Sonic Automotive Inc (SAH) 2023 Q2 法說會逐字稿

Good morning, and welcome to the Sonic Automotive Second Quarter 2023 Earnings Conference Call. This conference call is being recorded today, Thursday, July 27, 2023. Presentation materials, which accompany management's discussion on the conference call can be accessed at the company's website at ir.sonicautomotive.com.

早上好，歡迎參加 Sonic Automotive 2023 年第二季度收益電話會議。本次電話會議於​​今天（2023 年 7 月 27 日星期四）錄製。電話會議中管理層討論的演示材料可在公司網站 ir.sonicautomotive.com 上訪問。

At this time, I would like to refer to the safe harbor statement under the Private Securities and Litigation Reform Act of 1995. During this conference call, management may discuss financial projections, information or expectations about the company's products or market or otherwise make statements about the future.

此時，我想參考1995 年《私人證券和訴訟改革法案》下的安全港聲明。在本次電話會議中，管理層可能會討論有關公司產品或市場的財務預測、信息或預期，或以其他方式發表以下聲明：未來。

Such statements are forward-looking and subject to a number of risks and uncertainties that could cause actual results to differ materially from the statements made. These risks and uncertainties are detailed in the company's filings with the Securities and Exchange Commission. In addition, management may discuss certain non-GAAP financial measures as defined by the Securities and Exchange Commission.

此類陳述具有前瞻性，並受到許多風險和不確定性的影響，可能導致實際結果與所做陳述存在重大差異。這些風險和不確定性在該公司向美國證券交易委員會提交的文件中有詳細說明。此外，管理層可能會討論美國證券交易委員會定義的某些非公認會計準則財務指標。

Please refer to the non-GAAP reconciliation tables in the company's current report on Form 8-K filed with the Securities and Exchange Commission earlier today. I would now like to introduce Mr. David Smith, Chief Executive Officer of Sonic Automotive. Mr. Smith, you may begin your conference.

請參閱公司今天早些時候向美國證券交易委員會提交的 8-K 表格當前報告中的非 GAAP 調節表。現在我想介紹一下索尼克汽車公司首席執行官大衛·史密斯先生。史密斯先生，您可以開始會議了。

Thank you very much, and good morning, everyone. And welcome, as she said, to the Sonic Automotive Second Quarter 2023 Earnings Call. Again, I'm David Smith, the company's Chairman and CEO. Joining me on the call today is Mr. Jeff Dyke, our President; our CFO, Mr. Heath Byrd; our EchoPark Chief Operating Officer, Mr. Tim Keen; our Chief Digital Retail Officer; Mr. Steve Wittman, and our Vice President of Investor Relations, Mr. Danny Wieland.

非常感謝大家，大家早上好。正如她所說，歡迎參加 Sonic Automotive 2023 年第二季度財報電話會議。我是大衛·史密斯，公司董事長兼首席執行官。今天和我一起參加電話會議的是我們的總裁 Jeff Dyke 先生；我們的首席財務官希思·伯德 (Heath Byrd) 先生；我們的 EchoPark 首席運營官 Tim Keen 先生；我們的首席數字零售官； Steve Wittman 先生和我們的投資者關係副總裁 Danny Wieland 先生。

Earlier this morning, Sonic Automotive reported second quarter financial results, including record quarterly total revenues of $3.7 billion, a 4% increase from last year. Second quarter EPS was $0.65 per share, which includes the effect of $75 million in charges related to our previously announced plan to indefinitely suspend operations at 8 EchoPark retail hubs and 14 delivery and buy centers as well as 3 Northwest Motorsport stores in the EchoPark segment.

今天上午早些時候，Sonic Automotive 公佈了第二季度財務業績，其中季度總收入創紀錄地達到 37 億美元，比去年增長 4%。第二季度每股收益為0.65 美元，其中包括與我們之前宣布的計劃無限期暫停8 個EchoPark 零售中心、14 個配送和購買中心以及EchoPark 部門的3 個Northwest Motorsport 商店相關的7500 萬美元費用的影響。

Offset partially by a $21 million gain on the disposal of 3 franchise dealerships. Excluding these items, adjusted EPS was $1.83 per share, a decrease from $2.45 in the prior year, due primarily to normalizing new vehicle margins and higher interest rates.

部分被出售 3 家特許經銷店的 2100 萬美元收益所抵消。排除這些項目，調整後每股收益為 1.83 美元，較上一年的 2.45 美元有所下降，這主要是由於新車利潤率正常化和利率上升。

We are proud of our team's performance in the second quarter, and we remain focused on maximizing profitability in the near term while positioning Sonic to achieve our long-term strategic goals. We would like to thank our amazing teammates, manufacturer and lending partners and of course, our customers for their continued support.

我們對我們團隊第二季度的表現感到自豪，我們仍然專注於短期內實現盈利最大化，同時讓 Sonic 實現我們的長期戰略目標。我們要感謝我們出色的隊友、製造商和貸款合作夥伴，當然還有我們的客戶的持續支持。

Turning now to second quarter results. The industry continued to see improvement in new vehicle production and inventory levels, which resulted in incremental new vehicle sales volume and lower new vehicle gross profit per unit sequentially as expected. This decline in new vehicle GPUs should continue as we progress through the second half of 2023 and into 2024, but we continue to believe that the new normal level of new vehicle GPU will remain structurally higher than it was pre-pandemic.

現在轉向第二季度業績。行業新車產量和庫存水平繼續改善，導致新車銷量增加，新車單位毛利潤環比下降，符合預期。隨著 2023 年下半年和 2024 年的進展，新車 GPU 的這種下降應該會持續下去，但我們仍然相信，新車 GPU 的新常態水平在結構上仍將高於大流行前。

In the used vehicle business, wholesale auction prices for 3-year-old vehicles decreased 6% in the second quarter, unwinding the surprise increase we saw in the first quarter. And this is important. July month-to-date, 3-year-old wholesale prices are down nearly 4%, consistent with our expectations for continued price normalization in the third and fourth quarters, which will ultimately benefit consumer affordability and demand for used vehicles once retail pricing follows the wholesale trend in the same direction.

在二手車業務中，三年車齡車輛的批發拍賣價格在第二季度下降了 6%，結束了第一季度的意外上漲。這很重要。 7月至今，3年批發價格下跌近4%，符合我們對第三和第四季度價格持續正常化的預期，一旦零售價格調整，這最終將有利於消費者的承受能力和對二手車的需求批發趨勢同方向。

Lower lease turn-ins at our franchise dealerships continue to limit our used vehicle volume in the second quarter, but we were able to maintain higher used GPUs to somewhat offset the lower volume. We expect used vehicle prices to decline further in the remainder of the year.

我們的特許經銷商的租賃交付量較低，繼續限制我們第二季度的二手車銷量，但我們能夠維持較高的 GPU 利用率，以在一定程度上抵消銷量下降的影響。我們預計今年剩餘時間二手車價格將進一步下降。

Now to our franchise dealerships. Our franchise dealerships F&I gross profit per unit improved $156 sequentially from the first quarter to an all-time record $2,516 per unit, and we reiterate our previously issued guidance for the full year 2023 franchise F&I per unit at or above $2,400 per unit.

現在我們的特許經銷商。我們的特許經營經銷商每單位F&I 毛利潤比第一季度連續增長了156 美元，達到每單位2,516 美元的歷史紀錄，我們重申之前發布的2023 年全年每單位特許經營F&I 的指導值為每單位2,400 美元或以上。

Our Parts and Service or Fixed Operations business remains very strong with another quarter of all-time record Fixed Ops gross profit at our franchise dealerships up 9% year-over-year, driven by 11% growth in our customer pay business. We are proud of the success our team has had in this area, and we believe there are remaining opportunities to optimize our fixed ops business as we progress through 2023.

我們的零件和服務或固定運營業務仍然非常強勁，在我們的客戶付費業務增長 11% 的推動下，我們的特許經銷商的固定運營毛利潤又創歷史新高，同比增長 9%。我們為我們的團隊在這一領域取得的成功感到自豪，我們相信，隨著 2023 年的進展，我們仍有機會優化我們的固定運營業務。

Turning to the EchoPark segment. In this morning's press release, as I mentioned, we provided additional details around the previously announced suspension of operations at certain EchoPark locations and the closure of 3 Northwest Motorsports locations. In total, we suspended operations at 8 EchoPark retail hubs and 14 related EchoPark delivery and buy centers as well as 3 Northwest Motorsport stores.

轉向 EchoPark 部分。正如我所提到的，在今天早上的新聞稿中，我們提供了有關先前宣布的某些 EchoPark 地點暫停運營以及關閉 3 個 Northwest Motorsports 地點的更多詳細信息。我們總共暫停了 8 個 EchoPark 零售中心、14 個相關 EchoPark 配送和購買中心以及 3 個 Northwest Motorsport 商店的運營。

In the second quarter, we suspended operations -- I'm sorry, the suspended operations represented 14% of our EchoPark segment unit sales volume, approximately $74 million in revenues and incurred a segment loss of $13.2 million. Going forward, we expect $2.5 million to $3 million in ongoing quarterly expenses associated with these nonoperating locations.

第二季度，我們暫停了運營——抱歉，暫停的運營占我們 EchoPark 部門銷量的 14%，收入約為 7400 萬美元，部門虧損為 1320 萬美元。展望未來，我們預計與這些非運營地點相關的持續季度費用將達到 250 萬至 300 萬美元。

Suspending operations at these stores was a very difficult, but necessary decision given the current used vehicle market conditions and our near-term outlook. As we've continue to develop the EchoPark model, our team has learned how to adapt the business to the unique challenges we have faced over the past 3 years.

考慮到當前的二手車市場狀況和我們的近期前景，暫停這些商店的運營是一個非常困難但必要的決定。隨著我們不斷開發 EchoPark 模型，我們的團隊已經學會瞭如何使業務適應我們在過去 3 年中面臨的獨特挑戰。

While we believe the delivery and buy centers remain a key opportunity for EchoPark growth down the road, the success of the delivery center model is dependent upon broader EchoPark brand awareness to drive organic e-commerce traffic to echopark.com and generate sufficient delivery center sales volume to meet our required returns.

雖然我們相信配送和購買中心仍然是 EchoPark 未來發展的關鍵機會，但配送中心模式的成功取決於更廣泛的 EchoPark 品牌知名度，以推動 echopark.com 的有機電子商務流量並產生足夠的配送中心銷售額數量以滿足我們所需的回報。

In light of the inventory constraints we are facing in the current environment, we do not feel it is prudent to invest in this level of brand marketing at this time. However, as market conditions improve, we'll begin to roll out our EchoPark national branding strategy, which will enable us to selectively invest in delivery center growth to facilitate our goal of reaching 90% of the U.S. population and maturity.

鑑於我們在當前環境下面臨的庫存限制，我們認為此時投資這種級別的品牌營銷並不明智。然而，隨著市場狀況的改善，我們將開始推出 EchoPark 全國品牌戰略，這將使我們能夠有選擇地投資於交付中心的增長，以實現我們覆蓋美國 90% 人口和成熟度的目標。

We believe that the decision to suspend operations at these stores will substantially improve our near-term financial performance and allow us to reach our goal of breakeven EchoPark segment adjusted EBITDA by the first quarter of 2024, while maintaining the viability of our long-term strategic plan for EchoPark once used market conditions normalize.

我們相信，暫停這些商店運營的決定將大大改善我們的近期財務業績，並使我們能夠在 2024 年第一季度實現 EchoPark 部門調整後 EBITDA 盈虧平衡的目標，同時保持我們長期戰略的可行性。一旦市場狀況正常化，EchoPark 的計劃就會出現。

Turning back to our second quarter EchoPark financial results, we reported record revenues of $601 million and gross profit of $27 million, down 44% due in part to the volatility in wholesale auction pricing I mentioned earlier. EchoPark segment retail unit sales volume for the quarter was approximately 17,100 units, up 4% year-over-year.

回到我們第二季度 EchoPark 的財務業績，我們公佈了創紀錄的收入 6.01 億美元，毛利潤為 2700 萬美元，下降了 44%，部分原因是我之前提到的批發拍賣定價的波動。本季度 EchoPark 部門零售銷量約為 17,100 輛，同比增長 4%。

Second quarter EchoPark segment adjusted EBITDA was a loss of $31.8 million compared to an adjusted EBITDA loss of $36.9 million in the first quarter and $27.3 million in the year ago period. We expect to see continued improvement in adjusted EBITDA losses through the second half of 2023, both due to the reduced store footprint and through improved profitability at our remaining operating stores as we are better able to allocate inventory and management resources across the entire platform.

第二季度 EchoPark 部門調整後 EBITDA 虧損 3180 萬美元，而第一季度調整後 EBITDA 虧損 3690 萬美元，去年同期調整後 EBITDA 虧損 2730 萬美元。我們預計到2023 年下半年，調整後的EBITDA 損失將持續改善，這既是由於商店佔地面積的減少，也是由於我們能夠更好地在整個平台上分配庫存和管理資源，從而提高了我們剩餘運營商店的盈利能力。

As for our Powersports Segment, the second quarter kicked off the summer Powersports selling season, and we expect peak seasonal profitability in the third quarter, highlighted by the Sturgis Motorcycle Rally next month. We are continuing to identify operational synergies with our growing Powersports network, and we remain optimistic about the future growth opportunities in this adjacent retail sector.

至於我們的 Powersports 部門，第二季度拉開了夏季 Powersports 銷售季節的序幕，我們預計第三季度將出現季節性盈利高峰，下個月的斯特吉斯摩托車拉力賽將凸顯這一點。我們正在繼續尋找與不斷發展的 Powersports 網絡的運營協同效應，並且我們對這一鄰近零售行業的未來增長機會保持樂觀。

Finally, turning now to our balance sheet. We ended the fourth quarter with $864 million in available liquidity, including $407 million in combined cash and floor plan deposits on hand. Additionally, I'm pleased to report today that our Board of Directors approved a quarterly cash dividend of $0.29 per share, payable on October 13, 2023, to all stockholders of record on September 15, 2023.

最後，現在轉向我們的資產負債表。截至第四季度末，我們的可用流動資金為 8.64 億美元，其中包括 4.07 億美元的現金和現有平面圖存款。此外，我今天很高興地向大家報告，我們的董事會批准了每股 0.29 美元的季度現金股息，將於 2023 年 10 月 13 日支付給 2023 年 9 月 15 日登記在冊的所有股東。

In closing, our team remains focused on near-term execution and adapting to changes in the automotive retail environment and macroeconomic backdrop, while making strategic decisions to maximize long-term returns. Furthermore, we believe any industry-driven margin headwinds we may face in the franchise business shouldn't be a tailwind to EchoPark segment revenue growth and profitability, minimizing the earnings downside to our consolidated Sonic results over time.

最後，我們的團隊仍然專注於近期執行並適應汽車零售環境和宏觀經濟背景的變化，同時制定戰略決策以實現長期回報最大化。此外，我們認為，我們在特許經營業務中可能面臨的任何行業驅動的利潤逆風不應成為EchoPark 部門收入增長和盈利能力的順風車，從而最大限度地減少我們合併的Sonic 業績隨著時間的推移而產生的盈利下滑。

This concludes our opening remarks, and we look forward to answering any questions you may have. Thank you.

我們的開場白到此結束，我們期待回答您的任何問題。謝謝。

(Operator Instructions) And we'll take our first question from Daniel Imbro from Stephens.

（操作員說明）我們將回答來自 Stephens 的 Daniel Imbro 的第一個問題。

I want to start maybe on the EchoPark kind of restructuring side. I guess, Jeff or Heath, if we look at the portfolio today, how did you arrive at those 8 locations? Are there more in maybe a second tier of challenging markets that could close? If the market stayed tougher for longer, and then just a clarifier on the numbers is the right implication of your cost commentary that it's like $40-ish million of annual savings or $40 million of accretion towards EBITDA?

我想也許從 EchoPark 的重組方面開始。我想，Jeff 或 Heath，如果我們看看今天的投資組合，你們是如何到達這 8 個地點的？第二層充滿挑戰的市場是否還有更多可能關閉的市場？如果市場持續更艱難的時間更長，那麼您的成本評論中的正確含義就是對數字進行澄清，即每年節省 4000 萬美元左右，或者 EBITDA 增加 4000 萬美元？

Yes, the $40 million is correct. And sure, there -- we did. We took -- we looked at the stores across the board, and this is Jeff, by the way. We looked at the stores across the board. And we took the stores that we might have more difficulty getting inventory to buying inventory in the market areas around those stores and really pared it down from the 50 level down to 25 that we feel, given the market conditions today that we can buy enough inventory to support the volume that these stores are capable of doing.

是的，4000 萬美元是正確的。當然，我們做到了。我們全面考察了所有商店，順便說一下，這是傑夫。我們全面考察了商店。我們選擇了那些我們可能更難以獲得庫存的商店來購買這些商店周圍市場區域的庫存，並將其從 50 個水平減少到我們認為的 25 個，考慮到今天的市場狀況，我們可以購買足夠的庫存以支持這些商店的銷售量。

And we need to all remember that you go pre-COVID, these stores basically, that this group of stores, I think it was 12 or 13 pre-COVID, was averaging about 500 to 550 units per rooftop per month. And today, we're just not able to buy enough inventory in the 1 to 5 segment to support as many stores as we have.

我們都需要記住，在新冠疫情之前，這些商店基本上是，這組商店，我認為是新冠疫情之前的 12 或 13 家商店，平均每個屋頂每月大約有 500 到 550 個單位。如今，我們無法在 1 至 5 部分購買足夠的庫存來支持我們擁有的盡可能多的商店。

So we pared down to the number of stores that we knew we could buy inventory for. If the market conditions change, we certainly have the ability and the leverage to pull to adjust store counts in either direction because we've got the stores hibernated, the market comes back faster than we think it's going to.

因此，我們減少了可以購買庫存的商店數量。如果市場狀況發生變化，我們當然有能力和槓桿在任一方向上調整商店數量，因為我們已經讓商店冬眠了，市場恢復的速度比我們想像的要快。

We can open stores back up. Certainly, if we see a jog in the inventory valuations that we saw in March, where prices went from basically what we were buying at 24,000 up to 29,000. If that happens again, then we can certainly make other adjustments and pull other levers to get us to our target of being EBITDA positive in the first quarter of '24.

我們可以重新開店。當然，如果我們看到 3 月份庫存估值出現小幅波動，價格從我們購買的 24,000 美元上漲到 29,000 美元。如果這種情況再次發生，那麼我們當然可以做出其他調整併拉動其他槓桿，以實現 24 年第一季度 EBITDA 為正值的目標。

And this is Heath. I think just a couple of things to add. Your $40 million is correct from an annual basis. That is the savings that we have. But the bigger benefit is to Jeff's point is the fact that we can sell more units out of the 25 remaining locations than the 50 units because you can stock the shelves properly.

這是希斯。我想補充幾點。從每年的計算來看，您的 4000 萬美元是正確的。這就是我們的積蓄。但對傑夫來說，更大的好處是，我們可以在剩下的 25 個地點中銷售比 50 個單位更多的單位，因為你可以正確地庫存貨架。

And so because of these moves and the limitations of getting the inventory, we can now do a better job of inventory mix at those 25 resulting in more units at a higher gross of GPU than we had with the 50, if that makes sense.

因此，由於這些舉措以及獲取庫存的限制，我們現在可以在這25 家公司中更好地進行庫存組合，從而比50 家公司擁有更多的單位和更高的GPU 總量（如果這有意義的話）。

Yes. So on a go-forward basis, if you guys are looking at modeling this as we get to the first quarter and breakeven the EBITDA, we're going to sell more cars out of the remaining 25 locations than we did out of the 50 locations in the first and second quarter.

是的。因此，從長遠來看，如果你們在我們進入第一季度時考慮對此進行建模並實現EBITDA 盈虧平衡，那麼我們在剩餘25 個地點中銷售的汽車將比在50 個地點中銷售的汽車還要多在第一和第二季度。

And our margin improvement should be in and around $500 better in the third quarter versus -- in the fourth quarter versus what you saw in the second quarter. And it's simply because we can buy enough cars sell enough volume. We're seeing that happen in July. We're going to turn our inventory almost 2x in the month of July, which is fantastic.

第三季度我們的利潤率比第四季度第二季度的利潤率提高了 500 美元左右。這僅僅是因為我們可以購買足夠的汽車並銷售足夠的數量。我們看到這種情況會在七月發生。 7 月份我們的庫存周轉率幾乎翻了 2 倍，這太棒了。

And getting back to that big volume pre-COVID level that these -- what these stores were built on and what the model is built about. So we can definitely buy enough inventory right now to support the remaining stores as long as the market stays where it's at. Now the market we think is going to get -- is going to continue to get better, right? Meaning prices are going to continue to drop and inventories become more available as we move from now to the end of the year.

回到新冠疫情之前的大容量水平——這些商店是建立在什麼基礎上的，模型是建立在什麼基礎上的。因此，只要市場保持在現有水平，我們現在絕對可以購買足夠的庫存來支持剩餘的商店。現在我們認為市場將會變得更好，對嗎？這意味著從現在到年底，價格將繼續下降，庫存將變得更多。

That's helpful to understand kind of your assumption. Is there any pricing -- just to make sure I understand, if pricing were to move higher in the wholesale side, that would get more challenging, and that would necessitate potentially further actions on the store front?

這有助於理解您的假設。是否有任何定價——只是為了確保我理解，如果批發方面的定價提高，這將變得更具挑戰性，並且可能需要在店面採取進一步的行動？

That's correct. Yes. We don't anticipate that, though. That's just not in the cards, the manufacturer producing more cars, new car inventory across the board from everybody's announcements is going up from a day supply perspective. No sales in the auction lanes are real high, north of 50% right now, which is a good sign that inventory is building and prices are going to come down.

這是正確的。是的。不過，我們預計不會出現這種情況。這根本不可能，製造商生產更多的汽車，從每日供應的角度來看，每個人都宣布新車庫存全面上升。拍賣通道的銷售額目前還沒有達到真正的高位，超過 50%，這是一個好跡象，表明庫存正在增加，價格將會下降。

So there's going to be more volume to buy the rental car companies pretty much now are out of the lanes from buying cars, and that's what really caused a big issue in March for us and for the industry. So all indicators are that we're headed certainly in the right direction.

因此，購買量將會增加，租車公司現在幾乎已經不再購買汽車了​​，這才是三月份對我們和整個行業來說真正造成大問題的原因。因此，所有指標都表明我們肯定正朝著正確的方向前進。

Great. That's helpful. And then maybe last 1 for me. Heath, if we look at the franchise F&I per unit, it was much stronger. I think you made some changes over the last year, I think you brought on some new financing partners. Can you take a parse out what the drivers were of the sequentially stronger F&I per unit on the franchise dealer side and maybe the sustainability of that level going forward?

偉大的。這很有幫助。對我來說也許是最後一個。希思，如果我們看看每個單位的特許經營 F&I，就會發現它要強大得多。我認為你在去年做出了一些改變，我認為你帶來了一些新的融資合作夥伴。您能否分析一下特許經銷商方面每單位 F&I 相繼增強的驅動因素以及該水平未來的可持續性？

Yes. I mean, look, we're not the #1 in the peer group. I think AutoNation's out there, $2,800. We're a little over $2,500. And our warranty penetration is just getting better and better every month. And so we reiterated in David's announcement north of $2,400 a copy, and we're going to hit those numbers. We're doing it now and had an all-time record quarter.

是的。我的意思是，你看，我們不是同行中的第一名。我想 AutoNation 就在那裡，2,800 美元。我們的價格略高於 2,500 美元。我們的保修滲透率每個月都在變得越來越好。因此，我們在 David 的公告中重申，每份售價超過 2,400 美元，我們將達到這些數字。我們現在正在這樣做，並且創下了歷史最高季度記錄。

And this is Heath. If you look at our penetration to Jeff's point, our new finance penetration was up 250 basis points. Warranty penetration was up 200 basis points on new and used warranty penetration was up 50 basis points.

這是希斯。如果你看看我們對傑夫的觀點的滲透率，我們新的金融滲透率上升了 250 個基點。新的保修滲透率提高了 200 個基點，二手保修滲透率提高了 50 個基點。

And we'll take our next question from Rajat Gupta from JPMorgan.

我們將回答來自摩根大通的 Rajat Gupta 的下一個問題。

I just wanted a bit of further clarification on EchoPark. You mentioned that you're going to be -- you're going to get better throughput from the remaining stores. So is the assumption that if we adjusted the $32 million loss in the second quarter or like -- or $20 million loss adjusting for the store count reduction. Is it going from the $20 million loss to the breakeven?

我只是想進一步了解一下 EchoPark。您提到您將從其餘商店獲得更好的吞吐量。假設我們在第二季度或類似情況調整了 3200 萬美元的損失，或者因商店數量減少而調整了 2000 萬美元的損失。是否會從 2000 萬美元的虧損轉為盈虧平衡？

Is that -- you mentioned the $500 of gross profit per unit, that would be better. Is the remaining coming from volume growth going forward? So is the assumption that sequentially volumes keep going up from here? Or I'm just trying to understand like with a little more granularity, how do we get to that breakeven or the PAT...

是不是——你提到每單位毛利潤 500 美元，那就更好了。剩餘的部分是否來自未來的銷量增長？那麼，是否可以假設成交量從現在開始持續上升？或者我只是想更詳細地了解我們如何實現盈虧平衡或 PAT ......

Yes, this is David. It's interesting. Jeff touched on a second ago, and I'll let him touch on it. But it's interesting to note that our capacity to grow our volume, we -- in the past, we -- as you mentioned, we did 550 cars per store, whereas -- where we're sitting now is less than 300 units per store. So we easily have the capacity on our -- in our team and our structure to sell far more cars with this remaining group of stores and also deliver the world-class guest experience that EchoPark has been delivering really for the last nearly 10 years.

是的，這是大衛。這真有趣。傑夫剛才談到了，我會讓他談談。但有趣的是，我們增加銷量的能力，我們——過去，我們——正如你提到的，我們每家商店生產 550 輛汽車，而——我們現在每家商店的銷量不到 300 輛。因此，我們的團隊和結構很容易就有能力通過剩下的這組商店銷售更多的汽車，並提供 EchoPark 在過去近 10 年裡一直提供的世界一流的客戶體驗。

Yes. The breakeven, I think we gave you all last quarter was -- or the quarter before, it was around 9,000 cars. Given the changes that we've made, that breakeven number now for the segment is 7,200 cars. And we feel that between now and the end of the year, we're going to be in a position to make that happen.

是的。我認為我們上個季度或上個季度給您帶來的盈虧平衡大約是 9,000 輛汽車。鑑於我們所做的改變，該細分市場目前的盈虧平衡數字為 7,200 輛汽車。我們認為從現在到今年年底，我們將有能力實現這一目標。

Remember, a lot more throughput means we've got to hire more people, hire more technicians. Our average experience guide sales associate at EchoPark this month it was going to be in the 27.5% to 28% range. Pre-COVID, we were doing well over 30%. So that's coming back. So the volume -- the inventory -- there's plenty of inventory to support the stores that we have left open. And we think we can continue to grow that. We will continue to grow that through the third and fourth quarter and hit our breakeven target for Q1 of 2024.

請記住，更高的吞吐量意味著我們必須僱用更多的人員、更多的技術人員。本月 EchoPark 的體驗指南銷售助理的平均體驗率將在 27.5% 至 28% 範圍內。在新冠疫情爆發之前，我們的表現遠超 30%。所以這又回來了。因此，數量——庫存——有足夠的庫存來支持我們繼續營業的商店。我們認為我們可以繼續發展這一點。我們將在第三和第四季度繼續增長，並在 2024 年第一季度實現盈虧平衡目標。

Yes. And to sum it up, it's basically those 3 components. It's the reduction in expenses of the $10 million a quarter plus the increase in volume and the increase in GPU.

是的。總而言之，它基本上由這三個組成部分組成。這是每季度減少 1000 萬美元的費用加上數量的增加和 GPU 的增加。

And we are seeing that occur in July, yes.

是的，我們看到這種情況發生在七月。

Got it. Got it. That's helpful. And just on the inventory revaluation charge in the second quarter and the $10 million. Would that just mean that the front-end gross profit in EchoPark this has a much more favorable base here into the third and fourth quarter? And does that kind of like drive your confidence in that $500 GPU increase sequentially as well. I just wanted to make sure like we're thinking about that correctly.

知道了。知道了。這很有幫助。僅就第二季度的庫存重估費用而言，還有 1000 萬美元。這是否意味著 EchoPark 的前端毛利潤在第三和第四季度擁有更有利的基礎？這是否會增強您對 GPU 價格連續上漲 500 美元的信心？我只是想確保我們的想法是正確的。

Yes, it's certainly a part of that. But more importantly, it's the 1 to 35-day old car that we're selling, we're turning our inventory so much faster buying cars cheaper. So our margin is significantly better on our fresh inventory. The $10 million really went against our aged inventory and a lot of the inventory that we bought in March that depreciated a lot faster than probably we've ever seen before in history.

是的，這當然是其中的一部分。但更重要的是，我們銷售的是 1 到 35 天的舊車，我們的庫存周轉速度更快，購買的汽車更便宜。因此，我們的新鮮庫存利潤率明顯更高。這 1000 萬美元確實與我們的老化庫存和我們在 3 月份購買的許多庫存相抵觸，這些庫存的貶值速度可能比我們歷史上見過的要快得多。

And so that's where those dollars took care of some of that inventory. But the bigger news is the margin that we're making on our fresh inventory now, that's back to normal for us and actually better than normal for us, which is just fantastic. We're in the $550 to $600 range on fresh inventory, which is well above where we've been even pre-COVID. So that's the exciting news is we know margins improving on our fresh inventory. We're turning our inventory really fast, probably turning our inventory faster than we've ever turned it because we're going to be nearly 2x turned in July. And the faster you turn your inventory, the higher your margins are going to be.

這就是這些美元用來處理部分庫存的地方。但更大的消息是我們現在在新庫存上賺取的利潤，這對我們來說已經恢復正常，而且實際上比正常情況更好，這真是太棒了。我們的新鮮庫存價格在 550 美元到 600 美元之間，這遠遠高於新冠疫情之前的水平。因此，令人興奮的消息是我們知道新鮮庫存的利潤率正在提高。我們的庫存周轉速度非常快，可能比以往任何時候都快，因為 7 月份我們的周轉速度將接近兩倍。庫存周轉越快，利潤就越高。

Right, right. That makes sense. One last 1 on the franchise SG&A to gross. That the prior guidance was, I believe, like mid-60s. I'm just curious if you're reiterating that and maybe like any updated thoughts on how you expect new and used car GPUs to trend at the second half?

是的是的。這就說得通了。特許經營 SG&A 總收入的最後 1 名。我認為，之前的指導大約是 60 年代中期。我只是好奇您是否會重申這一點，也許您對下半年新車和二手汽車 GPU 的趨勢有什麼最新的想法？

Yes. We reiterate that we believe that the franchise will be in that mid-60s from a SG&A as a percent of gross and total of that will equate to a total of around 65 to 70 for the year.

是的。我們重申，我們相信特許經營權的 SG&A 佔總收入的百分比將在 60 左右，而全年總收入將相當於 65 至 70 左右。

And margins should be consistent from a used vehicle perspective from what you saw in the second quarter. In new car margins, mid-4,000 range, somewhere in that ballpark between now and the end of the year.

從二手車的角度來看，利潤率應該與第二季度的情況保持一致。新車利潤率在 4,000 輛左右，從現在到年底大約在這個範圍內。

(Operator Instructions) And next, we'll take a question from Bret Jordan from Jefferies.

（操作員說明）接下來，我們將回答 Jefferies 的 Bret Jordan 的問題。

This is Patrick Buckley on for Bret. Just digging a bit more into the used GPUs. How should we think about what the new normal is there moving forward? Given the rebound in the past couple of quarters, should we think about 1,400 as a new low or more volatility in the longer term there?

我是帕特里克·巴克利 (Patrick Buckley)，代表布雷特 (Bret) 發言。只是對所使用的 GPU 進行更多的挖掘。我們應該如何思考未來的新常態？鑑於過去幾個季度的反彈，我們是否應該將 1,400 點視為新低或長期波動更大？

I think if the market keeps dropping like it's dropping, then we're going to be real comfortable in that 1,400 range. If the market keeps moving around a lot, margins are going to move around. And that's just keeping up with the depreciation.

我認為，如果市場繼續下跌，那麼我們將在 1,400 點的區間內感到非常舒服。如果市場持續大幅波動，利潤率也會發生波動。這只是跟上貶值的步伐。

But I don't think the markets are going to -- maybe another 4 or 5 weeks of drops, but it's got to flatten out here at some point because we've gone from $29,000 a car or $27,000 a car in the first part of June. Now we're buying cars below $25,000. That trend is just not going to continue at that steep level. So if that happens and things begin to flatten out, margin should sustain itself between now and the end of the year, entered around where we are today from a franchise perspective.

但我不認為市場會繼續下跌——也許還會持續4 到5 週的下跌，但在某個時候它一定會趨於平緩，因為我們已經從29,000 美元一輛車或27,000 美元一輛車的價格下降到了上半年的27,000 美元。六月。現在我們購買的汽車價格低於 25,000 美元。這種趨勢不會繼續保持在如此陡峭的水平。因此，如果這種情況發生並且情況開始趨於平緩，那麼從現在到年底，利潤率應該會保持不變，從特許經營的角度來看，我們今天所處的位置是這樣的。

And this is David. I think it's important to touch on that our team has been very disciplined in selling through our inventory as that market's dropped, right? And so it has put a little pressure on margin. But as it levels out, as Jeff was saying it's margin should [improve it].

這是大衛。我認為重要的是要提到，隨著市場下跌，我們的團隊在通過庫存銷售方面一直非常自律，對嗎？因此，這對利潤率造成了一些壓力。但隨著情況趨於平穩，正如傑夫所說，其利潤率應該[提高]。

Got it. That's helpful. And then just moving over to the parts and service side. Could you talk a little bit more about where your capacity levels are at? I imagine labor continues to be a constraint there, but curious to hear that compares to your overall physical capacity and how much room left there is to grow?

知道了。這很有幫助。然後轉移到零件和服務方面。您能多談談您的能力水平嗎？我想勞動力仍然是那裡的一個限制，但很想知道與您的整體體力相比，以及還有多少增長空間？

Yes. We're full. Every stall, we need more technicians. We're actively building stalls in many of our locations today or we'd have further upside in terms of our year-over-year growth. This is a long runway. We've been really working on our market share as we said last quarter from an opcode perspective in growing our share across all our brands.

是的。我們已經滿了。每一個攤位，我們都需要更多的技術人員。今天，我們正在許多地點積極搭建攤位，否則我們的同比增長將有進一步的上升空間。這是一條很長的跑道。正如我們上季度從操作碼角度所說的那樣，我們一直在努力提高我們的市場份額，以提高我們在所有品牌中的份額。

We've got BMW done now. We've got Honda done now. that will continue throughout the rest of the brands and growing share by specific opcode. And that's given us a great return. We've had just an amazing performance from fixed ops perspective, another record-breaking quarter, and we expect that to continue to grow. But we need more stalls, we need more techs. There's no question about that.

現在我們已經把寶馬搞定了。我們現在已經把本田搞定了。這將在其他品牌中繼續下去，並通過特定操作碼不斷增加份額。這給我們帶來了豐厚的回報。從固定運營角度來看，我們取得了令人驚嘆的業績，又一個破紀錄的季度，我們預計這一業績將繼續增長。但我們需要更多的攤位，我們需要更多的技術人員。毫無疑問。

(Operator Instructions) And we'll take our next question from John Murphy from Bank of America.

（操作員說明）我們將接受美國銀行的 John Murphy 提出的下一個問題。

I just wanted to follow-up on the EchoPark restructuring from an operating standpoint and maybe from an accounting standpoint. So if we think about the 25 locations or maybe the 22 and except the Motorsport stuff, should we really think about these as the lights kind of being turned off? And then if market conditions in 12-plus months improve that you might be able to turn these lights back on pretty quickly?

我只是想從運營角度或者會計角度跟進 EchoPark 的重組情況。因此，如果我們考慮 25 個地點，或者可能是 22 個地點，除了賽車運動之外，我們真的應該將這些視為燈被關閉的情況嗎？然後，如果 12 個多月內市場狀況有所改善，您也許能夠很快重新打開這些燈？

Yes, that's the exact idea.

是的，這就是正確的想法。

I'd like to brag on our team here a little bit that our team does an amazing job of hiring and training and getting these stores open. I think that it's actually going to be an easier job as the market improves and because of the experience of our existing leaders at EchoPark to ramp up these stores and get them going again, again, as the market improves.

我想在這裡向我們的團隊吹噓一下，我們的團隊在招聘、培訓以及讓這些商店開業方面做得非常出色。我認為，隨著市場的改善，這實際上會變得更容易，因為我們 EchoPark 現有領導者擁有豐富的經驗，可以隨著市場的改善，擴大這些商店並讓它們再次營業。

Yes. The lights are definitely out in the stores that we closed, but it doesn't mean they can't be turned right back on. And that would be the intention if the market improves like we think it's going to do. It's just not going to happen in this calendar year, right?

是的。我們關閉的商店裡的燈肯定已經滅了，但這並不意味著它們不能立即重新打開。如果市場像我們認為的那樣改善，這就是我們的意圖。這在今年是不會發生的，對吧？

We've got a long way to go to get back down to the $21,000, $22,000 price level if we do, but certainly rapidly improving prices and rapidly improving availability is occurring right now. And we're seeing that in this month or so in a lot more cars per rooftop because we can buy and fill the shelves at the remaining stores that we have. But if that more inventory becomes available at the right prices, then absolutely, we have the ability to pull those triggers and levers and open more stores and open them quickly, obviously, because they already exist.

如果我們這樣做的話，要回到 21,000 美元、22,000 美元的價格水平，我們還有很長的路要走，但肯定的是，價格正在迅速提高，可用性正在迅速提高。我們看到在這個月左右每個屋頂的汽車數量會增加，因為我們可以購買並填滿我們剩餘商店的貨架。但是，如果以合適的價格提供更多庫存，那麼我們絕對有能力拉動這些扳機和槓桿，開設更多商店並迅速開業，顯然，因為它們已經存在。

And a key takeaway is that the stores that were closed only represented 14% of the volume.

一個重要的結論是，關閉的商店僅佔銷量的 14%。

Yes. No, yes, that's pretty resounding, right, given it's the same number of stores that you're going to keep open, right? I mean, it clearly you chose the right stores or at least appears to chose the right stores.

是的。不，是的，這相當響亮，對吧，考慮到你要保持營業的商店數量相同，對吧？我的意思是，很明顯您選擇了正確的商店，或者至少看起來選擇了正確的商店。

Just a follow-up on the accounting side on this. Why would you keep an ongoing expense for something that's put in [disc ops]? Wouldn't that have been put into the charge? And then sort of the follow-on on the accounting side. When you talk about the inventory write-down is that write-down for vehicles that are then dispersed to the other locations and then sold at a higher gross, so they help you out in the short run. I'm not trying to be wild. I'm just trying to understand the accounting and how this is all flowing.

只是會計方面的後續行動。為什麼你要為[光盤操作]中的東西保留持續的費用？那不就被算入罪名了嗎？然後是會計方面的後續工作。當您談論庫存減記時，指的是車輛的減記，然後將其分散到其他地點，然後以更高的毛利率出售，因此它們在短期內可以幫助您擺脫困境。我並不是想變得狂野。我只是想了解會計以及這一切是如何流動的。

Yes, John, this is Danny. Two pieces to that. The ongoing expenses are the pieces that we couldn't accrue and recognizing that onetime charge, you've got ongoing maintenance, security utilities at those leased and owned properties going forward.

是的，約翰，這是丹尼。兩塊。持續費用是我們無法累積的費用，並且認識到一次性費用，您將在這些租賃和擁有的財產上獲得持續的維護和安全公用事業。

Other things like the rent and depreciation were contemplated in the $75 million of charges in the second quarter. When you think about the $10 million inventory adjustment, as we noted in the release, about $7.7 million of that's related to the operating stores. Again, as Jeff noted, just cleaning up some aging with the rate of depreciation that we saw in the second quarter. The remaining $2.3 million, you're exactly right, with the aged inventory as well as then just valuing that to what the retail market value is as we reassign that either to other EchoPark locations or at wholesale.

第二季度 7500 萬美元的費用中還考慮了租金和折舊等其他費用。當您考慮 1000 萬美元的庫存調整時，正如我們在新聞稿中指出的那樣，其中大約 770 萬美元與運營商店相關。正如傑夫指出的那樣，只是用我們在第二季度看到的折舊率來清理一些老化。剩下的 230 萬美元，你是完全正確的，加上老化的庫存，然後將其估價為零售市場價值，因為我們將其重新分配給其他 EchoPark 地點或批發。

Okay. But that -- but given that inventory write-down in operating stores another $2.3 million in the disc op stores, like that will help -- I mean that will flatter the margins in the short run as you're going through the next quarter. Is that correct? I just want to make sure I understand that.

好的。但是，考慮到光盤運營商店的庫存減記額為 230 萬美元，這樣會有所幫助，我的意思是，這將在下個季度的短期內提高利潤率。那是對的嗎？我只是想確保我理解這一點。

Yes, this is Jeff. It's certainly going to help the aged inventory, and let's call it aged inventory, anything north of 45 days because you bought cards 45 days ago they're down a couple of thousand dollars a car already.

是的，這是傑夫。這肯定會對老化庫存有所幫助，我們稱之為老化庫存，任何超過 45 天的庫存，因為你在 45 天前購買了卡片，每輛車已經便宜了幾千美元。

So yes, it will shorten there. But the more important thing is what's the margin on the cars that are 1 to 35 days old now that we're seeing in July. And of course, those dollars aren't going to that inventory. And what's happening in that inventory is our margins are significantly higher than the pre-COVID run rates that we had in margins, where the stores were making all the money that they were making. So that's the great news.

所以是的，它會在那裡縮短。但更重要的是，我們在 7 月看到的 1 至 35 天車齡的汽車的利潤是多少。當然，這些美元不會進入庫存。庫存中發生的情況是，我們的利潤率明顯高於新冠疫情爆發前的利潤率，當時商店正在賺他們所有的錢。這是個好消息。

The great news is the margins on the fresh inventory is back and back better than it was pre-COVID. So that's what we hope to see continue to happen between now and the end of the year and why we're so confident in positive EBITDA in the first quarter of '24.

好消息是，新庫存的利潤率比新冠疫情爆發前有所回升。因此，這就是我們希望看到從現在到今年年底繼續發生的情況，也是我們對 24 年第一季度的正 EBITDA 充滿信心的原因。

I'm sorry. And just 1 last 1 on this. Is this mean that you will not open any new stores until these stores come back on? Or could these stay in disc ops and you say, hey, listen, we just found a new market or newer markets that are just really attractive, and we can add a couple of stores here and there. So we could see EchoPark grow store counts even with these kind of stores in disc ops for now?

對不起。這只是最後 1 1 點。這是否意味著在這些商店恢復營業之前您不會開設任何新商店？或者這些可以留在光盤中，然後你說，嘿，聽著，我們剛剛發現了一個或多個新市場，它們確實很有吸引力，我們可以到處添加幾家商店。所以我們可以看到 EchoPark 的商店數量不斷增加，即使目前這些商店都在光盤運營中？

Yes. I mean some of those stores in disc ops couldn't be there forever, right? And we might end up selling and find new markets that are bigger, better, we've got the inventory resources there, you name it. It will be a combination of what you said.

是的。我的意思是光盤運營商中的一些商店不可能永遠存在，對吧？我們最終可能會出售並找到更大、更好的新市場，我們在那裡擁有庫存資源，凡是你能想到的。這將是你所說的的組合。

And our next question comes from David Whiston from Morningstar.

我們的下一個問題來自晨星公司的大衛·惠斯頓。

I had a question on your franchise business. Just looking at the reported versus same-store on the used side, your used GPUs were actually up 14%, but on a same-store basis, they were down 3%. And so you seem to be bucking a pretty strong industry headwind here, which is great to see, but it looks like maybe you're favoring profit over volume on the used side on the franchise side, but also do you have some newly acquired stores not yet in the same-store base that we're just outperforming the industry and use to cause that difference?

我對你們的特許經營業務有疑問。僅查看所報告的與同店使用的情況相比，您使用的 GPU 實際上增加了 14%，但在同店基礎上卻下降了 3%。因此，您似乎在這里克服了相當強大的行業逆風，這是很高興看到的，但看起來您可能更看重特許經營方面的二手店的利潤而不是數量，而且您是否有一些新收購的商店還沒有達到我們剛剛超越行業並用來造成這種差異的同店基礎？

There is some of that going on, but we are bucking the trend. We're being very conservative. I mean we sold 75 to 80 units per rooftop, and we typically run over 100, but we just can't buy the inventory. There's no off-lease cars coming, so we're really trading for cars and buying cars off the street.

有些事情正在發生，但我們正在逆勢而上。我們非常保守。我的意思是，我們每個屋頂售出 75 到 80 套，通常會運行超過 100 套，但我們就是買不到庫存。沒有租賃結束的汽車進來，所以我們實際上是在交易汽車並在街上購買汽車。

And we did take a much more conservative approach than we normally have in terms of holding under our GPU and selling a little less volume. We can sell more cars. There's no question, but the margins would really drop if we had to go buy more cars in the auction, and we see that at EchoPark with our lower margins.

在持有 GPU 和減少銷量方面，我們確實採取了比通常更為保守的方法。我們可以賣更多的汽車。毫無疑問，但如果我們不得不在拍賣中購買更多汽車，利潤確實會下降，我們在 EchoPark 看到利潤較低。

So yes, that was strategic. And we'll continue to balance that through the rest of this year before we start opening any of our buyers to go back into the auction lanes to buy cars for the franchise stores. we're going to live off of vehicles that we buy off the street and our trade-ins, keep our trade ratios really high, which is running in the 55% to 60% range right now. And we'll live off that until we really get a hand on what's going to happen in this used car market.

所以是的，這是戰略性的。在我們開始開放任何買家重新進入拍賣通道為特許經營店購買汽車之前，我們將在今年剩下的時間裡繼續平衡這一點。我們將靠從街上購買的車輛和以舊換新為生，保持我們的貿易比率非常高，目前在 55% 到 60% 的範圍內運行。我們將以此為生，直到我們真正了解二手車市場將發生什麼。

And one of the big differences is really just the brand mix of what we've heard last year and what we disclosed this year. So that's also some noise in those new numbers.

最大的差異之一實際上只是我們去年聽到的和今年披露的品牌組合。因此，這些新數字中也存在一些噪音。

And this is David. And we mentioned it earlier. I mean it was from all accounts, a historic drop in valuations of used cars in the market. So we think that strategically, it's really smart to keep that inventory tight. And as Jeff said, maybe miss a few retail deals until that market starts to flatten out more consistently and then we can crank up the volume.

這是大衛。我們之前提到過。我的意思是，從所有方面來看，市場上二手車的估值都出現了歷史性的下降。因此，我們認為從戰略上講，保持庫存緊張是非常明智的做法。正如傑夫所說，也許會錯過一些零售交易，直到市場開始更加穩定地趨於平緩，然後我們才能增加交易量。

Yes. We're seeing prices drop in the wholesale market for the mix that we buy. Two weeks ago, we were buying cars over $26,000. Last week, we bought cars under $25,000. And you have to adjust your retail pricing on your [allowed] to account for that. And so we're just being very, very careful. Turning our inventory a lot faster getting our cars through reconditioning quicker in executing our playbooks at a really high level, it's given us more growth. There's no question. And we're seeing that with the EchoPark on the franchise side.

是的。我們看到批發市場上我們購買的混合物的價格下降了。兩週前，我們購買的汽車價值超過 26,000 美元。上週，我們購買了 25,000 美元以下的汽車。您必須調整[允許]的零售價格以解決這一問題。所以我們只是非常非常小心。更快地周轉我們的庫存，讓我們的汽車更快地進行翻新，以非常高的水平執行我們的劇本，這給我們帶來了更多的增長。毫無疑問。我們在特許經營方面的 EchoPark 上看到了這一點。

So and just I got curiosity, do you have any store GMs complaining to you guys, though, that they like to get more volume on the used side?

所以我很好奇，有沒有商店總經理向你們抱怨，他們喜歡增加二手貨的銷量？

No, not at all. We buy our inventory. Yes, we buy our inventory and trade for inventory centrally. Our teams are executing their playbooks, and we don't have any of that.

一點都不。我們購買庫存。是的，我們集中購買庫存並進行庫存交易。我們的團隊正在執行他們的劇本，但我們沒有任何劇本。

Okay. And just curious on the Tesla Model Y aggressive discounting, how badly is that hurting not only your premium brands, if at all, but also your volume brand stores?

好的。只是好奇特斯拉 Model Y 的大幅折扣，這不僅對你的高端品牌（如果有的話）造成了多大的傷害，而且對你的量產品牌商店也造成了多大的傷害？

It certainly played a role if you had a bunch of Teslas in stock in any other franchise stores or pre-owns, right, that hurt -- but overall, I mean, it's certainly playing a role against electric vehicles from a new car perspective, because they're having to get more aggressive in terms of their pricing. But the quality of the product that the manufacturers are producing now is simply amazing.

如果你在任何其他特許經營店或二手車中有一堆特斯拉庫存，它肯定會發揮作用，對吧，這會造成傷害——但總的來說，我的意思是，從新車的角度來看，它肯定在對抗電動汽車方面發揮了作用，因為他們必須在定價方面變得更加激進。但現在製造商生產的產品質量簡直令人驚嘆。

I don't care if it's Mercedes, BMW, Audi, you name it, Lexus, Toyota, they're just producing an amazing product. And it's a better product than Tesla. And as the pricing gets right, the inventory levels come up, you're going to see a higher mix of electric vehicle sales throughout the category.

我不在乎是梅賽德斯、寶馬、奧迪，還是你能想到的，雷克薩斯、豐田，他們只是在生產令人驚嘆的產品。這是比特斯拉更好的產品。隨著定價合適，庫存水平上升，您將看到整個類別的電動汽車銷售組合更高。

Do you think consumers are catching on, though, that is a better product than Tesla because was complying they have too many [EQS]?

不過，您是否認為消費者會意識到這是比特斯拉更好的產品，因為他們有太多的[EQS]？

Yes. I think it's a little early yet to -- it's a little early yet to make that comment, right? It's -- let's see what happens as we move through the next 6 months. Shells begin to get filled, and we put some loaner electric loaner vehicles in and let the customers get used to driving the electric vehicle, dealing with the range issues that kind of go with the consumers' concerns.

是的。我認為現在發表評論還為時過早，對嗎？讓我們看看接下來 6 個月會發生什麼。外殼開始填滿，我們放了一些借用的電動車進去，讓客戶習慣駕駛電動汽車，解決與消費者關心的續航問題。

And so let's see what happens. I think we've got another 6 months to a year of sort of crossing some new boundaries with the electric vehicle. And if the manufacturer could get the pricing right and they keep their days supply in line, which are 2 big questions, that they really need to focus on, then I think they can do very, very well.

讓我們看看會發生什麼。我認為我們還有六個月到一年的時間來跨越電動汽車的一些新界限。如果製造商能夠制定正確的定價，並保持每日供應量（這是他們真正需要關注的兩個大問題），那麼我認為他們可以做得非常非常好。

But if they're going to launch vehicles that are $112,000 when the counterpart combustion engine vehicle is $20,000 and $30,000 cheaper, they're going to have a problem. And they're very well aware of that. Some manufacturers are doing a their job than others. But everybody is learning the electric vehicle business right now, and that includes the manufacturer, how to launch it, what product to put out there, how to compete against Tesla.

但如果他們要推出售價為 112,000 美元的汽車，而相應的內燃機汽車則便宜 20,000 美元和 30,000 美元，他們就會遇到問題。他們非常清楚這一點。一些製造商正在比其他製造商做好自己的工作。但現在每個人都在學習電動汽車業務，包括製造商、如何推出它、推出什麼產品、如何與特斯拉競爭。

And we're nowhere near that limit. I think Mercedes, BMW in the 17,000 to 20,000 vehicles versus Tesla 600,000 maybe this year from a U.S. perspective. So there's a whole lot to learn and a long way to go before we can claim any victories from an electric vehicle perspective.

我們還遠未達到這個極限。我認為從美國的角度來看，今年梅賽德斯、寶馬的銷量可能會達到 17,000 至 20,000 輛，而特斯拉的銷量可能會達到 600,000 輛。因此，從電動汽車的角度來看，我們還有很多東西需要學習，而且還有很長的路要走。

Yes. And I think it's worth noting, you mentioned the EQS and that we've got the #1 Mercedes dealership in the country out in California that's in the EQS model. It is regional, where it's like that part of the country has been faster to adopt that car. And so that store has actually been buying EQS from other parts of the country and shipping them out there.

是的。我認為值得注意的是，您提到了 EQS，並且我們在加利福尼亞州擁有全國排名第一的梅賽德斯經銷店，該經銷店採用的是 EQS 車型。這是區域性的，就像該國的某個地區更快地採用該汽車一樣。因此，該商店實際上一直在從該國其他地區購買 EQS 並將其運往那裡。

(Operator Instructions) And we'll take another question from Rajat Gupta from JPMorgan.

（操作員說明）我們將回答來自摩根大通的 Rajat Gupta 的另一個問題。

Just wanted to get your obvious thoughts on capital allocation, buyback, M&A. Obviously, big focus on conserving cash at EchoPark in the near term. But as you get more comfortable with the line of sight towards profitability and like lowered cash on an EchoPark. How should we think about use of excess cash and like just reluctant capital allocation?

只是想了解您對資本配置、回購、併購的明顯想法。顯然，近期 EchoPark 的重點是節省現金。但隨著你對盈利能力的視線更加適應，就像在 EchoPark 上降低現金一樣。我們應該如何看待多餘現金的使用以及不情願的資本配置？

Yes. This is David. And I know Heath has a comment about this. But we think that our focus on our balance sheet and making sure we have the strongest balance sheet possible. We deliberately -- there is a strategic decision to not buy back shares in the second quarter. And we'll see where we go opportunistically from here. As you see, we've got a fantastic balance sheet, a lot of cash.

是的。這是大衛。我知道希思對此有評論。但我們認為，我們的重點是我們的資產負債表，並確保我們擁有盡可能最強的資產負債表。我們特意做出了第二季度不回購股票的戰略決定。我們將看看我們從這裡機會主義地走向何方。正如你所看到的，我們擁有出色的資產負債表和大量現金。

And we'll look at strategically at various opportunities for acquisitions and share buybacks. And -- but we just thought that it is important to focus on. We've had quite a few acquisitions and a lot going on with EchoPark is to focus on those operationally, and we've got our Powersports business and the RFG dealerships and putting into our playbooks and making sure that we execute properly. And so there'll be plenty of opportunities in the future for our capital allocation.

我們將從戰略角度審視各種收購和股票回購的機會。而且——但我們只是認為專注很重要。我們已經進行了相當多的收購，EchoPark 的很多工作都是專注於運營方面的收購，我們已經擁有了 Powersports 業務和 RFG 經銷商，並將其納入我們的行動手冊中，並確保我們正確執行。所以未來我們的資本配置會有很多機會。

But Heath, did you have anything?

但是希斯，你有什麼東西嗎？

Yes. Now I'll just reiterate, we believe that cash is king when you have uncertainty with economic conditions. So we want to have dry powder for that, #1. #2, we also have a strategic initiative to bring our debt down.

是的。現在我重申一下，我們相信，當經濟狀況存在不確定性時，現金為王。所以我們想要為此提供乾粉，#1。第二，我們還有一項降低債務的戰略舉措。

And so we've reduced our debt about $60 million for the year. So that's a big, important part of our capital allocation plan. We're reinvesting in our IT infrastructure and innovation as well as our facilities. So that's a priority.

因此，我們今年減少了約 6000 萬美元的債務。所以這是我們資本配置計劃的一個重要組成部分。我們正在對 IT 基礎設施和創新以及設施進行再投資。所以這是一個優先事項。

We don't have anything that is pressing the material from an M&A perspective in the near term. We want to be prepared and have capital available to start growing EchoPark again as we start seeing that market normalize. And then again, as always, we will return capital to shareholders, primarily through our dividends and opportunistically do share repurchase.

短期內我們沒有任何從併購角度來看有壓力的材料。當我們開始看到市場正常化時，我們希望做好準備並擁有可用資金來再次開始發展 EchoPark。然後，一如既往，我們將主要通過股息和機會主義的股票回購向股東返還資本。

(Operator Instructions) Okay. There appear to be no further questions at this time. I'd like to turn the floor back over to management for closing remarks.

（操作員指示）好的。目前似乎沒有其他問題了。我想將發言權交還給管理層作結束語。

Thank you all so much for attending the call, and we'll talk to you next quarter. Thank you. .

非常感謝大家參加電話會議，我們將在下個季度與您交談。謝謝。 。

Thank you.

謝謝。

Thanks.

謝謝。

Thank you. Ladies and gentlemen, this does conclude today's teleconference. We thank you for your participation. You may disconnect your lines at this time, and have a great day.

謝謝。女士們、先生們，今天的電話會議到此結束。我們感謝您的參與。此時您可以斷開線路，祝您度過愉快的一天。