Asbury Automotive Group, Inc. (NYSE:ABG) Q4 2014 Earnings Conference Call - Final Transcript

Feb 04, 2015 • 10:00 am ET

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Asbury Automotive Group, Inc. (NYSE:ABG) Q4 2014 Earnings Conference Call - Final Transcript

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Presentation
Operator
operator

Good day, and welcome to the Asbury Automotive Group fourth quarter and yearend 2014 earnings call. Today's conference is being recorded. At this time, I'd like to turn the call over to Vice President and Treasurer, Matt Pettoni. Please go ahead, sir.

Executive
Matt Pettoni

Thanks, operator, and good morning, everyone. Welcome to Asbury Automotive Group's fourth quarter 2014 earnings call. Today's call is being recorded and will be available for replay later today. The press release detailing Asbury's fourth quarter results was issued earlier this morning and is posted on our website at asburyauto.com.

Participating with us today are Craig Monaghan, our President and Chief Executive Officer; David Hult, our Executive Vice President and Chief Operating Officer; and Keith Style, our Senior Vice President and Chief Financial Officer. 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.

(Forward-Looking Cautionary Statements)

It is my pleasure to hand the call over to our CEO, Craig Monaghan.

Executive
Craig Monaghan

Good morning, everyone, and thank you for joining us today. 2014 was another great year for Asbury. Our team grew full year 2014 revenues 10% and full year 2014 adjusted EPS 24%. For the fourth quarter, we are once again reporting record results with adjusted EPS from continuing operations of $1.07, an increase of 22%.

Our stores continue to produce excellent operating results by maximizing new and used vehicle sales opportunities, improving F&I penetration, pursuing incremental service opportunities and controlling expenses. In total, fourth quarter revenue was up 9% and gross profit was up 10%, and we achieved an operating margin of 4.4%.

These results and our strong balance sheet enabled us to deploy over $200 million of capital in the fourth quarter, including repurchasing $92 million of our stock, acquiring two Ford stores, opening our third Q auto store and continuing our investments in our core stores. We are extremely proud and thankful for our teams' hard work this year to achieve these outstanding results.

Looking forward to 2015, we believe automotive sales will remain healthy, as customers take advantage of extremely attractive financing options and a breadth of exciting new models. For 2015, we are planning our business around a high $16 million SAR. Going forward, we will continue to execute our two-part strategy, driving operational excellence and deploying capital to its highest returns.

Joining us on our call today is our new COO, David Hult. David brings a wealth of auto retail industry knowledge and a proven track record to our team. We are very excited to have David on board. I also want to thank Michael Kearney, for his 25 years of service to Asbury. I am personally thankful for his partnership over our years of working together.

Now, I'll hand the call over to Keith, to discuss our financial performance. Keith?

Executive
Keith Style

Thanks, Craig,

Executive
Keith Style

and good morning, everyone. This morning we reported record fourth quarter adjusted EPS from continuing operations of $1.07, a 22% increase from last