Group 1 Automotive Inc (GPI) 2002 Q2 法說會逐字稿

Good morning and thank you for standing by. All participateants will be able to listen in. This request is by Thompson Financial. If anyone has any objections, please hang up at this time. I would like to introduce Mr. Jeff O'Keefe.

Thank you, Carla. Welcome to our second quarter conference call. Before we get started, I'd like to get going with the forward-looking statements. Forward-looking statements are according to the safe harbors litigation. It involves known and unknown risks and uncertainties, which can cause actual results to differ materially from forecasted results of those included, but are not limited to risks have the pricing, volume, and conditions of market. Those and other risks are discussed in the filings with the SEC within the last month. Representing Group 1 this morning are Mr. B. Hollingsworth Jr, President and CEO. And Mr. Scott Thompson, Chief Executive Officer.

Thank you. And welcome to our conference call. This morning, we will discuss operating costs. First, for the highlights, net income rose $17 cents for the quarter to $19.1. Second, earnings per share increased. Six-month net income increased 48% to $36.4 million. And six-month diluted earnings per share was up 23.5%, to $1.42. Operating margin rose for the second quarter and the six months. 2002 earnings guidance is confirmed and tightened with a range of $2.75 to $2.85. Reacquisitions have been completed and three new franchises have been granted.

I'm pleased to announce this record second-quarter performance during a turbulent economic environment. Even with a less robust U.S. automobile market during the first half of this year, we responded by producing solid earnings per share growth. This quarter's performance marks 19 consecutive periods of double-digit quarterly earnings per share growth on a year-over-year basis. Our solid execution produced another billion-dollar revenue quarter. We continue to demonstrate our strength as a specialty retailer and the importance of having diverse revenue strength. From a brand standpoint, Toyota, Lexus, Honda, and General Motors were among the strongest performers. I will now ask Scott Thompson to go over the details for our financial results, as well as our brand and geographical mix. Scott?

Thank you, Ben. Starting with the operating results for the three month end of June 30, 2002. The company had a solid quarter driven by improved operating margin, strong finance and insurance business, and lower inventory finance costs. These factors more than offset a slight underperformance in our used vehicle operations. The companies revenues totaled just over $1 billion for the quarter. With the overall new car market off about 2% for the second quarter to second quarter, our same store new units were down about half the overall market decline. We retailed over 39,000 vehicles and serviced over 350,000 vehicles with warranty work accounting for about 20% of our business. From a geographic standpoint, we had outstanding performance in Boston, West Texas, New Orleans, and Houston, offset by performances in Atlanta and Dallas. Our geographic mix for the quarter was as follows. Houston/Beaumont, 18.7% of our business, Oklahoma, 14.2%, Boston, 12.2%; Austin, Texas, 9.8%, West Texas, 9.1%, Florida, 8.9%, Atlanta, 7.5%; Dallas, 7.4%; New Orleans, 7.2%; New Mexico, 3.6%, and Denver, 1.4%.

From a brand standpoint, we experienced very strong performances from Toyota Lexus, Honda, General Motors, offset by some Daimler Chrysler performance. Our Ford dealerships met expectations. For the second quarter, domestic manufacturers represented 53% of our sales and import manufacturers were 47%. Interestingly after the Miller acquisition is complete, import manufacturers will represent 53% of our business and domestic manufacturers will be 47%. Luxuraly brands represented 11% of our business, up from 10% same period last year. This is due primarily to a strong performance by our Lexus dealerships. Our brand mix for the quarter was as follows: Ford represented 29.5% of our business, Toyota Lexus, 25.6%, Daimler Chrysler 13.9%, General Motors 12%, Honda Acura, 6.3%, Nissan, 5.7%, and a balance of array in franchise.

The truck market continues to be strong. Trucks and crossover vehicles represented 59% of our unit sales. And cars were 41%. This is consistent with the last several quarters. Our gross margin for the quarter was up 30 basis points to 15.6%. The increase was as a result of our finance, insurance, and parts and service revenues, becoming a greater percentage of our business. We are expecting a similar gross profit margin for the third quarter of 2002. Finance and insurance business grew 12.1% this quarter, which is especially impressive considering the unit volume decline slightly. Profit for retail unit reached a record $990 this quarter up from $879 the same period last year.

New product offerings to our customers accounted for about 50% of the improvement. Increased fees on vehicle service contracts and improved sales training accounted for 40%. And the remaining 10% of the improvement was caused by several annual performance bonuses which were earned and collected. Annual performance bonuses are not scheduled for the third and fourth quarter. Thus, we would expect to see around $975 per retail unit sold for the balance of 2002.

Individual product margins for the quarter are as follows: new vehicles were 7.4%, used vehicles, 9.8%, parts and service, 56.2%. And again, gross margins, 15.6% compared to last year, second quarter, 15.3%. For the third quarter 2002, we expect new vehicle margins of 7.4% to 7.5%. We expect used vehicle retail margins of 9.5% to 10%. And parts and service margins should be approximately 56%.

Income for operations for the quarter reached $37.2 million, or 3.6% of revenue. The 3.6% operating margin is up from 3.4% second quarter of 2001. We are comfortable with the 3.6% operating margin for the third quarter of 2002. Our new vehicle inventory turn for the quarter was 59 days, slightly quicker than our target of 60-day turn. Our used vehicle inventory turn was 31 days. We feel our new and used vehicle inventories are in great shape going into the third quarter.

For the quarter, floor plan interest expense decreased as interest rates were down approximately 240 basis points. And our average floor plan debt outstanding for the quarter was down $87.8 million. These factors, after accounting for the impact of interest rate swaps resulted in a $3.5 million reduction in floor plan interest expense. Reduced leverage on inventory accounted for 33% of the decline interest expense. And debt reduction accounted for 67% of the decline. For the quarter, floor plan assistance, which is recorded as a reduction in new vehicle cost of sales and realized as vehicles are sold, totaled $7 million. For the quarter, floor plan assistance covered 161% of the company's total floor plan expense. June 30th, after conserving long-tomorrow interest rate swaps, approximately %45 of the company's debt is subject to variable rate pricing. With manufacture interest assistance and interest rate swaps, we feel 100-basis point change in mark interest rate, based on our current capital structure, will impact EPS by approximatley $6 cents per share. The company's effective tax rate was 37%, which is down approximately 100 basis points from the same period last year, due to the goodwill (fasby). We expect that after the closing of the Miller accuisition, our effective tax rate will be 38% as California is a high-tax state.

For the quarter, the company made $19.1 million or $78 cents a share on a diluted basis. This is the highest pretax and EPS the company has ever achieved in any quarter, which represents a 14.7% increase in EPS over the same period last year. As Ben mentioned this represents the 19th period the company has achieved double-digit earnings per share growth on a year over year basis. Since going public in late 1997, the company has grown EPS at acompound annual growth rate of over 30%. EBITDA for the quarter was $40 million. For the quarter return on average equity was 18.1%, versus 21.8% in the second quarter of 2001. Remember, the company is significantly less leverage than last year. Return on equity should improve as we close the pending acquisition and return to a more normal debt level.

Turning to same-store data now. Remembering the new car market was off 2% overall in the U.S. Our new vehicle revenue same store, were down 10 basis points. Used vehicles were down 4.6%. Parts and service was consistent with last year. F&I income was up 4.7% and total same-source sales were down 1.3%. The 4.6% downdraft in same store used vehicle sales, was caused by a reduction in property reduction in vehicles. New vehicles have been priced netive incentives very aggressively while at the same time, the cost of used vehicles havey mained unusually firm. The results is the differential between the cost of the customer of a new or used vehicle and a new vehicle has narrowed, driving more customers to the new vehicle market. We believe this might take another quarter or so for the valueuation of used cars to adjust., restoring the normal spread between used and new cars.

After realizing same-store sales, revenue increases of 13% in parts and service in the second quarter of 2001, this quarter, parts and service same-store revenues were consistent with last year. We believe the parts and service business in the second quarter of 2001 was significantly enhanced by the Ford Firestone recall in related work. We expect the third quarter to see the same trend, and we will be comparing against very tough comps. Over the long term, we continue to expect parts and service to realize a 6% to 8% growth rate in this highly profitable area. As we reported in first quarter, we applied (INAUDIBLE) 142 effective January 1, 2002, as part of applying the new accounting standard, we evaluated the fair value of our $297 milliion in tangible assets recorded on our books. Based on our estimated normal cash flow, which is recorded based on historical cash flows and our judgement is the market value of our operating units, we feel comfortable with the realization of this asset. You might find it interesting, since the inception of the company, we have sold 11 franchises for an aggregate gain of $400,000. This, along with our evaluation of realization of our intangible assests, is evidence of our discipline acquisition approach and effectiveness of our due diligence process.

Turning to the financial results for the sixth month period ending June 30, 2002, the underlying trends for the sixth month period are very similar to that of the second quarter we just discussed. Revenues grew 2.3% to $9 billion. Growth was led by finance and insurance, which grew at 13%. Earnings per share was up 23.5% to $1.42 a share. EBITDA for the sixth month period was $74.5 million. We expect the back half of the year to look very much like the first half of the year, adjusted for acquisitions.

Turning to the company's capital structure, as of quarter end, the company had over $150 million in working capital. We believe that approximately $80 million in working capital is more than we need to operate the business. In fact, we will fully fund the Miller acquisition out of working capital. Thus, after closing the Miller acquisition, the company's long-term debt-to-cap will still be the lowest it's been in years at 17%. We have stated previously that we are comfortable with the long-term debt-to-cap of around 40% to 42%. Total capital expenditures for the quarter were $11.5 million, in which approximately $8.4 million were for new or expanded operations. We continue to expect Cap-ex for 2002 to total approximately $30 million. We expect before acquisitions weighted average diluted shares outstanding for third quarter to be $24.5 million. I am pleased to report that our financial capacity for acquisitions is very robust. We have $80 million in excess working capital. Our EBITDA over the next six months is expected to exceed $74 million. Our $200 million long-term acquisition working line of credit is totally unfunded today and we can currently meet our 2002 acquisition budget without drawing on our working capital line. We estimate the depending on the cash stock mix of purchase price that we have financial resources to close between $2 to $3 billion in revenue and maintain a long-term debt-to-cap under 40%. It is clear we're positioned for significant growth without reliance on any future capital transaction. Ben will now update you on our earnings per share guidance for 2002 and our recent acquistion activity.

Thank you, Scott. We have completed the previously tuck-in of acquisitions of the Nissan dealership in the Houston markets of annual revenue of $50 million and the BMW Buick Jeep dealership in Tulsa, Oklahoma, with annual revenues of $80 million. The Nissan dealership has become part of the Sterling McCall automotive group. Which now consists of 7 dealerships, including the second largest Toyota dealership in the nation. The BMW Buick Jeep dealership has joined the Bob Howard autogroup, now consisting of 10 dealerships in Oklahoma, the largest group in that state. Additionally, we have completed the acquisition of a Nissan dealership in the Boston market, not previously announced. And have been granted three new franchises, including an additional Nissan franchise in the Boston marke, a Ford franchise in Pensacola, Florida, and a Hummer franchise in the Tulsa, Oklahoma market. These franchises will be tucked in to establish operations.

The Nissan dealerships have become part of the IR Motor Group, with the new franchise expected to be operational in late 2003. This brings the numbers of dealerships in the I.R.A. platform to 10. The new franchise in Pensacola, Florida will expand our Ford presence in that market and is expected to open in the second quarter of 2003.

The hummer franchise, which is granted to this company by General Motors corporation, opened this quarter as part of the Bob Howard platform. Once these dealerships are fully operational, we expect they will generate approximately $120 million in annual revenue. We completed sale of a floor franchise in Elgram, Texas, a small central Texas city. The dealership had annual revenues of $25 million dollars and we fully realized our investment in the dealership. These tuck-in acquisitions augment our existing brands in major markets and are expected to increase operating efficiencies while our disposition allows us to exit a small market which is not consistent with our overall strategy. We are very positive about our future prospects. Favorable interest rates, as Scott mentioned, combined with manufacturers' insendives and rebates and more innovative products with shorter cycles, as well as the affordability vehicles continues to attract customers to our dealerships.

In addition, record sales levels last few years have produced more automobiles than light trucks in operation. Driving business to our higher margin, parts and services department. We expect the positive business trends will continue for the balance of the year. And including a previously announced acquisition, which is not closed, we are confirming and narrowing the range of our diluted earnings per share guidance for 2002, which revised is $2.75 to $2.85.

Additionally, I want to point out that the earnings per share guidance for 2002 is after the $31 cents diluted impact of the company's 2001 fourth quarter common stock offering and the $20 cent positive impact of the new accounting standard on good will amortization and assumes that the announced acquisition is completed during the third quarter of 2002. We continue to focus on operations while seeking to acquire new dealerships that meet our high standards. Group 1 will seek additional platform and strategic tuckin acquisitions in 200 targeting to add dealerships to a total aggregate revenue of at least $800 million. Year-to-date, we require dealerships with $330 million of revenue and undisposed to an underperforming dealership for $48 million of revenue. We previously announed that we aggred to acquire the Miller Auto Group in Los Angeles. With 6 dealerships, and annual revenues of approximately $400 million. This new platform consists of two Honda franchises and Toyota, Nissan, Infiniti, and Mitsubishi franchises in this major market for imported vehicles. It is expected this acquisition will close in the third quarter of this year.

And now for the top sellers for the quarter. And I might point out that this time the top sellers for the quarter were also the same top five sellers for the 6 months. Once again, group ones overall top selling model is the Ford F-series pick-up truck. Number two in our top selling car is the Toyota Camry. Number three is the Ford Explorer. Number 4, the Dodge Ram pick-up. And number 5, the Ford Expedition.

Upon completion of the previously announced acquisition, Group 1 will own 72 automotive dealerships, comprised of 109 franchises, 29 different brands, and 24 collision service centers located in Texas, Oklahoma, Florida, Georgia, New Mexico, Colorado, Louisiana, Massachusetts, and California. Each dealership on the internet site, the company sells new and used cars and light trucks. Arranges (INAUDIBLE) vehicle service and insurance contract, provides maintenance and repair services, services, and sells replacement parts. We'll now be happy to entertain your questions.

Thank you. At this time we are ready to begin the formal question-and-answer session. If you'd like to ask a question, please press star 1. You will be announced prior to asking your question. To withdraw your question, please press star 2. Once again, if you'd like to ask a question, please press star 1. One moment please. Our first question comes from Rick Nelson of Stevens.

Thank you. Good morning guys.

Good morning, Rick.

Congratulations! Another great quarter.

Thank you.

And can you comment on traffic during the quarter and also how the new incentive programs might be affecting traffic and sales since they have been implemented?

Well, traffic -- I think Scott spoke to the count of the dynamics of the pricing used cars versus new cars, which was a big factor in the second quarter. We saw, and Scott also mentioned, our strong markets where we continue to have, for example, in the Houston market, the Boston market, West Texas, had strong traffic in the second quarter and have continued strong traffic, I might add, into this month, July. So I say if, as Scott mentioned, we had softer presence in Atlanta and Dallas for our traffic in those markets were down. But I think the -- Scott, do you want to add to that anything on the used car-new car dynamics?

You're asking about the tone of the traffic throughout the quarter, Rick?

Yeah.

I would say the first part of the second quarter was stronger. And as we went through the second quarter, it was a little less robust in the end of the is second quarter and current trend, since manufacturers have instituted aggressive incentives in July, the traffic in July has become much more robust.

What happened...why is Dallas seeming to be a recurring source of weakness? I'm wondering why that is and what strategies you can try to implement to try to turn things around?

I'll comment on Atlanta. And part of that -- I'll say probably self-inflicted. We have a -- what we like to call a lot of moving around going on in Atlanta right now. We just relocated a new Ford store in Stone Mountain. We just recently opened that new store and moved into it. So there's a transition phase going on there. We're moving another Ford store into a prime location in an old Lincoln Mercury store. We're in the middle of doing that right now. We have a new Toyota store under construction, moving to another great new location. So we're upgrading facilities and locations, and all of those instances I've just mentioned. But it definitely takes its toll on current sales and managements, you know, current ability to be able to drive earnings. We are confident that once we get situated, and I said that the Stone Mountain Ford, we're already in that new dealership, that once we get all of these new locations built and occupied, and all of our sales force up to standard, that platform will return to leadership, among all of our groups. Scott, do you want to talk about Dallas a little bit?

Yeah. First, I would echo Ben's comments on Atlanta. I think that is self inflicted as we are building that platform and we're making significant capital improvements.

Scott, let me, sorry for interrupting. But I should have mentioned this. Atlanta is really unique for us. Because rather than acquiring's dealership group, such as we're doing in California, with the Miller Automotive group, we opted to hire a management group. In other words, we actually hired a platform President, platform CFO, H.R., et cetera. And built our own platform, brick by brick, in buying individual dealerships, all with different cultures, different management, different systems, et cetera. And then pulling all those together into one Atlanta platform, branded under the name, well, World Automotive Group. That's a unique thing for us to do. So remember the culture had to be built and we've had all these new locations. So it's been a little different than where we acquire, such as Miller, an outstanding management team in place that worked together for many years, systems in place, very strong presence in that market. In the long run, we think our returns in Atlanta are going to be very good and just as good as a normal platform acquisition we would do. But it takes a little longer to go this route. So sorry, Scott.

No. I agree, Ben. And I think you're going to see Atlanta probably in the underperformer category for maybe one more quarter, Rick. And then I think there will -- they will be some of the stars of our group.

In the Dallas market, that's a difference story. I think that's really a regional issue that our dealerships fit in north Dallas, which is really very much a Telecom market. And I think we all know gone on in the Telecom industry. So that whole market has had down draft. And I think we're just going to have to ride out the downdraft of theTelecom market, in the Dallas market.

Thank you.

Thank you. Our next question comes from Jerry Marks of Raymond James.

Good morning.

Good morning.

Just wanted to clarify a couple of things. Same store sales in the quarter were down 2%?

1.3%, same store revenues were down.

So essentially, balancing off the regions with Dallas, I guess, and Atlanta, were what you indicated with West Texas, because if new vehicle sales were down industry wide 1.5%, do you guys have a stronger foreign mix? Do you have a relative balanced off regional standpoint, kind of in line with the industry?

Let me go through the same story with you, Jerry, to make sure we're on the same page. Our industry statistics show that ew industry units are down about 1.9%. You look at our same store new vehicle revenues, we're down 10 basis points in new vehicle revenue, so effectively flat in new vehicle revenues. Used vehicles did get hit pretty hard. They're down 4.6% in used vehicles. Parts and services is consistent with last year. Finance and insurance is up, even though units are down, it's still up 4.7%. So total same-store revenues are down 1.3%, is the performance from the same store stand.

Okay. So you're...

You have to look -- if you look at the brands, you know, we obviously havea a heavy load of Ford.

Right.

Ford was down, looking for the number, I think 10% from the quarter, from a unit standpoint. They were down 10.6%. Overall. So brand mixes certainly had some impact on the same-store sales performances. Our Ford stores did better than the market. But our Ford stores were still down 5% compared to an industry standard down 10.6%.

Okay. With regards to the used vehicle outlook, Scott, did I catch that right? Had you were talking about gross margins for the third quarter, were you indicating a 9% to 10% gross margin?

For used vehicles, 9.5% to 10% retail used vehicle margin, which would be consistent with what we've had recently.

Retail. Okay. I think that's about all I have. Thanks.

Thank you.

Thank you. Our next question comes from Jordan Heimowitz of AESOP Capital.

Good morning, Jordan.

Sir, please check your mute button. Our next question comes from Nate Hudson of Bank of America Securities.

Good morning.

One of the follow up regarding on your Ford stores, specifically its impact on the parts and service, I guess if you exed out the Ford stores from the parts and service comparison, would you have seen that 6% to 8% growth that you were talking about?

We still would have been slightly below that. The other thing I didn't mention, and it's going to affect us more in the third quarter than the fourth quarter was the Houston market had the Allison flood last year in the second quarter. And it certainly enhanced the Houston operation's parts and service business in the second and the third quarter. If you go back and look at our same store sales and parts and service over the last few years, you'll see that we ran about 6% to 8% same-store sales up until the second quarter of 2001. Then they jumped to 13%. And then third quarter of 2001, they jumped again to 12.4%. And we believe that that's really a spike relating to the flood in the Houston market and to the Ford Firestone activities.

Just to kind of order a magnitude, how much is the parts and service business off at the Ford stores? Is it 10%? 20%?

I don't have that broken out by brand. Generally, I'd say certainly it was off more than the other stores. But I don't have that specific number computed, Nate.

Okay. Second question. Just kind of generally in the used vehicle business. Talking about used prices need to adjust. What's your senses of how much they need to come down? 1%? Is it 5%? And how long of a period do you expect that to take?

Of course part of that is a little bit of guess work because the stats on that aren't readily available. But what we're seeing on our markets, I believe those prices are going to come down rapidly. Part of that is the function of supply and demand as the wholesale buyers, who have not been buying vehicles since 9/11 or back in the -- are back in the market now. So that's turning a large number of late-model used vehicles, program cars, et cetera, through the auctions, as we speak. You know, that price bearing that we have seen in the first half of the year and then driving that customer really to the new car because of the financing and spread, I think, is going to widen, by how much, I do not know. I think it will return to more normal spreads. And used car prices will fall to more normal levels. Creating enough of that gap not to drive customers to the new car. But I believe it's starting to happen now we're hearing that the auctions are gearing up for a large number of vehicles to come in during this last few months of the year. Our strategy on that -- I think I can speak to that better than I can predicting how those prices are going to fall, is to stay real lean in our inventories and as Scott mentioned, our days and our turns, and we have historically been that way. But in some of our platforms, we're actually at 20 days in used cars. So that we're staying very lean, so we follow that market down. In other words, you don't buy a lot of used cars at auctions that you thought was a good price today. But in a month, it turns out you had $1,000 a unit more than you should have. Our strategy is to keep the inventory lean, restock it often, keep those turns high so we don't get stuck in stalel inventory and that is kind of been our strategy all along, it continues to be it right now.

What did you say your date supply of used stands at this point?

31 days, system wide.

Good quarter. Thanks a lot.

Thank you.

Once again, if you would like to ask a question, please press star 1. Our next question comes from Jordan Heimowitz of AESOP Capital.

That's hilarious. Hi, guys, how are you?

Hi, Jordan.

Extremely good quarter. And interesting thing is you did it all with the least leverage within the entire group, which I think should be pointed out. And your cash flow situation is very strong. Your estimates at this point don't include any acquisitions further and you said you've done $300 million this year, right?

Yes. 330.

And your target is $800 million, right?

Yes. Let's be clear. What our guidance includes, Jordan, is the closing of the Miller acquisition, the beginning of the fourth quarter. Okay? That's in the numbers. And then no other acquisition activity during the year.

And that's the 300, right?

No. We've closed 300. Once we close Miller, that will be another 400. So if you really want to say it, there's $700 million of acquisition activity that's in the guidance number.

Okay. And each 100 million adds approximately $3 to $4 cents. Correct, guys?

I'll let you compute that. Our return on invested capital for acquisitions is 20%.

Okay. And hence, it wouldn't most likely be the same for next year in acquisition run rate, correct?

I don't understand the question. I'm sorry.

The $800 million would probably be a target for next year as well?

It would be $800 million to north of that probably next year. As you can tell from our balance sheet, we're certainly positioned to do more than that for next year.

And none of those numbers are in the estimate either, correct?

You'd have to ask the sales side analysts and we haven't given our guidance yet for 2003.

Okay. But just by my calculations, those - the Miller acquisition and other acquistions alone should have you guys north of $350 next year.

That would be your number.

Ok, phenomenal quarter, once again with less leverage you generated with the highest returns on capital.

Thanks, Jordan.

Our next question comes from Jerry Marks of Raymond James.

Hi, sorry, just a quick follow-up. Ben, with your second half guidance, do you have any kind of same-store sales? Are you assuming still declines in new and obviously you're probably assuming some declines in used, given the environment?

We're -- I think as Scott said, we're kind of looking for the second half to be pretty much a mirror of the first half. You may see, as I was talking about, and Scotts mentioned, the used car-new car balance change a little bit. Actually, I would expect that. But we still feel like that overall, our flavor is right now that the second half is going to look an awful lot like the first. With one exception. We should have the Miller acquisition closed sometime during the third quarter.

But fourth quarter same store are going to be down because of the 0% that happened where you had like $21 and $18 million (INAUDIBLE) in the fourth quarter last year?

Yes. On a comparable basis of fourth quarter last year, you'll have negative same-store sale.

So I'm trying to figure out how it's going to be similar to the first half then?

When Ben says similiar, what he means is the first six months of this year, we think are a good proxy for what the next 6 months will look like, in total, not necessarily in the same store sale basis, but in total revenues, pre tax, EBITDA, and stuff. The the first six month will layer on the Miller acquisition, that is pretty much what we are saying.

Okay. I got you. Thanks.

At this time, this concludes the Q&A portion of the conference.

Okay. Thank you very much. In closing, to accomplish our vision, we need continued commitment of our dedicated 6,500 coworkers and the support of our 29 manufacture partners. We thank them for their contributions and look forward to the successes their efforts will continue to produce this year and in the future. We are, indeed, creating the future of automotive retailing. Thank you very much.