AutoWeb (AUTO) 10 May 202020 Q1 Earnings call transcript

Good afternoon, everyone, and thank you for participating in today's conference call to discuss AutoWeb's Financial Results for the First Quarter Ended March 31, 2020.

Joining us today are AutoWeb's CEO, Jared Rowe; and the company's CFO, J.P. Hannan.

Following their remarks, we'll open the call for your questions.

Before I introduce Jared, I remind you that during today's call, including the question-and-answer session, statements that are not historical facts, including any projections, statements regarding future events or future financial performance or statements of intent or belief are forward-looking statements and are covered by the safe harbor disclaimers contained in today's press release and the company's public filings with the SEC. may by from these results in is and implied or forward-looking outcomes differ what materially expressed Actual statements.

other XXXX Specifically, Form please time from that well to XX, by filings SEC differ materially could XX-Q company's by statements. as as factors for the time. those with refer quarter ended from to the filings made the cause identified to AutoWeb These March forward-looking results

financial This measure call, this defined management be is during a G. that posted EBITDA. non-GAAP to the Regulation this note also SEC GAAP most Please of directly today's in on which non-GAAP as press included measures discussing by is will company's reconciliation the compared adjusted A is release, measure financial website.

turn Jared. over now the And call with I to that, will

afternoon, I Thank appreciate good and that, everybody. operator. you,

pandemic, circumstances the a quarter. approach for ongoing Given did call, the similar surrounding last going take I as this to I'm COVID-XX

this of of our the providing industry I'll and means most pandemic. of the start time So for that we're responding then how dedicate business COVID-XX by And state current results quarter. our impact, out is we'll what overview the to brief to a last

the of were on good we quarter, turnaround through mandates our most on made enacted quickly QX, So stay-at-home first the March. with progress that in

see state local time. uncertainty whether under vehicle around mandates did from both considered clients. of lot essential our federal spend service we some However, pullback during OEM sales marketing a retail and There's our and an that were

means put spend hold days until strategic suspend to time with what at call, they on this So status they for that. accounts retail of their effectively started which a environment, in entering, us reset XX or and many our want with us, we that

or sometimes Sometimes it's shorter. termination media it little helps it's longer; isn't It spend. just them a their full a cancellation. manage But a little

and also align started purchase consumer overall volumes with time, same lead demand better to reducing industry our click a generation vehicle. Now spend during our intent the we and to

of imagine for in mandates online. you surge were browsing consumers when a was As vehicles put can stay-at-home place, there

mean a for that in-market the really days. purchase to clients. to necessarily we on highly focused buy most And And car. ready in doesn't next However, to on they we're consumers who the ready XX those focus are our leads XX were that vehicle were a targeted

days, we Again, or XX at who folks to longest is XX XX the focus ready buy on are days. days

US COVID-XX and estimate respectively. XX%, did They million. sales sales various XX.X a and million to March anywhere those impact XXXX XX% between XX.X to reports rate. April. down and of sales And million expect million annualized two XX.X seasonally also range the now that severely automotive in to months, for industry auto SAAR, pre-COVID This XX adjusted In from compared were baseline

emphasize further numbers amid strategic we're true trends, our orders, the focused we leads our and core monitoring we commitment clients. our consumers all our clicks So of positioning while some as staying initiatives efficient the partner strengths and still to our and of to ourselves delivering on these with shopping strategy. namely, resources to holding we're actively of online higher of accordingly continue And adapting that and mixes stay-at-home constitute And to customers. high-quality a to with

expenses, cost important pandemic, the we have especially Now this of industry the a with to in organization, focus disruption. implemented current has context reductions And on our mitigating become BXB aim of within in the response of series We've broader We marketing pulled we've to and the travel, prudently reduced our to financial impacts reduced continue our to forward. going we're spending back our going manage recruitment, consulting. nonessential team.

to our savings. tools and of In realize addition, cost products we've further technology many consolidated

for nearly the cash us are executive And have team. executive taken remain for for with by for compensation measures and the few fully voluntary our XX% to QX, compensation team and Directors helping Board, staff that reductions a have XX% of These focused me health limited of in our then But public staffed. finally, the being entire XX% employees, and on some We've Board rest layoffs abroad. supporting limited ensure care had this furloughs we're and we're access health States crisis. very trying the reduced they during continued of to our United

continuity through employees The a health going be and maintaining evaluate We're clients. folks really OEM as supportive and And safety those an continue helping to to right time who continue we measures is also that's to of are to while we're for priority, them of top struggling this and of dealer effective stay well. now our necessary. challenging all our think operations critical

evolving more have navigating these I'll market to discuss about conditions. So

before But you turn J.P., over, to our to over walk results. J.P. like it to QX take further, commenting through I'd please? can

good Well, thanks, Jared, and afternoon, everybody.

reviewing that going the our we're focus the quarter than our calls, maintaining So of recent structure in realize fast-changing in We're every it the going key found less environment. be that item as here relevant release to of results for the today's most now line brief to our are can rather also the themes for and we filings. commentary on keep QX

So quarter. with about in in the from from quarter million million the ago and that year quarter said, at down million, first $X $XX.X and X revenue total came last that's

click lead and and advertising million, subset The decline $X of quarter. the slightly increased up March. display last stems total so revenue that's to in and revenue, was that total really revenues, the Our and quarter aggregate lower ago from volume, in year from which particularly is both

year Gross last gross to and Now profit our compared $XXX,XXX continued from quarter focus is ago only on down reflected the quarter. the value line. is further at $XXX,XXX by profit

in is last million year. this a quarter despite Now from reduction $X

which were and XXXX. Our traffic first basis margin and channel is was acquisition and The higher-margin up last of margin XX.X%, efficient basis points points gross by quarter quarter gross XXX more improvements XXX driven mix. from product QX from up

of that million compares a to XXXX million in a loss $X.X million, loss of year the and of $X.X $X.X net loss quarter and our the net in was ago quarter. And fourth the net quarter in

credit loss refinancing the of net by in our quarter related was items to negatively onetime PNC facility. Our this first impacted some

$XXX,XXX So that there fee. of a was expenses, termination in included a capitalized and debt write-off $XXX,XXX issuance early approximately

for a last the that's million quarter loss $X.X but by ago quarter. an EBITDA improvement year quarter, from and about was adjusted $X about Our million the down of from million, of $X

Our net million in million from operations first the was up QX $XXX,XXX, quarter $X.X from used cash of and the that's XXXX. an used $X.X last in improvement quarter in and used about

we equivalents outstanding million balance to of XX, CIT end Capital. revolving Northbridge on At March credit had of cash compared and XX, facility restricted million XXXX, last also at our an stood $X.X $X.X the At $X.X March XXXX, million cash, at cash with year.

us March our facilities, of that are on about revolver. some keep CIT as asset-based $X two of. in mind to there differences available be that and million structures have we both Now to But lending between just while new the the revolver, PNC please XX, XXXX, the facility aware

we So maintain we the under additional any the as gain didn't were line, deposit cash restricted to majority reserves. collateral, access of facility, on With have again we required cash to our this minimum but a the requirements new PNC line. draw

now us to maintain outstanding, on requires facility a $X right CIT million. the the which balance line is However, minimum

will corresponding now we period. the than and next a you'll interest see XX higher over months be ago debt in a they the also the balance of balance carrying cost on were are that year as higher result, our So sheet, comparable

we this us our navigate which positioned environment. more So sheet shortly, further we months, in market costs with has to present access we signed and business, If hold trends credit taken recent in balance in the that we've these the see liquidity through will steps believe our QX, our to will think us discuss Jared XXXX. to reduce position, along cash that facility

a our overview QX Lastly, brief provide on I'll metrics. operating

traffic click X and slightly X million up and million to was clicks million clicks quarter last visits about X the volume year Our from quarter. The increased by year-over-year. ago down sequentially by

traffic also the down but by was visits Lead last last to year. X it to up about compared quarter, was million compared

is mentioned, online, stay-at-home given Now numbers for this of the as of we orders. looking cars believe from the Jared much consumers elevated increase coming

sequentially retail that widely some of the the dealer hit retail months. impacts these over and decreases per correlate our few all count, can were Our net year-over-year. industry we down, last capacity COVID-related the with and our revenue auto both lead click And

And prepared Jared. over that remarks, my concludes call the with and to that, back I will turn

J.P. Thanks

to can look we we our activity. sort any the as we're discern as closely that QX, trends both So as for industry patterns monitoring customer well of

a period of want U-shape, We that sustained to a pre-COVID the shape you That to return really longer lows to is automotive W-shape, a before industry or vehicles whatever levels. expect speaks entering anticipate choose.

everywhere. strong nearly on can new really as much of incentives, as over helping see Homeland Security OEMs rates essential either restrictions to and We Department classified to trying or online an of also the cars the them as as that auto car vehicle OEM at dealership dealerships. really weeks. Now sales be couple financing the bought see really really are sales sales support stabilize possible. the last service, low has loosened We state

is in context, March the last our So our pandemic initial certainly around we given we we we're a in thinking better business this were from year. broader than thought would while industry since place down where be

held I stabilize up our in of reach suspend results at mean entering and anticipated. dealers to status worst-case the with began not better than lead retail end we Our volumes initially of OEM April scenario April. have number did us really the

is this for agency well spend perspective actually reason April. relationships roughly that month I'm clients. talked our These peak direct Just talking on this retail margin second as when during some past, XX%. as end, in I'm week top the of talking But improved the dealer about XXX suspense relationships, and by status about by highest really the this, was we some are it The matters, really relationships. about status. our

it has coming really really the actually last was weeks. of and that stabilized peaked to for see it down and couple back over good So us been

not with At and consumer We XX% unemployment know, stage, we our make certain XX% undeniable down is We confidence. does pre-COVID not to certainly the volumes must yet. anywhere levels. increasing contend from macroeconomic a woods going still that the that be industry of to this estimate factors, however, trend and out from X-month that numbers declining are including

discounting As really would we inflate deep that any other or in our volumes. engaging artificially aren't measures

sticking with we're since in not price. the right a The propensity is next willing consumers clients better strength reality our delivering clients, translate the purchase and because Also, sales vehicle that to high-quality taking that with Now car fewer on leads volumes our because full clicks a align capacity our far running lower to days. there a sales. stance this are firm at for have now. and to we're of current ones to commitment core It's XX they're higher isn't certainly

let deliver our isn't to going customers believe not again. we pre-COVID. can did So amount as of that same high-quality pricing we're leads we the This about

sales consumer and It's our respectful clients' about real current capacity. being demand of

this We improved materially the in back Our March month. hit the of internal they further of rates and a deteriorate half early in saw actually supports lead and close data stabilized low before half then the April positioning. of by end the

approach clients. and actually optimizing our So pulling that good about sell product we the we of our proactively feel we stabilize the that we've to the some campaigns, offering because we're our think to by out that of helping overall pretty quality core taken volume

current and said, consumers while and recovery, end still for prepare of that's OEM reflect. market customers what helping are we're fewer many post dealer our that the retail our know COVID All there volumes we today,

current As in operational to continue are their months. with needs the the to auto media we're changes coming packages consumer aligned work macroeconomic for of to we sure all behavior, business going follow closely customers and make both their that our the and with industry evolving

what is we which we quality While and products the ultimately goal. a predict and know delivering can't we will with broader quality the economy, will continue in that happen service that partnership,

of And has manufacturer the to of this to note and out network begin retail of separate into OEM entire terminate lead in transitioning its program on its process one decided marketing OEM signing our a program. program. our of dealers third-party We're customers to COVID-XX, unrelated our based

corporate story, Just to resell we those leads sell and leads program. products those the OEMs for their AutoWeb then a redistribute dealers to to that of as newer or clicks part

sell also to directly through our we program. dealers However, leads retail

about and So the the X% lead over going these But this OEM short, selling This revenue. for instead impact will as OEM. now of our directly the in begin dealers will volumes short-term our through clicks we margins of as accounted we OEM higher to program. benefit retail that believe sales will and it we a materially than are network, the with far rebuild gross business long our the channel medium more term, profitable it's in

COVID on this or are in good ago a again, about OEM transition this fertile so some bit into pre-COVID. we because month as process. of enrollment terms a our saw But retail of a dealer We little to us us this for the down making see revenue. progress slowed we revenue comment opportunity

aside, Now improve to to as past, the clicks I've both leads we mix sales retail for more this an transition leads. OEM our dealers of consistently strategy advertisers. have channel near leads endemic to COVID-XX directly dealer to plays program stated The and work more in clicks selling continue by that from a or to program manufacturer's for into retail into and endemic

pricing more endemic this selling demand the what to clicks times higher Now towards current we non-endemic is work advertisers. on advertisers as eight that when will XX audience side, believe be mix their near increasing of environment, must that and we to to the to in even see than often we continue targeted and endemic clicks

As a have short- business, a make benefiting closing long-term we're lean, organization. work across and AutoWeb in efficient put thought, our to both flexible from and we

The believe and road have our helped really as comfortable they clients, prepare cost the With us ahead. two latest us, both the support and helped information taken the to past new trends environment that years over we us and and position team OEM navigate few dealers even initiatives this we our the current really and past support a the for available in are recovery. for months our we've

our that and it's sheet liquidity, business As through in see J.P. XXXX. the believe present trends we going to balance mentioned us hold, earlier, if

our So that's with end of the remarks. prepared that,

so we're open it And for up I to think now. going questions

for So please? you open operator, can it questions, up

the come Gary Barrington Thank Prestopino you, of sir. will from question from [Operator Instructions] And our first line Research.

How afternoon Good gentlemen. you? are

Gary, doing well. your family alright, are hopefully, you and

complain. here. couple is of Yeah, great questions here, Hey, everything can't a

were to the sell lead correct? was OEM First of ability the of that all, the you kind dealers, this suspending out Is go have program, leads. the leads OEM with recollection that half and ticket dealer of My to now right? about

Pretty close. Yeah.

Okay.

of that to to on revenues So you're the half basically, X% have recoup the you much the sell dealers side, losing achieve to to equilibrium. as OEM

the different can mix. is that a And here, too, news we push good Yeah.

one-for-one And and so clients, back, your to point, not our more when focused Gary, getting we're sales. this with talking it's on we're plus, solution-based

program. that much and leads leads clicks as characteristics we're through together. optimize and OEM a margin it loan So has And talking selling about the we mix, better just the

important So not trying And it's right. open we're one-to-one, opportunity is for clicks you're in it here. does as again, the well, absolutely to what of up an us to do press part which

Okay. And count in. of as somebody do the let a couple dealer suspense, and as quarter? into jump I'll a that you end questions, of then goes dealer a the other of just When

do. Yeah, we

a do? saw – just We pretty you

Yeah.

that there? have count since retail? – maybe your going you the So generally sequentially dealer like that of just dealers that It drove about was could just suspended Is dealers what's that dropped about So means on retail right? the programs? not XXX, talk some the issues down looks it's

Yeah.

up of an are a that. because couple see where for to we dealers early And We you to while we're rethink pick stay-at-home in number things did Gary, dealers back. is at the between the there's hunker marketing there. into the no end normally in we are the orders strategies. of their increase dealers weren't status, coming down, to as dealers – end we and always tend in online. decline unknown and a we keep QX starting And churn going really them as QX, to at there's of of and transition One friction come them all. So with leaving March, see as know, on And seasonality a able really particular, who preparing did them there we we they dealers suspend of started good certainly see there's

improve about retail this need back some April, from around the a effectiveness. I'll throughout was to give increased points is a because mentioned. the I of of of side And to data it's points give will get to is talked you the for data and effectiveness reasons drop. retail couple we've a you of that I that our couple outbound call it So a we've We going because interesting think we're I've think the year volume. bit retail December

So our productivity, think of it teams XX%. as by sales

Now at the new same time, we've salespeople. also added four

we've So efficiency. and increased capacity increased also

Now that's one measure, and that's interesting.

increased But our we've also XX%. by time talk

with those with two talked our the about are our have selling just – and motion. talked having longer a with So We're place and channel And we've actually there. that help more interactions we that systematize confidence longer about better selling where it's touching and we're them, this improving to we And to metrics needing listen, leads engagements not which touching us to them our get the actively motion. be retail need me clients. lot

a we've know, I of think finally perspective. team we're from root. some made And that a you take of As leadership seeing lot changes

and those the outcomes activity-based listen, so And measures follow them. are

get outcome. the you need You activity the before can

Okay, thank you. else I'll go. let somebody

Gary. Thanks Yeah.

And next line from JP Value Global of the Investments. question your from comes Geygan

good Hey, gentlemen. afternoon

You've been When your of some liquidity for pushing and make positive year, or the in the it really anticipate sufficient do and say the becoming of to doing made towards second since what profitability time about half really do cash think how the changes your environment? year. through considering rest have profitable? the that you are turning last sheet macroeconomic flow that, you frame balance And progress you time some

talking a way, you, one, J.P., JP, the would that take do you want to you by take please? And that but to J.P., one? good

Yes.

been expenses, be we've down million in on. we areas really, revenue in then expenses spent this gross focused And XXXX. $X seen, operating you've the As where margin. in from over the of operating second finished is is key should year-over-year the cost and I the and we've mean, year – two One

So steady sequential gross margin. we've seen growth in

And quarters climb in going around six month, saw of about it's the We row. the March, March best gross a two nicely. everything in margin every gross and we've us. on think month February years I months had profit actually despite had else we in January, X of

of today. is culmination operating far mean but but a run think are I we a better tough it's I this of So all environment, that,

here. to We we're are a we get mean, far I top well be and positioned And efficient. line going momentum, if leaner I more little think

developing And over I you you noted frame? a you? that what's your see this optimal do time number Do for what target gross increased and How has nicely. margin specific or

depends hard in and that situation, the about the all right mean, positive. our forecast I again. Well, we think be get it'd about put to around And internally to to We're – there, environment negative from a XXX,XXX to of positive number there get any us, all now, more We – our just we're pandemic. goal drag that right goal – I the bit with by little our a know a month is now my now. want out cash or it until right on then generating kind just premature cash living

Yeah. Understandable.

response the you change last removed costs in have in much to much much been how how versus As structural from taken operating or out would environment this is to is expect COVID-XX how has short-term? or of current we that perpetuity expenses,

JP, – I'm ahead, we go JP, haven't sorry.

Then entirely almost recently costs. just out, we one that to I'm add and million I point. X.X fixed sorry. cut was going was

We haven't personnel. with done a lot

We didn't the design, we by We maintain wanted that possible. staff haven't level to its – fullest at want. was

unless layered think cost to what we've reason some in. and is want fixed is there's strategic start permanent, we So most in the of most what of back done in layering I

Jared, there. it sorry, So I'm from take

internally thing, bringing this really roles things a do that of the folks and we're was think in folks with right here agree going work about No, you we've done but have half challenges. say really lot one some to point, now, to engaged call, the done the And and I is call do we've what in into of I to new years. lot of now the because organization about realigning, the the we've team couldn't J.P.'s is the – team awful businesses When same hold you one restructuring, last I I and of focused some last to an to in and believe a the of transformational terms last on elevating talked done more. JP. over in, keep – new mentioned it work hard trying And some

the again, And so now. focused we're anything on right depending market And conditions. can change,

it, the really forever, going time right together We other kind focused see some we And get where now and our we're because whatever ready that it's have, the U, side point. W, harden want and to further Again, team to hold we of to to the have the we taking just trying are at we right operations we're like thing to because now then. we really for But that the like until isn't using improvements last have. whether made. we is team of call this this team going this operational we've abate the

this with So of the stuff. layer didn't couple onetime line about these was some kind But a back going that was of bit cost gotten been It in. out, timing, maybe structural pandemic we've a terms we a was a lot in to pulling – it way it of working in to the little again through do sped of more a a reaction just to and not costs hadn't little work costs. of systematically. of just and more we bunch we bit because our our about took them time forward we're This of up

good. frankly. feel feel. structural, We So this think we lot a quite is of We

Great, good I time your and appreciate luck.

JP. Thanks

you. Thank

Lee of with line the from B. Riley. comes Krowl question next your And

taking is questions all hope and Hey well. for you guys, thank my

Hey, you. Lee. Thank

in about traffic of on cost few is like traffic there's your particularly thinking business, Wanted touch to on cheapening trends, important in costs. kind the guys. a traffic been how and a sector-wide, seems margin. Hey, for key acquisition gross acquisition points, It change

as the guys question a seeing just a that the case, gross And on value the proposition that given prior relates perhaps just is And tailwind? product bundling can to the the how context are in benefit margin? you improvement in Just become volumes, better of my is, then that if of you've sustainable time lower that calls. it tweaks to second strategies a if of driving outlined curious

Yeah.

absolutely question an good here, as some acquisition and have Listen, Lee traffic down. industry-wide, we in right. April, No, Okay. seen of benefit going in costs particular

us generate us little also of the a going bit it's some hadn't volume it hit more we traffic. us forward. about would helped One has is different optimize environment. becomes slightly the is us, things, a thinking slightly in efficient way what generally Lee, helped pandemic what different Because if speaking, start we for that the it which We've to than to adopted seen in have look like to probably going really have tactics

terms over So the we that efficiency are in credit we of the the the XX pullback the just did of because seeing benefit some conditions while drive we've some market operational from good hit to running. the I been give other all to really last spend, able not days,

March XX from extent. been a to really surprising to make in perspective when able to particular. SEM to was started think I we it And we've cost is some our spend optimize changes a like

learn wave our it's don't market riding us Again, to going give recovers going around to right? to this all harder isn't have actually taking campaign to We to going because think it the the of us learn. characteristic, your some here, us it just though. simply would the it volume some as helping Now As optimize back, things certainly new come we're back of which we're point, is back. to just back, about in, this business the been that and give opportunity people we're it give some

my in answer of that's spend. So to terms that marketing side the

terms the of too. question, interesting positioning And products, in that's the an of

promoting for bundle a now. while been we've So the

have we but done we're haven't as it now. We well liked, would better doing it as

is a to Ready our with really And talking or conform bundling I It's package. that it digital we've to retailing. So is, a been six about this and more the calling of DRR for transition it's being think digital market we've package. right focused on what something Retail retailing. services is products that push existing really this new we're gone And Digital trend listen, to now a years

side. think this burn the it consumer also a of bit in to I is going side more to help retail terms and the in

are there product, other or as well, to ways a for Payment web really lead new leverage are strategy plus retailing. our got car us dealer's Pro, retailing products product support approach to components traffic our like digital to that a But leads digital these and

really really approach with have kind the have is market can on and so payment we perfect products And to about a an like oriented or get to of help we unique our either support on a existing $X.XX product, gone into first putting process, consumer Pro piece we can that's towards bundle services is, that it's really retailing dealers with that didn't the payments the focused digital Payment of practices dealer that and which dealer inventory. help taking deliver components a that actual maybe so

this lost us be bundling and is on because the businesses a differently, been have which engagements this, things our clients thing would position too, on opportunity able been it would perspective been an gives our definitely slowed better say have letting about little makes slightly we've our not side, thinking interesting and think that, their last maybe we to to have us one more this before. because products some with I Lee, in So they're with I we're our have there, clients about is retail from difficult us heads ways a conversations that them down to what's guess as differently.

last taking been weeks advantage we've as few over so And of that well. the

this to reposition our building I'm taking clients. and regard. stuff. we're with activity all is in to market is helping that repackage the we're solutions way pleased that us quite the starting and And so the I'm pipe, with and But current them way the pleased again, that the disruption And frankly,

it. Got

like seems has and obviously, ball question no mix right it today. from last but very new the versus one Just is used crystal a me shift to prevalent now,

if kind just temporary the the that on of options your whether to right are trend, it potential out quarter thoughts that financing some the there it's or context Just of of incentives multiple given kind of trend, now? has a be and

Yes.

we in three is our Number I the regards that you're eye on that. big with what think exactly need talking there's one all OEMs. to keep to about things

business. listen, pinned OEMs now. OEM now So back in they're terms behind of support right everything car new that they years can. just can doing the the Most of They're side putting are the are right they doing the everything

that's a the still is we used supply There's eyes wholesale lot So Number positive. our keep on building car no to the side. need two There's a sale. pricing. on

adjustments market, really we that's price to While expect just the all have in we've keep our see that our would yet to coming. pricing to and manage the through seen haven't adjustments just seen to and number of car going we on That's eye some used And two. that wholesale we're way it.

economy you to the was thing April. I of because And bit push a in lot we would that April, one and is nonetheless. confidence it If talk an thing, you, one may could the is confidence back overall. about of fell the first consumers interesting. how car, are credit tell awful interesting, then we on third of half new but just further. consumers just with that pressure out availability further even disappointed up, car start consumer this that fell non-sequitur, a big consumer again and in internally see second and the just purchase side their if half a the didn't of Listen, opens need and timing then car it's cars don't It's even overall new

we've how has our and e-mail the asking research some impacted consumers about purchase doing As internally timing. them been with COVID-XX their

up who think actually should is that the and think us, of search researched responded I have said that in-market perspective, Lee. the the Now it wrong, do to XX% we them that say. it where It's to think this to that you trouble that us it, me to we specific get if they submit go you're do sample speaks the didn't to I them lead, consumers attacked the specific significant. impact of Because market from of through we've point or readiness services. market. a the the to darn have representative don't probably a either Don't close of XX% pretty going timing. think our but to full that I to overall way pulled transaction. I you're is purchase uses if their is the And you're somebody

meandering a that I Lee. a know bit So was of answer,

that car market hold. I have think new that the I hopes will

happens particularly as well Washington happen, we're to hearing the industry, I things seen think the potential the on good the new Washington around And we've support of lean support things when out automobile need certainly car industry. and what the good folks in side. in

SAAR So we the rate. about good feel

five last context million, to million think not think XX.X could I number. to is in the still million steps million maybe robust good of XX I government that's XX.X number, a If it in, XX go years. But the the a higher.

a it's market With million still us. cars, the million still XX okay. to It's XX for decent

So answered hopefully, your that question.

some Yeah, guys. Thanks good taking that my color. was questions for very

you. Now, thank

comes Ed next the of with Ascendiant question line Woo Capital. your And from

especially Yeah, in thanks eased My question not for do any or particularly And recent have is, perform, lockdown? the have did state? trends your up, that of areas you places that my some geographies trends how the home taking have question. with a differences in any seen notice in you

having given you see definitely And And geographic a area, of you Yeah, question. to and trend as the Ed, bit. put interesting that sales. it the have see starts It's retail by in seen really we've market. get is you seen up the negative is interesting COVID-XX in And in What's is hit, orders a terms in on it – we see as upward get crest then what listen, lighten hit definitely that case plateau then of the declines be place. There's that. too, market sales. though, the stay-at-home really rise impact

it sales metros this. vehicle of be how major to waves in about terms are how it we're And the talking candid with our so And come waves expecting for in And matter we're business, preparing of clustered. of we're that's internally. because quite To right, major you is kind of metros. for

But get plateau up, that back we data. looked things point, half, be is appears mainly to to right, than and April start we're something of second it us. new the whole kind we big cut for say, Again, be that as one second that's close were. get as were for data. that January, a interesting is And in historic has rate I terms February. an the big half, to which to example. they month of into half think back and York, we the for Texas is to of until because been one reasons. this rates close kind market sales. market in do to to It's go host normal of rate going a close March car a of were in relatively January kind as We Texas April, New first nearly of from just hard, obvious of the that normal, first open Again, we half, hit the thought each end half, seeing normal we see

of beginning to the decline. March, At they started

half second really down. moved The March, they

The there, were they and of low. they April, first held half

line Second markets to of it's in been half would of gone some big on that getting made, then a was it's the Ed, kind our these initial regards the of thing, kind the learning how April, when back. the say, and place seizing in of curves of the interesting put one as And are orders of the too, with these we've all to going new to up stay-at-home some That's that where everything take orders because look go through market. clients a coming they with on, started there's markets loosening watch a environment. I and at well time how if stay-at-home a lot as general understand you the this in – through the they operate local

see going we're we answers, incredibly don't car that. hit are We to then dealers kind to preparing We least think to – in how But retailers And internally. claim is And And listen, know who this resourceful. again, that's are incredibly the see this incredibly, environment. up. new the open then operate it you of out back resourceful, let you figure me that's – think in have all we're but for at seeing waves. us thing at how the least it I

color for your situation. Well, Tampa you're while in here. to say It's the for from I dip just a something you the hope in that's Great. real do hard good And could just on stand want to California. us toes from I California, very that

Ed. Thank is your point No, Thanks, Ed. to that –

guys. safe Be

be well. you. Thank Yeah,

And Barrington a Prestopino follow-up from we do of have Research. question the Gary line from

give a program. Yes. quick opted you question has this dealer I want back this or your have dealers America? any they out many how idea to going Can OEM of just across us North

I not good off know be provide don't at their head. something that's asking our leads of clear to program. I Gary, not a going with the dealers of to They're too. question. top my And out want third-party to They're all.

whole They're to It's now. the specific just they're the not thing thing us. So shutting whole shutting down.

tell circle And say I they're you back what one. so on major a I'll OEM. can this, I'll Gary, that

– Okay. just I curious was

ahead. go sorry. – they And I'm

next and P&L cost get just and guys they take? OEM the question leads. for to No. dealers just third-party leads get idea that leads, my sign hitting to trying all the charge then an Or to your then on how dealers out OEM, OEM the cost their Does this curious to I'm leads, is a is paying lead was going your when generation? be these an from is OEM that the those that just takes works obviously, the that flows. up, I is because to and the becomes go

And fee, do it not this may for it that, so and calculate basically absolutely, So none – as lead negotiate per calculate of bulk they the they rates. some they free. do OEMs

mask and what multiple in them. these is programs other fees services. it they marketing normally will they with of run Some Because do components digital inside

program. dealers kind not certainly they're free. charge of transactional And whether not their they the fees, the it fee, OEMs not a money so for – technology are they They're doing on whether losing charge dealers their

different and pricing retail where positive because with clients we've So clicks. we story ways, for to bunch very the they been of right, in can of theory, go a control side and this, bundle over our actually is in get actually doing program direct when optimizing relative the side, rates, been we we've particular, our a lead also our on a it with our think lot they

them partners. this X,XXX client clients. specific team imagine, because just has. they that of from for participating of Gary, great really can text really, We me got good hey, a unique a you appreciate build our build that And of again, the program. can the is them message members, actually, clients kind them got bundle just to But in team ways, a are job, everybody great of to when these as of the do clients, I've and opposed programs, we think a the directly me, We behind go my attractive show better than the as get cookie-cutter one and certain of OEM they franchisees I they for in wrong. needs and don't they're all And services number

Okay.

is this pretty So OEM. a big

you. thank Okay,

Yeah. Thanks Gary.

call session. the our like this turn I question-and-answer closing time, to to this Mr. At over remarks. Rowe for now concludes would back

blessed last that call. Well, this I'm business. thank But quite our transitioned to to take frankly, of But team want I that AutoWeb has the proud This watch each feel the you have to really impressive really that facing really we to the clients, specifically, challenges work really is the We right everybody. doing. stay last of I and time say team just in take continue team years. these the the XX the and care of to proud to also appreciate interesting other automobile challenge to been communities. It's I'm delivering Look met two over do, focused we're the those way days. that again. forward of be now just and you, really challenges to rise talking and the to care you joining we're an meet value on just the over

work And when call joining you just for look all everybody. been they've to thank on thank you about say can I we to say talk the So appreciate to team all call. I the want to care. to forward for the Thanks, next want talking I and you doing, earnings Take I the great that. QX.

conclude call. this Ladies does today's and conference gentlemen,

lines your may you time. for this You your participation. disconnect Thank at