carried elsewhere
The $196.1 million (13%) increase in parts and service revenue was primarily due to a $137.0 million (17%) increase in customer pay revenue, a $43.6 million (21%) increase in warranty revenue, a $10.4 million (3%) increase in wholesale parts revenue and a $5.1 million (3%) increase in collision revenue. Same store parts and service revenue increased slightly by $4.9 million from $1.54 billion for the nine months ended September 30, 2023 to $1.55 billion for the nine months ended September 30, 2024. The increase in same store parts and service revenue was due to a $20.8 million (3%) increase in customer pay revenue and an $18.2 million (9%) increase in warranty revenue, partially offset by a $18.4 million (9%) decrease in collision revenue and a $15.7 million (5%) decrease in wholesale parts revenue. Consumers are owning a vehicle for longer periods of time due to various factors, including the higher cost of vehicles, higher interest rates, as well as the vehicle inventory constraints experienced in the automotive industry in recent years.
Previous report — wording carried elsewhere
For the nine months ended September 30, 2024, total parts and service gross profit increased by $145.9 million (17%) to$1.01 billion, and same store total parts and service gross profit increased by $36.8 million (4%) to $889.0 million when compared to the same period of the prior year. The all store increase is primarily due to the Koons acquisition, while the same store increase is primarily a result of increased customer pay and warranty volume and reconditioning and preparation, which is in line with the increasing trend of aged vehicles.
Previous report — wording carried elsewhere
The financial results of the TCA segment, after dealership eliminations, are as follows:
Previous report — wording carried elsewhere
TCA offers a variety of F&I products, such as extended vehicle service contracts, prepaid maintenance contracts, GAP, appearance protection contracts and lease wear-and-tear contracts. TCA's products are sold through our automobile dealerships.
Previous report — wording carried elsewhere
Direct expenses incurred for the acquisition of F&I contracts on which revenue has not yet been recognized have been deferred and are amortized over the related contract period. During the nine months ended September 30, 2024, TCA recorded $40.5 million of cost of sales consisting primarily of claims expense. Commissions expense paid by TCA to our affiliated dealerships and reflected as F&I revenue in our Dealerships segment is eliminated in the TCA segment upon consolidation.