America's CAR-MART Inc (CRMT) 2024 Q3 法說會逐字稿

Good day, and thank you for standing by.

美好的一天，感謝您的支持。

Welcome to America's Car-Mart's third-quarter fiscal 2024 results conference call.

歡迎參加美國 Car-Mart 2024 財年第三季業績電話會議。

(Operator Instructions) Please be advised that today's conference is being recorded.

（操作員指示）請注意，今天的會議正在錄製中。

I would now like to hand the conference over to your speaker today, Vickie Judy, Chief Financial Officer.

現在我想將會議交給今天的發言人、財務長 Vickie Judy。

Please go ahead.

請繼續。

Thank you.

謝謝。

Good morning, and welcome to America's Car-Mart third-quarter fiscal year 2024 earnings call for the period ending January 31, 2024.

早安，歡迎參加美國 Car-Mart 2024 年第三季財報電話會議（截至 2024 年 1 月 31 日）。

Joining me today is Doug Campbell, our company's President and CEO.

今天加入我的是我們公司的總裁兼執行長 Doug Campbell。

We've issued our earnings release earlier this morning, and it is available on our website along with the slide of supplemental materials.

我們今天早上早些時候發布了收益報告，可在我們的網站上取得該報告以及補充資料的幻燈片。

We will post the transcript of our prepared remarks following this call, and the Q&A session will be available through the webcast after the call.

我們將在本次電話會議後發布準備好的發言稿，並在電話會議後透過網路直播進行問答環節。

During today's call, certain statements we make may be considered forward looking and inherently involve risks and uncertainties that could cause actual results to differ materially from management's present view.

在今天的電話會議中，我們所做的某些陳述可能被認為是前瞻性的，並且本質上涉及風險和不確定性，可能導致實際結果與管理層目前的觀點有重大差異。

These statements are made pursuant to the Safe Harbor provision of the Private Securities Litigation Reform Act of 1995.

這些聲明是根據 1995 年《私人證券訴訟改革法案》的安全港條款作出的。

The company cannot guarantee the accuracy of any forecast or estimate, nor does it undertake any obligation to update such forward-looking statements.

該公司不能保證任何預測或估計的準確性，也不承擔更新此類前瞻性陳述的任何義務。

For more information, including important cautionary notes please see Part 1 of the company's annual report on Form 10-K for the fiscal year ended April 30, 2023, and our current and quarterly reports furnished to or filed with the Securities Exchange Commission on Forms 8-K and 10-Q.

如需了解更多信息，包括重要的警示說明，請參閱公司截至2023 年4 月30 日的財年10-K 表格年度報告的第1 部分，以及我們向證券交易委員會提交或提交的8 表格當前和季度報告-K 和 10-Q。

I will now turn it over to Doug for his introductory comments about our third quarter.

現在我將把它交給道格，請他對我們第三季的介紹評論。

Good morning, and thank you for joining us and for your interest in our company.

早安，感謝您加入我們以及對我們公司的興趣。

I mentioned in our earnings release that sales volumes fell short of our internal expectations during the quarter.

我在我們的收益報告中提到，本季的銷售量未達到我們的內部預期。

There are times when the results you produce don't align with the level of effort or output.

有時，您產生的結果與努力或產出的程度不一致。

And this was one of those quarters.

這就是其中之一。

I want to acknowledge the hard work of our associates because they do so much to take care of our customers and keep them on the road, very appreciative of the effort put out by the team.

我要感謝我們員工的辛勤工作，因為他們為照顧我們的客戶並讓他們繼續前進付出了巨大的努力，非常感謝團隊付出的努力。

I'll start by highlighting some of the positive items that occurred during the quarter and discuss more in detail the drivers of the sales decrease.

我將首先強調本季發生的一些積極事項，並更詳細地討論銷售額下降的驅動因素。

Last quarter, there was speculation about direction of the credit loss and whether it would continue to degrade, flatten, or even improve.

上個季度，有人猜測信貸損失的走向以及信貸損失是否會繼續惡化、趨於平緩，甚至有所改善。

Our associates have worked tirelessly to assist our consumers in navigating an ongoing challenging environment.

我們的員工孜孜不倦地努力幫助我們的消費者應對持續充滿挑戰的環境。

Throughout the quarter, we reduced the number of unit losses taken when compared sequentially by 9%.

整個季度，我們的單位損失數量與上一季相比減少了 9%。

As an industry backdrop, delinquency trends worsened throughout the quarter.

作為行業背景，整個季度的拖欠趨勢都在惡化。

However, we improved our 30-plus day delinquencies by 30 basis points This drove a $3.9 million favorable adjustment in the provision for credit loss.

然而，我們將 30 多天的拖欠率改善了 30 個基點，這推動了信用損失準備金的 390 萬美元的有利調整。

We've now completed the planned rollout of our loan origination system.

我們現在已經完成了貸款發放系統的計畫部署。

As with the implementation of any large-scale system that is built on change management, there were some challenges in getting it fully in place, but we're happy that those implementation challenges are now behind us.

與實施任何基於變革管理的大型系統一樣，在將其完全到位方面存在一些挑戰，但我們很高興這些實施挑戰現在已成為過去。

We now have two quarters with the LOS originations driving more money down, stronger consumer profiles, and shortened term lengths.

現在有兩個季度，LOS 的發起會導致更多的資金下降、消費者形象的增強以及期限的縮短。

Let me make this point clear.

讓我澄清這一點。

The LOS is a game changer for Car-Mart, and we're really excited about the system leaving its imprint on the fourth quarter and into the future.

LOS 改變了 Car-Mart 的遊戲規則，我們對這個系統在第四季和未來留下的印記感到非常興奮。

As mentioned in the press release, we also entered a strategic partnership with Cox Automotive, which will aid in vehicle movement, repairs, acquisitions, and remarketing.

正如新聞稿中所提到的，我們也與考克斯汽車公司建立了策略合作夥伴關係，這將有助於車輛運輸、維修、收購和再行銷。

I'll cover this more in detail, but let me start with revenue and sales.

我將更詳細地介紹這一點，但讓我從收入和銷售額開始。

Revenue was down 7.9% for the quarter, driven by several factors.

受多種因素影響，本季營收下降 7.9%。

First, a 19.6% decrease in unit volume was the primary driver.

首先，單位銷售量下降 19.6% 是主要推動因素。

Overall industry softness accounted for roughly half of that.

整體產業疲軟約佔其中的一半。

Recall that in our second-quarter report, we said that August and September volumes were up or flat, with October contributing to the decline.

回想一下，在我們的第二季報告中，我們說過 8 月和 9 月的銷售成長或持平，其中 10 月導致銷售下降。

Those October trends persisted into the third quarter with overall application volumes softening by 8.3%.

10 月的趨勢持續到第三季度，整體申請量下降了 8.3%。

The LOS implementation challenges mentioned, along with balancing volume and deal structure, also contributed to the decrease.

提到的 LOS 實施挑戰以及平衡數量和交易結構也導致了數量的減少。

The benefits of system updates to the LOS, along with an augmented marketing plan for the fourth quarter, are expected to win back some volume and deliver stronger outcomes.

LOS 系統更新的好處以及第四季度的增強行銷計劃預計將贏回一些銷售並帶來更強勁的成果。

We also had two fewer selling days in the quarter because of holiday shifts.

由於假期輪班，我們本季的銷售天數也減少了兩天。

Our stores are always closed on Sundays, but the shift in days for Christmas Day and New Year's Day landing on a Monday added two more closure days to the quarter when compared to the prior year's quarter.

我們的商店週日總是關門，但與去年同期相比，聖誕節和元旦的天數轉變為週一，本季的關門天數增加了兩天。

Additionally, there was severe winter weather in January, which necessitated closures of up to three days at roughly a third of our 154 dealerships in January, which kept consumers from shopping.

此外，1 月的冬季天氣惡劣，導致我們 154 家經銷商中約三分之一的經銷商不得不在 1 月關閉長達三天，導致消費者無法購物。

These revenue headwinds were partially offset by a 16% increase in interest income and a 7.5% increase in the average retail sales price.

這些收入阻力被利息收入成長 16% 和平均零售價格成長 7.5% 部分抵銷。

That increase in the average retail sales price was driven equally by a mix of ancillary products sold and vehicle price.

平均零售價格的上漲同樣是由銷售的輔助產品和車輛價格共同推動的。

You'll hear more from Vickie on the specifics on the LOS here in a minute, but let me comment on the results of these deal structures.

稍後您將聽到 Vickie 關於 LOS 細節的更多信息，但讓我對這些交易結構的結果發表評論。

The credit losses that we're seeing on our loan originations are very positive when compared to the legacy system.

與遺留系統相比，我們在貸款發放中看到的信用損失非常積極。

However, I want to caution, these results are very preliminary in nature.

然而，我想提醒大家，這些結果本質上都是非常初步的。

But that's rapidly changing with now 10,000 originations performing materially different than the loans generated by our legacy system.

但這種情況正在迅速改變，現在有 10,000 個發放機構的表現與我們的遺留系統產生的貸款有很大不同。

We plan to share more specifics in the future, but words like substantial and material come to mind when we start to quantify their effect on both the frequency and the severity of loss.

我們計劃在未來分享更多細節，但當我們開始量化它們對損失頻率和嚴重程度的影響時，我們會想到諸如「實質」和「實質」之類的詞彙。

We've mentioned numerous times the importance of acquisitions and it being one of the strongest uses of capital for our company.

我們已經多次提到收購的重要性，它是我們公司最強大的資本用途之一。

We're proud to announce that the purchase of Central Auto in Hot Springs is complete, and we're actively pursuing other opportunities that we expect to close in the calendar year.

我們很自豪地宣布，對溫泉城 Central Auto 的收購已經完成，我們正在積極尋求預計在今年完成的其他機會。

I want to provide more detail on this critical initiative that we teased out in last quarter's report.

我想提供有關我們在上季報告中提出的這項重要舉措的更多細節。

As noted in our release this morning, we've entered into a strategic partnership with Cox Automotive to aid in driving efficiencies within our vehicle supply chain process.

正如我們今天早上發布的新聞稿中所指出的，我們已與考克斯汽車公司建立了策略合作夥伴關係，以幫助提高我們的汽車供應鏈流程的效率。

I personally have a long history with Cox and their leadership team across several organizations in driving large-scale projects that have driven tremendous value.

我個人與考克斯及其領導團隊在多個組織中共同推動大型專案有著悠久的歷史，這些專案創造了巨大的價值。

We've begun to leverage their digital and physical assets as well as their logistics services.

我們已經開始利用他們的數位和實體資產以及物流服務。

This initiative will be centrally managed, removing the day-to-day burden of processing and overseeing the disposal and reconditioning of assets from our operations team.

該計劃將進行集中管理，從而消除我們營運團隊處理和監督資產處置和整修的日常負擔。

Strategically, we expect this to allow our dealership teams to have more time selling and helping customers navigate vehicle ownership.

從策略上講，我們希望這將使我們的經銷商團隊有更多的時間銷售和幫助客戶掌握車輛所有權。

We believe this partnership will help address some of the affordability challenges that exist in our industry, and we expect it will lead to greater value creation for our shareholders and customers alike.

我們相信這種合作關係將有助於解決我們行業中存在的一些負擔能力挑戰，我們預計它將為我們的股東和客戶創造更大的價值。

And I'll turn it over to Vickie to cover more details on our financials.

我會將其交給 Vickie，以介紹有關我們財務狀況的更多詳細資訊。

Vickie?

維琪？

Thank you, Doug.

謝謝你，道格。

In my commentary, the comparisons that I will cover will be the third quarter of 2024 versus the third quarter of 2023, unless otherwise noted.

在我的評論中，除非另有說明，我將討論 2024 年第三季與 2023 年第三季的比較。

As Doug mentioned, LOS has allowed us to improve upon our deal structure with average down payments for the quarter trending up 30 basis points to 5.1%, also up sequentially by 20 basis points.

正如 Doug 所提到的，LOS 使我們能夠改善我們的交易結構，本季的平均首付趨勢上升 30 個基點，達到 5.1%，也比上一季上升 20 個基點。

Our originating term was 43.3 months, improved from 44.1 months sequentially and for the second quarter in a row.

我們的原始期限為 43.3 個月，比上一季和連續第二季的 44.1 個月有所改善。

They were up from 42.5 months compared to the prior-year third quarter.

與去年第三季的 42.5 個月相比，有所增加。

The weighted average total contract term for the portfolio is at 47.6 months, including modifications.

此投資組合的加權平均總合約期限為 47.6 個月（包括修改）。

The average age of the portfolio improved to nearly 12 months or almost two months better compared to last year.

投資組合的平均期限縮短至近 12 個月，比去年延長了近兩個月。

Our total collections increased 9.3%.

我們的總館藏增加了 9.3%。

The monthly average total collected per active customer rose to $540 from $519.

每位活躍客戶每月平均收取的總金額從 519 美元增加到 540 美元。

This metric also improved sequentially.

此指標也連續改善。

We originated contracts in the third quarter that are expected to produce cash-on-cash returns of over 66% and an IRR over 41%.

我們在第三季簽訂的合約預計將產生超過 66% 的現金回報率和超過 41% 的內部收益率。

We provided a table in the earnings release and a supplemental chart on our website that demonstrates our positive cash-on-cash returns over time.

我們在收益發布中提供了一張表格，並在我們的網站上提供了補充圖表，展示了我們隨著時間的推移所實現的積極的現金回報。

This data reflects our history of earning strong cash-on-cash returns in various markets and macroeconomic conditions.

這些數據反映了我們在各種市場和宏觀經濟條件下賺取強勁現金回報的歷史。

We're very focused on quality of originations and deal structure to maximize these returns and ultimately our profitability.

我們非常關注起源品質和交易結構，以最大限度地提高這些回報並最終提高我們的獲利能力。

The gross profit dollars per retail unit improved 10.5%, and the gross profit percentage increased 50 basis points compared to the prior-year quarter, primarily due to improved pricing discipline and repair expenses.

與去年同期相比，每個零售單位的毛利成長了 10.5%，毛利百分比增加了 50 個基點，這主要是由於定價紀律和維修費用的改善。

There was also an increase in profit dollars sequentially, and we expect further improvements in our gross margin as volumes rise and we have more affordable vehicles in our supply chain from the initiatives underway.

利潤也連續增加，我們預計，隨著銷售量的增加，我們的毛利率將進一步提高，而且我們的供應鏈中正在採取的舉措將提供更多價格實惠的車輛。

Net charge-off as a percentage of average finance receivables were 6.8% versus 5.9% last year and down sequentially 40 basis points.

淨沖銷占平均財務應收帳款的百分比為 6.8%，去年為 5.9%，較上一季下降 40 個基點。

We were pleased with this, especially when considering the sales decline.

我們對此感到滿意，特別是考慮到銷售額下降。

We experienced an increase in the frequency of losses compared to prior year, which was about 55% of the increase as well as an increase in severity.

與去年相比，我們的損失頻率增加，增幅約為 55%，嚴重程度也有所增加。

Severity continues to be impacted by the longer-term links, although that has begun to stabilize.

嚴重程度繼續受到長期聯繫的影響，儘管這種情況已經開始穩定。

Recovery values for the quarter were approximately 24%.

本季的回收率約為 24%。

Accounts over 30 days past due improved in Q3 dropping 40 basis points to 3.3%.

第三季逾期 30 天以上的帳戶有所改善，下降 40 個基點至 3.3%。

This was also a 30-basis-point improvement sequentially.

這也是連續 30 個基點的改善。

Our customers continue to face ongoing pressures related to the increased costs for housing, energy, childcare, auto insurance.

我們的客戶繼續面臨與住房、能源、兒童保育、汽車保險成本增加相關的持續壓力。

However, that's slightly offset by lower inflation in some groceries and fuel.

然而，這被一些雜貨和燃料的較低通膨所略微抵消。

Sequentially, the company decreased the allowance for credit losses from 26.04% to 25.74%, resulting in a benefit of $3.9 million to the provision.

隨後，該公司將信貸損失準備金從 26.04% 降低至 25.74%，為準備金帶來 390 萬美元的收益。

The key drivers of the adjustment were lower delinquencies at quarter end and a lower overall inflationary outlook.

調整的主要驅動因素是季末拖欠率下降和整體通膨前景下降。

In summary, the improvements we've made in deal structure, the higher average age of the receivables portfolio, lower delinquencies, and our operational initiatives are expected to lead to better customer success and lower credit losses in the future.

總而言之，我們在交易結構方面所做的改進、應收帳款組合平均帳齡的提高、拖欠率的降低以及我們的營運措施預計將在未來帶來更好的客戶成功和更低的信用損失。

Moving on to SG&A, sequentially, we were able to lower SG&A dollars by $1.3 million.

接下來是 SG&A，我們連續將 SG&A 費用降低了 130 萬美元。

The steps we took in the second quarter to reduce expenses contributed to the sequential improvement.

我們在第二季採取的減少開支的措施促成了環比的改善。

It was slightly offset by increased collections cost related to repossessions.

與收回相關的催收成本增加略有抵銷。

Our SG&A per average account was down 6.7% from $451 to $421.

我們的平均帳戶 SG&A 下降了 6.7%，從 451 美元降至 421 美元。

We're very focused on cost efficiency while continuing to serve over 102,000 customers and providing quality service.

我們非常注重成本效率，同時繼續為超過 102,000 名客戶提供優質服務。

Interest expense as a percentage of sales increased to 7% for the quarter compared to 3.6%.

本季利息支出佔銷售額的百分比從 3.6% 上升至 7%。

In dollar terms, interest expense increased $7 million due to increasing interest rates and an increase in average borrowings of approximately $145 million over the prior year.

以美元計算，由於利率上升以及平均借款比上年增加約 1.45 億美元，利息支出增加了 700 萬美元。

Our funding and financing program remained strong in December.

12 月份我們的融資和融資計劃仍然強勁。

We called our '22-1 notes and paid them off during the quarter.

我們發行了“22-1”票據並在本季度還清了它們。

In January, Kroll upgraded all tranches of our '23-1 notes, and the company completed its fourth securitization at the end of the quarter, issuing $250 million in bonds with a weighted average fixed coupon rate of 9.5%.

一月份，克羅爾對我們的「23-1」票據的所有部分進行了升級，該公司在季度末完成了第四次證券化，發行了2.5 億美元的債券，加權平均固定票面利率為9.5 %。

In February, we renewed and extended our revolving credit agreement to September of 2025 with a $340 million revolver, along with access to a $100 million accordion feature.

今年 2 月，我們將循環信貸協議續約並延長至 2025 年 9 月，其中包括價值 3.4 億美元的左輪手槍，以及價值 1 億美元的手風琴功能。

At quarter end, we had $4.2 million in unrestricted cash and approximately $126 million in additional availability under our revolving credit facilities based on our borrowing base of receivables and inventory.

截至季末，我們擁有 420 萬美元的非限制性現金，以及基於應收帳款和庫存借款基礎的循環信貸額度下約 1.26 億美元的額外可用資金。

Access to capital with our revolving credit facility and a successful securitization program gives us flexibility and a distinct advantage over many competitors.

透過我們的循環信貸額度和成功的證券化計劃獲得資本為我們帶來了靈活性和優於許多競爭對手的明顯優勢。

Our non-recourse securitized notes represent the bulk of our funding, and our cost of funds fluctuates with the level of interest rates and credit spreads.

我們的無追索權證券化票據占我們資金的大部分，我們的資金成本隨著利率和信用利差水準而波動。

We remain committed to growth, thoughtful capital allocation, and financial management as well as improving profits and shareholder returns.

我們仍然致力於成長、深思熟慮的資本配置和財務管理以及提高利潤和股東回報。

Now I'll let Doug close this out.

現在我讓道格結束這一切。

Thank you, Vickie.

謝謝你，維琪。

February is off to a better start than last quarter.

二月的開局比上季好。

We're closely monitoring our consumer and the tax season.

我們正在密切關註消費者和納稅季節。

Initial refunds are up slightly year over year, but they're running a little bit behind the last year.

初始退款較去年同期略有增加，但略低於去年。

Affordability continues to be the biggest challenge in our industry.

可負擔性仍然是我們行業面臨的最大挑戰。

We're all competing for similarly priced assets to provide customers with reliable and affordable transportation.

我們都在爭奪價格相似的資產，以便為客戶提供可靠且負擔得起的運輸。

Initiatives like the ones that we put in place will aid in addressing these issues and enhance our ability to grow as a company.

我們實施的此類措施將有助於解決這些問題並增強我們公司的發展能力。

We do have near-term challenges that we're addressing, such as striking the right balance between loan origination volumes and our cost structure.

我們確實面臨著需要解決的近期挑戰，例如在貸款發放量和成本結構之間取得適當的平衡。

We reported progress in the third quarter on key metrics, including gross profit, credit losses, and loan originations.

我們報告了第三季關鍵指標的進展，包括毛利、信貸損失和貸款發放。

And we expect to make additional profit progress on these and other areas.

我們預計在這些和其他領域將取得額外的利潤進展。

We believe that our agility and underlying cash-generative nature of our company continues to position us for long-term profitable growth.

我們相信，我們公司的敏捷性和潛在的現金生成性質繼續使我們能夠實現長期獲利成長。

We're bullish about Car-Mart's future because our initiatives will be accretive to earnings and shareholder returns.

我們看好 Car-Mart 的未來，因為我們的舉措將增加收益和股東回報。

We'll now open up the line for questions.

我們現在將開通提問熱線。

Operator, please provide instructions to do so.

操作員，請提供執行此操作的說明。

(Operator Instructions) John Murphy, Bank of America Securities.

（操作員指示）John Murphy，美國銀行證券公司。

Good morning, guys.

早上好傢伙。

Just a first question, Doug and Judy, if you want to come on as well.

這是第一個問題，道格和朱迪，如果你們也想上來的話。

When you look at this, you're basically transacting in vehicles that are approaching $20,000 before, and pre-COVID, they were $10,000.

當你看到這個時，你基本上所交易的車輛之前價格接近 20,000 美元，而在新冠疫情之前，這些車輛的價格為 10,000 美元。

I know there's obviously been a major inflation in used vehicle pricing, but can you talk about sort of the challenges and opportunity and what that really means because that really is -- has some very potential big implications for how the business is run and performance over time.

我知道二手車價格顯然出現了嚴重的通貨膨脹，但是您能否談談挑戰和機會以及這真正意味著什麼，因為這確實對業務的運作方式和績效產生了一些非常潛在的重大影響時間。

And will it go back down over time?

隨著時間的推移，它會回落嗎？

Yes.

是的。

Appreciate the question, John, and good morning.

謝謝你的提問，約翰，早安。

So on I think you're spot on.

所以我認為你說得對。

This is a -- it's like a variant of a question we got last quarter, but I'll try to answer it slightly differently.

這就像我們上個季度收到的問題的變體，但我會嘗試稍微不同地回答它。

And that $19,000, $19,500 car is -- equals about a $570 payment today in terms of origination payments.

這輛價值 19,000 美元、19,500 美元的汽車大約相當於今天 570 美元的初始付款。

When you look at that and you start to deconstruct that, a lot of that is price.

當你看到它並開始解構它時，你會發現其中很大一部分是價格。

A lot of that is what we've done with service contracts, which you've improved over time; and our debt cancellation product, which is a percentage of the transaction price.

其中許多都是我們透過服務合約所做的，隨著時間的推移，您已經對其進行了改進；以及我們的債務取消產品，這是交易價格的一定百分比。

If we even went back just a year ago and said, hey, let me normalize for what the management action items on taking price increases and adjustments to these items, the payment is actually today less than what it is a year ago if I take away some of these management execution items.

如果我們甚至回到一年前並說，嘿，讓我對有關提價和調整這些項目的管理行動項目進行標準化，那麼今天的付款實際上比一年前要少，如果我去掉的話其中一些管理執行項目。

In addition to that, we believe car prices were coming down, although all the indicators are pointing in the right direction for our prices to come down in the balance of the year.

除此之外，我們認為汽車價格正在下降，儘管所有指標都指向我們的價格在今年剩餘時間內下降的正確方向。

How quickly?

太快了？

That is sort of the question mark around how quickly that comes down.

這是關於下降速度有多快的問號。

But I think the back half of the year is really going to provide some relief for us and our consumers.

但我認為今年下半年確實會為我們和我們的消費者帶來一些緩解。

Additionally, the initiative, like the one we mentioned with Cox Automotive, is going to go a long way in aiding us getting there faster and not so reliant on the marketplace to get there.

此外，這項舉措，就像我們在考克斯汽車公司提到的那樣，將大有幫助，幫助我們更快地實現這一目標，而不是那麼依賴市場來實現這一目標。

Our ability to recondition and repair more vehicles to resell in an inexpensive way is going to help us drive down that price, and we think we can do that in fairly short order.

我們以廉價的方式翻新和修理更多車輛以轉售的能力將幫助我們降低價格，而且我們認為我們可以在相當短的時間內做到這一點。

Okay, and that just leads to a second question.

好的，這引出了第二個問題。

Can you talk about what exactly Cox is doing?

可以談談考克斯到底在做什麼嗎？

And when you get into recon, there's also questions of what level you recon to.

當你進入偵察階段時，還存在著你偵察到什麼程度的問題。

I mean, if you're [reconing] a three-year-old vehicle, you want to get close to new.

我的意思是，如果您正在[偵察]一輛使用了三年的車輛，您希望接近新車。

But if you're reconing something that's closer to a 10-year-old vehicle, there's a lot of questions as to where you recon it to, so you're outsourcing that.

但如果你要偵察的東西更接近一輛 10 年車齡的車輛，那麼你在哪裡偵察它就會存在很多問題，所以你將其外包。

How do you make those decisions efficiently?

您如何有效地做出這些決定？

And how much money can you save, and what kind of increase in throughput could you get ultimately per store as a result of this?

您可以節省多少錢，最終每個商店的吞吐量會增加多少？

It's a great question.

這是一個很好的問題。

So today, when we look at the business -- and we have partners that help us.

因此，今天，當我們審視業務時，我們有合作夥伴為我們提供幫助。

They're helping us on a store-by-store basis.

他們正在逐家幫助我們。

So you can imagine those agreements for repairs are written up sort of one-off and low volume.

所以你可以想像這些維修協議是一次性的、少量的。

When you have a large skilled partner who has a footprint that aligns closely with your footprint, and you can start to negotiate labor rates and parts rates and body repair rates at more commercialized terms for a player our size, I think there's still savings to be had and improved and drive a nicer product in the end.

當你擁有一個技術精湛的大型合作夥伴，其足跡與你的足跡緊密相關，並且你可以開始以更商業化的條款針對我們這種規模的玩家協商勞動力費率、零件費率和車身維修費率時，我認為仍然可以節省成本最終改進並推出了更好的產品。

And so that's our goal.

這就是我們的目標。

We think there's a tremendous opportunity to do that.

我們認為這是一個巨大的機會來做到這一點。

We're not trying to repair cars and make them like new vehicles.

我們並不是要修理汽車並使它們像新車一樣。

We have a standard, and we've been working closely with the Cox team over the last 90 days to get them up to speed on what that standard is.

我們有一個標準，並且在過去 90 天裡我們一直與 Cox 團隊密切合作，讓他們盡快了解該標準。

Okay, great.

好的，太好了。

I got a few more questions, but I'll drop back in the queue.

我還有幾個問題，但我會回到隊列中。

Thank you very much.

非常感謝。

Appreciate it, John.

很欣賞它，約翰。

Thank you.

謝謝。

John Rowan, Janney Montgomery Scott.

約翰·羅文，珍妮·蒙哥馬利·斯科特。

Good morning.

早安.

My apologies if you went over this already, but can you kind of deconstruct the decline in unit volume?

如果您已經討論過這個問題，我很抱歉，但是您能解釋一下單位體積的下降嗎？

I know, obviously, you mentioned weather and a couple of missing days and kind of the timing of sales days in the quarter.

我知道，顯然，您提到了天氣和缺席的幾天以及本季銷售日的時間安排。

But more so just looking at the declining unit volume relative to the reduction in duration, did that have a material negative impact on sales?

但更重要的是，只要看看相對於持續時間縮短的單位銷售量下降，這是否會對銷售產生重大負面影響？

And also whether or not there was anything being driven by any changes in the competitive environment?

競爭環境的改變是否會推動什麼？

Thank you.

謝謝。

Good morning, John.

早安，約翰。

I'll try and answer that.

我會嘗試回答這個問題。

And no one sort of asked, so I'll try and reiterate some of the key points and add a little bit more color.

沒有人問過，所以我會嘗試重申一些關鍵點並添加更多色彩。

So we mentioned the environment was generally softer.

所以我們提到環境整體比較軟。

We thought that was about half the decline.

我們認為這大約是下降的一半。

If you look at other competitors, other public retailers, they all reported being sort of down single digits, some double digits.

如果你看看其他競爭對手，其他公共零售商，他們都報告說下降了個位數，有些下降了兩位數。

And so if you take that as a proxy, that's part of it.

因此，如果你以此為代理，那就是其中的一部分。

The other portion we mentioned comes from weather, and we had some closure days there, too.

我們提到的另一部分來自天氣，我們那裡也有一些關閉日。

I think the biggest driver there is traffic.

我認為最大的驅動力是交通。

And so we've gone and been on record about the ability to drive application volume, and that's been really healthy.

因此，我們已經記錄了提高應用程式數量的能力，這非常健康。

That's the first time we've seen a decline.

這是我們第一次看到下降。

But more importantly was that -- was the type of channel.

但更重要的是──通路的類型。

So when we give you that sort of report out on traffic, it's an aggregated view of floor traffic and online traffic and what we call application traffic.

因此，當我們向您提供此類流量報告時，它是樓層流量和線上流量以及我們所說的應用程式流量的聚合視圖。

On our iPads, we can see customers who were walking into stores.

在我們的 iPad 上，我們可以看到走進商店的顧客。

And so some channels declined stronger than others.

因此，有些通路的跌幅比其他通路更嚴重。

Other ones actually had improvements, and we know some of that's driven by marketing and the way we've sort of run the business in terms of the LOS.

其他的實際上有了改進，我們知道其中一些是由行銷和我們在服務水平方面經營業務的方式推動的。

And so on to your point, we opened up term slightly from the prior quarter to aid in driving some more of that traffic.

就您的觀點而言，我們比上一季稍微開放了期限，以幫助推動更多流量。

We also made some more iterations and adjustments in getting ready for the fourth quarter.

我們也做了一些更多的迭代和調整，為第四季做準備。

That's what gives us some confidence that we can win back some volume.

這讓我們有信心贏回一些銷售量。

And if February is any indication, some of those changes are working.

如果二月有任何跡象的話，那就是其中一些變化正在發揮作用。

Okay, and you wouldn't attribute it -- you wouldn't attribute the change in traffic to competition?

好吧，你不會將其歸因於——你不會將流量的變化歸因於競爭嗎？

No, we're really not seeing that.

不，我們真的沒有看到這一點。

I wouldn't say that that's a major contributor at all.

我不會說這是一個主要貢獻者。

Okay.

好的。

All right.

好的。

Thank you.

謝謝。

You're very welcome.

非常不客氣。

Derek Sommers, Jefferies.

德里克·薩默斯，傑弗里斯。

Hi.

你好。

Good morning.

早安.

Just to kind of follow up on the unit sales decline, 3% to 4% was attributed to weather, and roughly half of the remainder was attributed to lower volumes.

就單位銷售下降的情況來看，3% 到 4% 是由於天氣原因造成的，剩下的大約一半是由於銷量下降造成的。

Was there any portion -- meaningful portion attributed to credit approval rates associated with the LOS implementation?

是否有任何部分——有意義的部分歸因於與 LOS 實施相關的信貸批准率？

I would say there's certainly some of that.

我想說肯定有一些。

Anytime you restrict your underwriting, whether it's in terms of down or the terms, there's certainly going to be some impact from that.

任何時候你限制承保，無論是在首付還是條款方面，肯定都會產生一些影響。

It's difficult to kind of tease all of those pieces out, but that's part of -- when Doug mentioned balancing originations, that's a piece of that.

很難梳理出所有這些部分，但這就是其中的一部分——當道格提到平衡起源時，這就是其中的一部分。

And we're really trying to look at the customers and the score of the customers that we're allowing those longer terms for.

我們確實在努力關注客戶以及我們允許更長期限的客戶評分。

And so Doug mentioned that we made a few adjustments to that, and we're continuing to make adjustments to that and reiterating as we adjust to this new system.

因此，道格提到我們對此做了一些調整，我們將繼續對此進行調整，並在適應這個新系統時重申。

I would also say it would be hard to measure because on the approval rate line, you'd see a negligible difference, if any.

我還想說這很難衡量，因為在支援率線上，你會看到微不足道的差異（如果有的話）。

For us, it's the deal structure.

對我們來說，這就是交易結構。

We do want that customer, but we want it under different terms.

我們確實想要那位客戶，但我們想要它的條件不同。

And so whether that's how much money we're willing to finance for a certain rating of customer, whether that's how much equity position we want them to be and when they originate their loan, those are just different terms.

因此，無論我們願意為特定客戶評級提供多少資金，無論我們希望他們擁有多少股權，以及何時發放貸款，這些都只是不同的條款。

It's not that they're not approved, but we want them to be structured differently.

並不是說它們沒有得到批准，而是我們希望它們的結構有所不同。

It's why the affordability component is so important because if they don't have anymore, the thing that we can do to assist them is get cheaper vehicles, right?

這就是為什麼負擔能力部分如此重要，因為如果他們不再擁有，我們可以幫助他們的就是獲得更便宜的車輛，對嗎？

And that would aid in getting more customers qualified under the new terms that we would like to have them.

這將有助於讓更多客戶符合我們希望的新條款的資格。

Got it, very helpful.

明白了，非常有幫助。

And then do you guys have a timeline in mind for kind of full LOS implementation across your dealerships?

那麼你們是否有在經銷商中全面實施 LOS 的時間表？

Yes, so the LOS is implemented across all of our dealerships today, with the exception of our stores that we've acquired over the last couple of years.

是的，所以現在我們所有的經銷商都實施了 LOS，除了我們在過去幾年收購的商店之外。

They're in their earnouts, so we don't want to tinker with them while they're -- during those periods, but they'll be tucked in underneath that shortly thereafter.

它們在收益中，所以我們不想在這些時期對它們進行修改，但不久之後它們就會被藏在下面。

But all origination volume for our base stores will be pretty much through the LOS.

但我們基地商店的所有出貨量幾乎都在 LOS 期間。

There's one last piece we need to address, which is we cross border state transactions where people drive from Missouri into Arkansas to get a car or vice versa.

我們需要解決最後一個問題，那就是我們跨境交易，人們從密蘇裡州開車到阿肯色州買車，反之亦然。

That's like 5% of the volume, but I think on a go-forward basis, greater than 80% of our originations should come from our LOS.

這相當於總量的 5%，但我認為從長遠來看，我們 80% 以上的來源應該來自我們的 LOS。

Got it, and then just one more.

明白了，然後再多一個。

Just any kind of commentary on February trends, tax refunds, and what you're seeing at the consumer would be helpful.

任何有關二月份趨勢、退稅以及您在消費者身上看到的情況的評論都會有所幫助。

What we mentioned -- I mean, the tax data is sort of out there.

我們提到的——我的意思是，稅收數據就在那裡。

It was off to a slow start, where we saw refunds initially down.

一開始進展緩慢，我們最初看到退款下降。

Now they're up higher year over year, but they're still trending about a week behind.

現在，它們的漲幅逐年上升，但仍落後一周左右。

We stay really close to third-party tax partners and the IRS data and our application data.

我們與第三方稅務合作夥伴、國稅局數據和我們的申請數據保持非常密切的聯繫。

And we, anecdotally from our stores, some of that data might be just shifted out to the right.

根據我們商店的傳聞，其中一些數據可能會被移到右側。

And so I'm encouraged Friday -- excuse me, February, I said, started off.

所以星期五我很受鼓舞——對不起，我說二月開始了。

We're off to a better start in the quarter than we were last quarter.

我們本季的開局比上季更好。

So that's indicating a move upward.

所以這表示價格上漲。

And if some of that -- some of those sales are going to be pushed into March, which is -- that's a great thing.

如果其中一些——其中一些銷售將被推遲到三月份，那就是——那是一件好事。

And we have a nice long March with five weekends in there as well.

我們度過了一個美好的長徵，其中還有五個週末。

So we're excited about a big month.

所以我們對這個重要的月份感到興奮。

Okay.

好的。

Thank you, guys.

感謝你們。

That's all for me.

這就是我的全部。

You've got it, Derek.

你明白了，德瑞克。

Thank you.

謝謝。

Thank you.

謝謝。

John Murphy, Bank of America Securities.

約翰‧墨菲，美國銀行證券公司。

Hey, guys, just had two more.

嘿，夥計們，剛剛還有兩個。

As you guys are looking at the volume decline versus what were stronger GPUs, is there the potential to take pricing down in GPUs a little bit lower to drive volume?

當你們看到銷量下降與更強的 GPU 相比時，是否有可能將 GPU 的價格降低一點以推動銷量？

And how are you making that decision in a new world order?

在新的世界秩序中你是如何做出這個決定的？

Vickie, do you want to get that?

維琪，你想得到那個嗎？

Yes, we -- that's certainly an option.

是的，我們——這當然是個選擇。

Most of the changes in the GPU were really where we've been focused on efficiencies around cost on the repair side and being more efficient there, as well as movement of our vehicles.

GPU 的大部分變化實際上是我們一直專注於維修方面的成本效率、提高效率以及車輛移動的效率。

But the pricing of that is certainly something that we'll also always consider as we move forward.

但在我們前進的過程中，其定價肯定也是我們始終會考慮的問題。

That will be a piece of us continuing to iterate on this LOS.

這將是我們繼續迭代此 LOS 的一部分。

Yes, John, the historical gross profit average is really driven off a function of sales price.

是的，約翰，歷史平均毛利確實是由銷售價格決定的。

If I just hold price constant, we are going to continue to make improvements in the gross profit that we're seeing through initiatives.

如果我保持價格不變，我們將繼續透過措施提高毛利。

Some of that we can give back to win back volume.

我們可以回饋其中一些以贏回饋銷售。

And so we're trying to balance that with what are volumes in a normal run rate with this new LOS.

因此，我們正在努力平衡這一點與新 LOS 正常運作率下的交易量。

And I think when we see that sort of normalize and get in a good spot, then that's certainly an option for us as well.

我認為，當我們看到這種正常化並處於有利位置時，這當然也是我們的一個選擇。

Okay, and then just one other on the acquisitions.

好的，然後再談收購方面的另一件事。

You're not totally new to the story, but it's sounds like they're going to ramp up significantly as you're going through this ramping LOS.

你對這個故事並不是完全陌生，但聽起來當你經歷這個不斷增加的服務水準時，它們會顯著增加。

And then thinking about integrating new stores or the acquired stores, how is that process working?

然後考慮整合新店或收購的店，這個過程是如何運作的？

How big is that team, and how does that actually work on the integration?

該團隊有多大？它在整合方面實際上是如何運作的？

We do have a team.

我們確實有一個團隊。

It's not a huge team.

這不是一個龐大的團隊。

We just started building it out this last year, so it's a smaller team.

我們去年才開始建立它，所以這是一個較小的團隊。

These acquisitions are also a bit unique, and we've talked about this before.

這些收購也有點獨特，我們之前已經討論過這一點。

This is a business that these owners have built up over a significant amount of time, and it's kind of their baby and their life's work.

這是這些業主花費大量時間建立的企業，這是他們的寶貝和他們一生的工作。

And so the task of working through them preparing to sell.

因此，完成他們準備出售的任務。

These take them a bit of time.

這些需要他們花一些時間。

So some of these we may talk to for a couple of years until they finally get ready to do this.

因此，我們可能會與其中一些人交談幾年，直到他們最終準備好這樣做。

But we do have several in the pipeline, several that we've been talking to for a couple of years or several months.

但我們確實有幾個正在醞釀中，其中一些我們已經討論了幾年或幾個月。

And we have several in the pipeline that are getting close to being able to be closed on.

我們正在醞釀幾個項目，即將關閉。

So that was in relation to our comment that we are expecting some others before the end of this calendar year.

因此，這與我們的評論有關，我們預計在今年年底之前還會有其他一些。

Okay.

好的。

Thank you very much, guys.

非常感謝你們。

Thank you, John.

謝謝你，約翰。

Thank you.

謝謝。

I'm showing no further questions at this time, and I would like to hand the conference back over to Doug Campbell for closing remarks.

我現在不會再提出任何問題，我想將會議交還給道格·坎貝爾（Doug Campbell）做閉幕詞。

Thank you very much.

非常感謝。

Listen, I am really excited about all the initiatives that we have underway.

聽著，我對我們正在進行的所有舉措感到非常興奮。

And again, I'm really thankful for the effort being put forth by our team.

再次，我非常感謝我們團隊所付出的努力。

They keep getting back up and fighting our way and helping our consumers fight.

他們不斷地站起來，為我們的道路而戰，並幫助我們的消費者進行戰鬥。

The thing that we are myopically focused on is helping our teams and our customers be successful.

我們短視地關注的是幫助我們的團隊和客戶成功。

And when you think about some of the initiatives and the Cox partnership, the alignment of our interest in just having customer success rate in the center of everything, that's going to be a really great partnership, so I'm excited about that.

當你想到一些舉措和考克斯合作夥伴關係時，我們的利益一致，將客戶成功率置於一切的中心，這將是一個非常好的合作夥伴關係，所以我對此感到興奮。

On the LOS front, I'm glad the implementation is behind us.

在 LOS 方面，我很高興我們已經完成了實施。

And I think as we go forward, I'm really excited for what it is going to do to our business.

我認為，隨著我們的前進，我對它將對我們的業務產生的影響感到非常興奮。

We included another supplemental slide on our cash-on-cash returns.

我們在現金回報上又增加了一張補充幻燈片。

And if you look at the third-quarter projections, we had a nice improvement, and that's showing the LOS and its influence on the financials of our company already.

如果你看一下第三季的預測，我們有了很大的進步，這已經顯示了 LOS 及其對我們公司財務的影響。

So I'm really excited about that.

所以我對此感到非常興奮。

And we're really bullish about the company's future and these initiatives to be accretive to earnings and shareholder returns.

我們非常看好公司的未來以及這些能增加收益和股東回報的舉措。

So I thank you for your time today and your interest in our company.

因此，我感謝您今天抽出寶貴時間以及對我們公司的興趣。

This concludes today's conference call.

今天的電話會議到此結束。

Thank you for participating, and you may now disconnect.

感謝您的參與，您現在可以斷開連接。