RMBL - Earnings call transcript Q2 2024

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Operator

Greetings, and welcome to RumbleOn Incorporated Second Quarter 2024 Earnings Conference Call.

[Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Tom Zelewski, Vice President, Finance and Treasurer. Thank you. Please go ahead.

Thomas Zelewski

operator. you, Thank and conference everyone, financial for us joining Good to thank discuss this call XXXX RumbleOn's on morning, you second results. quarter

RumbleOn's Tiffany on are Officer. me call Chief Kennedy, Executive Joining Officer; RumbleOn's Kice, the and Chief Financial Mike today

detailed quarter results press the filed. Form morning, XX-Q are earlier be available release information a once supplemental Our will issued in this in QX we and our second

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

current or on obligation and risks as of based developments to new to call, are as or from actual Additional information and to can cause no in a including that revise update The responses questions, forward-looking expectations differ them, could whether forward-looking statements required SEC this by otherwise, other RumbleOn of filings. assumes RumbleOn's law. conference and as be results periodic your except statements found result in today,

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

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

Mike Kennedy, Now I'll the CEO. call over Mike? turn our to

Michael Kennedy

good you joining in RumbleOn us Thank morning, and everyone. you, for Tom, for morning. this on and Thank your interest the call

about Tiffany impact already our elements business and fit our years private shortly. Financial reporting Officer, and her better with Chief the and Vision perfect Tiffany XX align experience multi-location Tiffany industry you'll finding transform ways as appointed RumbleOn new for XXXX over our drive our in hear of experience businesses Joining growth-focused positively and Kice, me financial is makes for Her performance standards, today's on June. continue business to brings leadership our a those companies. to to call retail to to public in roles is goals. we

also and Elliot our Tom call, heard Wagner, Finance. the And also joining you Vice us President from earlier on of is

group focus Our reflects is continue inflated second powersports performance to progress I'm to cash of X cash the our proud free cautious first of best quarter America. flow dealerships rate continue free year. the our the team's the and flow we a unit we dealership which goals, and new high our remain industry run goal of challenges, to the for responded deliver powersports XXXX, in positive as It inventories. major a of in to on challenging Despite way back we a time consumer environment, XXXX the We in our of as months Vision we The March Powersports delivered navigate team effort we on during continue interest to these our half outlined and strength this on expect achieving has positive laser-focused turnaround. XXXX.

team. the in pillars I XXXX of November, as in I our about When My gain each was excited I of joined company the grown has strategy and the opportunity business. we on X Vision excitement our align traction the saw

improvement an corporate efficient heard aligned run you've and example, culture composite best-performing office. the our a mention in an and supported continuous mindset As me by America, of building dealerships to

some actions in our corporate These XXXX workforce end continued streamline optimizing marketing quarter, Vision we our goals. well drive the as make We in to as resulted in reduction of a approximately decision we to to XX% made Towards second and improvements reductions. actions our cost of the as towards our force structure. accelerate

strategy forward expect and of XXXX. $XX million to We savings driving the team $XX in in XXXX our going result as our generate back aligning million Vision to of and half a annualized

open to pre-owned update of now excited an Houston operational on about with year. Powersports is focus I'm I announced creation, our builds. this Hurricane new on growth after wanted provide value the fully intention momentum now, that to center announce excited market to a setbacks first right on our is Beryl. our some this and great Continuing and from store early open for and us, opening team Houston the is new previously powersports

We via to they growth continue arise. opportunities greenfield acquisitions are poised and as

the As more on to first ability model previously a this operating the number since markets. my arrival acquisition Houston the close project our pilot, by at focused encouraged We're pipeline, new are we company. its and We activity, opportunities. and of and are also reminder, this acquisition focused across our is we a scale very analyzing results on remain on mentioned

We will be per makes selective share builds and sense financial and it only deploy capital where value.

to I'd And industry standards. performance Tiffany over quarter's we to some walk turn to of financial implementing financial to reporting the that, this better through like talk changes call and the the align are about us with

Tiffany Kice

goals weeks adjusted and few last and Mike, we've I've you, with the few and adjusted and Thank changes company's the team the SG&A I'm and join internally highlight aligned spent thrilled the RumbleOn I'm regarding wanted made business to EBITDA. objectives. fully reporting a to key assessing

our SG&A of Going deduct operations we considered are an necessarily core that adjusted run not our forward, not part a define and our and expenses are business indicator adjusted to charges of SG&A as measures use adjusted those progress SG&A to We one of to rate adjusted XXXX our SG&A. to EBITDA. These our adjustments we to plan towards Vision evaluate goal. are make similar as

revised which facilities. non-vehicle to restricted also cash, net calculation primarily exclude floor have debt to plan relates our We

dealership with is this with and industry EBITDA plan align beginning by practice, Additionally, reduced adjusted floor to expense. interest quarter

the our expense leverage debt plan debt the as balance floor as powersports and is typically sheet collateralized floor operating and industry our is from operations integral to Our treats by calculation interest on debt expense excludes floor plan vehicles. plan an

retroactively prior We earnings have our included in supplemental a schedule release to periods. recalculate

quarter gross reporting adjusted million results. or and second totaled of on XX.X% $XX.X SG&A Total gross the profit. was I detail of EBITDA generated $XX.X quarter $XX.X XX.X% would second changes, down of and Revenue was profit of of million Now XX% XXXX. that adjusted XX.X% outlined quarter revenue last to $XXX.X of like same to adjusted we've in the our our year-over-year We million expenses provide million compared down year-over-year. company or year EBITDA

As were a SG&A gross SG&A Adjusted targeting reminder, lower XXXX of than the Vision XX.X% expenses to be time quarter XX% year. frame. within profit adjusted are we our same last

major same the Starting approximately team pre-owned sales dealership new major same XX,XXX sales during retailed with unit the group. X,XXX, last Total Powersports down units approximately XX.X% the which The XX,XXX, X.X% year. from quarter year, total down XX.X%. Powersports is were while powersports totaled to unit quarter, last quarter the down

on day inventory new levels inventory pre-owned and heavy a basis, supply shared our As continues on to call, our light. are previously last our be

market working realities. Our partners OEM team with to levels is closely inventory new align our to current

progress the the half to and We reduction year. over expect have inventories a last days significant of see in our XX made the back in new

unit Gross improve remain new trend second to challenged be we continue margins on expect pre-owned sales major on throughout this the in for and continue to XXXX. to quarter, and

for to aligned and margins were year, with driven the quarter XX.X% Vision the decision gross industry, product XX.X% over-assorted in by noncore in to compared by our brands lines same compounded the exit not unit New overstocking XXXX. quarter last

gross to quarter the margins pre-owned XX.X% pleased XX% year. same quarter last of in are to We for report the compared

Cash continue leverage the to pre-owned RideNow's to business. improve We Offer

or Our department million from of or decrease of volume, service preowned in is impacting $XX profit attributable prepare couple $XX.X units The million $XX.X operations macro this of GPU amount unit of the also revenue parts, a gross and and services decrease the and service. and delivered believe to those $X,XXX, for accessories to or comes business We labor environment accessories including down X.X%. developments, of fixed our sale. reduction used primarily

Our team internal elevated financing in a of consumer or on team's challenged strong interest up and rates delivered believe set environment. based trend results in well impressive year-over-year $X,XXX, will revenue despite and X.X% OEM-supported this area, our as of finance capabilities our $XX.X strength macro as insurance processes We a GPU offerings. continue this million with in

$XXX.X Powersports a lower decrease ASP. revenue the quarter volume, fixed attributed major in, in all down revenue XX.X% operations The was to a dealership from group from for decrease our coming essentially flat was same unit in and last million, volume year. So our

quarter X.X% continue same manage in of down expectations we to inflated Total or our was and as GPU line inventories the $XXX headwinds with industry $X,XXX for the the group year last rates. and for interest high

services Turning group. now transportation vehicle operating asset-light our to

quarter, driven second Wholesale dropped profit up Express the revenue industry by X.X%, For million, while gross $X.X was X.X% pressures. to pricing nearly

cash provided Lastly, We floor flow our credit for to months and restricted with plan of Total million by the sheet. under facilities million. availability was non-vehicle million short-term June revolving as $XX.X available XX. XX was total Availability totaled defined plus activities in June floor XX. and million. $XXX.X $XXX.X cash approximately cash totaled the as $XXX.X plan debt quarter Cash turning credit our $XX.X June unrestricted ended facilities on operating X ended million liquidity, balance under

I'm signed until covenants which financial agreement happy the June relief of XX structure. that our providing to for flexibility loan agreement with certain also amendment our lenders within our report lenders, with the certain relaxes remainder XX. credit term quarter a December capital this year, from existing through for leverage we covenants provides further This

As has covenants from million part increased of $XX to cash million. unrestricted minimum the agreement, our $XX

XX, payable $XX.X million. of of cash approximately we As had unrestricted June

I'll operator over turn now open we'd like back question-and-answer line. that, With to the the session. the to begin the to call

Operator

question first Davidson. the from Mike comes D.A. line your of of [Operator Instructions] And Baker

Michael Baker

heavy you are the One, Two you that? are in versus just top heavy last a that? how worse but you that have your would making And feels question, to of worse how And sort But through things new you in resolved could progress us on you on questions. expectations? some year-end. terms second process? decelerated. you comment down just of that and are the internal quarter, It and are you just I my just on like where guess talked line about results expect little of to wondering order How then much inventory, environment, relative guess, bit the give still macro-wise, quarter? much last overall said, sales by could getting as you magnitude even I quarter. of if said And how in -- as you these

Michael Kennedy

Mike Thanks, Mike. bet. is Kennedy. This You

questions of asked couple there. You've a different

expected. perspective, think much we the pretty and First, the issues, volume on I think I what volume experiencing from a we're macro

volume When environment. said, is we the much help macro a from new interest down. We weren't we hey, expecting it's started year, Our tough rates.

expected. customers are think leads We delayed reacting that, inventories performance, that. know us that to for challenged part are surprise seen gross a of been me COVID had throughout which the which probably coming the are And year times. the of a I is and second to our gross of that's more bit haven't off margin little question, than a new in bit the and have probably inflated industry we margins We OEMs

And with so we're dealing that our operations. within

we're we're The question I where and that. of of terms be say point. I'd second a expectations little was your inventory, this bit probably around think, behind of to at doing piece in my like would how that I

the we're However, really of time, at making keeping inventory in we in same headway line terms day are really, our making supply. -- good with

our we're You that, previous to calls really goal mention great that's shape. you supply great making relative inventory healthy day me are some a progress, in heard OEMs some and stores get And as might imagine, and our in is perspective. to

more we other motorcycles, and other been and whatnot. than of challenged color that, the we in working through motorcycles and OEMs, stores Other one piece market that. UTVs, to much, this the categories performed year on-road like Relative PWC Maybe expected. off-road around we're so has not

we by And to of so we're reduce terms year in end our still But dealing inventories of and $XX good year. feel delivering with target million that. the by for new this confident the

Michael Baker

million. $XX annualized right? interpretation? at is. program, could. of Okay. what million $XX PWC, one next and $XX The your another not annualized that If year that Two us million. other you then right? pretty it's is year savings right cost Is if It's part an just that a could small And follow-ups, I business, remind of a then clarification. number Is the $XX that's this percent million

Michael Kennedy

correct. That's

Michael Baker

a sales? PWC of as percent Great. Okay.

Michael Kennedy

our I of the of but volume, business. still you're of don't we in piece categories think one some in we've past, category-specific that directionally our sell. shared correct. But stuff meaningful PWC terms not top is it's

Operator

comes of question Wold B. Securities. from Your Riley next Eric

Eric Wold

me, an total amount case, if follow-ups A questions. guess, next starting to reduction of year? the that's the wrong, -- questions of a that the year one, you you on I kind of give couple the really rate would anything kind expense incremental talked I incremental prior that's correct you've basis taken if talked am and plan today, out before? to million/$XX or, that million kind And else on of what to plan, you to I guess, can that about the open you this take out $XX

Michael Kennedy

is this Mike Eric, Okay. again.

Let which is the piece address of your address. me easy first first question, to

the can So and I'm a of think moves of. let strategy aligning we the running focus aligned way in and is most really we what proud embracing is best number around of the giving what around And to it. team stores clarity go I made team our America. strategy And on around what we the strategy the is with need the

stores aligning learn better that's the in optimizing other to in piece think I our contact tools is our leading starting to to our that as terms managing structure marketing you or just we're also those really with whether doing things developing to of scale, platforms, our opposed talk cost terms how management leverage within of about, ways. want efficiencies creating in whatever in standards standards XX different driving and OEMs demand, of

that us given of that All a took. has we view confident

We're out relates for, asked you to of to this and back the annualizes then going take confirm $XX of cost How of this cuts to to other million. year half done, cost what incremental. that is the we've million that $XX

I So work definitely this incremental and -- was think a question, piece I optimization of to new is that and that delivered. we've your want

answer question? So your does that

Eric Wold

actions, board, is new combining the including guess, you've the you started starting year, of It annualized what run does. out, since come I you've this guess kind cost run new cost $XX on rate, total rate next million that I million. $XX taken the as

Michael Kennedy

don't Great I have I I do in. That's you. and for to we'd guess, we'd have question, the math you. with have on answer to follow something Yes, walked some up that.

because some that to numbers I it's a already and were into that walked that I there know to went in, great difficult that then in midstream some moving. cutting some through eyes. discontinued question with kind clarity operations some There my work were on. think we were there going were I November, was -- then I walked answer and were cost targets of there

we what we cost on So go us going the feel has about to team focus structure, good really the clarity around our to forward. about good I the I and listen, ability how I is optimize returns And look and again, given think strategy. really of embracing strategy feel let what need good the and can

Eric Wold

impacted Okay. back that. reacting of That's half you the bring success to overall fair. too in on back progress more ability your right year. more to flow, on bring that expect I vehicle that your the vehicles base? be inventory, in then vehicle attractive of around have now because the get et higher kind new to to you customer inventory OEMs And in late, heavy. appreciate that that Has has more high, or the cetera. new remaining kind might -- of going ability on Is to just pressured want the or used to the cash that of but too used of comments to pressured vehicles kind inventory don't

the then as back margins incremental the you that inventory back going more half And that much get reduce OEMs your year, to the to is in think in from be done? on how new want to you versus vehicle that of help of the half

Michael Kennedy

Okay.

there. questions different a So couple in of

So my first little And headway. off, we our inventory. we're are making good around again, to initiative bit our expectations some reduce new a behind

this with us don't And on talked the And multiple just all when balance from help manufacturers the we them, afford And others. talk aligned, think I speeds OEMs right? to to can't entirely different of inventory this we're The we and at have, retail. healthy a with great mentioned sit to them issue. OEMs, we've previously, times principally, I getting down want think certainly, we respond at can don't some than I are on OEMs. we it. We carry

working we're that. so And through

our their we're promotional about all talked They've see margin, domestics. about them are OEMs in in the paying They increase all price, can gross that's paying costing the activity. the talked dollars. You price. right?

compressed mentioned business a our margins on see Tiffany our That's are can You obviously that. lot. new. gross costing

unit showroom, a I there's do side. there's I customer a think buy environment impacts the I new different customer attractive incredibly a would the wins, And a that see attractive a whole buy acquisition in they finance what really some that, might rates, much pre-owned thinking the have on preowned. so previously if think ways, new that not they a walks think rider this now preowned in experiencing silver in can in get think the and they the our for in not maybe and in we're really And or the wins rate finance in so I but vehicle piece. in our I can think into business couple customer them pricing influence line of is and that aggressive was when But unit. they that an this on much pricing versus attractive of thing because marketplace. there's the stores.

So for end in that I probably inventory get confident by bring we're during going the our our successful, feel new same we're If time of 'XX that inventory the up think frame. I the line season. in year, anticipation to preowned overall,

Eric Wold

Got it. then last And me. just question for

helps. is reaching you're a year starting about or units But out that confident margin. kind announced annualized snap of year? you've kind that that it on cost kind the lower be more in is strategic just on it's know [indiscernible] kind I that baseline assume of weaker XXXX that taken still more seems year? baseline fronts, is this we'll next earlier get kind of It trends the to kind meaning still back a Or basis, Does there. the flexing this going whether of of that plan understand confidence of talked You given to confidence problem so of to explain reaching normalized the the year. number of help an this

Michael Kennedy

powersports and that get that through a in product so at No, great great working and -- not partners we innovation listen, and XX-plus bringing and BRP I cycles Polaris guru who new I know question. and go categories It's so appreciate product evolution all. I Yes. we And just and hard and at question. And the forecast on spent plans years forth. are I I'm economic that to OEM an Harley industry.

we're to So regard. we help that we're election going in know year. the know going to get get economic an today. challenges We some in we're that It's through

So going that month-to-month. a month-to-month. and in in -- saw we year to We saw we that knew QX, and be seeing that dynamic, this was challenge we're QX,

probably like to And going year. so that through it's of rest play the the

piece this for mostly watch That's for got there, still opportunities But here to to acquisitions company. optimize going have this that's Happy when but start-up play going the future certainly dealerships on a about issues, think through we -- the opened us. horizon and that. preowned to The up excited of the continue think I announce think opportunity continue recently, country. is storm to cost we about to we opportunity get a scalable get just We're really exciting. the to best the the to to some the big going Houston down I structure, And are that I the business team running exciting. relative to in about and really

here just I'm Tiffany team We're So with my it. excitement so is and optimism very team's about all, board all The building on out grows. building. a in excited

Operator

Baird. question of next Kennison Your from comes Craig

Craig Kennison

project you something curious are as talking what that that's just you a Houston well? start-up the floor can a moment Mike, and were like use how I'm you financing finance whether for plan about costs inventory, the for ago.

Michael Kennedy

Yes.

So I the appreciate thanks, question. Craig.

lucky So that this find our in It want for a that is. commitments find pretty but something capital So about a in facility in to we and looking try smart were needs. right? signing mind, and is to the to criteria Keep the the we cost of property, outlay. we're fit investment, met like minimal We the the project be up Houston really of be were pilot, is able that about we're for for. smart all the terms we terms

that inventory, channels, that right stores, the that inventory or we're from of through terms plan what we inventory could we're in floor we're other offer plan normal cash and and that transferring doing through floor inventory, we and bringing In can that's whether acquiring now.

accessory nice a lineup store We also have with that a in partner.

all excited we're so about brings. And that

Craig Kennison

off to example? How cash it flow pay quickly can be to for debt, generate used

Michael Kennedy

That question around? your particular story, is

Craig Kennison

to cash investment, use debt Houston, any quickly, hard you've at but in the Look, are some makes are a or it's who investors it I just cash, deviates think if promising, on just great. debt but cash use like this. got of you of the reduction, of a level has to there vision this it almost Yes from kind organization un-investable. it's this who I of find If just capital feel it unwilling kind have be leverage. And generates like look those investors

Michael Kennedy

I No, aspect the question, that and added it. appreciate Craig, absolutely of I Yes. appreciate

address So the good. level confidence share your sure debt to And make return is also specifics pretty on we're question, cash which I not the of but project and pretty it. it's it, other investors going to on give particular want piece our I around is And good. that

throughout expectation that our year. off generate we 'XX the is going balance with on So cash this we're that in to our early converts sheet pay our

into cash the And leverage comfortable you fully part are we front a to today. be in in where makes in year, As of back part the saw year. the the everybody in We're more comfortable. we cash the you'll expect to we positive positive and see that were where release, we grow release, of the expect

pilot isn't forward, a forward future, we'll right? item won't cash we the line, scalable But we'll for there's flow dedicated us optimistic we we today. going and We're grow extremely the and go cash, more think the it if forward. through as could huge store. in the then in have we to it. top importantly, that doing grow about debt opportunity comfortable And with a be determine go And more that line way, generate free we preowned walk This as but bottom burned the my growing in down preowned generating doesn't from is with of of terms Houston. great it by opportunities do -- the get And business a team the job cash and away

Craig Kennison

I of in is guess side And the a we could be of know. in reduction that front other interest rates. all We

curious, in Just you flowing you or model? how business either Tiffany, your rates meaningful through see cut

Michael Kennedy

talking expense Well, retail let of the impact me I'll on of Tiffany debt, rate stuff talk to interest start cash about of by that. our the kind And end like kind and let interest cuts.

think immediately. pretty help interest I showrooms, think, will rate our cut I an

just some you a the when normal our interest term overly rate, a might rate a if say While other bring people the interest in significant. our that's on change and what what payment, to changed But atmosphere, the are do is math an and on will areas. ASP rate think I customers not is today,

unit soon And rate a whatnot. buying will of so terms think on our trading in interest or or a have any of mindset I relief fairly maybe kind riders impact new

let Tiffany our about in customers how impacted. of will business So I side other I'll will interest us of are showroom. of about do terms get thinking for talk in rates kind think the good what the

Tiffany Kice

does our our our it. very are coming and It's Yes, they variable fixed have plus Tiffany. rates, term debt won't is shortly. a converts floor due impacted, plan be to rate they're Craig, debt so this that

it'd change If of But in you there mind be a little savings. as time far had a [indiscernible]. of cash on XX bp affecting and impacts would bit the that $X be immediately that keep P&L about a an those change, outflow about annualized as don't million the basis lag that

Operator

question And of your comes Wightman Research. Wolfe Fred next from

Frederick Wightman

I ton of back levels. we sequentially quarter, But improvement positive about just the XQ to signs look last inventory to some Mike, talked you move Didn't from XQ. come wanted if a to into back start XQ. really

an shipments commentary? wondering the I'm if prior drove from you What was it that was of versus it if retail So in the saw disconnect sort what changed that OEMs? softened, increase

Michael Kennedy

I Yes, thanks. disconnect I what don't from know earlier. said a it's if

the with think of particular, product, absorbs I inflow pretty watercraft. QX typically in heavy seasonal a

be when so that's to kind we feel are I mentioned with the lower, but of hit the inventory year. why although I feel And comfortable of as I'd ability the probably comfortable puts at that's which terms today, in -- takes look our I and to and improved you where target, for like

so seeing And you're and what inventory And in remember PNA. and numbers. pre-owned also probably that's dissect new don't numbers, that the overall the we in

one And so number. it's just all

you're So this less be right, the yes, the going but would that's in showrooms, and listen, time, forward. less clutter lower cost better at point goal in and

Frederick Wightman

what elevated the inventories are And other seems experiencing. if just about of emblematic about, think you've you that new talked I it mean, pretty dealers like that's

going a if at noncurrent what like total the side positioned GPUs in that's on forward? your I'm feel you across levels the or inventory new wondering you at terms you of characterization so guys when front-end think for peers look you're maybe fair if market either versus And means better that and current

Michael Kennedy

I numbers trying their on, that the as don't No, major and game inventories Tiffany remarks, and it down. cause inflated industry entire the right. is focused get margin to is dealing a want we're to our Clearly, and are taking unit how know the dealers Yes. gross inventories. I strategy on do with our and think a overinflated we being real that seeing that that's of compression cause in her you're -- is industry our that everybody of, said and in on new is other

bit of the decisions negatively we brands. numbers influenced a I because are exit think made some maybe little our to

decision exit puts also a products, was a even on. that pressure to a that think we bunch gross when margins and major niche in on so some make fit. didn't good you just And anxious product a where out And a because marine get bunch move we it brands of those of exit stores we're products, brand, to

that why -- and issue, an industry the So on clearly you're that's that's seeing margin. compression but gross

Frederick Wightman

there ability close was any in reported the or lastly, CRM Great. from CDK impact And from in results a quarter perspective deals? either outage to your just then the

Michael Kennedy

some management CDK. question. is our great of impact -- DMS have system not because did the Yes, We dealer impacted. was not To the be CDK, quarter to it so clear, throughout connected

to industry. minimal our auto So impacts compared were the

as the titling were workarounds a concluded Florida There but administrative quarter. State we platform around the manual Our some CRM those. was platform impact, There as both meaningful was a and impact of impacted. it certainly well wasn't on of

Operator

of Basham And your from question next Wedbush Seth comes Securities.

Seth Basham

My first question outlook. the line top is just on

environment we you demand results be this quarter, the how thinking for and posted about balance of weakened trends the top the year? the line Given should

Michael Kennedy

this made Seth, prior is the to Kennedy. We forward. going not guide Yes, decision Mike

probably forecasting to we inflated think, to past, But think refrain generally speaking, from be. to line obviously, I the same my so it's inventories. an election remarks got is a what and top we've And environment, challenging closer going issues. from macro going in We're the getting

those X So to pass we same or I any in experience of the experienced think change, things previous what until probably quarters. going the

Seth Basham

is well? about first usually, remind line top this Okay. year to that's perspective and half, the it as seasonally, way the the back us, weaker a from And think half then than appropriate

Michael Kennedy

year. kind bell especially I in you Yes, of off, mean, then strong. don't that. as have back of still through a QX front but But traditional And top is I line I seasonality the of it's the curve it go drops pretty the me, obviously -- recall, numbers QX towards half

is So an important for quarter QX us.

Seth Basham

Got it.

next my question gross year-over-year around the in quarter. this margin is change And Okay.

would helpful. magnitude the us to different decline to brands, and factors product You the relative predominant I noncore from understand you a help that lines one. attributed overstocking, the But degree being presume the be of exiting could if that few

Michael Kennedy

Yes.

the of from No us. the it. as gross industry well in question vast inflated sure, For the compression margin is as inventories about majority the

I I new think it the of teams of mean at adder on-road Again, inventory. we inflated brand vast the just doesn't stores the gross see say that to off-road, gross I from of we inventories. up But a in the to when you is an the UTV. category bunch pressure bunch level. is coming brands margin a fact that and margin the the brands, help exit clean motorcycles majority when ATV, category, study trying margin PWC, gross when can And at the that level,

well, we days this inflated can And relief we those get levels, once that gross margin. as terms definitely ahead in see some gives us of of in inventory the we that. So areas new better some which through see confidence

Seth Basham

expectations entering to and you competitive get on to Relative inventory inventory to your to price less the cuts take or to quarter, the more the from environment you need win did OEMs margins? aggressive, try clear get clear support your additional the that

Michael Kennedy

they're of quarter, ends, announcements the past that lever I think And half planned that's saw biggest all the the seen we've year. public towards especially levels it manufacturer I terms the this domestic back and volumes and in the their what doing. in in we probably probably for production of think

the new Some of exciting pricing news of Polaris aggressive those and redesign -- and out their vehicle terms the meeting some pricing off-road in of products. on

less more price. features So at

rider wins the and think and because for the sign days So I when rider that's a the I again, really great whole in aggressive. in environment showroom, very is pricing this product there's walks mean good

Seth Basham

for last for And one now. it. Got me

remind what exiting? you lines brands product what can you're Just and us exiting you're

Michael Kennedy

don't anything any product. we wheel of powersports, actual think earlier exited. Also, brands I picked during -- kind in a could in that shared sector. we the I the we COVID, we shared -- up company pretty quite marine expanded they that But they bit Yes, think we the in much

boat have than we business And jet almost exited PWC product. Yamaha the so other Marine entirely some and

all We the products. number we've we've brands then boats that and And some on of products. it were Seth, So where call pretty I a store. we top were that. in -- exited -- decisions, exited assortment stores, were big them niche micro brands just that much that, saltwater of we've in kind terms exited And sense we've of exited pontoon of brand we in of also the in make then didn't the in

Operator

[Operator Instructions]

Michael for Kennedy, no this turn CEO, closing comments. the further at There are like call over questions to to I'd time. back now

Michael Kennedy

everyone. you, like X I'd just important just Thank and mention close things. out to

express as conviction the to with team the keeping our gratitude my to priority determination. riders moment First, impress current company appreciation on I environment take entire our and the who me a and take top want to to throughout and by continue

thank So team. very you much,

on to Vision we revenue while longer. sooner of are in than committed XXXX a that adjusted adjusted and EBITDA key of long-term the achieving flows per maximizing our timing, free are cash said our annual we company us I XXXX, us get builds delivering as decisions And talked Vision creation on Lastly, I'd our of targets take the management we Vision confidence every value greater that like about we alternatively, best share of in per $X.X laser-focused excess from dynamic and Regardless of interest we'll billion, XXXX, in emphasizing share annual million to earlier, $XXX close more. million operating on of and at environment turn. by bit or $XX I moment to make are a team might annual it mentioned may a and targets and value or as the long-term

RumbleOn. call. time Thank our you very much and continued for in That today your concludes your interest

Operator

Ladies today's and and gentlemen, participating you ask We concludes disconnect that please lines. this you for your conference. thank

RumbleON (RMBL) 7 Aug 242024 Q2 Earnings call transcript