AutoCanada Inc
TSX:ACQ
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AutoCanada Inc
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Good morning. My name is Krista, and I'll be your conference operator today. At this time, I would like to welcome everyone to the AutoCanada Inc. First Quarter 2019 Results. [Operator Instructions] Thank you. I would like to remind everyone that certain statements in this presentation and on our call are forward-looking in nature including, among other things, future performance and the implementation of the Go Forward Plan. These include statements involving known and unknown risks, uncertainties and other factors outside of management's control that could cause actual results to differ materially from those expressed in the forward-looking statements. AutoCanada does not assume any responsibility for the accuracy and completeness of the forward-looking statements and does not undertake any obligation to publicly revise these forward-looking statements to reflect subsequent events or circumstances. For additional information about possible risks, please refer to our AIF dated March 14, 2019, which is on the SEDAR website as well as on our website within the Investor Documents and Filings section.I will now turn the call over to Kevin McPherson, Director of Finance. Please go ahead.
Good morning, everyone, and thank you for joining us on today's first quarter results conference call. For today's call, I am joined by Paul Antony, our Executive Chair; Michael Rawluk, President of our Canadian Operations; Tamara Darvish, President of our U.S. Operations; and Peter Hong, our Chief Strategy Officer. We released our Q1 results after market close yesterday. A copy of our results is available for download on our website. For today's call, we will be discussing the current state of the business, discussing the financial results and providing an update on the Canadian Go Forward Plan and an overview of our U.S. Go Forward Plan. With that, I'd like to turn the call over to Paul.
Thanks, Kevin, and good morning, everyone. Thanks for joining us on today's conference call. During our fourth quarter and annual conference call, we discussed the implementation of our Go Forward Plan and our U.S. operations. We're continuing our dedication to ensure AutoCanada has the best-in-class dealerships that will deliver superior returns on capital for our shareholders. Consistent with the view that auto sales have peaked, AutoCanada has experienced volume contraction over the last several quarters. The industry experienced even greater headwinds in Q1 as did we at AutoCanada. We have previously provided guidance that we would attain at least $100 million of EBITDA in our Canadian operations in 2019. While we are still extremely confident in our business and in the improvements of our Go Forward Plan will deliver over the course of this year, we think it's unlikely we'll meet this target in 2019. We think it's important to keep pushing forward with our Go Forward Plan and evaluate the performance of our dealerships over the next few months before providing any further guidance. That said, there's no doubt that we'll substantially improve our results over the course of the year, and we expect to show very material improvement in our business in Q2. Although our U.S. operations are still struggling, Tamara Darvish has completed a thorough evaluation of our dealerships in the U.S. and has put together a comprehensive Go Forward Plan for our U.S. store. After her review, it becomes clear that some of our dealerships in the U.S. can become very profitable in the near future while some stores will not be able to attain profitability within a period of time that's acceptable to us under our leadership. As a result, we'll be looking to optimize our platform in the U.S. in order to bring us to profitability within acceptable period of time. Tamara has created a Go Forward Plan that focuses on optimizing our operation, reducing expenses, while growing revenue with a view to creating a sustainable platform in the U.S.I'll now turn the call over to Kevin to discuss our financial results.
Thanks, Paul. Before I discuss our Q1 highlights, I wanted to discuss the changes that occurred with the adoption of IFRS 16, took effect on January 1. The adoption of the new accounting standards resulted in both changes to the balance sheet and the income statement. In Q1 2019, we recognized depreciation expense related to right of use assets of $6.5 million and lease liability interest charge of $4.5 million totaling to $11 million. The offsetting reduction of facility lease expenses recognized was $9.7 million. This resulted in a net difference of $1.3 million during the quarter, which increased our total net loss. IFRS 16 also had a significant increase to our EBITDA metrics as both depreciation and interest charge have been included in our non-GAAP measures. On our total Q1 2019 EBITDA for the period, the adoption of IFRS 16 contributed approximately $9.7 million. On both the revenue and gross profit standpoint, we performed better in 2019 than the last 2 years. In order to fully understand the numbers as a result of the different operating economic environments, we've broken out the results between the Canadian and U.S. operations. For the first quarter, the Canadian group generated higher revenues and gross profit against Q1 2018. $635.4 million versus $620.5 million in revenue and $113 million versus $104.3 million in gross profit. This amount to 17.8% versus 16.8% from the prior year on a percentage of revenue. For the U.S. group, we reported $103.9 million in revenue and $13.7 million of gross profit amounting to 13.2% on a percentage of revenue basis. We are continuing to work on our operational efficiencies in both groups. The Canadian group did see an increase in operating expenses of $101.9 million compared to $95.8 million. This is primarily due to higher expenses associated with IFRS 16, management transition costs and higher expenses and advertising and employee costs, which are all related to the ramp-up of the Go Forward initiatives. Although the dollars are higher, the percentage of expenses to gross profit decreased from 91.8% to 90.2%, which is a good trend moving into our busiest quarters of the year. This is a summary of our first quarter results, and there are a couple of items I wanted to highlight. Overall net loss for the quarter was $4 million, and net losses attributable to AutoCanada shareholders is $4.1 million or negative $0.15 per diluted share. Adjusted EBITDA, which includes management transition costs amounted to $17.8 million. Important to note that IFRS 16 contributed approximately $11 million to this as well as gains from transactions in the quarter, which were $2.7 million from the sale-leaseback transaction of the 2 dealership properties and $4.3 million from the dealership divestiture. Adjusted net earnings amounted to negative $3.2 million or negative $0.12 per diluted share. And with that, I will turn the call over to Michael.
Good morning. We'd like to start with a big thank you to all of our team members, our dealers, OEM partners and strategic partners. The improvement of this business is a full team effort by all, and we thank you. We started the Canadian recovery process only 9 short months ago beginning with a full operational review, followed by the creation of the Go Forward Plan, we then initiated a robust communication and change management process. The implementation stage really started in October and November. We then spent the winter building up new structures and getting comfortable with an adjusted operating methodology. January and February were tough, in part due to the industry and in part due to some internal bumps with the new platform structure, but March was strong and created a lot of internal confidence and momentum. Early estimates for April are in line with our forecast and continue to build our confidence. We are very encouraged that gross profit is growing and expense management is starting to show up. In addition, our business development initiatives with strategic partners like Kijiji and DealerMine are producing double-digit growth in their respective areas, and the new profit centers are starting to make strong contributions. In a short period of time, we've completed a major overhaul of the operational and organizational structure. In parallel, we are building brand-new profit centers from ground zero and moving them forward at a rapid pace. From a core operations perspective, all the metrics that we used to manage the business are moving in the right direction. Vehicle sales are growing in a down market on a same-store basis while service parts and Collision are showing significant growth. Overall, team morale is high, and we believe we're in full recovery mode.Paul, over to you.
Thanks, Michael. I want to update everyone on the balance of our initiatives. We continue to dispose of and cease operating nonperforming dealerships. Toronto Dodge was disposed off in early March for approximately $6.8 million proceeds. Operations were also ceased in Grand Prairie Mitsubishi due to its poor performance. As we continue with our real estate strategy seen during the 2018 year-end results, we entered into another sale-leaseback transaction for 2 properties with APR REIT for approximately $24 million. The fund from this transaction were used to repay the debt. There are additional plans to execute on more sale-leaseback transactions, which will continue to unlock the value of our real estate and delever our balance sheet. We continue to believe there is a strong pipeline of acquisition opportunities that will help diversify our brand portfolio and geographical presence. With a mixed market for auto sales, we believe this is to our advantage to seek out dealerships that will help improve our brand strategy and geographical presence. We remain highly disciplined when considering acquisitions. With respect to our CFO search, we have retained the search firm, and we are well underway in our recruitment process. We're confident that we'll be able to recruit a qualified individual in the near term. Before we finish, I'd like to thank our team of more than 4,000 hardworking AutoCanada team members who are the key to helping us deliver on our Go Forward Plan in both Canada and the United States. I'd also like to thank all of the support from our strategic partners, financial institutions and OEM partners as Michael has as well. Without everyone's support and devotion to the Go Forward Plan, this opportunity to turn this company around would not exist, and we would not be on the trajectory we're on today. As we continue down this bold path, we believe that we have the right team and the right culture in place to succeed and deliver better results as we continue to move forward into Q2. With that, I'd like to turn the call over for questions. But before I do so, I'll preemptively deal with the question whether we can provide further guidance. As mentioned at the start of the call, this is not something we can address at this time. We need some more time to assess the performance of our business in the current market conditions, and we need to have a CFO in place that will help us assess such performance before we can provide any further guidance. Thank you.
[Operator Instructions] Your first question comes from the line of Chris Murray from AltaCorp Capital.
Just, if you can, when you look at the segmented information and thank you for that, it's kind of useful. It really becomes apparent that the cost profile in the U.S. dealerships is pretty significant. So can you elaborate a little bit on your commentary around deciding to keep some dealerships, deciding to close some dealerships? And can you give us some indication of at least your early thoughts around how quickly you can either fix the dealerships you're going to keep or dispose of the ones that need to go?
Sure. This is Paul. I can tell you we've -- getting to the real number is taking a lot of time, and we're confident that we now have the real numbers. We also have projections out, which we call 6 months, 12 months and 18 months in the U.S. And the decision to turn stores profitable, from our estimation we will be spending our time and energy developing the dealerships that we can turn into profitability within the next, call it, 6 to 12 months. And if we can't get a dealership into profitability over the course of the next 6 to 12 months under our leadership, we think it would be better served under different ownership.
Okay. So if I think about the 15 stores that you've got right now, you'd mentioned that you've done your initial analysis. Some you think are fixable. Realistically, what's left of that U.S. base when you're done, do you think?
So I actually don't want to comment on that right now. I would tell you that we've analyzed, we've done a full review of the business and we're confident with our numbers. And so I'll leave it at that. We're going to optimize that platform for the future.
Okay. All right. My next question just moving on is thinking about the Canadian business and some of the initiatives that you guys were looking at, and I think one of the core ones was the finance initiatives, either the near prime and some of the other, call it, Finance & Insurance line items. Can you give us an update on where you're standing with those and when we could expect to see a contribution coming in through 2019?
Michael here. Yes, great question. That -- those were ground-up initiatives, lots of hiring, lots of investment in branding and processes and everything else like that, which took place during the winter, and we started to see some contribution in January and February. March, we were very pleased, and we think we're just up and running in April moving forward. From our internal forecasting standpoint, we are right on budget for both those initiatives with expectations, and we have big expectations for the full year. Those will continue to pick up strong momentum.
Okay. So I mean you certainly laid out some targets on just an EBITDA contribution, so you're still comfortable control with those numbers that you've put out in the past?
Absolutely. Full confidence in those numbers.
Your next question comes from the line of Michael Doumet from Scotiabank.
Paul, so on previous calls, we reviewed sort of, call it, waterfall to get from a base of $70 million in 2018 to $100 million in 2019. The expected contributions were from F&I wholesale nonprime. So maybe to ask the guidance question in a different way, where did those lowered expectations come from?
So you're asking something, Michael, that I said that I wouldn't comment on this call. We will review it over the course of the next quarter. And once we have a CFO in place, feel more confident discussing.
Okay. Like, maybe going at it slightly differently. You indicated the underlying momentum of the business was slightly improved in March and in April. Any way you can help us bridge to a Q2 EBITDA for Canada? I'm sure you can appreciate it, just without the guidance forecasting is quite a challenge.
Look, I was hesitant to give the guidance when we first gave it, when we first started. And I don't feel comfortable at this point giving further guidance.
Okay. So I'll turn away from guide.
Your next question comes from the line of Matt Bank from CIBC.
Just to follow up on that U.S. Could you share some of the plan to reduce operating expenses in the U.S.? Is it mostly a rent issue? And what are the levers you can pull on the cost side in the U.S.?
So I can -- I'll probably turn it over to Tammy, but just high level from what -- I mean we've spent a lot of time on this, we diverted a lot of our resources in Canada to help out in the U.S. to get a really strong understanding of this. Our pay plans are being rightsized. Our vendors, we had vendors that we were overpaying in an astronomical fashion. The rents were part of it but not all of it. There's costs that for the normal operations of these business are highly abnormal, and so we're basically -- we're getting rid of all these costs right now. And so I mean, I can turn it over to Tammy, but if you're looking as far as the expense portion of it, I would say employee salaries.So moving away from guarantees to performance-based, which guarantees in climate like this are just not acceptable and not sustainable. Our advertising budgets were completely out of line. Our leads from our lead management system were again out of line. Rents, and I mean if you want, I mean, I can dig deeper, but it's just been a number of things. And every day we come in, there's new invoices for new things that we didn't think is possible to have anymore. I would say, we're to the bottom of it now. Was that helpful?
Yes. That's great. And then in terms of the Q1 loss in the U.S., was that as you had expected?
I would say, no. So I would say, that originally when I joined the Board, like, I guess this is my 1-year anniversary just joining the Board. We have an understanding that those dealerships in the U.S. were EBITDA positive, and so getting our head wrapped around the fact that not only these dealerships not make money, in aggregate, they lose money, has been a challenge for us and difficult trying to understand how we ended up with this collection of stores. And so it's -- I would say that it's troubling and unexpected, and now we're doing the work that we need to do to rightsize the ship. It's, of course, not fun going in every day and losing money. And so at some point, this is a public company, we obviously take this very seriously, and time is of the essence.
Okay. Great. And I want to ask on the guidance without asking specifically about forward-looking guidance, just in terms of what's happened in the past. So I mean is there anything specific -- you mentioned the tough market as kind of the reason to sort of go back on the guidance. Is there anything specific in the market that you want to point to? I mean you said March was good, and April was improving, and the first 2 quarters -- or months are actually pretty small. Just curious what's specifically you guys are seeing, and then also if it's a gross profit issue or an OpEx issue?
So I know -- listen, this is difficult because we don't have a CFO in place right now, and we've already set the standard by giving out guidance once, and now we're saying that it's unlikely that we're going to hit the number that we gave you. And so rather than make a mistake and say something that's actually not accurate, we'd like to at least focus on the business. We'd like to operate the business, have a CFO in place before kind of discussing guidance any further because it feels like you're kind of trying to back into a way to try and get an answer on guidance, which I'd love to give you. I just don't want to mislead you.
Okay. Now I actually have a finance question for absolute Director of Finance. Is the Q1 IFRS impact to EBITDA, will that be the same through the rest of the year? Is that a good run rate?
It's going to be -- it's Kevin here. It's going to be very similar, absolutely. So Q1 was the first quarter of the adoption. So under the IFRS 16 model, it is weighted heavier at the beginning of periods just because of the way the interest charges work, but that would be a good run rate. It will change depending on future sale-leasebacks because that will affect the kind of the rent out and the depreciation and interest and so -- but it's a good basis to use.
Your next question comes from the line of Derek Dley from Canaccord Genuity.
Just following up on that last question just on IFRS 16. So we'll call it $9 million, $36 million in IFRS 16 benefits. Was that included in your past guidance? I'm not asking you to put forward, but it's the past $100 million where you were accounting for the accounting changes?
No. No, it was not. So we -- IFRS 16 is net new right now, and so we're going to be dealing with that conversion going forward.
Okay. So that was not as when you guys issued your guidance previously, you were not using IFRS 16. Okay. And this -- okay, I got another question. This might be a bit of a tougher question, but just as it relates to the U.S., I mean that was an acquisition, obviously, that was going under a different management team, and it sounds to me like things have not progressed there, and it is going to take up a lot of management's time. I mean why are you not looking harder at just divesting that business as it does not seem like it was core to your strategy or to management's current strategy going forward? I don't expect you're going to look to pursue consolidation in the U.S. in the near term. So like, why even bother trying to do the turnaround and not just look to divest it at this point?
What I would say right now there's probably some -- with Tammy at the helm, we feel there's some low-hanging fruit that we can actually go ahead and achieve profitability in some stores fairly quickly. And as I said in other stores, it doesn't feel like we're going to get in there. And so for those, we're actually -- we're going to proceed exactly as you had said.
And when you referenced fairly quickly, is that in 2019?
Yes.
Okay. Just on your -- moving gears a little bit. On your same-store sales performance, it's actually quite good in the context of a softening market but still very healthy market. Any regions that performed better than others? How's Alberta doing? Have you seen any changes in Alberta consumption with the recent strength that we've seen in the oil price?
Yes. Michael here. I would say from a Canadian core operations side, that's where I spend my time is in the core operations. As we sit right now, they're strong. They're getting stronger. We're moving ahead in every market. We're outperforming the markets. All the data shows us that and it's just through pure focus and talent in the teams. Honestly, we're feeling really good about Canadian core operations and everything that we look at is moving in the right direction and it's strong. It just -- I'll just stop there. But Canadian core operations are good. We're feeling good and we're getting stronger every day.
And in terms of your OEM mix. On the national stats that we see, Chrysler is continuing to lose market share. I mean have you guys seeing the same dynamic or? I think in the past your Chrysler stores have actually been outperforming the rest of the national Chrysler stores.
Yes. Every Chrysler store that we compete against is losing market share to us, and we're holding our own with Chrysler.
Your next question comes from the line of Maggie MacDougall from Cormark.
So you mentioned you have some more sale and leaseback transactions that you're going to be pursuing, and I'd like to just pick your brain a bit on how you're thinking about your overall real estate strategy and what the right balance between owning land and buildings versus leasing them maybe in the future and the extent to which this pursuit strategy in the future of sale and leasebacks is meant to just help with deleveraging the balance sheet near term or how much of it is actually more strategic in that you don't really think you need to own those properties?
Sure. Kevin, I think you can probably cover some gaps for Maggie.
Yes. Hi Maggie. It's kind of at the true core AutoCanada is in the business of running leaderships. We're not really real estate company. So we're unlocking the value that we have in our properties right now. And for the future, we'll assess whether it makes sense to enter into leases or purchase the property depending on the transaction and the point of the company at that time, but we're focused on unlocking that value right now to help delever the balance sheet.
Your next question comes from the line of Roland Keiper from Clearwater Capital.
Just wanted to talk a little bit about the covenants. The senior facility covenant that EBITDA drops from 4.5 to 4 mid-year, I assume you're going to meet with the banks and try and amend that covenant and relax it back to 4.5x. Is that fair?
We're in discussions right now with all of our lenders.
Good. Items that are excluded from the credit facility EBITDA calculation, can you comment where the gains on sales, management transition costs and how they're treating IFRS 16 for purposes of the credit facility EBITDA calculation?
So there's accommodations by the lenders in regards to what it's added in, so we're doing the calculations underneath that credit facility guidance.
Sorry, I don't understand that answer. Just when you have EBITDA
Yes. We've got Devon here. He's actually dealing with the lenders directly. Devon?
Yes. So Devon Wilson here, Director of Treasury. So to answer your question, so the calculations we do under the credit facility are not going to mirror exactly IFRS calculation. So there's sort of onetime add backs provisioning that's been accommodated by the banks, additional sort of items that we've discussed with our lenders and that they are supportive of us adding back into that EBITDA calculation.
I know you've got your facility under SEDAR but haven't reviewed it for these issues. But gain on sales, are they taken out of EBITDA for purposes of the current credit facility?
No. The gains are included in the EBITDA calculation.
They are? Okay. IFRS 16, is there any adjustment for that or do they allow you to benefit from IFRS 16?
No. So the way when we originally constructed the facility, we had -- we didn't necessarily know the impact, the full scope of the impact of IFRS 16. So what we did is we had stated that the covenants will be calculated on sort of a pre-IFRS 16 basis. So we will do the covenant calculations on a -- based on the accounting standards that were in place at the time the credit facility was crafted.
And management transition costs, are they excluded as an adjustment to EBITDA for the purposes of credit facility or not?
Yes. We have added back those management transition costs in the EBITDA calculation.
As an adjusted. You get to adjust EBITDA for purposes of the credit facility?
That's correct.
Is there any severance -- the $1.3 million severance expense, is it for someone other than Raj?
Yes. It was. Yes.
Okay. Good. All right. And I mean I wonder if you can give some direction just because these acquisitions and dispositions affect the credit facility EBITDA because you're allowed to make pro forma adjustments. You've done some. Obviously, don't have the full year effect of the U.S. business because that closed in April, but most of it's in the last 12 months. You bought the Mercedes dealership in the summer. You bought Rose City Ford in Windsor last year, and you sold Toronto Chrysler last month. All of these things have an impact on EBITDA and the bank facility EBITDA. Can you comment whether the net of all of that is a positive adjustment or a negative adjustment to EBITDA?
Yes. It's a net positive adjustment. So we are -- on a trailing 12-month basis, we're taking into consideration the EBITDA from the Heritage Valley Mercedes store Rose City. And then also conversely, normalizing out the disposed off dealerships, taking out that EBITDA contribution to the extent possible. The net effect being positive.
And just one last question. I see you made a fair value adjustment on the U.S. acquisition that's related to these leases that were in place that you assumed.
Correct.
What is the impact on reported -- how you guys report adjusted EBITDA of that fair value adjustment annualized?
It's Kevin here. So how that happens is, essentially, we set up a liability as at December 31 but it then rolled into the new IFRS 16 calc. So effective of what it's doing is it's reducing the interest associated with the IFRS 16 numbers.
What is -- you've made a fair value adjustment. What is the impact on your reported EBITDA as a result of that fair value adjustment?
In the individual quarter...
Was it $5 million a year? That's -- I saw someone said that it was a $5 million benefit to reported EBITDA in the U.S.
So that -- it will be spread out over the term associated with that lease. So it's not a...
You're looking for the actual number, are you?
Yes.
We'll get that for you, Roland, if you want. If you can bear with us, or if you to want actually -- yes, if you want feel free to call Kevin. We're happy to provide that number for you.
Your next question comes from the line of Maxim Sytchev from National Bank Financial.
Is it possible to get some color in relation on the fleet sales and the wholesale strategy kind of on a going forward basis?
The fleet sales and the wholesale. So the wholesale disposal or the Wholesale business that we have as part of the Go Forward Plan or? I'm not certain what we're talking about, just to be clear.
Well, new vehicles and fleet in revenue and the total unused vehicles wholesale, just sort of both buckets because they were down significantly, right, year-on-year on same-store basis, so just in terms of -- yes, any color there, please.
So I'll give you over to Michael, please.
Okay. So if I understand the question correctly, why are fleet sales down and Wholesale sales down? So the Wholesale sales are down because our dealers are keeping more of their trade-ins for retailing, and that's why same-store is up for used cars. So that transfers into the retail line, which is higher profit margins than just sending them to the auction and wholesaling. And fleet sales are down in combination of -- there's a seasonality effect and there's still the Alberta oil field and some of the commercial effect, and also because it's a low-margin kind of high capital-intensive business, and so part of it is highest and best use of time equation and capital. So we're not really pursuing those low-margin opportunities.
Okay. Fair enough. And then do you mind maybe just commenting in general on the incentives from OEMs, what trends are you seeing and how that should play out for the rest of the year?
Yes. Great question. So we -- hitting the OEM incentives means that we have to sell more cars and we have to hit our targets. And in combination with that is working collaboratively with the OEMs on our business development and targets and everything else they have. So the -- what I can say is we expect this whole equation to, I would say, materially improve as we get more focused on hitting our targets and achieving scorecards as set out by the OEMs coupled with significantly improving relationships with our OEM partners and better transparency and collaboration, so that equation will get better. We're seeing it already in March and April.
Okay. Sounds good. And Paul, I obviously, realize that you're not commenting on the $100 million EBITDA target and so forth, but in terms of now that you have 2018 numbers, obviously, the run rate EBITDA ex IFRS kind of ex all this stuff, I think on the last call you said it was $70 million kind of run rate. Are you still comfortable with that number or should we be adjusting that down as well?
So to be clear, for last year?
Yes. Because I think there was a comment last quarterly conference call that when we're talking about the base kind of run rate for EBITDA of which you are building into 2019, I believe you mentioned $70 million as a run rate. Is this still an accurate number because I think there was a bit of a discrepancy versus kind of our calculations.
Yes. It's Kevin here. Just wanted to get some clarity on that question there and kind of that comment. So prior year definitely there was no IFRS 16 impact, so that was just stand-alone operations as we saw.
No. But I mean, like, what clean base EBITDA are you guys kind of using to build off the waterfall? Again, like, I'm not asking for the 2019 EBITDA but just in terms of the base for 2018, is the $70 million still...
So Max, are you saying that you can't get to the $70 million of EBITDA?
Correct.
Within our rolling 8-Q in the MD&A, that -- like, really what we're taking is the adjusted EBITDA base that's presented previously.
Okay. Anyway, maybe we can take it as -- off the call.
Absolutely. Yes. For sure, we can definitely come back.
We have no further questions in our queue at this time. I will turn the call back over to the presenters for closing remarks.
So really appreciate everybody's patience. It's been now 9 months to have Michael in place. Tammy has been in place for 2 months, and I think we're seeing significant -- significant strides. Nothing is fast enough and I would probably, as a fellow investor, I would say that obviously we want this to happen much sooner. Unfortunately, we have to be patient. And I can see now and we can all see the fruits of our labor. And everybody at AutoCanada going forward, we see the plan is actually starting to take hold. So again, we thank everybody for your patience as we're kind of ramping up and are ramped up and getting into full swing. So thank you very much and we look forward to speaking to everybody at the next call.
And this concludes today's conference call. Thank you for your participation and you may now disconnect. Have a great day.