Lithia Motors Inc (LAD) 2024 Q2 法說會逐字稿

Good morning, ladies and gentlemen, and thank you for standing by. Welcome to the Lithia Motors second quarter 2024 earnings conference call. (Operator Instructions) Please note, this conference is being recorded. I will now turn the conference over to your host, Jardon Jaramillo, Senior Director, Investor Relations. Thank you. You may begin.

早安，女士們先生們，感謝你們的支持。歡迎參加 Lithia Motors 2024 年第二季財報電話會議。（操作員說明）請注意，本次會議正在錄製中。我現在將會議交給東道主投資者關係高級總監賈登·賈拉米洛 (Jardon Jaramillo)。謝謝。你可以開始了。

Good morning. Thank you for joining us for our second quarter earnings call. With me today are Bryan B. DeBoer, President and CEO; Chris Holzshu, Executive Vice President; Tina Miller, Senior Vice President and CFO; Chuck Lietz, Senior Vice President, Driveway Finance; and finally, Adam Chamberlain, Chief Operating Officer.

早安.感謝您參加我們的第二季財報電話會議。今天與我在一起的有總裁兼執行長 Bryan B. DeBoer； Chris Holzshu，執行副總裁；蒂娜·米勒，高級副總裁兼財務長； Chuck Lietz，Driveway Finance 資深副總裁；最後是營運長亞當張伯倫 (Adam Chamberlain)。

Today's discussion may include statements about future events, financial projections and expectations about the company's products, markets and growth. Such statements are forward-looking and subject to risks and uncertainties that could cause actual results to materially differ from the statements made.

今天的討論可能包括有關未來事件、財務預測以及對公司產品、市場和成長的預期的陳述。此類聲明具有前瞻性，並存在風險和不確定性，可能導致實際結果與聲明有重大差異。

We disclose those risks and uncertainties we deem to be material in our filings with the Securities and Exchange Commission. We urge you to carefully consider the disclosures and not to place undue reliance on forward-looking statements.

我們在向美國證券交易委員會提交的文件中揭露了我們認為重要的風險和不確定性。我們敦促您仔細考慮所揭露的內容，不要過度依賴前瞻性陳述。

We undertake no duty to update any forward-looking statements which are made as of the date of this release. Our results discussed today include references to non-GAAP financial measures. Please refer to the text of today's press release for a reconciliation of comparable GAAP measures. We have also posted an updated investor presentation on our website, investors.lithiadriveway.com, highlighting our second quarter results.

我們不承擔更新截至本新聞稿發布之日所做的任何前瞻性陳述的義務。我們今天討論的結果包括對非公認會計準則財務指標的參考。請參閱今天新聞稿的正文，以了解可比較的公認會計準則指標的調節表。我們也在我們的網站 Investors.lithiadriveway.com 上發布了更新的投資者演示文稿，重點介紹了我們第二季度的業績。

With that, I would like to turn the call over to Bryan DeBoer, President and CEO.

說到這裡，我想將電話轉給總裁兼執行長 Bryan DeBoer。

Thanks, Jordan. Good morning, and welcome, to our second quarter earnings call. Our Lithia & Driveway teams continue to drive results as we mature our unique and profitable mobility ecosystem. Our associates met their operational challenge we faced in the quarter and delivered much improved operating results and execution of our strategy with an adjusted diluted earnings per share of $7.87, a 30% improvement sequentially despite the CDK outage.

謝謝，喬丹。早上好，歡迎參加我們的第二季財報電話會議。隨著我們獨特且有利可圖的行動生態系統的成熟，我們的 Lithia 和 Driveway 團隊將繼續推動成果。我們的員工應對了我們在本季度面臨的營運挑戰，並大幅改善了營運業績和策略執行情況，調整後的攤薄每股收益為7.87 美元，儘管CDK 中斷，但仍比上一季增長了30% 。

We achieved our highest ever quarterly revenue, our first quarter of profitability in financing operations and laid the foundation for continued growth in our ecosystem as we serve customers wherever whenever and however they desire.

我們實現了有史以來最高的季度收入，即融資業務第一季的獲利，並為我們的生態系統的持續成長奠定了基礎，因為我們隨時隨地為客戶提供服務。

We've strategically use the higher profits and capital of recent years to grow scale revenue and earnings by nearly three times since COVID began plus built acquired and funded all are crucial, differentiating strategic adjacencies, Driveway green cars, DFC, PVM and now Wheels. These important design and scale advantages built and assembled during a period of low cost capital have paved highway to higher margin and a lower kind of business with unlimited potential to capture market share.

自新冠疫情爆發以來，我們策略性地利用近年來較高的利潤和資本，將規模收入和收益增長了近三倍，而且收購和資助的所有項目都至關重要，能夠區分戰略鄰接、Driveway 綠色汽車、DFC、PVM 以及現在的Wheels。這些在低成本資本時期建立和組裝的重要設計和規模優勢，為通往更高利潤率和具有無限潛力的較低類別業務鋪平了道路，以奪取市場份額。

We are now focused on growing this market share, leveraging our scale, realized all the potential to we have built and delivering operational efficiencies through customer experiences across our ecosystem. This quarter brought a unique challenge when CDK faced a cyber-attack that impacted many of ours and others dealer management systems.

我們現在專注於擴大市場份額，利用我們的規模，實現我們已經建立的所有潛力，並透過整個生態系統的客戶體驗提高營運效率。本季帶來了獨特的挑戰，CDK 面臨網路攻擊，影響了我們和其他經銷商的許多管理系統。

I'm proud of the way our team responded quickly pivoting to create solutions and continuing operations across our network. We will talk about the impact on results and operations in a moment, but I want to recognize the impressive efforts of our team members who rose to the challenge, serving our customers 24/7. We continue to make significant progress with large sequential improvements in profitability even after the impacts of CDK. We've achieved the first promise stage of the 60-day plan that aim to create at least $150 million in annualized SG&A cost savings that will be fully realized during Q3.

我對我們的團隊快速回應以創建解決方案並在整個網路中持續運作的方式感到自豪。我們稍後將討論對結果和營運的影響，但我想表彰我們的團隊成員所做出的令人印象深刻的努力，他們迎接挑戰，24/7 為我們的客戶提供服務。即使在 CDK 的影響之後，我們仍繼續取得重大進展，獲利能力連續大幅提高。我們已經實現了 60 天計畫的第一個承諾階段，旨在節省至少 1.5 億美元的年度 SG&A 成本，並將在第三季完全實現。

Looking forward, we now believe there is potential to double this amount, primarily driven from inventory reductions and are expected to occur by year end. During Q2, we made significant progress in areas such as personnel, advertising and corporate level expenses and implemented a redesign of leadership roles to focus on maximizing profitability while leveraging our ecosystem.

展望未來，我們現在認為這一數字有可能增加一倍，主要是由於庫存減少，預計到年底就會實現。第二季度，我們在人員、廣告和公司層面費用等領域取得了重大進展，並對領導角色進行了重新設計，以專注於在利用我們的生態系統的同時實現利潤最大化。

We are pleased to announce that we have purchased a minority stake in Wheels in partnership with Marubeni Corporation. Wheels is one of, if not, the largest fleet management company in North America, with the best in class management team's strong performance and surrounded by a robust competitive moat.

我們很高興地宣布，我們已與丸紅株式會社合作購買了 Wheels 的少數股權。Wheels 是北美最大的車隊管理公司之一，擁有一流的管理團隊，業績強勁，並擁有強大的競爭護城河。

This investment in a high margin, highly profitable fleet management operator has the potential of the create transformative synergies between our retail and their fleet platforms. Alongside PVM and fast leasing Wheels completes our global omnichannel strategy focused on a complete mobility ecosystem.

這項對高利潤、高利潤車隊管理營運商的投資有可能在我們的零售與其車隊平台之間創造變革性的協同效應。除了 PVM 和快速租賃 Wheels 之外，我們還完成了專注於完整行動生態系統的全球全通路策略。

Now on to key results for the second quarter. Lithia & Driveway grew revenues to $9.2 billion up 14% from Q2 of last year. While vehicle operations experienced headwinds as a result of the CDK outage, prior to the outage, Q2 had strong improvements in our same-store sales and delivered good momentum in our cost savings efforts.

現在我們來看看第二季的主要業績。Lithia & Driveway 營收比去年第二季成長 14% 至 92 億美元。雖然車輛營運因 CDK 中斷而遇到阻力，但在中斷之前，第二季度我們的同店銷售有了強勁的改善，並在成本節約方面取得了良好的勢頭。

Diving into same-store sales performance, total same-store revenues were down 6.4% and gross profits declined 12.5%. Consumers remain resilient despite recent trends that reflect challenges from affordability and higher interest rates with unit sales in the quarter down only 3%.

從同店銷售表現來看，同店總收入下降了6.4%，毛利下降了12.5%。儘管最近的趨勢反映了承受能力和利率上升的挑戰，但消費者仍然保持彈性，本季的單位銷售僅下降了 3%。

Total vehicle gross profit per unit remained resilient in the quarter at [$4762] similar to last quarter and down [$951] compared to the same period a year ago. Our aftersales business was down 1.4% in the quarter. This decline is primarily related to CDK which drove after sales down almost 40% during the 12 days of the outage.

本季每輛汽車總毛利保持彈性，為[4762 美元]，與上季相似，與去年同期相比下降[951 美元]。本季我們的售後業務下降了 1.4%。這一下降主要與 CDK 有關，CDK 在停駛的 12 天期間導致售後銷量下降了近 40%。

We expect some of the work will be deferred into early July as our systems and processes return to normal. Our teams have been nimble and responsive, and we do not expect any long-term impacts. Our investment adjacencies are maturing nicely as they move towards sustainable and considerable profitability.

隨著我們的系統和流程恢復正常，我們預計部分工作將推遲到 7 月初。我們的團隊靈活且反應迅速，我們預計不會產生任何長期影響。我們的投資鄰接正在逐漸成熟，並朝著可持續和可觀的盈利能力邁進。

Financing operations produced strong results with income of $7.2 million in the quarter compared to $18.7 million loss last year, achieving profitability earlier than expected. Driveway and GreenCars burn rates have also been reduced by 40% compared to a year ago as we continue to refine our e-commerce strategies, improve operating and advertising efficiencies and convert new customers.

融資業務取得了強勁的業績，本季營收為 720 萬美元，而去年則虧損 1,870 萬美元，實現獲利的時間早於預期。隨著我們不斷完善電子商務策略、提高營運和廣告效率以及轉換新客戶，車道和綠色汽車的消耗率也比一年前降低了 40%。

All in, we generated adjusted diluted earnings per share of $7.87 a decrease of [28%] from Q2 of last year with an estimated [$1.10] impact from the CDK outage. We saw clear strength in operational performance in the second quarter, and we're on pace for nearly a 50% increase in sequential EPS.

總而言之，我們的調整後稀釋每股收益為 7.87 美元，比去年第二季下降 [28%]，CDK 中斷的影響預計為 [1.10 美元]。我們看到第二季營運業績明顯強勁，每股盈餘預計將較上季成長近 50%。

We continue to focus on unlocking the profitability of our ecosystem by decisively acting to meet customer demands and operate efficiently by delivering on our core strength execution. Moving on to our unique and extremely difficult to replicate strategy. The foundation of the LAD strategy is our vast physical network built upon the industry's most talented people, highest demand inventory and dense physical network.

我們持續專注於釋放生態系統的獲利能力，果斷採取行動滿足客戶需求，並透過發揮我們的核心優勢執行力來高效運作。繼續我們獨特且極難複製的策略。LAD 策略的基礎是我們龐大的實體網絡，建立在業界最有才華的人才、最高需求的庫存和密集的實體網路之上。

We continue to build the most extensive physical network in North America and the UK, adding new stores, foundational adjacencies and strategic partnerships, such as Wheels, to expand our customer experiences and diversify our portfolio.

我們繼續在北美和英國建立最廣泛的實體網絡，增加新商店、基礎鄰接點和策略合作夥伴關係（例如 Wheels），以擴大我們的客戶體驗並使我們的產品組合多樣化。

Operating in the largest addressable retail market in the world, we continue to strengthen our ability to profitably grow across all elements of our business. Our strategy to expand and create customer solutions that are simple, convenient and transparent, allowing us to capture more of the customers wallet share remains unchanged.

我們在世界上最大的潛在零售市場開展業務，不斷增強我們在所有業務領域實現獲利成長的能力。我們的策略是擴展和創建簡單、方便和透明的客戶解決方案，使我們能夠獲得更多客戶的錢包份額，而這一策略保持不變。

These solutions integrate digital solutions and create sticky natural retention of customers within our ecosystem, while magnetic brands, like Driveway and GreenCars, provide access to 50 times more customers than our core physical businesses do. The LAD ecosystem, including Driveway, showed a 2% increase in total MUVs year-over-year, reaching $12 million per month with GreenCars contributing over 900,000 MUVs.

這些解決方案整合了數位解決方案，並在我們的生態系統中創造了黏性自然保留客戶，而像 Driveway 和 GreenCars 這樣的磁性品牌所提供的客戶數量是我們核心實體業務的 50 倍。包括 Driveway 在內的 LAD 生態系統的 MUV 總數年增 2%，達到每月 1,200 萬美元，其中 GreenCars 貢獻了超過 90 萬個 MUV。

MUV effectiveness is also building momentum, where we saw over 38,000 digital units in the second quarter, up 5% compared to last year. Our teams have made great strides in our digital channels with a Google rating of 4.7 out of 5 year-to-date, and renewed focus on reaching profitability and expanding market share.

MUV 的有效性也在不斷增強，第二季度我們看到超過 38,000 個數位單元，比去年增長 5%。我們的團隊在數位管道方面取得了長足進步，迄今為止，Google 評分為 4.7 分（滿分為 5 分），並重新專注於實現盈利和擴大市場份額。

As emphasized by recent events with CDK, technology provides an avenue for sizable increases in productivity within our business. We are excited about the progress our Lithia UK platform is making with Pinewood Technologies as we continue to convert our stores there onto a single platform. Solutions such as Pinewood systems, bring the ability to place customers and associates in the same ecosystem in order to increase productivity, substantially improve our current customer experience and enhance our operational resiliency.

正如 CDK 最近的活動所強調的那樣，科技為大幅提高我們業務的生產力提供了途徑。我們對 Lithia UK 平台與 Pinewood Technologies 的進展感到興奮，因為我們繼續將我們在那裡的商店轉換為單一平台。Pinewood 系統等解決方案能夠將客戶和員工置於同一生態系統中，從而提高生產力、大幅改善我們目前的客戶體驗並增強我們的營運彈性。

This quarter, our investment in Pinewood Technologies generated a nice return, which reflects the market's positive view of the platform's possibilities. These strengths, combined with our mission powered by people, financial discipline and regenerative free cash flows, enable us to quickly respond to local market dynamics.

本季度，我們對 Pinewood Technologies 的投資產生了不錯的回報，這反映了市場對該平台可能性的正面看法。這些優勢，加上我們以人才、財務紀律和再生自由現金流為動力的使命，使我們能夠快速回應當地市場動態。

This capability allows us to increase touch points throughout the customer's life cycle across our adjacencies and equips our stores with the tools to improve market share loyalty and ultimate profitability. Acquisitions continue to be a core competency, and we remain disciplined as we look for accretive opportunities that can improve our network focused on the United States.

這種能力使我們能夠在鄰近地區的整個客戶生命週期中增加接觸點，並為我們的商店配備提高市場份額忠誠度和最終盈利能力的工具。收購仍然是一項核心能力，我們在尋找能夠改善我們專注於美國的網路的增值機會時仍然保持紀律。

As a reminder, we target a minimum after-tax return of 15% or greater and acquire for 15% to 30% of revenues or 3 times to 6 times normalized EBITDA. We reiterate our expectations that estimated future annual acquired revenues will be in the range of $2 billion to $4 billion per year.

提醒一下，我們的目標是稅後回報率至少為 15% 或更高，並獲取收入的 15% 至 30% 或正常化 EBITDA 的 3 至 6 倍。我們重申我們的預期，預計未來年收購收入將在每年 20 億美元至 40 億美元之間。

Life-to-date, our acquisitions have yielded over 95% success rate and after-tax returns to over 25%, demonstrating that LAD is not your typical high risk roll up strategy. This quarter, we welcomed two stores from the Sunrise Group in Tennessee and the Woodbridge Hyundai store located in the greater Toronto area to Lithia Driveway.

迄今為止，我們的收購成功率超過 95%，稅後回報率超過 25%，這表明 LAD 不是典型的高風險匯總策略。本季度，我們在 Lithia Driveway 迎來了田納西州 Sunrise Group 的兩家商店和位於大多倫多地區的 Woodbridge Hyundai 商店。

To date, in 2024, we have acquired $5.6 billion in annualized revenues. I would like to personally welcome all our new associates to the Lithia & Driveway family. We are growth-oriented and see industry consolidation as a driver of strong long-term returns.

迄今為止，到 2024 年，我們的年收入已達到 56 億美元。我謹親自歡迎所有新進員工加入 Lithia & Driveway 大家庭。我們以成長為導向，並將產業整合視為強勁長期回報的驅動力。

With the capital engine we have built, we are able to deploy our free cash flows to drive the greatest returns responsive to market conditions. As discussed last quarter, we have adjusted our capital allocation targets to equally balance acquisitions and share buybacks. During the quarter, we repurchased 202 million or 2.9% of our outstanding shares. We continue to monitor valuations on both acquisitions and share repurchase and remain opportunistic.

借助我們建立的資本引擎，我們能夠根據市場狀況部署自由現金流，以實現最大回報。如上季所討論的，我們調整了資本配置目標，以平衡收購和股票回購。本季度，我們回購了 2.02 億股，佔已發行股票的 2.9%。我們繼續監控收購和股票回購的估值，並保持機會主義。

Weaving these elements together, and assuming a normalized SAAR and GPU environment, we see more clearly a pathway to generating $2 of EPS for every $1 billion in revenue as we illustrated in slide 14 of our investor presentation. The key factors underlying our future steady state are now totally within our control as follows.

將這些元素編織在一起，並假設標準化的SAAR 和GPU 環境，我們可以更清楚地看到一條每10 億美元收入產生2 美元EPS 的途徑，正如我們在投資者簡報的幻燈片14 中所示的那樣。我們未來穩定狀態的關鍵因素現在完全在我們的控制範圍內，如下所示。

First, continuing to improve our operational performance by realizing the massive potential that we have built in our existing stores. This includes increasing our share of wallet through greater customer life cycle interactions, sustained productivity gains and growing each store's new used and aftersales market share.

首先，透過發揮現有門市的巨大潛力，持續提高我們的營運績效。這包括透過加強客戶生命週期互動、持續提高生產力以及增加每家商店的新二手和售後市場份額來增加我們的錢包份額。

Increasing profitability with continued cost efficiencies, combined with the technology catalyst created by customers and team members of coexisting in the same solutions will help as well. Through these levers in our business, we see a pathway to achieve SG&A as a percentage of gross profit with adjacencies in the mid-50% range.

透過持續的成本效率來提高獲利能力，再加上客戶和團隊成員在同一解決方案中共存所創建的技術催化劑，也將有所幫助。透過我們業務中的這些槓桿，我們看到了一條實現 SG&A 佔毛利潤的百分比（接近 50% 左右）的途徑。

Second, optimizing our network by acquiring and driving high performance in larger automotive retail stores in the stronger profitability regions of the Southeast and South Central United States. We also expect further growth in our digital channels to increase our market share to ultimately reach a blended US market share of 5%.

其次，透過在美國東南部和中南部盈利能力更強的地區收購大型汽車零售店並推動其業績表現來優化我們的網絡。我們也預期數位通路的進一步成長將增加我們的市場份額，最終達到 5% 的美國綜合市場份額。

Today, we have combined new and used vehicle market share of 1.1%. Third, financing, up to 20% of units with DFC and maturing beyond the headwinds associated with CECL reserves. Our financing operations achieved profitability in Q2 and is expecting to continue consistent profitability growth going forward.

如今，我們的新車和二手車市佔率合計為 1.1%。第三，為高達 20% 的單位提供 DFC 融資，並在與 CECL 儲備相關的不利因素之外到期。我們的融資業務在第二季度實現了盈利，並預計未來盈利能力將繼續持續增長。

Fourth, through scale and size, drive down vendor pricing with solutions like Pinewood, improved corporate efficiencies to save costs, and lowering borrowing costs as we path towards an investment-grade credit rating.

第四，透過規模和規模，透過 Pinewood 等解決方案降低供應商定價，提高企業效率以節省成本，並在我們邁向投資等級信用評級的過程中降低借貸成本。

Fifth, maturing contributions from our horizontals, including fleet management, DMS software charging infrastructure and captive insurance. And finally, deliver ongoing return of capital to shareholders through increased share buybacks and dividends.

第五，我們的橫向貢獻日益成熟，包括車隊管理、DMS 軟體充電基礎設施和自保保險。最後，透過增加股票回購和股息，為股東帶來持續的資本回報。

We continue our journey in building a total mobility ecosystem and are well positioned to maximize our unique and powerful scale and reach to deliver more frequent and richer customer experiences throughout the ownership life cycle at global scale.

我們繼續建立全面的行動生態系統，並處於有利地位，可以最大限度地發揮我們獨特而強大的規模和影響力，在全球範圍內的整個所有權生命週期中提供更頻繁、更豐富的客戶體驗。

Our original design elements are now firmly in place, and we look forward to focusing all of our attentions on execution to establish new levels of performance for our industry. Now before we move on, I would like to share some organizational changes that I spoke to that are designed to support our evolving company delivering at a high level of performance.

我們最初的設計元素現在已牢牢就位，我們期待將所有註意力集中在執行上，為我們的行業建立新的績效水平。現在，在我們繼續之前，我想分享一些我所談到的組織變革，這些變革旨在支持我們不斷發展的公司以高水準交付。

I am very excited to announce the promotion of Adam Chamberlain to Chief Operating Officer. Adam's leadership as Chief Customer Officer and Eastern Regional President since 2022, combined with his extensive experience in automotive industry positions him perfectly for this new role.

我非常高興地宣布亞當張伯倫 (Adam Chamberlain) 晉升為營運長。Adam 自 2022 年以來擔任首席客戶長兼東部區域總裁的領導能力，加上他在汽車行業的豐富經驗，使他能夠完美地勝任這一新角色。

Adam's commitment to improving operations and creating customer-centric culture will be instrumental in driving a more connected and convenient experience across our ecosystem. Diana Deprez will step into the Chief Customer Officer role partnering with Adam in operations to continue to build out Driveway channel, along with our customer ecosystem and related experiences in our aftersales business.

Adam 對改善營運和創建以客戶為中心的文化的承諾將有助於在我們的生態系統中推動更互聯和便捷的體驗。Diana Deprez 將擔任首席客戶官，與 Adam 合作運營，繼續打造 Driveway 管道，以及我們的客戶生態系統和售後業務的相關經驗。

With these changes, Chris Holzshu will be handing the baton to Adam, allowing Chris to strengthen our ecosystem to spark growth and serve as the company appointee on the Boards of Pinewood Technology and Wheels. Chris has been instrumental in our growth and we are excited to see his continuing contributions to expand our partnership and enhance the company.

透過這些變化，Chris Holzshu 將把接力棒交給 Adam，讓 Chris 能夠加強我們的生態系統以激發成長，並擔任該公司任命的 Pinewood Technology 和 Wheels 董事會成員。克里斯在我們的成長中發揮了重要作用，我們很高興看到他為擴大我們的合作夥伴關係和增強公司的持續貢獻。

These changes provide the organizational leadership and design to deliver best-in-class results and continue to execute on our strategy. Driving profitability through a seamless customer experience across our unique ecosystem and aligns our future success and differentiation. Congratulations, Diana, Chris and Adam.

這些變化提供了組織領導和設計，以實現一流的結果並繼續執行我們的策略。透過我們獨特的生態系統中的無縫客戶體驗來提高獲利能力，並調整我們未來的成功和差異化。恭喜戴安娜、克里斯和亞當。

Thank you, Bryan. It's an honor to be stepping into this new role. I look forward to leading our drive to operational excellence and enhancing our focus on creating a customer-centric culture. Thank you, you also Chris, for the operational foundation that you've built and I'm excited to use this to springboard our company to the next level.

謝謝你，布萊恩。能夠擔任這個新角色是我的榮幸。我期待著帶領我們實現卓越運營，並加強我們對創建以客戶為中心的文化的關注。謝謝你，克里斯，為你建立的營運基礎，我很高興能夠利用它來將我們的公司推向新的水平。

We have the team and clear strategy to grow our market share and achieve store potential within a few years. I'm excited for the team to execute a high levels of performance and realize the massive profitability opportunity our ecosystem provides.

我們擁有團隊和明確的策略，可以在幾年內擴大我們的市場份額並實現商店潛力。我很高興團隊能夠執行高水準的績效並實現我們的生態系統所提供的巨大獲利機會。

Thank you, Adam and Diana. Chris. I'm excited and looking forward to accelerating our journey to reach our potential. Now I'd like to turn the call over to Tina.

謝謝亞當和戴安娜。克里斯.我很興奮並期待著加速我們發揮潛力的旅程。現在我想把電話轉給蒂娜。

Thanks, Bryan, and thank you, everyone, joining us today. Our Financing Operations segment, primarily driven by DFC, continued its upward trajectory and achieved profitability earlier than expected with income in the second quarter of $7.2 million compared to a loss of $18.7 million in the second quarter of last year.

謝謝布萊恩，也謝謝大家今天加入我們。我們的融資業務部門主要由 DFC 推動，繼續保持上升趨勢，並早於預期實現盈利，第二季度收入為 720 萬美元，而去年第二季度虧損 1,870 萬美元。

This adjacency continues to grow, and we are seeing the benefits of diversity in our business model as we increase penetration rates and are now past many of the initial headwinds from CECL reserves. We continue to strategically balance yields, growth and risk through our underwriting and focus on high credit quality loans at market rates of interest.

這種鄰接關係持續成長，隨著滲透率的提高，我們看到了業務模式多元化的好處，並且現在已經克服了 CECL 儲備帶來的許多最初的阻力。我們繼續透過承銷策略性地平衡收益率、成長和風險，並專注於按市場利率提供高信用品質貸款。

The DFC portfolio balance has now grown to over $3.6 billion with origination volumes of $562 million during the quarter. Originations were consistent this quarter in the prime credit quality band, similar with other quarters.

DFC 投資組合餘額現已成長至超過 36 億美元，本季的發動量為 5.62 億美元。本季的主要信貸品質範圍內的貸款發放保持一致，與其他季度類似。

Overall, our financing operations business continues to perform better than expected. We reiterate that we expect to continue profitability in 2024 and remain confident in the ability for financing operations to deliver long-term earnings growth with a fully scaled and seasoned portfolio.

整體而言，我們的融資營運業務持續表現優於預期。我們重申，我們預計 2024 年將繼續獲利，並對融資業務透過規模全面且經驗豐富的投資組合實現長期獲利成長的能力充滿信心。

As a reminder, each loan originated by DFC is expected to contribute up to 3 times more profitability compared to traditional indirect lending and presents significant upside potential to our profitability and is a key element as we move toward our [2:1] EPS revenue target.

謹此提醒，與傳統間接貸款相比，DFC 發放的每筆貸款預計將貢獻高達3 倍的盈利能力，並為我們的盈利能力帶來巨大的上行潛力，並且是我們實現[2:1] EPS收入目標的關鍵因素。

Moving on to SG&A. Adjusted SG&A as a percentage of gross profit was 67.9% during the quarter, which reflects the impact of the CDK event and 67% on a same-store basis, which excludes the higher expense profile of our UK business.

繼續討論SG&A。本季調整後的 SG&A 佔毛利的百分比為 67.9%，反映了 CDK 事件的影響，同店基礎上的百分比為 67%，其中不包括我們英國業務較高的費用情況。

We continue execution of our UK network optimization, including streamlining operations and divesting merging and closing targeted stores. Moving on to our balance sheet and cash flow performance. We reported adjusted EBITDA of $435 million in the second quarter, driven by the impact of the CDK outage on unit sales, lower new vehicle GPUs as supply normalized and higher interest expense.

我們繼續執行英國網路優化，包括精簡營運以及剝離、合併和關閉目標商店。接下來是我們的資產負債表和現金流表現。我們報告稱，第二季調整後的 EBITDA 為 4.35 億美元，這是由於 CDK 中斷對單位銷售的影響、供應正常化導致新車 GPU 數量減少以及利息支出增加所致。

We ended the quarter with net leverage of approximately 2.3 times, comfortably below our target of 3 times and our bank covenant requirements of 5.75 times. We maintain our financial discipline even with planned growth and target leverage below 3 times. These figures adjust for the impact of floor plan debt, which is unique to our industry and related to the financing of vehicle inventory.

本季結束時，我們的淨槓桿比率約為 2.3 倍，遠低於我們 3 倍的目標和 5.75 倍的銀行契約要求。即使計劃成長和目標槓桿率低於 3 倍，我們仍維持財務紀律。這些數字根據平面圖債務的影響進行調整，這是我們行業所特有的，並且與車輛庫存融資相關。

This financing is integral to our operations and collateralized by these assets. The industry treats the associated interest as an operating expense and EBITDA and excludes this debt from balance sheet leverage calculations. Similarly, we have ABS warehouse lines and issuances to capitalize DFC, which are also excluded from our leverage calculations.

這筆融資是我們營運不可或缺的一部分，並由這些資產作為抵押。該行業將相關利息視為營運費用和 EBITDA，並將該債務排除在資產負債表槓桿計算之外。同樣，我們有 ABS 倉庫線和發行來資本化 DFC，它們也被排除在我們的槓桿計算之外。

During the quarter, we generated free cash flows of $127 million. Free cash flows were impacted by declining EBITDA due to decreasing margins, the CDK outage in June and an increase in capital expenditures compared to prior year, mainly related to construction at recently acquired locations to meet manufacture requirements.

本季度，我們產生了 1.27 億美元的自由現金流。自由現金流受到 EBITDA 下降的影響，這是由於利潤率下降、6 月份 CDK 中斷以及資本支出與上年相比增加（主要與最近收購的地點的建設以滿足製造需求有關）。

Our capital allocation strategy focuses on the regenerative cash flows from our business, which preserves the quality of our balance sheet while supporting our growth initiatives and navigating today's complex environment. Earlier this year, we adjusted our capital allocation strategy to more closely balance acquisitions with shareholder return.

我們的資本配置策略專注於業務的再生現金流，這可以保持資產負債表的質量，同時支持我們的成長計劃並應對當今複雜的環境。今年早些時候，我們調整了資本配置策略，以更緊密地平衡收購與股東回報。

As a result of the rebalanced focus in the second quarter, we repurchased 2.9% of our outstanding shares at a weighted average price of $256, approximately [$615 million] remains available under our share repurchase authorization. Our vision and ability to deliver on synergies through acquisitive growth remains unchanged.

由於第二季重點重新平衡，我們以 256 美元的加權平均價格回購了 2.9% 的已發行股票，根據我們的股票回購授權，仍有約 [6.15 億美元]可用。我們透過收購成長實現協同效應的願景和能力保持不變。

And our team has the necessary infrastructure and tools to drive revenues and margins toward our long-term target of achieving $2 in EPS per $1 billion in revenue. Our culture and business is designed to grow and deliver consistent strong performance. Coupled with the diverse and talented members of our team, this gives us the necessary foundation to achieve our plan and to continue driving value for our shareholders.

我們的團隊擁有必要的基礎設施和工具，可以推動收入和利潤，實現我們的長期目標，即每 10 億美元收入實現 2 美元每股收益。我們的文化和業務旨在發展並提供始終如一的強勁業績。再加上我們團隊的多元化和才華橫溢的成員，這為我們實現我們的計劃並繼續為股東創造價值提供了必要的基礎。

This concludes our prepared remarks. With that, I'll turn the call over to the audience for questions. Operator?

我們準備好的演講到此結束。接下來，我將把電話轉給觀眾提問。操作員？

Thank you. At this time we will be conducting a question-and-answer session. (Operator Instructions)

謝謝。此時我們將進行問答環節。（操作員說明）

Ryan Sigdahl, Craig-Hallum.

瑞安·西格達爾，克雷格·哈勒姆。

Hey, good morning, guys. Congrats Adam.

嘿，早上好，夥計們。恭喜亞當。

Thank you, Ryan.

謝謝你，瑞安。

Good morning, Ryan.

早安，瑞安。

Bryan, I want to start with something in your prepared remarks. I believe I caught it right. But you said we're on pace for a nearly 50% increase in sequential EPS. I guess if I'm looking at the $7.87 in the quarter into Q3 for that 50% target, some context around that statement would be helpful.

布萊恩，我想從你準備好的演講中的一些內容開始。我相信我聽對了。但您說過我們的每股盈餘有望環比成長近 50%。我想，如果我考慮的是第三季 7.87 美元的 50% 目標，那麼圍繞該聲明的一些背景資訊將會有所幫助。

Ryan, so the concept was its CDK. cost us $1.10 add the $1.10 onto the $7.87. And you get what our tracking would have been without the CDK event, which is almost 50% and just a little over 40% excluding the Pinewood impact

Ryan，所以這個概念就是它的 CDK。花費 1.10 美元，將 1.10 美元加到 7.87 美元上。您將獲得我們在沒有 CDK 事件的情況下的追蹤情況，幾乎 50%，略高於 40%（不包括 Pinewood 影響）

So that's Q2 versus Q1, correct 50% that where you were referring?

這就是 Q2 與 Q1 的對比，您所指的地方修正了 50% 嗎？

Exactly right. Yes.

完全正確。是的。

Thank you, Bryan. Then looking at slide 14 for my follow up, midterm, I believe is a new kind of statement in there, and it's for $40 billion to $50 billion of sales, which isn't far away from where you guys are today. So I guess any time frame around it, what type of timeframe we're looking at for midterm? Or I guess is it really just about reaching that revenue range and you can get to $1.20, $1.30 of EPS?

謝謝你，布萊恩。然後看幻燈片 14 作為我的後續行動，中期，我相信其中有一種新的聲明，它的銷售額為 400 億至 500 億美元，這與你們今天的情況相距不遠。所以我想圍繞它的任何時間框架，我們正在尋找什麼類型的中期框架？或者我猜它真的只是達到這個收入範圍並且你可以獲得 1.20 美元、1.30 美元的每股收益嗎？

Yes. I think when we think about midterm, we think two to four years. And if we think long-term, it's five to eight years. So I think that's the appropriate way to look at this. I think we're probably going to be able to eclipse those numbers a little bit quicker. And as you saw in the quarter, we still got some pretty good tailwinds. We made some pretty good improvements in operations.

是的。我認為當我們考慮中期時，我們會想到兩到四年。如果我們長遠考慮，那就是五到八年。所以我認為這是看待這個問題的適當方式。我認為我們可能能夠更快地超越這些數字。正如您在本季所看到的那樣，我們仍然獲得了一些相當好的推動力。我們在營運方面做出了一些相當好的改進。

And I think most importantly, of the four peer groups that have been announced so far, our SG&A as a percentage of gross was the lowest on a same-store basis of all four, which is much different than it was even last quarter.

我認為最重要的是，在迄今為止已宣布的四個同行群體中，我們的銷售及管理費用佔總銷售額的百分比是所有四個同店群體中最低的，這與上個季度有很大不同。

So you're saying the impact of the 60-day plan start to stake hold. And that 60-day plan, you're going to --we're going to be realizing most of that starting on July 1, like we said last quarter.

所以你是說 60 天計畫的影響開始顯現。那個 60 天的計劃，我們將從 7 月 1 日開始實現大部分計劃，就像我們上個季度所說的那樣。

Good to see. I'll turn it over to others. Thanks, guys. Good luck.

很高興看到。我會把它轉給其他人。謝謝，夥計們。祝你好運。

Thanks Ryan.

謝謝瑞安。

Rajat Gupta, JPMorgan.

拉賈古普塔，摩根大通。

Great. Thanks for taking the question. Really just a couple you're falling following up on the SG&A and cost reduction plan given like 60 days were complete on the $150 million. Is there a good framework to think about SG&A to gross in the third quarter?

偉大的。感謝您提出問題。實際上，您正在跟進 SG&A 和成本削減計劃，因為 1.5 億美元的資金在 60 天內就完成了。是否有一個好的框架來考慮第三季的銷售、管理及行政費用 (SG&A) 與毛利率之比？

I think previously, you've cited something like 64% to 67%. Are we going to be within that range in the third quarter itself? Or is it going to be later in the year or maybe next year? Maybe you could clarify that, and then I have a follow-up.

我想您之前引用過 64% 到 67% 之類的數字。第三季我們會處於這個範圍嗎？或者是今年晚些時候或者明年？也許你可以澄清一下，然後我會有後續行動。

Sure, Rajat, this is Bryan. Hope, all is well. I think most importantly, when we think about SG&A going forward, I think what you're seeing in cement momentum start to build. Remember this in Q3, I would say that we'll probably end up somewhere around where we were this quarter. In Q3 for two reasons, even though rightsizing the 60-day plan are taking hold and I can give you some specifics on that in just a second.

當然，拉賈特，這是布萊恩。希望，一切都好。我認為最重要的是，當我們考慮未來的SG&A時，我認為你所看到的水泥勢頭開始增強。請記住第三季的這一點，我想說我們最終可能會達到本季的水平。在第三季度，出於兩個原因，儘管 60 天計劃的規模調整正在實施，但我可以立即向您提供一些具體資訊。

It's important to remember that we still have the possibility that new card GPUs are a little bit inflated still, so that could offset it in by the time you hit September, October, you start to feel that going into the winter seasonality. I would also say this. So we did eclipse the first half of what we've now called the 60-days plan.

重要的是要記住，我們仍然有可能新卡 GPU 仍然有點膨脹，因此到 9 月、10 月時，這可能會抵消它，你開始感覺到進入冬季季節性。我也想說這個。因此，我們確實超越了現在所謂的 60 天計劃的前半部分。

We've earmarked $150 million and we eclipse that on July 1. I got the report yesterday, we're now over $200 million that will be realized prime, mostly in Q3, okay with the remaining difference of about $100 million coming primarily from inventory reductions, which we've got lots of opportunity and to improve there, and it may take us closer to the end of the year.

我們已經預留了 1.5 億美元，並在 7 月 1 日超過了這筆金額。我昨天收到了報告，我們現在超過2 億美元，將在第一季度實現，主要是在第三季度，剩下的大約1 億美元的差異主要來自庫存減少，我們有很多機會並可以在這方面進行改進，這可能會讓我們更接近年底。

So I would say if we're lucky, we'll get to realize some of that in Q4. But definitely into 2025, we'll get that benefits of most of that.

所以我想說，如果我們幸運的話，我們將在第四季度意識到其中的一些。但毫無疑問，到 2025 年，我們將獲得其中大部分的好處。

Got it. That's very clear. And then just from parts and services clearly, June was impacted by CDK. I was curious if you could give us a sense of the run rate you saw in April, May? And maybe what are you seeing in July? And also, I'd love to know like is there any opportunity to take more price and perhaps some of the acquired stores over the last couple of years where they might not have been as proactive or opportunistic like the legacy stores? Thanks.

知道了。這非常清楚。然後，僅從零件和服務來看，很明顯，6 月受到了 CDK 的影響。我很好奇您能否讓我們了解一下您在四月、五月看到的運行率？也許你在七月會看到什麼？而且，我很想知道是否有機會採取更高的價格，也許過去幾年中收購的一些商店可能不像傳統商店那樣積極主動或機會主義？謝謝。

Yes, I think if we think about our potential, which I think is what you're indicating on the newly acquired stores, we've spent now, what, 4.5 years being able to add almost $25 billion in revenue of some good stores but a lot of stores that have massive potential. And I think to highlight that, if you get a little more detail into our numbers, our value auto sales, which is over nine-year old vehicles, is now only 12% of our mix.

是的，我認為如果我們考慮一下我們的潛力，我認為這就是您在新收購的商店中所指出的，我們現在已經花了4.5 年的時間為一些好商店增加了近250 億美元的收入，但是許多具有巨大潛力的商店。我想強調的是，如果你對我們的數據有更詳細的了解，我們的價值車銷售量（即車齡超過 9 年的車輛）現在只占我們產品組合的 12%。

It used to be in the mid-20% of our mix, meaning that we're not selling those things that Lithia typically does. So that's one of the opportunities. Obviously, in service, body and parts, there's further opportunities to be able to grow that. And obviously, the leverage of the whole gets there.

它曾經占我們產品組合的 20% 左右，這意味著我們不會像 Lithia 那樣銷售那些產品。這就是機會之一。顯然，在服務、車身和零件方面，還有進一步發展的機會。顯然，整體的槓桿作用就達到了。

Now in terms of parts and service which was the first part of your question, pre-CDK event, we were tracking in the mid to low single digits on a same-store sales basis. And then obviously, when you're handwriting a [rose], it's a little bit more difficult that we did get most of the business that we had during that 12-day period into the books in June.

現在就零件和服務而言，這是您問題的第一部分，CDK 之前的活動，我們在同店銷售的基礎上追蹤中低個位數。顯然，當你手寫一朵[玫瑰]時，我們確實將 6 月份 12 天期間的大部分業務記入賬簿，這有點困難。

However, there was a little carryover for the first 10 days or so. So we are seeing a little bit of lift in July. However, July also has two extra days relative to last year. So anything that I give you, it automatically should be up about 8% or 9% just because of the fact that we've got 23 days instead of 21 days in July. Thanks Rajat.

然而，前 10 天左右有一點結轉。因此，我們看到 7 月略有上升。不過，7月也比去年多了兩天。所以我給你的任何東西，它都會自動上漲約 8% 或 9%，因為 7 月只有 23 天，而不是 21 天。謝謝拉賈特。

Got it, thank you.

明白了，謝謝。

Bret Jordan, Jefferies.

布雷特·喬丹，杰弗里斯。

Hey, good morning, guys.

嘿，早上好，夥計們。

Hi, Brett.

嗨，布雷特。

Bryan, I think you just said the quote the possibility that new car GPUs are a little inflated still. Could you sort of talk about where you see that glide path now and maybe the cadence in the quarter on GPU?

Bryan，我認為您剛才提到了新車 GPU 仍然有點誇大的可能性。您能否談談現在看到的下滑路徑以及本季 GPU 的節奏？

Sure, sure. We were fortunate that June ended up looking pretty darn good. And if you look sequentially quarter over quarter, we were basically the same as we were last quarter. Our total vehicle GPU now going back five years, okay. We were about 3,500 to 3,700 in total GPUs, including F&I. Today, we sit at 4,700 still, okay.

當然，當然。我們很幸運，六月最終看起來非常好。如果你逐季觀察，我們的情況基本上與上個季度相同。我們的整車 GPU 現在可以追溯到五年前，好吧。包括 F&I 在內，我們的 GPU 總數約為 3,500 到 3,700 個。今天，我們仍然坐在 4,700 點，好吧。

We do know that our F&I is structurally different than it was before because of the ability to improve for five years. So we think that there's a couple $100 there that would have took in our F&I from $1600 up to about $1800 and in the single biggest difference and this is the big difference when you start to think about your SG&A as well is now have a good portion of our businesses in the high margin regions of the Southeast and South Central, which has higher F&I, less regulation, a lot higher average store size, which really helps us a ton.

我們確實知道，我們的 F&I 在結構上與以前有所不同，因為有五年的改進能力。因此，我們認為其中有 100 美元，我們的 F&I 從 1600 美元到 1800 美元左右，這是最大的差異，當您開始考慮 SG&A 時，這就是最大的差異，現在有很大一部分我們的業務集中在東南部和中南部的高利潤地區，這些地區的F&I 較高，監管較少，平均商店規模較大，這確實對我們有很大幫助。

So we think that our normalized total vehicle gross profit with F&I as some between $4,200 and $4,500, meaning that if we're still sitting at $4700, there's a chance that $200 to $500 still has to come out but we're going to do everything in our power. And I would say this, we believe we're starting to believe that we could be at the bottom, which is great.

因此，我們認為，我們的 F&I 標準化總車輛毛利在 4,200 美元至 4,500 美元之間，這意味著，如果我們仍保持在 4700 美元，則仍有可能需要 200 至 500 美元，但我們將竭盡全力在我們的力量範圍內。我想說的是，我們相信我們開始相信我們可以處於底部，這很棒。

Now we can actually build back up because everything that we're talking about does get diluted a little bit by this overhang of GPUs. But I do think that we've got the ability to be able to power through this now and be able to grow earnings and grow our same-store sales base from this point forward.

現在我們實際上可以進行備份，因為我們正在討論的所有內容確實會被 GPU 的這種懸置所削弱。但我確實認為，我們現在有能力渡過難關，並能夠從現在開始增加收入並擴大我們的同店銷售基礎。

On a quick question on dollar (multiple speakers)

關於美元的一個簡單問題（多個發言者）

Adam had a little bit more to share with you, too, on that, Bret.

關於這一點，亞當還有更多要與你分享的，布雷特。

Hi, Bret. Just to add to that. Pre-COVID, we were seeing incentives as a percentage of MSRP in the kind of 10% to 11% range. Right now, we've climbed kind of slowly through the year and running about 6% to 6.5%. So if you take then the delta to pre-COVID levels of about 4% to 5%, that could be another $2,000 to $2,500 based on the average selling price of a car at sort of mid to late-40s. Does that make sense? So there's kind of offset between the two, whether we decreased a little bit sequentially, but we also expect with day supply, we expect some of the OEMs to be stepping up incentive levels as well.

嗨，布雷特。只是補充一下。在新冠疫情爆發之前，我們看到的激勵措施佔建議零售價的百分比在 10% 到 11% 之間。目前，我們全年的成長速度很緩慢，大約成長了 6% 到 6.5%。因此，如果將增量調整到新冠疫情爆發前約 4% 至 5% 的水平，則根據 40 多歲中後期汽車的平均售價計算，這可能會再增加 2,000 至 2,500 美元。這樣有道理嗎？因此，兩者之間存在某種抵消，無論我們是否連續減少一點，但我們也預計隨著日供應量的增加，我們預計一些原始設備製造商也會提高激勵水平。

Okay. All right. On the CDK $1.10 as far as been our business interruption insurance or is there a piece of that you can bring back and maybe timing that is that going to fall within this year if you get some recovery?

好的。好的。在 CDK 上，我們的業務中斷保險為 1.10 美元，或者您可以帶回其中的一部分，如果您能得到一些恢復，那麼時間可能會在今年內恢復？

Yeah, Bret. This is Tina. We do have on cyber insurance and obviously are going to work with our carriers around that. It does take some time to put that claim together and work that through with. So hopefully there's something there, but we didn't record anything in the second quarter.

是的，布雷特。這是蒂娜。我們確實有網路保險，顯然我們將與我們的營運商圍繞這個問題進行合作。確實需要一些時間來整理並落實這項主張。所以希望那裡有一些東西，但我們在第二季度沒有記錄任何東西。

Thank you.

謝謝。

John Murphy, Bank of America.

約翰‧墨菲，美國銀行。

Good morning everybody. I had two questions for you guys. First, Bryan, on the Wheels acquisition or sort of tie up here. I'm just curious, when you think about fleet management, how does it kind of dovetail into the core business? Is it something where you sell the new vehicles and you manage them and then you're able to sell them out of the fleet into your business and then retail them. I mean what's the general take here on fleet management?

大家早安。我有兩個問題想問你們。首先，布萊恩，關於輪子收購或某種程度的合作。我只是好奇，當您考慮車隊管理時，它如何與核心業務相契合？是不是你銷售新車並管理它們，然後你可以將它們從車隊中出售給你的企業，然後零售。我的意思是，這裡對車隊管理的一般看法是什麼？

Yes, I may have -- Chris jump in a little bit on this. But let me just take a shot at this. Okay. I think most importantly, in the relationship, we look at synergies first. However, they have very high levels of service expectations for their drivers. And I challenge all of us on Lithia & Driveway teams to be able to meet those demands because it is a different level of service than probably even what our retail customers get.

是的，我可能已經——克里斯插話了一點。但讓我來嘗試一下。好的。我認為最重要的是，在這種關係中，我們首先考慮協同效應。然而，他們對司機的服務期望非常高。我向 Lithia 和 Driveway 團隊的所有人提出挑戰，要求他們能夠滿足這些需求，因為這是與我們的零售客戶所獲得的服務水準不同的服務。

So most importantly for us to realize the synergies in the partnership with Wheels, which are primarily the ability to sell some new vehicles to them to help embellish the fleets that they service, okay? That's an important thing. They divest somewhere around 100,000-plus vehicles a year, which if we can do a good job and pay market and build Driveway, GreenCars in the Lithia channels to be able to attract more customers.

因此，對我們來說最重要的是實現與 Wheels 合作的協同效應，這主要是能夠向他們出售一些新車，以幫助美化他們所服務的車隊，好嗎？這是一件重要的事情。他們每年剝離大約 100,000 輛以上的車輛，如果我們能做好工作並支付市場費用並在 Lithia 渠道中建立 Driveway、GreenCars，就能夠吸引更多客戶。

And obviously, we've now got a pipeline of vehicles that maybe competitors don't have. Ultimately, we'll have to be the highest payers for those, but those relationships can grow and build and bond. In addition, they maintain all those cars, okay?

顯然，我們現在擁有競爭對手可能沒有的車輛管道。最終，我們必須成為這些關係的最高支付者，但這些關係可以發展、建立和連結。此外，他們還維護所有這些汽車，好嗎？

And that is maintained through multiple different networks of retailers today. If we could get some of that business or all that, it's a massive lift to service and parts long term, that's where we start with the synergies. The other neat part about it is when I talk about the service level that they provide their drivers. We were inspired, Chris and I, when we met with them, what, almost 16 months, 17 months ago now at their ability to provide services to consumers to their drivers that we have never even contemplated, okay?

如今，這一點是透過多個不同的零售商網路來維持的。如果我們能夠獲得部分業務或全部業務，那麼從長遠來看，這對服務和零件來說將是一個巨大的提升，這就是我們從協同效應開始的地方。另一個精彩的部分是當我談論他們為司機提供的服務水準時。克里斯和我，當我們與他們見面時，我們受到了啟發，大約 16 個月、17 個月前，現在他們有能力為消費者和司機提供我們從未想過的服務，好嗎？

They've got the relationships, the APIs and their apps, the pricing methodology and the contracts negotiated where you get into more of a subscription services like what we try to do with service contracts, but these are big dollar amounts.

他們擁有關係、API 及其應用程式、定價方法和談判合同，您可以在其中獲得更多訂閱服務，就像我們嘗試透過服務合約所做的那樣，但這些都是大筆金額。

Their business is based off small dollar amounts, such as selling people toll services where a customer says, I want my tolls to be done on my app. Okay, I want to pay for everything in one spot rather than to have to go into the toll companies or those municipalities, they don't have to do that, okay?

他們的業務以小額金額為基礎，例如向人們出售收費服務，客戶說，我希望在我的應用程式上完成收費。好吧，我想在一個地方支付所有費用，而不是必須去收費公司或那些市政當局，他們不必這樣做，好嗎？

And they negotiate with municipalities, discounts that on that and then pass some of the discounts along to their users. So it's pretty exciting. There's probably half a dozen examples like that. That we believe could be monetizable within Lithia & Driveway portals to be able to access and be a conduit to further growth in our F&I products or our subscription services, creating greater ties with our consumers and more touch points than what we currently have.

他們與市政當局協商，給予折扣，然後將部分折扣傳遞給用戶。所以這非常令人興奮。類似的例子可能有六個。我們相信，Lithia 和Driveway 入口網站可以實現貨幣化，從而能夠訪問並成為我們的F&I 產品或訂閱服務進一步增長的管道，與我們的消費者建立比我們目前擁有的更緊密的聯繫和更多的接觸點。

That's incredibly helpful. And just a second question on interest rates, which is an obvious question, but you guys I'm not really addressed too much. I think here is I mean, if you look at what's happened in last 2.5 years, we have a basically about a 400 basis points, maybe a little a little more rate increase to the data consumer.

這非常有幫助。關於利率的第二個問題，這是一個顯而易見的問題，但我並沒有真正討論太多。我想我的意思是，如果你看看過去 2.5 年發生的情況，我們基本上有 400 個基點左右，也許數據消費者的利率會增加一點。

And everything you've done over that timeframe is just better in the industry has put up record profits. There's no real discussion about how big a benefit that could be as rates come back down. And you will look about ASPs and your GPUs and say they're just not sustainable, but they've been sustainable by very strong in the face of that.

在這段時間內你所做的一切都在行業中做得更好，並創造了創紀錄的利潤。目前還沒有真正討論利率回落會帶來多大的好處。你會看到 ASP 和 GPU 並說它們不可持續，但面對這種情況，它們已經非常強大地可持續了。

Effectively, you're looking at something, it's almost a 15% picky or incremental to the ASP. So I'm just curious as a on a good guy side, how you guys think about what the potential could be here. And I think you're maybe conservative on your GPU and ASP assumptions in the face of this. What's your take?

實際上，您正在查看一些東西，它幾乎是 ASP 的 15% 挑剔或增量。所以我只是好奇，身為一個好人，你們如何看待這裡的潛力。我認為面對這種情況，您對 GPU 和 ASP 的假設可能會比較保守。你怎麼看？

John, this is Tina. On the interest side, and I'll start maybe with just our business, right, we obviously have several of variable debt. So there is a tailwind that we can get as rates get cut from that perspective. around consumer affordability, it's impacted, and we've talked about that in the past around what that monthly payment is.

約翰，這是蒂娜。在利息方面，我可能會從我們的業務開始，對吧，我們顯然有一些可變債務。因此，從這個角度來看，隨著利率下調，我們可以獲得順風。圍繞著消費者的承受能力，它受到了影響，我們過去已經討論過每月付款的情況。

And then I think that gives a good strength and tailwind for consumers going forward since they're monthly payment shoppers. And Bryan, I don't know if you have anything to add to that, but I think affordability is something we've always commented on that's important that drives our business.

然後我認為這為消費者的未來提供了良好的力量和順風，因為他們是每月付款的購物者。布萊恩，我不知道你是否有什麼要補充的，但我認為負擔能力是我們一直評論的一個重要因素，它對推動我們的業務非常重要。

John, I think when we think it from an impact and magnitude to the organization, and I'm sitting here next to Adam who spend a lot of his career with manufacturers. His focus and the operational team's focus of our presidents and regional vice presidents.

約翰，我認為當我們從對組織的影響和規模來考慮時，我坐在亞當旁邊，他在製造商中度過了很多職業生涯。他的關注點以及我們的總裁和區域副總裁營運團隊的關注點。

We have tons of opportunity in terms of inventory and being able to control inventory and now that the ecosystem is fairly well built and our people are out there swinging, and they get this. We're talking about almost $1 billion cut in total inventory between new and used by year end, while still maintaining our same growth rates, okay? And if nothing else, improving velocity of our turns to be able to improve that. But we're talking that that's almost $100 million in interest rate savings at today's rate, compounded with the things that Tina just spoke to.

我們在庫存和控制庫存方面有大量的機會，現在生態系統已經建立得相當好，我們的員工在那裡搖擺不定，他們明白了這一點。我們正在討論的是，到年底，新庫存和舊庫存之間的總庫存將減少近 10 億美元，同時仍保持相同的成長率，好嗎？如果不出意外的話，提高我們的轉彎速度就能夠改善這一點。但我們說的是，以今天的利率計算，再加上蒂娜剛才談到的事情，這幾乎可以節省 1 億美元的利率。

Thank you very much, guys.

非常感謝你們，夥伴們。

Thanks John.

謝謝約翰。

Douglas Dutton, Evercore.

道格拉斯·達頓，Evercore。

Hi team. Thanks for taking my question here. Just had a question on the buyback. Obviously, a very strong quarter there, about $200 million in repo. Is what would you handicap as the new normal there going forward, Q3, Q4 in '25. Do you think high [8-figure loan], [9-figure] buyback could be the norm? Or are we going to go back to that 10% to 12% level of free cash?

大家好。感謝您在這裡提出我的問題。剛剛有一個關於回購的問題。顯然，這個季度非常強勁，回購額約為 2 億美元。作為未來的新常態，25 年第三、第四季，您會阻礙什麼？您認為高額[8位數貸款]、[9位數]回購可能是常態嗎？或者我們會回到 10% 到 12% 的自由現金水準嗎？

Yes. I mean for us -- this is Tina. When we think about capital allocation, it really is balancing valuations that we're seeing out there from an M&A perspective as well as the stock price and how we can be opportunistic in it.

是的。我的意思是對我們來說——這是蒂娜。當我們考慮資本配置時，實際上是在平衡我們從併購角度看到的估值以及股價以及我們如何在其中投機取巧。

And so from our perspective, it's always running that math as we look at what the opportunities are. M&A, as you know, is core to our business and our strategy, and we see really strong value and continuing to grow the footprint.

因此，從我們的角度來看，當我們尋找機會時，它總是在進行數學計算。如您所知，併購是我們業務和策略的核心，我們看到了真正強大的價值並不斷擴大足跡。

Our focus is here in North America, especially in the United States, where there's lots of opportunity in the fragmented market. So we don't really set sort of a dollar amount on our approach. It's really looking at what is that opportunistic purchase that we can make compared to our stock versus the M&A activity out there from that perspective.

我們的重點是北美，尤其是美國，那裡的分散市場有很多機會。因此，我們並沒有真正為我們的方法設定一定的金額。實際上，從這個角度來看，與我們的股票和併購活動相比，我們可以進行哪些機會主義購買。

Do you want me to embellish a little bit on that too? Keep this in mind as well, Doug. The marketplace is pricing acquisitions, close to three years average earnings on inflated earnings. So when we look at that and the opportunity, that's not that appealing because we typically look at pretty high returns on what we expect to be able to buy things through.

你想讓我對此也做一些修飾嗎？道格，也請記住這一點。市場對收購的定價接近虛增的三年平均收益。因此，當我們審視這一點和機會時，這並沒有那麼有吸引力，因為我們通常會專注於我們期望能夠透過購買東西獲得的相當高的回報。

We think that will subside, okay? And I think our standard line is you already got that earnings, why do you expect us to pay for it? But we are competitive buyers, and we'll continue to grow and find opportunistic acquisitions, expecting somewhere between $2 billion and $4 billion in the years to come.

我們認為這種情況會消退，好嗎？我認為我們的標準是你已經獲得了這筆收入，為什麼你會期望我們為此付費？但我們是有競爭力的買家，我們將繼續發展並尋找機會性收購，預計未來幾年收購金額將在 20 億至 40 億美元之間。

More importantly than that, the value that our stock trades at, now one of the lowest in the sector. So we would say we're at trough earnings potential, okay? We're also at trough multiples. So when we look at the fact that I can look around this room with the six of us in here and confidently say that the $2 of EPS for every $1 billion of revenue is a very high probability of success in the mid to long-term range, okay?

更重要的是，我們的股票交易價值現在是該行業最低的之一。所以我們會說我們正處於獲利潛力的低谷，好嗎？我們的倍數也處於低谷。因此，當我們看到這樣一個事實時，我可以和我們六個人一起環顧這個房間，並自信地說，每10 億美元收入對應2 美元的每股收益，在中長期範圍內成功的可能性非常高， 好的？

And you can see the reconciliation on page 14, we updated the slide because our forecasting is quite clear on it. We've now disseminated through the organization. It's clear that We're about $0.80 right now in that ratio, so about 0.8:1 rather than a 2:1.

您可以在第 14 頁看到調節表，我們更新了投影片，因為我們的預測非常明確。我們現在已經透過組織進行了傳播。很明顯，我們現在的比率約為 0.80 美元，因此約為 0.8:1，而不是 2:1。

We've got somewhere around $0.60 to $0.70 that we think can be realize in the potential within our stores as well as the acquisitions that come from the capital that we've allocated and that I just walked through with you. Our financing operations of what Chuck talked about, at maturity gets us to [$0.22 to $0.25] additional.

我們認為可以透過我們商店的潛力以及來自我們分配的資本的收購來實現大約 0.60 至 0.70 美元的資金，我剛剛與您一起討論了這些資金。我們的 Chuck 談到的融資業務在到期時可以讓我們額外獲得 [0.22 至 0.25 美元]。

We talk about capital efficiencies that Tina just spoke to and the idea of using some of the capital for share repurchases, especially if we're going to be penalized this much okay? That's another $0.25 to $0.35, okay, massive amounts as well. We haven't even got into the new adjacency that Chris is going to be working on with Wheels and Pinewood and the things that we don't even really share with the world that's the advantages of what Lithia & Driveway built in an ecosystem that is totally different than what anyone else in the space has.

我們討論了蒂娜剛才談到的資本效率，以及使用部分資本進行股票回購的想法，特別是如果我們要受到這麼多懲罰，好嗎？這又是 0.25 到 0.35 美元，好吧，也是一大筆錢。我們甚至還沒有進入克里斯將要與 Wheels 和 Pinewood 合作的新鄰接關係，以及我們甚至沒有真正與世界分享的東西，這就是 Lithia & Driveway 在生態系統中構建的優勢與空間中其他人的完全不同。

And now you're starting to see that, that realization come through. And as long as operation can keep going, which I know it will under Adam's leadership, that we'll be able to take that potential and realize the true potential of what we've built over the last 8 to 10 years.

現在你開始看到這一點，這種認識已經實現。只要營運能夠繼續下去（我知道這將在 Adam 的領導下進行），我們就能夠發揮這種潛力，並實現我們在過去 8 到 10 年所建立的東西的真正潛力。

Awesome. I appreciate the detailed answer there any, Actually I answered my follow-up as part of that. So I'll turn it over. Thanks team.

驚人的。我很欣賞那裡的詳細答案，實際上我回答了我的後續行動作為其中的一部分。所以我會把它翻過來。感謝團隊。

Great Doug. Thanks

偉大的道格。謝謝

Colin Langan, Wells Fargo.

柯林‧蘭根，富國銀行。

Great. Thanks for taking my questions. Have a follow-up on your comments on some sort you address sort of new GPU coming down only? I think you said $200 to $500 that did include when you quoted at F&I. And I think in the past, you've talked pretty clearly how you think new GPU released alone would normalized pre-COVID level. So has that part of the changed? It's just F&I is offsetting some of that? And if it's changed, why hasn't changed? Thanks.

偉大的。感謝您回答我的問題。您對某些僅解決新 GPU 問題的評論有後續嗎？我認為您所說的 200 至 500 美元確實包括您在 F&I 報價時的價格。我認為在過去，您已經非常清楚地談到了您認為單獨發布的新 GPU 將如何使新冠疫情前的水平正常化。那麼這部分有改變嗎？只是 F&I 正在抵消其中的一部分嗎？如果改變了，為什麼沒有改變？謝謝。

So in my comment, when I said we're at $4700 and we're going to go to -- we think we're going to be at $4200 to $4500, that was total GPU, okay between new and use. We do believe that the way that you get there, that $200 to $500, some recovery of used vehicles, which are still depressed levels below where they were pre-COVID. Okay?

因此，在我的評論中，當我說我們的價格為4700 美元並且我們將達到- 我們認為我們的價格將達到4200 美元至4500 美元時，這是GPU 的總價格，介於新的和使用的之間。我們確實相信，只要花費 200 至 500 美元，就能回收一些二手車，但二手車的價格仍低於新冠疫情前的水平。好的？

And if we can get more into the value of auto cars at Lithia, we're making about $200 more on every value auto car and turning about three to four times as fast, okay than what we do on a certified car. So we think that there's a lot of opportunity there. So it's probably, I would say, [$300] to $500 return of used vehicles and maybe $800 to $1,000 drop still in new vehicles.

如果我們能夠更多地了解 Lithia 汽車的價值，那麼我們在每輛價值汽車上就能多賺大約 200 美元，並且轉動速度大約是經過認證的汽車的三到四倍。所以我們認為那裡有很多機會。因此，我想說，二手車的返還可能是 [300 美元] 到 500 美元，新車的返還可能是 800 美元到 1,000 美元。

If we can prevent that, that's the upside. But I think we're real close to normalization at this stage out -- not assuming some macro factor that changes things, okay. But we feel real comfortable with where we're sitting today that it's been a softer landing rather than a pretty abrupt landing.

如果我們能阻止這種情況發生，那就是好處。但我認為現階段我們已經非常接近正常化了——不假設某些宏觀因素會改變事情，好吧。但我們對今天所處的位置感到非常滿意，因為這是一次軟著陸，而不是突然著陸。

Got it. That's a helpful clarification. And then you mentioned $1.20 CDK impact. I think the question earlier recovery, how should we think about that and sort of insurance recovery, I was sort of wondering how much of that lost sales that's in $1.10 in the quarter is a good portion recoverable? Is it most kind of just sort of lost and you're not going to see any sort of benefit into Q3 as maybe things are deferred? How should we be thinking about what kind of maybe quarter?

知道了。這是一個很有幫助的澄清。然後您提到了 1.20 美元的 CDK 影響。我認為早期恢復的問題，我們應該如何考慮這個問題以及保險恢復，我有點想知道本季 1.10 美元的銷售損失中有多少是可以恢復的？這是否是一種迷失，你不會在第三季度看到任何好處，因為也許事情被推遲了？我們該如何考慮什麼樣的季度？

Good question, Colin. Yes. So it was $1.10. And I would think that a portion of it, and I would say less than the majority is probably recoverable. It may be as little as $0.10 to $0.20. A lot of it is really service and parts that was backlogged in terms of production levels.

好問題，科林。是的。所以是 1.10 美元。我認為其中的一部分（我想說的是少於大部分）可能是可以收回的。它可能低至 0.10 美元到 0.20 美元。其中許多實際上是在生產水準方面積壓的服務和零件。

But you have to remember this, even though CDK had this event, 55% of the industry wasn't on CDK in the United States, okay? So understand that customers don't typically wait around for 12 days to15 days to buy another car. They may wait around a little bit on service just because it may be their only service point, especially 40% of our stores are in isolated markets, okay?

但你要記住這一點，儘管CDK有這個活動，但美國55%的行業沒有上CDK，好嗎？因此，請理解客戶通常不會等待 12 天到 15 天才能購買另一輛車。他們可能會在服務上稍等一下，因為這可能是他們唯一的服務點，尤其是我們40%的商店都在孤立的市場，好嗎？

So that probably helps a little bit. But ultimately, those new and used car customers probably bought, okay? Most customers buy within 72 hours of making the decision to buy even though they may research for two weeks to four weeks, they typically buy when they want to buy. So I don't believe there's a ton of that $1.10 that's sitting out there, unfortunately.

所以這可能會有所幫助。但最終，那些新車和二手車客戶可能會購買，好嗎？大多數客戶在做出購買決定後 72 小時內購買，儘管他們可能會研究兩週到四個星期，但他們通常會在想購買時購買。所以不幸的是，我不相信那裡有大量 1.10 美元的東西。

Very helpful. Thanks for taking my questions.

非常有幫助。感謝您回答我的問題。

Thanks, Colin.

謝謝，科林。

Ron Josey, Citigroup.

羅恩喬西，花旗集團。

Hi, this is James Michael, on for Ron. Two-part question here focused on your evolving omnichannel strategies. So first up, can you talk about any shifts you're seeing in the broader online competitive environment? And any update on marketing ROI or underlying conversions across your Driveway and GreenCars digital sales channels? Secondly, how are you balancing investments to tackle that 50x online customer TAM, while at the same time, cutting burn rates by 40%? Thank you.

大家好，我是詹姆斯·邁克爾，替羅恩發言。這裡的問題由兩部分組成，重點在於您不斷發展的全通路策略。首先，您能談談您在更廣泛的線上競爭環境中看到的任何變化嗎？您的 Driveway 和 GreenCars 數位銷售管道的行銷投資回報率或潛在轉換有任何更新嗎？其次，您如何平衡投資以應對 50 倍的線上客戶 TAM，同時將資金消耗率降低 40%？謝謝。

Thanks for the question, James. I think when we think about our GreenCars and our Driveway channels. We're quite pleased to see that our top of funnel is staying pretty consistent while still reducing marketing budgets by over 50%. So we're pleased with that. We think that we're ready to turn the afterburners on both of those channels again because what we were struggling with was customer retention and satisfaction, where we were at a 3.7 Google score last year, year-to-date, so far, we're at 4.7.

謝謝你的提問，詹姆斯。我認為當我們考慮我們的綠色汽車和車道頻道時。我們非常高興地看到我們的漏斗頂部保持相當一致，同時仍將行銷預算減少了 50% 以上。所以我們對此感到滿意。我們認為我們已經準備好再次在這兩個管道上加力，因為我們一直在努力解決客戶保留率和滿意度問題，去年迄今為止，我們的 Google 得分為 3.7，到目前為止，我們現在是 4.7。

I congratulate our GreenCars and our Driveway teams massively. That's a massive shift, meaning that our ability to grow and improve what we used to call a golden ratio, which is the bottom of funnel relative to the top of funnel can be massive now that we've got satisfied customers, what you get is repeat and referral business that start to come back now, okay?

我衷心祝賀我們的 GreenCars 和 Driveway 團隊。這是一個巨大的轉變，意味著我們成長和改進我們過去所說的黃金比例（即漏斗底部相對於漏斗頂部的比例）的能力可以是巨大的，因為我們已經有了滿意的客戶，你得到的是重複和推薦業務現在開始恢復，好嗎？

That's how you access the 50x or 50 times more customers than what our core businesses typically touch, okay? We are still seeing that 98%-plus of our customers in Driveway and GreenCars are new to Lithia & GreenCars and Driveway. So that's really exciting to still be able to have, but we built a channel with an experience that's transparent, convenient and simple and it's a great way to be able to access this, especially as our procurement of used cars and our ability to really leverage the network that we've built, start to take hold in the overall ecosystem.

這就是您接觸比我們核心業務通常接觸的客戶多 50 倍或 50 倍的方式，好嗎？我們仍然發現 Driveway 和 GreenCars 中 98% 以上的客戶是 Lithia & GreenCars 和 Driveway 的新用戶。因此，仍然能夠擁有這真的很令人興奮，但我們建立了一個具有透明、方便和簡單體驗的管道，這是一種能夠訪問此內容的好方法，特別是當我們採購二手車以及我們真正利用的能力時我們所建立的網絡開始在整個生態系中佔據主導地位。

Very helpful. Thank you.

非常有幫助。謝謝。

Thanks, James.

謝謝，詹姆斯。

Rajat Gupta, JPMorgan.

拉賈古普塔，摩根大通。

Great. Thanks for squeezing me in again. I just had a question on the used car GPUs in the second quarter. It looks like the same-store numbers were up sequentially with the overall numbers took a big dip. And I'm sure like UK had like a bit of a mix impact. But I was curious were there any time like one-time liquidation type events in the UK that that might have driven that reduction?

偉大的。謝謝你再次把我拉進來。我剛剛有一個關於第二季度二手汽車 GPU 的問題。看起來同店數量連續上升，而總體數量卻大幅下降。我確信英國會產生一些混合影響。但我很好奇，英國是否有類似的一次性清算類型事件，可能會導致這種減少？

And then how to think about just used car GPUs going forward? Thanks.

那麼該如何看待二手汽車 GPU 的未來發展呢？謝謝。

Rajat, you nailed. That was a great summation that you had there on used car GPUs. We do think that there's opportunity for growth. But again, operation and we have to get back to selling and keeping those value auto cars that yield the big profits in turn so quickly, that will lift our overall GPUs backup and their way less sensitive to market conditions. But no, there wasn't any one-times or anything like that? That was true market conditions.

拉賈特，你成功了。這是對二手汽車 GPU 的一個很好的總結。我們確實認為存在成長機會。但同樣，營運和我們必須重新開始銷售和保留那些能夠如此迅速地產生巨額利潤的有價值的汽車，這將提升我們的整體 GPU 備份，並降低它們對市場狀況的敏感度。但不，沒有一次性的或類似的事情嗎？這就是真實的市場狀況。

Got it. Okay. Thank you.

知道了。好的。謝謝。

Thanks, Rajat.

謝謝，拉賈特。

Ladies and gentlemen, we've reached the end of the question-and-answer session. I would like to turn the call back to Bryan DeBoer for closing remarks.

女士們、先生們，問答環節已經結束。我想將電話轉回給 Bryan DeBoer，讓其致閉幕詞。

Thank you, everyone, for joining us today. We really look forward to updating you again and seeing the impacts of the 60-day plan really take hold. We'll talk again in October for the third quarter results. Bye bye.

謝謝大家今天加入我們。我們真誠地期待再次向您通報最新情況，並看到 60 天計劃的影響真正發揮作用。我們將在十月再次討論第三季的業績。再見。

This concludes today's conference. Thanks for your participation. You may disconnect your lines at this time.

今天的會議到此結束。感謝您的參與。此時您可以斷開線路。