Good morning, and welcome to the Sonic Automotive third quarter two 2024 earnings conference call. This conference call is being recorded today, Thursday, October 24th, 2024. 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 would like to refer to the Safe Harbor statement under the Private Securities and 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, Chairman and Chief Executive Officer of Sonic Automotive. Mr. Smith, you may begin your conference. Thank you very much, and good morning, everyone, and as you said, welcome to Sonic Automotive's third quarter 2024 earnings call. Again, I'm David Smith, the company's Chairman and CEO. Joining me on the call today is our President, Jeff Dyke, our CFO, Heath Byrd, our EchoPark Chief Operating Officer, Tim Keane, our Vice President of Investor Relations, Danny Wieland. We would like to open the call by sincerely thanking our amazing teammates for continuing to deliver a world-class guest experience for our customers. Our EchoPark Automotive teammates have once again earned the top spot as the number one pre-owned automotive dealer in guest satisfaction, ranked by Reputation.com, and our Sonic Automotive franchise teammates continue to achieve among the highest customer satisfaction scores in our company's history. Our teammates are truly living our Sonic purpose to deliver an experience for our guests and our teammates that fulfills dreams, enriches lives, and delivers happiness. We believe our strong relationships with our teammates, our manufacturer and lending partners, and guests are key to our future success, and as always, I would like to thank them all for their support and loyalty to the Sonic Automotive team. Our company remains focused on our ability to adapt to changing market dynamics in the near term, while positioning Sonic to achieve our long-term strategic goals. I'm pleased to report that we continued to make great progress in our EchoPark segment performance in the third quarter, reporting all-time record quarterly gross profit, segment income, and adjusted EBITDA. Overall, the Sonic Automotive team continued to execute at a high level, despite operational disruptions related to the functionality of certain CDK customer lead and inventory management applications, as well as manufacturer stop-sale orders in certain key brands, amid the continuing normalization of new vehicle margins and increased vehicle production. Third quarter GAAP EPS was $2.13 per share, and excluding the effect of certain items, as detailed in our press release this morning, our adjusted EPS was $1.26 per share, a 38% decrease year- over- year, due primarily to the continued normalization of new vehicle GPU and the carryover effects of the CDK outage in July. Our reported results for the quarter included a $31 million tax benefit associated with an out-of-period adjustment, correcting an error recorded in connection with the impairment of franchise assets in a prior period. In addition, as a result of the business disruption caused by the CDK outage, we estimate that our third quarter GAAP income before taxes was negatively impacted by approximately $17.2 million or $0.36 in diluted earnings per share, which includes approximately $1.8 million or $0.04 in EPS, related to excess compensation paid to our teammates who had reduced income potential due to the CDK outage. Turning now to third quarter franchise dealership trends, we saw stability in average new vehicle inventory levels, ending the third quarter with a 57-day supply of inventory, in line with the day supply at the end of the second quarter, after accounting for the CDK-related sales disruption at the end of Q2. Third quarter same-store new vehicle GPU was $3,049 per unit, down $540 per unit from the second quarter. The rate of new vehicle GPU decline accelerated somewhat in the third quarter, due primarily to larger GPU headwinds from electric vehicle sales compared to the second quarter and the effects of stop-sale orders on certain high-margin models. However, we are affirming our guidance to exit the fourth quarter in the low $3,000 range due to the seasonal benefits of our luxury-weighted portfolio in the fourth quarter. Looking beyond 2024, we continue to believe that the new normal level of new vehicle GPU will remain structurally higher than it was pre-pandemic, normalizing in the $2,500-$3,000 per unit range in 2025. Additionally, our teams continue to work closely with our manufacturer partners to manage new vehicle inventory levels and better align powertrain options with evolving consumer demand, which should benefit inventory day supply, floor plan interest costs, and new vehicle GPU. In the used vehicle market, wholesale auction prices for three-year-old vehicles increased nearly 1% during the third quarter, while our franchise dealerships average retail used pricing decreased 1% compared to the second quarter, driving a sequential decrease in used GPU to $1,386 per unit on a same-store basis. Elevated used retail prices remain a challenge for consumers, contributing to affordability concerns amid the current interest rate environment. However, the return to normal seasonal trends in used vehicle wholesale pricing are positive for our business outlook, and when combined with potential further interest rate cuts, should begin to benefit affordability and used vehicle sales volume in 2025. In the meantime, our team remains focused on driving incremental used inventory acquisition and retail sales opportunities, driving upside in this line of the business, alongside the expected normalization of used car pricing and volume over time. Our F&I performance continues to be a strength despite elevated consumer interest rates, with same-store franchised F&I GPU of $2,339 in the third quarter, down 3% year- over- year, but well above historical levels. The continued stability of F&I in these levels supports our view that F&I per unit will remain structurally higher than pre-pandemic levels, even in a challenging consumer affordability environment. Our parts and service, or fixed operations business, remains very strong, with an 8% increase in same store fixed ops gross profit in the third quarter. We are very proud of the success our team has had in this area, and we believe there are remaining opportunities to grow our fixed ops business as we finish 2024 and look ahead to 2025. As we have previously discussed, in March, we launched an initiative to increase our technician headcount by a net 300 techs in 2024, which we expect would contribute an additional $100 million in annualized fixed ops gross profit. To date, we have increased our technician headcount by a net 216 techs and paced, adding 15 net techs per week in the last few weeks, positioning us to achieve this goal as we approach the end of 2024. Turning now to the EchoPark segment. We are very excited to report all-time record quarterly EchoPark segment Adjusted EBITDA of $8.9 million, consistent with our previous guidance for a seasonally strong third quarter. For the third quarter, we reported EchoPark revenues of $545 million, down 13% from the prior year, and all-time record quarterly EchoPark gross profit of $55 million, up 5% from the prior year. EchoPark segment retail unit sales volume for the quarter was approximately 17,800 units, down 7% year- over- year, but up 7% sequentially from the second quarter, outpacing the industry growth rate of 2% sequentially from the second quarter. On a same market basis, which excludes closed stores, EchoPark retail unit sales volume was up 2% year- over- year, revenue was down 3%, and gross profit was up 21%. EchoPark segment total gross profit per unit was $3,111 per unit, up $344 per unit year- over- year, and up $33 per unit from the second quarter, despite marginal increases in used wholesale market pricing, as a result of improving inventory sales velocity and higher F&I gross profit per unit. EchoPark used vehicle day supply finished the third quarter at 33 days, compared to 38 days at the end of the second quarter, which, with faster inventory turns, benefited GPU. As discussed on our previous earnings calls, the reductions to our store footprint since the first quarter of 2023 allowed us to better allocate inventory across the platform, driving higher unit sales volume per rooftop, better total variable GPU, and improved overall profitability. Our unwavering confidence in EchoPark's long-term potential has allowed us to weather the challenges in the used vehicle market in recent years, and we believe our performance in the third quarter demonstrates a tremendous opportunity for this brand. A third consecutive quarter of positive segment Adjusted EBITDA for EchoPark validates the strategic adjustments we made over the past few quarters, and we look forward to resuming disciplined long-term growth for EchoPark as used vehicle market conditions continue to improve over the next several quarters. Turning now to our Powersports segment. For the third quarter, we generated revenues of $59.4 million, gross profit of $17.7 million, and segment-adjusted EBITDA of $5.8 million. As expected, the Powersports selling season accelerated in the third quarter, and this year's Sturgis Rally was an overwhelming success, benefiting from the new processes and technology we recently began to integrate into this segment. We continue to focus on identifying operational synergies within our current Powersports network, while fine-tuning our operating playbooks. In the near term, we look forward to finalizing the implementation of our refined F&I sales strategy, centralized marketing and inventory management, and the recent rollout of sonicpowersports.com. While we are taking a disciplined approach to expansion in this segment, we remain optimistic about the future growth opportunities in this adjacent retail sector when the time is right. Finally, turning to our balance sheet. We ended the third quarter with $834 million in available liquidity, excluding unencumbered real estate, and $418 million in combined cash and floorplan deposits on hand. We continue to maintain a conservative balance sheet approach with the ability to deploy capital strategically as the market evolves. Additionally, I'm pleased to report today that our board of directors approved a 17% increase to the quarterly cash dividend to $0.35 per share, payable on January 15th, 2025, to all stockholders of record on December 13th, 2024. As you can see in the investor presentation we released this morning, we have updated certain limited financial guidance for 2024 following our third quarter results. We continue to believe that our lower Franchised Dealership segment earnings can be at least partially offset by significant improvements in EchoPark segment results, returning to positive EchoPark segment adjusted EBITDA for the year and setting the stage for continued growth in 2025 and beyond. In closing, our team remains focused on near-term execution and adapting to ongoing changes in the automotive retail environment and macroeconomic backdrop, while making strategic decisions to maximize long-term returns. Furthermore, we continue to believe our diversified business model provides significant earnings growth opportunities in our EchoPark and Powersports segments that may help to offset any industry-driven margin headwinds we may face in the franchised business, minimizing the earnings downside to our consolidated Sonic results over time. We remain confident that we have the right strategy, the right people, and the right culture to continue to grow our business and create long-term value for our stakeholders. This concludes our opening remarks, and we look forward to answering any questions you may have. Thank you. Thank you. And at this time, we will conduct our question-and-answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate that your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. And our first question comes from John Murphy with Bank of America. Please state your question. Good morning, guys. I just have a couple, but just a very simple one, and I apologize there's a lot of earnings and noise today. So just trying to understand, when you think about the adjusted EPS on an operating basis that you want folks to focus on, ex-CDK, storms, and stop sale, what do you think is the correct number? Because I think there's some questions about comparability to what the consensus number was, and we may have had this off, so I just want to get clear on this. Yeah, this is Heath. Real quickly, on the CDK impact, we are estimating it's around $17 million, so $0.33 impact by the CDK. And BMW is $2.6 million impact for this quarter, and that's $0.05 of EPS. So a total between the two is $0.38. Okay. That's incredibly helpful. I mean, was there any storm impact? I mean, what was sort of the net of the storms? I know that's always hard to tease out, but I mean, is there something you can give us on storms, Heath, or do you think that's not big enough? I'd first like to say that we were very, very fortunate and none of our teammates were hurt, and we did have some damage, but I think Jeff Dyke has color on that for you. Yeah, John, we were prepared. Unfortunately, David says often, we're getting really good at this, unfortunately, and so we were really prepared. We didn't lose any inventory. We had one air conditioning unit on top of a store that had an issue, but overall, it did not really slow us down, either of the storm. That's good to hear from a people and property perspective. Just quickly on the GPUs. I mean, you highlighted that EVs stop sales is a weight, but EVs are certainly a weight. Can you give us a breakdown of EV versus ICE new GPU, if you can? I'm sure you don't want to disclose quite that level of detail, but we'd love to hear it. Yeah. I've got a couple of numbers of the headwinds related to EVs. In Q1 is a $400 headwind to the front-end GPU. Q2 is a $170 headwind to new GPU, and Q3 was $440. That difference in the second quarter, the incentives were much higher, in particular on the West Coast, with certain luxury brands, that helped the GPU and the headwinds there. Those incentives lessened in the third quarter, and therefore, you saw kind of a return to normal that we saw in the first quarter. If you look at the difference sequentially, I think it's $530, $540. About half of that is related to the EV, the incremental. So $270 was EV, the other $270 was from normal price. And John, this is Danny. If you look at slide eight in our deck, we've got the relative GPU broken out between EV, hybrid, and ICE by luxury, import, domestic. You can see that hybrid is equal to or better than ICE across that platform, and EV is still significantly underperforming. There's no structural reason why, in the same price point, an EV, a hybrid or an ICE vehicle should make a different GPU. It's all about the imbalance of supply and demand. So while we've seen some improvement in days supply of EV relative to demand, we still had 15% of our inventory with EV, while only 10% of our sales. We're still relatively oversupplied, and I think the OEMs are moving in the right direction. We've just got some work to do. Do you think they're going to step back in with those kind of incentives they had in the second quarter, or is it still head in the sand kind of stuff? There are some aggressive incentives out there. You know, BMW is really aggressive right now. That's a lot just to do with inventory buildup because of the stop sale in the third quarter. Mercedes continues to be, you know, decently aggressive on EVs. So, you know, I expect the fourth quarter, in particular, with the stop sale at BMW. I mean, you look at October for us, our BMW business is on fire. We're up plus 20%. And I expect that to continue on into the November and December timeframe as well. So should be a great fourth quarter. Okay. And just one last one on the 300 techs. I mean, the run rate sounds like it's pretty awesome, adding 15 a week, and that's pure gravy. I get... I mean, it's not pure gravy, but it's a lot of gravy there. As you think about the potential beyond those 300 techs, you know, could you keep going? You know, do you think there's any reason that you couldn't keep going at that 15 per week or some pretty hot pace? And is there any issue with actual stall capacity in adding folks at this point? Yeah, it does become an issue over time, but we'll add more stall capacity. It's the best, you know, capacity, the best thing we can do at a dealership is to add stall capacity, right? And so, yeah, once we change the culture in the stores and got everybody believing that we needed more techs, that's one of the big things. It's not so much that you can't go out and get a technician. It's you got to get the culture in the store to want more technicians, because technicians are working in the stores, they'll want you to hire more technicians, right? There's more food to feast on. Once we got that changed in the stores, that's made a big difference for us, and now we're beginning to see really the doors open and things unlock for us. So, sure, that could continue on in the first quarter. We'll probably get the 300 techs hired in this calendar year, take a little breather, do a much better job of retaining our technicians than we've done in the past, and really kind of shift our focus there, and then we can grow from there. But the fixed operations business is just fantastic. And of course, warranty, you know, played a big role in all that with BMW. But customer pay is there, too. And so it all, you know, 2025 should be fantastic. The fourth quarter is going to be great from a fixed ops perspective, and we'll see how things go from there. Very helpful. Thank you, guys. You bet. Our next question comes from Rajat Gupta with JP Morgan. Please state your question. Rajat Gupta, your line is open. Go ahead with your question. You may be muted. Oh, sorry, sorry about that. I was muted. So yeah, just wanted to follow up on John's question there. You know, BMW, I think you mentioned just $2.5 million impact. I mean, that seems so much lower than what we would have thought, you know, given the stop sales. Is that net of, like, any recovery you might have seen on the recall side, or were you just able to get more out the door? And just curious, like, what happened if you could dissect that a little more. And then just on CDK, are you able to give us what kind of unit impact it had on both new and used for the quarter or maybe just in July? That would be helpful. And I have, like, one or two quick follow-ups. Thanks. Yeah, the BMW impact, it's seen 500-550 cars, somewhere in there, during the quarter, from a new car perspective and, you know, obviously, hurt pre-owned business as well. Our team did an outstanding job selling what we could sell, getting the vehicles that we were on stop-sale sold, but waiting for the part to come in. And that's why we're seeing the huge increases that we're seeing, and we will see for October and November. I also tip my hat to BMW. I mean, they were faced with a very difficult situation. They did an amazing job communicating with us, and really were on top of this. So all the way around, we just executed at a really high level. We're getting good at this kind of stuff, and we've got a great tenured BMW team, and those 15 stores really did just an amazing job getting us through that time. So we expect it to be a little bit tougher, too, to be honest with you, but our team, you know, raised up and did their job, and we got a lot of cars sold during the period. Again, it really cost us about 550 units. That's not the end of the world, and we're certainly going to make all that up in the month of October. And then y'all want to do CDK? Yeah, this is Heath. On new units, we calculated that the impact was $482 on new units. GPU was down about $370 on new, and used units was $920, with it impacting our F&I GPU $153. We also got impacted, obviously, our F&I as well, because trying to do deals very quickly, and that was around $124 on the front end of- or on the F&I for GPU. I understand. And then just on BMW, so the fourth quarter, you're obviously, you talked about the October sales looked good. But is there gonna be, like, a big pickup on the service side as well? Oh, yeah. As you go forward. Yeah, we still have about 25% or so of the inventory that needs to be corrected. So the warranty business will continue to grow, and then we'll make up what we couldn't get done from a CP perspective. So it's gonna be a really good BMW quarter. And it should be a great quarter overall. You know, the business is there, and now with, you know, no recalls really going on and no CDK and whatever else was thrown at us during the last couple of quarters, we're able to operate without any of those distractions, and so we'll see what we can do in the fourth quarter. Understood. And just like on SG&A to gross, you know, for the fourth quarter, you obviously have a full year guidance, you know, that's been pretty consistent through the course of the year. You know, the year-to-date numbers look a little better than expected. You typically see a seasonal drop in the fourth quarter always, you know, just given how the comp structure works. Curious, anything to keep in mind here, specifically, you know, given, like, all the changes around BMW that are happening, how should we think about SG&A to gross, you know, in the fourth quarter, specifically? Yeah, I think we always have, like, a better SG&A to growth in the fourth quarter because, you know, we're very, over 50% luxury, and the fourth quarter is always big for us. So you should continue to see that kind of drop, but our guidance would be the same, you know, in the low 70s%, for the franchise and of course, EchoPark. You may note that we changed our guidance there. We're guiding in the 80s%, and now we're guiding in the high 70s% because of the performance we're seeing. Yeah, the normal seasonality, you'll see some of that, like you always have in the fourth quarter. Understood. Great. Thanks for all the color. I'll get back in queue. Thank you. Thank you. Our next question comes from Jeff Lick with Stephens. Please state your question. Good afternoon, guys. Thanks for taking my question. With respect to the new units in Q3, you know, given your brand mix and, you know, the fact that, you know, you were operating pretty dark on your CRM because of CDK, I was a bit surprised, you know, +2 same-store units. Can you talk about why it was as good as it was? Because it, it's quite an outlier, you know, based on what, you know, the, your brand mix said it should have been. This is David. I'd like to take that opportunity to, you know, it's kind of a layup because it's, you know, our teammates, the way our organization is structured, you know, our teammates really did a fantastic job. We talked about our guest experience a lot. You know, our tenure, we've got a lot of veteran leaders, and that has a huge amount to do with it. We actually knew, and we talked about it on our operations calls, that when the CDK issue hit, we talked about it. We're like, "Our teammates are gonna step up and deliver," and they did. Yeah, and I would add to it. This is Jeff. I would add to it, Honda, we did a great job with Honda. The import brands did very well. I mean, a little tight on inventory with Toyota. The luxury brands were strong. Even BMW, I mean, on a year-over-year basis, I think we were down 103% or something like that. So we really did a great job there. And then luxury, I mean, then in the domestic business, you know, Ford and GM, flat. Stellantis, you know, continues to be, you know, a case study for the universities in this country in how to screw up the number of brands, the brands that they have. It's just amazing. We're selling a lot of cars, and they played a big role. I mean, we're selling. We're now starting to sell a bunch of, a bunch of vehicles for Stellantis, but at the end of the day, the margins are absolutely horrible. And it's because of the over day supply. We, you know, woke up in July and August, had 1,000 more cars than we did the prior year on the ground. And they're really paying you. They're couponing you to buy cars instead of really giving the incentives to the consumers and doing things the way we're supposed to do it today. So, ultimately, you know, good, good volume pretty much across the board in luxury and in import and domestic. And we look forward to that really continuing on, in particular with our luxury mix in the fourth quarter. And this is Heath. I'm not sure. I don't think you mentioned it. We had a lot of good volume with Mercedes, so I think Mercedes took that opportunity to have some conquest and get some of that market share from BMW, but we had a really good quarter with Mercedes. Yeah, up 700+ units for the quarter. And then just a follow-up on the service and parts and the technicians. You know, given your service and parts same-store sales up 7%, you know, it implies you're getting good growth. How much incremental business do you think you're losing because of the technician? You know, I don't know if you want to refer to it as a shortage, but, you know, how much business do you think you're leaving on the table? You know, it's $20,000-$23,000 in gross per technician per month per stall. You just do... You can do the math right there on the $300 million. That tells you what, what's out there in terms of our ability. That's that hundred million dollar number we've been talking about. And so, you annualize that for next year, it ought to be a fantastic fixed operations year for us, along with our focus on growing market share by job code. That's something we've been working on now for over a year and a half. And those two things are really driving the business. And we've got great customer satisfaction scores to go along with that. Pretty much green KPIs with all of our manufacturer partners. It's also been a huge focus for us. And so I expect that to continue on into 2025. Huge, huge upside there for us. Well, great. Congrats on the quarter, and, I'll get back into the queue. Thank you very much, Jeff. Our next question comes from Chris Pierce with Needham & Company. Please state your question. Hey, good morning, everyone. I just had two quick ones on EchoPark. What's the right way to think about retail gross profit per unit at EchoPark? I think you did around $300 per quarter in the first two quarters, $250 this quarter. Is that just because of better days supply, because of better demand and inventory was tight, and that'll kind of normalize to closer to zero based on the model? Or should we model in modest, you know, retail gross profit per unit? Are you talking about front-end gross? Yep, that's right. Yeah, so you know, the theme that we saw in the third quarter, and a lot because of the storms, is valuations. We were buying cars in the low $23,000 range at the auctions. Valuations moved up just the last few weeks, anywhere the last month, into the upper $23,000 range. And that should. That's gonna provide some gross compression as we move into the fourth quarter, and I think you'll, you'll see that. But then I think as we move into the first quarter, as traditional seasonal numbers flow for pre-owned, we're gonna see. We'll see increases in our GPUs, and it'll flow very similar to what it did for 2024 and 2025. And I think it's important to note that if we look at, you know, let's look at the Denver market, we see the value of brand equity. In that market, they average over 200 higher than our other locations of GPU, and they're actually performing higher than their pre-COVID numbers as well. And so we definitely believe it's, you know, I think we mentioned that trough hitting in 2025 of inventory for used. Once that starts heading back up, we think it's gonna be a perfect opportunity for EchoPark. This is David, and simply to keep in mind is, you know, in the third quarter, we did around about 325-330 cars per store with our existing EchoPark stores. You look at what we were doing and the potential for additional capacity to do, you know, around 550 cars per store with the existing stores. So you talk about, you know, technician capacity. Look at where we could go and where we expect to go with our EchoPark volume, in addition to the GPU, as you all were talking about. Yeah, it's Jeff. One of the great things to look at is just that average selling price. We really want to get down to the $20,000-$21,000 range for selling. We're in the $23,000-$24,000 range now. When we get down there and we get that average payment down below $400 and interest rates continue to fall, the numbers that David spoke of, we had north of 500 units on average per store per month. Our big stores now in Denver, they're doing 800-900 to 1,000 a month. And that, a lot of that is the brand equity that we have in the market for being open as long as we've been. But it's just nothing but upside. It's gonna be... It'll be a great 2025, and as the lease returns come back and prices continue to fall a little bit in the back half of 2025, we see room for margin improvement on the front end, a lot of volume improvement, and then we can begin talking about rooftop growth. This is Danny. One more point on that. From a margin perspective on the vehicles, we're tracking $350-$375 better year- over- year on a full year basis, despite the fact that used car pricing is coming down. Obviously, wholesale, retail spreads have widened, and that's good for the business. We see it reported where used car price declines expected through the remainder of this year into 2025 could be a headwind for the used vehicle business. To Jeff's point, it improves affordability. We've improved margin in the face of that decline in used retail price environment, so it's positives for us on both fronts. Yeah, in auto retail, you can't get fooled by revenue, because average retail selling price is dropping, but margins stay the same or, as Danny said, improve. We sell more cars, we grow overall gross. So sometimes when people look at revenue, revenue can move around a lot. You're selling a $30,000 car versus a $20,000 car, but if you make more money on the $20,000 car, you'd rather sell the $20,000 car. That's something that we focused on very hard, that we do very well, and we've obviously done great with that, with EchoPark in this calendar year. All right. That was a lot of detail, but could you actually go a little bit deeper just on Denver? I, I just, I guess I want to make sure I understand. When I think about the model, I think about buying a car at auction and selling it for minimal gross profit, and, you know, the, the gross-- you make the gross profit on the finance and F&I side of the world. But, you know, I, I think maybe I've been underestimating how much you actually can do on front-end gross. And why is Denver better from a front-end gross perspective, and will other stores look like that? It's just because cars stay on the lot less there, because you've been there longer, or you can still price below your competitors but make $200 front-end gross and still be well below competitors? I just kind of want to make sure I think about the model correctly. Yeah, we've just been more mature in Denver. We've got a great brand awareness, a lot of repeat customers. Mm-hmm. You know, we've been open since November of 2014 there, and that's the whole idea, is to take what we've done in Denver and grow that. We've not done the brand marketing in the other markets because of affordability issues over the last three or four years with COVID. That will all change as we move, you know, sort of out of 2025 and into 2026. And that affords us the ability to sell vehicles in the + $200 to +$400 range on the front, which is still, you know, way below the market, and still drives a lot of traffic for us, along with having nearly $3,000 a copy, $2,900 a copy in back-end margin. You put those things together, you have a 500-unit average volume on a rooftop basis, or in the big stores, 1,000, and it's just, it's a printing machine. It's fun to watch, and that's what we're seeing. That's what we said all along. You know, the last few years have been really tough because we've had huge losses, but we hung in there while a lot of others bowed out, and understandably so. But we know our model. We know that it works very, very well in the environment that's ahead of us. EchoPark was built for that environment, and we look forward to the lower prices coming. Okay, and then, perfect. Thank you for that. And just lastly, on EchoPark, where are you as far as inventory, where you are now and kind of where you want to be into tax refund season and just kind of broadly on a normalized basis? In terms of day supply? Yes. Yeah, we're right where we want to be. We're, you know, 20 days on lot, 10- 12 days in the pipeline, and we'll increase as volume increases, that 20 days obviously generates more units on lot. As volume decreases, we bring our inventory level down, but we stay, you know, 20 days on lot, 10- 12 in the pipeline, and that's where you'll see us stay. Is there any metrics you have that you could share that shows that 20 days is actually X number of units? Because I imagine as you take share in the market, that, you know, that 20 days is more units, but you're turning them over faster. Is that the theme? Yeah, that's correct. I mean, the more cars we're selling, the more units are on the lot. So if you just take a store selling 1,000, you can do the math pretty easily. You're gonna have that 20-day supply on the lot to turn for that 30-day period. Okay. All right. Thanks for all the detail. Thank you. You bet. Thank you. And just a reminder to the audience, to ask a question at this time, press star one on your telephone keypad now. Once again, to ask a question, press star one on your telephone keypad now. Our next question comes from Bret Jordan with Jefferies. Please state your question. Hey, good morning, guys. This is Patrick Buckley on for Brett. Thanks for taking our questions. Hey, Patrick. Good morning. And, you just touched on this a bit, but, you know, looking ahead for the EchoPark eventual, you know, expansion and ramping up the footprint again, it sounds like that's an early 2026 and a 2025 event. I guess, what sort of market conditions are you looking for and how quickly can that ramp back up? Yeah, this is Tim Keane. You know, we believe over the next 12-18 months, it will get what we would call normalized pre-COVID conditions. Supply will be where we want it, and we'll be able to supply additional growth with the levels of inventory that we're experiencing now. So sometime in early 2026, we believe the conditions will be perfect for growth. Yeah, and I'll add to that. Then, you know, very disciplined growth from our perspective. So, you know, our goal is still to have 90% coverage of the country, and, but we'll do that in a very disciplined way. And really, it's just a matter of getting that average payment, you know, down to 400 and below 400. That's where we really see the volume start to fly off the shelf. So, we're thinking the back half of 2025 is when we'll start seeing the prices get down into that range. We'll put plans together. We have plans. We've got properties that we own already that we've sort of hibernated, if you will, and we're just waiting for the right time to pull the trigger. Great. That's helpful. And then could you guys talk a bit more on where you see F&I trending in the 2025? You know, I know in your slides you called out $2,400 GPU, and you're talking about stability there, but I guess, are you seeing any signs of headwinds from increased leasing or just general pushback on add-ons? Or I guess on the flip side, as the macro improves and you see rate cuts, is there upside there? Look, it's. I would be sort of modeling the range that we're in now. And I think as rate cuts, yeah, there is some upside there. I mean, we're not there. There are other big consolidators that have higher PURs than we do. And while we're at the top of the group, you know, we're chasing those and think that we can perform at those levels as well. We think there's opportunities with warranty in product sales, and obviously, as margins drop and rates drop, we have an opportunity to grow more there. So average retail selling price drops, we can carry more costs, so from a lender perspective. So, yeah, we think there's upside, but if I'm modeling, I model in and around, kind of where we are today. Great. That's all for us. Thanks, guys. Thank you. Thank you. Thank you, and there are no further questions at this time, so I'll hand the floor back over to David Smith for closing remarks. Great. Thank you very much. Thank you, everyone, for logging in, joining us, and we look forward to speaking with you next quarter. Thank you. And that concludes today's call. All parties may disconnect. Have a good day.