1144980--3/16/2009--ASBURY_AUTOMOTIVE_GROUP

related topics

{customer, product, revenue}

{condition, economic, financial}

{acquisition, growth, future}

{competitive, industry, competition}

{debt, indebtedness, cash}

{investment, property, distribution}

{operation, international, foreign}

{product, candidate, development}

{regulation, change, law}

{cost, regulation, environmental}

{stock, price, share}

{personnel, key, retain}

RISKS RELATED TO OUR COMPANY If we are unable to generate sufficient cash, our ability to service our debt may be materially adversely affected, and our failure to comply with certain covenants in our debt, mortgage and lease agreements could adversely affect our ability to access our revolving credit facilities and adversely affect our ability to conduct our business. We have significant indebtedness, which may limit our flexibility to manage our business. If the retail environment continues to be challenging and our dealerships are unable to generate sufficient cash, our liquidity position may be materially adversely affected and may impact our ability to continue as a going concern. Recent turmoil in the credit markets and financial services industry could negatively impact our business, results of operations, financial condition or liquidity. If economic conditions in the United States do not improve, and the capital markets remain depressed causing a further negative impact on our stock price, such negative effect on our stock price could jeopardize our listing on the NYSE and affect our ability to raise equity in the future. Our capital costs and our results of operations may be materially and adversely affected by changes in interest rates. RISKS RELATED TO OUR DEPENDENCE ON VEHICLE MANUFACTURERS The reorganization or bankruptcy of one or more of the vehicle manufacturers could have a material adverse effect on our operations. Adverse conditions affecting the manufacturers of the vehicles that we sell may negatively impact our revenues and profitability. If we fail to obtain renewals of one or more of our dealer and framework agreements on favorable terms, if certain of our franchises are terminated, or if certain manufacturers rights under their agreements with us are triggered, our operations may be adversely affected. If we fail to comply with the financial covenants contained in certain of our framework agreements, the manufacturers who are parties to such agreements may terminate our dealer agreements with them and cause us to divest our dealerships with them, which would have a material adverse effect on our business. Our failure to meet manufacturer consumer satisfaction, financial or sales performance requirements may adversely affect our ability to acquire new dealerships and our profitability. Manufacturers restrictions on acquisitions or divestitures may limit our future growth and impact our profitability. If state dealer laws that protect automotive retailers are repealed, weakened or superseded by our framework agreements with manufacturers, our dealerships will be more susceptible to termination, non-renewal or renegotiation of their dealer agreements. Our dealerships depend upon vehicle sales and, therefore, their success depends in large part upon customer demand for the particular vehicle lines they carry. If we fail to obtain a desirable mix of popular new vehicles from manufacturers, our profitability will be negatively impacted. If automobile manufacturers reduce or discontinue incentive programs, our sales volumes may be adversely affected. Manufacturers restrictions regarding a change in our stock ownership may result in the termination or forced sale of our franchises, which may adversely impact the value of our common stock. RISKS RELATED TO THE AUTOMOTIVE RETAIL INDUSTRY A continued decline in consumer demand will adversely affect our profitability. A decline of available consumer financing may adversely affect our sales of vehicles and the results of our business. Our business may be adversely affected by unfavorable conditions in our local markets, even if those conditions are not prominent nationally. A decline of available financing in the sub-prime lending market may adversely affect our sales of used vehicles. The results of our second and third quarter results may be disproportionately affected by adverse conditions. Our business may be adversely affected by import product restrictions, foreign trade risks and currency valuations that may impair our ability to sell foreign vehicles or parts profitably. RISKS RELATED TO OUR DEALERSHIP PORTFOLIO MANAGEMENT If we are unable to acquire and successfully integrate additional dealerships, we will be unable to realize desired results and acquired operations may drain resources from comparatively profitable operations. There is competition to acquire automotive dealerships, and we may not be able to fully implement our growth through acquisition strategy if attractive targets are acquired by competing buyers or if the market drives prices to the point where an acceptable rate of return is not achievable. Substantial competition in automobile sales and services may adversely affect our profitability. Government regulations and environmental regulation compliance costs may adversely affect our profitability. Future changes in financial accounting standards or practices or existing taxation rules or practices may affect our reported results of operations. The loss of key personnel may adversely affect our business.

Full 10-K form ▸

1144980--3/16/2009--ASBURY_AUTOMOTIVE_GROUP_INC