Lithia Motors Inc. (NYSE:LAD) Q4 2018 Earnings Conference Call Transcript
Feb 13, 2019 • 10:00 am ET
Good morning, and welcome to the Lithia Motors Fourth Quarter 2018 Conference Call. All lines have been placed on mute to prevent background noise. After the speakers remarks there will be a question-and-answer session.
I would now like to turn the call over to Megan Kurz, Director of Corporate Finance. Please begin.
Thank you, and welcome, everyone, to Lithia Motors Fourth Quarter and Full Year 2018 Earnings Call. Presenting today are Bryan DeBoer, President and CEO; Chris Holzshu, Executive Vice President; and John North, Senior Vice President and Chief Financial Officer.
Today's discussion may include statements about future events including financial projections and expectations about the company's products, market and growth. Such statements are forward-looking and subject to risks and uncertainties that could cause actual results to differ materially from statements made. We disclosed those risks and uncertainties we deemed to be material in our filings with the Securities and Exchange Commission. We urge you to carefully consider these disclosures and not place undue reliance on forward-looking statements. We undertake no duty to update any forward-looking statements, which are made as of the date of this release.
Our results discussed today include -- references to non-GAAP financial measures. Please refer to the text of the earnings release for reconciliation to comparable GAAP measures, which can be found at lithiainvestorrelations.com.
With that, I would like to turn the call over to Bryan DeBoer, President and CEO.
Bryan B. DeBoer
Thank you, Megan. Good morning, and thank you for joining us today. Earlier today we reported the highest adjusted fourth quarter earnings in company history $2.57 per share, a 20% increase over the fourth quarter of 2017. Full year adjusted EPS was $9.98, a 19% increase over last year. Our earnings improvement was driven by strong top line gross profit growth both up 17%. Full year revenues were $11.8 billion, and we delivered double-digit revenue increases in all business lines. We remain focused on our core strategy of purchasing strong assets that have yet to realize their full potential to achieve operational excellence throughout our network. These efforts will drive the realization of the $250 million in incremental EBITDA potential within our existing store base. This creates a clear line of sight to $15 in EPS and provide the additional capital necessary to accelerate consolidation within our highly fragmented industry. In just a few minutes Chris will be providing more details on 2018, and how our teams are delivering operational excellence through their 2019 annual operating plan.
As mentioned in our press release, John is resigning on March 1st. I would like to thank John for a fun and productive 17 years together at Lithia. We will miss him and wish him great success in his future endeavors. In addition, I want to congratulate our 36 Circle of Champion winners as our highest performing stores in 2018. Thank you. We also invited two additional general managers to our Lithia Partners Group. Recognition as an LPG member is a highly coveted position at Lithia and represents the