RumbleOn(RMBL) - 2024 Q4 - Earnings Call Transcript

Financial Data and Key Metrics Changes - In Q4 2024, the company generated revenue of $269.6 million, down 13.4$2.2 million, an improvement from a slight loss in the same quarter last year [20][27] - Total company revenue for the full year was approximately $1.2 billion, down 11.5$32.9 million, down 12% [27] Business Line Data and Key Metrics Changes - The Powersports Dealership Group retailed approximately 14,100 major units in Q4 2024, down 9.3% year-over-year, with new unit sales down 9.5% and pre-owned unit sales down 8.8% [22] - Gross margins for new unit sales were 10.8%, down from 13.2% in the same quarter last year, while pre-owned gross margins improved to 9.8% from negative 10.3% [23] - Revenue from the Powersports dealership group was $256.2 million, down 14.1$80 million from 2023 to 2024, aligning inventory levels with current market conditions [13][22] - The asset-light vehicle transportation services segment, Wholesale Express, saw a revenue increase of 3.1% year-over-year, although gross profit decreased by 2.9% [27] Company Strategy and Development Direction - The new CEO emphasized a focus on driving profitability, growing the company, and creating shareholder value, moving away from the previous Vision 2026 plan [16][19] - The company aims to enhance revenue, optimize costs, and grow EBITDA and free cash flow, with plans for both acquisitions and organic growth [11][12] Management's Comments on Operating Environment and Future Outlook - The management acknowledged a challenging macro and industry environment but expressed confidence in the team's performance and the company's ability to emerge stronger [12] - The CEO highlighted the dynamic global tariff landscape and its potential impact on product affordability and customer demand [17] Other Important Information - The company ended the quarter with $96.7 million in total cash and$182.1 million in non-vehicle debt, benefiting from a $30 million capital raise [29] - Cash inflows from operating activities were$99.4 million for the year, a significant improvement from cash outflows of $38.9 million in the previous year [30] Q&A Session Summary Question: What is the company's exposure to tariffs and how will it handle potential cost increases? - The CEO identified Polaris, BRP, and Harley-Davidson as the top three OEMs, which account for 60% to 65% of sales, and noted the uncertainty in quantifying the tariff impact [35][36] Question: Is there any indication of a slowdown in business due to consumer confidence issues? - The CEO stated that while the company does not provide inter-quarter commentary, it is facing similar consumer challenges as others in the industry [39] Question: How does the company view its inventory levels compared to the rest of the industry? - The CEO expressed confidence in the company's inventory management but acknowledged that parts inventory might still be slightly high [43]