Earnings call transcript Q1 2023

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Operator

Greetings, ladies and gentlemen, and welcome to RumbleON's First Quarter 2023 Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded.

It is now my pleasure to introduce your host, Will Newell, Head of Investor Relations with RumbleON. Thank you.

Will Newell

Thank you, operator. gentlemen, call you quarter to results. and on joining XXXX ladies conference this discuss morning, and for thank us financial Good RumbleON's first

me Chief Financial Chesrown, are Executive Joining and Officer. call and Officer; RumbleON's Chairman Chief Marshall Lawson, Blake the on RumbleON's today

and first today. results morning quarter will filed detailed later Form issued are be will QX the press XX-Q information Our we available release in this supplemental on our be

statements, risks the Before but we future to like to, from discussion here. market not actual including, start, that those forward-looking RumbleON's remind you limited materially cause following financial contains that to results and I'd opportunities may differ discussed results and and uncertainties involve

in that filings. actual Additional could RumbleON's from results and cause forward-looking other differ SEC be information to periodic found statements can

statements update of a current of expectations your law. this including conference The risks required as assumes revise as to as or or in them, on by call, result no questions, based forward-looking new responses and developments obligation otherwise, are except RumbleON today, and to whether

the financial measures. discussion non-GAAP Also, contains following

please of measures this non-GAAP financial morning. earnings our For a issued reconciliation release these see earlier

Now I Marshall? Marshall. over will call the to turn

Marshall Chesrown

took XXXX for powersports. RumbleON's X QX the priorities encouraging position about that the just in Thanks, everyone, morning, continues macroeconomic really and of challenges first we work our economic thank all destination in fourth see the began and for build we We are in results to for to key Despite to beginning quarter 'XX our proactive things call. leading us Will. XXXX. team response as headwind, we XXXX, for the toward our you quarter confident measures continued this quarter Good are of earnings delivered joining and of benefits

proxy by statement Before quarter former preliminary address results, I X directors. filed discussing the first will

working Board resolution of issue. on this Our is diligently

a fire-ready a the is shareholders aim focus not around creating up to approach. the smooth annual days meeting XX over leading and primary transition Our next

You public would as towards communications series be of resolution. we the you I a continue urge move to from positive should expect to company a patient.

comments for metrics. objectives we will all We outcome it foremost without best quarter turning to guidance and begin of the with XXXX With possible decision XXXX first and over our before high-level I'll not Blake will considering that, first overview concerns followed accurate not address important shareholders. have and financial data make to and a with any by discuss our performance and

vehicle have the altered expectations. mention we our year, normal sales this seasonal First not but quarter this back and us achieved revenue and in They overview. significant XQ and In We on experienced are plan weather plan we the managed proactively company quarter, face delivering of over X-pillar disruptions. with slowed line unprecedented have our seasonality of These guidance. bit, industry-wide of March our first for our grow profitably atypical unit and XQ the in new these course April. to a the down through rebalancing to factors not headwinds in inventory difficult

early in QX, we March, continued April. point, which and into appears bottomed GPU improvement this have saw To to in

tightening XX,XXX negative in We slight credit effect a on expectations. vehicles in However, our and customer new line and had points April. affected our in price with sold used in lower-end the units lower QX of units

anticipated. the that last new XXXX, XXXX, Recall rapidly our to used used OEM. inventory units room reduce of with leaving new pre-COVID today, than more to inventory as new wholesale We took year due measures data a aggressive value. the manufacturers signals units back reduced of of grow reduced us saw our to stands we purchase lower we normalize inventory of As half at than level in of the

$XX over on we speak. the overshot inventory as again 'XX. by Also, high inventory October The used probably good in we stated, are is, a as ramping news by used we million we from downside of reducing

catch 'XX a story. and of our would this season for we to 'XX, is in quickly to We demand expect lack peak up time consumer selling just not Similar as prefer. not as

we are buyer revenue on at seeing that credit However, ASP our end 'XX. near but seeing dramatic from the of nowhere a clearly reflected tightening, 'XX in and volume. unit less some increased lower targets is perspective the is level hitting That

pace continue on first preservation. conservatism to fulfillment capital quarter, at albeit build slower we out the In our due strategy, a to

are will be Pennsylvania. to for largest term. launching in will yet we Bristol, our and announce the open buying This our with in new entry excited center public selling However, the soon we center Northeast be to first near that into the

be predicted, saw the uptick encouraged new first supply we in improvement the we the in modest by inventory continued April. March further average impacted sales, by in to are days an unit in that but quarter economy, As GPU and and growth

balance given business prudent control in between expense We our current on right focused economic the the investment and are intently environment. striking

plans comfortable from Prior our tightening consumer any unit to level. call, We significant some deterioration third-party financing have primary with partners GPU stated for this have not this target dramatic credit current of in to do are approximately per XXXX further of at that time. additional they no $X,XXX and our spoke they assuming we immediate

priorities Now for moving our XXXX. key on to

organic and growth. self-funding, of We are through of X focused strategy. accretive lastly, the share and M&A our market debt, technology reduction the to improve refinancing and experience; continuing immediately in increasing pillars on customer

committed to a business. we're First, self-funded remaining

million estimates which Blake implemented opportunities we of expenses. of reduce upon additional stated, previously million $XX As We $XX are expand further. and million will strategy to $XX this cost-cutting accomplished identifying to a with now

effects reductions outlook the reiterating of we these and the provided. SG&A the We year remainder flow are the of will through see previously

and debt. Second, we the refinancing are focused reduction on our of

was and continuous XX, was liquidity million, as remain million, As bank $XX of March cash improvement. comfortable our $XX.X we and our balance over and we total see

on we of have costs, over financing million. credit to $XX We have unit business interest higher opportunity. line draw our unless immediately compelling will $XX available used million facilities not a liquidity on Due JPMorgan we

Additionally, noncore we which million be identified have can pay $XX assets, down to liquidated of debt.

JPMorgan capital fixed rates leveraged option most debt management good by in that can to for for cash financing optimal time be as work and augmented best with and appropriate partnership We towards structure inventory scale. additional revolving the at over debt business the securing our we continue

with experience. Third, future. upon feature, We as launched which our and we allows architecture, and up enhancements competitive intervals. are with our corporate robust website searches game-changing a now more expanding our the proprietary and to is of our our garage leading-edge storing One for at base will dominance out experience RideNow performance service this will create insurance roll favorite which from and technology. website my customer more. enhancement Think much enhancements improved and we into regular information such record, serve consumer platform personalized new customers new registration and website portfolio Customer a far the RumbleON organizing

Another allows out exciting experience. customer reservation, step vehicle the enhanced a after feature hours eliminating of is towards perfect is unparalleled customers an frustration This a of research. put to commerce missing online which hold, vehicle and on the on true critical

capability capabilities selling, parts such handling as and appointments making us buying, company of schedule and merchandise. the online, and for introducing an only also with service financing, online purchase are needs purchasing the service and powersports the accessories and inventory as We to extensive parts selection well

on, best providing customers enhancements we Our and are committed the with functionality experience technology. through goes and to our list on possible of innovative

we create for online. customers and experiences initiatives our focused on Fourth, remain that in-store better

location. offerings around We and to locations are from add proud and selection new selection existing continue of the at of exciting expanding diverse, unparalleled thereby brands best-in-class the this our our retail to world,

to iPad of selling great our reasonable showroom possible continue everything the the create do current It important and experience is is If within customer showroom enhancements. is location, a we distance online a to many test We visitor. that other and any offline will one.

improvements However, boundary down long towards commerce. our behavior capabilities to geographic consumer march we as continuous continues bring the to online online to simple term, intend with

focused we growth. Fifth, market are through both share increasing and organic on acquisition

mentioned the dramatically elevated Tallahassee the exciting in productivity that that portfolio, we couldn't commentary, dealership into Since and our we our very a excited QX and about As additions. more merging location's location future acquired in be during quarter. we

see strong allocation to XXXX economy. that We due latter expect liquidity capital half maintaining look We but And world the ample in the to forward of in our and and in uncertainties remain is being, would opportunities, continue time priority M&A pricing. the the to acquisition debt reducing beyond. favorable for opportunities more

implementation bricks-and-mortar efficiencies for continued of not a and the fulfillment the sales. service sales see foundation sets side online pure but in We ultimate infrastructure the long-term drives organic also objective on changer. the of game as and only our Fulfillment strategy

the expect service customer will improve and efficiencies Our our sell-through of which all, most improve fulfillment revenue, will departments, increase and we then sales strategy experience. and in

modified are We to have the most the discussed plan. initiatives slowing but business uncertainties due not

around as to in but our prudent would slow might business new made plans be have put, but year real June to XXXX not and much If the XXXX. and since around winner certainly simply wait technology. moves further will We have initiatives we happened point. until centralization spend at We facilities, are on of have this technology space, this fulfillment, it slowed just our this revolve what long-term along the timing have such other, estate and might ventures,

things as determined powersports. the them. way that of point. all others execution have we when of And it plans be The the are that ours future flexibility may are focus powersports some to doing consumer at done lifetime our works while a the that focus in is customers, our like haven't do, before been evolve, legacy expectations, forefront into you demand We we is recognizing of built With exceed underperform will own. It's change. value on business this to

the focus long-term of our best-in-class providing our plan customers. the leading is with customer be on all for by line, experience the clear Bottom powersports destination lifetime to things value

share progress, do. slowed is and our committed The on they work of of throttle We proud business for far team's hard but self-funded plan always back model to and our improve, growth a things market enough has nimble objective the future. are and our when current completely fully our to the increased environment into remain get

hand that, XXXX call over through to With our I'll first outlook quarter walk to the and more in Blake detail. financial

Blake Lawson

and Marshall, everyone. you, good Thank morning,

year our remain and proactive the beyond. XXXX remainder of we to key measures our focused the priorities on for detailed, Marshall and benefit throughout continue As that will financials take

As to we is environment, dynamic P&L team is self-funding my ensure managing balance sheet for our our navigate plan this achieved. and

begin followed review our by first results, our of quarter will outlook. I financial a Now with

quarter sequentially XX,XXX the and down first both comprising in units, sold X.X% units, units, with XX,XXX powersports X,XXX Beginning used total we new segment. units

decline greater inventory. new of data inventory As normalization the we strategic happened of of quarter, compared we late earlier decrease used than September indicated approach from This because a and to purchase decision mentioned quarters. our the faster made in the a took to last anticipated value vehicles used was

we in increase from While started returning nearly inventory date, used levels. to our the don't is recently inventory to And October. peak our XX% year peak the prior as anticipate used inventory used we reduced to acquisition,

prior new-to-use line The QX X.X:X, ratio in with quarter. for was the

focus which products, maintain good remains used helps OEM supporting as both the new status brands a represent. and us partner, Our on our we

As and maintain quickly to cash used advantage a our it ability moving tool a with competitive reminder, offer most where needed. inventory, effectively it we is source to and our

models and cost days more the We competitors us used that broader the of RumbleON maintain options to RideNow, to any show lower was credit-challenged additional of customer to prior level continue closely larger allows supply, those inventory provides monitor This and and array used strive to consumers. of merger. our inventory for a we held than much significantly

units, in priced mirrors that finance due a from as sales Revenue insurance revenue our mix per revenue the accessories accessories declined and decreased and sequentially in sequentially typically X.X% and Total lower to units and with of ATV parts UTV first million, $XXX.X was sold, parts, line sold. while expectations. reduction unit stream quarter X.X% service driving

was In an The compared a tightening in Total imbalances the reduction as X% inventory GPU quarter, side-by-side $X,XXX as overhang, on-road used $XX was XX% by category, XXXX for through and on gross decline due finance as was work supply offset Total profitable to gross down motorcycle. consumer to new brought profit the partially in used first in in in was increase units. quarter. million, by we our the quarter the pressured well slight prior GPU the $X,XXX sequentially. profit

GPU we going mentioned, and the have of products, saw closer higher inventory have February second inching improvements than us also March our GPU benefit which combined used I What encouraging to used was fresh acquiring the We target was XX% half above March, April As as slightly and January March is average. will year begun is rightsized $X,XXX our that forward. GPU GPU. in

this expenses. cut control. up are late operating Since the lag but time results overarching natural from expense January promoted in year, now will to starting in an to always which CFO results, through the QX. visible Moving the expense of see my QX I a focus was There's on is to you ramp we aggressively to

As mentioned, opportunities. expenses implemented are we reduce cost-cutting we to and previously $XX strategy additional identifying of million a now

our to SG&A goal eliminating cutting its and muscle expense business. reduce by remains Our but inefficiencies target, component without the We can't EBITDA key it our waste know the sales we is of achievement. way to that into a simply to

loss fourth in million, total was QX down Within stock-based were $X.X of up compensation XXXX. $X.X in the million, share million expenses color million a SG&A, and of SG&A $XX approximately give some I breakdown Total sequentially. $X expense our loss X% on quarter or from of million $X.XX. a quarter. income was earnings Adjusted was $XX.X adjusted additional the for per diluted will net

targeted Total utilization of in to anticipation sequentially. that drastically due XX% spring well season of sequentially, cost X% in professional the our roles as second the select as increases selling were Professional of services compensation service positions higher lower strategic half corporate sales increased fees XXXX. key decrease in and will in primarily additions headcount

slight in expenses the We decrease prior also quarter. a compared saw to G&A

from competition. labor Additionally, we inflationary pressures some are increased seeing and wages market

buckets facility employee number a replace to benefits, include additional in million. number change, reductions two, reduce partially own be our we positions; reduction implementing in obtained by three, one, offset a renewal; and vital services to to freeze expense with non-revenue-generating fees. which through we workforce hiring workforce. our through in $XX as are in number plan the small Starting million achieved expenses legal reductions annualized by These were our increases professional Subject annual outside will QX, internal fees compensation and expense an $XX

to opportunities Additionally, as we market the targeted have dictates. expenses other further reduce

driven record Adjusted the $XX.X the peak in the SG&A EBITDA which and demand units fourth by million economics. continued compression has and quarter, the from lag effect margin pandemic by from reductions. supply at XXXX was usual time normalized from and of was GPU XX% down first on extremely new favorable used quarter driven

partly unexpectedly of experienced used inventory came with from I compression November the As previously, we inventory buying mentioned new believe through February margin was rushing as aggressive the severe just of we back. QX XXXX, self-inflicted into

EBITDA mentioned, EBITDA in I increased seeing positive we As over are of signs of represented alone GPU March QX. and total March XXX% for April.

experienced Additionally, March similar April. to results were in

to to sheet plan with JPMorgan and had $XX quarter, of Turning million million At $XX.X used million. balance end unrestricted the we and cash capacity the flow. the floor with unused $XX in of facility cash

can roughly outlined our $XX had with million liquidity unfinanced used plan. available equity to We of combined inventory, our in business that cash also unrestricted provides of which as be in the million $XX fund used

to letter a signed have we initiatives quarter, sheet of review last engagement and balance options. mentioned we our As with JPMorgan

in so with paydown ready we focused the are back to they $XX of service and mentioned, We the Marshall identified for on, Moreover, to operating agencies profitability that XXXX that flow. debt. an without additional course we remainder work our debt for the and million we remain of noncore which will open allow go principal the $XX when as working We generation we credit closely million actively to cash XXXX assets are over cash on impacting rating to and our have of markets for additional business up our JPMorgan scale as continue business.

on me for our provide outlook XXXX. more details Now let

revenue powersports powersports $X.X compared and $X.X XXXX. transportation to our the reiterate full billion revenue of of guidance year, the billion transportation range billion to of and total For within company we $X.XX in

which to to ramp we GPU in in continue $X,XXX achieving of target XXXX. toward the XXXX prior up our compared second We of half anticipate the $X,XXX approximately year

reductions million we any gross We are to financial for $XX by of so. needed. as this by covenants maintain with in to to reductions. the shortfalls adjusted remain our have margin million and believe with compliant strong driven SG&A we expenses guidance remain a pressure comfortable relationship debt We as expect our We plans with continue EBITDA we offset fully $XXX offset further lender, with to XXXX, flexibility and range

back closing I will for now remarks the pass questions. the Marshall before for call to call we open

Marshall Chesrown

Thank in are you, There and the our recognize relentless our and through best at strategy. to Blake. business there's know, right committed to we plan, moment noise with To is we doing results change to incredible are execution. and the environment now, challenging out to remain strong take deliver our focus I a close pillars you value. lot out, and our as a X to We team RumbleON. long-term no on want fully of plan forward of shareholder navigate a drive the marching thank and there

We are and goals. such fortunate towards talented dedicated have group of individuals together shared our to working a

for I With it will that, up open questions.

Operator

comes Our B. from Instructions] first Eric Wold of question [Operator Riley.

Eric Wold

be I the guidance? one When open is that kind How So the that couple you just location you questions timing around of details two be public? guess follow-up. a haven't do before? that and subquestions. to will and envision of give market quickly for a How on one, Bristol, are new in large source I color included tapped center used? the you opening can that inventory of in more can the will and fulfillment guess, you that for And

Marshall Chesrown

there on. a me But ago, -- for question. lot XX morning of to kept we questions everybody this a wasn't wasn't comment -- since already to good my Okay. spoke Well, in added a light you've whole comments question. compared war good lot to days I there Yes, there. We

market one, XX, million Number minutes is north reasons. XXX-mile a XX the It's for whole approximately -- XX of miles XX of from circle about As far lot there's a Bristol Philadelphia of location. downtown the the as about people within intriguing Bristol the market, about tunnel. around XX that and

So incredible. access we the is pretty think

is miles with distribution Our Philadelphia away wholesale facility. X.X partner their

it. super about excited so And we're

a for are costs into days. of getting and consumers. -- I vehicles in within the of we that access just Northeast, of Obviously, garage they're think pretty We Southeast. there main we'll weather, and high-quality in direct is than our the in vehicle complete They're buy retrofit is the that from all up small process and facility. because much are have which manage like the vehicles say training But where of always And hiring of percentage we facility accordingly. things large the start with the two those better-quality the come out and a being that they're much kept

As far included that guidance, as mentioned we've past in it in our is calls. not

think along again certainly the million. $XXX at for So we look adjusted when the April, our guidance can and we've month will guidance. I in to the think of we're identified We reductions that some additional I walk look comfortable affect we already and outlined with March that EBITDA we of that business, at be retail that with that these opportunities, expense our don't think implementing you we've

Eric Wold

it. Got

last going that on to and correct? be one new is piece Just used, It one.

Marshall Chesrown

new just made -- the it Well, No. some franchises. determination we mostly and lines representation, existing go yes, buy has out secondary we to not because did but

in product by okay? getting our any gross processing will is of our we have regards capability opportunities important of our reconditioning to to those to to right part preowned closer This group. facility that most the today, But say improve profit we wouldn't, Now have entire products. now isn't the facility with

Eric Wold

powersports do for of are want operate in they you still to Perfect. to of the of the by [indiscernible] relative October sales? be where XX% inventories peak used end follow-up Got And were in at going-forward my kind down where of on basis and of lot. an then expect kind were on inventory what's you question the level that the kind they a where said XXXX. year from you optimal down to a on it. But

Marshall Chesrown

supply vehicles from move the new just are should more because built of bounce a way delivered down. perspective Well, up new they'll the days that and manufacturers, than these little from and around a so

a the is today On perspective. is our which target extremely XX manageable used, about supply, depreciation from days

but nearly you our powersports would I have it As the such manageable. don't overshot say target. know, as makes depreciation extremely it we that automobile

on will Our tied year-end to business the day better was directly anticipated used the side. inventory at And probably than be supply. we

opportunity on the have to as see fit. we We and turn throttle the off

certainly not we back Freedom very have that -- are of the stores in as days stores keep of, acquired the on used in were as especially in to a we buying we lot So inventory group. early the the because the business any aggressive mind, didn't of speak

we a of starting But we we obviously, in reap backfilling aggressively early June, the supply. and very were that good So events the continue day benefits with on. on

In fairly because I fact, primarily quarter, was going something everything overnight and a on just is were on I XX what around coming into jumped the through and This basis. think that standard. third of gas was like that prices days -- daily to it shock think watch with we of else. XX personally going And I up

I think of that some normalized. has

is Eric, outperformed here, sales. side-by-side typical of Again, less units, which demand said unit my an being but at in higher business, basis of the lack clearly as our higher-priced is we ASP our time year, there's actually less this still from see can I with you no on with ASP comments, which

available make anything unaffordable answer, the clearly, of type market he pressures But wanted particular it credit where the pressure it in the wants. end it, credit he which on where significantly with is It sorry. that for unit consumer. is And low-end doesn't credit that months pressure right? be low used mistake the because have lean. a credit he the -- buyer. So they anything different, XXX-credit where XXX that most, make score score don't the buy ago can been which cost the the Long of about does just would is no X price and no mean could always There That's has change, buy is that challenge. still any them. same, of that to lower It's that's

Operator

Baker of Davidson. The question D.A. comes from next Michael

Michael Baker

wanted least years. you an They've launched about competitively. to on locations. XX,XXX available. surface, you're units about know what looks your both of we that that you in physical and I the to online ask which else ramped website, How of do particular, competition? suppliers one to you are has seeing in what In seeing similar see online And terms competition, at

Marshall Chesrown

think some site, Great And This is no than clarity Michael. listing question. I getting forth. out different there would a traders than be so different cycle HDX, and helpful. no

a Polaris by dealer. used largest it's be are leverage their which think to I to move for smart provide we their and dealers, leads able business the

the purely So not these are not lead all. we Keep competition mind, it at are gen. a welcome We see do in website. transactional These opportunity.

company, okay? transaction a are We

website as So listed of some type the possible have is comments creates should in it, unlike a position that all hand, his OEMs' my position, media. every ROI. much possibly on any of winner not as take vehicles we The my every the dealer one hate past, Internet as on

your You in want front of everybody with to be goods.

coming. was from nature you competitive And can So think with talked the and We And do used be see to whatsoever. they're We it. under just I welcome relationship sale. dealers the product sales, the anything I our no for see Polaris. a circumstances, were that opportunity think aware about we additional We available this for to their super Polaris.com Michael have fact people we think it's and go all able and well proactive. that now

Michael Baker

sense. Okay. Makes

this the seeing March on months. Is better year-over-year Are about in above improvement that April Let's should seasonal last that? a you're the ramp, and Just few ramp see, seen and -- a we by way seeing say words, time that know April. the this on growth seeing beyond than ramp follow-up, Is so me when let basis? be this that you've ramp year. in the ask other more that of of a you March you're normally expected? In is you and color

Marshall Chesrown

Yes.

that were encouraged and the there, November, cetera, -- was been We transparent with you consumer I our think et and all but December, with think February, the out I normalization. very with all only little typically they of that that feel impacted We they I've months, a to certainly January of are not slowest pressured has disruption pretty seem were March us. numbers. the significantly

out, February February, me, reversal would -- been pointed more we if message in perspective have would have near it anywhere timing dramatic a completely continued continued dramatic March and today, plan, a anywhere near excuse at of if have have would As from least and the would a of Blake expense. cut different a

think as And ones myself and -- I just able our experience nimble to of all can advantage I we've this time we of want others than might is everybody I've team, I have sure other -- and experience just of to worst an that that just you faster that are. 'XX, still And make guys we coming me, we're believe And and -- and to we Blake, in lots in we downturns. overreact. is had be our team, been think. that every regards, out this, but waters, optimist in all I'm past mistake 'XX situation. in be continue while This me the we we that be of been take to through make know tell tell them through that enough various would problem we might the

We prudent. have to be

cash. manage to have We

have and things, to expenses. do all we manage to of We course, have those

of and but company. ongoing always by to process any be I Adjustments question, the didn't should an -- know SG&A, amendments answer you way, the are to SG&A

and never I that that little think have make more a you in able this be times improvements I opportunities bit been to like didn't -- company some in regard. just scrutinized make to a I've don't

plan identifying And job the executing think done the from of around members. most I team and it Blake getting support fantastic a those. has importantly,

So all and the across mix and our really ramp March because perspective wasn't encouraging of GPU from for was driven departments. board April, is in extremely that it

good. looks that So

pre-COVID looking is The think and actually usually things pre-COVID we in start to point, as plan. dive to than our the that do the But to what XXXX proxy when all of based we post-COVID. we're comparisons I in And question you had different are see. one past, stuff. the market. would your on if up look in as April March proxy very proxy, using But of those financial Inventories spring type that versus dramatically I we and last sales, a our XXXX other on accomplishments asked covering watching at the we and matching -- way XXXX the the internally, And past -- the because up in that full that would Mike, daily we seeing about year are pre-COVID. you the at from you've with March And and urge are basis we're I tell at talking and of it financials performance about. looking encouraged we're data, of public, is we're a down, be some sales we're we you will the our those

So that's it.

Operator

comes question Wedbush Basham Securities. The from of Seth next

Seth Basham

balance hoping this Given questions. sheet I couple your to year, priority around the was ask of balance sheet a

covenant what at quarter. calculated First, debt the under the first of ratio the was leverage your end

Blake Lawson

X.X. Roughly

Seth Basham

Got your the expectation for of the it. second quarter? end And what's

Blake Lawson

below be X.XX. To

Seth Basham

it. Got

that terms assets? $XX of in of that? considering? Are And still debt referenced, helpful. auction worth selling is in That's noncore the is an Or big Okay. how principal paydown are you million priority that the a you you process of that

Marshall Chesrown

is certain. fairly that's No, that

near regard. term, deployed hear And have say first those in representatives should very that probably moves. would you the of I in third-party We the

announce but lady right? perspective, until those to imminent fat So are we our the want from it sings, don't

Seth Basham

it. Got

be at the of quarter. expectation incorporated Okay. And to X.XX the into second that's under that end

Marshall Chesrown

right the watch to have covenant. Obviously, covenant to within that very, that. closely sure only have that And we very that Correct. make we debt live think now we maintain to I very got plan is we've reasonable a

operated and certainly It's Seth, second XXXX very in a quarter relates think dropping know and XX, current off. of very, the off. to strong purely challenge that on regard first have we that I that are that you falling trailing a

have we we're element it but control. well under of another -- so think And that challenge, we added

Seth Basham

helpful. expecting you are a restrict credit that environment, for Got what anticipating then that Do and drive availability it within it. the lastly, your cost ability standpoint That's your improvement you're sales? further or to you credit the And standpoint to expectation, expect from regarding customers? broader tighten of

Marshall Chesrown

availability interest isn't mentioned Obviously, the the subprime of in it call. X customer drives and have this. rate just X can't things. involve I X don't customer days end price the Blake he to payment. get our last that the our now guess is, have credit, with lot even our sure. where -- with maybe any and We business affects are that, he's don't couple lenders. [can't] low of GPU. with Tier a does they far And higher the see as a been the Tier of we which the they primarily. on is, unit, might their in a X is that different And communications and Yes. the the had that lower the It's in noncaptive the which market with afford our financed. the tightening for And Either as of lender just tightening largest Tier eliminating we a of comment conversation not top used

So that's comes in. pressure the where

revolves think of whatever, -- having sometimes Seth, softening sales encouragement traffic, to I confuse a the But directly or the people where comes the our not related right? think from, really customer desire. around I

desire pressure We seeing issue. financing. just are with some consumer not seeing a minor to We're regards

But to what there do we aggressive captive I across are mean don't. that were. that on expect are all from us not business any don't way, assured And that better in they bit further they've they regard. deterioration. we today lenders lenders. know that people every And as the by with, would You it's the see as

So as you see, minimal been can in it's our results. fairly

Blake Lawson

on And one that, Seth. more point

is of actually more things getting -- unions is, business. driving large One the they're starting credit are lenders see them which our level at business more with the us and they're slightly, lenders to that lenders to tightening pullback or the banks, larger interesting telling despite maybe some local

pullback don't side. -- their So see and they on any

Marshall Chesrown

Yes.

services, credit I most more the the in and I so credit through that from a thing consumer guys that is with Polaris it the have middleman majority our markets think probably one that pass and is financial say, and the the captive and effective forth. manage of The are the last borrow would and Yamaha, Seth, are those markup portfolios. Harley-Davidson of nature likes lenders

Operator

end session. have gentlemen, question-and-answer reached to remarks. for we like and of turn the the Ladies Chesrown Marshall I would now over conference back to closing

Marshall Chesrown

calls it. days. always approachable, all Well, we're appreciate to both -- today. always, We look very Blake We I. next thank the joining for two follow-up And forward you the we obviously, and as

Will at So Don out and to schedule any feel and to free conversation. please we'll further time, any a questions, reach

I and appreciate great have So day. Thanks. being Bye. a an enjoy day. you investor

Operator

concludes this your and may you disconnect you lines. for now Thank attending, conference. you. Thank Ladies today's and gentlemen,

RumbleON (RMBL) 10 May 232023 Q1 Earnings call transcript