Asbury Automotive Group, Inc. (NYSE:ABG) Q1 2018 Earnings Conference Call - Final Transcript

Apr 24, 2018 • 10:00 am ET


Asbury Automotive Group, Inc. (NYSE:ABG) Q1 2018 Earnings Conference Call - Final Transcript


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Good day, and welcome to the Asbury Automotive Group Q1 2018 Earnings Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Mr. Matt Pettoni. Please go ahead, sir.

Matt Pettoni

Thanks, operator, and good morning everyone. Welcome to Asbury Automotive Group's first quarter 2018 earnings call. Today's call is being recorded and will be available for replay later today. The press release detailing Asbury's first quarter results was issued earlier this morning and is posted on our website at

Participating with us today are David Hult, our President and Chief Executive Officer; John Hartman, our Senior Vice President of Operations; and Sean Goodman, 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.

Before we begin, I 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. All forward-looking statements are subject to significant uncertainties, and actual results may differ materially from those suggested by the statements. For information regarding certain of the risks that may cause actual results to differ, please see our filings with the SEC from time to time, including our Form 10-K for the year ended December 2017, 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.

It is my pleasure to hand the call over to our CEO, David Hult. David?

David Hult

Thanks, Matt. Good morning, everyone. Welcome to our first quarter 2018 earnings call. The first quarter marks a solid start to 2018. During this quarter, we achieved record EPS of a $1.93, 22% increase over last year's adjusted EPS. From an operating perspective, our success was driven by enhanced F&I PVR, continued growth in parts and service, and disciplined expense management. Our plan for the remainder of 2018 is to focus on the aspects of the business that we can control, specifically parts and service, used cars, F&I, and overall expense management, while continuing to intelligently deploy capital towards the highest return, be that strategic investments in our existing business, notably our omni-channel capabilities, acquisitions or returning capital to shareholders.

This quarter, we repurchased $20 million of our common stock and we acquired a Honda dealership in the Indiana market, which should generate approximately a $120 million in annual revenue. In addition, in the second quarter, we plan to close two acquisitions in the Atlanta market, which combined should generate approximately $120 million in annual revenue. I would like to share our thoughts on these acquisitions.