DULUTH, Ga. -

While also discussing how used-vehicle operations can help offset Japanese production shortfalls, Asbury Automotive Group shared how it enjoyed a healthy gain in first-quarter adjusted income from continuing operations, thanks to both used- and new-vehicle unit sales climbing by more than 20 percent.

Asbury revealed Wednesday that its adjusted income from continuing operations for the first quarter was $11.6 million or 35 cents per diluted share. In the year-ago period it was $9.0 million or 27 cents per diluted share. This means the company showed a 30-percent improvement on a per diluted share basis.

Executives mentioned first-quarter adjusted income from continuing operations excludes a charge for a legal reserve of $5.5 million after tax, as well as executive separation costs of $1.4 million after tax, or a total of 21 cents per diluted share. Management said there were no adjustments in the first quarter of 2010.

Looking at first-quarter net income, Asbury determined it came in at $19.9 million or 59 cents per diluted share, compared to $7.4 million or 22 cents per diluted share in the prior-year period.

The company pointed out first-quarter net income included, as part of discontinued operations, an after-tax gain of $15.8 million or 47 cents per diluted share. The gain came from the sale of Asbury’s heavy truck business.

Executives calculated their first-quarter revenues totaled $1.0 billion, an 18-percent spike from a year ago. They figured this increase was primarily due to a combined 20-percent growth in new- and used-vehicle retail revenues.

Asbury noted first-quarter used-vehicle retail revenue climbed 22 percent compared to the prior-year period, as used retail unit sales spiked 24 percent.

Additionally, the company’s parts and service revenue edged up 5 percent, and F&I revenue soared 29 percent higher compared to the first quarter of 2010.

“Asbury is pleased to announce continued double-digit revenue growth for the first quarter, primarily as a result of growth in new and used light vehicle revenues,” stated Craig Monaghan, Asbury’s president and chief executive officer.

“With the completion of the sale of our heavy truck business, we are now a focused, pure-play light-vehicle retailer,” Monaghan stressed.

Michael Kearney, Asbury’s executive vice president and chief operating officer, said the company’s used-vehicle gains greatly aided overall first-quarter financial performance.

“We continue to see the benefits of the programs we have put in place, particularly the Asbury 121 used-vehicle retailing program,” Kearney explained.

“In the first quarter, we delivered a 20-percent increase in same-store used-unit sales, while earning gross profit margins of 10.6,” he shared “The 26-percent growth in same-store F&I revenue compared to our 19-percent same-store unit volume growth in new- and used-vehicle sales reflects the ongoing success of our F&I sales process training and execution.”

Commentary on Japanese Disaster & Other Financial Updates

Like other large dealership groups, Asbury took its earnings update as an opportunity to address the ongoing production constraints connected with the earthquakes and tsunami in Japan.

“We continue to evaluate the consequences that the earthquakes and related events in Japan will have on our operating results,” Kearney explained. “We anticipate some meaningful supply disruptions, but we are unable to quantify the depth or duration at this time.

“We are beginning to see the effect of production disruptions and expect to have approximately 45 to 50 days’ supply of inventory of our Japanese brands at the end of April,” Kearney also shared. “We are working to mitigate the situation through several initiatives, such as expanding our used-vehicle business, seeking higher margins on vehicle sales and more actively managing inventory across stores within our dealership network.

“We are confident in the long-term strength of our Japanese partners and believe the current disruption will be temporary,” he added.

Despite the recent events in Japan, Monaghan also emphasized that Asbury is continuing to roll out approaches to shore up its balance sheet.

“We generated a $26 million pre-tax gain on the sale of the heavy truck business, sold our subprime consumer loan portfolio, paid down $7 million in mortgage debt, spent $17 million on property lease buy-outs with another $14 million under contract and repurchased $4 million of Asbury common stock thus far this year,” Monaghan highlighted.

“At the end of the first quarter, we had $104 million available between cash and our floor plan offset accounts,” he mentioned. “We are pleased with our first quarter performance and confident in our long-term business strategy.”

Asbury wrapped up its financial statements by pointing out an after-tax charge of $5.5 million recorded in the first quarter was related to recent developments in ongoing litigation in Arkansas.

“This litigation relates to our operations in Arkansas prior to 2007,” company officials concluded.