Good morning. Thank you for joining LKQ Corporation's second quarter 2023 earnings conference call. I'm your operator, Jiao. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star one on your telephone keypad. If you would like to withdraw your question, again, press the star one. For time, we ask that you limit yourself to one question and a follow-up question. I will now turn the conference over to Joe Boutross, VP of Investor Relations. Go ahead. Thank you, Operator. Good morning, everyone, and welcome to LKQ's second quarter 2023 earnings conference call. With us today are Nick Zarcone, LKQ's President and Chief Executive Officer, and Rick Galloway, Senior Vice President and Chief Financial Officer. Please refer to the LKQ website at lkqcorp.com for our earnings release issued this morning, as well as the accompanying slide presentation for this call. Now, let me quickly cover the Safe Harbor. Some of the statements that we make today may be considered forward-looking. These include statements regarding our expectations, beliefs, hopes, intentions, or strategies. Actual events or results may differ materially from those expressed or implied in the forward-looking statements as a result of various factors. We assume no obligation to update any forward-looking statements. For more information, please refer to the risk factors discussed in our Form 10-K and subsequent reports filed with the SEC. During this call, we will present both GAAP and non-GAAP financial measures. A reconciliation of GAAP to non-GAAP measures is included in today's earnings press release and slide presentation. Hopefully, everyone has had a chance to look at our 8-K, which we filed with the SEC earlier today. As normal, we're planning to file our 10-Q in the coming days. With that, I'm happy to turn the call over to our CEO, Nick Zarcone. Thank you, Joe. Good morning to everybody on the call. I hope you are all having a safe and enjoyable summer. This morning, I will provide some high-level comments related to our performance in the quarter. Then Rick will dive into the financial details and provide an overview of our updated guidance before I come back with a few closing remarks. The second quarter of 2023 was a continuation of what we delivered in the first quarter, where again, the resilience of our businesses shined through with an exceptional organic revenue growth and strong margins in our North American and European segments, which more than offset the impact of the headwinds experienced by our Specialty and Self-Service segments. The non-discretionary nature of the parts these core segments distribute, coupled with our ongoing operational excellence initiatives, highlights the strength of our business model and our ability to generate robust profitability during periods of challenging macroeconomic conditions, including flat, declining economic growth in several of our markets, decreases in commodity pricing, the ongoing conflict in Ukraine and its impact on the broader European markets, and the continued increases in interest rates and its subsequent impact on consumers. The strength of our North American and European segments is evidenced by the fact that in the second quarter of 2023, North America and Europe collectively represented roughly 90% of our total segment EBITDA, versus 79% for the second quarter of 2022, and just 74% in 2021. The variance in performance across our operating segments this quarter again validates our long-term diversification strategy, both with respect to geography and product, and speaks to the true strength of our organization and our portfolio of businesses. Now on to the second quarter 2023 results and year-over-year comparisons. Revenue for the second quarter was $3.4 billion, an increase of 3.2%. Parts and services organic revenue increased 4.8% on a reported basis and 5.4% on a per-day basis. The net impact of acquisitions and divestitures was flat year-over-year. Foreign exchange rates increased revenue by 0.6%. For total parts and services, revenue increases of 5.4%. Other revenue fell 23.9% in the second quarter of 2023, primarily due to weaker precious metal prices relative to the same period in the prior year. Net income for the second quarter of 2023 was $281 million, as compared to $420 million last year. Diluted earnings per share was $1.05 in the second quarter of 2023, compared to $1.49, a decrease of 29.5%. The company completed the divestiture of PGW Auto Glass in the second quarter of last year, which generated a pre-tax gain of $155 million and an after-tax gain of $127 million or $0.45 a share in the second quarter of 2022. Adjusted net income of $291 million in Q2 of 2023, compared to $307 million last year, a decrease of 5.1%. Adjusted diluted earnings per share in the second quarter of 2023 was flat with last year at $1.09. Coming in flat to the prior year is a testament to the strength of our operating performance as we faced headwinds from significantly lower commodity prices and higher interest expense. Rick will provide further financial details in his prepared remarks. Now let's turn to some of the quarterly segment highlights. As you will note from slide eight, organic parts and services revenue for North America increased 8.3%. North America also reported the highest quarterly EBITDA margin on record as a standalone segment, excluding S elf-Service. We continue to perform well in North America, especially when you consider that collision and liability-related auto claims were down 3.1% year-over-year in the second quarter. Similar to Q1, the growth in North America was a combination of price and volume improvements. The pricing impact primarily reflected the year-over-year benefit of increases implemented late in Q2 and Q3 of last year, as opposed to further increases in 2023. The volume pickup was particularly evident in the aftermarket product line and was the result of two factors. First, having largely worked through the industry supply chain issues and returning to proper levels of inventory enabled us to get back to our historical level of fulfillment rates, with year-to-date aftermarket fill rates at their highest levels since June of 2020. Second, the impact of the State Farm program continues to unfold nicely and is building demand for aftermarket headlights, taillights, and bumper covers. As previously disclosed, in December of last year, State Farm announced that it would allow the use of these aftermarket part types. Late last month, State Farm announced that they are running yet another pilot, this time in California and Arizona, for the use of a full range of aftermarket collision parts, including sheet metal products like fenders, hoods, and trunk lids, and other items like side mirrors and grilles. As part of this pilot, State Farm requires that these parts to be certified by CAPA, the Certified Automotive Parts Association. As many of you know, we are by far the largest distributor of CAPA-certified collision parts in the United States. Importantly, we believe the potential expansion by State Farm into the utilization of these additional aftermarket part types validates both the high-quality standards of our Platinum Plus private label aftermarket parts offerings and our ability to deliver best-in-class service to State Farm's direct repair network across the country. We will be a beneficiary should State Farm ultimately decide to roll out the use of these additional aftermarket part types on a nationwide basis. This upward trend in our aftermarket sales volumes is consistent with a general rise in alternative part usage, or APU, which again approached pre-pandemic levels in the second quarter. I am pleased to say that the increase in APU also included an uptick in the recycled parts category, increasing about 140 basis points year-over-year. Combined, aftermarket and recycled parts have witnessed over a 400 basis point improvement in industry-wide APU year-over-year in the second quarter of 2023. Our outperformance is another indicator that we continue to take market share. Non-comprehensive total loss rates decreased sequentially in the second quarter to 20.4% from 20.9% in Q1. With the recent drop in used car prices, we expect total loss rates to slightly tick up for the balance of the year. As OE work through their healthy inventory levels, industry experts believe we will likely see a mix shift to newer vehicles on the road and would expect to see any near-term increase in total losses to reverse course, given newer vehicles are less likely to be deemed a total loss. As stated in prior calls, we are generally agnostic as to the small up and down shifts in the total loss rate. Last month, I had the opportunity to spend some quality time with the top-performing general managers and salespeople at an event for our North American business. I must say, their enthusiasm regarding the future of LKQ was simply energizing. Let's move on to our European segment. Europe's organic revenue growth for parts and services in the quarter increased 8.5% on a reported basis and 9.8% on a per-day basis. It was a quarter of records for the European segment, which reported the highest quarterly revenue ever at $1.64 billion, the highest EBITDA at $188 million, and the highest second quarter EBITDA margin percentage ever at 11.5%. During the quarter, we saw high single-digit to low double-digit reported organic growth in some of our key operating geographies. In particular, our Benelux, German, and Eastern European operations performed exceptionally well. The revenue growth reflected a combination of positive movements in both price and volume. We are confident we are continuing to take share in these large and highly fragmented markets, as witnessed by ECP, our U.K. business, which generated its highest level of per-day sales on record. In the second quarter, LKQ Europe entered into a strategic partnership with Mobivia, Europe's largest independent provider of automotive maintenance and repair services, operating under 11 brands in 18 countries across Europe. The agreement between Mobivia and LKQ Europe is based on a dual mode of collaboration, which includes the procurement and delivery of automotive parts to Mobivia's 530 ATU service branches across Germany. LKQ and Mobivia are both leaders in our respective sectors of the European automotive aftermarket, and thanks to this collaboration, we will leverage our strengths to provide a differentiated solution that is unparalleled in the marketplace. Our European team continues to face cost inflation across all operating markets, and to combat this, the team has taken decisive structural and multiple efficiency actions. These actions resulted in year-over-year improvements in SG&A for the second quarter, despite this challenging macro environment. I spent last week in Europe meeting with all the senior leaders across the segment and also with the regional teams in the U.K. and the Benelux region. I am incredibly proud of the performance of the European team and what they are delivering, and I am very excited about all the initiatives they have underway to grow the business and enhance our leading competitive position. The team's focus and drive are outstanding, and they are creating a uniquely special and market-leading business. Now let's move on to our Specialty segment. During the second quarter, Specialty reported a decrease in organic revenue of 12.9%, which was below our expectations. There were major differences in the demand for various part types, with the truck, off-road, and marine categories being down less than 2%, while RV and towing-related products were off substantially more than the overall segment decline. The RV portion of our Specialty business was impacted by the wholesale shipment and retail sales of RVs, which were down 50% and 20% year to date through May, respectively. We expect to see further declines in the RV market as recent industry reports project that full year 2023 wholesale shipments will be down 40% year-over-year. With that, we believe the challenges for our Specialty segment will continue in the back half of the year. Now, on to our Self-Service segment. Organic revenue for parts and services for our Self-Service segment increased 4.7% in the second quarter. Self-Service was again challenged by extremely soft commodity pricing, particularly as it related to precious metals. On the corporate development front, during the quarter and recently in July, we completed some smaller, highly synergistic tuck-in acquisitions, including a U.S.-based remanufacturer and distributor of OE replacement engines, marine replacement engines, and high-performance crate engines, a leading independent truck parts distributor in the U.K., a Holland-based automotive aftermarket parts distributor, a Belgium-based business that distributes automotive parts, paint, tools, and accessories, an aftermarket accessories distributor with locations in Texas and Oklahoma. Additionally, during the quarter, we divested a small non-core business in our Specialty segment. The net annualized revenue impact of these six transactions collectively is approximately $240 million. As most of you know, on February 26, we entered into a definitive agreement to acquire all of Uni-Select's issued and outstanding shares for CAD 48 per share in cash, representing a total enterprise value of approximately $2.1 billion. The process is on schedule, and we are pleased with our progress. During the second quarter, we received the required approvals from Uni-Select shareholders, the Superior Court of Quebec, the antitrust regulators in the U.S. and in Canada. On July 21st, the Competition and Markets Authority in the U.K. issued its phase one decision on the transaction, and in response, we immediately submitted our proposed undertakings related to the divestiture of Uni-Select's GSF Car Parts business in the U.K. for evaluation by the CMA. In light of those developments, yesterday, we waived the closing conditions relating to regulatory approvals. I'm happy to announce we plan to complete the acquisition of Uni-Select on or about August first. The pending divestiture of GSF Car Parts continues to progress in accordance with our desired timeline. After we complete the customary competitive bid sale process, the CMA will complete its suitability review of our proposed buyer. Upon receipt of approval of the buyer from the CMA, we will complete the sale of GSF Car Parts, likely in the third quarter. Turning to ESG. During the quarter, we initiated or expanded various programs that centered around our people, LKQ's most important asset. As part of our response to our employee engagement survey, we identified that ensuring the health, safety, and well-being of our employees is essential to our success. With that engagement data, we took action. We expanded our Inspired to Thrive wellness program globally, which focuses on the physical, mental, and financial well-being of our employees. We expanded the installation of dash cams across our North America and specialty fleets, a program that enhances the safety of our drivers. At ECP, our team implemented two exciting programs: 25 by 25 and PAVE, which stands for People Adding Value Everywhere. Both these programs are centered around our diversity, equity, and inclusion initiatives. We implemented these programs as they are in the best interest of our employees. I could not be prouder of the continued progress on our ESG efforts, which was again validated in June by MSCI maintaining our triple A ESG rating, a rating that very few companies can claim. Lastly, I am pleased to announce that on July 25th, 2023, the board of directors declared a quarterly cash dividend of $0.275 per share of common stock, payable on August 31st, 2023, to stockholders of record at the close of business on August 17th, 2023. I will now turn the discussion over to Rick, who will run through the details of the segment results and discuss our outlook for 2023. Thank you, Nick, and welcome to everyone joining us today. The second quarter was another solid performance from the business, with highlights including record-high segment EBITDA margin of 20.6% in North America and at 11.5%, the highest quarterly margin in a decade for Europe. Organic revenue growth in the high single digits in North America and Europe, operating improvements countering headwinds from commodity prices and interest costs. Strong free cash flow of $414 million in the quarter, and the completion of a $1.4 billion bond offering to secure financing for the pending Uni-Select acquisition. I want to reiterate Nick's thanks to the global LKQ team for delivering exceptional results in difficult conditions. To provide further details on these results, I will start with comments on segment performance. Going to slide 10, North America continued its strong performance, posting a segment EBITDA margin of 20.6%, a 190 basis point improvement over last year. We saw gross margin improvement of 150 basis points, driven by lower freight costs, pricing and productivity initiatives, and a favorable mix effect with the sale of the lower-margin PGW business. Overhead expenses were favored by 40 basis points, primarily due to lower freight, vehicle, and fuel expenses. With the continued strong performance in our North American segment, we believe the full-year segment EBITDA margins will finish the year in the low 19% range, with some moderation in the second half of 2023, with salvage margins tightening, along with some normal seasonality. Europe also delivered terrific results, with a segment EBITDA margin of 11.5%, up 70 basis points from the prior year period. As seen on slide 11, gross margin improved by 20 basis points, while overhead expenses decreased by 50 basis points, with the effect of improved leverage due to the 9.8% per day organic revenue growth and emphasis on productivity initiatives on personnel costs and reduced freight costs. There are some headwinds anticipated in the second half of the year as personnel costs increase due to wage inflation. We intend to mitigate these increases through productivity initiatives, and we remain optimistic about our previously disclosed expectation for full-year margin expansion of 20-30 basis points in 2023. Moving to slide 12. Specialties EBITDA margin of 9.5% declined 390 basis points compared to the prior year. Gross margin, which was down 370 basis points year-over-year, is under pressure from increased price competition as inventory availability continues to improve for our competitors, in addition to unfavorable product mix, as lower-margin lines, such as auto and marine, have been less affected by revenue reductions. Overhead expenses were up 20 basis points, primarily from the decrease in leverage driven by organic revenue decline of 12.9% per day. The Specialty team continues to take actions to align the cost structure with revenue trends, and prior restructuring efforts have provided some benefit in the second quarter to counteract the revenue softness. As you can see on slide 13, Self-Service profitability declined sequentially to 4.1% this quarter from 13.2% in the first quarter and decreased relative to the 15.3% reported in Q2 2022. Metals prices had a net negative effect on results, with lower precious metal prices representing a $15 million reduction in EBITDA and an unfavorable lag effect from sequential scrap steel price changes, driving a further $5 million decline. Other revenue decreased by 28.3% in total, contributing to a reduction in operating leverage of 620 basis points. Relative to Q2 2022, the average price received for catalytic converters in Q2 2023 declined by 39%, and scrap steel fell by 20%. While car costs typically move in tandem with changes in commodity prices, we have experienced a stickiness in car costs, which were only down 12% relative to Q2 2022. These trends created a gross margin headwind in the second quarter that could persist in the second half of the year. For further details on the consolidated results. As mentioned, adjusted diluted earnings per share of $1.09 was flat to Q2 last year. Our operational performance showed strong year-over-year improvement, with a net increase of $0.11 per share on an adjusted basis, driven by solid gains in North America and Europe, partially offset by the decline in the Specialty business. We benefited by $0.04 due to the lower share count resulting from our share repurchases in 2022. These factors were of $0.08 from the impact of metal prices, as shown on slide 27, $0.05 in higher interest expense resulting from rate increases, and $0.02 due to higher effective tax rate. On the tax rate, we applied an annual effective rate estimate of 27.0%, which is 40 basis points higher than the 26.6% in our prior guidance. The rate change is attributable to nondeductible Uni-Select transaction costs and other effects related to the Uni-Select financing. As shown on slide 18, the Uni-Select transaction affected various parts of the second quarter financials. The income statement effects of the pre-acquisition net financing expenses and transaction costs have been excluded from adjusted diluted EPS. Once we complete the acquisition, going forward, interest expense will be reflected in adjusted diluted earnings per share. In May, we completed the offering of $1.4 billion of senior notes due in 2028 and 2033. We're happy with the results of the offering as a first-time investment-grade issuer. Obtaining financing at 5.75% and 6.25% for the five and 10-year maturities was an outstanding outcome. We recorded interest expense on the bonds for the period between the issuance dates and the quarter end in the interest expense line on the income statement. The interest earned from the bonds proceeds is reflected in interest and other income. In Q1, we hedged the interest rate risk prior to the issuance of permanent financing in the bond market. Upon issuance of the bonds, we unwound these interest rate swaps and settled by making a payment of $13 million. As these swaps qualified for hedge accounting, the loss was held on the balance sheet and will be amortized to the income statement over the life of the bonds. With the completion of the bond offering, we terminated the bridge loan facility and amortized the remaining $6 million of upfront fees in Q2. To hedge the risk related to the movements in Canadian dollar exchange rates between signing and closing, in Q1, we entered into foreign exchange forward contracts to purchase Canadian dollars at a specified rate. These contracts had a fair value of $46 million as of June 30th, and as we are not eligible for hedge accounting on these contracts, the mark-to-market gain is reflected in the income statement as a separate line item. We incurred M&A advisory costs of $6 million in the quarter, which are presented in restructuring and transaction related expenses. Shifting to cash flows in the balance sheet. With the $1.4 billion bond offering and the CAD 700 million Canadian dollar term loan, we have secured the necessary financing for the Uni-Select transaction. By completing the bond offering ahead of the deal closing, we are carrying more cash on the balance sheet than usual at $1.9 billion. If you set aside the roughly $1.4 billion earmarked for the acquisition, we have $519 million in cash and $1.2 billion of available liquidity as of June 30th. As of June 30th, we had total debt of $4.0 billion, with a total leverage ratio of 2.3x EBITDA, which takes into account the additional debt for funding Uni-Select and none of the projected EBITDA from the acquisition. The increase in the total leverage ratio above our target range of 2.0x was expected, as we disclosed in our prior Uni-Select communications. We are committed to reducing our leverage ratio below 2.0 times within 18 months of closing the transaction. Upon achieving our target leverage ratio, we will return to our balanced capital allocation strategy, including share repurchases. Our effective borrowing rate rose to 5.3% for the quarter due to global market rate increases. The increase in the leverage ratio above the 2.0 times will trigger a 12.5 basis point increase in our credit facility margin going forward. We have $1.7 billion in variable rate debt, of which $700 million has been fixed with interest rate swaps at 4.6% and 4.2% over the next 2 to 3 years, respectively. We produced $414 million in free cash flow during the quarter. At $567 million on a year-to-date basis, we remain on track for our full year estimate of approximately $975 million. Compared to the year-to-date June 2022, free cash flow was down $71 million, with higher outflows from income taxes of $39 million, interest of $38 million, and capital spending of $37 million. These are the three areas we highlighted as headwinds in our February call. The actual results are playing out mostly as expected. Interest payments will be a larger headwind than originally projected because of higher interest rates and the impact of Uni-Select financing coming onto the books before the acquisition closes. As previously mentioned, we have paused our share repurchase program and directed our free cash flow to paying down debt of $131 million in the second quarter, as well as tuck-in acquisitions of $27 million. Additionally, we paid a quarterly dividend of $74 million. I will conclude with our thoughts on projected 2023 results. Our guidance is based on current economic conditions and recent trends and assumes scrap and precious metal prices hold near June levels, and the Ukraine-Russia conflict continues without further escalation or major additional impact on the European economy and miles driven. On foreign exchange, our guidance includes balance of the year rates for the euro of $1.09 and the pound sterling at $1.25 in line with June rates. We expect reported organic parts and service revenue in the range of 6.0%-7.5%. Organic growth was 6.4% through June. We decreased the high end of the range in recognition of the ongoing challenges at Specialty, which is down 13% year to date. We expect Specialty to reduce the year-over-year decline in the second half of the year, the lower full year expectation makes reaching 8% at the consolidated level unlikely. Please note we have one fewer selling day in North America, Europe, and Specialty in Q3. We expect adjusted diluted EPS in the range of $3.90-$4.10, which brings in the high end of the range from our previous estimate, while there is no change to the low end. The midpoint is now $4 per share, down $0.05 from our prior figure. We anticipate North America and Europe continue to perform ahead of prior expectations and are mitigating softness in our Specialty segment, resulting in net operational growth of $0.05. However, the negative effects of declining metals prices of $0.07 and higher interest in tax expenses of $0.03 are more than offsetting this operational growth. Slide 5 shows the primary factors contributing to the EPS guidance change. There is no change to our free cash flow expectation of approximately $975 million and 55% annual EBITDA conversion, noting a portion of the Uni-Select transaction fees and pre-acquisition interest costs will have a one-time impact to free cash flow and create a headwind that we expect to overcome. To be clear, the numbers I just quoted do not include operating results for Uni-Select. We expect to close on Uni-Select on or about August 1st, and assuming that timing, we are projecting the acquisition will be dilutive to adjusted diluted EPS by $0.02-$0.04 per share in fiscal 2023. While we believe the transaction will be accretive over the first 12 months, in the early months, it is expected to be dilutive due to the integration costs and the time required to begin to achieve the synergies. Our overall expectation for the businesses have not changed, and we are excited to bring them in as part of the LKQ family. Thank you for your time today. With that, I'll turn the call back to Nick for his closing comments. Thank you, Rick, for that financial overview. In closing, the 2Q was another solid performance for Team LKQ. I am beyond proud of the results we delivered for the 1H of the year, particularly how the teams are diligently planning and positioning their respective businesses for the balance of 2023, as we continue to be challenged by certain uncontrollable dynamics. As we move into the 2H of the year, let me restate our key strategic pillars, which remain central to our culture and our objectives. First, we will continue to integrate our businesses and simplify our operating model. Second, we will continue to focus on profitable revenue growth and sustainable margin expansion. Third, we will continue to drive high levels of cash flow, which in turn will give us the flexibility to maintain a balanced capital allocation strategy. Fourth, we will continue to invest in our future. As always, I want to thank the over 46,000 people who work at LKQ for all they do to advance our business each day and for driving our missions and our delivers values forward, regardless of the challenges. With that, operator, we are now ready to open the call to questions. Thank you. Again, if you have a question, press star one on your telephone keypad. If you wish to remove yourself from queue, again, press star one. One moment, please, for your first question. Your first question comes from the line of Scott Stember of ROTH MKM. Please go ahead. Morning, guys. congrats on the quarter, and thanks for taking my questions. Thanks, Scott. In North America, just wanted to touch on State Farm. I think in previous calls, you had talked about, I guess based on those three SKUs throughout the country, about $100 million in benefit. Getting a lot of questions from investors about, what the potential is with California and Arizona now going fully live with the whole program. Sure. I'll take that. Obviously, we are delighted by the movement State Farm is making in terms of utilizing our high-quality aftermarket parts and the repair of policyholders' vehicles. You're correct. We previously mentioned that the upside from headlights, taillights, and bumper covers was about $70 million-$100 million, on an annual basis, once everything gets up and running. We are tracking toward that number, so quite frankly, probably toward the midpoint, as there appears to be a little bit of cannibalization on the salvage side, in addition to the significant cannibalization on the OEM parts side. These three part types represent the highest volume of aftermarket parts, as almost every collision requires replacement of lights and bumper covers. If you think about 3 equal-sized baskets, Scott, of lighting, bumpers, and everything else, adding everything else to the bucket would add another 50% or so to our original estimate, which would push you towards somewhere in the $125 million-$150 million on an annual basis over time. That's probably a little bit higher than some preliminary guesstimates that some of you have had, likely due to the fact that State Farm will only use CAPA-certified parts. Capital parts only represent about $1 billion of our overall aftermarket sales. When you add on top of that the $1 billion includes chrome bumpers, basically bumpers for pickup trucks, that State Farm has been using for the last several years. If you apply roughly their 16%-17% market share on that lower base, you get back to that $125 million-$150 million on an annual basis of incremental revenue over time. That's the number that we're comfortable with right now. I would also say that's a very nice revenue pickup, and because there's a limited amount of required SG&A to deliver all those incremental parts, we think there will be really good margins on that incremental State Farm business. That $125-$150, like, is that an all-in, or that's an additional amount just for California? That's all in. Again, everything else is you know, about a third of the bucket. Lights are about a third, and bumper covers are about a third. The pilot, Scott, won't mean much for us. Yeah. the pilot. It, we're the numbers that Nick just quoted are assuming they go live at some point in time. Okay. Does that. I'm sorry for belaboring the point here, but does that assume that the whole country goes live? Yeah. With all parts, 100%? Yes. Yes. Okay. Got it. Maybe just walking over to Europe for a second. Obviously, you know, tremendous growth there. Sounds like the volume has picked up nicely. Maybe just talk about some of the things that are really pushing growth there. I know that you guys are taking share and doing a better job, but are you seeing signs that the countercyclical nature of the business is kicking in? I wouldn't say countercyclical, Scott. I mean, the reality is the economies in Europe are in much worse shape than the U.S. economy. You know, if you just look at some of the published statistics, you know, Germany is, you know, in a recession. They've had two quarters now of negative GDP growth. The U.K. is probably the worst off of any of the economies. You know, the impact of the war, the impact of energy prices, inflation. While inflation has come down a bit in the U.S., inflation is hanging pretty high over in Europe, and quite frankly, that's having an impact on the consumer. The fact that we are continuing to grow our business, both from a volume perspective and a price perspective, tells us that while it may not be countercyclical, we are more than holding our own as it relates to the overall economic backdrop in Europe. Again, a good growth. We are highly confident that what this means is over time, the car park is going to age, and if you talk to anybody in our business, an older car is our friend. We think that longer term, the soft economic conditions in Europe will actually bode to our favor. Thank you. Your next question comes from the line of Craig Kennison of Baird. Please go ahead. Hey, good morning. Thanks for taking my question. Rick, I had a question for you on North American fulfillment rates. Is there any way to quantify the year-over-year increase you saw this quarter? Then how long do you expect tailwinds from that improving fulfillment rate to impact North American organic growth? It's a good question. Thanks for calling, Craig, and thanks for the question. You know, fulfillment rates are back to the mid-nineties, which is kind of our target, as we've kind of talked in the past. We were low nineties when we think about where we were just a year ago in Q2. Actually, we're in high eighties as I'm looking at the numbers. We've got about, you know, 5 points of improvement. As far as quantification, the difficulty in doing that is that it's a bit of a mixed bag. I'd hate to quote what the overall benefit was as far as dollars go, as there is a little bit of a movement, and we've talked about this before, between the salvage side and the aftermarket. There's been a little bit of a flip. When some of the volume went away from aftermarket, when the availability wasn't there, it went over to salvage. It's kind of gone back the other way. We're happy with where we're at. We don't think we need to go much more of where we're at, as we're continuing to balance the free cash flow impacts of holding the additional inventories. Thanks. As you look at, like, Q3 and Q4 and then 2024, do you still expect tailwinds, or do you think that has abated from a year-over-year perspective? Yeah, I think we're minor improvements, but nothing that's gonna be meaningful for us at this time. I mean, we're back to, you know, not quite to where we were pre-pandemic, but, I mean, it's really, really close. Thank you. Your next question comes from the line of Bret Jordan of Jefferies. Please go ahead. Hey, good morning, guys. Good morning, Bret. Good morning. With a bit more visibility now, I guess, of the Uni-Select business, could you talk about how you see the synergies of having a North American mechanical business in Canada? As we outlined back in late February when we announced the transaction, Bret Jordan, we are highly confident that there is $55 million of cost synergies that we will be able to get our hands on over the first kind of three years post-transaction. Most of that will come in the second year, with only a few of those dollars needing a full three years to access. We're gonna start the process just as soon as we can in trying to deliver the synergies very quickly. Again, there's facility savings, there are some procurement benefits, and kind of all the corporate overhead and the like that we don't need. Nothing has changed from the presentation that we gave everybody back on February 27th, 28th, when we announced the transaction. Again, we are highly confident in our ability to do that. Obviously, much of the synergies are going to come in the U.S. That's where the FinishMaster operations and our paint operations overlap. That's where a lot of the synergies come from. We have no plans on, you know, eliminating, changing, or shutting down facilities up in Canada because we don't do what they do in Canada today, right? They're distributing small mechanical parts. That's the business that we have over in Europe. We do think that there will be benefits, revenue benefits, that we can glean by broadening out their product line, giving them some incremental, inventory to cover all car types that are used up in Canada, by giving them some capital to grow their business. None of that is included in the $55 million of benefits that we outlined when we announced the transaction. Okay. You didn't mention Elitek in your prepared remarks. Could you give us an update on the third-party diagnostics development? Oh, Elitek. Oh, Elitek. Yeah. Yeah. We love our services business. The reality is it's growing about 25% a year, which is obviously significantly higher than any of our other businesses, and it has really strong margins. We are very, very happy about that. I mean, if you look at some industry data, about 75% of all repairs at the MSOs are scanning the car for some of that technology, and about 18% of the repairs actually have some sort of calibration work being done on the vehicles. The 18% may sound low, but you got to remember that today, there's only a small portion of the car park that has all the technology on it. you know, average price of a scan is running about $140. Average price of a calibration is running close to $400. It is a really attractive business, and the market is going to continue to grow because every year there's simply more cars out on the roads with some of that more advanced technology on the car. That's why we got into the business several years ago. We've created what we believe is a market-leading offering, providing a high level of service to our existing customers by providing some of those services actually in their shops. We're optimistic about the future. Thank you. Your next question comes from the line of Brian Butler of Stifel. Please go ahead. Hey, guys. Thanks for taking my question. Good morning, Brian. Just when you think about Specialty, it doesn't sound like there's a bounce from the bottom, but do you feel like we've kind of reached the bottom? How to think about, you know, where the margins ultimately settle out, maybe kind of back half of 2023 and then thinking about 2024? Yeah. We're not predicting that we're at the bottom yet. The reality, it's been a rough couple of quarters for our Specialty business. We have not seen a catalyst that that's going to turn quickly. Obviously, as we start to get into 2024, we've got, you know, better, easier comps that we'll be working against. The numbers may, from a growth perspective, may not look as soft, but from an absolute dollar perspective, we're not anticipating a significant uptick. You know, the good news is they did some restructuring earlier in the year. They're going aggressively at their cost structure. The month of June, they were actually back to a double-digit margins, even though they weren't there for the quarter. You know, I would suggest that margins in and around the 10% range is something that we're striving to achieve, even though the revenues may be challenged now for several more quarters. All right, that's helpful. Thank you very much. Second question, how do you bridge the free cash flow outlook staying the same with the higher interest expense? What's offsetting that? You know, if you look at the overall pieces that we've got, the trade working capital for us has been a nice improvement. We continue to see a nice improvement. We saw a really good improvement within Q2 as well. You know, the earnings side is the other side of it. You know, we're real happy with where we ended up in Q2. Overall, trade working capital improved roughly little less than $180 million, and we expect to continue to drive that throughout the rest of the year. Thank you. Operator, do we have another question? Operator, it appears our phone line had cut off here. I don't know if that's on your end or our end? It appears the operator has a provider has a little bit of a technical issue, so if you could please sit tight. Thank you. If the analysts want to, send us in an email, maybe send the email over to Joe Boutross, and we'll answer them through email until we get the technical aspect fixed for us. Pardon the interruption. Sorry about that. We now have the next question from the line of Gary Prestopino of Berenberg Research. Please go ahead. Hey, good morning, everyone. Morning, Gary. Morning, Gary. A couple of questions here. With, with your, some of the puts and takes on your adjusted EPS guidance, the changes here, which is rather minimal, but in looking at it, it looks like this does not really impact the consolidated segment, EBITDA, or the consolidated EBITDA that you generate for the year. Is that kind of a correct assumption? It looks like there'll be very little impact from some of these changes. The metals will be an impact. You're right, on the interest side, you know, on the taxes side, those will be avoided. The metals impact, you should feather that in. Right. You're also getting, $0.05 from operating results, right? Yep. Yeah, exactly. It's roughly the same, Gary. I mean, it's minimal as far as the difference go on the EBITDA side. Okay. Nick, it seems like Varun's got things really humming over in Europe. Could you maybe talk about some of the actions that, you know, they've taken over there that have led to, you know, the margin improvement and the segment EBITDA generation in the quarter that were at record levels? You know, as Rick indicated, you know, a lot of the focus came on SG&A. We, of the 70 basis point improvement, I think we're split 20 basis points in gross margin and 50 basis points in SG&A. Taking a really hard look across all of our platforms to make sure that we're doing the best job possible to control our overhead expenses. Now, when you have 9.8% per day organic revenue growth, that helps. Make no mistake, Gary, the inflationary environment, as I indicated over in Europe, is much more intense than it is here in the U.S. They've needed productivity gains to offset a lot of that increase and allow us to actually get to a lower SG&A percent as our, as it relates compared to revenues. Rick did indicate that we've got some wage inflation coming at us in Europe in the second half of the year. We know that already. You know, certain other countries, particularly, the Netherlands, has another wage increase coming at them. We experienced already a couple base strike in Germany as the unions over there and the work councils have pushed their members to use, you know, short-term strikes to try and petition for better wages. Those are all things we're gonna have to deal with in the second half of the year. Okay. Thank you. Thank you. Your next question comes from the line of Daniel Imbro of Stephens. Please go ahead. Yep. Hey, good morning, everybody. Thanks for taking our question. Good morning, Daniel. Good morning, Daniel. Rick, I want to start on North American EBITDA margins. You know, obviously, I think you had guided earlier this year, they would step down as smaller competitors got inventory and maybe price to get share back, but they've held in much stronger. I guess, what's playing out differently than you thought? Are smaller peers being more rational, or is there something else driving North American wholesale margin up to offset some of that price competition? Yeah, thanks for the question, Daniel. You know, it's a combination of several different things. One is productivity initiatives have been something that we focused on for a while, that are helping to offset any of the risk we're seeing on the pricing side. The other thing is that competition, you know, we believe has a decent amount of inventory and has been pretty good about holding pricing. We haven't been looking at dropping the pricing piece as we were kind of expecting earlier. You heard in the prepared remarks, You know, as we think about the back half of the year, there's a little bit more seasonality than anything else. kind of pulling away from the idea of, you know, how bad could the, you know, how low could the margins go relative to where they're at right now? we're just not seeing it. I think, you know, productivity is one of the biggest things that is offsetting that, and, you know, we're continuing to drive it. we think we'll end up in the low 19s for the, you know, for the full year number as we're coming in to the back half of the year. Thank you for that color. Maybe my related follow-up on North America. You know, I think, Nick, you mentioned 400 basis points of APU improvement. That should have been, I would guess, just a nice tailwind to volume. Could you break out of the 8.5% comp, how much was ticket versus like more ticket growth versus more traffic growth? Are you seeing any change in OEM pricing? I think that's an investor concern out there as OEM production picks up. How has that side of the pricing backdrop been in related to the traffic versus ticket discussion? Yeah, North America, more than half of the year-over-year growth was volume, which is really good to see. Obviously, a lot of that has to do with the aftermarket volume as we talked about, having the inventory in stock, getting the fulfillment rates up, the State Farm program, all that leads to higher volumes. You know, the OEs, you know, they've generally kept their prices steady. They certainly haven't dropped prices, and we don't think that they will. They've never shown a propensity to lower prices, if you will. I mean, there was a period of time where they didn't increase prices for quite a bit. Then they started, you know, like everyone else, with inflation, everything else, we're taking some prices up, so we did. We followed their tracks. You know, our expectation is that they're gonna keep pricing pretty moderate here going forward, and we'll just continue to sell it at a discount to the OE list, as we've done forever. People shouldn't anticipate any significant movement on behalf of the OEs or that having an impact on our pricing. Thank you. There are no further questions at this time. I would now like to turn the call back over to Dominick Zarcone for closing remarks. Please go ahead, sir. Well, I'd certainly like to thank everyone for your time and your attention this morning. Again, we are very proud of the Q2 results that we were able to report earlier today, and we're looking forward, obviously, to the back half of the year. We certainly look forward to chatting with you again in late October when we announce our third quarter results. Until then, I hope you all have a wonderful end to your summer. Thank you, everyone. That concludes today's conference call. You may now disconnect.