Asbury Automotive Group Inc

Greetings, and welcome to the Asbury Automotive Group second quarter 2023 earnings conference call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, George Villasana. Senior Vice President and Chief Legal Officer. Thank you, sir. You may begin.

Thank you, Operator, and good morning. As noted, today's call is being recorded and will be available for replay later this afternoon. Welcome to Asbury Automotive Group's second quarter 2023 earnings call. The press release detailing Asbury's second quarter results was issued earlier this morning and is posted on our website at investors.asburyauto.com. Participating with me today are David Hult, 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 the call up for questions and will be available later for any follow-up questions. 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 2022, 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. We also have posted an updated investor presentation on our website, investors.asburyauto.com, highlighting our second quarter results. Now, it is my pleasure to hand the call over to our CEO, David Hull.

David? Thank you, George. And good morning, everyone. Welcome to our second quarter earnings call. I'm proud of the team's performance in Q2. Our strong cost discipline and continued work to maximize our gross profit streams generated strong results this quarter. We've also been opportunistic, utilizing our strong cash flow from operations for share repurchases. We repurchased over 1 million shares year to date, with 960,000 of those shares repurchased in the second quarter alone for 190 million. Within this current macro environment, we are well positioned due to our diversified business model, our strong balance sheet, our focus on profitability, and our North Star to be the most guest-centric automotive retailer. Now I'll turn to our consolidated results for the second quarter of 2023. We delivered $3.7 billion in revenue, had a gross profit margin of 19.1%. Our adjusted SG&A as a percentage of gross profit was 57%. generated an adjusted operating margin of 7.8%. Our adjusted EBITDA was $307 million, and adjusted EPS was $8.95. Looking forward, we are optimistic about the future of automotive retail. We operate in an environment where the average age of the car is 12 and a half years, the highest it's ever been. While SAR levels have been trending higher, they are still well below historical levels. The combination of older cars, complexity of new cars, and the transition to EVs enables consistent growth within our parts and service business. With our strong balance sheet and robust liquidity, we are looking to deploy capital through opportunistic share buybacks and acquisitions. We continue to aggressively pursue acquisitions that will be accretive to Asbury. We are disciplined stewards of capital. We are strategic when the capital allocation opportunities arise, such as our recent share repurchase activity. Again, I am pleased with the second quarter results, especially with regards to our expense management. We have been and continue to be thoughtful operators with an eye towards efficiency and strong profitability while integrating over 50 stores from our acquisitions. Finally, I would like to extend a thank you to my fellow team members for a terrific first half of 2023. I'll now hand the call over to Dan to discuss our operating performance. Dan?