Good morning, and welcome to the Lithia Motors Second Quarter 2017 Conference Call. Management may make statements about future events, including financial projections and expectations about the company's products, markets, and growth. Such statements are forward-looking and subject to risks and uncertainties that could cause actual results to differ materially from the statements made. The company discloses material risks and uncertainties in its filings with the Securities and Exchange Commission. The company urges you to carefully consider these disclosures and not to place undue reliance on forward-looking statements. Management undertakes no duty to update any forward-looking statements, which are made as of the date of this release. Management may also discuss non-GAAP financial measures. Please refer to the text of the earnings release for a reconciliation of comparable GAAP measures. Management will provide prepared remarks and then open the call for questions. I will now introduce Bryan DeBoer, President and CEO. Mr. DeBoer, you may begin.

Good morning and thank you for joining us today. On the call with me are Chris Holzshu, Executive Vice President; and John North, our Senior Vice President and CFO. Earlier today, we reported adjusted second quarter earnings of $2.28 per share or $57 million, which marks our 27th consecutive quarter of record performance. We grew revenue 16% and adjusted earnings 14% over last year, and anticipate total revenue of nearly $10 billion in 2017. On the same-store basis, total sales grew 3%. New vehicle sales were up 1%. Retail used vehicle sales increased 4%. F&I increased 8% and service, body and parts sales were up 7%. The new vehicle SAAR appears to be stabilizing within a 16.5 million to 17.5 million unit range, which we expect to continue for the next several years. Our store leaders remain focused on growing new vehicle market share, increasing used vehicle unit sales, and attracting and retaining more service and parts customers to drive same-store growth. Another driver of organic earnings growth is through dry powder or the potential profit opportunity is available in both our current store base and recently acquired stores. Our strategy is to purchase strong brands that have yet to realize their profit potential. Two-thirds of our current revenue base was added in the last three years and is still seasoning. Our people-powered entrepreneurial growth strategy fosters innovation and continuous improvement to better meet our customers' needs. Improving operations in both our seasoned and newly acquired stores generates additional revenue and gross profit in each of our four departments, while also leveraging costs. I'd like to spend a few minutes explaining these opportunities in more detail. Across our stores, we retailed 9% more new vehicles than our OEM's average. Our Lithia Partners Group, or roughly the top 20% of our…

Thanks, Bryan. I'd like to provide more detail on the results in the quarter. All numbers from this point forward will be on a same-store basis. In the quarter, new vehicle revenue increased 1%. Our unit sales were flat, better than national results, which decreased 3% from the prior year or translating into a SAAR of 16.6 million units. Our average selling price increased 1% compared to the second quarter of 2016. Gross profit per new vehicle retailed was $1,992 compared to $2,019 in the second quarter of 2016, a decrease of 1%. Retail used vehicle revenues increased 4%, of which 5% was due to greater unit sales, partially offset by a 1% decrease in selling price. Our used to new ratio was 0.81 to 1. In the quarter, certified units increased 1%., core units increased 6% and value auto unit sales increased 5%. Gross profit per unit was $2,394 compared to $2,427 last year. Our F&I per vehicle was $1,352 compared to $1,271 last year or an increase of $81. For the vehicles we sold in the quarter, we arranged financing on 72%, sold a service contract on 45%, and sold a lifetime oil product on 26%. Our penetration rate decreased 210 basis points for financing, increased 110 basis points for service contracts and decreased 40 basis points for lifetime oil contract. In the second quarter, the blended overall gross profit per unit was $3,545 compared to $3,491 last year or an increase of $54 per unit. Our service, body and parts revenue increased 7% over the second quarter of last year, customer pay work increased 7%, warranty increased 7%, wholesale parts increased 5%, and our body shops increased 10%. Our total gross margin was 15.5%, an increase of 40 basis points from the same period last year. As…

Thank you, John. As Lithia's personal transportation model continues its evolution, a high performing culture of store leaders will continue to generate opportunities in our core business lines and leverage our cost structure. Our stores provide a national footprint in prime retail locations that can be augmented to expand our reach even further to drive results. Our stores continue to innovate from the living room to the showroom using web and app solutions, including market-based pricing, algorithms, digital appraisal and vehicle purchasing tools, online credit approval and payment calculators, virtual service scheduling, mobile payment processing, direct-to-home sales and delivery, fleet management and ride-sharing applications, digital lease renewals, owner loyalty programs, virtual test drive and product selection tools, customer interaction through artificial intelligence and low- and no-haggle pricing. These technologies provide solutions to personalize our customers' transportation needs. Our culture of high performance and empowerment is providing demonstrated proof-of-concept as our operational results favorably diverge from the industry performance. By nearly any metric, our store leaders are performing at higher levels, although considerable opportunity remains. We are focused on accelerating the development of stronger, more dynamic leadership. We continue to mentor, train, and provide opportunities for leaders joining our team. Two-thirds of our revenue base was acquired in the last three years. As Bryan noted, a store takes five years to fully realize its potential. In the last 12 months, over 80% of the general managers at our acquired locations have successfully integrated, are embracing the future potential of the store, and are trending towards long-term success. Additionally in 2017, two-thirds of our new store leaders were internally developed and promoted from within the organization. Our Accelerated Management Program, or AMP, currently has 35 individuals who are developing their leadership skills to serve in future general manager positions. As mentioned earlier,…

Thank you. Our first question comes from the line of Jamie Albertine with Consumer Edge. Please go ahead with your question.

Great. Thank you and good morning, gentlemen.

Good morning.

Wanted to ask, if I may, we're seeing, obviously, some difficult new vehicle sales trends and improving used vehicle sales trends. I think, traditionally, we would have thought of a new customer sort of a different customer than a used customer. I'm wondering, however, as we're seeing kind of certified pre-owned sales sort of drive a lot of the used sales growth, are you seeing more of an overlap? And are you, because of your positioning, able to sort of redirect that would-be new customer to used transactions that is enabling your used growth?

Hi, Jamie. This is Bryan. Those are usually independent customers that are really coming in either to buy one or the other. The real bridge is that price differential between a certified car. And I think as price changes on certified cars, you get less overlap because the delta between the two is bigger. But typically, I would say, probably, 90% of the consumers are specific either in used car bucket or new car bucket. So, we don't believe that that's what's driving our used car growth. I think our primary driver is our ability to sell deeper into the model mix of used cars and get into the 3- to 10-year plus old vehicle, which is not something that most typical new car dealers do. It's also not something that the stores that we typically buy do. So, sometimes, when we're buying stores, we're building in same-store sales growth because they're not in a segment of that used car business that they've been in, in the past.

Okay. That's very helpful. I appreciate that color. And if I may, on the F&I side, you had a lot of improvement there. I mean, historically, you trended a little bit lower than peer group and you've been gradually sort of closing that gap. I'm wondering, though, as new sales have sort of fallen off and used have picked up, we would expect the F portion of that business to go down. But wondering what the product penetration looks like for used vehicles that may actually help mitigate some of that pressure on the financing portion of it?

Yeah. Good morning, Jamie, this is Chris. The penetration that we have actually on our used vehicles is very similar to the new vehicle penetration. So, I don't think there's a drastic difference on the penetration rates that we have for used or new. For example, service contract penetration on new vehicles is about 41% and it's actually a lot higher on used vehicles at 48%. And so, I think our key is continue to focus on making sure we have the right products for the right customers. As Bryan says, I mean, you have certified customers, you have core customers, and you have value customers. And what we're trying to do is make sure we have the right products that we can attach to each one of those customers based on where they're at in the buying cycle.

Okay. Very good. Thanks again. Congrats on the strong quarter and good luck in the third quarter.

Thanks.

Thanks, Jamie.

Our next question comes from the line of Steve Dyer with Craig-Hallum. Please go ahead with your question.

Thanks, guys. Congratulations on another good quarter. Just one question for me. There's a slide that I think is a new slide that talks about acquisitions in the deck and a variety of spheres, and you kind of threw out some different names and some different sort of end markets complementary opportunities. Just wondering if you could elaborate a little bit on the strategy, the thought process, what kinds of things you're looking for. Maybe you talked a little bit about the framework, but bigger picture, what are you kind of looking to build?

Steve, great question. I think you're referring to slide 9, which is a strategic slide. It's giving indications of our growth plans, both short and long term. And as you move from the center of those concentric circles, you begin to move out in time. We believe that our value-based investment strategy at some point, and I would say a decade or longer, will require us to look deeper into business opportunities, and we believe it's important to be able to shop for a long period of time, to learn about those businesses. So, I think that's an illustration of things that we may be learning about today and may become part of our core a decade or two from now. I think when you also look at who is Lithia Motors, we are an automotive-related business company, okay, and we look at personal transportation as the easiest avenues towards profitability and towards expanding our relationship with our consumers. So, ultimately, I think a lot of the things that we're doing today that are more relative to driving earnings growth and adhesion to our current consumers are things like Southern Cascades, which is a small finance company that we have about $60 million, $70 million in portfolio. We have buying service called Lumei, which is dealing with Chinese students that are coming into America, looking to purchase vehicles. We have NISC, which is a home delivery type of model. And I think these are the things that will help move us into other businesses over time. But I think, most importantly, Lithia is a conservative value-based investment strategy. I don't think you're going to see drastic shifts other than we are spending time in learning about diverse type of businesses.

That's very helpful. Thanks, Bryan. Thanks, Chris.

Thanks, Steve.

Thanks, Steve.

The next question comes from the line of Chris Bottiglieri with Wolfe Research. Please go ahead with your question.

Yes. Thank you for taking the question.

Hey, Chris.

Hey. I was hoping you could just segment your performance. I mean it really stood out this quarter relative to the peer group, especially just given how overweight import you are. Maybe just talk about how the legacy Lithia stores performing, which I guess are more insulated? DCH tends to be metro. And then to the extent you're willing or able to quantify it, how much you think the recent acquisitions are adding to your volumes and profitability metrics?

Chris, this is Bryan. So, about two-thirds of our current revenue base was added in the last three years. And I think if you take it from a top level and you think about EBITDA margins and you think about market share, and we tried to lay out fully the ideas of used car units per site as well as our retention rates in service and parts and what typical SG&A is. I mean, if you recall, we typically purchase stores that are performing at about half to one-quarter of their potential. So, as you think about two-thirds of our stores being unseasoned, you start to be able to extrapolate what will happen over the coming three to five years as the stores become more seasoned. We actually built in some new slides that can help point you to that. So, there's one on each of the four departments, plus one on the leveraging and synergies that are affected in SG&A. And that can drive through and show you how another $375 million in growth potential is sitting there in dry powder today in that two-thirds of stores that are unseasoned that can ultimately turn into another $175 million or so in EBITDA.

Got you. Okay. And then if I could, one more unrelated, and I promise that's it. In the past, you gave us some really helpful details on energy market. I was wondering if you can do something similar this quarter, just give us a sense of where we stand in kind of some of those energy markets, how they performed, how the markets have performed, and maybe like how margins are looking in those markets?

Yeah. Absolutely. We got it right here for you. So, Texas, which is our largest energy market by far, same-store revenues were down 6% for the quarter. The good news is, is we've seen used cars turn, so we're actually up in profitability 3% for the quarter. Montana was up 1% in revenues and actually flat in earnings. Alaska was down in revenues 4% and down in profits just over 10%. So, I think what you find is that energy states, they obviously have been more cyclical. But I think it's more of an indication of how our people respond. And if we have good, strong used car business and fixed operations, any changes within those markets seem to be taken out with the abilities to adjust from the new car sales. And I think we're starting to see Texas start to shine in those areas. Montana has always been a well-rounded group of dealers. Whereas Alaska, we're still building there and we had some new opportunities that we changed some people out, and I think we're seeing some of the early changes, but ultimately we'll come through in profitability in the future.

Got you. Okay. Thanks. Great job. Good luck next quarter.

Thanks, Chris.

Our next question comes from the line of Rick Nelson with Stephens. Please go ahead with your question.

Hi. Good morning. Congrats on a great quarter. I'd like to follow-up also on slide 9 in the handout. The complementary opportunities, those around the outer ring, you said those are further out in terms of pursuit. A ring inside of that includes the UK and Canada and Ontario. What your thoughts are there and how imminent that could be?

You bet, Rick. This is Bryan again. I think when you think about Canada and the UK, I think, most importantly, what we're looking at is where can we culturally adapt fairly easily and be able to communicate to be able to motivate our teams and learn. We're not an international company as of yet, okay, and I don't know that we will be very quickly. However, what we know is when we went into metropolitan markets two-and-a-half years ago, we spent probably five years discussing opportunities with certain groups, learning about the competitive pressures or the cultural or regulatory differences within certain metropolitan areas. And I think we're at that state today in those English-speaking countries that we're really in a learning scenario that, ultimately, we'll find a partnership with someone that we can challenge mutually and share best practices and learn from and really be a base to be able to grow in those companies – in those countries. But I think we still have a little bit of time to be able to continue to learn.

And Bryan, any update on the acquisition environment here in the U.S.

Sure, Rick.

How that looks, if you've been able to find deals, obviously.

Sure. Sure. So, I think everyone recalls that we've done about just under $600 million in the first half of 2017. I would expect that the second half is more robust than the first half was. The pipeline is extremely full and it seems to be expanding. There's multiple drivers of that expansion, too, and we've obviously talked about the average life of the – age of the dealer. We've talked about the idea of some pent-up demand still from the Great Recession. We've talked about the idea of flattening SAAR that is starting to put earnings pressures on sellers where they're looking at multiples and going, this could be my biggest multiplier. And then, probably, even more recent than that is, there has been a number of VC money that's coming to the space that seems to be desiring to exit now, which we believe that that could actually affect pricing a little bit and maybe have an oversupply, which can bring things a little bit back into our realities. Now, I'm not sure that there's a lot of stores that the VC's purchased that are, what I would call, our typical strong assets that are underperforming that we're looking to be able to improve. But I think that there's still opportunities out there and I think that consolidation is right to be able to be accelerated in the coming years.

Okay. That sounds good. Thanks for the color, and good luck as we push forward.

Thanks, Rick.

The next question comes from the line of Bill Armstrong with C.L. King. Please go ahead with your questions. William R. Armstrong - C.L. King & Associates, Inc.: Good morning, everyone. You've moved into the Eastern part of the United States with a couple of deals over the last year. Could you remind us – you've talked about how many potential dealerships there are out there in the U.S. that could be potential candidates. Any update to that target? I think it was something over 2,000 potential dealerships you guys were possibly looking at?

That's exactly right, Bill. Out of the just under 18,000 dealerships, we've targeted 2,600 in metro and exclusive markets that are strong franchises and we believe perform at average or below. Ultimately, in terms of the Northeast, we did just add the Baierl organization in Pittsburgh that's off to a nice start. The company's integrating well with our teams. The Carbone organization, we also added in upstate New York, and Enessa and her team are really fitting in well and driving some good top-line and bottom-line growth, which we like to see. And I think, ultimately, those type of acquisition groups are things that we'll be looking at in the future and are also included in that 2,600 number. William R. Armstrong - C.L. King & Associates, Inc.: Got it. Thanks for that. And just one other question on off-lease. We've seen a lot of off-lease vehicles coming into the market this year and that will continue over the next couple of years. And there's a lot of dealers talking about how there's kind of a disconnect between the composition of vehicles that are coming back too heavily weighted towards sedans and not enough with the larger SUVs relative to what demand is today. Are you seeing that sort of thing in your markets as well? And how do you see the influx of off-lease impacting your business, both in terms of used car sales and the potential competitive impact on new car sales?

Good question. This is Bryan, again. I think if you think about the off-lease vehicles, I think we're at a state that is more of a normal state. So even though it's a larger number, it's a normal number as to what a 16.5 million to 17.5 million SAAR would be. I think most important, Lithia Motors is sheltered, to some extent, from any increases or decreases in off-lease cars, because we ultimately only play a very small part in the certified business, which is really what those cars are driven to eventually become. We spend our time on our core product, which takes in that third-level trade in of value auto. And a think because of that, we're a little bit more insulated from any pricing or supply differences that come from off-lease vehicles. Now, if you think about off-lease vehicles in terms of SUVs or trucks, or sedans, I think you've got to keep in mind that Lithia, about 70% of our stores are in rural markets. So, most of the vehicles match that are coming off-lease than what we're currently selling. We've always been in agricultural energy-based markets where the mix is similar to what we'll need coming off of used vehicle. William R. Armstrong - C.L. King & Associates, Inc.: That makes sense. Thanks. And just a one quick follow-up. What percentage of your total used volume is CPO roughly?

About a quarter. William R. Armstrong - C.L. King & Associates, Inc.: About a quarter. Okay. Thanks very much.

Our next questions come from the line of John Murphy with Bank of America. Please proceed with your question.

Good morning, guys. This is Aileen Smith on for John. As you highlighted in your prepared remarks, the used vehicle business represents a significant growth opportunity. Clearly, there's some dealers in the market that are trying to capitalize on this, like AutoNation or Sonic, that are investing heavily in stand-alone used vehicle stores, whereas companies like Asbury have actually pulled back on these efforts, has your thinking or planning on this front changed at all in the past few quarters? Are these types of programs something you could envision doing in the future or do you just plan on pursuing the used vehicle business through the traditional dealer model?

This is Bryan, again. I think we spend a fair amount of time thinking about this, but most importantly, we believe there's few primary drivers to used car business, okay, that are tangible drivers, okay? One is the space to store cars. Okay? And we only utilize less than 50% of our current space, so there's no reason to go get more land and have higher costs. So, for us, it's more about getting to the 85 units per site, which still will only utilize our space at less than probably 60%, 65%. Okay? Secondarily, I think when you think about the used car business and you think about the supply of vehicles that are coming into the marketplace, that's where we look at, at how we drive our business. An increased supply just means that if we can get cars at a faster rate or find higher demand cars which we have multiple tools that we use and our people are specifically trained to go find those cars, the used car business is about getting and procuring those cars. And when we look at our growth opportunity, if we can find those cars and we have the space, we're going to be able to market those through our web applications and our online business to be able to expand the reach beyond our current footprint because the world has become pretty flat. So, for us, the actual brick and mortar in those locations is less important to the space and the ability to find those cars. And I think those are the delineators that I think why we'll be able to continue to grow our used car business with our existing base of stores and aren't looking to really add used car independent sites.

Great. That's very helpful. And can you talk about the trends you're seeing with consumer trade-ins, how the level of consumers with negative equity in their vehicle has changed over the past couple years? And of your consumers that do come in to trade in their vehicles with negative equity, how many levers or what levers do you have to pull to get those consumers into another new vehicle? Are your financial partners receptive to rolling in negative equity to new vehicle loans and loan-to-value levels increasing in order to get that consumer in another new vehicle?

This is Bryan again, and Chris may have a little bit to add there as well. We've seen no shift in vehicle equity with our consumers, either short or long term. The values of used vehicles is pretty minor in terms of the shift, and you're seeing this idea that negative equity is coming from devaluation of used vehicle is really being driven off the fact that supply of off-lease vehicles is getting back to a normal level, which means that the supply is driving the price down on really only vehicles that are one- to three-years old. It's not changing the three- to eight-year-old vehicle which the typical vehicle that we take in on trade. And I think if you take it one step further and you think about how do we deal with any disequity, because there has always been disequity depending on how that customer's driving habits are, and now if they're a Uber driver, obviously, they're going to have tons of disequity because they're driving the cars 50,000, 60,000, 70,000, 80,000 miles a year. That anomaly may be changing things, but ultimately, we have 170 lenders that can adapt to most people's credit or equity situations. Obviously, cash down affects that model. And ultimately, the LTV, when you get to finance, is affected by interest rate. And if you have high LTVs, you pay a higher interest rate. And I think we have enough finance sources that we somehow are able to take out those disequity situations. I would say this to you, you asked about what type of quantity is that. And this is totally going from the hip. I would say that it's around 40% to 45% of our consumers have disequity in their trades, and that number has probably been like that pretty much at all times other than when we had the gas event with Cash for Clunkers.

Yeah. Maybe just to add on to that, I mean, as Bryan alluded to, I mean, we have a lot of strong relationships with the banks that are definitely still heavily engaged in auto retail. And if you look at our credit tiers of customers that are financing above the 15% range, which we would probably categorize as more of our lower tier customers on credit, that book of business is up over 200 basis points on the year-over-year basis. So, we feel like right now credit is strong and we definitely have the opportunity to finance negative equity in a lot of deals.

Great. That's very helpful. Thank you very much.

Thank you.

Our next question comes from the line of David Kelley with Jefferies. Please go ahead with your question.

Good morning, guys. It's David in for Bret Jordan. Just a quick question on the $170 million incremental EBITDA opportunity you referenced. I think you mentioned that being a target in a static market. Should we think of static as flat total retail volumes, or is that more of a reflection of SAAR movement? I guess, is there upside to that number if we grow used retail despite a flat SAAR environment?

We're making the assumption that the SAAR sits within a 16.5 million to 17.5 million number. Any growth in the new and used segments has a trickle-down effect into F&I as well into service and parts, which is the longest part of the transformation. So, I think when you think about it, it's an illustration that even in a flat SAAR environment, we're going to still be able to grow our business because of the dry powder and the two-thirds of stores that are not yet seasoned.

Okay. Great. Thank you. And I guess a quick follow-up to that. You mentioned the five-year timeframe of the seasoning. Should we look at that as more of a stair-step upward movement, or is there some sort of inflection point as these newer stores start to close the gap to your core operation?

The illustration is to trying to give an average type of outlook. I mean, we ultimately have stores like, I mean, Wyoming and our Maui Honda store. I mean, they turned in less than 90 days and I think that's ideal. But then we also have some stores that have taken seven, eight years and are still not showing the fortitude and the expansion that we're hoping for. So, I think it gives you a kind of a center point of what we're typically seeing. I think if you think about the different drivers of the $380 million in gross profit opportunities, I think new vehicles grow somewhat slowly, because it's built off of team and relationships in the community and expanding your social networks online and beyond. And I think if you think about used cars, there's a slight initial spike by just moving into core sales and value auto sales, when most of our stores that we buy are somewhere around, what, 75% to 80% of the same make that they sell new is what they sell used. So, just expanding to off-brand gives us some punch in the arm. But ultimately, the F&I comes along with that. And really that service and parts business is what can drag and it takes time to build your units in operations. In fact, we're still seeing trends in our – what we call our Partners Group, which is our top 20% of our store. We're still seeing trends that are indicating that their current plus-20% retention over average can get to plus-25%, and we really believe over extended period of time that what we'll be able to see across the company as well.

All right. Great. I really appreciate the color. Thanks for taking my questions.

Thanks, David.

Our next question comes from the line of David Whiston with Morningstar. Please go ahead with your question.

Thanks. Good morning. I've three questions. First is probably for John on buybacks. Would you expect those to be more front-loaded to first half since it looks like you're going to be really aggressive on M&A in the second half?

Hey, David. We look at buybacks opportunistically. What I can tell you is that, as a management team, our philosophy is that we'll always have a grid in place. And, clearly, there's volatility in the sector and, frankly, noise around what people are talking about that we don't think is really that meaningful for what we're trying to execute, but that sometimes creates opportunity in the share price. And so, what I can say is that if there's a dislocation, we're prepared to direct capital to it, but we still believe the best use of our capital is to go out and look for accretive acquisitions. So, my hope is we don't buy any shares, but what I can tell you is we're willing to meaningfully step in should the opportunity present itself. So, it's hard for me to tell you consistently our cadence there because it's really optimistic in nature.

Okay. On acquisitions in terms of especially some of these larger deals you've done like Carbone and Baierl in Pittsburgh.

Baierl.

Are you guys getting to what – I'm just curious on this whole idea of keeping that legacy brand alive. Is that a big point in the negotiation because it just seems like you're getting to a point where you really could want to just put everything under the Lithia brand if you wanted to?

This is Bryan. I think if we think about branding, and I think it goes back to how we manage stores. We manage stores by individual market, not on a national basis, even though we have global websites that try to draw traffic into the individual market. But we brand with the local community and the names of Carbone, or DCH, or Baierl are persistent brands that have been around for 30 to 50 years in most of those communities. In fact, I think in Carbone, it may be close to 90 years now. Those are things that are hard to change and we wouldn't have any desire to change that because our consumers in those markets know the people within those organizations. And ultimately, they're not just buying Carbone or DCH, they're buying a Honda, they're buying a Toyota, they're buying a Subaru, or a Chevrolet, or a Dodge, and that is the brand that we're building within those communities. And I think that's what's attached to the legacy of those families and that their Ford families, or their Subaru families, or whatever they may be. And I think that becomes a bigger highlight than calling stores all Lithia Motors. And I think because of it, it's easier to have teams join us and have less disruption on things that are somewhat irrelevant to consumers and focus immediately on high performance expanding market share, selling extra-used cars, expanding retention in service and parts, controlling our expenses, finding synergies to get – I mean, those are the things that we really focus our attentions on.

That makes sense. Last question – and I think I know the answer to this, I just like to get a little more color is, if you had an investor or potential investor say to you they're very concerned about you being aggressive on M&A given that the U.S. new vehicle market peaked last year for the cycle, what's your answer to that?

That's a really easy answer. I think our model is built for that to occur. We really believe that in these type of times that it is our opportune time to grow, because if you think about acquisitions, they usually only become available every generation or two. I mean, the top 10 dealers only own less than 7% of the dealers in the country. So, I think when you think about that, we look for that disconnection to occur because ultimately that is where we get the dry powder that even in a flat environment or a declining environment, at some point, that returns, and that's what rewards all of us in terms of growth potential, same-store opportunity, greater economies of scale, and the ability to continue to innovate and share best practices and do all the things that I think growing organizations need to be healthy.

Okay. Thanks so much.

Thanks, David.

Thank you. This concludes our question-and-answer session. I would like to turn the floor back over to management for closing comments.

Thank you, everyone, for joining us today. We look forward to speaking with you again in October. Bye-bye.