AutoNation, Inc.

Good morning. My name is Jacqueline and I will be your conference operator today. At this time, I would like to welcome everyone to the AutoNation fourth quarter 2020 earnings conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, press the pound key. Thank you. I would now like to turn the call over to Rob Cortero, Vice President of Investor Relations. You may begin your conference.

Thank you. Good morning. Welcome to AutoNation's fourth quarter and full year 2020 conference call and webcast. Meeting our call today will be Mike Jackson, our Chief Executive Officer, and Joe Lauer, our Chief Financial Officer. Following your remarks, we will open up the call for questions. I will be available by phone following the call to address any additional questions that you may have. Before we begin, let me read our brief statement regarding forward-looking comments. Certain statements and information on this call, including any statements regarding our anticipated financial results and objectives, constitute forward-looking statements within the meaning of the Federal Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks that may cause our actual results or performance to differ materially from such forward-looking statements. Additional discussions of factors that could cause our actual results to differ materially our container of press release issued earlier today, and in our SEC filings, including our most recent annual report on Form 10-K and subsequent quarterly reports on Form 10-Q and current reports on Form 8-K. And now I'll turn the call over to AutoNation's Chief Executive Officer, Mike Jackson.

Good morning, and thank you for joining us. Today we reported all-time record quarterly results with adjusted EPS from continuing operations at $2.43. an increase of 94% compared to last year. During the fourth quarter, same-store revenue increased $265 million, or 5%, compared to the prior year, as solid growth in new use and customer financial services revenue was partially offset by declining customer care, which has experienced a slower recovery correlated with lower miles driven. New vehicle inventory levels remain constrained, and we expect demand to exceed supply for an extended period. Given these dynamics, we remain focused on optimizing our business in the current operating environment. We expect industry sales to approach 16 million in 2021, with strong retail sales growth compared to last year. We've seen a solid growth in 21, with January trends in line with our annual forecast. For the quarter, same-store total variable gross profit per vehicle retailed increased $765, or 21%, compared to the prior year. Same-store new vehicle gross profit per vehicle retailed increased $919, or 50%, And same story, used vehicle gross profit per vehicle retail increased $127.09% compared to the prior year. We drove significant SG&A leverage in the quarter. Adjusted SG&A as a percentage of gross profit was 63.8% for the quarter, representing an 820 basis point improvement compared to the fourth quarter of 2020. We remain committed to operating below 68% SG&A as a percent of gross profit on a long-term basis. We are continuing our opportunistic capital allocation strategy that balances investing in our business and returning capital to shareholders. We expect to allocate capital towards the AutoNation USA expansion, share repurchase, and franchise expansion. acquisitions. Today, we announced our board authorized an additional $1 billion of share repurchase from October 22nd through February 12th. We brought back 6 million shares or 7% of our outstanding shares. We remain on track to open five new AutoNation USA stores by the end of this year. The stores will be located in Austin, Phoenix, and San Antonio, and two stores in Denver. We also entered the planning phase to open an additional 10 AutoNation USA stores in 2022. These stores will benefit from the AutoNation brand and its proven customer-friendly processes. We have set the long-term goal of selling over 1 million combined new and used retail units per year. We recently announced that we have enhanced AutoNation Express, our integrated retailing solution that provides customers with a seamless and intuitive omni-channel shopping and purchase experience. AutoNation Express is powered by real-time customer insights that provide a highly personalized, mobile, optimized, step-by-step digital experience. I'll now turn the call over to Joe.