Good day, and welcome to the Asbury First Quarter 2013 Earnings Conference Call. Today’s conference is being recorded. At this time, I would like to turn the conference over to the Treasurer, Mr. Ryan Marsh. Please go ahead sir. Thanks, Alisha and good morning to everyone. Welcome to Asbury Automotive Group’s first quarter 2013 earnings call. Today’s call is being recorded and will be available for replay later today. The press release detailing Asbury’s first quarter results was issued earlier this morning and is posted on our website at asburyauto.com. Participating with us today are Craig Monaghan, our President and Chief Executive Officer; Michael Kearney, our Executive Vice President and Chief Operating Officer; and Scott Krenz, our Senior Vice President and Chief Financial Officer. At the conclusion of our remarks, we will open up the call for questions and I will be available later for any follow-up questions you might have. Before we begin, I must remind you that certain -- the call today is likely to contain certain forward-looking statements. These forward-looking statements are statements other than those, which aren’t historical in nature. All forward-looking statements are subject to significant uncertainties and actual results may differ materially from those suggested by the statements. For information regarding certain of the risks that may cause actual results to differ, please see our filings with the SEC from time-to-time, including our Form 10-K for the year ended December 2011, any subsequently filed quarterly reports on our Form 10-Q, and our earnings release issued earlier today. We expressly disclaim any responsibility to update forward-looking statements. It is now my pleasure to hand the call over to our President and CEO, Craig Monaghan.

Good morning everyone and thanks for joining us. We are pleased to once again report record quarterly results. EPS from continuing operations increased 43% for the first quarter. January and February developed in line with our expectations, but March proved to be a blowout month. In March our stores produced the highest level of monthly operating income in our history. Our new vehicle unit sales significantly outperformed the industry increasing 11% due to the strength of our brand portfolio and excellent sales execution. Revenues were up 15% and gross profit was up 12%. We improved our cost structure, reducing SG&A as a percentage of gross profit by 290 basis points and we achieved record income from operations with a margin of 4% placing us among the leaders in our industry. These results clearly demonstrate the operating leverage we are building into our business. I couldn’t be more proud of what our team is accomplishing. Now, I’ll turn it over to Scott.

Thank you, Craig. Our record first quarter results of $0.77 continue to demonstrate our powerful operating leverage. Once again, this quarter’s results include no adjustments for non-core items. Our SG&A to gross profit margin was 71.6% for the quarter, a 290 basis point improvement compared to the prior year period. We are proud of the progress we have made with our cost structure, but we'll continue to focus on future productivity enhancements. Excluding rent expense, which we view as a financing decision, our SG&A as a percentage of gross profit ratio was 67.4%. Our strong cash flow generation during the first quarter allowed us to continue investing in our business and to support our ongoing share repurchase program. During the first quarter, we spent $7 million on CapEx. We are budgeting approximately $45 million of CapEx for 2013 as we continue to upgrade our stores, expand service capacity and invest in important technology enhancements. Our CapEx numbers exclude lease buyouts and real estate investments. We raised $12.5 million through a mortgage of one of our captive financing partners in the first quarter. To take advantage of the current low rate environment and considering the amount of unencumbered real estate on our balance sheet, we will consider mortgaging more of our properties throughout 2013. We'll also continue to evaluate other ways to capitalize on the current low interest rate environment. We ended the quarter with a total debt to adjusted EBITDA leverage level of 2.3 times. This puts us at the low end of our peers and provides us with significant financial flexibility. During the first quarter, we repurchased $7 million of our common stock or 213,000 shares. We have $43 million remaining under our authorization and we'll continue returning capital to our shareholders in 2013. We ended the quarter with total liquidity of $312 million, which includes $225 million under our revolving credit lines, a $100.000 in cash and $87 million available in floor plan or offset accounts. We continue to execute our plan of allocating capital in a balanced and disciplined manner to improve our operations and increase share ownership of our stores, grow our company and return capital to shareholders in an ongoing basis. I’ll now hand the call over to Michael to discuss our operational highlights.

Thank you, Scott. I would like remind you that everything I will be covering with respect to operational highlights will pertain to same-store retail performance. New vehicle revenues and gross profit increased 14% and 4% compared to the prior year. Our new vehicle unit sales were up over 10% easily outpacing the industry growth rate of 8%. Although the new vehicle margins for the quarter were 6.1% down 60 basis points, the increase in volume more than offset that margin decline. On a sequential basis, our new vehicle margins were essentially flat compared to the fourth quarter and we do not anticipate significant new vehicle margin erosion from current levels this quarter. Before moving on to our used vehicle sales performance, I want to highlight the fact that our total front-end gross profit yield that is new and used vehicle gross profit per vehicle sold plus our F&I profit per vehicle sold of $3,240 for the first quarter has been increasing since 2009 and is within $34 for our all time quarterly high of $3,274 we set in the second quarter of 2011. I think this speaks volumes as to resiliency of automotive retailing model. We continue to offset the effect of lower new margins by enhancing our F&I revenue. We ended the first quarter with $557 million of new vehicle inventory or 66 day supply on trailing 30 day basis. We are comfortable with our new vehicle inventory levels but we continue to watch them very closely. We increased used vehicle revenues 14% over the first quarter of last year as we implemented Phase II of our Asbury 121 Program. Although margins decreased 50 basis points to 9.5% compared to the prior year period, gross profit per vehicle remained essentially the same while the average selling price increase about…

Thanks Michael. Continuing Michael’s thoughts regarding 2013, we expect the recovery of automotive sales to continue throughout the year due to the current age of the vehicle fleet, extremely attractive financing rates, and the availability of exciting new products. Our planning assumption for 2013 SAAR remains in 15 to 15.5 million range, which implies an overall industry growth of 3% to 7%. The outside performance we delivered in the first quarter relative to the underlying SAAR growth proves that we have positioned our company to outperform in the industry. We believe our strong brand portfolio, attractive geographic locations, and proven ability to execute will allow us to grow across all business lines. I am excited about Asbury’s future and remain encouraged by the recent positive momentum from four trailing quarters of record profits during an uncertain economy. In closing, I want to thank each of our employees. Our record results and momentum are a direct result of your dedication and hard work. I’d now like to turn the call back to the operator. And we’d be happy to take your questions. Operator?

(Operator Instructions) And we’ll go first to Rick Nelson from Stephens.

Thanks. Good morning. Congrats on a terrific quarter. (Inaudible) three segment outperformed both mid-line import and domestic this quarter 19%, same-store were up 11% in both mid-line import and domestic. Can you talk about the drivers there and if you could also address the margin indices that we’re seeing (inaudible) there within those three segments one less than another?

Rick, this is Mike. I’ll take a shot at that. Our increase in the luxury segment was driven primarily by BMW. It was up by 35%. I think if you’ll remember on our Q1 call last year, we noted as did another group that BMW inventory was little bit constrained in the first quarter of last year. As ‘12 developed and we went into ‘13, the supply of that product increased substantially. So we took advantage of that. We also saw nice uptick in the Acura business. So those two kind of push those numbers up. As to the margins, it is -- we're seeing a little bit of compression of margin across all lines. There is no one particular brand that’s not been affected by how our luxury business is holding up a little bit better. We’re still seeing some decent margins there. And with the new product and expanding of the actual brands themselves, we recall into the mid-line price range. We’re seeing a little bit of margin compression from there also. So those are the drivers on where that luxury business went to and as far as the margin, the rest of the mid-line import and the domestics actually held their own and it was reasonably stable on the mid-line side.

Thanks for that color. Are you hearing from BMW supplies are going to remain more plentiful, that was a challenge as I recall through summer months a year ago?

As it stands right now, Rick, we don’t anticipate any shortages from them. We’ve not heard anything. So we’re just continued to move long as if our inventory supplies that we have at the end of the first quarter will remain consistent throughout the year.

Got you. And then the SG&A that was noteworthy this quarter, once again actually. We’re calculating SG&A flow-through ex-rent and incremental gross profit of 50%. Do you think those sorts of levels can be maintained as we move forward?

Yeah. Your number is right around where we calculate, Rick. This is Scott by the way. We’ve consistently said that we feel that we target and can get into the range of 40% to 50% flow through and we are hanging right there at the top end of the range and that continues to be our long-term target. Overall, SG&A also reached the point where I describe it now, as cost control was a cultural issue was much as there was anything. And we continue to focus on cost and we are getting better in every aspect of our business and that will keep us neck 40% to 50% range and we will continue to be the way we run the company. So no big things, but it is a matter of just having the cost control culture.

Got it. Thanks. And a final question. You can address the acquisition pipeline and the pricing. Some of the dealers are saying that there is a lot out there, but the pricing is still high.

Rick, it’s Craig. I will give you a shot on that there. There is certainly a lot of activity. We are talking to a number of different individuals about potential transactions. I would say that we are optimistic that we are going to be able to get some things done. But we don't want to talk about those until they are actually in the bag. With respect to pricing, I mean, I think every seller is different. I would call your attention to the transaction that we did at the end of last year in December. With the release of this financials now where you get total reported numbers as well as same-store numbers, you can back end into the profitability of that Volkswagen, BMV store. If you look at the cash flow statement from last year and essentially, we figure out what we paid for and you will see that store in just one quarter is generating a very attractive double-digit returns. So we believe that there are deals out there that makes economic sense. It’s going to work hard and find them, but they are there and we like I said, we feel pretty good that we are going to be able to bring some more to table here and certainly as we move forward through the remainder of this year.

Got you. Thank you and good luck.

Thanks, Rick.

We’ll go next to John Murphy from Bank of America Merrill Lynch.

Good morning, guys.

Hi, John.

Just a follow-up on the SG&A question. Obviously your performance there is pretty stellar. Are you at a point where you think you are kind of reaching through this asymptotic limit to the downside and there is not a whole lot of more cost to cut or do you think you can go a lot further because your percentages are pretty damn low relative to anything we’ve seen from any dealer?

We are still chasing, right. And as long as we are chasing, we can get better.

Hi. This is Scott. I’m not willing to give up. I think there is always things we can improve. When you are in an improving sales market, which we are right now, it makes those percentages a lot easier to keep improving. But in any market I think there is still always a place you can get better. There is always a place you can become more efficient. And as I said before, that’s a cultural thing and we are trying to instill cross this entire company from every place down as far as all the way up to the very top that culture and constantly look for ways to improve and get better and we’ve not given up on it.

Okay. I wasn’t suggesting you were giving up. I just said the numbers were pretty good already, so just curios there. And then on parts and service as well, I mean there is 59.4% gross margin. Was there anything going on in mix and wholesale parts or something going on in the business that drove that huge margin? Is it internally incredibly high margins? I was just trying to understand what that was in the quarter?

John, this is Michael. No, we don’t do a particularly large amount of wholesale parts business. But I will tell you the margin on our customer pay business actually was up a few basis points. Margin up on warranty was up a little bit. We just have been doing a substantial amount of internal prep work because of our big increases in used car sales and that pushes that also. So it’s nothing that we haven’t been doing for the last eight quarters. It’s just -- when they combined them all this quarter, we had a little bit of an increase and effect on the margin.

Okay. And then just as a follow-up on parts and service. I mean, it seems like in second half of this year, we are hitting the nadir where the UIOs really start to grow pretty significantly. Is there opportunity to improve this business even further from where you are right now, which is already a great level and is the second half of the year where you kind of see that nadir and that return or increase in the units and operations around your dealerships?

John, this is Michael again. Yeah, I think I would agree with you that we are seeing a point where we’ve got a lot more cars that we've been selling. They are hitting this 18 month, to 24 month, to 36 month maintenance period, which is usually the peak maintenance period before we get into the heavy repairs. So we are going to all benefit from that. We've put a number of programs in place. We have some follow-up programs we stated at the end of last year. So we think that, that will very much help us take advantage of these units that are in operation. So I think there is always this potential to grow it more in that business. I've said it a number of times on the calls that our industry the retail automotive franchise dealers gave away a large piece of this business decades ago and I think all of us are trying to get that back and we are putting in retention programs, wiper blades programs, tire programs to bring those customers back to us. So I think we'll all see the benefit of that and I think we can continue to benefit from just having a lot more vehicles out there.

That's helpful and then just lastly as we look at the -- sort of the leveraging of your real estate and the $12 million in mortgages you put in place in the first quarter, I was just curious what kind of capacity you think you have out there beyond that, is there another $50 million of real estate that might be available to get mortgages off over the next 12 months? Just trying to understand the possibility of a really -- realization of some of that value?

Well, you know we have said that you know we had $200 plus million of unencumbered real estate and we thought a very attractive way of accessing this market with the low interest rates was by writing mortgages on those. In terms of capacity to get that done, we don’t see any constraint right now. There is a lot of appetite for assets. I think the financing people whether it's their captive partners or the broader financial community has seen how well car stores have performed throughout the cycle and find these you know a very attractive investment for them. So I don’t see any constraints in terms of capacity. It's just a matter of striking the right deal and working through all the detailed negotiations.

And I apologize, I probably should know this, but of the $200 million that you said was unencumbered, how far you are through that? I mean, $12 million in the first quarter, what was done certainly last year, or is there still a bulk of this to go?

No we are still chasing the number and we said we would be writing mortgages throughout the year and we'll continue to do that. I don’t -- I hesitate to put an exact number of it because for one thing I don’t want my phone ringing off the hook with all these finance companies selling this stuff, but it's a matter of just working through the paper work, but it's a very attractive way for us to access this market.

Okay. Great. That's very helpful. Thanks a lot guys.

Thanks John

We’ll go next to Scott Stember from Sidoti.

Good morning.

Good morning, Scott.

Good morning, Scott.

You know just talk about the -- the last couple of quarters it seemed that you faced tough comparisons in the used car business and now that Phase II of one to one has come on you, seeing things accelerate again. Could you may be just talk about what's basically the difference between Phase II and Phase I and may be just give us a timetable or in which phase it will be completed?

Yes, Scott, this is Michael again here. So Phase I we started a number of years ago, which was essentially a process at the store level on teaching individuals how to value cars and value that we put on them as well as educating sales staff and management. It took a while to get that implemented, but we got it done and it's been out there for well over 18 months. Phase II is essentially inventory movement. It is a process whereby all of our inventory is consolidated daily. We evaluate inventory. We have a team of individuals that work with individual store management and evaluate based on the age of a vehicle. Where that vehicle should be moved? Whether it should go to another store? At what price it should go to that store and then eventually should that vehicle be sent to auction? We started that program late last year. It's -- obviously it will move much faster. We will be finishing the entire country on that program sometime before the end of the second quarter.

Okay. Did that require the implementation of a bolt-on system or is that all part of the DMS?

It's actually part of a used car system we've been utilizing for about the last five or six years. It's just management, some individuals that we put on the team that are very, very good and skills they using that.

Okay. And obviously you did great job putting more profit down to the bottom line with regards to G&A and now with the DMS is complete and maybe just talk about some of the things that really driving this 200 basis point move, maybe just talk about, last you talked about shared services and few other items that you could get that would further those gain?

It’s a, again, it’s no single big thing, yes, we’ve got the DMS in, we are leveraging that technology, it’s largely, it’s a much better visibility into the operations of our stores allowing us to be I think better managers across the Board, now that we have access to common numbers across the entire platform. Michael and his team have done a great job of making sure pay plans are competitive and amongst the best in the business but at the same time produce leverage as we grow the business that’s been a part of it. We’ve constrained headcount. We are very cautious to add people to the organization unless is absolutely necessary and that has become part of our culture. We have a whole team working on shared services and that is making progress and that is beginning to have some real traction in terms of creating more leverage and more leverageble environment. So it’s across the Board, outside services, you name it, we scrutinize that we look at it and our systems and infrastructure now really allow us to stay on top of that stuff and it is a like all cost control initiatives. It’s a detailed job and everybody needs to be part of it. It’s a full contact support here at Asbury.

Got you. And last question, obviously more towards the record month for everybody across the Board. But what do you guys seen in April so far?

Yes. Scott, this is Michael, again. So as old guy had been in this business a long, long time always looked at month to month to month, have a track seasonally. So April is always less than March. April is turning out to be a very good April. We anticipate that we will take advantage of what's happening in the marketplace, particularly the brands that we have and just referencing what we just spoke about on the preowned side we anticipate that we will not be disappointed with April.

Got you. That’s all I have. Thank you so much.

Thanks Scott.

We’ll go next to Bill Armstrong from CL King & Associates. Bill Armstrong - CL King & Associates: Good morning, guys. Most of my were answered but can you talk about the supply availability of used cars both on the trading side and on the wholesale side and what you are seeing in terms of pricing?

So, Bill, this is Michael, again. So, as we ramped up with the sour on the new car side, we take about 65% of our new retail sales result in a trading. When you couple that with the Asbury 121 Program, we are keeping more of those being able to move them around. So I think the availability of used from trading side as we become increasingly more aggressive in that pricing arena, I think we will have ample supply with the sour the way that it is. We do purchase of course cars at auction, cars are available, there is, I wouldn’t say a shortage, but the prices for luxury, certifiable cars is pretty tight, you are going to pay a little bit for those, its not has recovered quite yet from the ’09, ‘010 time period but we are beginning to see more of those. We’re beginning to see a few more midline priced vehicles at the auction from their rental fleets. So there is prices, there is product out there. It is a little pricey in the auctions. The other side of that is that we also see except for the real high amount vehicles we still see a very strong wholesale market would anticipate that market to stay that way at least through June, July timeframe. Bill Armstrong - CL King & Associates: Okay. Great. Thanks.

We’ll go next to James Albertine from Stifel

Thanks for taking my question. Good morning and congratulations. Just to follow on to that that last question just for a moment. Have you seen any discernible trends in terms of your new sales performance, if you look at it by brand, so luxury used lots versus sort of mid-line imports so forth.

So James, this is Michael. We track it obviously above the brands that we have and what we sell. So it’s not -- it would not be unexpected that our inventory and our sales reflect what we sell in news. So our largest by model, our largest sale of used cars is Toyota, Honda, and Nissan falls right in with our new car site. And then our inventory of course reflects that same. So we’re not seeing any trends other than what I mentioned earlier. Availability for certifiable high-end BMW, Mercedes, Lexus is still fairly tight there. There is still a shortage of those. So there is lot of price out there on them but again we saw 65% of our product on the trade-end side. So as the new business increases, we will continue to supply ourselves particularly with the brand that I just mentioned.

That’s helpful. What I was getting, I was trying to, I guess, dig a little deeper in demographics whether the luxury consumer, if you will, is more or less likely to purchase a used vehicle in this environment versus maybe a mid-line import consumer or so on so forth. But I appreciate that color. And then, look over the course of the last several years, I mean, this has really been a record breaking, record setting turnaround effort continues to be so, certainly on the SG&A side. I guess, is there any color you could provide as to the opportunities going forward. I know, you touched on a lot of different opportunities but maybe framing with the respect to the top third of your stores versus the bottom third. And whether there is a bigger gap in F&I or bigger gap in used gross profits or sort of what you’re seeing there and how long you think it will take to sort of close that gap over time?

That’s -- this is Craig. That’s the all encompassing question. What’s senior management here for question. I’d start off, I think there is still areas where we can perform significantly better. I think that starts with people. I think we’ve got a great team in place. We’ve got a great structure, that’s the way we were organized out in the field. Our general managers get very good support within the different segments of the business from the folks that we have out there to help them. You could always take the bottom quartile of any set of stores and look at any area whether it’s new used F&I. So there is an opportunity because bottom quartile is not at our midpoint. It’s like the way we think about things. The other thing that we constantly do is we rank the stores. The stores sit actually by brand among themselves and look at one other, ranked in different areas and look for opportunities to do better. I would say that our systems are starting to mature to the point where -- because we do have common systems. We do have common charts of accounts. We make information available to our general managers on a real-time basis. So they can see how they are performing in any aspect of business relative to the peers and relative to other stores in the market place. Obviously, when we see -- when they see some others doing well, there is an opportunity to pick up the phone and call them and find out what’s working, what’s not. I would back up and say that we think the big areas of focus, Michael has already touched on is we do have an opportunity to do better in used. We still have too many vehicles that are…

That’s very helpful. I appreciate the detailed answers. And then just one last sort of housekeeping item. Apologies, if I missed it in the prepared remarks. I thought you had mentioned it, maybe earlier in the quarter at either in the conference or in the last call. But the dealer that you sold, was that a function of an opportunity that you just couldn’t pass up as a seller, or was it a function more of the under performance of that particular dealership and did you say what brand or location that was at one point? I just don’t recall. Thanks?

We haven’t called out the brands, specifically. But I would say that we run this business very much from a shareholder and there are times that buying stores makes sense. And there are times that selling stores makes sense. In the last quarter, we did sell a store. We feel that we’ve got a very attractive price. We’ve got a multiple well in excess of what we create for that sale. And if you go back and think about a year, you would find that we’ve sold another store. And in that case again, we’ve got a very attractive price and we thought it was in our shareholder best interest if you wouldn’t, perhaps essentially to rebalance the portfolio, take those proceeds and redeploy them where we can earn a greater return. So you should not be surprised to see us buying stores in the future or even potentially selling stores, if that’s what we believe we can do get the greatest return for our shareholders.

Great. Thanks, again. You are doing a great job and certainly good luck on the year ahead.

Thank you.

We’ll go next to Brett Hoselton from KeyBanc.

Good morning, gentlemen.

Good morning, Brett.

Let me start on the new car side. Michael, you obviously had a good quarter. You talked little bit about BMW, helping you out there. I’m wondering, as you think about your inventory constraints and your comparison moving into through 2013. Do we just get more difficult, more difficult comps consequentially as we move into the second, third and fourth quarter, or is there actually a particulars step-up, maybe in the third and fourth quarter timeframe when inventory really became plentiful?

Brett, this is Michael. I think, as we look back on the comps from last year, the first quarter of last year with the exception of BMW was the only quarter that we really had any kind of constraint and it was not much. We still had a little bit of tightness in supply, in some Lexus product, a little bit of Honda but not so much. So, I think, second and third and fourth quarters of this year, the only comps that where we would be looking at would've been BMW and that product really began to loosen up in the third quarter of last year. So, if you go forward into ’13, I don't -- unless something unforeseen happens, I don’t see a shortage issue or a constraint on any of the new product that’s out there in our portfolio right now.

And then as you think about your F&I gross profit per unit up, I think was around $135 per unit year-over-year, a very, very nice improvement. Can you talk about the drivers of that improvement? And then secondly and more importantly, can you talk about -- where do you think you might be able to go and to put that into context, is there any sense of where maybe your top quartile was performing.

So, I will take the shot at the couple pieces of the question. As far as one of the drivers to that, the vast majority of our income comes from product sales. So our focus is educating about both our managers and consumers where everything is menu-driven at our store. So it is just presentation, presentation, presentation and that’s what drives product sales and that’s what drives value to the consumer. So, I think just the continuation of our training and process and our presentation is what continues to move that number up. I’ve said this probably every quarter, how high is high and we alluded to it in some other areas. There's always a bottom third. So when we look at the bottom third and we do have some very specific programs. We call them our Boot Camp that we place our bottom third performers in on a very regular basis and help them and retrain and learn the processes little better. So we are seeing the results of that. As far -- we don't really want to disclose the top number versus the bottom numbers that is an average. So you can just imagine that there are some highs and some lows in that number. And we think, again, constant improvement is what we are looking for. So, I would anticipate we can just continue to move that number up.

And then as we think about parts and service margins, some very nice improvement on the year-over-year basis. I would expect to see that continue as your used-car sales build and warranty rebound, is that a fair expectation?

I think that's a fair expectation. I am not too sure that there is a substantial magnitude of that number, but I would say that if you just do the pure risk from taking us, that we should be able to at least hold the margins that we've already got out there.

Okay. Excellent. Thank you very much gentlemen.

Okay.

Thanks.

We'll go next to Ravi Shanker from Morgan Stanley.

Thanks. Good morning, everyone. Can you give us a little more colour on exactly why March was so awesome for you? And also you said earlier that you are pretty confident that new margins won't deteriorate from current levels. What gives you that confidence as actually we are seeing some other dealers talk about openly wanting to gain share at the cost of some margins in the near term?

This is Craig. Let me take a shot at the question about why March was so great.

Yes.

And we'll let Michael do the second part of the question. And my short answer would be, we wish we knew why. It was January and February where our tracking was very much in line with expectation and March was just phenomenal like we said and I wish we could tell you why. We don’t have a staff of economists here, but it just -- we just hit on all cylinders. I mean, every...

And if we are looking...

I am sorry?

I am sorry? Please go ahead.

I was going to say it wasn’t just new or used. It was every element of the business including parts and service just took off in March. So it's -- I would like to believe that this is beginning of a strong recovery of the economy, but like Michael said, one month doesn’t make a trend. I would also point out that this is a business where you can have a phenomenal weekend and then you get to the next weekend and the business is absolutely dead. So we are enjoying this but we hope it continues, but we don’t have the crystal ball that's clear enough that we can be confident about which way it's going from here.

No, I would just add that this is the pay-off. I mean we've worked very hard as a company here to put in the processes, the systems, the cost controls, so that when something like this happens, you benefit and you see it right here and this is the pay-off of all that hard work.

This is Michael. On the margin piece, what makes me think that we shouldn’t see a substantial deterioration of a couple of pieces to that, fundamentally we do want to hold market share ourselves and we are watching manufacturers as to what they are doing to grow market share. We are seeing a little bit of readjustment of some of the programs that the manufacturers are putting out there, which should help us a little bit may be not quite as many of some of the programs that cause margin deterioration. We are also enjoying new products that seems to come out in a very nice steady flow from all the manufacturers especially with our portfolio, so it's not like we got a whole bunch from one and none from the other. We are seeing a very nice steady flow of it across the Board. New products always helps us maintain the margin. The other piece of it is just the training part of it. There is a certain margin that we work for. We don’t everyone to give us market share, but we work for that constantly talking about it. So I just view it as the deterioration of it we watched it over the last seven or eight years. We've also watched the rate of that deterioration slow down. We are getting very, very narrow bands of transaction prices now. We are not seeing these huge variations within a particular model. We are seeing a much narrowing of that transaction pricing band. So we put all those together and that's what kind of gives me the confidence that I think we will see a substantial decrease in it.

Got it. And is April looking similar to March or Jan, Feb?

April is let’s see -- April is not as good as March. It's never in my -- my history, it's never been as good as March, but I think April is favourable for us. It is a -- I am saying this because Easter was in March, April will be better than a normal April.

Understood and apologies if I missed this earlier, but can you give us your thoughts on the F&I business and what the CFPB rules might mean for F&I per vehicle over time.

Sure, this is Craig. I would say that's -- that's an initiative we are watching closely. We don’t really have any more information than what you do and it's more concrete information. Some of the things that we understand is that, obviously there are lot of question about cap on the F&I reserves as we called them, the rates, lot of questions about whether if that cap would happen, would that be a hard dollar cap, would that be percentage cap, we just don’t know. I would say that we feel that it’s something big come, we feel like we could manage it well. We have self-imposed caps that we've already got place today to make sure that our stores remain within compliance, so if there is a new cap, I’m not sure that will be have major impact on us, if the cap were -- even if the cap were somewhat less than the caps that we've got in place as Michael said the majority of our profit comes from products, so we would continue to just even put more emphasis on product. So I think something that we’ve got to watch, but at this point, we feel like we’re in good shape and we'll manage through that challenge as well, same we manage to many other challenges in the past.

Got it. How long do you think it will take to get that clarity, I mean, is going to be in matter of weeks, quarters or maybe year or so?

I wish I knew.

Yeah.

Yeah. You probably know as much as we do. I think our sense is it’s not weeks and months, it’s probably more likely quarters before we get any more clarity in that regard.

Great. Thank you very much.

Thank you. We have time less for one more question.

Where we do have one more question in the queue. Would you like to take that?

Not least

Okay. Well go next to Brad Jordan from BB&T Capital Markets. David Kelley - BB&T Capital Markets: Hi. Good morning. This is actual David Kelley in for Brad. I appreciate you guys putting me in here last second. Just a couple quick follow ups and we are really looking at the second quarter here where warranty has rebound and I think gross profit was up like 10% year-over-year. Do you think we finally bounced off the bottom and are the expectation that warranty should show some positive improvement from here now?

Yeah. David, this is Michael. I think the rate of decline of warranty that we’ve all seen in the industry over the years is that rate is definitely slowing down, I don’t know whether we bounced off the bottom or not. I will as we all know the cars are made so much better. The quality have substantial, so the improvements in technology and so on have made it, so that the warranty business is a much smaller piece of what use to be. We will always see recalls in our business. We can’t predict them, they just when they occur we will work with them as with our manufacturing partners. So some time we will see a little lumpiness in the way the warranty business works, but I think it is a much more stable part of our business then it had been in the past. David Kelley - BB&T Capital Markets: Okay. Great. Thank you. And then just one quick final follow up on parts and service. I know you guys mentioned that prior volumes expanded considerably 70% in 2012 and you had aggressive goals set for ’13. I’m just wondering as of April 2013, where you are relative to those aggressive goals you had set unless you are seeing in the tire market?

So the tire business continues to be very strong for us. We are not quiet at our goal. We are very close. We were addressing what we need to do get there, but it is still very good for us and again as I said on number of calls, it is a retention business for us, it’s a way to keep, not only the customers that we have sold to and service in the past but to attract customers to whom we did not service or sale. So that is how we view it and I’d say we are on track David. David Kelley - BB&T Capital Markets: All right. Great. Thank you for taking my questions today.

At this time, we have no further question.

Okay. Thank you very much Operator. And thank you everyone for joining us today. We appreciate your time and look forward to talking to you again next quarter.