Asbury Automotive Group Inc

Good day, everyone, and welcome to the Asbury Automotive Group Q4 and year-end 2018 earnings call. Today's conference is being recorded, and at this time, I would like to turn the conference over to Matt Petone. Please go ahead, sir.

Thanks, Operator, and good morning, everyone. Welcome to Asbury Automotive Group's fourth quarter 2018 earnings call. Today's call is being recorded and will be available for replay later today. The press release detailing Asbury's fourth quarter results was issued earlier this morning and is posted on our website at asburyauto.com. Participating with us today are David Holt, our President and Chief Executive Officer, John Hartman, our Senior Vice President of Operations, and Sean Goodman, our Senior Vice President and Chief Financial Officer. At the conclusion of our remarks, we will open the call up for questions, and I will be available later for any follow-up questions. Before we begin, I must remind you that the discussion during the call today is likely to contain forward-looking statements. Forward-looking statements are statements other than those which are historical in nature. All forward-looking statements are subject to significant uncertainties and actual results may differ materially from those suggested by the statements. For information regarding certain of the risks that may cause actual results to differ, please see our filings with the SEC from time to time, including our Form 10-K for the year ended December 2017, any subsequently filed quarterly reports on Form 10-Q, and our earnings release issued earlier today. We expressly disclaim any responsibility to update forward-looking statements. In addition, certain non-GAAP financial measures as defined under SEC rules may be discussed on this call. As required by applicable SEC rules, we provide reconciliations of any such non-GAAP financial measures to the most directly comparable GAAP measures on our website. It is my pleasure to hand the call over to our CEO, David Holt. David?

David Holt Thanks, Matt, and good morning, everyone. 2018 was a record year for Asbury. In a flat-star environment, we generated $6.9 billion of revenue, retailed over 185,000 vehicles, serviced over 2 million vehicles, delivered front-end yield per vehicle over 3,100, grew parts and service gross profit by 5 percent, achieved an adjusted operating margin of 4.6 percent, and grew adjusted earnings per share by 31 percent to a record of $8.41. Our success was driven by growth in our used vehicle business, higher F&I gross profit, and continued solid growth in parts and service. This was coupled with a balanced approach to SG&A, disciplined spending, while at the same time investing in our future by developing omnichannel capabilities. During 2018, we continued our strategy of balanced capital allocation. seeking the highest risk-adjusted returns through investments in our existing business, acquiring new stores, and returning capital to our shareholders. During 2018, we repurchased $105 million of our shares, we acquired and integrated three stores, and we recently signed an agreement to acquire four stores in the Indianapolis market that we expect to close in Q1 of 19, subject to customary closing conditions. With this transaction, our total stores in the Indianapolis market will increase to seven. Turning to the future, to capitalize on our unused fixed capacity and enhance employee retention, on Monday, we announced a package of industry-leading benefits for revenue-producing associates. These benefits include subsidized medical plans, education grants, a four-day work week, extended vacation time, paid maternity leave, and equity grants. The Frontline Equity Program is expected to be part of Asbury's new equity plan, which is subject to shareholder approval in the second quarter of 2019. Finally, the omnichannel investments that we have made in the past are the foundation of a differentiated, guest-centric retail model that we have been developing for the future. Our Frontline associates are critical to our vision and we are excited to be able to offer them industry-leading benefits that we believe will enhance our long-term growth potential. I will now hand the call over to Sean to discuss our Q4 financial performance. Sean? Thank you, David, and good morning, everyone.