Asbury Automotive Group Inc

Good day and welcome to the Asbury Automotive Group second quarter 2022 earnings call. Today's conference is being recorded. At this time, I would like to turn the conference over to Karen Reid. Please go ahead.

Thanks, Operator, and good morning, everyone. As Kevin noted, today's call is being recorded and will be available for replay later this afternoon. Welcome to Asbury Automotive Group's second quarter 2022 earnings call. The press release detailing Asbury's second quarter results was issued earlier this morning and is posted on our website at asburyauto.com. Participating with me today are David Holt, our President and Chief Executive Officer, Dan Clara, our Senior Vice President of Operations, and Michael Welch, our Senior Vice President and Chief Financial Officer. At the conclusion of our remarks, we will open up the call for questions and will be available later for any follow-ups. Before we begin, we 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, which may include financial projections, forecasts, and current expectations, each of which are subject to significant uncertainties. For information regarding certain of the risks that may cause actual results to differ materially from these statements, please see our filings with the SEC from time to time including our Form 10-K for the year ended December 2021, 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 to any such non-GAAP financial measures to the most directly comparable GAAP measures on our website. We've also posted an updated investor presentation on our website, asburyauto.com, highlighting our second quarter results. It is now my pleasure to hand the call over to our CEO, David Holt. David?

Thank you, Karen, and good morning, everyone. Welcome to our second quarter earnings call. We continue to make strong progress towards our 2025 plan. For the quarter, we grew adjusted EBITDA by 126 million to 352 million, and adjusted EPS from $7.78 to $10.04, an increase of 29%. Delivered an 8.5% adjusted operating margin, increased revenue by 1.4 billion to 4 billion, and increased gross profit by 305 million to 803 million, and drove F&I gross profit per vehicle to $2,390, up 563. During the second quarter, we executed on our plan of continuing to integrate our acquisitions and reducing our net leverage. In addition, The system's integration for the rollout of Clicklane and Total Care Auto was completed. Combining our fully transactional tool with TCA requires significant work to integrate systematically across all platforms. We will start rolling out Clicklane to our acquired dealerships and TCA into the legacy Asbury stores during this quarter. In the second quarter, We sold almost 6,600 units through Clicklane, growing 17% from the first quarter of 2022 and 55% year over year. Clicklane is currently installed at 88 of our 155 dealerships and is on pace to provide approximately $1 billion of revenue in 2022. Currently, our unit sales are governed by the lack of new vehicle inventory, and our advertising campaign has been on hold until inventory levels improve. Once completely rolled out to all 155 stores, we'll be on pace for $2.2 billion in revenue through Clicklane by the end of 2023. TCA provides us the opportunity to expand our business horizontally into our F&I business. CCA generated $36 million of income year to date on the LHM stores, excluding unrealized losses on investment. Once completely rolled out to all 155 stores and with future acquisitions, we expect EBITDA from this unique asset to hit $185 million by 2025. We continue to experience solid demand across all of our revenue streams. but we do not anticipate a meaningful recovery in new inventory levels in 2022. Year to date, we have generated $544 million of adjusted operating cash flow. Net leverage decreased from 2.7 times at year end to 2.1 times at the end of the second quarter. Our strong cash flow and reduced leverage will allow us to shift our focus to strategic acquisition and share buybacks. With consumers financially healthy, consumer financing readily available, the car park age to record levels, and sizable pent-up demand, combined with our technology to improve efficiency and productivity, we are well positioned to weather the current market conditions. We look forward to continuing to deliver strong results for our shareholders be outstanding partners with our OEMs to steward their great brands, and offer an environment where our team members can thrive while providing the most gas-centric experience in automotive retail. We have the right brands in the right states with the right people to execute our strategy to grow and improve our business. Finally, I would like to acknowledge the hard work and dedication of all my fellow Asbury teammates, It is through your efforts that we continue to produce strong results for our shareholders and be the most guest-centric automotive retailer to serve our guests. Thank you. I will now hand the call over to Dan to discuss our operating performance. Dan?