Q2 2022 Group 1 Automotive Inc Earnings Call
Okay.
Okay.
Good morning, ladies and gentlemen, and welcome to group, one Automotive's 2022 second quarter financial results Conference call.
Please be advised that this call is being recorded.
I would now like to turn the floor over to Mr. Pete The long shot group, one senior Vice President of manufacturer Relations financial services and public Affairs. Please go ahead, Mr Dong shop.
Thank you, Jamie and good morning, everyone and welcome to today's call. The earnings release, we issued this morning and a related slide presentation that include reconciliations related to the adjusted results were referred to on this call for comparison purposes have been posted a group one's website.
Before we begin I'd like to make some brief remarks about forward looking statements and the use of non-GAAP financial measures.
Except for historical information mentioned during the call statements made by management of group. One are forward looking statements that are pursuant to the safe Harbor provisions of the private Securities Litigation Reform Act of 1995.
Forward looking statements involve both known and unknown risks and uncertainties, which may cause the company's actual results in future periods to differ materially from forecasted results. Those risks include but are not limited to risks associated with pricing.
Volume inventory supply due to increased customer demand and reduced manufacturer production levels due to component shortages conditions of market and adverse developments in the global come up economy as well as the public health crisis related to COVID-19.
Those and other risks are described in the company's filings with the Securities and Exchange Commission. In addition, certain non-GAAP financial measures as defined under SEC rules may be discussed on this call as.
As required by applicable SEC rules. The company provides reconciliations of any such non-GAAP financial measures to the most directly comparable GAAP measures on its website.
Participating today on the call Earl Hester Burke, our President and Chief Executive Officer, Darrell Kingham, President of U S operations, and Daniel Mchenry Senior Vice President and Chief Financial Officer, I'd like to now hand, the call over to Earl. Thank you Pete and good morning, everyone. I am pleased to report that for the quarter group one generated record.
Adjusted net income of $198 million from continuing operations.
So adjusted earnings per share of $12 per diluted share an increase of 18% over the prior year.
Our adjusted results exclude noncore items totaling approximately $2 million of after tax gains, which primarily resulted from the sale of two franchises in the quarter.
These record setting results were largely due to continued strong new vehicle margins that we're able to more than offset weak supply continued double digit same store growth in our after sales business and.
Impressive cost control and significant contributions from our recent acquisitions.
Consumer demand for vehicles remains strong exiting the second quarter and we continue to sell most parents almost immediately after OEM delivery.
This dynamics should continue throughout the year.
As with the U S consumer demand for vehicles in the U K continues to remain strong and new vehicle availability is still constrained.
Our new vehicle order bank of 17000 units represents more than a six month backlog based on first half unit sales.
We continue to believe the pent up demand built over the past several years due to both Brexit and a very strict pandemic lockdowns will help drive strong UK vehicle demand well into 2023.
We're also seeing continued strength in the state of Texas the market collectively outperformed our total U S same store growth in new vehicle sales used vehicle sales after sales and net profitability.
Texas demographic trends continue to be a positive tailwind for the company due to population growth.
Reasonable cost of living low taxes, and a friendly business environment.
We believe this is both a near term and longer term advantage for our company.
To provide some color on our U S second quarter performance I'll now turn the call over to Dr. Terrell Cunningham.
Thank you Earl we're pleased with our overall performance in the U S business, our after sales and F&I were outstanding once again, both generating generating incremental standout performance.
As of June 30, we had 3600 U S. New vehicle inventory units in stock representing an 11 days supply, which was roughly flat from December of 'twenty one are.
Our pipeline customer orders have stayed consistently strong with no discernible change in pre sales or inventory aging.
Despite significantly fewer trade ins due to a 26% 26% decline in new car sales in the quarter. Our same store used retail sales declined only 4%.
Our organic sourcing efforts, including 9200 units acquired from individuals to accelerate led to stronger than expected used vehicle inventory of 32 days supply.
As a franchise dealer, we have a distinct advantage over used only operators due to the numerous channels of sourcing available only to us.
<unk>, our service drives the lease returns and OEM for our stock.
As I mentioned, our after sales performance delivered once again.
Through our technician recruiting and retention efforts, we increased our same store technician head count by 12% versus the second quarter of 2021.
Following a very strong 21, our customer papers business generated 20% same store revenue growth compared to a year ago.
Collision revenues increased 18% wholesale parts revenues were up 16%.
This allowed us to grow overall same store after sales revenue by 15% versus the second quarter of 2021. Despite continued declines in warranty work.
We foresee our after sales business continuing to be a strength over the course of the rest of 2022.
Our F&I business was up $388 per unit in the quarter.
And we're seeing improved product penetrations nearly across the board.
The final major factor driving our outstanding profit performance was continued cost discipline.
Second quarter SG&A as a percentage of gross profit was 59% a sequential reduction from 60% in the first quarter and down from 70% in pre pandemic second quarter of 2019.
Lastly, I am happy to say that our customers continue to vote, yes on accelerator.
We sold an all time record 6900 vehicles serve sunrise in the second quarter, 10% of our used vehicle sales.
And all time record.
We offer delivery in every U S dealership and over 70% of our customers choose who choose this convenience options are local.
Which gives us the opportunity to maintain them as a customer by providing future service through our outstanding after sales operations.
As we continue to make enhancements and we continue to make enhancements to accelerate.
During the quarter, we started to more fully integrate our websites into accelerate and we've also begun to integrate accelerate with our desking and CRM software as well as our credit software this will provide faster and more transparent transactions for our customers.
I'll now turn the call over to our CFO , Daniel Mchenry to provide a balance sheet and liquidity overview Daniel.
Thank you Daryl and good morning, everyone.
As of June 30, we had $26 million of cash on hand, and another $83 million invested in our floor plan offset account, bringing.
Bringing total cash liquidity to $109 million.
We also had 236 million available to borrow on our acquisition line, bringing immediate available liquidity to $345 million.
These amounts do not include the cash received from the sale of our Brazil operation, which finalized in July <unk>.
During the first half of 2022, we generated 457 million of adjusted operating cash flow and $402 million of free cash flow after backing out $55 million of capital expenditure.
This capital was deployed through a combination of acquisitions share repurchases and dividends.
As previously announced over the first half of the year, we spent $254 million repurchasing over one 4 million shares at an average price of $176 74.
This represented over 8% of our beginning of the year share count.
Our rent adjusted leverage ratio as defined by our U S. Syndicated credit facility was one eight times at the end of June .
This strong leverage position will continue to allow for meaningful capital deployment in 2022, if appropriate opportunities exist.
Finally related to interest expense, our quarterly Floorplan interest of $5 9 million was a decrease of $2 7 million or 32% from prior year due to lower vehicle inventory holdings.
Non floor plan interest expense increased by $4 9 million or 36% from prior year, primarily due to the debt raised in conjunction with the Prime acquisition.
As a reminder, the majority of our debt has been fixed through interest rate swaps.
As of June 30, 76% of our $2 8 billion in floor plan and other debt with fixed.
Therefore, the annual impact to EPS is only 32.
For every 100 basis point increase in the overnight funding rate, our sofa, which is the benchmark rate referred to in our floor plan and mortgage debt interest instruments.
For additional detail regarding our financial condition. Please refer to the schedules of additional information attached to the news release as well as the Investor presentation posted on our website I will now turn the call back over to Harold Thanks.
Thanks Daniel.
2022, we've continued our focus on high quality external growth actions with the purchase of five U S. Dealerships that are expected to generate $660 million of annual revenues.
These dealerships add to our existing scale and Austin, Albuquerque, and Shreveport market.
Growing our U S and UK businesses remains our top capital allocation priority and we expect to find additional external growth opportunities in 2022.
However, our balance sheet cash flow generation and leverage position, we will continue to support a flexible capital allocation approach, which will likely include serious consideration of further share repurchases. In addition to pursuing external growth.
Since November 2021, we have repurchased two 4 million shares representing over 13% of our outstanding share count.
This concludes our prepared remarks, I'll now turn the call over to the operator to begin the question and answer session operator.
Ladies and gentlemen, we will now begin the question and answer session to ask a question you May Press Star then one on your telephone keypad.
If you are using a speaker phone and we ask that you. Please pickup your handset prior to pressing the keys.
So withdraw your question you May press Star two.
We also ask that you please limit yourselves to one question and one follow up.
You may rejoin the question queue. If you have additional questions.
At this time, we will pause momentarily to assemble the roster.
Sure.
Our first question today comes from John Murphy from Bank of America. Please go ahead with your question.
Good morning, guys.
Hi.
The thing you're probably stood out the most was the surging in parts and service and there's a lot of good things that stood out but that seems that relative to what we were looking for it stood out the most.
I'm just curious what's driving that I know you are up 12% in tax, but I mean, you are even saying in wholesale parts of Europe mid teens. So it.
It seems like it's a real resurgence there is there anything other than hiring the 12%, Texas going on and how sustainable do you think these levels are.
Hi, John this is Daryl.
The recovery in.
I'll speak to two different pieces.
Wholesale parts speaks to the collision business in general is recovery.
We service a lot of outside collision centers, obviously as well as our own.
Collision business. So there is an industry collision recovery, that's happening and that's driving some of the wholesale parts increase on the customer pay service.
The thing that we have.
Our focus on is how can we drive capacity in our shops and.
Whether it's our hours of operation our four day work week, which are familiar with our our technician hiring and then ability availability of appointments to our customers. We think is very important to have as many appointments available as possible that's different than.
Some in the.
Industry will do they will limit appointments.
We tend not to do that we'd rather be available and then that puts a little more pressure on us to keep our capacity high our staffing high and our hours of operation at a point that is convenient for customers. So I would say thats, probably the largest differences as well as.
The car park is continuing to age and so there's more work to be done on some of these cars. So that's happening as well.
Okay, and then maybe if I can call. This is a follow up on <unk>.
<unk>, obviously continues to.
Surprise.
So the upside is a lot of skeptics out there.
Could you kind of just remind us what the compositions of our of the F&I PBR and maybe just give us an idea of sort of a best in class F&I PBR versus versus the average so people can understand where it could potentially go to not on the average, but you're still on the high side.
Sure John It's Pizza Longshore, we're clearly pleased with the results and if you break it down we're at 70% Finance penetrations are service contracts.
Or just slightly less than 50% and when you take a look at the overall products. We've just continued to see increases there and.
And we're also seeing strong partnerships with our banks Theres a lot of discussion about delinquencies and we've seen some of those delinquencies kind of returned to pre COVID-19 levels, but when you look at charge offs and what's happening in the marketplace. There is still a healthy appetite for lending so.
The F&I team has performed at a very high level and we continue to think that there's some opportunities ahead for us.
And our next question comes from Rajat Gupta from Jpmorgan. Please go ahead with your question.
Great. Thanks for taking the questions I, just had one and a follow up on productivity.
Productivity metrics.
Particularly in the U S SG&A to gross.
It was down.
Sequentially, despite flattish GPU units still pressured.
Could you help us unpack the drivers of the sequential improvement.
It just parts and services drop through.
This continued in store productivity improvements.
Perhaps from accelerated around the duals.
And maybe if you could.
Give us an updated normalized view on SG&A to gross.
Gross and do go back to pre pandemic levels. Thanks.
Rajat. This is Daryl I'll answer part of it and one of my teammates made a size of China.
On the people issues in the store in terms of productivity, yes accelerated.
As driving continues to drive productivity.
Sales per salesperson sales per sales manager sales per F&I manager.
With constrained inventory.
We're still seeing higher productivity I believe that will improve even further as inventories loosen.
And after sales, we're seeing higher productivity among our technicians and then thats generally connected to higher productivity among our advisors as well.
Daniel May have something yes answer to the second part of your question.
What we have been essentially said is that if we were trying to 2019 level.
Stability in terms of new and used vehicles.
Our expectation would be that SG&A will not return to above 70% as a percentage of growth.
Got it.
That view has not changed despite some of the accelerated and drove the integration.
CRM credit apps et cetera.
Is that kind of baked in to that number I think it would.
I think what we are discussing that as those things get implemented we would expect to see a further reduction in SG&A.
We're just launching our first set of stores as you know over to John on the testing on that.
Yes.
Our next.
Question comes from Daniel <unk> from Stephens incorporated. Please go ahead with your question.
Good morning, guys. Congrats on the results and thanks for taking my questions.
Or I want to start on the <unk> side and talk about the value line offering.
Are you seeing any outsized growth there just given consumer pressures, we've heard others talking about a potential trade down and then I think historically, you've said that that.
Bucket or that strategy with kind of seven plus year old vehicles.
Are you expanding into older vehicles or just any change in the strategy within that segment.
Well I'll start out with that this is Earl, but I'll, let darrell chime in because he is more into the detail but.
Yes, as you would expect in this type of economically challenged environment, particularly for the middle class and the volume brand in used car customers, where we're seeing demand shift to lower price points.
And with the advantage of our flexible business model, we tried to pull on that lever and push.
The average price of our used vehicle inventory down and that applies to both the U S and the UK. So thats one of the countermeasures that we just normally taken these times the problem with these value line cars as they're very difficult to source, we would be selling a lot more if we could buy a lot more.
Like all used cars their scarce, but the lower price used cars are the most scarce.
And my observation Darryl do you want to add anything.
Yes, Daniel.
Data supports earles comments that our fastest turning.
Segment or sub $10000 cars, and our leanest inventories are in sub 10000 dollar cars.
One thing to note you saw wholesale volumes down considerably about 25% that's all in an effort to preserve as many cars inside our own system as possible.
And then part of that is obviously.
<unk>.
Got it that's great. Thanks, that's helpful color and then as a follow up just moving over to the UK kind of side.
We were seeing I feel like last couple of quarters, a more steady economic reopening that seems to be more disrupted kind of this quarter, given COVID-19 and now some economic uncertainty across the continent. So what are your field teams are operational team, saying that they're expecting and as we look to the back half of the year and preparing for the September registrations month.
Yes, I don't think there will be a big September new vehicle registration month.
As there have been historically same with March because of just the <unk>.
Supply is just so limited.
Mentioned in the script, we have a new.
New vehicle order bank of 17000 units.
And in each of the first two quarters, we have retail a little over 7000. So you can see that that's a pretty big backlog and the same dynamic in the used vehicle market.
Is occurring in the U K as the U S. These middle class.
And volume brand customers are under pressure from increasing utility prices or food prices in and so we're seeing the average price points go down and we are actually.
In normal conditions of UK used vehicle market is much newer cars in the U S. There's a lot of nearly new used vehicles sold in the UK in a normal market.
That market has dried up because of the lack of supply of new vehicles. So we're selling continually older lower priced used cars in.
In the U K, but of course this is increasing our reconditioning cost and so forth. So that's another factor that's put a little pressure on our used vehicle margins, but but overall.
<unk>.
83% of our business in the UK, our luxury brands and Volkswagen, which is a near luxury brand in the U K. So the majority of our business continues to be and more.
Higher income consumers. Daniel is just one thing I would add to what Earl has to say I think if you look at the comps for quarter two.
You really need to look at it year to date in both quarter, one and quarter two together because there was a significant number of closures in quarter. One 2022. So I think some of the result needs to be balanced over the two quarters effectively.
Our next question comes from Adam Jonas from Morgan Stanley . Please go ahead with your question.
Hey, Thanks, everybody. Good morning, you provided some useful color I believe on the UK order bank and the backlog can we get a similar number for the U S. In terms of how big the order bank.
How long is the backlog and how that might compare to a quarter or two ago in terms of stability and then I have a follow up.
Adam This is Daryl we haven't seen any material change at all when you look at our.
Domestic business about half of our pipeline is pre sold when you look at our volume imports it's.
80%, some as high as 95% and when you look at our luxuries.
In the 60% range and that is right where its been for the last couple of quarters.
That's amazing.
And just a follow up any thoughts on.
Some of your competitors that are investing are requiring investing in or acquiring in captive finance capability to kind of help rollout business, particularly in the used market I didn't know where that where that was on your order of.
Priority of use of the capital.
Yes. This is Earl it's not at the top of our list right now obviously, we watch what others are doing so.
So you never say never but.
We have so so many lenders who are willing to.
Support us with retail lending.
And we just don't see any any benefit for our company.
In the near term and taking that kind of step.
We also think that we can sell <unk>.
25% or more volume of used vehicles through our existing physical plant.
So investing in.
An additional fixed cost doesn't seem right for group one.
Right now and quite.
Quite frankly, we have trouble sourcing.
Additional used vehicles right now.
Daryl.
And anything over that.
And our next question comes from David Whiston from Morningstar. Please go ahead with your question.
Thanks, Good morning.
Yes.
<unk> you talk about how you could sell more if you could buy more.
I know theres a lot of issues with US right now because of the chip shortage impact on new but.
Is the real problem for you what's more of a serious problem I guess is what I'm asking is is it that there is too many bidders like the rental agencies coming back in or is it a problem more just not overpaying because use the acquisition costs are so high right now.
I would say this is Daryl I would say.
You have to be careful about overpaying.
And Thats, probably are we're doing a lot of work on appraisals.
Appraisal accuracy in our company and.
Because of the dynamics of the market over the last few months.
<unk>.
I would say the largest issue David.
Okay and.
I think with the URL that said Youre looking to give serious consideration to more buybacks you've already been doing a lot.
How much of the company do you want to buy back long term.
We don't have any goal on that.
That's fair.
Capital allocation is something Thats dynamic and it's a continual process of discussion with our board so.
We just have to balance.
The balance of the accretion from acquisitions that are made available to us versus.
<unk> versus the accretion of returning capital to shareholders via buybacks and then of course, the buybacks don't have any execution risk.
So say that the quality of the acquisitions, we've made such as these Toyota stores in Austin in Albuquerque, and things like that.
We don't think they have any material execution risk either so we think we're in the best position we've ever been in terms of capital allocation with the ability to do both of those things simultaneously.
<unk> quality external.
Growth.
<unk> investments and also return capital to shareholders.
Our next question comes from Michael Ward from Benchmark. Please go ahead with your question.
Thanks, Good morning, everyone.
<unk>.
Carl just curious you know the bear case on the dealer group is that we're at peak earnings.
Just curious what your thoughts are.
Well I don't I don't think so because we have a flexible business model and that's that's the beauty of what we do right.
And to me the key.
Driving factor to our business model now or or over time as the balance of supply and demand on new cars. That's what makes everything work.
<unk>.
<unk>.
I have incorrectly predicted that.
It would.
That would revert to.
So pre COVID-19 levels for year year, and a half now and I believe all of the auto manufacturers are also starting to see that.
<unk>.
Maybe this is a more sustainable model for everyone.
And I.
I see a lot of after sales growth opportunity.
For companies like like group one.
These these comps were putting up on after sales now are against some pretty strong comps from a year ago.
I don't think were anywhere near our peak and being able to capture more of the after sales market.
And in used vehicles.
I think that market is is going to revert back a bit.
But I think there's great volume opportunity for us.
When it stabilizes.
And you can see that.
Our new vehicle sales are down over 20%.
So there's a lot of room for volume to offset any degree of margin correction.
Mike It's Daniel going just as a follow up to what you. All said you need to remember that the company is structurally different from 2019, we have grown the company by $3 billion in revenues as you've seen the share repurchases that we've done and I think that's all going to help sustain our EPS going forward.
Sure.
As a follow up it seems like.
We're going to have a new normal of inventory.
Going out.
Going forward.
But for at least the next two years, we're going to be in an inventory build mode and as a result these.
Record levels of like these preorders I it sounds like it's over 70% of your expected deliveries over the next six months have an order behind it.
I think by definition, that's going to push more people to accelerate and when I look at that chart on page 15.
And it's showing that F&I goes up by $151 when people used to celebrate and just get a better understanding service goes up.
We're going to see an increased increased usage of accelerated for both service and F&I and just getting more knowledgeable and does that push those too.
Does that help additional growth in my reading that wrong.
Mike This is Daryl I think youre reading it exactly right.
<unk>.
Customers today.
Shop for vehicles, and we're now in the appointment business.
The days of our.
People waiting outside for a customer to wander into a dealership are going away and that has implications on.
A lot of is because customers now have digital tools that they can use and leverage to shop with us and that has implications all through our business on staffing and compensation and all kinds of areas and we're seeing it with the 10% of the business that we're doing with accelerate and I expect that to do nothing but grow.
Yes, Mike This is al I, just wanted to follow up on that on.
Some of that inventory build.
Comment you made.
I continue to remind myself of the staggering fact that pre Covid, we had 29000 new vehicles in inventory at group one and.
And we were a much smaller company.
30, some less dealerships I think.
And we don't I don't think we've cracked 4000, new vehicles in inventory yet four versus 29000, when we were a smaller company. So I don't think this build inventory build is going to happen overnight I have been shocked by it I must admit but.
I think that's a pretty pretty staggering hole in the inventory.
And our next.
Question is a follow up from Rajat Gupta from Jpmorgan. Please go ahead with your follow up.
Great. Thanks for.
The other question can you maybe help us understand the divergence.
Consumer health between Texas, and some of the other.
Markets you're present in.
Maybe if you could provide us some metrics on what president Asia incoming shipments of resold in Texas versus other market or maybe any other regional commentary that you could provide.
If it's meaningful.
Yes.
Well I'll just start out on a macro basis I don't know if Daniel can come up with some some data for you but.
Even through Covid, Texas continue to grow like we've done involved with some economic development organizations in Texas and east.
Even when oil prices were low and there was a correction in the energy market and such.
Texas the companies were still moving to Texas monthly and that's never stopped and that doesn't appear to be a trend that is going to stop and then of course, the energy business not only as the prices recover because of these global.
Macro forces, but the energy business is shifting to newer forms around energy and renewable energy so.
I think you have the best of both worlds in Texas.
You have you have just natural growth of industry in places like Austin and Dallas.
And even Houston, we have a huge medical medical research community.
And then you have the energy business this probably back.
On to one of its stronger.
Stronger periods of growth.
So that combined with the business environment, the legal environment in Texas. It's just the best place we found in the country to do business.
Got it great. Thanks for the color.
Our next question is also a follow up from Adam Jonas from Morgan Stanley . Please go ahead with your follow up.
Hey, guys. Thanks for the follow up opportunity remind us your net debt EBITDA leverage target. Your one eight but kind of give us your narrow ranges just when thinking about your ability and capacity to keep doing M&A and buybacks and what the what the capex.
Our credit facility.
Just to go to five five times in terms of leverage ratio.
Company as we saw.
They are big acquisition, even bigger than the Prime acquisition, we would possibly go as far as 354 times, but ideally we'd like to stay under three times.
Thanks, a lot.
Yes, just a follow up there or any signs of that.
Auto credit tightness impacting your business in any way I mean, obviously you are seeing some softness in used but I didn't know what you're watching in particular in terms of credit cohort or showroom traffic or anything else that gives me it.
It gives you an opportunity to.
Be cautious if need be and so what's your radar telling you on consumer credit.
Sure Adam it's pizza Longshot address that a little bit earlier in the comments, but we are seeing no tightening whatsoever. When you think about the asset class performed very very well in 2008, and nine and when I talk to the heads of these finance companies as I said they are seeing some delinquency increases on.
On the lower end, but it's back to pre COVID-19 levels, but I think the reassuring part of that is loss losses are at historic lows and the appetite for car loans is robust so.
We have not lost any car business because of the availability of credit.
And our next question is also a follow up from John Murphy from Bank of America. Please go ahead with your follow up.
Hey, guys. Thanks for the follow up.
Okay.
Two quick ones on on SG&A right.
Understanding using about half is variable half is fixed.
The happens variable big chunk of that is pay plans for salespeople.
Im just curious im glad to get certain SG&A will.
Inflate as volume comes back and grosses come under under pressure.
Normalized that actually even come under pressure, but yes.
The plant is constructed for the sales folks I mean accelerate is making them more efficient.
You have a lot of vehicles that are that are essentially pre sold and you have lower head count. So I mean, how should we think about that re inflation of SG&A.
Comes back how are the pipelines constructed.
Hi, John Daryl historically variable pay plans are based on.
Two things unit sales and gross profit per unit generated.
And I think what you will see moving forward.
Because of the nature of our business changing I think youll see that dynamic change a bit.
As margins get perhaps.
Theres less negotiation going on.
I think youll see.
Compensation plans are changes there to accommodate that.
Okay.
Net sales portion.
Sales comp is.
Not going inflates, one for one with you.
Unit gross to the covenant pressure so there should be some real leverage even comes off of that go forward is that a fair statement Darryl we would hope to see that but.
Okay.
Okay and then just.
I can follow up I mean, you said something in the press release, just about the acquisitions that the.
It seemed like you were surprised at how well your integration of your acquisitions that go on and I know you've been a little bit skeptical in the past you're concerned about that and what has been surprising on the positive side.
Made you say youre integrating east with extreme speed.
Just kind of indicated you were very pleasantly surprised and it might be to maybe a greater appetite to making these acquisitions going forward.
Well the the real challenge was 28 prime stores to take into our accounting center and so forth all at once but also to integrate accelerated was done with incredible speed by the <unk> team.
And some of these recent acquisitions like a Toyota store in Austin These are huge dealerships.
And the way we do it as we do it the first day.
<unk>.
So doing a big dealership are doing 28 dealerships that really taxed us and it did create some strain I will tell you, but the benefits came.
Much more quickly than.
Then I would have imagined and I think youre seeing some of that in our after sales growth.
And then obviously, it's not in our same store number yes.
But.
I really was very impressed with what Daryl Daniels teams did.
To bring those.
Standardize those operations with the rest of our operations in a short period of time, John This is Daryl just a bit more.
So there we had acquisition teams.
Over 100 people.
Flew from around the country to the northeast.
From all of our disciplines F&I parts and service sales accounting each assigned to every one of those stores and they were on the ground in those stores on the day that we took over and that was a huge difference maker.
Employees of ours that have been with us a long time.
Working with the new teams that we've just acquired a new store, we just acquired.
Made a huge difference with the technology uptake with accelerated.
Our processes and that was that was a real key and they were there for about two five weeks.
Okay.
And ladies and gentlemen, we have reached the end of today's question and answer session I would like to turn the floor back over to management for any closing remarks.
Okay. Thanks to everyone for joining us today, we look forward to updating you on our third quarter earnings call in October have a good day.
And ladies and gentlemen, with that we'll conclude today's conference call and presentation. We do thank you for joining you may now disconnect your lines.