Asbury Automotive Group Inc

Good day and welcome to the Asbury Automotive Group Q4 and year-end 2019 earnings call. Today's conference is being recorded. At this time, it is now my pleasure to turn today's call over to Mr. Matt Petone. Please go ahead, sir.

Thanks, operator, and good morning, everyone. Welcome to Asbury Automotive Group's fourth quarter 2019 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, Dan Clara, our Senior Vice President of Operations, and Matt Petone, our Vice President of Finance and Treasurer. 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 you might have. Before we begin, I must remind you that the discussion during the call today is likely content 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 Form 10-K for the year ended December 2018, 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? Thanks, Matt, and good morning, everyone. Welcome to our fourth quarter 2019 earnings call. I'd like to start by welcoming our new Senior Vice President of Operations, Dan Clarke. Dan has held the following positions with Asbury over the past 18 years. He started his career selling cars, then worked his way up to general manager, then he successfully ran a market for us, and most recently, he was VP of operations for all of Asbury. Dan's servant leader mentality, knowledge of our business, and his passion for our vision makes him the obvious choice for this role. Now turning to our performance in the quarter and year-end results. We achieved record fourth quarter adjusted EPS of $2.53, up 15% from prior year. This was driven by revenue growth of 6%, gross profit growth of 7%. We also grew our parts and service gross profit 8% and grew finance and insurance by 8%. Since last quarter, we were able to bring down our new vehicle inventory by 10 days. 2019 was a record year for Asbury in a slightly down-star environment. We generated $7.2 billion of revenue, retailed over 190,000 vehicles, serviced over 2 million vehicles, grew our front-end yield per vehicle 1% to $3,140, grew parts and service gross profit by 8%, decreased SG&A as a percent of gross profit by 10 basis points to 68.4%. We achieved an adjusted operating margin of 4.6% and grew adjusted earnings per share by 12% to a record of $9.46. During 2019, we continued building out our vision of being the most guest-centric company in the automotive industry. We continue to invest in our omnichannel initiatives, which are a key part of the foundation to develop the guest-centric retail model. We also continue to invest in our employees. We implemented industry-leading benefits to our frontline associates that we believe will enhance our long-term growth potential while maintaining SG&A ratio at approximately the same level as last year. During 2019, we also continued our strategy of balanced capital allocation, seeking highest risk-adjusted returns through investments in our existing business, acquiring new stores, and returning capital to our shareholders. We invested $57 million in our business, we repurchased $15 million of our shares, and we acquired and integrated six stores. Now turning to 2020. We are excited to expand our footprint in Colorado by acquiring a Chrysler Jeep Dodge and Ram store. This is a well-performing store led by a solid management team and their members. These brands are the perfect compliment to our Subaru store in this market. We have long been attracted to the Colorado market due to its business-friendly environment, moderate cost of doing business, growing population, and attractive demographics. we plan to methodically build out our presence in the market following a similar approach to what we successfully executed in Indianapolis. In addition to our acquisitions, we will continue to optimize our dealership portfolio. Late this quarter, we plan to divest our Mississippi platform and our Nissan store in Atlanta. In total, we are divesting six dealerships, three Nissan stores, one Ford, one Toyota, and one Chevrolet. And finally, we are still on track to close the acquisition of Park Place in late March. As we mentioned in December, this transaction will increase Asbury's geographic mix to 36% of revenue derived from the attractive Texas market and transform our overall portfolio to approximately 50% of revenue derived from luxury brands The professionalism and passion of Park Place team members built a national brand known for delivering exceptional guest experience. We believe that combining what Park Place does best with what Asbury does best will drive significant shareholder value, and it will bring us closer to achieving our vision to become the most guest-centric automotive retailer. After the successful completion, of the Park Place acquisition, our main capital allocation focus in 2020 will be to de-lever. And we are targeting to be around 3.5 times by the end of the year. I will now hand the call over to Matt to discuss our financial performance. Thanks, David.