Good morning and welcome to the Sonic Automotive third quarter 2021 earnings conference call. This conference call is being recorded today, Thursday, October 28, 2021. Presentation materials which accompany management's discussion on the conference call can be accessed at the company's website at ir.sonicautomotive.com. At this time, I'd like to refer to the safe harbor statement under the Private Securities Litigation Reform Act of 1995. During this conference call, management may discuss financial projections, information or expectations about the company's products or market or otherwise make statements about the future. Such statements are forward-looking and subject to a number of risks and uncertainties that could cause actual results to differ materially from the statements made. These risks and uncertainties are detailed in the company's filings with the Securities and Exchange Commission. In addition, management may discuss certain non-GAAP financial measures as defined by the Securities and Exchange Commission. Please refer to the non-GAAP reconciliation tables in the company's current report on Form 8-K filed with the Securities and Exchange Commission earlier today. I would now like to introduce Mr. David Smith, Chief Executive Officer of Sonic Automotive. Mr. Smith, you may begin your conference. Thank you very much, and good morning, everyone. Welcome to Sonic Automotive's third quarter 2021 earnings call. As she said, I'm David Smith, the company's CEO. Joining me on the call today is our President, Mr. Jeff Dyke, our CFO, Mr. Heath Byrd, our Executive VP of Operations, Mr. Tim Keen, and our Chief Digital Retail Officer, Mr. Steve Wittman, and our Vice President of Investor Relations, Mr. Danny Wieland. We're very excited to announce another record-breaking quarter. This performance would not have been possible without the amazing effort and execution by our Sonic and EchoPark teammates. Congratulations, and thank you all. We would also like to thank our customers, manufacturer, and vendor partners for helping us achieve another record quarter. During the third quarter of 2021, Sonic delivered another quarter of record revenue and 11th consecutive quarter of year-over-year EPS growth. On a consolidated basis, we posted record third quarter revenues of $3.1 billion, up 21% in record third quarter gross profit of $472 million, up 25%, driven by strong performance across the board in new, used, fixed operations, and F&I. Going beyond our top-line growth, our third quarter results continued to validate our permanent expense reductions, achieving record third quarter SG&A expense as a percentage of gross profit of just 68.1%. On a franchise dealership segment basis, though, SG&A as a percentage of gross profit was just 60.1%, a 760 basis point decrease year-over-year and down from 76.9% in the third quarter of 2019. Turning to earnings, we reported record third quarter pre-tax income from continuing operations of $112 million, up 39% year-over-year, and earnings from continuing operations of $85 million or $1.96 per diluted share. Diving deeper into our core franchise dealership segment, third quarter 2021 revenues were $2.4 billion compared to $2.2 billion in the prior year, which reflects the ongoing recovery in consumer demand we've seen since the height of the pandemic. On the same-store basis, franchise dealerships third quarter revenues were up 11% year-over-year, while gross profit improved by 27%, driven by record new and used vehicle gross per unit, a 21% increase in customer paid fixed operations gross profit, and all-time record franchised segment F&I gross profit per retail unit of $2,303, up 27% from the third quarter of 2020. As a result of ongoing supply chain disruptions that limited new vehicle production and inventories, we believe that third quarter new vehicle unit sales volume was negatively impacted by the low supply of new vehicle inventory despite continued consumer demand. Our franchise dealerships new vehicle inventory was approximately 2,400 units or just a 10-day supply down from nearly 13,000 new vehicles at this same time last year. Comparatively, used vehicle inventory was in line with our target level of 27-day supply or 8,200 units. Turning now to our EchoPark business. We reported all-time record quarterly revenues of $663 million, up 72% from the prior year and representing our fifth consecutive quarter of record EchoPark revenues. We achieved record third quarter EchoPark retail sales volume of 21,255 units, up 41% year-over-year. During the third quarter of 2021, EchoPark market share increased 110 basis points to approximately 4% of the one to four-year-old vehicle segment in our current markets. At the end of the quarter, EchoPark used vehicle inventory was approximately 9,800 units for a 41-day supply. For the third quarter, we reported an EchoPark pre-tax loss of $32.9 million and adjusted EBITDA loss of $28.5 million. This includes new market related losses of $18 million and $16.8 million, respectively. The effects of new vehicle inventory shortages have continued to drive used vehicle wholesale pricing higher, which negatively impacted EchoPark margins and profitability in the near- term. While we continue to strategically manage our pricing and volume amidst this temporary disruption in the used market pricing environment, we remain very confident that EchoPark margins and profitability will rebound once these market conditions normalize, which we anticipate will occur in mid-2022. Despite these short-term challenges, we continue to believe in the long-term potential of the EchoPark brand and remain very committed to growing our nationwide distribution network. With our progress to date, we remain confident in attaining our goals of 25% population coverage by the end of 2021 and 90% population coverage by 2025. In addition, the launch of our proprietary digital retail platform at EchoPark continues to progress, and we remain on track to go live by the end of this year and roll out to our entire network in early 2022. As we announced earlier this month, the EchoPark team is pleased to welcome Dino Bernacchi, Chief Marketing Officer, and Thien Truong as Chief Revenue Officer. The addition of these key roles to our team reflects our continued focus on executing our long-term growth plans at EchoPark, and we are excited to see their expertise contribute to EchoPark's promising future. Returning now to our franchise business, we recently announced several strategic acquisitions to further accelerate our growth plans at Sonic. In September, we signed a definitive agreement to acquire RFJ Auto Partners, a top 15 U.S. dealer group by total revenues. With 33 locations in seven states and a portfolio of 16 automotive brands, the transaction will add six incremental states to Sonic's geographic coverage and five additional brands to our portfolio, including the highest volume Chrysler, Dodge, Jeep, RAM dealer in the world in Dave Smith Motors. This acquisition, which is expected to close in December of this year, is projected to add $3.2 billion in annual revenues to the company, which are an incremental to Sonic's previous stated target of $25 billion in total revenues by 2025. In addition to RFJ Auto, during the third quarter, we announced the acquisition of four Audi, Subaru, and Volkswagen franchises in Colorado, further enhancing our automotive sales and service network in that state. More recently, we continued the expansion of our franchise dealership network with the acquisition of Bobby Ford Chrysler Dodge Jeep RAM in the Greater Houston market. Turning now to our balance sheet. We ended the third quarter with $618 million in available liquidity, including approximately $320 million in cash and floorplan deposits on hand. More recently, in connection with our pending acquisition of RFJ Auto, we announced a significant upsize to our credit facilities, increasing total capacity to $2.95 billion, and completed an oversubscribed senior note offering with an aggregate principal amount of $1.15 billion, capitalizing on the favorable market conditions and an upgraded corporate credit rating to refinance our existing debt maturities at attractive terms with lower borrowing costs. These transactions demonstrate the strength of our business and positive outlook for the future as we continue to expand our nationwide reach and maximize operating efficiencies across our operations. With our improved balance sheet and additional liquidity resources, we believe Sonic is well positioned to pursue further growth opportunities in our franchise dealership business, as well as to keep executing on our EchoPark growth plans. Lastly, given our strong balance sheet, I'm pleased to report that our board of directors approved a quarterly cash dividend of $0.12 per share, payable on January 14th, 2022 to all stockholders of record as of December 15th, 2021. In summary, our quarterly results reflect Sonic's continued operating improvements despite industry-wide challenges stemming from the pandemic. These results demonstrate ongoing strong consumer demand, tremendous improvements in our franchise dealership performance, our success in maximizing operating efficiencies throughout our operations, and our teammates' unwavering dedication to delivering for our guests. Going forward, we will continue to execute on our strategic growth plans in both our franchise dealership and EchoPark business segments, including the rollout of our new digital platform beginning this quarter. We believe that by following this course, we will continue to achieve strong revenue growth, increase profitability, and build long-term value for our shareholders. This concludes our opening remarks, and we look forward to answering any questions you may have. Thank you very much. Thank you. If you'd like to ask a question, please press star followed by one on your telephone keypad now. If you change your mind, please press star followed by two. When preparing to ask your question, please ensure your phone is unmuted locally. Our first question today comes from John Murphy of Bank of America. John, your line is open. Please go ahead. Good morning, guys. Just wanted to ask a first question around cash allocation. Obviously, the acquisition of RFJ is sort of a major re-entry into the acquisition realm on the new vehicle franchise side that you kind of steered clear of for a while. Just curious, as you think about the cascade of, you know, capital that's been generated and redeployment of it. You know, how do you think about the priorities now? Because previously it kind of been all EchoPark, you know, and then internal reinvestment and then other shareholder actions. You know, how should we think about that now? Because this is a big one, obviously, right? It's like a good deal, but you know, it's a very big one, and it might signal a transition in strategy here. Yeah, John, thank you. This is David. I think that we need to emphasize the unique nature of the RFJ acquisition. I'll ask Jeff Dyke to expand on that. It's, we think, a fantastic value and a great use of our cash. Yeah, John, first of all, you know, the last couple of years, call it four or five years, we've just not been in a position liquidity-wise to go out and expand both EchoPark and our franchise business. It was never that we didn't intend to expand our franchise business. That was always there, but we were busy shoring up our balance sheet, paying off debt, and positioning ourselves so that when the day did come and the consolidation did start or restart, as I should say, in the industry, we could take advantage of that. We've done that. Rick Ford and I go back 25 years. We worked together at AutoNation. We certainly worked together at Sonic Automotive. We recruited Rick here along with his management team. As you look at capital allocations moving forward, and I know people, you know, want to comment here, but at the end of the day, we have the ability now to battle two fronts. We're going to continue to grow our franchise business. We have other acquisitions that we're planning, and that we've been working on, and we're very excited about growing our EchoPark business, as David said in his opening notes. We're going to have 25% coverage of the market by the end of this year, and we're on track to have 90% coverage of the market by the end of 2025. That's a real exciting time for us, and particularly if you're an investor in SAH because of EchoPark and the growth that we see there. We're very, very excited about the brand. We're going to fight both battles. When there's an opportunity for us to add a franchise business, and it meets our needs and where we are geographically, then we'll do that. Of course, we've been very clear and upfront about what we're going to do with EchoPark and our growth model there. Heath? Yeah. I'll just reiterate your point's exactly right. We have a strong balance sheet and the internal resources to fight both battles. We've always been a consolidator and a growth on the franchise side. We now just have the ability to do that a little bit more aggressively. On the EchoPark side, it's a capital light, you know, business model. Doesn't take that much capital to continue growing that, so that'll be one of our priorities, obviously. We will be looking at opportunistic acquisitions, the ones that fit, that are accretive and also allow us to do that without having a material impact on our leverage ratio. We don't intend to lever up to do another large deal anytime soon. We have a ceiling of 3.5. We'll never go over that. If you actually look at the RFJ acquisition, it's less than one turn on our most restrictive leverage ratio. We're going to continue to maintain that strong balance sheet. You know, after that, and even included with that is obviously investing in the current businesses on both sides. That includes facilities. We're doing you know significant investments in our digital retail platform. We're also investing in technologies that will enable us to continue these efficiencies and reduce our SG&A, like robotic process automation, things that will actually continue to get that SG&A's percent of gross down. Then of course, the return to capital shareholders. We will continue our regular dividend program, and we will opportunistically look at share repurchases. We think the share is greatly undervalued, and so we will always continue looking at share repurchase as an opportunity to return capital to shareholders. Okay. That's very helpful. I mean, then a follow-up. I mean, should we view this acquisition and the pickup in the pace or, you know, the focus here on new dealership acquisitions as maybe a sign that you may be leaning in the direction of separating EchoPark? I s that reading too much into this and that's not associated with this review process of the alternative for EchoPark? Yeah, this is David Smith. We cannot comment any further on our previously disclosed announcement about EchoPark. We'll just leave it at that, if you will, please. We, you know, we're just not legally allowed to expand on it. Got you. Okay. Then just lastly on EchoPark, I mean, it seems like you guys are highlighting the tightness in the used market as a little bit of a disruptive force there for EchoPark. But in your core, your new vehicle franchise dealers and other new vehicle franchise dealers, the used business has been doing, you know, fairly well. So I'm just curious as far as, you know, why you think that is. Is it just a question of sourcing more from auctions, you know, and you just have better flow from trade-ins? It's not disruptive to the franchised used side of the equation? And what's the delta in the two businesses there, and how long do you think that lasts? Yeah. John, this is Jeff. No question. I mean, if the franchise business we're 80%, 85% trades are what we're retailing. At the EchoPark side, we're buying 80%, 85% of our inventory through auctions because that's where the one, four-year-old models are. It doesn't mean we're not trying to buy, you know, off the street. That represents about 12% of our overall business and continues to be in that range. If I could refer you to slide 20, if you look at that, you can see some of the things we've done from July to September to mitigate margin loss. We have raised our prices a bit at EchoPark, and we expect this. This is going to be a little bit bumpy. We expect the next two to three quarters, we'll begin to see the separation as new car inventory comes back between wholesale prices and retail prices. It's a really exciting time for us at EchoPark. There's a lot of great things that we're doing. Like I said earlier, by the time we get to 2025, we've got 90% coverage of the country. We're selling nearly 600,000 cars. The most exciting thing is when we get to the end of this quarter, we're going to launch our new website and e-commerce platform. I'll let Steve Wittman comment just a few comments on that. Yeah, sure. Actually, we will launch our new echopark.com in this quarter with what we believe is the best in the industry digital retailing tool. What that means is that the consumer will be able to go end-to-end online with a real deal, penny perfect payments and financing options and payment options. We'll have real online document signing, which in the experience, in the consumer experience online, which nobody else in the industry has. Last thing, we'll be able to let the consumer kind of go that hybrid model, where they can start online and finish in store. Our data tells us that about 75% of consumers really want that hybrid model. Our digital retailing tool will enable both end-to-end and hybrid. Really this is enabled without any human involvement. This is all done using AI as well as robotic process automation. Net-net, we're on track to deliver. We're delivering in this quarter. It'll be an accelerator to our business. John, whether you're an investor for the franchise stores or for EchoPark or combined, it's just an incredibly exciting time inside of automotive. We're going to grow the franchise side of the business and allocate capital accordingly. We're going to continue to press on the accelerator for EchoPark. We look at these next few quarters as an opportunity to look at a few other things. We're testing a five-year-old model now in a couple of stores, expanding the mileage range maybe up to 55,000 to help mitigate you know the next couple of quarters. But overall, we're just not going to change our strategy. When you see where we were before all of this hit, you know, our EBITDA was growing nicely, and we expect that to continue to come back just as soon as we have a gap between the wholesale and the retail pricing. New cars day supply are going to be tough, certainly through the fourth quarter in the first quarter. You know, there'd be some trickle up in terms of day supply as we move into the second quarter in the third quarter of next year. Hopefully we get back to that 20-25 day supply range, which is historically low, but that gets the job done in terms of creating the gap of wholesale to retail for us. Yeah, this is David Smith. We have to remember that we're, as far as EchoPark goes, we're growing market share and growing our footprint, and so this is an investment in that. When the market reverts back to what, you know, the normal traditional market, you got to remember some of our EchoPark stores prior to this unusual situation we have right now in the wholesale market were some of our most profitable stores, you know, in our entire company. You'll see it pop back up here shortly as the market corrects. Sorry, just one follow-up. I mean, Jeff, why not drop to a five, six-year-old vehicle that's a, you know, high quality vehicle that you can represent well, you know, and kind of be consistent with your MO of what you're trying to offer the consumer there to kinda alleviate some of the pressure on inventory or supply in EchoPark? Yeah, we're looking at it. In particular five-year-old. It adds complexities, John, in terms of reconditioning and the amount of time. Remember, EchoPark is all about buy a car, transport the car, recon the car, merchandise the car, and within like 12 days of getting on the front line, it's gone. That 20-day front line supply and that 10-day pipeline supply is critical to us keeping our expenses where they need to be. You got to have a little bit of a different technician, a little bit of a different recon process. We sell on e to eight in the San Antonio market, and the volume really hasn't adjusted there, and our margins are positive. There are some things that we're going to fiddle around here with over the next quarter or so. It might be that when we come out of this, EchoPark's model is a one to five-year-old model under 60,000 miles. We're working on that and we'll see how that goes. We're not going to disrupt our entire model for this sort of black swan event, if you will, that's happened in my 25 years. It's really at this point in time has never happened. It just makes no sense that we know the new car inventory is coming back. It's not going to come back pre-pandemic levels. I think we all know that and want that, because we're all enjoying the high margins on the new car side. It's going to come back. It's not going to stay at eight to 10-day supply. We're not going to have 2,000 cars on the ground, you know, in our franchise stores. We'll get back to 13,000, 14,000 cars and things will return to normal. When that happens, that gap comes back. Watch the EBITDA at EchoPark. It'll skyrocket given the number of stores that we now have open and the amount of coverage that we'll have by the end of the year and next year. This is Danny. One more thing to that. I think it's unappreciated or underappreciated that the perceived headwind to the franchise business as new and used margins revert toward a normalized, whatever the new normal go forward level is, that's an absolute tailwind to launch EchoPark back on its previous trajectory, both from a profitability perspective, and from a volume perspective. Because of those fast turns, that low day supply, we really gain a tremendous pricing advantage once the wholesale price increases moderate and then ultimately decline. Very helpful, guys. Thank you so much. You bet. Thank you. Our next question today comes from Rick Nelson of Stephens Inc. Rick, your line is open. Thanks. Good morning. Hey, Rick. Follow up on slide 20. You know, the adjusted pricing. I'm curious now how your pricing compares to the overall market. The EBITDA losses that have narrowed, you know, can we take the September EBITDA loss and carry that forward o r do you think you can continue to narrow the loss from the September levels? This is Jeff. We're going to continue to narrow the loss. We were traditionally EchoPark's priced in the 94.5%-95% of market range. We're probably in the 98%-98.5% range today. We'll continue to narrow that. That's not just the price that's going to narrow that, it's also some of the other moves that we're making, buying more cars off the street, expanding to that five-year model. A couple of those things will also generate higher margins. Of course, in the long run, we believe that the EchoPark front-end margin will end up naturally being in the positive. It won't be always negative $300, $400, but as the brand takes a hold across the country as we expand the brand across the country. That's why Dino and Tim and the whole entire team are here. We're really looking at the elasticity of pricing and how we can continue to have the great revenue growth, the great volume growth, and the EBITDA growth by doing some of those things. A combination of we'll continue through the fourth quarter of narrowing the EBITDA loss, and that'll probably continue into the first quarter, along with some of the other changes that we're making. Okay. Jeff, so also I'm not sure if you can answer those, but the challenges in the wholesale market have, you know, if they continue, you know, does that change the timeline for EchoPark and the exploration of strategic alternatives or executing on that? No timelines have changed. We're still executing on our plan. We're still executing on our strategic alternatives, as David Smith said earlier. Other than that, there's no further comments. There's just no timelines have changed at all. The only thing that I would tell you is that we're sort of going to have a convergence on EBITDA in the year 2022. That's what we said. Given what's going on in the wholesale market, that probably pushed back to the end of the year now versus being the entire year. Rick, this is David. I think, again, you have to look at this short period of time and this unusual market as just, again, an investment in the brand of EchoPark and growing our footprint, and that we're just plowing through this, and then we're going to come out the other side of it. As Jeff and the group have been saying, with a group of stores that are going to be highly profitable in the future. Thank you for that. Also, you know, like, you know, could you give more color on the RFJ acquisition, you know, the multiple you paid, the quality of the stores, if it's the management, that's coming along or might not be coming along. Any commentary, that'd be helpful. You bet. We visited all of the RFJ stores, Tim Keen, myself, Dave, the whole team. We've been in the last couple weeks living on the road. We visited all the stores. Their entire management team is coming along for the ride, their general managers, the regional vice presidents, who also are Sonicians. They worked for us at one point in time. Maya Hiranand, who's their COO also, who is a Sonician, is staying. Of course, Rick Ford, their leader, is staying. We were recently out on the West Coast at their general annual meeting with their general managers and controllers. We're so excited about this. You kind of walk into one of their stores, and it feels like a Sonic store. They run their playbooks very similar to us, and it's 'cause their DNA comes from Sonic Automotive. They are a fantastic leadership team, and we're very excited. We always want more talent on our team, and that's critically important to us, and adding that talent to this team is just going to be great. This is a perfect fit for us. You know, the multiple is somewhere in the mid-fives, so we think that that's a really good, really good deal for us. Then there's synergies that we have, kind of day one synergies in the $12 million-$14 million range, and then long-term synergies in the $20 million-$30 million range, when you put the companies together. It's just a really, really exciting time. We looked at a lot of other big deals that were done, and this one was just the best fit for us. Yeah, this is David Smith. I just would add that we've already learned that some of the processes that the RFJ team uses, you know, what's very exciting is the opportunity to implement some of their processes into our stores nationwide. They could be a huge boost to our profitability in the future. Which we haven't even figured in as part of the synergies. In particular, their Small Town USA stores, they just do a fantastic job in the smaller towns, and we look forward to expanding that to some of our smaller town stores, although we don't have a lot. It certainly opens up, you know, avenues for us to add more revenue in those type of markets. Great. Thanks for that. Also, you know, GPU was a big driver on the franchise side. If you could speak to the GPU exit rate as the inventory came down that, in fact, the GPU increased and, you know, the exit rate as we push into 4Q, and the recovery of the service and parts, do you think, you know, that is sustainable? First of all, on the service and parts question, yeah, that's a huge tailwind for us. Our warranty was only off 9%, I think, for the quarter. Our customer pay was up 21%. California lags all of that. We're going to get a big tailwind for California as they begin to open up as well. The parts and service business is fantastic for us and continues to be great. We see that as a big tailwind to us as we move into next year and the year after. In terms of new car GPUs, they just keep getting stronger. I don't know where the ceiling is. October's numbers are exceptional, better than what you saw in the third quarter for us. One of the things that I think is going to happen is the manufacturers have gotten really wise to this. They're not going to bring inventory levels back to the levels they were before. We're going to have sustainable new car GPU growth into the future, and I just don't see it. You know, it's never going to go back to pre-COVID. I don't want to say never, but it's very unlikely that it's going to go back to pre-COVID levels. We're going to enjoy great new car front-end margins for the foreseeable future. Yeah. This is on the fixed side, it's really amazing. You mentioned the fixed ops. You know, even if you compare to 2019, we're still up 20%. Fixed ops and the customer pay is really coming back strong. That's great. Thanks for that, Heath. Thanks, guys, for the color. Good luck. You bet. Thank you. Thank you. Our next question today comes from Rajat Gupta of JPMorgan. Your line is open. Please proceed. Thanks for taking the questions. Yeah, I just had, you know, a follow-up on the used vehicle franchise side. [Not sure if I missed your comment earlier, but, you know, 11% below, you know, three]. Yeah, I think it's more brand mix. I think if you look at us and Penske, they've got a real high-line brand mix, and both of us were a little bit flat to the prior year versus some of the others. A lot of that is just lease. There's not a lot of off-lease cars coming back in our high-line stores. So the sourcing of that inventory is difficult, and we're trying to balance the volume and the excellent margin growth that we saw in the quarter. We're very comfortable that we can sustain the margin levels that we're at. I'm not so sure that the industry can sustain the used-car levels, margin levels that they're at along with a good balance in growth and volume. As the inventories come back in the highline stores, and particularly from off lease, which is a big source of pre-owned and certified pre-owned inventory for us, that'll make a big difference in terms of our growth. That's what drives that. Adding to that, this is Danny. I think that one of the things that, you know, if you, if you look at where margins are, as you look at GPUs, where we are today and where we expect to be longer- term, and the mix and the sustainability of earnings based on those, we have a lot of things that are headwind based on the brand mix, you know, lower lease rate, lower lease returns, brand mix. So I think that our selling specific earnings opportunity to sustain at these levels with the expense reductions we've put in place looks pretty good. I think it's into 2022, and not just that, but beyond in 2023 as we return to a more normalized environment. Understood. That's helpful. Just on F&I, you know, really good improvement here over the last few years, you know, particularly after the JM&A partnership. Curious as to, you know, if you could unpack some of the drivers, you know, quarter to quarter, on the F&I uptake, and just how we should be thinking about the go-forward opportunity here. It continues to grow, right? Our warranty penetration on the franchise side is what is a big driver of that improvement. I give a lot of that credit to our team internally, Richard O'Connor, Tim Keen, and that whole team is really focused on driving F&I for us. I also give a lot of credit to JM&A. They've done a fantastic job, great business partner. As you stated, over the last three or four years, they've done an outstanding job with us. Very stable workforce in terms of our F&I leaders, with just very little turnover. The company turnover is just exceptional, right? Our general manager turnover, I think, will be less than 3% this year. We're in really good shape from an F&I perspective. I expect that our F&I numbers will just continue to improve. We're seeing that in October. I don't know what the ceiling is. There's you know one I think or two of the other publics are out ahead of us, and we'll go chase that down as well. I really see nothing but upside from an F&I perspective moving forward. Understood. Just lastly on, you know, the online platform coming up later this year, you know, early next year. Any preview on that platform? You know, you obviously have a lot of your peers come out with their platforms. You know, how do you plan to differentiate? You know, what are going to be, like, key features? Any quick preview on that would be helpful. Thanks. Yeah, sure. We actually compare ourselves versus the best-in-class competition out there. We looked at 10 different components in the consumer journey that were really meaningful to the consumer. We believe we deliver significant advantage versus the other guys, whether it's a real contract that the consumer can sign online, penny perfect payment, shopping a lender network of our preferred lenders, giving the consumer the ability to sign the real documents online, not documents that they'll have to sign again when they come in store. The omni-channel shopping ability, so the ability to stop halfway online and finish in store. We know most consumers want to do that. They want to go test drive the car before they finalize the deal. Our new platform enables that. You can save your progress. Then you can really do it in a seamless way, pick it up in a seamless way when you go to the dealership, and have a great customer experience and a customer experience that we believe will reduce the time in store so the customer will be more satisfied, and also make our sales process more efficient. Our sales folks will be able to sell more cars because they're not spending three or four hours in executing the deal. You know, we've taken our time here, we've learned from others, and we believe we're going to be the best, and we'll leverage that to accelerate our business. Yeah. I think you'll remember we really slowed down because we just did not have the expertise until Steve and his team showed up. Last year we said, "Look, we're going to slow down." Everybody else launched. Part of our process was to go on everybody's site and buy cars. I don't care if it was you know CarMax or Carvana or AutoNation or whoever. We went and bought cars from everybody to see where you know how everything worked. We felt like you know we could build a better tool for the consumer and the experience, and we've done that. We'll have a day where we share that tool with the investment community and really get you guys into the tool. Once you use it's self-intuitive. I mean, just it's very simple to work. I think we're looking forward to getting the launch. I think we're going to launch our Charlotte store in the North Carolina market in December. In January and February, we'll launch the rest of the platform. Yeah. The only other point to make is this will be entirely automated. We won't have people in the background, you know, doing the deal. It's automated based on the different API calls as the consumer goes through the journey. Like I said before, we're using artificial intelligence to help with that. We're also using robotic process automation to create the right documents and to create those deals. No human involvement. Of course, if the consumer wants human involvement, we'll let them. Our system is really an automated system that lets the consumer seamlessly buy a car in just three simple steps. Got it. All right. Great. Thanks for all the color and good luck. You bet. Thank you. Thank you. As a reminder, if you'd like to ask a question to the team, please press star followed by one on your telephone keypad now. Our next question comes from Ethan Huntley of Jefferies. Ethan, please go ahead. Hi, good morning. This is Ethan Huntley on for Bret Jordan. Thank you for taking my questions. Good afternoon. Hi. Just back to new inventory. I was wondering if you could sort of provide some color on how that trended throughout the quarter. I know you mentioned it was sort of 10 days at quarter end, and you know, expect a gradual improvement. But just during the quarter, has it sort of decreased since the start, maybe bounced along the bottom, improved? Just sort of any color you can provide there would be helpful. If you kind of go back to March of this year, we had about a 43-day supply of new inventory. By the end of June, that quarter down to 14. July was 12, August was 12, September 10. I think we've sort of bottomed out here and you're plateauing now, and we start trickling back up. That's going to be different by manufacturer, just depending on how they're executing, and their availability of parts, chips, you name it. The second wave of COVID really hit us. It's not as much a chip issue, I think as it is a labor issue. We see it on the parts side and getting parts deliveries, across the board. I think we're at our trough. We're not going to get any lower than the you know eight, nine, 10-day supply. That starts moving back north as we move forward from here. It's going to be slow. You know Q1 and Q2 are going to be a challenge. Q4, Q1, and Q2 are going to be a challenge from a new car inventory perspective. Great. That's helpful. Thank you. Then we sort of talked about new GPUs, but maybe moving to used GPUs. You know, pretty strong during the quarter, up about 32% on the same-store basis. But any sort of color you could provide on sort of the cadence of those used GPUs month to month? Month-to-month. Yeah, yeah. Do you want to answer that, Danny? Yeah, man. Yeah, this is Danny. To me, it's just north of $1,800 for the quarter, and we had a little bit of variability in that as we went through the quarter. If you recall, at the end of July, when we were looking at what we expected and what the wholesale price environment was doing, it started to soften. That allowed retail to catch up a bit. There was a little bit of a dip there in our business, in our make and mileage mix, in the middle part of the quarter. As we've seen used pricing continue to expand exiting the third quarter through the month of October to date, we've continued to strengthen those used margins. Okay, great. Thank you. Then just lastly here, if you don't mind, sort of on the M&A front, are you seeing multiples, you know, getting pretty frothy given, you know, the record profitability? Are you seeing, you know, sort of deals being priced on more of, sort of a normalized profitability? You know, as I'm looking at all the deals that we're looking at, it's pretty normalized in terms of the times earnings that we're looking at paying and what I've seen a few of the other deals. I don't think anybody's deals that have been recently announced, you know, have been way out of whack. I think it's pretty normalized. I think that there's you know, a lot of dealers out there that are looking at the tax situation and saying, "Look, we want to exit." T hey're looking long- term at what the investment's going to have to be from an electric vehicle perspective, and they don't want to go through the journey. The combination of those two things, I think are keeping the multiples reasonable. We certainly felt that way with the deals that we've done. As I look at the rest of the deals that are being done, I don't see anything just way out of whack. This is David Smith. I also think that you got to remember the automotive market is so huge. You know, the consolidation that's left to be done in the market, you know, it's just begun. So there's so many opportunities, where there's some dealers that would want, you know, a huge multiple, but we've had plenty of various opportunities. I think that it's really important to emphasize that our team is very ROI focused, and y ou know, we passed on many different opportunities that led up you know, to the big announcement of the RFJ deal. It just worked from a ROI perspective, but also, as Jeff mentioned, from a cultural perspective and the team and those great team at RFJ. It just all worked together. We just want to emphasize that we've got the focus and discipline on this team to make great acquisitions. Moving forward, I wouldn't expect to see us, you know, paying some ridiculous multiple. Because we have that selective, you know, discipline, we've been out, you know, talking to a lot of different dealers, and there's more deals in the pipeline, which is fun. It's fun. This is just a great, fun time for our company because we have the balance sheet. We're in a position to go do this. We've worked very hard on doing that really since 2017, 2018, when this leadership team came together. That really made a big difference in the company. Our balance sheet got shored up. Like we said earlier, we can fight these two battles and there are plenty of deals out there to be made, and we're going to get our fair share. Great. I appreciate the color. You bet. Thank you. Thank you. We have no further questions in the queue, so I'll hand back to David Smith for closing remarks. Great. Thank you very much, and thank you everyone for joining us on the call. Have a great week. Talk to you later. This concludes today's call. Thank you for joining us. You may now disconnect your line.