• Revenue: $295 million, down 12.7% year-over-year.
• Adjusted EBITDA: $6.8 million, down 26.1% year-over-year.
• Adjusted SG&A Expenses: $64.3 million or 86.5% of gross profit, down 21.7% from the same quarter last year.
• Powersports Major Units Sold: Approximately 14,300, down 13.2% year-over-year.
• New Powersports Major Unit Sales: Approximately 9,700, down 10.2% year-over-year.
• Pre-owned Unit Sales: Approximately 4,500, down 19% year-over-year.
• New Unit Gross Margins: 11.3%, compared to 13.8% in the same quarter last year.
• Pre-owned Gross Margins: 12.1%, compared to 13.6% in the same quarter last year.
• Parts, Service, and Accessories Revenue: $49.2 million.
• Financing and Insurance Revenue: $24.3 million, down 4.3% year-over-year.
• Wholesale Express Revenue: Up 7.9% year-over-year.
• Total Cash: $66.7 million, inclusive of restricted cash.
• Non-Vehicle Net Debt: $217 million.
• Total Available Liquidity: $188.2 million as of September 30.
• Cash Inflows from Operating Activities: $68.6 million for the 9 months ended September 30.

• Warning! GuruFocus has detected 7 Warning Signs with RMBL.

Release Date: November 12, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• RumbleON Inc (NASDAQ:RMBL) has secured $30 million in incremental capital commitments from its three largest shareholders, which will aid in refinancing efforts and debt repayment.
• The company has achieved a 53.8% reduction in total inventory as of September, indicating significant progress towards its inventory reduction goals.
• RumbleON Inc (NASDAQ:RMBL) has fully executed on $30 million of annualized cost savings, demonstrating effective cost optimization strategies.
• The company has expanded its network by acquiring a Harley-Davidson dealership in Massachusetts, showcasing growth in its M&A strategy.
• RumbleON Inc (NASDAQ:RMBL) is benefiting from recent Federal Reserve interest rate reductions, which are expected to save approximately $3 million in cash interest expense in 2025.

Negative Points

• RumbleON Inc (NASDAQ:RMBL) reported a 12.7% year-over-year decline in revenue for Q3 2024, reflecting challenges in the current market environment.
• Adjusted EBITDA decreased by 26.1% year-over-year, indicating pressure on profitability.
• The company experienced margin compression due to inventory overhang and the decision to exit non-core product lines.
• Sales of new and pre-owned powersports units declined by 10.2% and 19% respectively, compared to the same quarter last year.
• Gross margins for both new and pre-owned units decreased, driven by industry overstocking and strategic exits from certain product lines.

Q & A Highlights

Q: Can you provide more details about the $30 million capital infusion, specifically the terms of the $20 million and the $10 million backstopped portion? A: Michael Kennedy, CEO, explained that the $30 million includes a $10 million fully backstopped rights offering from the three largest shareholders, to be executed before December 1. The remaining $20 million comprises $4 million from a sale-leaseback of a property in Florida and $16 million from a floor plan facility provided by two major shareholders.

Q: Could you elaborate on the partnership with Octane and its economic implications? A: Michael Kennedy, CEO, stated that the partnership with Octane is a preliminary relationship aimed at enhancing customer services through a white-label program across RumbleOn outlets. This partnership strengthens their existing relationship and opens up future opportunities.

Q: How are you managing used vehicle inventories, and what changes have you observed in consumer behavior regarding vehicle offers? A: Michael Kennedy, CEO, noted that the cash offer platform is a competitive advantage, making RumbleOn the largest purchaser of preowned products in the country. The company is comfortable with its current days supply of preowned inventory and is optimistic about the platform's performance and margins.

Q: What factors contributed to the decline in F&I and parts service accessories revenue as a percentage of vehicle revenues? A: Michael Kennedy, CEO, attributed the decline to reduced preowned volume affecting fixed operations and the normalization of customer activity post-COVID. He expects improvements in these areas as the company focuses on enhancing customer engagement and operational strategies.

Q: To achieve the 75% SG&A to gross margin ratio, will improvements come more from gross profit or cost savings? A: Michael Kennedy, CEO, indicated that improvements will come from both increased gross profit and continued cost optimization. The company sees opportunities to enhance team strength and drive cost efficiencies while improving gross profit dollars.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.