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Whitney Kukulka | Investor Relations |
Marshall Chesrown | Chairman and Chief Executive Officer |
Steve Berrard | Chief Financial Officer |
Ron Josey | JMP Securities |
Ladies and gentlemen, thank you for standing by and welcome to the RumbleON Second Quarter 2020 Earnings Call. [Operator Instructions] I would now like to hand the conference over to our speaker today, Whitney Kukulka. Please go ahead.
Thank you, operator. Good morning, ladies and gentlemen. us XXXX conference financial joining RumbleON’s to for quarter second results. you on call this discuss Thank
company’s Joining me Chief of Relations on will management which Chairman taping details Relations RumbleON and can the at website our commentary investors.rumbleon.com. call today Executive of on our and the website. are the are section simultaneously Investor prohibited on the and reproduction Officer; be that call call available Please Steve conference consent. expressly webcast earnings and be this found section Berrard, of results of Financial in Full prior is Chief Officer. additional or Marshall corporate This release, property written without Chesrown, is note Investor the other any the
you involve I following results cause uncertainties limited to actual Before would the discussed here. forward-looking including, future remind and risks materially to that opportunities differ to like financial but that statements, start, results and RumbleON’s not from contains those discussion may we that market
Also assumes following to on expectations that in Additional found from of questions measures. statements whether conference law. as update differ discussion as forward-looking new actual in forward-looking except include financial to based and results no as a may non-GAAP be developments this and the of or call, responses today RumbleON by required cause result filings. to contain obligation revise are risks periodic can statements them, current SEC RumbleON’s could or otherwise, The your information
now, I over the reconciliation periodic see non-GAAP filings. For to And our call of measures, please turn these a Marshall. Marshall? financial will SEC
the several We’ve today. and And for you I'm to Thanks everyone. ones your that solid march the on hope report pleased morning, I our healthy. progress are past generated profitability and staying to Good joining we set our sights challenging the quarters. our rapidly $X margin loved Whitney. call we safe demonstrated XXXX, Thanks, in macroeconomic our profitability. despite demonstrated first RumbleON achieving history of backdrop. income ability time million our reported and the on positive gross net quarter In in for to double-digit and scale
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to are industry challenging reporting, supply circumstances. had competitive, than emerge in Consistent thus by profitability significant Very off, demand to nimble the trends, us experience facilities model located Between severely has business proliferated stronger to We of in turn imbalances, damaging in team's fast allowed to perfect enable changes we across on make with decided and progress acquisition the our our in inventory large is trifecta before us advantage. tornado and believe to that and Further, leverage Nashville may in the goals. see country, our able auto inventory what dramatically we make great the to inventory insurmountable, and quick industry us because to expensive. struck Off cuff, fluctuations inventory inventory but past Nashville were continue a the in others portion uncertainty a management ever. this our inventory COVID, damaged we but our hub. due made the will or our reduce uncertainty. of a and pandemic our of been expense to destroying continue adjustments towards to experience early macro We at COVID market pandemic, enabled reduction operational we have our near-term sell sound
been fast liquidate and our inventory being truly since on turnover over-aged is moving advantageous profitability. they mark-to-market are a that Our have means it's hands and inventory have around decision quick valuations in we to inventory on early our our today. inventory approach key depreciating as March, has don't Instead, turnover to When resulted mark-to-market.
We continue bottom improvements. to and prioritize margin line expansion
approach focusing a we on So highest margin acquisition, taking disciplined to very vehicle available. the are inventory
how temporarily adjusted align purchasing levels quickly and growth reduce with discretionary to and monitoring while to metrics determine adjust. conditions, demand to we Additionally, when key closely market expenditures and
margins. in All our of reflected which are QX
see customers. important Through insurance received from company most tornado, the our losses we the for of first the our and employees bottom proceeds of our sustained priority all recently can you is which the line well-being this, We some in also our from of results.
We travel social to have taken eliminating policies. provide healthy working a including for implementing implementing policies steps environment, distancing non-essential work-from-home employees, several and many
XXXX. we planned, hope we this such, in but as did return to As year attend Sturgis not
proud past made and changes all model our expense accomplished amid And prudent challenging am decisions times. changes our in quick I of operating profile. for these they've and several We with everything especially team to have months, those occurring the
and XXXX, COVID-XX, X, RumbleON March allowed to market orders we back growth soon on for issuance XXX% position aggressively. long-term. time industry stay-at-home so ad model and due respond of we were dramatically, thereafter tornado over the Our the profitable in to spend did sustainable, we to as roll us online swift business the the and changes quickly to of the At demand landscape
As it into the spend not were true gave future who acquisition results cost had X.X, for better-than-expected ad The of it massive QX thousands which of dramatically of returns. we down and we from an of vehicles out, improvements as consumers will amount $XXX led we view benefit marketing realized. opportunity by build their $XXX, vehicles In as as it to early in to rollback the looking are addition The only demand being although ad scarcity. to us began perfect the July, dealers customer support obvious slowdown, as listed another our young was and idea traffic, ramp accurate QX, In in of increase also cost inventory a vehicle control launch company. quarter. dealers from there was acquisition customer an available, Further, on for a successes organic did, RumbleON and we'll consumers spend site, are was our of our spend our a during baseline played of prudent for rare XXXX. the to navigate spend
our to organic addition the ads, inventory expect we strengthen to traffic. In paid aggregation new
experienced to sales sold We of margin channels addressable of results and the utilize brand gross January prior of to as downturn more and In our the the to in in are than of acquisition April's than year. June monthly April, January of for the direct what May quarter. vehicle April periods. additional to was on pre-owned XX% And month believe from higher guidance, progressed. June, increase providing down thus as began decline accelerated. show of of We the lows below we our demand offer building we volumes our Though, improving over don't in highest acquisition we want our were our begin for inventory ramping gross markets. inventory June compared and sales scale to month experienced improvement increase in from the as and rebound units June was from By Total this unit The we has response QX we and we returned, increase monthly experienced about in May, largest mid sales conditions month lowest and unit April. expect operating We history source has XX% bottom level efficiently levels still of are expected. the begin end our trends a our to and margin February, sales July increased and income as May unit velocity XX% the not believe the long-term. from the are with unit the some quicker significant July sustainable Since level the color levels. slowly began far during April of and
However, demand and our we In we approach per gross margins the profit March will continue unit do benefit disciplined expect to our take normalizes. towards to a profitability continue goals. as stabilize vehicle near-term will meantime,
time. could the is we as in demand, some anticipate industry, are there our seeing usual still increased uncertainty take environment macro we much impact While the will that business return and to
COVID-XX we new around industries a navigate all the dramatically world. all normal, transformation to the has across learned accelerated As digital
on transactions market leading bringing stay access of didn't look now are implement and all Now technology strategy buy new online. built early or at rapidly it online. build to reach competitive customers more purpose need operating businesses consumers ways to technology ever, the Companies to a transactions. online All and and need RumbleON's and their a technology this new environment. was online retailers process. took really and and new dealers in of streamline invested are in Those to digital simple normal experience, to exclusively who hard solutions elements than need and enable technology in XXX% that tools
increased super add multiple new excited the traffic are of content and to drive We to dealers rumbleon.com. the
services capabilities help available access similar launch will inspection leads only tool, and to high dealers to higher and platform, compete centric and offer tools, the coming them digital greater quality likelihood products days, quality logistics, the ability them will transformation. transactions to will dealer to the improve them a all RumbleON conversion of powersports listing our services cash of in generate X.X With participating tools with but will bringing consumer be and financing, that online the sites, in for dealers, bringing offering give RumbleON's and best technology We're technology to are dealers. powersports their leads transactions. enabling only ancillary we not our online RumbleON sale
online request of dealer their with consumers a them, to the in from the many first. who of Every demand than most have this added transact we For dealers at functionality this a We will rather are be struggling accelerate showroom. excited is clearly and to will incremental they’re looking sees online launch rumbleon.com value and powersports as the opportunity generate approach capabilities The with significantly this to be our only. presented and sales. in to improve
anything traffic, States alive ready and always our marketplace. of go and and rumbleon.com, monetization that effective anticipate and listing boats are and monetize autos, for fees, on and Rumbleon.com opportunities participate support in including all XXX be will our rumbleon.com and rumbleon.com in as once distribution X.X more acquisition also thousands keep vehicle launch several we to new we X.X, the those one technology backend mind, fees, quickly we designed powersports across will verticals. will improve growth to creating site There core further which maintain was the be In announced listings, franchise we a incremental we anticipate when dealers available advertising thereafter. logistics, independent online margin experience. X.X content with ways we and However, increase the tremendous transportation, even, will technology, July, can more. than RVs, with of while of we're in consumers tens XX used These offering continue scale accelerate powersports on in dealers accelerated thousands listings our customer And fees, to business.
the continue see mentioned in our enter both is our market have today. from distribution is powersports appropriate. the we opportunity and we model powersports RVs where in As business to And dynamics segments fully intend scalability paramount. similar meantime, in when to the in as In before, has we are those incredible automotive and opportunities dominance timing at
valuable trades the early were there of In more even backstop dealers for move. best allows anything space, to them to believe automobile with the our business, RumbleON in strategy over part felt with a was today forward. timing that grow and much the and and manage the purchases be wholesale as step long-term seasonality Express XX around and which the more distribution assure last we building Our XXX,XXX of questions profitability shifts successful ability vehicles this a online the even platform month to profile a our VIN at continues inventory that Management days first meaningful moved more is will going our for many effectively. X.X. consumer entering business of so and time to our Further,
we inventory, many has talks finance, inventory. not a and led of And during commitment in proud investing COVID. to thing software strategic more our onset tornado Building the platform but commitment to and lead and and believe trade development, that relentless best-of-breed many. are dealer's own our and now our that the sell, from going even down relationships ongoing in any investment we of backed that with just have ability Due fact, first one only RumbleON is will forward. continue We to development to we now we distribution in technology never to technology to buy, loss
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rapid we were and overdrive. feel kicked of rapidly, way. into technology propelled We will has handful sports COVID-XX a beneficiaries with our rapid both There lead has industry and acceleration have this accelerating and power dealers our transactions in already strong online agnostic strategy relationships model and our From the our expansion automotive. business of the but are perspective, change, supporting
Our of entire team we to happen, our have make Directors. future, about and is the will management recent especially with of team that the before team confident, is excited professionals never like Board management and highly experienced it additions the
we to Our they forward. well industry are the are team is versed organization team a members going We believe participating will and disrupting, already be way. in leadership our the in instrumental our of newest big
business key, clear shareholder loud and Lastly, revenue committed to and achieve growth I and want to stress to that we profitable sustainable, value are profitability our managing is deliver over long-term. the
dash. we results. Steve history, goes, yard a a in Steve? running same left X-year with the turn are we As our marathon, And the not financial over starting to I'll dates. feel that, short XXX barely call to the we our And have discuss
Thank you, Marshall.
QX issued results Our in detailed we press are release morning. this the
towards some address So profitability I will progress achieving being metrics and the targets. of key made the our
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$XX resulting has at of for settlement insurance Under final July and to against million. full our XX, recovery inventory has a on with June coverage recorded insurance We continuing We we including held of our in review damages continue XX, advance XX, damage to operations accounts inventory $X.X inventory carrier, our the the insurance. and XXXX, for separate well the claim component approximately the an as from damage of the facilities, On by this that made included sale. loss maintain The the business income to assessed impairment. coverage insurance insurer as and the covering XXXX, X-month Nashville period been been damage we million. the June is on from as carrier And value receivable interruption inventory, at of for ended were full view facilities XXXX. GAAP, maintain
to Turning cash.
focus sustained our achieving increase to We liquidity cash cash positive goal quarter. we move $XXX,XXX net QX, generated in of the strong we operations. have closer a preserving during a on as flow In from
is $XX had of $X.X cash, next under XXXX, million As of million of $XX.X approximately August the our million year XX, of availability approximately company remaining restricted line. credit and which
our the expects insured the losses. of company to Additionally, remainder receive
amounts, will any, given regarding when be recovered. the recovered, will ultimately However, be can if that if such amounts, be assurance any, no or
As and we continue will transactions, margin high that X.X maintain will rumbleon.com driven With our Marshall generation. less profitable to model and focus business revenue current disciplined approach on commitment. data capital we incremental our our participate require and to to in created discussed, transactions to be
impact predict customers, the the overall uncertainty others COVID-XX surrounding regional pandemic, effect conditions our work RumbleON, and we to unprecedented we cannot ongoing the partners, and that with. of Given the
gauge we impact to result, better clear continue lasting have COVID-XX and a believe market the understanding from As it's guidance to withhold prudent pandemic. we until conditions of a can
still we towards far progress work have flows. of making but improvement financial and progress in profitability, And and drive to on to the near-term We cash our near-term ahead. that made we've sustainable we our positive march confident the generate value. flows steady but as beneficial use are and is sight, always to Thank in looking long-term our profitability deliver We're objectives, thus profitability quarter the positive are do. We view cash target committed sustained growth, you. cash line catalysts we shareholder during and profitable our are
now open call Operator? to will the We up questions.
JMP Securities. [Operator Instructions] line comes of Go first with Our ahead please. from the question Ron Josey
is line Your open.
question. one-by-one, three a taking but Great. go we Hi, at Steve. them, and there's through the got Thanks Marshall. can least topics. rifle provide I've questions Hi, for that the
helpful, Rumble the So some That second and June your Understood highest first given question, and about activity And commentary, us the question demand. May and cadence? Marshall, can maybe give you just X.X. then April, on strongest just is online August. talk July but commentary would around quarterly on the insight be
one benefits here. less you on a makes bit to the focus that the in Can of needs just the this the launching about to what you next just Steve, last powersports only, little reiterated was to said You then of here, coming that's sense. on the just days, the question, as And auto? then, more case? talk And you expand commitment sort to hopefully why expand margin focus rollout happen the
it's dealers more a a expand Massachusetts, just on Just some inventory, customer how about CarGurus just update be pilot how specifically, helping the would on -- and helpful. pilot this any rollout provide is how product? you feedback the process, just helping CarGurus, but I the terms could maybe can think is talk in of promoting source CarGurus
then Thank cadence, quarterly be CarGurus, margins, and and So you that'd helpful. X.X guys. Rumble
we what mind setting tornado. May the Okay, and where the we great. as start is in of This is of for April but we Keep about Marshall. take cadence time COVID, our been with short COVID to Yes, the tornado tone headed. automotive I'll slowed I of XX% of and into just the is loss, would we beginning. I'll as June prior still described would it's the inventory, to far with there have a capacity down when lost And had think thing, due -- kind period sitting one COVID for demand. have
to continue a vehicles next we'll believe -- So couple to very manner. left efficient within very very small -- a through in here those very, that efficient work percentage of liquidate. and a weeks, in We of the have
believe said, with least. inventory heard you've Typically say think the we're vibrant because of I out vehicles. their new lack that because has to last, of has -- demand I thing. been from amount excessive. others, the the that So XX say of Business experiencing The dealer the same our there in dealers vehicle purchase days, we'll of Xx see, on inquiring been
software so the the We have is vibrant And turn inventory seen we a of been as it. developed lot way. also as along
I in to individual discussed inventory extremely can been couple ago us opportunities, inventory big look developed it allow and way. software of quarters of that very masses has profitable tool sometimes a we utilize a at software acquire And effective. about that in we that and locations remote determine does a and think we very, that today
we So a demand I'm we're said. see website whole, And you really, significant. bit, else really don't a whack. us well truly lot It's really why when as market as And what focus on on emphasis normalization, powersports website opportunity we a we Number powersports. one, and a always X.X rebound perspective side. in were different year, original the it again, on normalize what from saying is the like start what glance that The the as excited quarter of from But gives to share the left. still but anything about know, and are we launched any powersports. see not QX, And remains we little everybody are few it kind hasn't the high. our a especially kind starting grab. we the way of last can really starting Values good a with of to little out things. at is the the as reason of have we VX was value a launched but company we our there's competition do, of and
proprietary tremendous -- very a We powersports data our in data offers into the the cash is also have we've regard. that we amount that the million in redistributed that of of very, $X.X and well now excess marketplace, have from provided robust now
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a a side. piece to second They believe CarGurus to the is automotive the focused. they're on list, lot of And dealers as the like that opportunity We opportunities purely because of why second. on is The we're well. the in going able leaders about talk they're with looking in of them be to space. looks there addition automotive what are And forward for
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an does we've RVs. that add So segments. people people no same as today do the online as talk and me best that and But lead to we the know, we what in perspective direction consistent the you us. transaction demanding and be not other many competition heard that might was online going done that quickly you've on buying we side that with had and the powersports That with felt that on everything mean the in from of using to the past really regard is the able RVs, move times the an want RV of boats Boats almost there car about are really business. are for
today, get all the is, can the So think be be. system. faster to, there, put into VIN X.X an able we'll we still automotive the better off you'll we you can
baked say that cash in when just second still was in previous we -- functionality just day, the on your integration the vehicles or yet. and version, on advances we the a and through launch. following primarily, there some the can hundreds next dealers in thousands tested technology current a well get and the some And required completely as the into working both and It's we working will days, on -- You haven't finalization to We're thousands of some integrating car, challenges. all because few of ready offer platform, launched as X.X roll.
any of these unlike on a powersports side, lot technology not automotive do side, the of the level the guys On their end. have
adapt we've a DMS. even hard inventory so website -- and being plethora call the to supply them, we've some to able to had push them rest from had into of our you'd be DMSs been And to of
well role to types strategies and met things. we So ones the onslaught. relationships we've different be answers quarters be we that mentioned And tell the are CarGurus of dealers time. and know us the that and those we've constant them of in a and how down the We about it. see now contact on, for we we we've future, with about discuss I because whole see negotiations for things lot real think of that future hopefully this last about different and companies been a you probably wouldn't for And talking -- very lot very, can't the on both a ago what quick. and what I to been would first strategic and be those -- you other the MDA. a piece transacting right year the we it the are and CarGurus online us, in be. to might But of of of we've -- we're be agreement lot do we that couple internal knows that working on in future got obviously that CarGurus road through careful CarGurus, now
And from the equipped, responsible nor be dealer have very prove of effective or -- to we a certainly point auction vehicles, basically are So in our this title not a whatever we and backstop. nor a very, they it, might distribution it are then these things trucks. lead in position take And became a dad's equipped they to the doing do whether for now from a be. to of a at do moving it and just mom want like logistics a by dealer that an of test amount. where right pure be or to giant They're cars motorcycles, we be are house and redistributor we numbers
what one, is we Finance. being consumers of us and day, people going platform can is. is actually is easier today your no one talked whether quality are to and do like out preapproved forming to in I jury mistake the leads end blue that us be just -- they place a driven the test into that kind calling the jury a call functionality they RumbleON to it's as CarGurus click -- go normal comparison to we've the judge the opportunity judge want all has and a your the business what openly about home of few us. And of backstop is and make in But hands that without knowing model it, industry. new with all to Very to And Carvana at and this mortgage all think we than that was out, partners or they have see I the buy. And is for things And These it, it's that the is that reason of by So but for a the vehicles can CarGurus what shop the things proven be to list more regards that to question sales. leverage, incremental dealer the the we and when be whatever customer's we're throughs it presently consumer. service. a the their same whole to might of generating now huge going get have level supplying don't for and that work is about demand We means is really have. the transact that believe all of, the
the things that. coming a CarGurus, great out to And we so of see some long but that's answer
lot going be we'd great there's have and opportunity We them to things and think a think lot same, we relationship that we're like lot. the of with at. a do We We like a them. good to
the and on automotive a pre-qualified leads and -- of things, that the a level to lot finance have ever want of not there whole because be be to could we're be all and things to we're going things level space. all be offering these those to steroids whatever these motor done service able to in We that testing they we're might tools going and all And or do things. powersports this be can. of service going to we And dealer huge might are a to do, provide these
whole that's market whether both, or bunch the winners. them Now big for of us or is plenty a
those. answered I hope I So
the financial You answer to question? want
those not Ron, to Since with pay allowing on We've we're that bit sold many people a market, able those think us XXX,XXX just to If touch respects vehicle. approached we've I we little the offers. to in margins, tools cash for have and looking Marshall those also in through plan. the trending created, go yet changed it our something received. the go back we're offers that's the solve back that
and after we've our buy Now we've Wholesale it growth driven expense margin we're the link what we well top how got is not we business disciplined integrated when more we chasing necessarily buy in margins, of and been pay much fact line the buy think We've in. at and the plan tucked that that I more it. changed
it. That's great. Thank Appreciate you, guys.
one regards saw the different. is look before, And if I at you the say being me name look Powersports versus was X.XX. it, don't SG&A more in we competitors at that primarily dealer reason you thing. marketing, remember again, comparisons. you expense that dealer XX.XX, think fast to are point And mentioned gross for in I have we've to QX I margin, a the dealer normalize, heard out infrastructure, powersports and normalized at is it of what Carvana again, guys feel urge in our because that but from if as of what Vroom people, we able reason, you -- will only they're but regards ultra and I driven. the do does, been everybody whatever I I we're at earlier sale yet. turn with retail a this CarMax, inventory because with because Vroom and it gross yet the with the XX.XX, the margin. Carvana have to might do car at to RumbleON you not just numbers. one-third that we to world add, at create look Ron, to And tell has ASP And a demand. results spread as that's it's and a QX high extremely I'd wants of might -- sale, but think I likes add would have space, Obviously, of And
from So with else anything that's -- Ron, that, is you? there
I'll you. just in back queue. Very go helpful. Thank the
you we joining. And conference. thank with We ladies today's that, and do gentlemen, conclude for
disconnect. now may You
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