Asbury Automotive Group Inc

Good day and welcome to the Asbury Automotive Group Q1 2020 earnings call. Today's conference is being recorded. At this time, I'd like to turn the conference over to Mr. Matt Petone. Please go ahead, sir.

Thanks, operator, and good morning, everyone. Welcome to Asbury Automotive Group's first quarter 2020 earnings call. Today's call is being recorded and will be available for replay later today. The press release dealing Asbury's first 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 to contain forward-looking statements. Forward-looking statements are statements other than those which are historical in nature, including those statements relating to the duration and contemplated impact of the COVID-19 pandemic on our business and financial performance, as well as the financial projections and expectations about our product markets, and growth. All forward-looking statements are subject to significant uncertainties and actual results may differ materially from those suggested by the statements, including potential impacts from the COVID-19 pandemic on us, our industry, and our customers, suppliers, vendors, and business partners. 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 2019, 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 reconciliation 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. Good morning, everyone. Welcome to our first quarter 2020 earnings call. The quarter started off very strong. For January and February, our company was pacing extremely well. Here are the results. Total revenue increased 10%, gross profit increased 12%, and adjusted EPS increased 31%. On a same-store basis, total revenue increased 6%, gross profit increased 7%, new vehicle gross profit increased 10%, used vehicle retail gross profit increased 9%, Finance and insurance gross profit increased 9%, parts and service gross profit increased 3%, and SG&A as a percentage of gross profit decreased 130 basis points. Our business performed very well all the way through the first half of March. During this time, we were very successful implementing our business and omni-channel strategy, which Dan will provide an update on the progress we have made. As we continued executing our business strategy, we completed our financing and integration work to close the fireplace acquisition in late March. We divested a Nissan store in Atlanta and exited the Mississippi market, which included two Nissan stores, one Toyota, one Chevrolet, and one Ford store. We also acquired a Chrysler Jeep Dodge Ram store in Denver, where we continue to grow. These transactions are in line with our strategy of managing our assets to create the most shareholder value. Though the quarter started off great, our operations were significantly impacted by the COVID-19 pandemic in the second half of March and continued into April. As we saw business decline, we acted decisively to fire our business to prepare for the inevitable slowdown. Unfortunately, This included canceling the Park Place acquisition, furloughing employees, and reducing salaries and benefits. We also acted fast to right-size our business by reducing expenses, deferring most of our capital expenditures, and negotiated significant discounts with certain vendors. This totals approximately $15 million in expense reductions for April. Turning to the business in April. Same-store revenues declined approximately 35% for the month. We started off the month very slow with sales and service off between 50 and 60%. However, each week in April improved, and the last week being off about 25% in sales and 30% in parts and service. We believe our May business will grow 20% incrementally over April. Because we cannot predict the duration of the pandemic, and resulting economic impact on our business, we will continue to evaluate our options and make real-time decisions as appropriate during this challenging time. Our top priorities are to ensure the health and safety of our employees and guests while preserving the financial strength of our company. One final comment. During tough times, you find out the resilience of people. I just want to say how impressed I am with our teammates. It has been inspiring to watch our teams in the field have positive attitudes, deliver great guest experience, and find ways to serve our guests in a safe manner. Thank you very much to all our teammates. I will now hand the call over to Matt to discuss our financial performance. Matt?