Q2 2019 Earnings Call
This conference call is being recorded today Thursday July 25 2019.
Presentation materials, which management will be reviewing on the conference call.
Can be accessed at the company's website at www Dot Sonic automotive dot com.
By clicking on our company.
Then investor Relations.
Then webcasts and presentations.
At this time I would like to refer to the Safe Harbor statement under the private Securities Litigation Reform Act of 1995.
During this conference call management may discuss financial projections information or expectations about the company's products or markets or otherwise make statements about the future.
Such statements are forward looking and subject to a number of risks and uncertainties that could cause the actual results to differ materially from the statements made.
These risks and uncertainties are detailed in the Companys filings with the Securities and Exchange Commission.
In addition management may discuss certain non-GAAP financial measures as defined by the Securities and Exchange Commission.
Please refer to the non-GAAP reconciliation tables in the company's current report on form 8-K filed with the Securities and Exchange Commission earlier today.
I would now like to introduce Mr. David Smith.
Sonic and Echopark, Chief Executive Officer, Mr. Smith, you May begin your conference.
Thank you very much and good morning, and welcome to Sonic automotive second quarter 2019 earnings call.
Again, I'm, David Smith, the company's CEO and joining me on the call today is our president Mr., Jeff Dyke, and our CFO Mr. Heath Byrd.
We are very excited to share the results of our quarter with you.
We want to thank our teammates customers and vendors and manufacturer partners for helping us achieve a record second quarter.
Consolidated Sonic automotive delivered 62 cents per diluted share from continuing operations on a GAAP basis in the second quarter of 2019.
An improvement of 55% versus 40 cents per diluted share.
Continuing operations in the prior year quarter.
Our echopark business continued to grow at a record rate and the franchise business performed exceptionally well.
Exports revenue for the second quarter of $291.7 million.
Increased $111.5 million.
61.9% compared to the second quarter of 2018.
Based on the revenue trajectory through the year, thus for annual Echopark revenue should exceed $1.1 billion in 2019.
This will represent a 57% increase in annual revenues.
For the full year compared to 2018.
Echopark also improved its pre tax profits during the second quarter 2019 by $29.5 million.
Or 106.1% compared to the second quarter 2018.
Echopark continued its profitability streak and we expect this profitability.
Trend to continue.
Echopark generated positive cash flow during the quarter or $4.8 million as measured by adjusted EBITDA a non-GAAP measure.
Cash generation improved $7 million or 321.7% from the use of cash in the second quarter of 2018.
We continue to expect Echopark to retail approximately 50000 pre owned vehicles and 29 team, which is about five times. The volume we were showing just two years ago.
Our website Echopark dot com and our existing network of eight echopark locations.
We are continuing to experience huge organic growth and draw customers from over 120 markets across the United States.
We are continuing to move forward with Orica port growth mode, and expand our network to additional locations across the United States.
We believe that we can grow echopark revenue $500 million to $1 billion annually.
And continue to grow our profitability without going to the capital markets.
We believe this level of growth and doing it profitably sets us apart from other disrupters in the pre owned auto retail market.
While we remain very bullish on the new vehicle franchise business and we plan to grow that business, both organically and opportunistically through acquisitions.
It's especially important to highlight that we believe we can achieve this echopark growth without having to pay the huge blue sky or goodwill multiples in todays market.
For traditional new vehicle franchises.
It's also very important to note that the cost to open even a large echopark location is drastically less expensive than the cost of the traditional new vehicle franchise and real estate.
As noted in our press release today, there are several items of interest that affected second quarter 2013 results.
Excluding the effect of these items from 2018 results adjusted diluting earnings per share from continuing operations for the second quarter of 2018 was 35 cents compared to 62 cents per diluted share in the second quarter of 2019 and improvement in 2019 of 77.1%.
See the materials provided in conjunction with the earnings release related to non-GAAP measures I've mentioned for a reconciliation of these non-GAAP measures to their closest GAAP counterparts.
Some other highlights for the second quarter of 2019 on a total so on a consolidated basis include.
All time quarterly record pre owned units sales of 41458 units.
All time quarterly record ethanol gross per retail unit of 1700 $10.
All time quarterly record up an IDE rose.
Of 118.3 million.
An increase of $14.2 million or 13.7% from the second quarter of 2018.
New view its per unit of $2000 up one or $146 or 7.8% from the second quarter of 2018.
Same store fixed operations gross increased 6.4% during the second quarter of 2019.
With customer pay being up 7.9%.
As to unite to gross profit ratio of 77.2% in the second quarter of 2019 and improvement of 330 basis points compared to 80.5% in the prior year period, when adjusting for the items of interest noted in the press release affecting the prior year quarterly period I'm inventory day supply for new units was 64 days down two days from the prior year quarter.
Inventory days supply for pre owned units was just 28 days down one day from the prior year quarter.
Lastly, we are also pleased that our board of directors approved a quarterly cash dividend of 10 cents per share.
The dividend will be payable in cash for stockholders of record on September 13th 2019.
They did the dividend will be payable on October 15th 2019.
At this point, we would like to open the call to questions. Thank you.
As a reminder, in order to ask a question. Please press star followed by the number one.
Telephone keypad.
And we'll pause for just a moment to pilots and <unk> roster.
[laughter].
Our first question comes from John Murphy from Bank of America Merrill Lynch.
Please go ahead.
Good morning, guys. This is your denim saw him on for John .
First question. Thank you.
Hi, good morning.
You guys posted very strong used vehicle unit comps this quarter, but margins, our GPU is a little bit weaker.
Can you maybe talk about what's driving the performance there and whether that reflects the inclusion of equal black and at what point do you expect those margins to recover if at all.
Yes. This is Jeff Dyke, that's just a blend of echopark and Sonic automotive thats driving that so.
We expect it to continue to be in this range.
Remember our strategy at Echopark is a little different than you'd see in the traditional environment, where our front end margins are a lot lower with high end back in margins and as I've said in the first quarter. We look at the margin combined between front end back anyway in so those blended margins are.
You are right.
In terms of our forecasts are right in line.
So we're satisfied and were up.
In terms of our Echopark.
Margin.
Year over year. So we're in real good shape, there both from an economic perspective, and a front end margin perspective so.
We expect it to continue to be in that range and are not concerned about it at all.
Okay. That's helpful. Thank you.
And then your cost performance. It seems like you guys are really starting to see the benefits of our restructuring actions from earlier this year.
How much would you think you have left to take out cost and how you think about as DNA I guess over the longer term, especially given your continued investment in echopark.
You can see this it's quarter, especially we started really leveraging or as you know.
With the increase in gross when we look at our initiatives we implemented back in September of 18 cost reductions not only at the store level at the corporate level and so we still see some opportunities you can actually see it.
Especially in Echopark segment.
I think our incremental flow through was 54% and for this quarter and consolidated.
Throughput was 85%.
So we see it continuing to.
To leverage and yeah, we think that the same rent 177.
2.2%, which was 310 basis points lower and so we feel like we're doing a really good job on our cost reductions and those are going to also this David Smith also as as our stores, whether they're going to grow organically. There is a lot more growth.
We had in our current.
Eight echopark locations, so that that will especially helped to offset the.
The other thing too is in the franchise stores, we see that there is more opportunity from a from an expense management perspective. So I think we will continue to drive expenses down as as we perform so there's still more to come in that in that arena for us.
And lastly, we talked about on the last call that we really have started focusing on the core business. We had a lot of projects in 2018, we've eliminated all of that the shiny objects and we're just focusing on the core business, which are obviously reduced expenses.
Yes. Thank you that's great.
My last question is on.
Financing insurance vehicle retailed can you maybe talk about what's driving the improvement there and especially given the higher mix of used vehicles and over the longer term how much do you think you have to push Jeff I PVR even high there.
Well I mean, you look at our friends over at Autonation, We're running a 1900 plus the coffee and we're at 17 10, all in so it seems like there is more room there.
Our echopark stores are north of $2200, I think center and that level were over $1500 or at the store level. When it comes to the Sonic stores. So there's plenty of upside.
Again, and I reiterate this the last several quarters, Jay M&A and the relationship between us and them. It's been fantastic. They played a huge role in helping us drive the business and our finance team is very very focused operationally speaking so we think there's still upside and and.
I think we'll continue to see more and more improvement as we go through the next few quarters.
Okay. Thank you for taking my questions.
You bet.
Our next question comes from Rick Nelson from Stephens. Please go ahead.
Good morning, and nice quarter.
Hey, Rick Hey, Rick Thank you.
Arc.
Can you speak to the mark to market that you're targeting for these four.
Two stores do you ever locations already identified and are they going to be large or maybe emphasize stores in those markets.
Yeah traditionally speaking, they're all large stores, Rick [laughter], but at the end of the day, we are going to open in long Beach, California. I'm. This is a a store that will get opened this year repurchasing an old many store, where we moved many into the BMW store. So we're very excited about that that will happen probably late fourth quarter. The next markets that you can expect us to show up in two or Atlanta, the DC area, Orlando and possibly a Fort Lauderdale Miami. So these are big target markets. We've identified property in Atlanta, obviously have the property in long Beach, and we're getting close and the other markets. So and then you can expect us to continue to expand echopark, probably at the tune of three stores, possibly four stores a year as we move forward, but remember for us it's not about a number of rooftops, we have eight store selling into over 120 markets. So far this year in.
And so it's just how far out can we reach we have a lot of customers coming from all over the country entities eight stores and we expect that trend to continue.
And then just David as Jeff mentioned, yet re Purposing a facility and L.A.. We did the same thing in Houston.
And with a huge.
Huge amount of success and it doesn't take us long to sound like we have to build from the ground up every location. It takes a year to open a location yeah and we're excited I mean, that's that's a great point that you're making the store has been open for six months and it's gonna do north of 600 cars in July . So we're we're really excited about the progress that we're making there.
Okay counter revenue foreign tariffs, which which good crews.
1.1 billion.
15 pounds of sand cars can you speak to the profitability that you're expecting.
It is here.
Yes, so sure look we've got we make $1.7 million I think it was our funnel number there at the store level for the for the for the second quarter and I think our forecast is somewhere in the six plus million dollar range, a $5 million to $6 million a lot of that depends on the drag we did not plan on opening kind of getting this long beach store opened prior to the end of the year, but we've had such great success at Echopark, we're trying to ramp that up long beach and the L.A. market is just that's the single largest year to five real car market in the country. So we're very excited about that there'll be a little bit of drag opening that store. So you know four or five $6 million with huge revenue growth is is probably what the numbers are going to be for the year and then that revenue growth will continue as David said earlier, you know we have to add half a billion or something like that and revenue for 2020 and grow profitability again.
We don't have to lose money to do this and that's what I think makes us, especially a disruptor when out out there you know I want a bunch of cars out on the street and losing a ton of money you know, we're making money as we do this we have a formula the formula is working and we're going to expand echopark as national brand across this country and this is eating that you got to keep in mind that out of the eight stores. We had two that you could call pretty close to maturity. Yes, you got six stores that haven't even reach their maturity and from a profitability perspective, and if you Rick look at July you know from an EPS perspective, you know said this last quarter I. Just every month I keep mentioning myself, we're having we're on pace to have another record month this month and lumps almost over so we shouldnt, we shouldn't lock up another record month, and then five weekends in August there's going to be a lot of fun and the Echopark world.
Yeah.
Do you think it takes two to reach maturity with yeah compared to stores.
You know, we we don't know the answer to that quite honestly I mean, our our Charlotte store came out of the chute and was profitable you know immediately and and we're doing between four and 500 cars. There. We think we can do a thousand cars here. We've been open for you know a year. So three years, maybe full all maturity somewhere in there we are.
That's what we think but who knows I mean, we keep saying that our Dallas towards a full maturity and it just keeps getting bigger and bigger and bigger same thing for Denver. It just keeps growing and so we'll see right. Now we said that we think we can get there in three years.
Yes.
Good good long term potential how many store echopark stores.
Thank you can operate.
So we we did a five year model and in our five year model. We have you know 25 to 28 stores somewhere in that ballpark, but again I want to emphasize it's not the number of rooftops for us. It's just where can we put a big rooftop and how far out can we penetrate we've got customers that are coming to us from Alaska for crying out loud you are coming from all over the country to these stores to buy so as long as we stay in a transparent keep our expenses, where we are stick to our plan. We believe we can control the costs keep our pricing really low and drive that customer traffic or is just amazing at these stores and so we'll see you know 25 to 28 stores maybe over the next four years, or so and and and we'll see how we're penetrating the market that's going to dictate how many rooftops, we believe we need overall.
Sounds good.
Thanks, and good luck.
Thank you very much I appreciate you.
Our next question comes from Collin Lang.
Yes. Please go ahead.
Excellent.
Hi, guys. This is been a lot of me off on for Colin.
Oh, yes.
So within parts and services warranty was up 9% year over year.
Wondering if you could talk about the drivers then there and how you're thinking about that for the rest of the year.
Yeah look the warranties all over the board all the time right. There's recalls from BMW Audi you name. It there stop sales all over its just become a way of life. Unfortunately, so and I think I show our number at 12% not 9% on a same store basis with our customer pay up nearly 8% I think its 7.9%. So I expect it to continue I mean, if you look and go back over the last couple of years, we've had recalls just coming in coming coming warranty keeps no kind of kind of driving the number Mercedes vendors have had recalls we were in a Mercedes Benz being the other day and they were you know apologizing for the recalls and and it just it just happens and so I expect that to continue its certainly more of a part of our life today that in the last year or two than it has been previously lot of new cars coming out everybody pushing for share. So I expect that to continue but I also expect us to be able to continue.
To grow customer pay you know in the mid to upper a double digit range, so or to the 10% range. So that opportunity is there we've really refocused our fixed operations team this year.
And they're doing a very good job and have Oh, I have a lot more upside from our perspective.
Got it great and then on the fed rates I think you guys are seeing you mentioned the spend a minute for a call right.
Do you have any view on the timing of that like what's embedded in the forecast and then do you have any color on sensitivity. So let's say like if it drops 25 that some some profit.
He does that I don't think we have any more insight on the timing other than what you see in the news interestingly obviously it helps on the new car side as interest rates in the used car side. So on the consumer side, there's great benefit from a.
Pricing on floor plan is all based on LIBOR and a lot of that is priced and so we don't see a lot of impact on floor plan expense.
Because a lot of his replacement underlined or.
Okay. Thanks, a lot for taking my question.
Thank you. Thank you.
Our next question comes from Michelle Good stuff from J.P. Morgan.
Go ahead.
Hi, Thanks for taking my question and congrats on the quarter.
HM.
No I just had a question on the balance sheet. Then you know M&A I mean, what do you see I mean, obviously you have the Echopark initiative going on starting to lose but outside of that.
Should we expect any kind of portfolio pruning actions going forward or you know maybe focusing more on the U.S in echopark and the de emphasizing on the new side in some ways and you had also mentioned early in the year regarding some divestitures steadier plan or could you just provide us an update on what's going on there.
It did see they'll start you know our capital allocation plans have not really changed is we have two major objectives. One is to grow echopark and one is to reduce our debt and we are actively involved in both of those on a daily basis as David mentioned, we are still looking for opportunistically to build the franchise business and so we look at deals every day I'm on the dispositions you know we look at every single facility and when we have a lot of requirements for the manufacturers that just doesn't pencil. If we have enhancements that are required we lose margin money, we do the math and we determine do we want to keep it or not and we make a financial decision. We don't have anything that's on the radar, but when things pop up we'll do the math and determine if we should dispose of the store or continue to operate it.
And this David Smith, Yeah, we as into.
[noise] piggyback off what he said we've got we have a number of things in the works, we're just not ready to announce yet, but we're certainly working towards continuing to improve our balance sheet.
Got it that's helpful color and just just wanted to also follow up on that you know on Capex.
Obviously coming down a little bit this year.
Oh, what's kind of a good run rate, we should be expecting you know going forward keeping in mind, you know the echopark expansion, but aren't getting on annual basis.
Yes, I think we actually now have for 2019 or 28 million.
And is that right.
I don't know 28 meters resonant before year end, we expect that same kind of level now as we ramp up Echopark you may see approximately.
40 to 50 million increase in 2021, as we open up new Echopark stores, but as you said is dramatically down from 16, and 17 and down from 2018, which was about a 143 million.
Got it okay. Thanks, and then one question.
[noise].
As a reminder, if you'd like to ask a question. Please press star followed by the number one on your telephone keypad.
Our next question comes from Bret Jordan from Jefferies.
Please go ahead.
Hey, good morning, guys.
Hi, Brett.
Hey, first on the you said Echopark front and is improving could you talk maybe <unk>, maybe order of magnitude and then is that better inventory sourcing or or better pricing that drives a little better unit profit.
And then I go.
So this is Jeff well at the end of the day what drives that margin is is what we're buying because our pricing is pretty well set in terms of the competitiveness and where we want to be against our competition. So as the market moves up and down inventory levels grow and it allows us to buy a little cheaper than the margins go up and I think we improved in the 100.
Well the overall number 100 and.
Well, we actually on the Echopark side, Yeah. The total ethanol plus front in increased 407.
Okay two of them five of that was that the not 202 was front end yeah. There you go.
Okay great.
And then a question I guess on the franchise side of the business, we haven't heard in any of the other competitor pure calls so far any discussion as far as competitive I guess promotional level has anything.
As promotional activity decreased year to date or is there anything to take note of.
No. It's the same it's very it's competitive I mean, I will give shops out of BMW is just done a fantastic job this year or new products are great and we were up double digit with them in the quarter and so they've done a great job same along the lines with Audi Mercedes Honda all of them.
For us are just performing at a really high level.
In our share in those brands are outperforming in some cases by double or what's going on in our local markets. So we're just having a fabulous Oh, hi line and import year.
Here at Sonic so.
But the same level of incentives and in the same craziness that's existed for the last four quarters continues.
Okay. Thank you.
You bet.
Our next question comes from Jordan Hymowitz from Philadelphia, Philadelphia Financial.
Hi, Thanks for taking my question guys a couple of different topics.
When you guys talk about redeploying certain assets when income no just northern California alone you have three of four stores that could be worth seven $800 million by themselves. I mean have you thought at all about either selling some higher priced franchise dealers and redeploying them in echopark or well highlighting some of the value of your underlying franchise dealers in a different way.
Yeah, you bet, we've already done it in some cases with some of the sales that we've made and the fines earnings that we've been receiving or.
No way way above what you would traditionally are normally see a lot of that is generated yet and we're talking to 15 16 times earnings range. So a lot of it depends on what the manufacturer is going to require us to do with the facility, but as you noted we have got a we never included in our in our liquidity ratios that are in our liquidity as we discuss liquidity, but you know our our liquidity from a real estate just big book value is somewhere in the half a billion dollar range $450 million range and the franchise values out there in particular with Sonic automotive because we're mostly the high line, there's just tons and tons of opportunity and leverage their if we need it to go grow echopark. The beauty of Echopark as David said in his opening statement is is that it's just not that expensive to open a store. We can five store bought facility refurbish that and be into business for you know either around $15 million.
For that same thing is more than double for a big high line stores, So plus the blues that you'd have to pay to go get it. So and then the returns at Echopark as you know our big Dallas store, you know, we've had as high as $2 million a month in profit and it'll do you know 14 million or so this year in profitability. The Denver store is going to be way up there. That's that's the Denver market is making a bunch of money in and it's going to be in a $678 million and profit. So yeah, you're we're starting to get into the echopark realm into some of these high line brand realm. So there's plenty of room for us to maneuver if we need to with some of these franchise locations were very very aware of it and its a great position to be in.
But but the numbers that I brought a crazy it could be 700 million, just your California stores or what do you. What's your franchise dealerships with real estate could be close to $2 billion valuation without echopark correct.
Correct, Yes, you're right on you're right on target.
Okay and one last different topic question is do you guys really since a long time ago 'cause it's been a long time. Following your company. They do you had some sort of captive finance operation, but with Echopark is that something that you may look to partner with one of the larger lenders and get some sort of shared receive a shared.
Incentives so to speak or are you guys getting big enough that are that's a possibility because that could also help narrow the differences and highlight the value there versus what carmax and what Carvana has done.
Yeah, 100% in and you know I mentioned, Jay M&A earlier, but I would tell you that allied on the Echopark side as don't equally as good a job with us they've just been fantastic great great partnerships and lots and lots of opportunity as you look at some of the aftermarket products that we sell and enjoying some of the profits that we get on those products or warranties service contracts. So to speak there's a lot of room, there and a lot of cash would be built up over time for us to bring those dollars to bring those dollars in so ally, it's certainly our business partner and the Echopark side, they've done a fantastic fantastic job in <unk> as you're pointing out Jordan, there's more there to do as we grow the Echopark model remember, we're real young yet I mean, we're I know, we've got 50000 cars being sold and we'll do over 1.1 billion. This year and you know probably in the 1.5 to 1.6 billion range next year, but we're relatively young and.
As we get bigger more mature the brand grows our partner with ally or partnership with allies Gonna grow too and and there's just a lot of work to do there with them to help build profitability for both them and us.
But with that client with anybody else you getting any split of financing specifically right now.
Yes, but I don't want to go after the details of what that is up to a little bit of our of our secret sauce fine, but what they already have some sort of financing that you get yet asterisk you bet. Thank you I would appreciate the question.
Our next question comes from Armintas. Thank you then I guess from Morgan Stanley . Please go ahead.
Oh good morning, Thank you for taking the question.
I believe last year, you are not last year last quarter I apologize you mentioned you know some with some announcements here in the third and fourth quarter around you know digital initiatives and was just curious to see if there are any updates there the digital one stop.
Yep, we will watch.
Digital one stop and November of this year, that's our target date right now we'll do that in one location are for real Ford store to get started and then we bought we also have already launched our car cash out.
And that App is just really being launched or at the port Neal Ford store as well, we're working to see you know can we take some of the echopark characteristics and plug them into a new car store and what happens to used car volume early on in July we're seeing a huge increase in our volume from a premium perspective out of that store, we expect digital one stop to bolster that and we expect our cash half which were not only providing to the consumer but we're also providing to our competitive dealer set so that so that our retail trade center can help make offers on vehicles that they might not want to trade for they may want to synta auction, we can put a little more money into because we have something to do with the vehicle via echopark or Sonic stores. So all of that is coming will.
Officially launch the car catch up on August 12 for that location will Geo fencing in I think a 50 mile radius. So if you want to use the I forgot to use the zip codes or and then digital one staff will become like you'll be able to finance a car by car the whole nine yards all online using the car cash app. So there's no external third party application to give you a range of value on your trade will our retail trade Center will give you. There is no phone calls, there's nothing or retail trade center. It takes about six minutes for you to put your appraisal in and to get an answer back and we'll give you a number and as long as you described your car right you know what kind of get your car and and added into our inventory. So we think it's a great opportunity a great way for us to buy more cars off the street not only from consumers, but also from other dealers.
Okay, and I would do with the the digital one stop or you know.
How much of this is you know you you developing the platform from the ground up or you know are you using existing software you know such as a you know drive motors or modal you know to prepare the offering.
We have about eight different vendor partners from banks to software builders that are joining us in this venture to pull this off so some of it is internal our own software and Caf. One has done a really good job working working with US route one has done a fantastic job working with us in developing this the certainly manheim and.
All of their all of their team has worked with us real hard BDC all their teams work real hard. So there we've got a lot more than just sonic automotive are working to help build a platform. That's good for the industry and this is no. We are building the backbone and then would you season eight I realize all of those vendors functionality.
Okay, and you know I can appreciate your launching at one store, you'll you'll sort of see how it goes but what are you looking for you know as far as milestones are markers whether to decide to expand this further and then how are you thinking about the pace of the expansion of digital one stop to the entire footprint.
Obviously what percent of our sales comes as a as a part of that what do we grow incrementally I'm will play a big role in that what happens to margins on the backend and F and I and I play such a big role in our overall profitability. Just overall user experience what are we getting back in terms of customer satisfaction scores you know a reputation dot com scores are very very important to us and as they are to everybody, but hugely important it's something that as a first.
Sort of report that we all get at about 430 in the morning every morning, and so all of those things have to happen. If it works really well at Fort Mill for you know true to form for Sonic automotive, we don't kind of just make a decision do everything across the country, maybe it's something we did in the past, but at this point in time, we'll look for a couple of other stores probably within the Charlotte market like Fort Mill for it is and roll it out to those and then.
Maybe we'll see how that might work in in Echopark store and just take our time to do it you know we took our time to get Echopark right before we started pushing on the gas pedal. We got that done now and we'll do the same with this is an important part of our overall offering to the consumer base and it's got to be right. So that it enhances our guest experience and we think not obviously there is a population that wants to buy online we want to provide that opportunity, but we want to do it profitably.
Yeah, Okay, I appreciate the time and money.
And this is David Smith at Neal, that's something to highlight in our.
Growth strategy and the yes, as Jeff mentioned, our feedback through reputation dot com and other sources that we get from our customers. They loved it they still love to come to our stores well. They do a lot of the transaction online right now they still love to come in and driving a car and you know before they buy it and it's a big part of the process and we have gotten.
No no I can't recall any any feedback from customers when they said gosh.
You know I would've bought the car for me if I could have done the entire transaction online.
<unk>.
I appreciate it.
You got it.
I'll now turn the call back over to David Smith for closing remarks.
Okay. That's it. Thank you everyone. We appreciate it have a great day.
This concludes today's conference you may now disconnect.