Group 1 Automotive, Inc.

Good morning, ladies and gentlemen. Welcome to Group 1 Automotive 2020 First Quarter Financial Results Conference Call. Please be advised that this call is being recorded. I would now like to turn the call over to Mr. Pete DeLongshaw, Group 1 Senior Vice President of Manufacturer Relations, Financial Services, and Public Affairs. Please go ahead, Mr. DeLongshaw.

Thank you, Ian, and good morning, everyone, and welcome to today's call. The earnings release we issued this morning and the related slide presentation that include reconciliations related to the adjusted results that we will refer to on this call for comparison purposes have been posted to Group 1's website. Before we begin, I'd like to make some brief remarks about forward-looking statements and the use of non-GAAP financial measures. Except for historical information mentioned during the call, Statements made by management of Group 1 Automotive are forward-looking statements that are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve both known and unknown risks and uncertainties, which may cause the company's actual results in future periods to differ materially from forecasted results. Those risks include, but are not limited to, risks associated with pricing, volume, conditions of the market, adverse developments in the global economy, as well as the public health crisis related to the COVID-19 virus and resulting impacts on demand for new and used vehicles and related services. Uncertainty regarding the duration and severity of COVID-19 and its impact on US and international authorities to ease current restrictions on various commercial and economic activities. and uncertainties regarding the timing, pace, and extent of an economic recovery in the U.S. and elsewhere from the unknown current and future impacts of COVID-19 and unknown future impacts of oil producers and the effects such can have on travel, transportation, and oil prices, which in turn will likely adverse effect demand for vehicles and services. Those and other risks are described in the company's filings with the Securities and Exchange Commission over the past 12 months. Copies of these filings are available from both the SEC and the company. In addition, certain non-GAAP financial measures as defined under SEC rules may be discussed on this call. As required by applicable SEC rules, the company provides reconciliations of any such non-GAAP financial measures to the most directly comparable GAAP measures on its website. Participating on the call today, Earl Hesterberg, our President and Chief Executive Officer, John Rickle, our Senior Vice President and Chief Financial Officer, Daryl Kenningham, our President of U.S. and Brazilian Operations, and Michael Welch, our Vice President and Corporate Controller. I'd now like to hand the call over to Earl.

Thank you, Pete, and good morning, everyone. For the first quarter, Group 1 generated $30.6 million of adjusted net income and adjusted earnings per share of $1.66 per diluted share, decreases of 20% and 19% from the prior year, respectively. Through February, we were on pace for record first quarter results in both the U.S. and U.K. Our March results, however, were devastated by shelter-in-place orders in nearly all of our U.S. markets, as well as a complete shutdown of our U.K. operations. As previously announced, In March, we acted swiftly to reduce costs by furloughing 3,000 U.S. and 2,800 U.K. employees, reducing the compensation of all executives, board members, corporate and support personnel, and significantly reducing advertising and capex in addition to receiving support from numerous vendor partners for reduced pricing. During early April, we furloughed an additional 1,800 U.S. employees as we further adjusted staffing levels to sales volume. We also announced the suspension of our quarterly dividend and the cancellation of our share repurchase program. The personnel actions were especially regrettable, but were unfortunately necessary to preserve capital during this unprecedented economic event. After the first week of March, virtually all of our showrooms in the US, UK, and Brazil have been progressively brought into a state of closure, leaving online sales as our primary means of selling vehicles. We were unable to deliver about 35% of the vehicles we had contracted to sell in March in the UK. And of course, that's the biggest selling month of the year. Our showrooms have been completely closed in the UK since mid-March, and our workshops are only open for emergency service work, which does not generate material gross profit. In the U.S., our workshops have generally remained open, unlike many of our showrooms. But the flow of service customers has been down 40 to 50 percent since mid-March, simply because most of our customers have been living under shelter-in-place orders. The closure of most of our U.S. showrooms since mid-March has reduced new and used vehicle sales by a similar percentage. Without strong OEM incentives and Acceleride, our effective vehicle online purchasing platform, I expect a drop in vehicle sales would have been even greater. As April progressed, we began to see some rebound in our week-over-week sales pace in the U.S. market. For the final week, retail unit sales were down approximately 25%, and service revenues were pacing about 30% lower than prior year levels. With sales and service beginning to recover from the lows we experienced at the start of April, we're starting to recall back some of our furloughed employees in the U.S. and anticipate being able to add back approximately 500 U.S. employees by June. We will continue to monitor sales levels and adjust staffing levels as necessary. We can see some level of pent-up demand, especially in service, but it's not yet possible to quantify what that might be over the course of the coming months. I'll now turn the call over to our CFO, John Rickles, for a balance sheet and liquidity overview. John?