AutoCanada Inc. - Third Quarter 2026 Results - DEFI TECHNOLOGIES INC

Thank you for joining Auto Canada's conference call to discuss the financial results for the third quarter of 2026. I'm Anas, your moderator for today's call. Before we begin, I'd like to remind everyone that today's discussion may include forward-looking statements, which are subject to risk and uncertainties. Actual results could differ materially from those anticipating these forward- looking statements. I encourage you to review Auto Canada filing on CEDAR Plus for discussion on these risks, as well as the second quarter's news release, financial statements, and MD&A. All lines will be placed on mute to prevent background noise. After the speaker's remarks, there will be a question and answer session. I would like to turn the call over to Mr. Samuel Cochran, Chief Executive Officer, AutoAd Canada, Inc. Please go ahead. Good morning, everyone, and thank you for joining us. During the third quarter, the business operated as expected. The automotive retail environment remains challenging from a margin perspective due to affordability and tariff concerns across the country. This means while we are driving more unit sales, we are having to meet the customer where they are, leading to pressure on our margins. As the backdrop for Canada improves and as we roll out our new sales training platform, we expect margins to begin to stabilize and then improve starting in the spring of 2027. That said, our Q3 results reflect continued progress in strengthening and simplifying Auto Canada. We are seeing year-over-year unit growth, improving inventory efficiency, making sequential gains in new vehicle market share, reshaping our dealership portfolio, building value in our collision business, and continuing to shut down or sell underperforming businesses. As an example of that, we sold three dealerships in BC that collectively lost $1.1 million in adjusted EBITDA year-to-date. A part of our strategy is to reshape the AutoCanada platform by divesting dealerships that do not meet the required return and reinvest that capital into new dealerships that meet our long-term criteria and investment hurdles. This includes balancing the brands we own, focusing on areas with lower real estate prices and rents, and building more density with clusters. We believe this will allow the company to gain leverage in our model over time. We've further simplified our business in Q3 by unwinding the used digital limited partnership. This will save the company approximately $6 million annually and will free up management time to focus on our core operations. In the dealership business, we reduced our used aged inventory over 90 days from 34% to 22% at the end of the third quarter. This will help us rebuild used GPUs as we head into 2027. The rest of the GPU rebuilding will be achieved by focusing on training our staff with our new sales training programs that are launching soon. As mentioned earlier, new GPUs will improve as the Canadian backdrop improves and from the same sales training program being launched soon. The dealership team has done a tremendous job this year in both cleaning up our inventory and stabilizing the overall business. I am excited for them to finish the year strong and get back to growth in 2027. In our ACX business, we grew adjusted EBITDA year-over-year by 58.7% as we continue to grow the business both organically and inorganically. We've been able to win market share while growing the business through highly accretive M&A. And since Q3 2025, we have added 10 collision shops that at maturity are expected to add an additional $7.1 million of annual post-rent EBITDA. I'm really proud of the work the Collision team has done this year. They have shown an incredible ability to grow organically and complete acquisitions and integrations at pace. Over to the balance sheet, we continue to reduce our overall debt levels. As a reminder, in Q4 2025, our net debt was at $427 million. At the end of Q3 2026, net debt was down 25% to $322 million. I expect our debt to continue to decrease as we improve our operational performance and continue to simplify the business and optimize the Canadian dealership network. While dealership profitability remains below our expectations, the improvement in underlying operating trends is encouraging. Our strategy remains consistent. improve execution and efficiency across the business, and allocate capital with strong discipline. We believe this work, together with great customer service and strengthening OEM relationships, will position Auto Canada for better performance over time. I will now turn the call over to Mike to review our financial results. Thank you, Sam, and good morning, everyone. Revenue from continuing operations in the third quarter of 2026 increased 3.1% year-over-year to $1.2 billion, with growth in both new and used vehicle sales and continued strength and collision. Strong revenue growth in the quarter was partially offset by lower parts and service revenue. Gross profit in Q3 increased 4.9% to $197 million, and gross profit percentage increased 30 basis points to 15.9%. The increase primarily reflects strength in collision and used vehicle sales, offset by reductions in GPUs from new vehicles. F&I improved 5.5%. Operating expenses before depreciation and amortization was flat year-over-year at $149 million. We remain focused on controlling costs while continuing to invest in areas that support long-term growth and operational performance. Adjusted EBITDA from continuing operations in Q3 was $48.4 million and adjusted EBITda margin was 3.9%. Net income from continuing operations was $40.3 million or $1.63 per diluted share compared with negative $2.9 million or negative $0.14 per diluted share in the prior year. In the dealership business, used vehicle revenue increased 6.9%, supported by a 7.4% increase in retail units and a 0.4 percent decrease in average selling price. Gross profit for used vehicles improved sequentially, but remained under pressure as we continued to work through aged inventory. The improvement in inventory days of supply is encouraging, and restoring margins while maintaining healthy inventory turns remains a key priority. Collision performance continues to improve. Finance and insurance continue to be an area of strength. Gross profit increased 5.5%, and average gross profit per retail unit increased to $3,381 from $3.346 in the prior year, reflecting stronger execution at the dealership level and improved product penetration. Turning to the balance sheet, cash at the end of Q3 was $171 million compared to $142 million at the end of Q2. This increase can be attributed to proceeds from divestitures and sequential improvement in net working capital, partially offset by a payment made to unwind used digital. Total net funded debt was $362 million at the end of the quarter, and total net funded debt to bank EBITDA ratio was 3.4 times at the end of quarter. This ratio is down from $412 million and 3.6 times at the end of Q2 and down significantly from the end of Q1, when it was 4.0 times. Net debt at $322 million has reduced considerably from $361 million in Q2. Reducing leverage remains a top priority, and we intend to direct proceeds from the remaining U.S. divestitures toward debt reduction. We are continuing to focus on restoring dealership earnings, improving working capital efficiency, and maintaining disciplined capital allocation as we move toward our target leverage range of two to three times total net funded debt to bank EBITDA. Our capital allocation priorities for the balance of this year remain clear. Protecting liquidity and financial flexibility remains number one. This was demonstrated through the reduction of our leverage ratios this quarter and the generation of cash through working capital. Second is to invest in high return operational initiatives. Good organic growth has a better return profile than acquisitions, and our technological investments are starting to show results. Next, pursuing selective accretive acquisitions where returns and balance sheet capacity support it. And fourth, consider share repurchases where it makes sense to do so. Leaving my first full quarter as CFO, I can confirm the team and foundation is strong. Finance is a key partner to the business, helping our operating teams make better decisions, improve returns, and allocate capital effectively. We have a clear understanding of where improvement is required, and we're measuring progress against both financial and operational objectives. With that, I'll turn the call back to Sam. Thank you, Mike. As everyone is aware, we launched a strategic review for our collision business. I can confirm that the process is ongoing and active. But for the purposes of today's call, I cannot comment on the process, but I can assure you that we will provide an update as appropriate. To conclude, I want to personally thank all our employees and stakeholders across the country. While the economic backdrop in Canada is challenging, the future of Auto Canada has never been brighter. We continue to reduce debt, improve execution, simplify our business, and more importantly, are recruiting and retaining the best and brightest talent in Canada. For example, I'd like to now recognize both Ethan Almeida and Casey Foy. I had the pleasure of meeting Ethan at our Excellence Auto Location in Toronto. After winning gold for body repair at Skills Canada, he went on to compete at WorldSkills in Shanghai, representing Canada for 2026. Casey, who works out of our ECX St. James location in Winnipeg, won gold medal for refinish repair at this year's Skills Canada. Retaining talent such as Ethan and Casey is the formula for great success. I will now turn the call over to the operator who can open it up for Q&A. Thank you, sir. Ladies and gentlemen, we now begin the question and answer session. If you'd like to ask a question, please press star, followed by the number one on your telephone keypad. If your question has been answered, you would like to withdraw from the queue, please press star followed by number two. And if you're using a speakerphone, please lift your hands up for pressing any keys. One moment, please. I will compile the roster. Your first question comes from Ty Collin with CIDC. Please go ahead. Hey, good morning, Sam and Mike. thanks for taking my questions i'll just start off on the on the new vehicle side of things so it seems like you're still trailing the market a little bit in terms of units sold uh despite gpus moving lower do you think gpu needs to move a little bit lower in the near term to help you guys build back market share or is your expectation that some of these other initiatives like sales training can kind of build back that volume without further margin investment hey ty um thanks for the question and uh actually i think this is good that you bring this up actually for four consecutive months we've gained market share so i think what you need to do in your analysis is adjust it by brand right so what you saw during the summer is with oil prices very high you saw a lot of teslas being sold in canada obviously we don't own any teslas it's corporate owned right and and toyota uh with their hybrids had a very good summer and won a bunch of market share. So what you'll actually see is if you weight it by the brands we own and we operate, we've actually been winning in market share, and what you will see on the new GPU side is as we launch our new training program, sales training programs, we're going to have standardized sales processes by OEM, and we're gonna teach our sales team how to desk a deal properly, how to be a bit more consistent in that approach. And we believe that will help build back new margins. And if you look at Canada, the economic backdrop, as that improves, you'll also see more margin there. So we are winning market share today, and we've done so consecutively for many months. And I actually believe that GPUs, you know, macro-dependent will start going up with our sales training. And as that backdrop improves, we'll stabilize and go up as well. So thanks for bringing that up. I think that's good to clarify. Okay, yeah, yeah. I appreciate those comments. And then I guess sticking on the same subject, like as you look across your dealership network at this point, what proportion of those units would you say are still underperforming today? And I guess based on how things have been progressing, how would you handicap the likelihood that you end up parting ways with more of those in the next few quarters here? Yeah, I wouldn't expect anything in the short term in the Canada side. But the longer term, we are going to be very disciplined on how we allocate capital. And if assets don't meet our thresholds and we have sort of internal threshold and other indicators that we look at, we won't be shy to make changes. And longer term we're actually looking to grow our dealership operation. So we are not going to be shy to make changes where you know it doesn't make sense to stay invested long term to free up capital to move it to better spots right whether that's buying another dealership um or doing a dividend or share buyback like we'll we'll do what's appropriate at the time but um but you don't don't expect anything in the next couple months or anything like that okay great and if i could sneak one more in just on uh on parts and service so i know you called out um you know a few areas where you think you can sort of sharpen things up from an operational standpoint there you know was there also an element of consumers kind of deferring maintenance work uh this quarter um just given some of those macro headwinds that you called out was there some of that at play as well yeah potentially a little bit of that but honestly i i think the demand is there i think we need to recruit more tech. So we have a new gentleman in Gary McDonald, who is in charge of our fixed op strategy. And we're a bit light on tech. We have dedicated now recruiters who just focus on the technicians on the dealership side. We've had that on the collision side with great success. You heard me in my prepared remarks talking about Ethan and Casey, and there's many more examples of that across our company. And they're getting more deliberate on the on the dealership side with that recruiting. So, we believe the demand is there, and we need to improve our BDC to be more effective. Is there some weakness in demand due to the backdrop? Potentially, for sure. But we could have done better this quarter, and we expect to do better going forward with the strategies that we're implementing. Okay. Thanks for those comments. All the best. Thanks, Todd. Thank you, Ty. Your next question comes from Luke Hannon with Canaccord Genuity. Please go ahead. hey thanks good morning i want to go back sam to the commentary you talked about um m&a and obviously you you have a preference it seems like or a willingness to continue rolling up what is a fragmented market in canada today with dealerships but i mean how do you think about the trade-off between that and then potentially the collision repair space where i know you mentioned you're not going to talk about the strategic view but it's i mean you initiated that review and then also it looks like you you consummated a transaction there so i'm just curious if you can shed more light on how you look at each of those end markets, purely from an M&A perspective. Thanks. Sure. I think it's a little bit early to talk about dealership M&As. Long term, obviously, we want to grow. And we think there's a great opportunity there to, you know, buy in clusters, you knows, rebalance our brands. And, we think that will give us more operating leverage over time. You know, in the next year, will you see one or two small sort of tests? Potentially, right potentially but i think it's a bit early to talk about getting back to the to a sort of roll-up cadence on the dealership side we're still focused on you know improving what we own um and but long term obviously we see a great opportunity on the dealer's side to get back to roll up but i think it'S a bit EARLY TO TALK ABOUT SPECIFICS uh to ty's question i just wanted to say we won't be shy if something's not working. That's it. On the collision side, it is already in that roll-up cadence, right? We've done 10 deals this year, added a lot of EBITDA. We've integrated them quite well. We're implementing a new branding strategy there. They're all branded. That's underway. The acquisitions on the collision site are part of just day-to-day business for them. You'll actually probably see another one close before the end of this year. And then more in the new year as we as we kind of just continue doing our normal business i mean it's a serial acquirer it's got a huge opportunity ahead of it it's a national platform it's the best collision team in canada by far um and we're going to keep going so um i hope that answers that question and then long term how do we balance between the two let's let's wait and see i think it's bit early to discuss that yeah okay that's fair so then um maybe sticking with collision repair um for a little bit then so you talked about the the 10 assets that you bought it represents 7.1 million of post-rent EBITDA at maturity but can you just define for us I mean what what exactly I guess two parts of the question one is um what what is the what is the runway or how long does it take to get to maturity where are these assets relative to what you define um as that I I suppose maybe that's the first part of the questions yeah Mike do you want to jump in and talk a little bit about the $7.1 million? Thanks, Sam. It's a good question. I think we've disclosed in our investor materials previously that we have historically bought at six to eight times on a post-rent EBITDA multiple and earned those down to three to four times. This is really a reflection of where these 10 assets would be once they're earned down to three to four times. And in the past, we've seen this take up to three years to mature. So it's a number of strategic initiatives that get implemented and just the operating team that our team has to get there. Got it. So on that same topic then, Mike, so then if we wanted to, you know, back into basically what the EBITDA that those assets are generating today, we could just do the math of well if in if you're earning it down to three to four times and you're paying this then basically what you're saying is we can figure out the delta and that would be whatever it was those assets are earning today i think that's right that each asset is different in a different stage of success some are uh yeah each asset ist different in different stages of success but i think that if you were to average it the way you're talking about it it wouldn't be a bad approach okay got it thanks and then my last question and then i'll pass the line is is just on used i think overall because look there was higher cost inventory that you guys had to deal with i think beginning towards the end of last year you've made progress through it and being able to clean that up but then i'm i'm trying to reconcile and i think investors are trying to reconcile we're in an environment now where it seems like these vehicles are more expensive overall i don't know what it looks like from a sourcing perspective for you guys how much of your business you're getting from trade-ins today versus other channels but what is a realistic i guess path from over the next 12 months on on used gpus taken into account it seems like it's a more difficult environment to do business from an affordability perspective from a sourcing perspective than maybe where we would have been let's say a year or two years ago yeah no good question and listen on the dealership side like the team has done an incredible job like a phenomenal job fade his team on we went from 34 percent of our vehicles over 90 days to 22 percent like it's incredible and so we're in a much cleaner spot um than we have been uh in a very very very long time and that's very good because of all the things that you just said not only that we're holding less inventory and creating it faster we're way more efficient we're selling 50 percent of our basic, of our used inventory every month, right? So this efficiency is helping with cash flow. You'll see if you look at the cash flow statement, but it's also helping us making sure we keep our inventory clean and moving units fast. And then to your question of what, how to think about GPUs looking forward, I think you're right. There's going to be some headwinds in the macro. That being said, now that our inventory is clean, we have a much better opportunity to get better margins out of this. So you should see margins go up in 27 from where they are. Is that increase going to be impacted by the macro? Potentially. But you will see them increase just because of how clean the inventory is and how good the team is moving those units. Got it. Thanks. I'll pass the line. Thank you, Luke. Ladies and gentlemen, as a reminder, if you have any questions, please press star one. Your next question comes from Chris Moret with ATB Capital Markets. Please go ahead. Yeah. Thanks, folks. Good morning. Just a couple of quick ones for me. Just looking at leverage and kind of a path of it, a couple questions here. One, can you maybe give us an update on where you are with the remainder of the U.S. sale proceeds? I think in the discussion you also talked about there could be some land sales that come with that. we think about you know kind of like a combination of of the different levers you can pull you know when you what's about the time you think you're actually going to be able to land kind of in the range you know that kind of that kind of sub three um and how does that change kind of capital allocation over the next little while i know you've got the ncib that uh i guess expires in december so just any thoughts around um around how to manage the leverage over the national law will be great no that's a great question um and you know i'll start by giving you an update on the u.s um i gotta be careful with what i say there because we're kind of in the deal but it's progressing well we do have land there as well we have about you know in canadian dollar basis you know 15 16 million dollars worth of land and we still have the auto malls and there's still value in those franchises so we will we will be in the range or near the top end of our range um as we dispose those uh they take a bit more time because of all the OEM involvement and the complications of it being an auto mall, but we're working through that. As far as the leverage ratio goes, I'll pass it to Mike, but what I'll say is, yeah, we continue to work to get it down to the range, and there's obviously a few things in the air right now around the collision process and other things that would have a big impact on leverage. So I don't want to give you an exact date of when we're going to be in that range, but you'll see leverage, I believe, was around five a year and a half ago or two years ago, and we're down to 3.4. So leverage continues to go down and debt continues to goes down. Our debt's down 25% since late 2024. So debt will continue to go up. Debt will continue go down as we continue to operate better and rebalance portfolios and leverage will continue going down. But, yeah, exactly when, we're not going to give a date at this time. There's too many factors. But, Mike, anything to add to that? I would just say that we're continuing to execute on our acquisition strategy for Collision, and that is a competing direction on the level of the leverage ratio because we're buying everything with effectively net debt. Our normal operation generates cash, and it'll continue to lower our outstanding net debt, And where we find good accretive acquisition opportunities, we'll execute on those as well. So, as Sam said, it'll be a bit impacted by collision, by the M&A strategy long-term, but trending in the right direction. Okay. The other question I had was around inventory levels. I know we've talked about this for a couple quarters now. um but given where you're thinking on the outlook um how do you feel about both the level of inventory in your mix of your inventory over the next couple quarters on both new and used yeah i mean we feel pretty good where we are right now like i said our asian on our u side is very clean and on the new side it's also very clean um we brought in a stalantis expert uh to help us on the on the stalantic side um and we have really deliberate strategies on how we're we're sourcing these vehicles um looking ahead in the winter is our sort of normal restocking so you'll see used inventory start to creep up a little bit um ahead of march when we get back into selling season but obviously we're going to be uh um cautiously optimistic uh and you know inventory levels are way down from historically where the company's been and we're turning them faster and we plan to keep that going but you will see a little Bit of a bind over the winter as we get ready for the spring. All right. Sounds fair. Okay. Thanks, folks. Thank you. Thank you, Chris. Your next question comes from Maxim Cichy with NBF. Please go ahead. Yes. Hi. Good morning, gentlemen. I had a question, if I may, on normalized OPEX. Because, I mean, like, obviously, you had this, you know, big cost-out exercise over the last couple of years. And I'm just curious, like how much of that is is actually sort of permanently uh retained uh in the in the platform and and how should we think about this on a going forward basis thanks yeah thanks max i have a i have a high level answer for you and we'll see if mike wants to have more details here but uh on the opex side we've added about i think it's about a 15 million dollar variance you're talking about um on normalized opex we've had about 5 million from collision for growth right that's with acquisitions and with our new store openings we've added about five million on the dealership side per quarter right um and that's really turning auto trader back on and building out the new team so that is sort of if you're looking to sort of normalize what's added back on the dealership side only it's about five billion a quarter and then last year we had sort of five million dollars of timing noise related to a cra settlement and some insurance proceeds that reduced OpEx in the prior year by about five. So what you're seeing is an extra five invested in dealership supporter, five on collision with new store openings and acquisitions, adding obviously OpEx. And you're seen some timing noise in the, in the prayer quarter. Is that helpful? Okay. That's, that's great. Thank you. And then in terms of, I was wondering if you, if it's possible to get any color on maybe productivity and kind of day utilization for your parts and service business? Just, you know, what are the trends there? Thanks. Yeah, no, it's pretty solid. I mean, can we do better? Yes. Is there opportunity there? Yes, for sure. It's less that the bays aren't utilized. It's more that we need to recruit more techs. And I talked about that earlier, how we have new dedicated recruiters who are focused just on that. We're looking for the best and the brightest as we grow this business. And it's also how do we do BDC a little bit better? be a bit more effective on how we fill those slots so um but all in all there's an opportunity there for sure and we're going to go grab it um uh you know yeah yeah i'll leave it at that thank you so much thank you max your next question comes from trevor reynolds with acumen capital please get that just one quick one just salmon you're prepared marks you mentioned the technology investments and that you're starting to see some benefit from those maybe you can just touch on what those investments have looked like and what sort of benefits you're starting to and what the longer-term impacts you expect to see from those are yeah if you're talking about on the dealership side of the business we are looking at our own in-house um uh tech using sort of ai to help uh performance management to help the rv the new team uh manage you know a large a large dealership network um and we're also looking at new training programs and that kind of stuff by oem to sort of get more standard sales training so we can uh keep volumes high but hold margin a little bit better and rebuild that knowledge and that skill but I don't want to go into too much more details about the technology at this time but yeah we are definitely doing some exciting things there and the team's excited about it and we'll get good ROI out of it and stay tuned Okay thanks Thank you Trevor Your next question comes from Gary here with Desjardins please go ahead Thanks. Good morning. I also have a few questions on the Collegian side. Just given the healthy free cash flow the business generates, at what point do you see the ACX platform being able to self-fund its acquisition pipeline? It could be, I don't know, maybe a couple years down the road, but I know there's a lot of moving pieces there, so maybe just walk us through how you think about that. I might ask Mike to help out a little bit because he's more into the model, but I'll say something and then Mike can correct me if I'm wrong here, but, I'm pretty sure it can self-fund now, right? It's generating a lot of EBT post-rent, it's generating lot of its own cash flow. CapEx in general, it is not a super heavy CapEx business once you have it. So could you spin that out, lever it up and grow it, self with its own balance? I think absolutely. Mike, am I missing something? I think the big unlock for us is adding a lot more acquisition capex as a result of this process. So, it can self-fund at a lower pace, but with the right results of our collision process, we're accelerating the growth in this business considerably beyond what it can do today. Okay. Okay. Yeah. I think Mike put another way is that, you know, anyone looking at this platform, you're not just buying the collision platform. You're buying the ability. Like we have a full pipeline, full integrations team. Uh, we scope deals coast to coast. You're buy-in the ability to deploy capital and grow this platform every year. Right. Cause it's, you Know, it's a very, very open market, very lot of independence. There's a lot of room to grow a lot. A lot of, a lot, a blue ocean, but I think it could be fun to answer your question yeah at a strong pace like mike said thank you and then uh just on the same sort of sales growth i think it's close to like 0.9 percent this quarter so how how do you feel about that uh those results and how much of it was weather driven versus the underlying um environment claims environment and are you seeing any improvement in trends so far in the quarter yeah i mean listen um you know q4 remains strong october on you know both businesses are going actually quite well uh actually so that that's good on the dealership side we're actually better than uh september and october which is fantastic um on the collision side you know same source hail growth is there we expect it to continue to be there there's a little bit of noise in our accounting because of the of the intercompany eliminations and the gross versus net that we do so i actually think it's a bit misleading to same source hills growth a little bit larger um and mike and i will will take on how to maybe report that a little bit better in the future um but our account is up severity is is steady um and the business continues to grow organically and i expect that to continue um on top of the the acquisitions that that we're doing so this business should grow organicoly and organically but if your question is do i see any big swings in any of the trends overall trends in the collision industry no it was a pretty stable quarter. Okay. And then just my last question, I know you can't comment on timing of the process or how it's progressing, but can you elaborate on kind of what prompted it and kind of why now? I think some of your peers' valuation on the collision side has been kind of under pressure more recently. Yeah, listen, I don't want to get into the process really uh on the on the why i mean quite simply i think mike put it really well the collision business is a phenomenal business it's a platform that is coast to coast it's a very unique asset uh they've shown an ability with a very very high success rate to go out there and buy for six to eight multiple and get that multiple cut in half quickly up to three years. I mean, most of the time it's quicker than that. And so it's ready to grow very fast. And if you look at our leverage ratio, where our debt is, it's still not within our target range. So while we continue to grow it at a slower pace, we think this could grow much faster in the right hands. And then on the other side of that, we have a dealership business that is showing very positive signs. If you look through the noise in the quarter, units are up for winning market share, the business is turning and it's getting better and better every month. So we're seeing great trends in the dealership business. And that is our core business. And we need to get back to what Auto Canada was when it was successful. And as a dealership business running it very well, generating great cash flows and using that cash to be a dividend, to buy back shares or to buy more dealerships as appropriate. We want to get BackBear. And we we believe this will win two ways one is you get collision off and it has its growth and it can go and become the largest collision business in canada which i know it will be and you deliver auto canada so we can actually get back to what we were originally which is a great dealership business um generate a lot of cash and then deploying that capital with discipline so So hopefully that gives you a good idea of why. Yeah, no, that's helpful. Thanks for those comments, Sam. That's it for me. Thank you, Gary. I know for the questions at this time, I will turn it back to Mr. Cochran for some closing remarks. Thank you everyone. Thanks for joining the call and have a great weekend. Thank you. ladies and gentlemen this concludes your conference call for today we thank you for participating and ask that you please disconnect your lines have a great day