Greetings, and welcome to Asbury Automotive Group's First Quarter 2023 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions]. As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Karen Reid, Vice President and Corporate Treasurer. Thank you. You may begin.

Thanks, Rob, and good morning, all. As noted, today's call is being recorded and will be available for replay later this afternoon. Welcome to Asbury Automotive Group's first quarter 2023 earnings call. The press release detailing Asbury's first quarter results was issued earlier this morning and is posted on our website at investors.asburyauto.com. Participating with me today are David Hult, our President and Chief Executive Officer; Dan Clara, our Senior Vice President of Operations; and Michael Welch, our Senior Vice President and Chief Financial Officer. At the conclusion of our remarks, we will open the call up for questions and will be available later for any follow-up questions. Before we begin, we must remind you that the discussion during the call today is likely to contain forward-looking statements. Forward-looking statements are statements other than those which are historical in nature, which may include financial projections, forecasts and current expectations, each of which are certain to subject -- subject to certain uncertainties. For information regarding certain of the risks that may cause actual results to differ materially from these statements, please see our filings with the SEC from time to time, including our Form 10-K for the year ended December 2022, and subsequently filed quarterly reports on Form 10-Q and our earnings release issued earlier today. We expressly disclaim any responsibility to update forward-looking statements. In addition, certain non-GAAP financial measures, as defined under SEC rules may be discussed on this call. As required by applicable SEC rules, we provide reconciliations of any such non-GAAP financial measures to the most directly comparable GAAP measures on our website. We've also posted an updated Investor Presentation on our website investors.asburyauto.com highlighting our first quarter results. It's my pleasure to now hand the call over to our CEO, David Hult. David?

Thank you, Karen, and good morning, everyone. Welcome to our first quarter earnings call. I am proud of the team's performance in Q1 and the execution of our business model across its diverse revenue and profit streams. As expected, we are starting to see trends as the industry begins to normalize. We are strategically operating within a changing environment, and we continue to prioritize profitability. Over the last couple of years, pre-owned has been depleted due to fleet levels and lack of leasing. Overall, with this limited availability of pre-owned inventory in an unbalanced new inventory by brand, we are focused on maximizing our gross profit streams. Now, to our consolidated results. As a reminder, during 2022, we divested of 16 stores, four occurring in the first quarter, three in the second quarter, and nine in the fourth quarter. These stores contributed $683 million in revenue last year. Now, for the first quarter of 2023, we generated $3.6 billion in revenue, had a gross profit margin of 19.4%. Our SG&A as a percentage of gross profit was 57.9%, had an operating margin of 7.7%, and our EBITDA was $294 million. We delivered an EPS of $8.37, and we repurchased 110,000 shares for $21 million. In addition, from the start of the second quarter through yesterday, we purchased 32,000 shares for $6 million. We continue to monitor the marketplace for acquisitions that meet our stringent thresholds for returns and that are a fit for the company from a cultural and operational view. Our mindset continues to be that we are opportunistic, strategic, and thoughtful in maximizing our returns for our shareholders. Now, expanding to all stakeholders, I would like to highlight that we published our second Corporate Responsibility Report at the end of March. We invite you to read it if you haven't already. Finally, I would like to thank my fellow team members for a strong start to 2023. The guest centric experience begins with you and we are looking forward to what is in store. Thank you. I will now hand the call over to Dan to discuss our operating performance. Dan?

Thank you, David, and good morning, everyone. I would also like to extend my thanks to all of our hardworking team members for consistently delivering an exceptional guest experience. Now, moving to the same-store performance, which includes dealerships in TCA unless stated otherwise. As a reminder, we acquired many stores as well as TCA in late 2021, which have now entered our same-store results for the quarter. Also, the 16 stores that were divested during 2022 are excluded from same-store. Starting with new vehicles. Our new vehicle inventory ended the quarter at $643 million, which represents a 30-day supply. Our day supply fluctuated by segment with domestic being at 63 days, import at 18 days, and luxury at 28 days, and varying greatly among brands and models within those segments. Our new vehicle volume was down 4% year-over-year, while we grew new vehicle revenue by 3%. New average gross profit per vehicle was $5,184, a decrease of $616 from the prior year quarter. Turning to used vehicles. Used retail revenue was down 9% through prior year quarter, mainly due to the dropping cost of sales. Used retail gross profit per vehicle was $2,146 for the quarter, a decrease of $385 from the per year quarter. Our used vehicle inventory ended the quarter at $309 million, which represents a 27-day supply. Shifting to F&I. We delivered an F&I PVR of $2,352, a decrease of $192 compared to the prior year quarter. Regarding consumer financing in general, we did not see a miserable impact of credit timing in the quarter. In the first quarter, our total front end yield per vehicle was $6,053, a decrease of $675. Moving to parts and service. Our parts and service business was a source of strength in the quarter. Revenue increased 12% in the quarter, customer…

Thank you, Dan. To our investors, analysts, team members, and other participants on our call, good morning. I would like to provide some financial highlights for our company. For additional details on our financial performance for the quarter, please see our financial supplement in our press release today and our Investor Presentation on our website. Overall, net income was $181 million and EPS was $8.37 for the quarter. There were no non-GAAP adjustments to net income in the first quarter of 2023. Adjusted net income for the first quarter of 2022 excludes gains net of tax of $25.5 million related to $33.1 million gain on the sale of four dealerships and a $900,000 gain on a sale leaseback. This adjusted 2022 first quarter EPS by $1.11 to $9.27. Our effective tax rate for the first quarter of 2023 was 23.9% compared to 24.2% for the first quarter of 2022. We estimate our tax rate for the remainder of 2023 to be approximately 24.5%. Excluding real estate purchases, we spend approximately $15 million on capital expenditures in the first quarter. We expect full-year 2023 CapEx to be $200 million as we continue to rollout our planned CapEx related to our 2021 acquisitions. Of this $200 million, about $20 million is expected to be related to the replacement of lease property. For the quarter, TCA made $17 million of pre-tax income, which excludes $3 million of net unrealized gains. We have rolled out TCA to all of our stores in Colorado, Texas, and St. Louis, and we expect to deploy TCA into the rest of our stores by the end of 2023. Due to the deferral of the income associated with the store rollouts, we expect TCA to generate $25 million of pre-tax income for 2023, a decrease from the $80 million in 2022. Our balance sheet remains strong as we ended quarter with approximately $1.7 billion of liquidity comprised of cash, excluding cash to total care auto, floor plan offset accounts and availability on both our used line and revolving credit facility. Even with our sizeable acquisitions in recent years, we have managed our debt levels strategically to support our long-term growth. Our pro forma adjusted net leverage was 1.6x at the end of March. For the first quarter of 2023, we generated $244 million of adjusted operating cash flow driven by our strong business model. With our robust cash flow generation, we have the flexibility to achieve our strategic goals and be able to seize opportunities. We constantly gauge the market for potential acquisitions that would further enhance our strong portfolio versus repurchasing shares to return capital to shareholders. Finally, I would also like to thank our Asbury team members. Our result is driven by your dedication to the guest centric model. I will now hand the call back over to David to provide some closing remarks. David?

Thank you, Michael. I'm encouraged by our results, especially from a same-store performance. In an age car park, we still historically depress our levels and the complexity of newer cars, such as EVs bodes well for our strong parts and service business. We have been and continue to be strategic in our philosophy and in our actions. With our strong cash flow and balance sheet, which has grown more robust over time, we are opportunistic for potential acquisitions and buybacks. This concludes our prepared remarks. We'll now turn the call over to the operator and take your questions. Operator?

Thank you. At this time, we'll be conducting a question-and-answer session. [Operator Instructions]. Our first question comes from Daniel Imbro with Stephens, Inc. Please proceed with your question.

David, you guys have done a great job. I feel like on the new vehicle side, especially with some of the elevated production at some of the domestic OEMs. I guess one, other than Clicklane, are there things you guys are doing operationally to protect that GPU margin or improve the vehicle sales trends? And then second, as a related one, what percent of new units are sold on pre-order today and maybe how has that trended as we try to assess the demand backdrop here in terms of what's getting pre-sold?

Daniel, this is David, I'll take it and Dan can jump in. Last quarter, about 38% of our cars were pre-sold on incoming. For Q1, it dropped to 33%. So we still think a pretty healthy number, but there certainly was a drop there as well. On the pre-owned side, sequentially, we actually went up in PVR. We just determined that it didn't make sense to chase volume. Our gross profits are not so much about the sale price, but the acquisition price because the market dictates what the selling price is going to be. So we weren't aggressive at buying cars from auctions or anything like that. We focused on trade-ins, off lease vehicles and purchasing cars direct from consumer. We felt it was a better trade-off to have lower volume and higher gross profits, which really generated a better EPS for us overall.

David, I have nothing to add. I think you covered it well.

And then on that used side - thank you for that. Maybe to follow-up, it's still obviously a point of weakness out there in the market. Are you seeing any discernible change in that pre-owned buyer or consumer? Are you seeing it trade down? Are you seeing lower product attachment on F&I? And anything that would tell you that consumer is materially changing from how they've been lost couple of quarters.

You can see on our cost of sale, it dropped a little bit for the first time in a couple of years. So we see that as a good sign. Certainly, with all the interest rate increases over time, that's put more pressure on the payment. So I think people are not reacting as quickly and being more thoughtful about taking time. The biggest challenge right now, as you can imagine, is finding the right fit. Really trying to find those cars that people are looking for so you can turn them in a quick manner, if you will. So again, we believe the focus almost 70% of the cars that we're selling right now are trade-ins and off-lease vehicles. And we feel if we can maintain that we can hold onto margin as best we can, which is what our focus is going to be.

Great. And then last one for me, Michael, as a follow-up on the financials, I guess $1.1 billion in cash on the balance sheet, you just did the divestitures in 4Q. What is the appetite for M&A? And are there any certain markets or brands you would like to fill in or are trying to fill in specifically with that cash?

Yes, I mean, we're still out there looking strategically for acquisitions. We like the markets we're in. We're trying to find those strategic acquisitions that make sense for us and then comparing that to the share buyback opportunities that are out there in the market as well. So trying to balance those two items with the cash, with the environment what it is and the uncertainties just in the economy, I think being a little bit just strategic with our cash and waiting for the right opportunities is the best approach right now just with that uncertainty in the markets.

And this is David, I'll just say we're seeing a good amount of M&A activity and seeing opportunities come our way, just haven't been able to land something that we feel really strongly about.

Great. Well, best of luck going forward and thanks for all the detail.

Thank you.

Our next question is from Adam Jonas with Morgan Stanley. Please proceed with your question.

Hey, everybody, good morning. So my first question is, I think, in your prepared remarks, you said that there was no measurable sign of financial tightening during the quarter. How about after the quarter? My first question.

Yes, Adam, this is David. Not yet. I would tell you as a reminder, we normally state that our subprime as a percentage of our business is about 10%. Last month in the quarter is just over 7% of our business. So our core customers over a 700 credit score. We have over 250 lenders that we're signed up with. So we have a lot of options and we're not seeing any tightening as we sit here today.

Okay. So just to interpret that, going from 10 to 7, maybe there is tightening, but you don't see it because it's happening on the lender side, right? Is that a fair interpretation, yes --

Well, so I would tell you, our store locations, our go-to-market in how we go after our business, we're just not aggressive looking for subprime. So I wouldn't say there's -- I wouldn't look at it that way as much. And as you can imagine with those number of lenders that we have, certainly some have tightened up their practices compared to others. But again, because of the majority of the polarity of the banks that we have available to us, we just don't have an issue seeking lending.

I got it. Thanks, David. Just to follow-up, can you update us on your current percentage of your new sales that are ordered to delivery or pre-ordered, let's say maybe how that's trended, where that was kind of exiting last year or a year ago. And then any comment on ATP versus MSRP, that gap there would also be helpful given the environment? Thanks.

Sure. I hope I get all of it. Last quarter, fourth quarter of 2022, 38% of our vehicles were pre-sold that were incoming. In Q1, it was 33%, so a little bit of a drop off there.

ATP versus MSRP.

Yes, and I would say percentage of MSRP, it's just like you'd expect certain models that have a single day supply, certainly holding to MSRP and vehicles that we have, say, north of a 40-day supply of vehicles, we're certainly discounting at this point.

Our next question is from John Murphy with Bank of America. Please proceed with your question.

Good morning, guys. I just wanted to get into one thing about your new vehicle affordability. And everybody claims that it's a real issue. And it is for the consumer, but it may be not such a big issue for you because you're putting up record profits or near record profits. And things are pretty healthy for you in the business. So as you think about somebody coming in and they're challenged from an affordability perspective and buying a new vehicle, what's the process and how successful are you in transitioning them to buying a used vehicle and/or transitioning them into parts and service customer, two avenues where you make pretty good profits relative to even the new vehicle side?

John, good morning. This is Dan. So from the first aspect of the affordability from a new car perspective, we're starting to see, I would say, slowly but surely in taking a faster pace for a lack of a better term, the leasing aspect of it. So as you see the challenging or the opportunity on the price of a new car that leasing coming back really allows consumer to be able to get into that car that they want for a lower payment. And we all know the benefits that's going to have from a used car perspective three years down the road getting those lease returns back. We know that the first car that we sell at our dealership is all done from the sales department, but the second, third, fourth, and so on is all done through service. So that turnover if I may that we do transaction wise from sales to service is extremely important. Not just on making sure that that we respect people's time, that's why we put so much focus on the cycle time making sure that when they come in for that first service, they're getting in and out and getting their services completed because we know that to the extent that we respect people's time, their loyalty is going to continue to grow with us. And then as I mentioned earlier comment if we do a good job in the service retention we're going to continue to sell the cars in the years to come.

John, the one thing I would add that we did see in the first quarter related to pressure and pricing some of our domestics was really we had an imbalance of inventory in the sense of, there were heavy contented vehicles that were built during the chip shortage, everyone went with the heavy content in the vehicles. And in the first quarter, especially on the domestic side, people were looking for less expensive trucks than what we had. And there was a slow approach on incentives there. So I think we're certainly seeing it on the truck side in the sense of people looking for a little bit less expensive less contented truck.

Okay. And maybe if I can follow-up on this, but I'm curious, if somebody comes in and they're challenged on buying a new vehicle, can you or have you been able to transition those folks into buying a used vehicle that they can afford? I mean, what's the success on that? I mean, you don't have the right vehicle to sell them on the new vehicle side, which is harder and harder with pricing and affordability at the moment. Are you having success in working -- walking those guys across to the used vehicle department and selling them a vehicle there? Or is that just fundamentally a different consumer?

Yes, John, I'll answer it. It's not, and it's usually a portion of your sales get transitioned to pre-owned. As you can see, we have a lower day supply of pre-owned than we do new, and it's more so about model mix than anything else an overall day supply. So there's no easy answer to your question. People constantly flip from new to pre-owned, but it's about having the right pre-owned vehicle that they're looking for in that segment. So we do it successfully, naturally when the availability is there when it's not there that's obviously an issue that we have.

Got it. And I apologize, I got on the call late, on the parts and service side, I mean, the same-store sales were very strong. Is tech availability the gating factor or is there something else if she looking -- should be thinking about sort of as the constraint on that sale -- the same-store sales growing there?

Yes. This is Dan again. The tech availability we will take every technician that is available out there for us. We'll now -- we all know how competitive this labor market is but we put a tremendous amount of emphasis not only in having good relationships with the local technical institutes where we're able to hire future technicians at a very entry level point, if I may and then developing them from within. So that has -- that is working out well for us in many of our markets. But certainly, we're not shying away from actively going after more technicians because we have the bay capacity and we just need to fill it out with more technicians.

John, the one thing I would add, it's a choppy market in a lot of ways economically, but with the average age of the car over 12 years, history has shown those folks tend to hold onto to their cars and invest in parts and service. So again, we see parts and service being healthy for many years to come.

Okay. And then just lastly on the SG&A cost save side, I mean, how much opportunity is there to take cost out at this point, David? Or is it really just a function of holding the line on costs and letting grosses improve over time as volume comes back?

Yes. One of the several positive things we had happen during the quarter in all segments, our production per employee went up even though we were a little bit depressed in some of the sales we had. That's just really working into our efficiencies with software and where we're trying to go. I would say that the volatility of the market for the next 12 months to 18 months will make it difficult to look for a lot of opportunities to be lower than where we are. But we think 24 months out with things that we're working on with our omni-channel and software approach, that there's another level for us to get to from a productivity per person, which should create a tailwind down the road for us.

[Operator Instructions]. Our next question comes from Ryan Sigdahl with Graig-Hallum Capital Group. Please proceed with your question.

Good morning. Just one question for us on Clicklane. So when I look at the F&I, it increased quite a bit more sequentially than the overall business in the quarter. I get the underlying KPIs are good, but what do you attribute the biggest incremental improvement in Clicklane relative to the retail dealerships, specifically on the F&I piece?

Ryan, this is David. It's interesting because we had the same question. I think the reality is when you're in the store; people selling products have preconceived notions about what someone's willing to buy. And I've stated it before, I'll say it again. It's pretty obvious. People love to buy things but not so much be sold things. The opportunity for them to shop the F&I products on their own are still converting at a great rate. And it doesn't matter if it's used; it doesn't matter if it's import, domestic or luxury. We've been very happy with the self-selection that our consumers are doing because there's no Asbury employee intervening doing F&I sales. This is solely based on the customer.

Our next question is from Rajat Gupta with J.P. Morgan. Please proceed with your question.

Great. Thanks for taking the questions. I just wanted to follow-up on the used cars strategy around the volume versus GPU trade-off. I mean, curious like how long you plan to persist with this approach, given you lose the opportunity to book F&I and maybe parts and repair work down the line. So any thoughts on like how long this is going to persist and would you reevaluate this at some point just to maybe retain that customer eventually? And I have a follow-up. Thanks.

Rajat, this is David. We evaluate it every month. I would tell you, we will continue to have this approach as long as the inventory availability isn't there. Again, we think it's a couple years depressed with COVID and we think next year you'll start to see some of those cars come back in. So maybe this entire year we ride with that philosophy, but if the market shifts and it changes, we will adjust quickly to it. The benefit of that low day supply allows us to be pretty nimble. I can say if we chased volume other than our margin being down, our SG&A would've been up and our profitability would've been lower for our shareholders. So again, we're trying to maximize our returns right now, and based upon current market conditions, we think this is a best approach to give the highest returns and have our lowest SG&A.

Got it. Got it. Good. Thanks for -- thanks for clarifying that. And maybe just to get your thoughts on the -- these price cuts from Tesla. I'm curious, with this price cuts -- with this other round of price cuts more recently, any feedback that you're hearing from the ground, from the GMs, SMs on how do consumers are reacting to it, anything you've heard from the OEMs or need or plans to counter this. Just maybe like what you're hearing on the ground. Just need what your thoughts are on the implications of this. And that's all I have.

. : I think traditionally what you'll see and we've seen for the last four decades as inventory starts to build, incentives will start to increase. We're hopeful selfishly that a lot of those incentives will be driven through leasing because we really think the leasing volume really needs to get back up to speed to get that healthy return or a customer and retention levels.

Got it. Got it. Thanks for the color. Maybe just one last one, sorry. On the 2025 targets, they were reiterated and but looks like used vehicle growth is going to be a big driver of hitting those targets. Over the embedded situation, this year perhaps extending into next year I mean are there any like other offsets that could still get you to those targets maybe more M&A or maybe more persistent new car GPUs. Just as curious around that comfort level with those targets and maybe like just the competence of that have changed versus when you caught initially. Thanks.

Sure. This is David again, Rajat. As we stated last quarter, we were on a large acquisition that fell apart at the end. We have looked at other things in the market now. We're not at a point that we would adjust our 2025 year target. But I -- we feel as a team by the end of the year, we'll have a great line of sight to how we're tracking towards that 2025 year target. We can control how we're operating our same-store growth within the market that we're in. But it's a little bit challenging with inventory levels and other things going on right now. So I would say look for an update for us at the end of 2025, but a couple acquisitions can put us right back on track for that. So it's too early for us to make any updates and we intend to do that at the end of the year.

Great. Thanks for all the color and good luck.

Thank you.

Our next question is from Glenn Chin with Seaport Research Partners. Please proceed with your question.

Can you speak to the divergence in new unit performance by segment, luxury import domestic? Was it a function of the issue you touched on David, that of pricing content of vehicles versus what consumers were looking for and that the fact that some of the domestic OEMs were slow to react with incentives?

Sure. And obviously it varies by market, whether it's Southeast, Southwest and so on Midwest. I tell you as you can see in our earnings release, on the import side, our largest flying brand is Toyota. The entire quarter we had a single day supply of vehicles. And really the hot models, we didn't really have much inventory at all. Honda was our second and we had an extremely most of the quarter single day supply. It jumped up towards the end of the quarter, close to mid-teens day supply. So the demand was there and the volume was there to do more we think at a healthy margin. On the luxury side, Lexus is usually our number one volume. Again, during the quarter, we had a single day supply of Lexus, and we know our sales were governed in the quarter, and there were more sales available, and a lot of cars were pre-sold there. We still see pretty good demand on the luxury side. Now it's model-based and it's certainly whether it's combustible or EV. But as we sit here today, we think our headwinds are getting our cost structure down on domestic vehicles. And we think we're fairly well aligned on the import and luxury side at this standpoint.

All right. So before when you talked about the issue, David, you mentioned that the domestics were slow to come to the market with incentives. It -- question is, has that changed or do you expect it to change, you expect them to come to market?

Sure. Stellantis is the one that has the biggest impact on us. We have over 60-day supply of Stellantis. We also have stop sale trucks in truck markets that make it difficult, so that's going to govern your sales as well. And their incentives have continued to increase but they were slow to come to the table. So we have heavily contented trucks with incentives that are catching up, and we still have stop-sale vehicles as we sit here today.

Okay. And just to confirm, David, that's primarily Stellantis, you're not speaking of the big three overall?

Yes. I would say again from a balance standpoint, we're seeing a majority of it with Stellantis right now.

Okay, very good. And then just a quick housekeeping question, on Clicklane, you normally specify the percent of customers that are new to Asbury. Can you share that for this quarter?

Sure. It was -- I think it was the same number as last quarter. It was 92%.

Our next question is from Bret Jordan with Jefferies. Please proceed with your question.

Could you give us an update on the insurance product that you'd acquired through the Larry Miller acquisition? And I guess is there any obviously it had some internal accounting issues, but is that changing the cadence of that rolling out across the broader Asbury network?

So just an update on that. We're rolling it out through our legacy stores. We've rolled it into Colorado stores, Texas and St. Louis. We still have our large markets of Georgia and Florida to go later this year. And so we're making good progress on getting that rolled out, but it is a kind of steady progress over the remainder of the year. The deferral of that income as we roll it out to our legacy stores, that's kind of the hit we take year one and then we get to recognize that income over the product life cycle. And so you'll see that hit kind of rollout toward the end of the year as we put on some of these larger groups in Georgia and Florida. So we're making good progress kind of on target for what we thought we'd be. It's just a slow process throughout the entire 2023.

Okay. And I guess with another quarter under your belt, do you have a feeling for sort of the cadence of the GPU trend? I think in your prepared remarks, you talked about sort of a two-year trend that whatever the new normal is and maybe lower selling expenses. But when you think about sort of the mix of incentive and inventory recovery and obviously high rates, are we in a world with sustainably higher GPUs than pre-pandemic? Or do you sort of see it going back to the 2000-ish new front ends?

Hi, Bret, it's Dan. Good morning. It's a supply and demand proposition. And with the current inventory levels that we have, we see that sustaining the moment that we see higher day supply come in and the higher availability of used cars then certainly that's going to have a -- an impact to the GPUs. But I think we're a little bit away, I don't know exactly how far away we are, but it's not in the near future.

Okay. But do you think we're structurally higher? Do you not expect us to see those pre-20 numbers again on new GPUs? Or are we sort of trending over the long-term back to where we were prior to the surge?

Bret, this is David. Yes, I might be pollyanna on this. But I don't see us getting back there. I think the OEMs are going to be a lot more efficient and better at day supply. And I think it'll float higher and specifically to Asbury selling off the stores in Crown and Mississippi and with the acquisitions that we had will naturally be higher. And again, last couple of years, the press -- our cars haven't been available, average age of the car is 12 years. As long as we can keep the day supply in check, we think we can maintain healthy margins for the next couple of years. Albeit they may drop some, we don't see 2019 coming back anytime soon if at all ever.

Okay. And on that day supply, I mean, obviously Stellantis you said over 60. Is that strategic because they may be the UAW strike example, or are they just producing for the sake of producing?

Yes. I would say I don't know that answer specifically but I would assume they've had less issues getting with their suppliers and getting the necessarily -- necessary products to put their vehicles content together. We've just been fortunate. But as a reminder, part of that day supply is stop-sale vehicles, on trucks that normally turn pretty quickly. So as those trucks sit for a couple months and we can't sell them, it's certainly hurting the day supply.

Thank you. That concludes today's call. We appreciate everyone participating today. We look forward to talking to you at the end of the second quarter. Have a great day.

This concludes today's conference. You may disconnect your lines at this time, and we thank you for your participation.