AutoCanada Inc.

Thank you for joining AutoCanada's conference call to discuss the financial results for the first quarter of 2024 and its strategic plans moving forward. I'm Chris, your moderator for today's call. Before we begin, I'd like to remind everyone that today's discussion may include forward-looking statements which are subject to risks and uncertainties. Actual results could differ materially from those anticipated in these forward-looking statements. I encourage you to review AutoCanada's filings on CDARplus for a discussion of these risks the first quarter news release, financial statements, and MD&A. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you'd like to ask a question at that time, please press star followed by one on your telephone keypad. If you'd like to withdraw your question, please press star followed by two. I'd like to remind everyone that this conference call is being recorded today, Thursday, May 2nd, 2024. Now I'd like to turn the call over to Mr. Paul Antony, Executive Chairman of Auto Canada Inc. Please go ahead.

Thanks, Chris, and good morning, everyone. I appreciate you joining us today as we discuss our recent financial performance and the transformational changes we're making to position Auto Canada for long-term success. As you've seen from our financial results, we faced significant headwinds in the past corner. primarily driven by challenging macroeconomic and market conditions. Despite our best efforts, these conditions impacted our top-line growth and profitability during the quarter. However, I want to emphasize that we remain confident in our ability to navigate through these challenges and emerge stronger on the other side. Our first quarter results reflect the impact of replenishing new light vehicle inventory against the backdrop of high vehicle prices and high interest rates. which are influencing customer spending preferences and impacting our business at all levels of the P&L. These factors, along with certain temporary challenges resulting from our region and brand mix, caused our revenue to decline 7.7% and our adjusted EBITDA to decline 51.2% compared to the same period last year. While challenging, the experiences of the first quarter underscores the importance of the strategic initiatives we've been implementing to drive long-term growth and create a lower cost and more profitable company for the future. Over the past several months, we've been laying the foundation for the next phase of comprehensive transformation at Auto Canada, with the team kicking off the implementation of our Project Elevate strategic plan last year. This plan is aimed at enhancing our operational efficiency and competitive positioning in the market. This includes, one, maximizing gross profit. While we remain committed to our existing operations, we've identified new growth opportunities as well as opportunities to maximize gross profit through on-the-ground bandwidth management and best practices. For example, we're pushing ahead with the development of our online Kijiji F&I and ICO applications, which will open a currently untapped e-commerce market for AutoCanada. We've also been working to improve the time it takes to get a used car through reconditioning and to the front line and available for sale, with average days reconditioning now at 8.3 days versus 63 days when we began. Getting a used car to the front line faster allows us to realize better GPU on the used car sale and increase parts and service utilization, which is a very profitable segment for us. These are just a few of the examples of where we're implementing solutions that require time to train and put into practice, but set us up for better outcomes and long-term success. Number two, optimizing our cost structure. We've identified areas within our operation where we can optimize processes, reduce costs, and improve productivity. During the first quarter, we restructured our US operations and developed standard operating expense ratios by brand for our Canadian stores. We're now in the middle of the Canadian implementation, which is expected to be complete this summer, and will contribute savings in the back half of this year and into 2025. We're also leveraging our new FP&A function and the combined extensive experience of our exec team to identify areas within our operations where we can optimize processes, reduce costs, and improve productivity. Inventory management, demo car management, travel and entertainment, and streamlining procurement are all areas where we see an opportunity. While Project Elevate is a multi-year project, we understand the urgency in realizing cost savings and efficiencies and are looking at all opportunities to accelerate savings where we can given the current market conditions. Number three, modernizing our corporate infrastructure. We're focusing resources on putting in place systems and processes that will make us better today and give us a platform to realize greater economies of scale in the future. Upgrades to financial and human resource systems are underway, along with a comprehensive operational IT modernization project across the organization. These upgrades will give us better data and management tools, allowing us to continue to find new costs and efficiency opportunities due to increased visibility benefiting the company as a whole. Finally, I'd like to highlight an important change to our first quarter results presentation. Beginning in Q1 2024, Auto Canada is going to break out the results from its collision division as a separate division from parts and service. Over the past five years, the company has established management systems and processes in support of growing collision, completing 11 collision acquisitions that bring our collision footprint to 27 locations. When this current management team arrived, the collision business was losing money. It generated over $10 million now in EBITDA in 2023, and in Q1 delivered 34.4% in gross profit growth. We believe that we've now reached a pivotal time in this division whereby it has established a solid base from which to grow. As such, we're providing more detailed financial information to allow our stakeholders to measure our continued progress. With that, I'm going to turn the line over to Azeem to discuss the Q1 results in greater detail. Azeem?

Thank you, Paul, and good morning, everyone. Before I begin my prepared remarks, I would like to highlight that we have changed our same store definition to refer to financial performance from locations that have been operational for 13 months from 25 months previously. We believe this will make our financial results more easily comparable to market and peer benchmarks. During the first quarter, we recorded sales of $1.4 billion. adjusted EBITDA of $22 million, and diluted loss per share of 10 cents. Sales decreased by 7.7% when compared to the same period of 2023, and same-store revenue decreased by 9.9% in the first quarter, primarily driven by lower used vehicle sales volumes. Same-store new retail vehicle unit sales growth was 3.4% during Q1, reflecting replenishing new light vehicle supply as well as a general divergence in performance at the brand level across Canada in Q1. For example, the top five selling brands in Canada during Q1 were Subaru, Honda, Jaguar, Volkswagen, and Nissan, which represent only 30% of our stores. This is cyclical as brand market share shifts from year to year depending on consumer preferences and vehicle lineups. So we fully expect this to change at some point. But during Q1, it was a factor for Auto Canada. Our same store used retail vehicle units sold decreased by 14% in the quarter. with the ratio of same-store used-to-new retail units sold decreasing to 1.46 from 1.76 last year. As new light vehicle supply replenishes, we foresee our used-to-new ratio moderating and eventually stabilizing. Auto Canada was among the top 10 used car retailers by volume in North America last year, and we continue to focus on initiatives to maintain our leadership to maximize high-margin sales opportunities through our top-tier F&I department and our parts and service footprint. The U.S. Division retailed 1,378 new units during the quarter, and new gross profit decreased by 10.6% versus the first quarter of 2023. As expected, we are seeing year-over-year new GPUs in our U.S. division gradually normalize with the replenishment of new vehicle supply in the U.S. market. Parts and service revenue was up slightly in both Canada and the U.S., resulting from good demand and rate increases. Same store gross profit declined slightly in Canada due to sales mix and rose in the U.S. on strong demand and following implementation of improvement initiatives during the first quarter. Consolidated collision repair had solid performance with same store gross profit increasing by 31.3%. Same-store F&I revenue decreased by 11.2% and gross profit decreased by 12.1%. These results reflected lower used sales volumes coupled with a growing proportion of retail vehicle sales being purchased without dealer financing, resulting in fewer opportunities to sell warranty and insurance products. Normalized operating expenses before depreciation were $191 million or 83.4% of gross profit compared to $194 million or 76.2% of gross profit last year. The $4.6 million decrease in employee expenses during the quarter were partially offset by slight increases in administrative expenses. As of March 31, 2024, we had $190 million outstanding on our $375 million revolving credit facility. Excluding our floor plan facilities and lease liabilities, our total net funded debt to bank EBITDA covenant ratio was 2.79, well below our 4.0 maximum. We have access to approximately $293 million of liquidity under our revolving facilities and cash on hand as of the end of March 31, 2024. During the quarter, we entered into a $75 million interest rate swap with a fixed one-month CEDAW of 3.77%. Our effective fixed-rate portion of total debt, including swaps, is approximately 37%. Subsequent to the quarter, we amended our credit facility with our existing lending syndicate. The maturity date was extended to April 2027 and includes a new $25 million CapEx term facility and a corresponding $25 million accordion feature which increases total aggregate bank facilities to $1.635 billion. We ended the quarter with approximately 23.6 million shares outstanding. In Q1, we repurchased and cancelled 78,688 shares at an average cost of $24.67 per share. So far in Q2 under the NCIV and ASPP, we have repurchased and canceled 78,000 common shares at an average price of $24.53 and total cash consideration of approximately $1.9 million. I will now turn the line back over to Paul to discuss the outlook.

Thanks, Azim. Looking ahead, while we anticipate continued macroeconomic challenges in the short term. We're confident that the strategic initiatives we're undertaking will position us for sustainable long-term growth and profitability. We remain committed to delivering value to our shareholders and are focused on executing our transformational project elevated agenda with discipline and agility. We're going to continue to be opportunistic in our approach to capital allocation, with the objective of maximizing shareholder returns over the long term. I want to take this opportunity to thank our employees for their hard work and determination over the past quarter. I also want to thank our OEM partners for their continued support. That's it for our prepared remarks, and at this time I'll turn it over to the operator to open up the line for Q&A.

Thank you. Ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please press star, followed by one on your touchtone phone. You will hear a three-tone prompt acknowledging your request, and your questions will be polled in the order they are received. Should you wish to decline from the polling process, please press star, followed by two. If you are using a speakerphone, please lift a handset before pressing any keys. One moment, please, for your first question. Your first question comes from David Ocampo, Coremark Securities. David, please go ahead.

Thanks. Thanks for taking my questions here. Paul, one of your US peers said on their last conference call that they believe GPUs for new vehicles still has around $1,000 per vehicle to fall as we return to pre-pandemic conditions. Curious if you guys have done any similar exercises internally or have any thoughts on how we should expect GPUs to trend over the next year or so.

Yeah, listen. We think that the GPU is going to continue to normalize. But that said, the U.S. actually definitely, like it has more to fall, right? Because they were charging over MSRP. And so I think over time, there's probably, Canada is going to normalize as well, but I think more so in the United States. I think also if you're talking, that's on the new side. And on the U side, I mean, yeah. And on the U side, I think, you know, the GPUs are compressed because we're looking at looking for we're, we're looking for vehicles that are more in the, in the price range that people can afford. And so, and as well as that, we're also not taking in as many trades because some of our brands are actually falling short of where they should have been. And so as a result of that, we're actually ending up buying vehicles from auction, which are, less profitable vehicles where we're making more on the back end than we are on the front end than normal. I think once we get our used buying program up and running, we'll see that probably expand a little bit.

Okay. And maybe a bigger picture question on your U.S. division. I mean, profitability obviously continues to lag here, but it is great to see you guys do some restructuring there. But when we think longer term for the U.S. operations, Do you think profitability can match that of your Canadian business or does size prevent you guys from achieving this? And I guess that leads to the bigger question. Do you need to make more acquisitions in the U.S. or divest the business entirely if margins and profitability can't match in Canada here?

So in the U.S., it's a question that we ask ourselves all the time. We ask ourselves when we got here initially, was the U.S. business profitable? the right business for us to be in given all the opportunity in Canada. We, you know, we tried several operators in there and then we went through COVID and we thought we were, you know, the best operators in the world. And then COVID went away and, you know, we started coming back down to earth. What Jeff and Brian have been able to do since September in restructuring that business gives me a great deal of confidence because I'm actually now seeing that this is a platform where that will scale. And I'm cautiously optimistic where I'm watching it in real time. And so the second portion of the question, the jury's out on how much we want to scale that business. If we actually can perform the way I'm told it can perform, it provides a wonderful platform for us to be able to go and acquire in the States at the right time. But it needs to prove itself out first, and it is definitely going in the right direction that we are seeing now.

That's a perfect response. And then just on your Kijiji B2C initiative, I know it's set to launch soon, and respecting that it's still early days, do you guys expect to tease us with any financial numbers over the next month or so as this starts to unfold?

I would say Kijiji is very, I think when the switch flips on it, I can't give you that right now. I can tell you what I think it's capable of doing, but it's all speculation. And so until we have data and we're in the market, I think it'd be unfair for me to give my view. I think, you know, what I would say is if we have more information at the August board meeting, I'm happy to share that with you. Right now, we're just building the scaffolding to actually go and execute on it.

Okay. That makes a lot of sense. That's my questions for today. I'll hop back in the queue. Thank you.

Thank you. Your next question comes from Chris Murray, ATB Capital Markets. Chris, please go ahead.

Thanks, folks. I guess starting, you know, kind of thinking about maybe more near term, I know there's a lot of moving parts in this thing right now. And I know you called out weather as a contributing factor to some of the Q1 numbers. I guess two parts to this question. So first of all, how are we trending as we kind of get into April? And what have you seen with weather maybe not as much of a factor in terms of use supply? You know, are we expecting that some of the trends we saw from Q1 are extending into Q2? Or is there some stuff that we should be thinking about in terms of some improvement to start with?

Hey, thanks, Chris. What I'd say is we're kind of seeing the seasonal uptick in terms of the sales trend improving after the winter, but the sales and GPUs are still normalizing post-COVID. We've also done a bunch of restructuring in Q1, and now that Now that Jeff and Brian have control of the U.S. platform, I think that we'll start seeing things turning in that division as well. So I think, you know, I think I called this out on previous calls during COVID that we don't know what the new normal is and we don't. We're all figuring this out in real time. But we do know that we have a lot of efficiencies to pull into our business. an expense to pull out of our business. And I think that gives us a little bit of an advantage versus our peers, right? We just have this opportunity to go after. We've called it out many times. It's fruit. It's just not low-hanging. Okay.

And again, you know, thinking about the mix of the business as we go forward, you know, I think, Azeem, you talked about a normalizing use-to-use ratio. You know, and again, there's a lot of moving parts in this, but is there a place where you want to be? I mean, I know there was originally, you know, the goal was to get to one times, you know, new to use, then the goal was sort of two. Now we're kind of, you know, kind of one, four, four, you know, where, where do you feel comfortable kind of running the operation? And I appreciate, you know, this is probably down the road. You have to get maybe the Kijiji piece to come in terms of vehicle supply, but, but where, where should we be thinking the right target is?

Listen, we are extremely focused on the new-to-use ratio, and buying cars has been a challenge, and acquiring them through trades is also a challenge. So buying them the traditional way that most dealers buy them, which is through auctions, where auction fees can be $500, sometimes $1,000 per car. And then you have transport on top of that. And then you have to, you know, get the car back and dust it off and get it frontline ready. It's, it's just not cost effective. So you're compressing the GPU on the front end and you're basically only working for finance and insurance. And so we do feel that when we set up our buying centers and the way that we're going to acquire inventory, that we think that we have, uh, I don't want to say an unfair advantage. We have an advantage over everybody else with the way we are going to be acquiring cars. And our goal is still that two to one. And once we hit that to go to two point five to one and so on and so forth, I'd say that's one piece of it. The other piece is trade ins are also off by by 20 percent. And, you know, we're running much less than we should be in the front end gross. And so our goal is to buy more cars off the street rather like to make up for that. And again, setting up that efficiencies and that process within the business, it changed on a dime, right? And so we had to be nimble and we have done that, but we're sitting under where we need to be for our volume of used cars in stock. The one thing though that's kind of interesting that I'd share is, You know, when we started with Jeff and Brian on board and something that we didn't know, our reconditioning time was 63 days. So 63 days from the day that we cut the check for the car to the day that the car made it to the front line. And I don't know if it was in this MDNA or where it was at some point, but I've seen a grid where you make your most money on that car if you sell it within the first 30 days. The second 30 days, so 30 to 60 days, It goes down, but slightly, but it goes down. But now you have this interest carrying cost and inventory carrying cost. In the third 30 days, the 60 to 90, the actual, the price that you make on the car is like, it's down a lot. And by the time you get over 90 days, that car actually costs you money. And so our efficiencies are, from when Jeff and Brian first got here, from 63 days, I can tell you right now, we're down to 8.3 days getting that car to the front line. That efficiency has changed so much in our business. Now we just now need to start boosting up the volume of cars.

Okay, that's great. Maybe one other question, just maybe thinking about M&A a little bit. You did talk about breaking out the collision center highlights. But I'm also thinking about other acquisitions of other dealerships. You talked about your mix of brands maybe isn't exactly where you want it to be. But at the same time, we've also had the conversation before about use of capital, buying back your own stock versus buying someone else's either assets or stock or whatever. How do you think about deploying capital into M&A this year? Are collision centers still maybe the focus And then you'll kind of work on fixing the business or is M&A like of other dealerships still an idea in Canada?

Here's what I would say on that. And this is just, this is my personal opinion. If we're off by this much, then I got to imagine that other dealerships in Canada are also going to be off by this much or close to it. In many of the brands that we're actually identifying as being a little bit of a laggard, And so us buying into this market right now, would I, I would say it'd be irresponsible when we see that margins are compressing because they're, they're compressing for us, but they're compressing for everybody. And in the United States, you're seeing that as well. I think that this takes 12, 12 to 18 months to start play out for, for owners that are considering selling their business to basically come from the prices that they were going to take for that store. to what they would actually really consider. And I think there's probably 12 to 18 months that we kind of need to be sitting on the sidelines watching what happens and actually doing what we need to to work on our business. That's at the dealership level. There might be some deals that come across that are, you know, somebody needs to sell the store and it's the right deal at the right time and we think we can add efficiencies to it. But I think by and large, expectations of sellers need to actually meet the new market And so I don't think there's going to be a ton of stores, um, that are going to transact unless, unless it's the right price. So we're going to be really disciplined about that on the share buyback side. Look, we're going to put our money to the highest and best use. And so if that's a share buyback, then that's a share buyback. And if it's a dealership, it's a dealership. And frankly, if it's a collision center, it's a collision center. What I would say is we've talked to a bunch of people that have actually scaled some of these, um, collision platforms like aside from Boyd. And what we've, what we've seen is that we actually have an asset within our business that has the potential to re like it's, it's now reached escape velocity and like getting it to where it is today was no easy task, but we now have a platform that can be scaled. And frankly, when we look at that, we need to actually think about the return, the return on investment for a collision center, the return on investment for a dealership, the return on investment for a share buyback, or just having the money in the bank. And that's kind of the way that we're going to evaluate everything.

All right. Thanks very much. I'll turn it over. Thank you. Your next question comes from Michael Dumais, Scotiabank. Michael, please go ahead.

Hey, good morning, guys. So maybe just continuing on, you know, the answer to the previous question. I like the collision disclosure, but I'm trying to understand what exactly you're signaling. I mean, if it's just the performance and certainly coming through, but if that is the answer, you know, maybe I guess the question is, you know, what's the long-term goal here for that business?

Yeah, it's a great question. Look, we love the business. We love the business because it's not, it's not cyclical like the car business. Like there's a certain quantity of cars that are going to be in an accident every year. You can bank on it. And the more market share we take, the more cars we'll fix. We actually believe in fixing cars in a certified fashion. So, um, you know, this is kind of the business that I came from prior to, um, prior to, uh, auto Canada, like actually fixing cars the way they were built. is actually very important. So that eliminates a lot of the diminished value in a vehicle. We actually are thinking more about this hub and spoke model. So as we sell the vehicles, we can actually service them knowing that 33% of those cars will be in an accident. And so we're actually educating our customers that when they get a car from us, if it's a mechanical repair, we'd love to fix it. If it's a body shop or a collision, we actually should fix that car because we'll put that car under the same condition it was coming out of the factory. And that's important when you have sensors. I've talked about this over and over again at Nauseam. But you have sensors that talk to the airbag, talk to the sensor, talk to the front bumper and deploy the airbag. It's important that that airbag goes off as advertised. And so when we look at that in totality, Michael, we think that we are the acquirer of choice. of collision centers and we can supplement the 100,000 cars we're putting on a road a year, knowing that 33% of those cars will be in an accident, we want to actually fix them. And when they actually get into an accident beyond repair, we want to be able to replace that vehicle. So there's a lot of synergies that go on within our organization. That's even holding aside all the parts that we're going to be supplying to our collision centers for the replacement.

That makes a ton of sense. Super helpful commentary. Maybe just shifting to the used. So the used vehicle turnover eight days, that's pretty impressive. And you talked about the GPU impact there, but it's not necessarily translating it into the results. And I'm wondering why, again, You know, it's not materializing to the effect that maybe we would have anticipated in the first quarter. And again, you know, use GPUs. I would almost think that it's below normal at this point. So just trying to figure out the dynamic there, you know, what to expect through the year given the improvements you've made.

Sure. It makes a lot of sense. So let me, let me just take a step back. We're now a thousand cars light of where we should be. And there's a couple of reasons for that. It's that cars are higher priced and consumers are, basically voting with their checkbook that they don't want higher priced cars or they can't afford them. And so we're just simply down a thousand cars. And so it's allowing us to actually get the cars to the front line a lot faster. I wish we were at 8.3 days and we had the right amount of inventory because then, then you know that we're, we're hitting on all cylinders. So just full transparency, there's still efficiencies for us to build out, but again, Being back a thousand cars also prevents us from putting a thousand more cars through our shops for parts and service and getting them reconditioned, right? Because we recondition those cars. They're also profit centers for us. And so because the cars are overpriced and because interest is where it's at, we actually are down from where we think the optimal number of used cars are. That said, there are still vehicles that we have in stock that are overpriced and we actually are still selling them to get the backend gross on the car. But I'd say beyond that, there's also a lack of fresh trades on some of the brands. I think we talked about it. Some of our brands are not performing and that fresh inventory actually drives the GPU. So if you recall, zero to 30 days, 30 to 60 days, 60 to 90 days. And so what we're doing is we're building out acquisition efficiencies that can actually help fill the first 30 days worth of inventory. And Jeff and Brian have actually been calling this out and building that muscle within the organization for the last several months.

It's super helpful. Thank you.

Thank you. Your next question comes from Krista Friesen, CIBC. Krista, please go ahead.

Hi, thanks for taking my question. I was just wondering, as we think about Project Elevate and maybe starting to see some of the impact of it later this year, where do you think we'll see that first? Is there a specific division that maybe you think might be, I don't want to say easy, but easier than other divisions where we might see some improvement there or how should we think about that?

So I can tell you, I guess what I can't do is because we're not providing metrics to the street. But look, one piece of our project elevate plan is customer paid repair orders. And if we talked about if we can get our bottom performing and that we talked about this bandwidth management, if we can get our bottom performing stores to actually just manage to average It's a significant jolt of EBITDA to the bottom line. And frankly, I'm really impressed. It's starting to translate now, but again, it's not something that happens overnight. It's change in process. And that change in process, it'll pay off in the long term and it'll pay dividends quarter after quarter after quarter, but we're building the muscle. And I'd like to remind everybody, Project Elevate, it's a five-year plan. It is a five-year plan that Jeff wants the team to kind of get done in 18 months to 24 months. But realistically, this is a five-year plan that we're all in this together and we've got to change behaviors. We've come out of COVID where we used to take orders for cars and now we're back into the selling of vehicles. There's a lot of process that has to be built into the system. And we've got the used car playbook that Jeff and and Brian and our platform VPs built. There's the service playbook that everybody built, our fixed ops directors built with our dealers. There's all these different playbooks and those playbooks translate over time to actually build the efficiencies that we're going to get out of Project Elevate. I would say we're also looking at areas though where we can save money as Project Elevate. And, you know, some of that is going to come and I'm sure they're probably listening or maybe not to some of our vendors and they need to come along for the party too. And so we'll be looking to reconfigure a lot of our contracts with a lot of our vendors over time because, you know, the world has changed and we expect them to participate as good partners do.

Maybe just to follow on that last point there and kind of the cost-cutting opportunities that are available, I believe, you know, a couple of years ago, at the beginning of the pandemic, there was certainly an effort to streamline costs. Did some of those costs just creep back into the cost structure over the past couple of years, or is there really still kind of more room to cut?

So, here's... When we went through COVID, we figured out, I remember this sitting in this office actually talking with the previous management team, how long could we go if we had to shut every dealership down? And so we really broke everything down to a granular level. So if we weren't selling any cars or servicing any cars because of COVID, we did this bottom-up build. And then all of a sudden cars started selling for more than they were worth, used cars, new cars, everything. Everybody became a superstar and the car business went into orbit. Things are coming back to normal now. And so what we're building out right now is infrastructure. It's shared services. It's a lot of the heavy lifting that I've talked over and over again. It's about building an HRIS system. So we know how many employees we have, how much money everybody gets paid, creating common element pay plans. Like there is just so much stuff that is, it's an opportunity to do within the business. And so what I would tell you is that new stuff might've creeped into the business and we definitely cut what we needed to cut for the business at that time. But now we're actually moving and this is what we've talked about. we're moving to a different level of business. This is no longer 40 stores that can be managed by one person and kind of oversee certain area people. This is a big organization. It's a complex organization. And we need to have proper infrastructure, better reporting, better measuring of everything. And once that is deployed, the cost that can come out of this business, frankly, we're extremely excited about the cost that can come out of this business are, I would say, immense. And not just the cost, I would say the opportunity that we can get from the business, it would be immense.

OK, great. Thank you. I'll jump back in the queue.

Thank you. There are no further questions at this time. Please proceed.

Listen, we really, again, we really appreciate everybody's support. I've taken tons of calls already today and it's been a rough road. We have a lot of headwinds, but I am optimistic that we are making the right changes right now in the business for the business. So over the coming quarters, We can start talking about different things, maybe outperforming the market again and how we've done that. Really appreciate everybody's time and support and look forward to connecting with everybody over the course of the quarter and on the next call.

Thank you. Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines.