Matthew Pettoni - Vice President and Treasurer Craig Monaghan - President and Chief Executive Officer David Hult - Executive Vice President and Chief Operating Officer Sean Goodman - Senior Vice President and Chief Financial Officer.

Rick Nelson - Stephens, Inc. Brett Hoselton - KeyBanc Capital Markets, Inc. William Armstrong - C. L. King & Associates, Inc. Bret Jordan - Jefferies LLC. Jamie Albertine - Consumer Edge Research LLC Aileen Smith - Bank of America Merrill Lynch.

Good day and welcome to the Asbury Automotive Group Q2 2017 Earnings Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Mr. Matt Pettoni. Please go ahead, sir..

Thanks, operator and good morning, everyone. Welcome to Asbury Automotive Group's second quarter 2017 earnings call. Today's call is being recorded and will be available for replay later today. The press release detailing Asbury's second quarter results was issued earlier this morning and is posted on our website at asburyauto.com.

Participating with us today are Craig Monaghan, our President and Chief Executive Officer; David Hult, our Executive Vice President and Chief Operating Officer; and Sean Goodman, our Senior Vice President and Chief Financial Officer.

At the conclusion of our remarks, we will open the call up for questions and I will be available later for any follow-up questions you might have. Before we begin, I must remind you that discussion during the call today is likely to contain forward-looking statements.

Forward-looking statements are statements other than those which are historical in nature. All forward-looking statements are subject to significant uncertainties and actual results may differ materially from those suggested by the statements.

For information regarding certain of the risks that may cause actual results to differ, please see our filings with the SEC from time-to-time, including our Form 10-K for the year ended December 2016, any subsequently filed Quarterly Reports on Form 10-Q and our earnings release issued earlier today.

We expressly disclaim any responsibility to update forward-looking statements. In addition, certain non-GAAP financial measures as defined under SEC rules may be discussed on this call. As required by applicable SEC rules, we provide reconciliations of any such non-GAAP financial measures to the most directly comparable GAAP measures on our website.

It is my pleasure to hand the call over to our CEO, Craig Monaghan.

Craig?.

Good morning, everyone. In a softening automotive retail environment, we are pleased to have increased our same-store revenue and gross profit by 2% this quarter compared to the prior year and to achieve an industry-leading adjusted operating margin of 4.5%.

Despite continued pressure on new and used margins, strong performances in F&I and Parts and Service have allowed us to maintain overall gross margins. We also successfully grew our same-store used unit volumes by 6% in the second quarter further enhancing overall profitability. This quarter, our SG&A expenses were 69.5% gross profit.

This reflects continued investment in our business, specifically in digital technologies and lead management initiatives that enhanced our customers’ experience. David will talk more about these investments during his remarks. Our adjusted earnings per share of $1.58 represents a 4% decrease compared to last year.

However, for the first half of this year, our earnings per share of $3.16, is 5% above last year. Assuming that SAAR holds at current levels and notwithstanding continued investment in the business, we expect to deliver low-to-mid single-digit EPS growth in the back half of the year.

Finally, I would like to welcome Sean Goodman to Asbury as our Chief Financial Officer. Sean joined us earlier this month and we are excited to have him on our team. I will now hand the call over to Sean..

Thank you, Craig, and good morning, everyone. I'm delighted to join the Asbury team and to be with you this morning. So let's start with a high level overview of the results for the second quarter. Revenue of $1.6 billion and gross profit of $267 million were in line with Q2 of last year.

SG&A expenses were 69.5% of gross profit, 140 basis points higher than Q2 of last year. Our floor plan interest expense totaled $6.1 million, up $1.1 million from the prior year period, primarily due to increase in the LIBOR rate.

And we are reporting earnings per share of $1.52 and adjusted earnings per share of $1.58 which is $0.07 or 4% less than the prior year period.

Earnings per share was adjusted by $0.06 for expenses associated with exiting our lease facility, partially offset by investment income related to the performance of certain F&I products that have now expired. There were no adjustments for the second quarter of 2016. David will provide details on the sales and margin performance for the quarter.

And I'd like to take a moment to give you some color on our SG&A expenses in Q2. SG&A expense deleveraging and the resulting impact on earnings per share was driven by three key factors, none of these were considered in arriving at adjusted earnings per share.

First, as Craig mentioned, we continue to invest in digital technologies and lead management initiatives. We believe that these investments will improve our customer's experience and enhance our stores competitive position in a changing auto retail environment.

The incremental expenses associated with these initiatives cost us approximately $0.03 per share this quarter. While we anticipate further investments in this area through the remainder of this year as we build out our omnichannel capabilities. We expect these investments to be ROI accretive going forward.

Second, our employee benefit costs are tracking higher than last year. We estimate impact of these higher expenses to be approximately $0.03 per share this quarter. Initiatives are being put in place to more efficiently manage to these costs in the future.

And finally, during the quarter we had two notable expenses; first, a major hail storm hit two of our dealerships in Plano, Texas. In addition to property damage, this storm destroyed all of our inventory resulting in $26 million of damage. While we were insured for the majority of this.

We estimate the impact of the storm and associated business interruption to be approximately $0.05 per share. And second, during the quarter we booked a charge of approximately $0.02 per share associated with prior period payroll taxes. For the remainder of 2017, we expect SG&A as a percentage of gross profit to be approximately 70%.

This compares to our original guidance of 69% to 70% for the full-year and incorporates our digital technology and lead management initiatives that David will describe in more detail. With respect to capital deployed. We repurchased $15 million of our common stock and spent approximately $6 million on capital expenditure this quarter.

We have taken a hard look at our CapEx program and as a result, we are now expecting CapEx for the year to be approximately $50 million and this is $20 million less than previously announced. Our facilities are in good condition and are well maintained and this should allow us to hold CapEx at around the $50 million level in 2018.

Note that these amounts exclude potential lease buyout opportunities that may arise and we consider these to be financing transactions.

From a liquidity perspective, we ended the quarter with $3 million in cash, $14 million available in floor plan offset accounts, $102 million available on our used vehicle line and $237 million available on our revolving credit lines.

Our total leverage stands at 3 times and our net leverage ratio is 2.7 times, which is in the middle of our targeted range of 2.5 times to 3 times. I’ll now hand the call over to David..

Thanks, Sean, and good morning, everyone. My remarks will pertain to our same-store performance compared to the second quarter of 2016. During the quarter, we grew our used vehicle retail unit sales by 6%, increased F&I PVR to $1,522, up $85 per car and grew parts and service gross profit by 6%.

Looking in new vehicles, the second quarter SAAR fell 3% to $16.7 million, but our new unit volume was down only 1% as we took market share in almost every brand. From a margin perspective, we experienced new vehicle margin pressure across all segments, but most notably in midline imports where we have a heavy Sedan versus truck mix.

In this segment, our PVR declined by 21%. However, our domestic business with a higher weighting of trucks enjoyed a stable PVR. Overall, new vehicle margins remain under pressure driven by aggressive dealer incentive targets and growing industry-wide inventory levels. As a result, our new vehicle gross margin was down 70 basis points to 4.6%.

Our total new vehicle inventory was $741 million. In an environment where inventory levels are building across the industry, we are pleased that our day supply declined by nine days to 74. Turning to used vehicles.

We increased our unit sales by 6% in the quarter and achieved a gross profit margin of 7.5%, which was 90 basis points less than prior year. The decrease in margin was driven by a combination of aggressive new vehicle pricing and the continued inflow of off-leased vehicles.

While our used vehicle retail gross profit was down 6%, our wholesale gross was better by $1 million. This led to total used vehicle gross profit being backwards by only 3% for the quarter. As I’ve mentioned in the past, the incremental used vehicle sales provide profit opportunities in both F&I, and Parts and Service.

We are pleased with our used vehicle volumes for the quarter. Our used vehicle inventory was at a 35 days supply at the end of the quarter, within our targeted range. Turning to F&I, our team continues to deliver strong results within $85 per car increase, along with an 8% increase in F&I gross profit.

Looking at Parts and Service, the Parts and Service business continue to perform well in the second quarter. With our team delivering 6% gross profit growth. This was achieved with a 23% increase in warranty and 4% increase in customer pay.

As both Craig and Sean mentioned, we are investing in digital technologies and lead management initiatives to enhance our business. With these investments, we are building out our omnichannel capabilities to effectively serve our customers online over the phone or in the store. However, they choose to interact with us.

Already we have seen solid results from these investments. For example, our website traffic count has more than doubled since last year. Our online service deployments have increased by more than 150% and our internet leads have increased by over 30% since last year.

All the above has achieved cost effectively with historically low advertising spend for a vehicle. We are now focusing on effective lead management through the creation of our Customer Care team, which will operate within our marketing team and provide industry-leading support to our stores.

With our investments in digital technology and lead management initiatives, we have reassessed our brick-and-mortar investment in Q auto and made a decision to exit the remaining 2Q locations.

With this decision, we are not decreasing our emphasis on used vehicle sales, rather we are focusing our investment and resources on alternative routes to market that we believe will provide a superior return. Our attention to the used car business is evidenced by the more than 500 basis point increase in our used to new ratio this quarter.

In closing, we want to thank each of our teammates for the continued dedication and hard work. We will now turn the call over to the operator and take your questions.

Operator?.

Thank you. [Operator Instructions] And we’ll now take a question from Rick Nelson with Stephens..

Thanks. Good morning. And welcome Sean to Asbury and the call..

Thank you very much..

To ask about the low-to-mid single-digit EPS growth that you are targeting from the second half, I'm curious what the inflection is that you’re seeing in the business relative to what you just reported in 2Q?.

Rick, it’s Craig. I mean when we look at – well I’ll start with the SAAR. Their forecast is based on a SAAR saying roughly to level where it is today, somewhere around [$70 million]. But then as Sean mentioned in our conversation, we had a number of cuts this quarter that we’re unique and we don't expect to continue.

If we just project through, if you would our core business in this environment, again with these investments that David talked about, we think low and mid single-digits is doable..

And if we can dig into the GPU pressures here especially in the Import segment down 21% year-over-year, do you see those types of incentives or those types of pressures continuing with the current incentive environment and the inventory environment that you referenced?.

Rick, I’ll hop in here, when I talk about – when we talk about low-to-mid single-digit EPS growth, we’re assuming that margins will stay at roughly the levels they are today on both the new and used side. And I think David can give you some more color on kind of what we see more broad happening with margins..

Rick, as I stated, our import line [we are] heavy car versus truck mix and it really is a push process with a lot of these sedans. This year is also mainly the year of a lot of change with the OEMs as far as factory incentives.

There's been a lot of movement even within the second quarter on incentives that came up that were on the table that came off the table. So they all kind of played a factor in our import margin pressure..

Are you suggesting it worsened as the quarter progress or got better as the quarter progressed from an incentive standpoint?.

It shows in our import volume, we did pretty well in unit sales and we were not able to achieve a lot of the incentive money that was out there. So there were very aggressive targets that were set and even what we thought was a good performance in the quarter year-over-year with volume, we certainly missed a lot of them – incentive money..

Gotcha.

So what’s our strategy, do you undertake now with those incentive money [indiscernible] and have to take some?.

They change monthly, as I'm sure you know in some cases quarterly. We enter the month understanding what our targets are and we make a decision early on in the month if we're going to chase it or if we're going to try not to.

The problem is even when you choose not to chase it, you still have to be somewhat market competitive, you still have excess inventory within the market. So it's not like your gross is that your margins going to go up materially if you don't chase the volume..

Gotcha.

You are comparing with dealers on our chasing that volume?.

Absolutely..

Yes. I don’t know if I could ask you about the warranty gross profits up 23% in the quarter, 22% year-to-date. Are those types of growth rates do you think that is sustainable? We still got to take out our airbag out there in a big way I guess in other recalls..

You know that the brands that drove most of that increase was Honda, Acura and Lexus. Honda and Acura that’s certainly was the [employee] campaign, it was different with Lexus. It's really difficult to predict what's going to stay.

Based on what we see currently, I think in the short-term period of stay and the brand mix certainly changes, but there always seems to be warranty issues out there..

Gotcha. Thanks a lot and good luck..

Thank you..

Thanks Rick..

We will now take our next question from Brett Hoselton with KeyBanc..

Good morning..

Good morning, Brett..

Good morning..

Just carry on from Rick's question.

Just in terms of the incentives on a go forward basis, do you see the – let's say the format maybe of the incentives continuing or do you see it maybe becoming a little bit less onerous going forward?.

That’s a great question. I'm not sure I can answer. Some of the imports like I said changed in Q2 and are reassessing even going into Q3 where they're at. There's been a lot of movement even on the Luxury side with how they've done it, so it's hard to interpret what changes are going to come and when..

And then on another subject, SG&A as a percentage of gross income, can you kind of talk through this quarter, but then more importantly second half and then into 2018.

What do you think are reasonable expectations?.

Brett, let me start and then maybe Sean would like to add some color. I think in Sean comments, we talked about you know expect something around 70% level. One of the things that's driving that is this initiative that David talked about where we're working to expand our omnichannel capabilities.

We're building out a team that essentially extends our marketing teams capabilities to manage lead and managing [down calls]. We think those are extremely important investments and will play well for us in the future, but the cost of those investments are baked into SG&A and that's why we think about probably running somewhere around the 70% level..

I'll just add a little bit to that. As I said in my prepared remarks, expecting SG&A for the remainder of the year to be roughly 70% of gross profit. If you look at our year-to-date SG&A expenses, that are 69.6% of gross profit. So doing the math on there, we’re pretty close to 70% for the full-year period.

As Craig said, we are going to be spending additional money on the digital technology. The investments in digital technology in the remainder of the year, we expect that to increase from the levels in Q1. We expect by Q4, our run rate on digital technology expenses to be around $1 million more than they were in Q2.

So that will put pressure on our cost, but remember that these are investments and investments that generated attractive return, and we expect to see the benefits of those returns probably starting in 2018..

Okay, excellent. Thank you very much gentlemen..

Thank you, Brett..

Thank you..

We’ll now take our next question from Bill Armstrong with C. L. King & Associates..

Good morning, everyone. Couple of questions here. So you talked about the midline import pressure on GPU as well. I was wondering if you could also discuss Luxury that was down about $300 year-over-year on your GPU, what do you see going on there..

It was essentially the same thing, if had we hit all the incentive money in the quarter, we would have had substantially different PVR than what shows from a Luxury perspective. It really isn't much more than that. It's Luxury mind that we missed..

Are we still seeing maybe also a little bit of disconnect in the mix of the Luxury manufacturers are offering in Sedans versus the SUVs and crossovers?.

When you look at the trend in the last couple of years, they are certainly doing the best job. They can try and catch up to it. It just doesn’t seem like they can quite catch it quick enough. But it's directionally correct, we can always be better..

Right, understood. Just going back to the SG&A, so you're expecting about 70% in the second half, so actually that's going to go up a little bit versus Q2 even though you had some non-recurring items in SG&A in Q2.

So when we kind of look at that mix it in, what's going to improve – where else in the P&L we're going to see improvement that would drive the low to mid single-digits earnings growth in the back half of the year?.

Again, I come back – on the SG&A side, we did have – just to start again. The hail storm was quite a significant impact in our second quarter. Sean called out the numbers somewhere around $0.05 of cost baked in there. We did not wreck that out separately. Some of our peers do. We just included in SG&A.

That will go away, but as we mentioned there will be increasing investment in the digital initiatives and basically just washing those two things together gets us back to – keeps us in roughly the 70% range..

I'll just add to that. The two expenses that will go away as the hail storm as Craig mentioned and the payroll tax charge. Those are clearly one-off in nature this quarter.

Our employee benefit costs as I mentioned in my remarks, we are putting in place initiatives to manage these costs more effectively, but given the nature of these costs the benefit is more 2018 benefit..

Okay. Got it.

And then finally, the $2.9 million of real estate related charges – what is that relates to? Is that Q auto, is that something else?.

No, it's got nothing to do with Q auto, that’s as you're well aware in our past when we get the opportunity to buy our way out of the leased property, we will and that was a charge essentially to exit a lease for facility early..

Okay, understood. That was all I had. Thanks very much..

Thank you..

We’ll take our next question from Bret Jordan with Jefferies..

Hi. Good morning, guys..

Good morning..

You made a comment about the growing industry inventory sort of industry-wide. And I guess, do you have any feelings on this sort of big picture question as far as how do – what’s the pulse on the OE production trends, and I guess is though production volume lining up with demand better fewer more SUV and fewer cars going forward.

I mean what's your take on inventory looking out?.

I think it's a real mixed bag Bret, I mean – because with some of the brands, we actually had a very low days supply and we actually think that impacted us because we didn't have enough and in another car lines, we have excessive inventory. We've been turning down inventory for month and we’ll continue to do it. I've seen minor production cutbacks.

There's a lot talked about it, but I don't think it's an enormous amount that they’ve cutback that feels like a small amount.

To me the big difference over the years is we’ve really widen our inventories in the sense that a lot of new models have been introduced to the market and it really plays heavy with the days supply when you add all these incremental models into the series. So that's made it obviously a little bit more complex control to day supply as well..

Okay, thanks. And I guess you've commented that the digital tech and lead management investment that cost to [$0.03] in the second quarter, but you're going to be spending into the higher absolute rate by the fourth quarter.

Will we be seeing returns from the earlier investment? I mean how do – I guess tell your thought about how dilutive it is from an EPS standpoint in the second half of the year, just those initiatives?.

I go back, when you add all these things together, you get this back to what we said earlier. We think we can grow EPS in low-to-mid single-digits and I think that's the best way to summaries it..

Okay. And then one last question, on Q auto.

Did you look back and sort of figure out what that might have cost? I mean was it dilutive or breakeven I guess as it initiative? Is there sort of – if we’ve think about a savings going forward by not being in the last two locations?.

No, maybe I give you some perspective on Q auto. The financial impact in the quarter was immaterial. Financial impact going forward of not having Q auto, will be material. First part of your question, what did we learn? I think that's a great question.

Well one, we made an investment in an initiative to see if we could generate an additional line of business that it produces an attractive ROI. We were unsuccessful, but I don't think we regret having tried it. I think it was something that we had to try.

We're much more excited about the digital initiatives that we talked about a little while ago and look forward to actually have and you come and visit us one day, so that we can show you those things. But I think the other takeaway from Q, just to follow-up there is I think there are two major learnings.

One is all about where do you source your inventory. And if you're going auction to buy a car, you're the last one with your hand up and that's not a situation we wanted to be in. We really have come to conclusion that we can move our traded vehicles to our stores as effectively or more effectively than we can moving them to an offsite location.

And secondly, we learned that a lot of those buyers are going to be sub-prime buyers. And without the captive finance company, running a standalone used vehicle operation; you are at somewhat of the disadvantage.

We decided strategically that we did not want to be in the business of lending money to used car buyers and take that altogether we've made a decision to exit the business..

Okay, great. Thank you..

Thanks..

We’ll now take our next question from Jamie Albertine with Consumer Edge..

Great. Thanks and good morning, and welcome to Sean as well..

Thank you..

If I may just a housekeeping item first, in the past few quarters you had some settlement payments come through from VW and perhaps elsewhere, just wanted to make sure that if there were any in the second quarter that we call those out or if they've subsided for now?.

We call it everything every quarter [front center]. There's nothing in there from Volkswagen..

Got it.

From a lead generation perspective, can you give a percentage breakdown of what's internally generated at this point versus or you're having to go through third parties?.

It's been our focus for well over a year now. Obviously, our internal leads are closer to much higher percent. We certainly do have outside the third-party vendor partners and we appreciate that relationship. But we've been growing internally at about a 30% clip to our internal leads..

Are you willing to share maybe where you are as a percentage of your total conversions, how much of it's coming from internal versus external versus our third-party?.

So from a conversion standpoint and let me know if I don't get the question correctly, but we convert that lead at almost double the percent compared to a third-party lease..

Understood.

If I may quickly on off-lease to surprised I guess to hear you guys sort of called that out as a headwind others in the sector have been looking at as more of a tailwind in terms of supply coming back to market helping to bring some pricing down, but help to maybe enable conversion? Is there something with respect to the mix of off-lease that is still causing it to be a headwind or how should we think about you the trajectory of used both unit demand, but ultimately profitability for really for the back half?.

Yes, Jamie, I’ll share some thoughts that we have. When you think off-leased vehicles and you think as the mix back a few years ago, it's obviously weighted more car than truck.

So you have that factor and when you have that much of influx of inventory in the market while there is a huge benefit from a dealer perspective in acquiring these vehicles, it's also depressing the retail price.

Because as everyone sits on these excess cars and they're competitive to try and churn them because everyone wants to be in a 30-day churn that depresses the retail price, so we're seeing on the retail side and the wholesale side as well. So while the influx is great and it's increased our CPO business were actually up 7% in CPO year-over-year.

It's still depressing pricing on both ends..

Well, maybe just as a quick follow-up to that point and would you say of all the off-leased vehicles coming back to your dealerships that you're sending more away then you're keeping?.

I would tell you that we're managing the days supply and we're not taking more than we can sell a return. So again I think there is excess cars throughout the market right now. So yes, it's fair to say we’re returning back cars..

And your days supply is what for you, sorry if I missed it earlier?.

That’s okay. We ended the quarter at 35 days..

35 days, okay very good. Thanks again and good luck in the next quarter..

Thank you..

We’ll take our next question from John Murphy with Bank of America Merrill Lynch..

Good morning, guys. This is Aileen Smith on for John. Not to beat a dead horse here, but to follow-up on some of the questions that were asked earlier.

Can you give us a bit more color on the strength and domestic gross profit per unit despite the pressure that you're seeing on sales? Is that a function of the Detroit 3 being relatively more rational on their stair-step programs than some of the foreign brands or the driven by better inventory management on your part or mix perhaps? And do you expect that relative strength to persist?.

I’ll try and answer, and please call back up if I missed something. Generally speaking with our domestic brands that we have will weighted more towards truck than car, and on a normal transaction between a car and truck, our PVR is double when we sell a truck compared to a car.

So with that, weight in that volume on the domestic being more truck work certainly benefiting from that. This is always our quarterly – throughout the years because with domestic you have that build up. So you tend to be a little bit higher in your days supply carrying you through the summer.

So we're sitting a little bit higher on domestic days supply than we want, but fairly normal for this time a year and we're kind of comfortable with the inventory levels where we’re at. We don't see anything significantly changing and one of our domestic partners has done away with the stair-step program and gone with something different.

The new program has benefited us for sure..

Great. That's very helpful.

And then to piggyback on your commentary that the elevated level of model introductions are creating some oversupply in the market? Can you talk about that by Vehicle segment? Is it particularly acute on the crossover side as we might expect given the strength in the market? And how is it impacting your ability to sell those vehicles at attractive GPUs?.

So it's not so much when I say starting – you look at your overall days supply if a particular manufacturer had 14 model lines and now they have 19 model lines. You have to have a representative days supply within those model lines.

Some of the model lines in the Luxury segment have been added so much, there's really not much difference between one model and the next and it really just becomes, which model is harder than the other and then the other model you're stuck with excess days supply.

Certainly there’s been more crossover vehicles in the market, but if you think over the last 36 months, there's also been a lot of finance that have been added to the market as well..

Okay, great.

And then sort of one last question, can you talk about the sustainability of your improvement in F&I per unit and perhaps some of the buckets in F&I that are outperforming relative to your expectations?.

Sure. This is a reminder about a third of our F&I PVR is finances – is pretty stable at that and really our increases have been through products sale. We have a great F&I team and trainers, and with that we think we've benefited through the additional sale and products sales.

We see our current rates we were at continuing, and the only thing that would offer that over time would be if lending started to tighten up..

Great. That's it for me. Thank you very much..

Thank you..

We’ll now take our next question from [Armentis Contovicous] from Morgan Stanley..

Good morning. Thank you for taking the question.

It looks like versus our estimates be – there was a bit of softness around new vehicle sales and I just wanted to get a sense of what the read through is to your customers? You talked about supply or production, but anything from the consumer side as far as negative equity or their ability to purchase new cars?.

It’s an excellent question. It clearly with the depressed values on used cars. It certainly affecting the consumer and their trading value, and increase is the negative equity. So from that standpoint, it does become more challenging.

If you're trading is now worth 15% to 20% less that much worse off from a negative equity standpoint, it makes some far more challenging to transact a new car..

Okay. And then the last quarter you talked about that the amount of production coming to market wasn't really sustainable and over time it would balance itself out.

Where are we as far as, what inning are we in and when do you think we get to sort of a more stable point?.

It’s an interesting time here because you're in the third quarter and it's always the traditional [sell down] quarter of the old models before the new models come out. It's hard to predict what the next model year is going to look like.

But at current pace, while there's been some pullback in production, it hasn't been dramatic and I think the pullback of 3% in SAAR in the quarter was an anticipated by the manufacturers, so that only further exacerbate the inventory level..

And then my last question just where we're towards the end of July, any sort of updates as far as sales go relative to targets and goals that you've set out?.

I'll just jump in there. I mean we see the same broad industry market data that you do. Our month in July is progressing, I think pretty much longer what you see happening market wide. New vehicle sales essentially flat with what we saw last year at this time and pretty much lines our expectations.

We started to call saying that we've fell to the SAAR would stay somewhere around current level that's what we're planning for. So I just somewhat and say we're – I would say we're starting July or halfway through July, pretty much inline with expectations..

Great, thank you so much for your time..

Thank you. End of Q&A.

That wraps up our questions for today. We appreciate you being with us and look forward to talk to you again next quarter..

Once again, that does conclude today’s conference. We thank you all for your participation. You may now disconnect..