Good morning, and welcome to the Sonic Automotive first quarter 2022 earnings conference call. This conference call is being recorded today, Thursday, April 28, 2022. Presentation materials which accompany management's decisions on the conference call can be accessed at the company's website at ir.sonicautomotive.com. At this time, I would 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 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, and good morning, everyone, and welcome to Sonic Automotive's first quarter 2022 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 Chief Operating Officer of EchoPark, Mr. Tim Keen, our Chief Digital Retail Officer, Mr. Steve Wittman, and our Vice President of Investor Relations, Mr. Danny Wieland. Building on our record-breaking results in 2021, today we reported record first quarter 2022 revenues and earnings per share, driven by strong customer demand, the continued execution of our operating playbooks, and a team focus on accomplishing our strategic growth plans. We also continue to expand EchoPark's nationwide footprint and digital network, while also strategically growing our franchise dealership network with our acquisition of Sun Chevrolet in Upstate New York. 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. Now let's briefly review our financial highlights. During the first quarter of 2022, Sonic delivered all-time record quarterly revenues and a 13th consecutive quarter of year-over-year EPS growth. On a consolidated basis, we posted first quarter revenues of $3.6 billion, up 29% from the previous year. In record first quarter EPS of $2.33, up 89% year-over-year. These exceptional results were driven by strong performance across our business amidst a challenging operational environment. We also continued to see further benefits from our initiatives to enhance operating efficiencies and permanently reduce expenses throughout our entire organization. As a result of these efforts, we reported record low first quarter SG&A expenses as a percentage of gross profit of 67.7%. On a franchise dealership segment basis, this figure was 59.8%, a 1,060 basis point improvement year-over-year. Our team remains committed to optimizing our expense structure to drive long-term profitability improvements. Taking a look at the larger industry picture, we have continued to generate record results in spite of the lingering effects of the pandemic, with ongoing new vehicle inventory constraints, inflation, and supply chain issues. Despite these headwinds, we achieved record revenues and profitability for the first quarter as a result of persistent consumer demand, our targeted sales and marketing initiatives, as well as our improved digital channels. Additionally, as an organization, we continue to realize the enhanced operating efficiencies and cost management measures that we implemented during the height of the pandemic, which demonstrates the inherent strength and flexibility of our business model. Based on a positive operating outlook and continued execution of our long-term strategic growth plan for Sonic and EchoPark, we remain confident in our ability to reach our stated goal of $28 billion in total revenues by 2025. Looking at our franchise dealership business, first quarter 2022 revenues were a record $3 billion, up 30% from $2.3 billion in the prior year. On a same-store basis, franchise dealerships first quarter revenues were up 5% year-over-year, while gross profit improved by 27%. Parts and service gross profit continues to improve, up 10% on a same-store basis, with a 21% increase in customer pay gross profit. Same-store F&I gross profit was up 7% despite a 15% decrease in retail unit volume, driven by all-time record F&I per unit of $2,448 in our franchise dealership segment. We continue to see supply chain disruptions during the first quarter that limited new vehicle production and inventory levels. This contributed to a 15% decrease in same-store retail new vehicle unit sales volume, slightly better than the industry retail SAAR decline of 11%. Offsetting the lower sales volume, same-store retail new vehicle gross profit per unit was $6,799, up 134% year-over-year and in line with the fourth quarter of 2021, which typically represents our highest GPU quarter due to our luxury brand mix. On a trailing quarter cost of sales basis, our franchise dealership segment new vehicle inventory had approximately 15 days' supply or 3,500 units, down from 13,200 units a year ago. Our franchise dealership segment used vehicle inventory had approximately 33 days' supply or 10,600 units, up from 9,400 units a year ago. Turning now to EchoPark. We posted record first quarter revenues of $625 million, up 23% year-over-year. In addition to solid revenue growth, we also continued the nationwide expansion of the EchoPark Automotive brand, opening EchoPark locations in three new markets since the end of 2021. Beyond expanding our physical footprint, in recent months we have also grown EchoPark's digital network. As previously announced, during the first quarter, we launched our proprietary e-commerce platform, echopark.com, in select geographic markets. Since our last earnings call, we have continued to make substantial progress with the national rollout of this digital platform. As of today, the platform has now been rolled out to 80% of our nationwide traffic at echopark.com. We continue to see positive early results and customer feedback from the new platform with a 30% increase in our website conversion rate and out-of-market buyers representing over 70% of our online sales. Given our success to date with our expansion of EchoPark's nationwide geographic and digital network, we remain on target to achieve 90% population coverage by 2025. Upon reaching this coverage level, we continue to anticipate delivering 575,000 vehicles and generating $14 billion in annual EchoPark revenues by this same year. We remain dedicated to the growth and expansion of our unique pre-owned vehicle concept. Reflecting this commitment to EchoPark, we continue to invest the necessary human capital to support EchoPark's future growth. This includes the first quarter promotion of Mr. Tim Keen as EchoPark's first Chief Operating Officer, and more recently, the appointment of Stephen Carvelli as Chief Technology Officer of both Sonic Automotive and EchoPark. These and other recent C-suite hires at EchoPark represent our commitment to EchoPark's long-term success as a key part of our strategic growth plan for Sonic Automotive. Turning now to our balance sheet. We ended the first quarter with $785 million in available liquidity, including $486 million in cash and floorplan loan deposits on hand. Our consistently strong sales performance, cash flow generation, and balanced capital allocation strategy have all contributed to our solid financial position, allowing Sonic to return capital to stockholders by increasing our quarterly dividend by 108% and repurchasing approximately 1.7 million shares of stock since the end of 2021. To that end, I'm pleased to report that our board of directors approved a quarterly cash dividend of $0.25 per share, payable on July fifteenth, 2022, to all stockholders of record on June fifteenth, 2022. In summary, our record first quarter results reflect strong consumer demand, the success of our targeted sales and marketing initiatives, our enhanced e-commerce network, our continued success in maximizing operating efficiency throughout our operations, and of course, the unwavering dedication of our talented teammates. As we look forward, we remain committed to implementing our long-term strategic growth plans for Sonic Automotive and for EchoPark Automotive. By continuing to execute on this vision, we expect to realize further revenue growth and increased profitability while continuing to enhance our best-in-class guest experience, driving long-term value for our guests, our teammates, and our stockholders. This concludes our opening remarks, and we look forward to answering any questions you may have. Thank you. Thank you. If you would like to ask a question, please press star then one on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star then two. We have the first question on the phone lines from John Murphy with Bank of America. Please go ahead when you're ready, John. Good morning, everyone. This is Aileen Smith on for John. The first question I wanted to ask is around EchoPark. Because as you continue to roll out the store base there, the same store sales performance in recent quarters has been pretty disappointing. Can you give a little bit more color on what is going on there? Is it your franchise stores trying to ground more used vehicles to retail rather than letting them flow through to EchoPark? Or is it more of a focus on getting the new EchoPark stores up and running, you know, rather than running the old ones more aggressively? Yeah, thanks for the question. This is Jeff Dyke. EchoPark and our franchise stores, EchoPark's never taken inventory from our franchise stores. When we first started EchoPark, that was a lesson that Tim Keen and I had learned from a different life. We built these two businesses to not really share inventory overall. That absolutely has nothing to do with it. To educate in anticipation of this question and to educate everybody on the call, I would refer everyone to a slide that we developed to help everybody look at this and look at some of the industry headwinds that we're facing, and so is our competition. I would refer you to Slide 20 of our investor deck. I'll give everybody a second to get there. With that being said, I sort of broke this slide down into three buckets. The first is just overall, let's take a look at the industry together and some of the headwinds that we have. There are three main drivers of the headwinds that we're all faced with in the industry today. One is supply chain disruption. We all know that low new vehicle inventories coming from the manufacturers are slowing down the ability to acquire 1-4-year-old vehicles. That's a major issue. The second bullet point would be rental car companies. Typically, what we see at this point in time is rental car companies in the auction lane selling cars, and we're all buying cars that they had purchased new. The rental car companies are now in the auction lanes buying cars, and because of their depreciation model, they're able to pay more for that 1 to 4-year-old car than the traditional retailer is, and that's causing a lot more competitive issues and pushing the prices up. Finally, the used vehicle price has moved at EchoPark from 21,000 in major headwind here, moving up to about 31,000 buying that car in the auction lane. Overall, we are now approaching a price point on used cars in the auction lanes of 70% that of a new vehicle, which is pushing the average payment that a customer would make on a pre-owned car upwards of $490-$525 a car. This is causing some major headwinds. Customers are either deciding they're going to wait to see what happens if prices come back down or they're moving, because it's so close to a new car payment, they're moving to a new car. If we understand the industry headwinds, then I'll walk you through very quickly, you know, what is EchoPark doing about that? Well, the first thing we're doing, we talked to John about this on the last call, is we're expanding our inventory model from a 1- to 4-year-old model to a 1- to 8-year-old model, and maybe go to 9- and 10-year-old, depending on the inventory that we can acquire. That is something that we said on the last call. It's going to take us, you know, 4- to 5 months to do. We've got to retool, we've got to hire some different technicians, put in a few different parts processes in order to handle that. So that is now in play and a part of our game plan. We're also launching, as David Smith mentioned in his opening notes, we're launching our new echopark.com to modernize our e-commerce offering. This offering and Steve Wittman can talk about it in a minute. It's just been fantastic. The results are fantastic, and we'll get into some of those details here in just a minute. We are also launching our EchoPark brand. Dino Bernacchi and our new CMO of EchoPark is driving that process, and we'll launch from a marketing perspective. Remember, we've really never marketed EchoPark. It's just a SEM, SEO play from a low price perspective. Our entire brand launch will start this summer, and we're also very excited about that. With some of the action plans and things that we're doing, initiatives that we've taken, what's happened? What are some of the results? Well, as you can see, on the slide, we've improved non-auction sourcing from the first quarter of last year at 7% to now over 20%, this year. We expect that number to continue to grow as Tim and his team keep rolling, above 30% as a percentage of our total mix, which really brings our margins up and changes the overall, perspective in terms of profitability for EchoPark. Our Denver hub location sort of leads the way. They returned to profitability in March. They made $458,000. They're having another good April. We do see some signs of the initiatives that we're taking beginning to take hold from a profit perspective. There is also a slide, and we gave you sort of our by month profitability for the first quarter on Slide 22 of the investor deck. You can see that in our mature stores, how that's working. Finally, by building all these stores and doing all the trading and everything that we've done, we've achieved the highest guest satisfaction scores in the pre-owned competitive segment. We know our customers love our process. We understand the headwinds that are facing not just us, but the industry, and you've seen that in all the announcements so far. We believe that the action plans that we're taking are dealing with those headwinds. It's going to take a few months to sort those things out for us. We're very, very confident in where we are with EchoPark. We're investing in our teammate structure, as David talked about in EchoPark, and believe that we've got the right solution for that here in the short term to deal with the turmoil that we have today. Again, this is a snapshot in time. Used car prices are now going to continue to appreciate. Inventory levels will at some point come back to a certain extent, and that'll play right into EchoPark's hands. We're very confident where we are and feel like we have things headed certainly in the right direction. This is Steve Wittman. Just to build on what Jeff said on the new EchoPark.com. We're very pleased with the progress so far. We've actually launched the new website to 80% of national traffic now, going to 100% by the end of Q2. The early results are showing us that the new website is driving an incremental 30% in conversion rate. So it's gonna drive incremental volume for us as we continue to roll that out. F&I is at $23-$25 per unit, exceeding our expectations. Our F&I penetration online is about in line with what we're seeing in store. In our mature stores, the stores that started first with this new EchoPark.com, we're actually seeing F&I penetration higher on those stores than we are on EchoPark.com, new EchoPark.com versus in store. Very good results there. Lastly, just from a nationwide inventory standpoint, our new website enables the consumer to access any car anywhere and have it shipped to them. Interestingly, over 70% of the cars that we've sold online so far have been shipped from another market. We're really extending our inventory, extending our appeal to consumers, which is in turn driving incremental volumes. More to come on the new echopark.com, but very strong early results. Okay, fantastic. That's really helpful color. I wanted to focus in on one of the industry headwinds. One of the larger players in the used vehicle market that reported a couple weeks ago was characterizing some of what they saw in the quarter as being demand weakness, which seems a little odd to us given, you know, everything that's going on from a pricing perspective suggests that demand is still clearly there, but, you know, supply is constrained. As you think about, you know, kind of the affordability dynamics that you mentioned, the lack of supply that's available, is there anything from a consumer perspective on the demand side of the equation that has you getting concerned that the consumer may be getting exhausted? Is there any other pushback other than price, which would be, you know, somewhat understandable? Yeah, this is Jeff Dyke. You know, the demand is there. I disagree with the comment made a few weeks ago. That. I don't think that's accurate. There's still plenty of demand. You know, there'll be 37-40 million cars sold in America this year in terms of pre-owned, so the demand is there. The problem is that we're pushing $500 a month payment, and we used to pay $400 a month payment, and it's too close to the new car pricing. Look, if you study used cars and you're kind of a used car geek like I am or like we are, you really want your average used vehicle selling price to be one half that of your new vehicle selling price. In my whole career, it's always run 50-55%, somewhere in there. It's at 70%. It's too close to the new vehicle pricing. Prices are too high, $500 to whatever, $525 a month payment. That's just not that's out of the norm, and that's what's causing, you know, someone to maybe think that there's not a demand there. There's plenty of demand. If the used vehicle prices fall back below $25,000, look out, 'cause there's a lot of cars are gonna be sold, and a lot of those that are suffering that acquire a lot of cars from auctions, et cetera, are gonna benefit in a big way. I believe that's coming. I just don't think it's coming this year. You know, it's COVID and Ukraine and all the things that could hit the used car environment. It certainly hit. It'll recover. You know, we're not gonna throw out our whole model, something that we've been working on for two decades and developing here at Sonic Automotive, just because there's a you know, a whim in a little change in the way that the winds have been blowing. So that's kinda how we see it. Plenty of demand for both pre-owned and new cars. This is Heath. I just wanna add to that, to your point about we're not throwing it all out and we're staying the course. When you look at EchoPark, you need to understand we're still staffed to handle a higher volume because we believe having that experienced team in place when the turn happens is a better investment than having to start over again with new hires. That's one of the drags that you'll see going forward as we get out of the current environment. When Heath talks about staffing, the staffing for us is the majority in the service department, where we're staffed to sell 10,000 cars, not 5,000 a month. We're just not gonna. I mean, technicians are very difficult to come by. There are certainly triggers that we could pull, but that's under no circumstances under consideration in terms of pulling back. We just don't see a need to do that. We're making an investment in EchoPark, and we're gonna continue to make that investment. Through a couple of bumpy quarters, we'll deal with that. Okay, great. That's very helpful color. Thanks for taking the question. You bet. Thank you. We now have Rajat Gupta of JPMorgan. Sir, your line is now open. Please go ahead. Great. Thanks for all that clarification on the EchoPark. But maybe just to expand on that, is there a contingency plan in place, you know, if used car prices do not moderate? You know, you talked about like, you know, 5- to 8-year-old, maybe 8-year-old, but you know, it's gonna take time to like get to a steady state of mix there and you know, just like transform the business accordingly. And you currently continue to make a lot of ongoing investments. So like how should we think about, you know, your flexibility in terms of like just the cost structure or you know, just the capital expenditures going in there? I mean, how nimble can you be on that front? And then I have a follow-up. Thanks for the question. This is Jeff. We're very nimble. I mean, we have the ability to stop rollouts at facilities tomorrow if we so choose. We can certainly adjust our headcount. Remember, our model is 1-4-year-old. We lose about $300 on the front end of a vehicle in normal times and make $2,500 on the back and net out around $2,200 or $2,250 a car. One of the things that we're working on right now, because the guest experience and our reputation scores are so high, our guest experience scores are so high, we believe we can translate that experience for higher front-end margins. We've got a big test coming in our Austin market where we're gonna move pricing up, change the mix, add more years, and see if we can't move the minus $300-$400 margin into the positive $500 upwards of $1,000 front-end margin, which then rolls, you know, with the amount of volume that we're doing now, that would roll $ millions to the bottom line and EchoPark positive EBITDA immediately. I would tell you that we've got a lot of flexibility. We're just being very cautious and very candid with everybody that at the end of the day, we're very confident in our model. You know, the model. We don't wanna adjust it too fast or make a mistake, but if we were to see that this is gonna last, you know, and used cars are gonna be a problem like this for the next, you know, couple of years, it's easy for us to pull a trigger and affect the bottom line. I think if you look at the slide that I told you to kinda look at on page 22, it'll show you that none of the new store impacts. You take those new stores out 'cause they're opening and growing, you got opening costs there. You can look at March, and we significantly adjusted our P&L in the month of March from actions that I talked about earlier that we took, you know, sort of late December, January, February, and what we talked to you guys about on the call. It just takes a little time to retool, but we do this every day on the franchise side. We sell lots of used cars there for a long time, and we know how to sell 5-8-year-old cars. We just aren't tooled for it at EchoPark. I would tell you that we're very nimble and can easily make adjustments, if the only thing in mind right now is positive EBIT. That's just that there's more to it than that for us. We're committed to growing our position in the pre-owned business. We're committed to hitting our 90% levels by 2025. It really doesn't mix well if you start pulling all that back, 'cause then we're gonna be telling you, "Well, it could be 2026 or 2027," and that's not our intention. Yes, it's a little bit of investment on our behalf at this point in time. If we see it's gonna last for a longer time, yes, we're very nimble, and we can make some very quick changes to adjust the EBIT. This is David Smith. I would just add that, you know, fortunately with our model and our company, we have these amazing franchise dealerships, right? That are making more money than ever. Because of all the ability to adjust that Jeff mentioned, you know, we're making this investment. This is a long-term investment. None of us think that the used car prices are permanently in this strange, you know, $30,000 average, $31,000 average price. We're, you know, as the saying goes, we are skating to where the puck is going to be, not where it is right now. We're making those investments and are committed to it. Got it. Great. Just a follow-up on, you know, just auto lending. I mean, maybe more of like just a broader industry question. Are you seeing any kind of stress there? I'm sorry. We didn't. Hello? We couldn't hear the question. Sorry. Yeah. Can you hear me now? Yes. Yes, sir. Yeah. Oh, okay. Great. I just had a broader question on the auto lending environment, you know, more of an industry question. Are you seeing any signs of stress developing there, you know, with interest rates rising? You know, are the lenders able to pass on all of those rate increases to the consumer? Or, you know, or is there some stress there just because of affordability where the lender is able to absorb some of those rate increases just to be more competitive? Just curious as to what you're seeing out there, and is there any concerns developing on that front? Thanks. Rajat Gupta, this is Heath Byrd. What we're seeing from a macro perspective is there's not any material impact to the prime and near prime consumers. You're starting to see a little bit of degradation in credit and affordability in the lower income brackets, which is a very small part of both our franchise as well as our EchoPark consumer. You're starting to see a little bit on the lower income, but on the upper tiers, we're not seeing anything material. Got it. Great. I'll get back in queue. Thanks. Thank you. Thank you. Thank you. We now have Ethan Huntley of Jefferies. Please go ahead when you're ready. Hi. Good morning. This is Ethan Huntley on for Brett. Thanks for taking our questions here. Sorry if I missed it, but have you guys sort of provided any, you know, update on your strategic alternatives for EchoPark recently? We have not. Okay. How about maybe when we go to the parts and service segment, can you maybe break out you know what the difference in traffic versus average ticket was? You know, just trying to gauge you know how much inflation had on that segment. Let us dig some numbers up for you real quick. I mean, if you look just at warranty and customer pay, obviously customer pay is really rolling up over 20%, for the quarter. Warranty was at 4%. You know, there's the way that service works is we have not seen or made major door rate increases across the board, and the parts tickets haven't changed on inventory in terms of pricing in the last, and it's certainly not in the first quarter. There would be very little inflationary impact to the overall gross growth, if you will, or to the consumer from a service perspective. Got it. Thank you. Then just maybe lastly here on franchise new GPUs. I think it was, you know, close to $6,700 on a same-store basis. Can you just sort of talk about where you might see those shaking out longer term? Are we, you know, maybe going back to pre-COVID levels or do you think we'll maybe sort of reset at structurally higher levels, you know, once things start to normalize? Yeah. This is Jeff Dyke. They're not going back to pre-COVID levels. I just don't see that happening. I mean, for us, that was a little over $2,000 a car. We're running almost $6,800 a car now. Is there gonna be a pullback in some time? Common sense would tell you as inventory comes back to some level, yes, there'll be a pullback, but I don't know that it's gonna be this year. You know, I certainly believe that in all the discussions that I have with manufacturers or on the dealer boards that I sit on, you know. When you look at the second quarter and the third quarter, the flow of inventory, we're in great shape for April, pretty darn good shape for May. As we get to the end of May, things are gonna seem to be tightening up. June and July are a little bit of a crapshoot right now in terms of the level of inventory that we're gonna be able to expect to come in. And straight answers we're not getting, you know, so to speak. Then hopefully things kind of get better as we move towards the end of the year and Ukraine maybe hopefully gets settled and COVID sort of starts to wane in the rest of the world like it is here. We'll see how it goes. I would tell you steady as she goes in the mid-6,000 range, somewhere in that ballpark is where we're gonna be for the next couple of quarters for sure as inventory constraints, you know, continue to drive margin up and create the inflationary issues that we're seeing. Yeah, this is David. As you know, if you think about it this way, as an industry, our manufacturer partners are motivated to keep inventory levels, you know, at a lower day supply than they historically have, right? Because they're having to spend less money on incentives and, you know, and so if we can keep a good balance of inventory, we, you know, everybody wins in our industry. I think this is Danny Wieland. To take David's point one step further, if you look back at the first two quarters of last year, first quarter we ran in or around a 40-day supply of new cars for Sonic, and we were just shy of $3,000 in new GPU. Second quarter it was a 25-30-day supply, and we were just shy of $4,000 in new GPU. If you take David's point about what the manufacturers are saying about, you know, and Jeff, BMW has said low 20 days, somewhere in that range. They're kind of 15 to 18, somewhere in that ballpark. You talk about what the manufacturers are saying about inventory levels going forward and somewhere in that $3,000-$4,000 range seems like the longer term number that we settle into. The question is just when are they able to rebuild beyond the supply chain issues and outrun the existing demand for new cars to get it back to that level? Still significantly higher than pre-COVID. Great. Thank you very much. I really appreciate the color here. You bet. Thank you. Thank you, Ethan. We now have Joe Enderlin from Stephens. Please go ahead when you're ready. Hi, guys. Thanks for taking our question. For EchoPark, after seeing some results from the quarter, longer term, how large are we thinking the 5-8-year-old and maybe 9-10-year-old vehicles can be as a percentage of the mix? Are you seeing any signs of older mix on the franchise side? As a follow-up, as vehicles are getting older, how would that impact parts and service over the coming years, as the car park gets older and you have less warranty repairs? Thanks. Yeah. The final question, you know, the older the vehicle, the more cars are gonna go through the service drive and we're gonna have higher service throughput. With capacity, that's fantastic, that all works. On the franchise side, absolutely. I mean, we're seeing customers keep their lease returns. I've seen a lot of that. That's part of the sort of our volume mix 'cause it was a big profit center and a volume center for us in lease returns, especially with BMW and Mercedes, Lexus, and they're a large part of our mix. The car park inside our inventory for sure is moving up in age. There's no question about that. We're trading for more cars. The franchise side of the business bought very few vehicles from auction in the first quarter. When I tell you a few, less than 500, maybe 1,000, it was a really low number. Danny's pointing out that it was 6% of our overall mix. Self-source was 94% of the franchise from a franchise perspective. Yeah, the age of the vehicle that we're selling is certainly growing. What level or percentage we can turn that in at EchoPark, we're just starting to keep those trades instead of sending them off to auction. We're just now beginning to sell those trades. If you were to take a look at our San Antonio market where we sell 1- to 8-year-old vehicles, Tim, I think it represents half the inventory? Something of that nature. About 50% of the inventory, so we might be able to grow it to that. I mean, we're having luck growing vehicles and purchasing vehicles off the street because we've expanded from the one- to four-year models. We're gonna be able to buy more cars off the street, and that kind of fits into the groove of what we're trying to create now in particular for the next few quarters and maybe, you know, on into the middle of next year as we figure out what's gonna happen in the used car inventory environment. It could go as high as 50%, would be my guess. I don't think it'd be any higher than that. Yeah, this is David. I think it's really important to remember that from a if you look at it from a customer first standpoint, and you look at the incredible guest experience that our stores, that our EchoPark stores are delivering, we're trying to look at what do customers want. The customers, they absolutely want the five to eight-year-old cars. There's a lot of demand for that because the pricing and other reasons and payment. We're trying to fill that demand. We were talking before about demand. There's just a huge amount of demand. We want to meet that rather than sitting that out by just focusing on the one to four-year-old cars. This is Heath. To add to that, if you look at the total annual used vehicle volume and you segment out the 5-6-year-old, it's about 18%, but that is historical. To David's point, as those 1-4-year-olds, which is about 15 million of the total, people are moving from that 1-4 to the 5-6 to 8-year-old vehicles. That's sort of the, from a big perspective, how the percentage that those older vehicles is about 18%. That's super helpful. Thank you, guys. That's all for me. Yes, sir. Thank you. Thank you. Thank you. As a reminder to ask any more questions, please press star followed by one on your telephone keypad. We now have a follow-up question from Rajat Gupta of J.P. Morgan. Sir, please go ahead when you're ready. Great. Thanks for giving me another question. I just wanted to get an update on, you know, the seasonality comments that you made last quarter. You know, I think you mentioned 1Q should be around 15%. Just curious, like, has anything changed there in terms of the thought process? Is that still like a good baseline to use? Did you say the seasonality? Of earnings? Yeah, seasonality. Yes. Of earnings. Sure. This is Danny. You know, we pointed to 15%-20% of the full year EPS typically comes from the first quarter. You know, I think with what's going on with the elevated GPUs and the uncertainty for production in the back half of this year, you could see that vary somewhat. But I think that, you know, we had a pretty good understanding internally of the quarterly cadence that we see, in particular the luxury mix. I think what may be varied this year a bit is that because of the delay in delivering vehicles, that luxury mix that we would normally have sold in the fourth quarter, we did deliver some of those vehicles into the first quarter, as you're seeing elevated GPUs in the first quarter, whereas normally it doesn't go backwards. I think all in all, you know, we expect for that generally to hold true to where the first quarter is our least contribution for the year. Second and third are generally fairly equivalent. Then the fourth quarter is our biggest quarter because of that luxury weighting. If we start to see inventory improve, if not come back, but improve throughout the year, then we'll get that similar kind of seasonality as we go. Obviously the EchoPark component of that is a little bit of a variable that I think was a little bit of a disconnect in the first quarter actuals. Yeah, I do think that, you know, to Danny's point, the fact that we have pre-sold some of these vehicles, and so we pulled basically cars that were sold last year really are recognized in that first quarter. This may be a very unique year where the percent that we earn in the first quarter is higher, a little bit higher than it normally is. When we define what a little bit higher is, call it 23%, in that range versus the 19% that we gave you back in February. You know, there's some people that you know listen to what we have to say, and it's great. There's others that you know are so far off the radar screen that they're obviously not paying attention, and we can't fix that. We can't help that. Somewhere right in the 20%-23% range we're gonna be. Danny's got it up. Maybe 22% in the first quarter, 24% and 25% in the second and third, and we'll see what happens once we get to the fourth quarter. We gave that kind of feedback in February. We're sticking to that same demo, that's the same story, and we'll see how things shape up for the year. Understood. Great. Thanks for the color. Yes, sir. Thank you. I would like to now hand it back to David Smith for some closing remarks. Thank you, and thank you everyone, and we appreciate your participation in the call. Have a great day. Thank you. This does conclude today's call. Thank you for attending today's presentation. You may now disconnect.