Good morning, ladies and gentlemen, and welcome to Group 1 Automotive's 2022 First Quarter Financial Results Conference Call. Please be advised that this call is being recorded. I would now like to turn the call over to Mr. Peter DeLongchamps, Group 1's Senior Vice President of Manufacturer Relations, Financial Services and Public Affairs. Please go ahead, Mr. DeLongchamps.

Thank you, Chuck, and good morning, everyone, and welcome to today's call. The earnings release we issued this morning and the related slide presentation that includes reconciliations related to the adjusted results we will refer to on this call for comparison purposes have been posted to the Group 1 website. Before we begin, I'd like to make some brief remarks about forward-looking statements and the use of non-GAAP financial measures. Except for historical information mentioned during the conference call, statements made by management of Group 1 Automotive are forward-looking statements that are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve both known and unknown risks and uncertainties which may cause results in future periods to differ materially from forecasted results. Those risks include, but are not limited to, risks associated with pricing, volume, inventory supply due to increased customer demand and reduced manufacturing production levels due to component shortages, conditions of markets and adverse developments in the economy as well as the public health crisis related to the COVID-19 virus and resulting impacts on demand for new and used vehicles and related services. Those and other risks are described in the Company's filings with the Securities and Exchange Commission. In addition, certain non-GAAP financial measures as defined under SEC rules may be discussed on this call. As required by applicable SEC rules, the Company provides reconciliations of any such non-GAAP financial measures to the most directly comparable GAAP measures on its website. Participating with me today are Earl Hesterberg, our President and Chief Executive Officer; Daryl Kenningham, our President of U.S. Operations; and Daniel McHenry, Senior Vice President and Chief Financial Officer. I'll now hand the call over to Earl.

Thank you, Pete, and good morning, everyone. I'm pleased to report that for the quarter, Group 1 generated adjusted net income of $185 million from continuing operations. This equates to adjusted earnings per share of $10.81 per diluted share, an increase of 96% over the prior year and an all-time quarterly record. Our adjusted results exclude noncore items totaling approximately $16 million of after-tax gains, which resulted from the sale of two franchises in Boston, as well as excess real estate in the U.K. These results were largely due to a record-setting U.K. performance, significant contributions from our recent acquisitions, continued strong vehicle margins that were able to more than offset weaker vehicle supply, continued double-digit growth in our U.S. after-sales business, and impressive cost control. Consumer demand for vehicles remains extremely strong exiting the first quarter, and we continue to sell most units almost immediately after OEM delivery. This dynamic should continue throughout the year. As with the U.S., consumer demand for vehicles in the U.K. is extreme, and new vehicle availability is severely constrained. We have a total U.K. new vehicle order bank of more than seven months right now with orders for some of our key luxury brand models now extending into 2023. We believe pent-up demand built over the past several years due to both Brexit and the very strict pandemic lockdowns will help drive strong U.K. vehicle demand into the foreseeable future. We believe our U.K. exposure, which is focused on major luxury brands such as Audi, BMW, Mercedes, and Land Rover, is a meaningful tailwind for our company. We're also seeing continued strength in the state of Texas. The market collectively outperformed our total U.S. same-store growth in new vehicle sales, used vehicle sales, after sales, and net profitability. Texas demographic trends continue to be a positive tailwind for the Company due to population growth, reasonable cost of living, low taxes, and a friendly business environment. We believe this is both a near-term and longer-term advantage for our company. To provide some color on our U.S. first quarter performance, I'll now turn the call over to Daryl Kenningham.

Thank you, Earl. Once again, the factors contributing to our outstanding quarter were great growth in all segments of our U.S. business, combined with the continuing focus on controlling costs and driving productivity in the face of very limited vehicle supply. As of March 31, we had 3,100 U.S. new vehicle inventory units in stock, representing a nine-day supply, which was flat from year-end. Our used inventory situation is stronger at 28 days. Our same-store used vehicle retail unit sales declined by 4% versus the first quarter of 2021, despite significantly fewer trade-ins due to a 17% decrease in new vehicle unit sales. Improved focus on sourcing resulted in acquiring more than 7,400 vehicles directly from individuals through AcceleRide, which was nearly a 300% increase from the first quarter of 2021. In addition, we wholesaled 1,700 fewer units during the quarter as we are focusing on building retail inventory. Those vehicles carry a bit lower retail PRU; however, the trade-off is our F&I attachment rate is high. We believe the most important profit driver was once again our after-sales performance. We've placed additional emphasis on technician recruiting and retention, and based on the attractiveness of our four-day work week schedule, we increased our same-store technician headcount by 16% versus the first quarter of 2021. After a very strong 2021, our customer pay same-store revenue grew 19% versus the first quarter of a year ago. Our same-store collision revenues increased 28%, and wholesale parts revenues increased 29%. This allowed us to grow same-store total after sales revenue by 19% versus a year ago, despite continued declines in warranty work. We foresee after-sales continuing to improve sequentially over the course of the year. The final major factor driving our outstanding profit performance was continued cost discipline. Our first quarter adjusted SG&A as a percentage of gross profit was 60%, down from 63% in the first quarter of 2021 and down from 74% in the first quarter of 2019. A material part of the improvement is due to productivity gains, which will be a permanent benefit. And now to AcceleRide, we couldn't be happier with our results as customers continue to demonstrate that they want to do business through AcceleRide. We sold 5,800 vehicles to AcceleRide online in the first quarter, representing over 9% of our total U.S. retail sales. These 5,800 sales were up 22% sequentially over the fourth quarter of 2021. In addition, we've launched AcceleRide in all of our new acquisitions, and AcceleRide is bringing a new level of professionalism to our sales teams. It's simpler, more transparent, faster, and customers are responding. Aside from our volume increases, AcceleRide customers are more loyal to Group 1, drive more F&I profit, and provide higher lifetime value to us, and we continue to make enhancements to AcceleRide. As an example, we now offer delivery in every U.S. dealership. In the first quarter, nearly 700 customers chose delivery, and 70% of those customers choosing this convenience option are local, giving us an opportunity to provide future service through our outstanding after-sales operations. In short, our customers continue to say yes to AcceleRide. We launched AcceleRide in the new dealerships during the first quarter, and because 60% of our customer interactions used AcceleRide in some way, we continue to see outstanding salesperson productivity results even in this depressed inventory environment. I will now turn the call over to our CFO, Daniel McHenry, to provide a balance sheet and liquidity review. Daniel?

Thank you, Darryl, and good morning, everyone. As of March 31, we had $17 million of cash and another $199 million invested in our floor plan to offset accounts, bringing total cash liquidity to $216 million. During the first quarter, we amended and extended our U.S. syndicated credit facility for another five-year term. As part of this amendment, we increased our acquisition line capacity from $349 million to $500 million. As of March 31, we had $185 million available to borrow on the acquisition line, bringing total immediate liquidity to $401 million. We generated $319 million of adjusted operating cash flow in the first quarter and $293 million of free cash flow after backing out $25 million of CapEx. This capital was deployed through a combination of acquisitions, share repurchases, and dividends. As previously announced during the first quarter, we spent $115 million repurchasing 639,000 shares at an average price of $180.30. This represented approximately 4% of our beginning of year share count. Over the past two quarters, we repurchased nearly 10% of our shares. Our rent-adjusted leverage ratio, as defined by our U.S. credit facility, was 1.8x at the end of March. This strong leverage position will continue to allow for meaningful capital deployment in 2022 if appropriate opportunities exist. Finally, related to our interest expense, our quarterly floor plan interest of $5.3 million was a decrease of $2.2 million or 30% from the prior year due to lower vessel inventory holdings. Non-floor plan interest increased by $4.3 million or 32% from the prior year, primarily due to the debt rates in conjunction with the Prime acquisition. For additional detail regarding our financial condition, please refer to the schedules of additional information attached to the news release as well as our investor presentation posted on our website. I will now turn the call back over to Earl.

Thanks, Daniel. In 2022, we have continued our focus on high-quality external growth actions with the purchase of two large highly successful U.S. Toyota stores. These dealerships add to our existing scale in the Austin and Albuquerque markets and are expected to generate $550 million of annual revenues. Growing our U.S. and U.K. businesses remains our top capital allocation priority, and we expect to find additional external growth opportunities in 2022. However, our balance sheet, cash flow generation, and leverage position will continue to support a flexible capital allocation approach which will likely include serious consideration of share repurchases in addition to pursuing external growth. This concludes our prepared remarks. I'll turn the call over to the operator to begin the question-and-answer session. Operator?

Thank you. We will now start the question-and-answer session. The first question will be from Mike Ward with Benchmark. Please go ahead.

If I'm not mistaken, your parts and service, the same store is the best in the group so far in the U.S. And I wonder, if you could just talk about it. I mean it looks like some of the digital activity is paying off. Customer pay was up. Warranty was down. Is that what I heard? And then also, can you talk about what you have done with the Prime acquisition? How has that folded in as far as the digital service appointments, those sorts of things?

Prime has completely integrated. All of the stores at Prime are completely integrated into every digital resource and tool and process that we have. AcceleRide went live there through the months of January and February. Digital service appointments are live there. So, we are seeing the same kind of traction in those, and we'll see, I expect for the rest of the year. And you're right about the CP growth and warranty; warranty was down a bit in the first quarter, and CP growth is very strong.

Now what percentage of the service formats are done digitally now?

Almost 40%, in the quarter, it was 37%, I believe, Mike.

And that will continue to grow as some of these other acquisitions are integrated. Second thing on the inventory front, I think your U.S. inventory nine days, that's on the ground inventory, correct?

On the ground, what we can see, touch and sell ourselves, yes.

Okay. Do you have a percentage of your sales that are basically sold off the truck? Are they just coming in and going out?

Basically, it's somewhere above 60%, with some brands reaching as high as 80% or 90%.

Okay. And how are your allocations in Q2 versus 1Q?

Hard to say. You've seen some things out in the press about the forward availability, and those are as reliable as anything I can tell you, to be honest with you.

The next question will come from John Murphy with Bank of America. Please go ahead.

I wanted to briefly discuss capital allocation. You are aware of the buybacks from the last two quarters. If you look at the average weighted count used in the diluted EPS calculation, the shift from the fourth quarter to the first quarter indicates a structural improvement in EPS power of just over 8%. Additionally, if we consider the acquisitions made, net of what was sold, and assume similar earnings power for the $425 million acquired, that adds over 3% to your earnings power moving forward. Therefore, during the quarter, it appears that through capital reallocation, you’ve enhanced your structural EPS by more than 11%. It seems you have not fully utilized your generated cash yet. Do you believe you can continue this approach? There seems to be a misunderstanding about certain aspects of the business potentially over-earning, which might not hold true in the future. That concern may be overstated. It appears that people are not recognizing the significance of the cash redistribution or reallocation and its impact on your structural earnings power. Daniel, do you see anything incorrect about this general analysis or thought process?

I think in terms of your math, John, you're 100% correct. I think one of the things that people forget is to compare companies to 2019. It's a structurally different company. We've reduced our share count. We've added over $3 billion of revenues so far versus 2019. As we were as a company, I think we've just come out of the pandemic a much stronger company. The cash flows that we're currently generating can be reinvested, whether we choose to do that through then growing the Company further or additional buybacks. I just think the Company is structurally different going forward, and your math is 100% correct. And John, this is Earl. Yes. We plan to continue down the same path. I mean clearly, our shares remain very much undervalued. But at the same time, we've been able to find some incredibly high-quality acquisitions with these Toyota dealerships, with Prime last year, and a couple of other dealerships we bought last year. So, we really don't see execution risk in the acquisitions, and the math on the share buyback is incredibly compelling, and there's no execution risk. So, we think we're getting tremendous accretion from the way we're allocating capital at the moment.

Yes. Sure seems like it and widely underappreciated. I guess the second thing. You're kind of hearing these rumblings from certain folks in the used car market, even some new car folks talking about weakness in demand, which seems like the most bizarre thing given what you're seeing in pricing and what we generally hear. But is there anything you're hearing from consumers or ups as they're walking into showrooms or getting on to AcceleRide, where there's some potential weakness in demand? I mean, I understand pricing is something that might give people a little bit of a pause. But I mean, in general, it seems like the auto consumer is in pretty good shape today. I mean we hear different things. What are you seeing on the ground?

I'll start with that, John, then I'll let Darryl jump in because he's closer on the U.S. operations. But inflation is never good for the consumer, but clearly, it's going to hit the lower demographic sectors of the market first. And there is such a massive gap and has been such a massive gap for the last 18 months between supply and demand. But first of all, demand would have to come down on new vehicles a long way before it got anywhere close to supply. And much of our business, particularly in the U.K. and to a large degree in the U.S., our luxury brand businesses and businesses such as Toyota and Honda in the U.S. And our core customers, while it may be not ideal, we just don't have data that show that we're seeing less activity in our stores yet. And Darryl, I don't know if you want to...

Agreed. During the quarter, John, we saw our average selling price held up through the quarter in used. We saw the lead counts per inventory continued very strong and very consistent in terms of gross profit and pricing ability. So we haven't seen that yet. We watch it every day, but we haven't seen it yet.

And maybe I'd ask you to make a characterization, and I don't know if it's fair or not fair. But given the volume levels, maybe specifically talking about the U.S. that we've seen in aggregate for the industry for the calendar year 2021 and what seems like it's going to transpire in '22. Earl, you've been in the industry for a long time. Would you characterize those as essentially recessionary level volumes right fulfilled, right? I mean, it's not necessarily the demand, so that you could almost argue that new vehicle out of demand has been in a recession for at least the last two years and probably going to be in it for a third year on the levels itself, not necessarily on the economics, but on the levels. Is that a fair characterization?

Absolutely. Absolutely, 13 million, 14 million SAARs, I mean that historically was a recession. And so, and there's a lot of consumer purchasing power that is still pent-up from the lockdowns from COVID. People are still trying to spend money. And yes, I get it if you talk about the lowest demographic sector of the subprime used car market, alright? That's a very price-sensitive, credit-sensitive market, but we're not in that market to any large degree. And inflation is never good for consumers, and in particular, the lower demographic sectors of the economy. That's a fact. But that's just not where our business is.

And then just lastly on parts and service, you kind of talked about this as really accelerating. But is there anything that's going on there that you can kind of quantify? I mean, you're saying you expect it to remain strong through the course of this year. On deferred maintenance, on people willing to maybe do more maintenance on their vehicles because they're holding on to them longer, things that we kind of sort of on a short term and long term sort of think about sort of they're a little bit more structural and sticky than I'll just, hey, there's just some pent-up demand? I mean, it seems like there's a lot more going on here.

John, this is Daryl. We've seen the trend in Q1 is similar to what we saw in Q4, the customer counts are up, but also the average spend per customer is up as well. So, and that's not inconsistent with what we've seen in the last couple of quarters. So, we've seen that continue. I expect it will continue.

Do you have enough tech at this point? Or no, you need to hire a lot more?

We're continuing to hire tech and we're happy with the number we've hired. We've increased our base by 16% in the last year, but we want to continue to hire like there's more growth opportunity there. And the good thing is our four-day work week allows us to be flexible with our scheduling, and we can maximize the productivity of our shops without adding brick-and-mortar.

You have a cap number for your stalls? Or is that something you're looking at, Daryl?

We actually, with the four-day work week, we can have more tech than we have physical stalls, and we have that in several dealerships. So, we don't feel like we're limited by the number of physical stalls that we have. We're not at our physical stall limit yet on techs, but we could go by that. And with the four-day work week, we do that in a number of stores. We have several more techs than we do stalls in a number of stores.

The next question will come from Daniel Imbro with Stephens. Please go ahead.

Congrats on a strong quarter. Daniel, I want to start on the AcceleRide business. I think you guys said you sold 5,800 units in the quarter. I guess, how are you measuring what's sold online? Is that just what fully done online? What does that count units that were part of it online? And then what percent of those are getting a trade attached?

Daniel, this is Daryl Kenningham. The AcceleRide numbers, that's 9.6% of our business, 5,800 units, where it was. Those are people that start in the AcceleRide process and continue through the process and buy a car. They may hop out of AcceleRide at some point to come in and test drive a car or something like that. But those are people that start the AcceleRide process and then end up buying a car from us. So that's how we define AcceleRide that. And then, there's 60% of our customers that touch AcceleRide in some way whether they trade a car in online using AcceleRide or whether they upload insurance and driver's license information using AcceleRide or whether they shop for inventory or value of trade through AcceleRide, that's over 60% of our customers are doing that.

Got it. And then I wanted to just add that into the F&I. I think you made a comment, Daryl, that AcceleRide customers are driving more F&I per unit. I guess how does that compare to an in-store F&I per unit? And then taking a step back, just broadly, as rates rise, is it going to get harder to attach more products to each vehicle sold? Or how should we think about rising rates impacting F&I?

I'm sorry. Go ahead. I will answer the AcceleRide portion of that, and then Peter DeLongchamps will answer the F&I impact moving forward. What we're seeing with AcceleRide customers is there's more attachment rate on FX for those customers that start in our AcceleRide, we are seeing that there's more attachment rate on F&I. And we're continuing to monitor that and believe that to be a long term, and we've seen that over several quarters. And then Pete can answer about interest rates and the impact of that on our PRUs.

Daniel, this is Pete. To follow up on Daryl's response, AcceleRide is approximately $140 higher than in-store sales. Regarding rising rates, consumers tend to focus on monthly payments, so there is a risk that increasing rates could impact product penetration. However, we haven't observed this happening. It's important to note that captive finance companies like Toyota and BMW are there to support dealers and typically offer incentivized rates when rates become too high. We are pleased with our product penetration, and the numbers indicate we are executing our plan effectively. For now, we will continue on this path.

Great. And then one more, if I could sneak it in. Are you guys seeing any discernible impact in the oil patch just in the move in commodity prices yet? And if not, do you think that will show up this year as drilling activity picked up down in Texas?

Yes, this is Earl. Yes. Clearly, these high energy prices help a lot of companies in the oil areas of Texas, West Texas, Houston, and a couple of the other areas. So that's good. I wouldn't say there's been more drilling activity and these companies have gotten very efficient and lean. But the other thing is these companies are also leading the energy transition in the new forms of energy. Texas now gets 20% of our power from wind if you can believe that. And the other thing that has really exploded in the last month or since this invasion of Ukraine is the future investment potential of LNG that is all centered within our markets here. So I think this LNG investment trend is likely to go on for some time. So the combination of this movement toward renewable energy and the energy transition of America, it's still going to be centered to a large degree around here. And then, the higher prices and the move toward LNG, all of that bodes well for our markets.

The next call will come from David Whiston with Morningstar. Please go ahead.

I noticed that your GPU increased despite facing high inventory acquisition costs, which seems to be different from what other dealers are experiencing. I'm curious if you were more proactive in raising prices to counter these high procurement costs compared to others in the market.

We felt like we had some opportunity, David, in our PRUs. And so, a lot of that is the way we're sourcing vehicles. We're not relying on outside auctions at all. We're keeping more vehicles, we're trading for more vehicles. We're buying more vehicles out of our service drives; 5,700 vehicles were acquired through AcceleRide. Those all have higher profit potential than anything we could go source from the outside. And so, I would say that's what's driving our incremental PRU improvement.

So 100% of the majority is coming from trades?

No, well north of 90% is being sourced organically, though. There's far less than 10% from penny auction.

And there was a slide in the deck. I think it says AcceleRide retention is 71% higher than traditional consumers, or maybe it was running at a 71% rate. It was higher than traditional. I'm just curious. Does that mean 71% of AcceleRide customers have already bought another car from you guys, or is it just a portion that are coming for service after buying from AcceleRide platform?

After two years of having AcceleRide fully deployed, those customers are returning to us 71% of the time compared to 54% of the time for other customers.

Okay. And finally, just on pricing with the dealers all doing 7%, 8% EBIT margins. Just curious, have the factories ever come to you guys and basically said, you're doing an extra 200 to 300 basis points of EBIT margin than pre-COVID and some of that belongs to us? I mean, it doesn't seem like there's been that tension or adversarial relationship the past few years.

Well, the factories, and you've seen it in all their own public releases, and they've been very clear that they would like dealers to sell vehicles at MSRP. Philosophically, we believe that we look at these transactions in the long-term relationship with a customer. And we want them to come back. We want them to have equity in their cars a year, two years, three years from now. And so that's philosophically why we approach our selling at MSRP the way we do. And the factories have been very clear. We've seen that this quarter quite a bit, and we see it in regular communications. But Earl, did you have something to add to that?

No, no. The only communication we've had is with most of them, that they would prefer that we don't have these markups on MSRP, and we agree with that. I'm not saying we haven't sold a few specialty vehicles above that. But our policy is, if it's our customer and it's in our market area, we're selling these cars at MSRP, and our feedback from our OEMs has been very positive in that regard.

The next question will come from Rajat Gupta with JPMorgan. Please go ahead.

Great. We often receive questions about what normalized earnings might look like for your company compared to competitors. The two main areas of uncertainty, aside from new vehicle gross margins, are the implications of SG&A relative to gross and developments in F&I. Could you provide insights on both? Your productivity has clearly remained strong. Can you share how your perspective has shifted over time regarding what a long-term ratio might look like? Since GPUs are a factor, it would be helpful to discuss this in the context of some GPO scenarios. Additionally, you continue to excel in F&I each quarter. If ASPs were to return to levels seen in 2019, even if that seems improbable, how would the F&I GPU be affected in that situation, considering the changes observed in service contract penetration? That will be all.

Let me provide an overview. It's evident that margins are unlikely to remain this high forever, and in a high interest rate environment, the Finance and Insurance (F&I) penetration per unit may decline as well. Both of these factors could lead to a decrease in gross profit at some point. We have demonstrated that our business model allows us to lower costs when gross profit generation declines, thanks to our flexible cost structure. This resilience has been evident during recessions and challenging times, such as COVID, when we needed to adjust. This flexibility is a key advantage of our business model. Additionally, if gross margins, whether from F&I or vehicle sales, begin to decrease, we anticipate an increase in volume at the same time. We all recognize that there is potential for increased new vehicle volume in the future, and these are the two elements we should leverage. When either vehicle or finance margins decrease, we will need to reduce costs and compensate through volume. The strength of F&I contributes to incremental volume; for instance, we might receive $200 less per unit, but if we're selling more new and used cars, that becomes a significant advantage. This is essentially how we approach the situation.

John, this is Pete. I appreciate your compliments on our performance. However, if you examine our trends over the last decade, even during challenging financial periods, we have continued to effectively implement our training, processes, and compliance measures. We maintain strong relationships with lenders that support our efforts. I also agree with Earl that the macroeconomic environment could have an impact, but the processes we have established in our company for finance and insurance continue to perform well.

We're seeing that it's not just ASPs driving the PRUs up; we're also experiencing better product penetration.

The next question will come from Glenn Chin with Seaport. Please go ahead.

Congratulations. Most of my questions have been answered, but maybe a couple of quick follow-ons. So Earl, I apologize if I missed it, but did you say you feel like you've benefited yet from record energy prices? Or the supply is so tight that it's not even rarely apparent?

I don't think I could articulate that we benefited by some amount. But by being the largest retailer in Houston and in Texas overall, these macro factors in the energy transition, energy prices, investments in LNG and alternative energy sources, that's all great for our core market. That's the only point I was making. But I couldn't tell you. One thing I could tell you is that our Texas market did outperform our other markets in the quarter. Texas is a very diversified state, however, so I couldn't tell you it was just attributable to anything in energy.

Right, but I think historically, the lag time was thought to be about two to three quarters. Is that fair?

Yes, there's a time lag of some amount. That's correct. That's directionally correct. I just know that when oil prices and gas prices go down, we get hammered and yet when one is strong, nobody seems to care.

I care.

Okay, that's what I want to hear, Glenn.

And then, I'll make sure everyone else cares.

That's the spirit.

A follow on self-sufficiency and your use of auctions granted, your use is very low. Your self-sufficiency is very impressively high. Just given reason, M&A in the auction space, right, with one of your competitors acquiring ADESA. Are you guys any less likely to use them in the future either to wholesale or to buy from them?

Yes, we're less likely to use ADESA in the future.

Okay. Thank you. And then lastly, just going back to F&I maybe a question for Pete. I mean, for years we thought this is the peak, and it just continues to step higher. Do you still see room or headway for it to grow further, Peter? And would that be a function of increased penetration or product proliferation or both?

Any increases will come from greater product penetration. We currently maintain a 1% rate spread, which we feel is acceptable. The growth you are observing is due to increased product penetration among our customers, and we’ve reached a penetration level of 73% to 74%. It's worth mentioning that we have nine regional finance directors who are doing an excellent job of training. Daniel's audit team collaborates closely with operations to ensure compliance, and our department is performing well. I expect this high level of performance to continue. If we manage to enhance penetration without facing interest rate challenges, I believe there is still potential for further growth.

This concludes our question-and-answer session. I would like to turn the conference back over to Mr. Earl Hesterberg for any closing remarks. Please go ahead, sir.

Thanks, everyone, for joining us today. We look forward to updating you on our second quarter earnings call in July. Have a good day.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.