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Asbury Automotive Group (NYSE:ABG)
Q4 2018 Earnings Conference Call
Feb. 6, 2019 10:00 a.m. ET

Contents:

Prepared Remarks:

Operator

Please stand by. Good day, everyone, and welcome to the Asbury Automotive Group Q4 and year-end 2018 earnings call. Today's conference is being recorded. And at this time, I would like to turn the conference over to Matt Pettoni.

Please go ahead, sir.

Matt Pettoni -- Regional Digital Marketing Manager

Thanks, operator, and good morning, everyone. Welcome to Asbury Automotive Group's fourth-quarter 2018 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 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. 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 report 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 measure on our website. It is my pleasure to hand the call over to our CEO David Hult. David?

David Hult -- President and Chief Executive Officer

Thanks Matt, and good morning everyone. 2018 was a record year for Asbury. In a flat SAAR environment, we generated $6.9 billion of revenue, retailed over 185,000 vehicles, serviced over 2 million vehicles, delivered front-end yield per vehicle over $3,100, grew parts and service gross profit by 5%, achieved an adjusted operating margin of 4.6%, and grew adjusted earnings per share by 31% to a record of $8.41. Our success was driven by growth in our used vehicle business, higher F&I gross profit, and continued solid growth in parts and service.

This was coupled with a balanced approach to SG&A, disciplined spending while at the same time investing in our future by developing omni-channel capabilities. During 2018, we continued our strategy of balanced capital allocation, seeking the highest risk-adjusted return through investments in our existing business, acquiring new stores, and returning capital to our shareholders. During 2018, we repurchased $105 million of our shares, we acquired and integrated three stores and we recently signed an agreement to acquire four stores in the Indianapolis market that we expect to close in Q1 of '19, subject to customary closing conditions. With this transaction, our total stores in the Indianapolis market will increase to seven.

Turning to the future. To capitalize on our unused fixed capacity and enhanced employee retention, on Monday, we announced the package of industry leading benefits for revenue-producing associates. These benefits include subsidized medical plans, education grants, a four-day work week, extended vacation time, paid maternity leaves, and equity grants. The frontline equity program is expected to be part of Asbury's new equity plan, which is subject to shareholder approval in the second quarter of 2019.

Finally, the omni-channel investments that we have made in the past are the foundation of a differentiated guest-centric retail model that we have been developing for the future. Our frontline associates are critical to our vision, and we are excited to be able to offer them industry leading benefits that we believe will enhance our long-term growth potential. I will now hand the call over to Sean to discuss our Q4 financial performance. Sean?

Sean Goodman -- Senior Vice President and Chief Financial Officer

Thank you, David, and good morning, everyone. We are pleased with our operating performance in the fourth quarter. Overall, compared to the prior year fourth quarter, revenue increased by 7% and gross profit increased by 5%. Gross margin of 15.8% was 30 basis points lower than last year.

SG&A, as a percentage of gross profit, increased by 90 basis points to 68.2%. Adjusted operating margin of 4.5% was 20 basis points lower than last year. Our adjusted net income increased by 14% to $43.2 million and adjusted earnings per share increased by 22% to $2.20. This year we implemented accounting standard ASC 606 for revenue recognition.

The net impact of adopting ASC 606 in the fourth quarter was to increase net income by $1.2 million or $0.06 per diluted share. Net income for the fourth quarter of 2018 was adjusted for a $3.7 million pre-tax noncash charge or $0.14 per diluted share for franchise rights impairments. Our effective tax rate was 25.3% for the quarter, up from 21.9% in the fourth quarter of 2017, and our full-year tax rate was 25.3%. We successfully managed our SG&A expenses during the quarter to achieve SG&A as a percentage of gross profit of 68.2%.

This is despite continued omni-channel investments that for the year exceeded $10 million. Overall, SG&A, as a percentage of gross profit for 2018 was 68.5%, down 60 basis points from the prior year. Floor plan interest expense in Q4 increased by $4 million over the prior year, driven mainly by higher interest rates. I'll remind you that our floor plan debt has a floating interest rate while all other debt is fixed rate.

At the end of the quarter, our total leverage ratio stood at 2.9 times and our net leverage ratio at 2.5 times, thanks to our strong operating results and solid cash flow generation. A 2.5 times net leverage ratio is at the low end of our targeted range of 2.5 to 3 times. We believe that this positions us well to capitalize our potential attractive future capital deployment opportunities while taking into consideration the economic cycle. We repurchased $48 million of our own shares in Q4, bringing the total share repurchases for 2018 to $105 million.

Our remaining share repurchase authorization stands at $82 million. In 2018, we spent $40 million on nonreal estate-related capital expenditures and approximately $69 million on three acquisitions. From a liquidity perspective, we ended the quarter with $8 million in cash, $33 million available in floor plan offset accounts, $78 million available on our used vehicle line, and $237 million available on our revolving credit lines. Before I pass the call over to John, I would like to make a few comments regarding our expectations for 2019.

We are planning our business for a declining SAAR with an expectation of between 16.5 million and 17 million units. The four stores in the Indianapolis market that David mentioned in his remarks are expected to close during Q1 of 2019 and generate approximately $250 million of annualized revenue. We expect front-end yield per vehicle to remain stable at around $3,100 with any pressure on vehicle margins being offset by F&I. We believe that we can continue to grow our parts and services gross profit in the mid-single digit range.

We expect SG&A, as a percentage of gross profit, to be in the range of 69% to 70%. This reflects our balanced approach to SG&A with disciplined spending while at the same time investing in our future. This guidance includes the impact of expected lower sales volumes, accelerated investments in our omni-channel capabilities, and additional costs associated with the enhanced benefits packages that we are providing to frontline associates in 2019. Based on the current forward liable curve, the average interest rate in 2019 should be approximately 100 basis points higher than in 2018.

Note that a 1% increase in interest rate results in additional interest expense on our floor plan debt of approximately $9 million. We expect our tax rate in 2019 to be between 25% and 26%. Finally, we are planning for CAPEX of approximately $55 million. This amount excludes any real estate purchases and potential lease buyout opportunities that we consider to be financing transactions.

I would now like to hand the call over to John to walk us through the Q4 2018 operating performance in more detail. John?

John Hartman -- Senior Vice President of Operations

Thank you, Sean. My remarks will pertain to our same-store performance compared to the fourth quarter of 2017. Looking at new vehicles, our new unit sales were up 2% while SAAR was down 1% from the prior year as we took market share in most of our brands. Our new car margin was 4.3%, flat versus last quarter and 50 basis points lower than last year.

Though margins were down in all segments, we experienced volume growth across our brand portfolio and delivered a front-end yield of $3,229. Our total new vehicle inventory was $865 million and day supply at 67 within our targeted range. Turning to used vehicles. This quarter, we were able to increase our used to new ratio by 160 basis points, resulting in used vehicles unit sales increasing by 5% and used vehicle gross profit increasing by 7%.

The successful deployment of our omni-channel initiatives and used car enterprise software help us drive these strong results. Our used vehicle inventory of $159 million was at a 34-day supply, which is within our targeted range of 30 to 35 days. Turning to F&I, our team continues to deliver strong results. F&I gross profit increased by 3% due to increased volume sales.

Our F&I gross profit per vehicle decreased slightly to $1,648. Turning to parts and service. Our parts and service revenue and gross profit increased by 5%. This was achieved with a 6% increase in customer pay.

The improved used vehicle sales drove reconditioning work within parts and service to increase by 5%. I would like to take a moment to give you an update on the progress of some of our omni-channel initiatives. We are currently over halfway through the rollout of our centralized brand-certified digital sales team and we are on schedule to onboard the remaining stores within the next six months. Stores participating in the program during this quarter increased digital sales by almost 20% year over year.

Our PUSHSTART online sales tool handled over 3,900 vehicle sales in the quarter, which is approximately 8% of our total retail units. We continue to grow traffic utilizing our digital parts and service scheduling tool and we reached a record of 114,000 online service appointments, which is up 24% from the prior year. We are excited about our omni-channel driven growth, and we are pleased that we've been able to invest in building these capabilities while maintaining our SG&A discipline. In conclusion, we would like to express our appreciation to all our teammates in the field and our support center, who continue to produce best-in-class performance and drive us toward our vision of being the most guest-centric company in the automotive retail industry.

We will now turn the call over to the operator and take your questions. Operator? 

Questions and Answers:

Operator

Thank you, sir. [Operator instructions] And going first to Rick Nelson at Stephens.

Rick Nelson -- Stephens -- Analyst

Thanks. Good morning. Nice quarter. I want to ask about the acquisition environment.

You acquired four more stores. Your appetite, considering the cycle and your balance sheet, seems to be in great shape and you've got the opportunity to execute, but just wondering how aggressive you want to get along those lines?

David Hult -- President and Chief Executive Officer

Rick, this is David. I'll say, we -- I don't think aggressive would be fair to term it that way. We're kind of looking at it as opportunistic. We've looked at a lot of deals in the last 12 months and only closed on three and got these other ones in Indianapolis that we're about to acquire.

We're really looking at the deal from -- what's best for our shareholders, what will integrate well into Asbury, and the culture that we are trying to create, and make sure that we can be thoughtful stewards of the business. So, I think our disciplined approach to M&A and not getting overly excited or falling in love with a deal, for lack of a better term, is the approach that we'll continue to have. We do see the market getting hotter. We do see a lot of opportunities come up.

But it's far too early in the game to tell whether they'll be good opportunities for Asbury or not.

Rick Nelson -- Stephens -- Analyst

All right. Thanks for that color. Also I'd like to ask about PUSHSTART, 8% of sales, the opportunity there and if you could compare the profitability on a PUSHSTART sale with an in-store sale that would be helpful.

John Hartman -- Senior Vice President of Operations

We see continued opportunity with PUSHSTART. We've built out the experience, so it's basically front to back. I think we're looking for that percent to increase over time as a percent of sales as consumers get more used to the tool that is available. As far as the deal in the gross profit, there's no material difference between the in-store experience and what we're seeing online.

The big thing is the experience for the consumers, so I think moving forward that business will continue to grow and that percent will continue to grow. But we don't see a material difference between the in-store experience as far as the gross and what the consumers are doing online.

David Hult -- President and Chief Executive Officer

The only thing I'll add to that Rick, from the last call that we had with you all. We finally executed DocuSign, and we have several of our documents on DocuSign for consumers to transact online with us. Certainly not the full deal. We still have many states that require Web signatures, but we're constantly progressing in that area.

To include uploading insurance information, drivers' licenses, facilitating the trade much easier, and instant decisioning with our API connections with RouteOne and DealerTrack.

Rick Nelson -- Stephens -- Analyst

Can you provide home delivery if the customer asks for that? What percent of --

David Hult -- President and Chief Executive Officer

We'll absolutely.

Rick Nelson -- Stephens -- Analyst

Sales would in fact be on delivery?

David Hult -- President and Chief Executive Officer

We've been doing it for a few years now. Initially when we went into it, we were -- we thought it would be close to half and half. It traditionally runs 70% to 75% of the consumers picking up at the dealership and 25% to 30% delivery. And the main reason for them wanting to come to the facility is really to create that relationship with the service center.

Rick Nelson -- Stephens -- Analyst

Are you having more success with new cars with PUSHSTART or used cars?

David Hult -- President and Chief Executive Officer

That too is fluctuated. Early on, we expect it to be more pre-owned than new, and it was just the opposite. It was more new than pre-owned and it was -- actually, the volume, midline import cars that were taking up the percentage of it. It does seem to fluctuate by quarter and today, it runs a little bit more pre-owned than new, but pretty close.

Rick Nelson -- Stephens -- Analyst

And your expectation now for a stable front-end yield that incorporates lower gross profit on vehicle and higher F&I per unit?

David Hult -- President and Chief Executive Officer

When I look back at the fourth quarter of 2015, which is a tremendous year for us, and I look at now, our total front-end yield is pretty similar to what it was four years within a few -- $40 or so. So, as the front end has gone down, F&I has gone up, but certainly those will reach a peak. We see it stabilizing. We see it staying in this area based on what we have now.

The toughest part of forecasting that PVR for this year is really going to be our partnership with the OEMs and what comes out from incentives this year. We saw it in the fourth quarter. We're already seeing it now in the first quarter, very reactionary incentives coming out that weren't planned. So very difficult to model, but we feel very confident that we'll certainly be above the $3,100 number.

Rick Nelson -- Stephens -- Analyst

Great. Thanks and good luck.

David Hult -- President and Chief Executive Officer

Thank you.

John Hartman -- Senior Vice President of Operations

Thanks Rick.

Operator

And moving next to Bret Jordan at Jefferies.

Bret Jordan -- Jefferies -- Analyst

Hey. Good morning, guys. A quick question on the new comp plan. I guess, sort of -- does it indicate a more aggressive hiring environment in this space or is this something to sort of keep the active sales people involved despite maybe a volume turndown? I mean, I guess, are people are trying to hire away or is it just sort of trying to keep people in the business?

David Hult -- President and Chief Executive Officer

Yes, I would say the technician piece is certainly a competitive market and everyone wants them. We try to be thoughtful. A year ago when everyone got the break with the tax incentives and what we are going to do for the associates, and a lot of companies gave a flat dollar amount. We kind of wanted to have a more thoughtful approach and give something that paid out over time as we certainly benefit from it as well.

We've also been working on what we think is our future retail model, and this is really just kind of falls in line with our plan and where we're at. If you want to create great numbers and be the best, you have to employ the best and have the best. And we thought these benefits would differentiate us from our peers and hopefully, give us an opportunity to grow. We've said this over the years.

From a fixed standpoint, we don't have a brick-and-mortar issue. We can certainly grow a large amount with our current brick-and-mortar set up. We need to fill the service base. So, this is certainly one attempt to do that while also taking care of our associates that are generating and running our business today.

Bret Jordan -- Jefferies -- Analyst

OK. And this question sort of follows on that. I guess, as you look at your customer pay service, it was up pretty nicely. How do you feel about that number versus the local market growth? Are you taking share or did you just see strength in service demand across your geographies?

David Hult -- President and Chief Executive Officer

Yes, it's -- Bret, it's really difficult for me to say how we're doing in the market, other than what I can see with that brand across the peers, but I can't see the independence in what they are doing. I would tell you that there is a huge space out there. We all know about the 270 million cars on the street. So, our potential and our runway is great.

And our continued growth is really going to be based on how well we service and communicate with our customers and create that guest-centric model I was discussing while filling the base with the additional tax. But I'm very optimistic and know how much capacity and available time or dollars are out there for us to really grow our business. And I think a very disciplined and thoughtful approach in making sure that we're not doing a knee-jerk reaction is imperative, and that's exactly what we think this plan is.

Bret Jordan -- Jefferies -- Analyst

Yes, great. Thank you.

David Hult -- President and Chief Executive Officer

Thank you.

John Hartman -- Senior Vice President of Operations

Thank you.

Operator

And we'll go next to John Murphy at Bank of America Merrill Lynch.

Unidentified speaker

Hi, guys. This is Jordan on for John. Congratulations on the quarter. So, first, could you maybe talk about how you're thinking about your earnings sensitivity to the SAAR? And especially given the very strong results this year on flat industry sales, I guess, as we potentially head into a decline in the U.S.

market, what kind of sales level do you think it will take to keep your earnings flat?

Sean Goodman -- Senior Vice President and Chief Financial Officer

Jordan, it's Sean. Look, we disclosed in our investor presentation that around 70% to 80% of our SG&A costs are variable. And this really does moderate the impact of a downturn scenario on our results. And so, that's one thing to consider.

The other thing to consider is that, the SAAR impacts our new car sales, and to a certain extent our used car sales, but almost 50% of our gross profit comes from parts and services. And parts and services is a relatively stable part of our business and we've seen that over the economic cycle. And so, we expect to be able to continue to grow that part of the business even in a declining SAAR environment.

Unidentified speaker

OK. Makes sense. Thank you. And then on your omni-channel efforts, you've highlighted in the press release to help you lower cost.

I was wondering, maybe are you willing to share some specifics around that? And I guess, as this new initiative develope, where are you seeing the greatest opportunity in terms of cost reductions?

David Hult -- President and Chief Executive Officer

Yes, I wouldn't want to get into specifics, but I would tell you the ability with software, the educated consumer what they're spending -- the time that they're investing online, educating themselves on what they want allows us to be more efficient and flatter at our personnel expense and our operating expenses. So, I think there is a lot of benefits to come in the future. This is starting for us, but we're confident we've landed on the right model for the future, and we're just really starting to attack that right now. But it's mainly through personnel expense and the ability of software.

Unidentified speaker

OK. I mean, I think you noted you've invested over $10 million in those capabilities last year. So, should we expect a similar level of investment in 2019?

Sean Goodman -- Senior Vice President and Chief Financial Officer

I think the way to think about 2019 is we guided to SG&A expenses of between 69% and 70% of gross profit. And included in that guidance is, one, the continuation of the omni-channel investments that we started back in 2017; two, in there is the enhanced benefits packages that we spoke about earlier; and then three, is also the equity program for frontline associates. So, all of those investments are included in that SG&A number. And because of our sort of two-pronged approach to SG&A, we'll be very disciplined in our expenditure, but also we invest for the long-term through SG&A as well.

We are able to keep our SG&A in the 69% to 70% range, which is roughly about 100 basis points higher than we were in 2018, where our SG&A for the full year is 68.5%

Unidentified speaker

OK. That's very helpful. Thank you so mucu. That's it for me.

John Hartman -- Senior Vice President of Operations

Thank you.

Sean Goodman -- Senior Vice President and Chief Financial Officer

Thanks.

Operator

And next we'll go to Armintas Sinkevicius at Morgan Stanley. Sir?

Armintas Sinkevicius -- Morgan Stanley -- Analyst

Good morning. Thank you for taking the question. When I look at F&I, that -- the chart in your slide deck is up into the right, which is a testament to your execution ability, but as you talk about the $3,100 front-end yield supported by F&I, how do we think about peak F&I? What is the run room here and just sort of any context you can provide around that?

John Hartman -- Senior Vice President of Operations

This is John. [Inaudible]

Armintas Sinkevicius -- Morgan Stanley -- Analyst

And then what the drivers -- sorry, historically have been around F&I as far as -- is it -- what's been driving the move higher here?

John Hartman -- Senior Vice President of Operations

So, two things. First of all, I think there's more room in F&I. As a company, we focus on the bottom half of our producers and try to get them up to average. And when we can get them up to average, it lifts the whole.

As far as what's driving it, there's been a shift over time. We focus on product sales, we're about two-thirds product sales now and one-third reserve. So, it's really focusing on those penetration levels, on service contracts and products to increase the number.

Armintas Sinkevicius -- Morgan Stanley -- Analyst

OK. And anyway to contextualize sort of the remaining room on F&I?

David Hult -- President and Chief Executive Officer

[Inaudible] This is David. I would say there is a couple of peers that are ahead of us and do a better job with F&I than we do. And I wouldn't -- there is no reason we certainly can't get to those numbers. This is the old addage.

You get the bottom half and fix that and you'll have a material impact, but life happens as you're running the business. So, we're continuing to strive at it. We've had solid growth, but we certainly see an opportunity to grow it even more.

Armintas Sinkevicius -- Morgan Stanley -- Analyst

OK. And then with your PUSHSTART initiative and the delivery ability, can you talk about -- do you use third-party logistics, do you use your in-house logistics or -- and how you think about that going forward?

David Hult -- President and Chief Executive Officer

Yes, it's all in-house. There have been some one-offs that have been significant distance for deliveries where we have used third parties. But other than that, the vast majority is in-house.

Armintas Sinkevicius -- Morgan Stanley -- Analyst

OK. Great. Thank you for taking the question.

David Hult -- President and Chief Executive Officer

Thank you.

Operator

Next we'll go to Chris Bottiglieri at Wolfe Research.

Chris Bottiglieri -- Wolfe Research -- Analyst

Hi. Thanks for taking the question. I guess, the first one, to follow up on parts and services guide. I know you addressed this earlier, but kind of surprised Q4 was strong and the guide says strong for next year just given kind of a number of years of flat to declining SAAR.

So, I guess like would that predict behind, was there any accounting, like how much is the accounting change benefit, was there any benefit from the hurricane compare or the number of selling days? Like, anything to think about that Q4 number?

David Hult -- President and Chief Executive Officer

I'll jump in and Sean can follow. No, the hurricanes that happened, certainly anyone that had stores in southern area of Texas was a big deal. We didn't. We had one store in Houston, so the hurricane wasn't a material impact last year or naturally this year with the comps.

The hurricanes we had in Florida were not damaging and really there weren't any vehicle loss or anything like that. So, I would say no. This industry as a whole, especially on the retail dealer side, has tremendous potential to grow its service retention numbers. And I think it's just our -- I'll speak for us, we have a very thoughtful and steady approach to growing it and I hope this comment comes across the right way.

We're not trying to mass market and bring a lot of people in because if you can't bring them in and handle them timely and pay attention to their cycle time and their transaction time, how quickly it is, you're just going to bring them in. They'll never come back to you. So, we're very thoughtful about how much traffic we increased to make sure that we can handle at the store level and service our customers with a great experience. And then we're slowly trying to build on that.

Chris Bottiglieri -- Wolfe Research -- Analyst

Gotcha. And then do you think it's --

Sean Goodman -- Senior Vice President and Chief Financial Officer

Sorry, I'll just add in on that because I think you mentioned was there an accounting impact. There was no impact from the revenue recognition accounting in Q4. And a very small negative impact for the full year of about $600,000 on gross profit for parts and services, so no real accounting impact there.

Chris Bottiglieri -- Wolfe Research -- Analyst

That's really helpful. And I'm thinking kind of about -- do you think that it's just that your scale is allowing you take share from other franchise dealers without a significant scale and digital capabilities? Or do you think there is some secular channel shift going on where customers that previously might have gone to like independent repairs shops are now moving toward franchised dealers? Or anything like that, that's driving it?

David Hult -- President and Chief Executive Officer

It's one person's opinion, so please take it at that. These cars, it's different than 10 to 15 years ago. The sophistication technologies in these cars are much different. Most of the independents are not able to work on the vehicles.

They don't have the special tools to work on them and they certainly don't have the manufacturer training to work on them. So, I mean, even as you look forward with electrification and everything else, it's only going to grow even more to push more business toward the dealers. So, for those that are worried about electric vehicles and what's going to happen to parts and service, I would respectfully say it's going be a long time before there is an impact, No.1, because right now electric vehicles have a lot of warranty work on them. While the typical mechanical that isn't there, there's a lot more warranty because of the software and that's certainly going to be for a long time.

But as the dollars come down even years beyond that, you're going to see retention numbers really jump because the independents really won't be able to service these vehicles, but that's our opinion.

Chris Bottiglieri -- Wolfe Research -- Analyst

No, gotcha. That's helpful. Thank you for the time. Appreciate it.

Operator

And next we'll move to Stephanie Benjamin at SunTrust.

Stephanie Benjamin -- SunTrust Robinson Humphrey -- Analyst

Hi, good morning. I just kind of wanted to ask about the current incentive environment and if you've seen really any material change in the fourth quarter. I know you said you felt that most incentives are pretty reactionary and just kind of what the expectations are through 2019? Thanks.

David Hult -- President and Chief Executive Officer

Typically the fourth quarter, the manufacturers because of the year end offer very strong incentives. So, there was good incentives going through for the whole fourth quarter, and but moving forward, we can't predict what they're going to do. Some of them have been reactionary, but specifically the luxury stores in Q4 have very good incentives.

Stephanie Benjamin -- SunTrust Robinson Humphrey -- Analyst

Got it. I appreciate it. Thanks.

David Hult -- President and Chief Executive Officer

Thank you.

John Hartman -- Senior Vice President of Operations

This concludes today's discussion. We appreciate your participation and certainly look forward to speaking with you in April. Thank you very much. Have a great day.

Operator

[Operator signoff]

Duration: 37 minutes

Call Participants:

Matt Pettoni -- Regional Digital Marketing Manager

David Hult -- President and Chief Executive Officer

Sean Goodman -- Senior Vice President and Chief Financial Officer

John Hartman -- Senior Vice President of Operations

Rick Nelson -- Stephens -- Analyst

Bret Jordan -- Jefferies -- Analyst

John Hartman -- Senior Vice President of Operations

Armintas Sinkevicius -- Morgan Stanley -- Analyst

Chris Bottiglieri -- Wolfe Research -- Analyst

Stephanie Benjamin -- SunTrust Robinson Humphrey -- Analyst

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