RideNow Group Inc (RDNW) 2024 Q3 法說會逐字稿

Good day and welcome to the RumbleOn, Inc.'s third-quarter 2024 earnings conference call. (Operator Instructions) Please note, this event is being recorded.

美好的一天，歡迎參加 RumbleOn, Inc. 的 2024 年第三季財報電話會議。（操作員說明）請注意，正在記錄此事件。

I would now like to turn the conference over to Elliot Wagner, Vice President of Finance. Please go ahead.

現在我想將會議交給財務副總裁艾利歐特‧瓦格納 (Elliot Wagner)。請繼續。

Thank you, operator. Good morning, everyone, and thank you for joining us on this conference call to discuss RumbleOn's third-quarter 2024 financial results.

謝謝你，接線生。大家早安，感謝您參加本次電話會議，討論 RumbleOn 2024 年第三季的財務表現。

Joining me on the call today are Mike Kennedy, RumbleOn's Chief Executive Officer; and Tiffany Kice, RumbleOn's Chief Financial Officer. Our Q3 results are detailed in the press release we issued this morning and supplemental information will be available in our third quarter Form 10-Q once filed.

今天和我一起參加電話會議的是 RumbleOn 執行長 Mike Kennedy；以及 RumbleOn 財務長 Tiffany Kice。我們今天早上發布的新聞稿詳細介紹了我們第三季的業績，補充資料將在提交後的第三季 10-Q 表格中提供。

Before we start, I would like to remind you that the following discussion contains forward-looking statements, including, but not limited to, RumbleOn's market opportunities and future financial results and involve risks and uncertainties that may cause actual results to differ materially from those discussed here. Additional information that could cause actual results to differ from forward-looking statements can be found in RumbleOn's periodic and other SEC filings. The forward-looking statements and risks in this conference call, including responses to your questions, are based on current expectations as of today, and RumbleOn assumes no obligation to update or revise them, whether as a result of new developments or otherwise, except as required by law.

在開始之前，我想提醒您，以下討論包含前瞻性陳述，包括但不限於 RumbleOn 的市場機會和未來財務業績，並涉及可能導致實際結果與討論結果存在重大差異的風險和不確定性這裡。可能導致實際結果與前瞻性陳述不同的其他資訊可以在 RumbleOn 的定期文件和其他 SEC 文件中找到。本次電話會議中的前瞻性陳述和風險，包括對您問題的答复，均基於截至今天的當前預期，RumbleOn 不承擔更新或修改這些陳述的義務，無論是由於新的發展還是其他原因，除非法律要求。

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

此外，以下討論也包含非公認會計準則財務指標。有關這些非公認會計原則財務指標的調節表，請參閱我們今天早上早些時候發布的收益報告。

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

現在，我將把電話轉給 RumbleOn 執行長 Mike Kennedy。麥克風？

Thanks, Elliott. Good morning, everyone, and thank you for joining us for RumbleOn's third quarter earnings call. As we walk you through the details of our third quarter results and key work streams within the team, you will see the entire organization has been fully engaged and continue to reshape the company for long-term success. I'm excited to share our key focus areas with all of you today, and I'm enthusiastic about our future.

謝謝，艾利奧特。大家早安，感謝您參加 RumbleOn 第三季財報電話會議。當我們向您詳細介紹第三季業績和團隊內的關鍵工作流程時，您會發現整個組織都在全力投入，並繼續重塑公司以實現長期成功。我很高興今天與大家分享我們的重點領域，並且我對我們的未來充滿熱情。

We've engaged an investment bank to explore a refinancing of the company's debt and continue to get clarity on a viable path to deleverage our balance sheet and lower our cost of capital. We believe the $30 million of incremental capital commitments from our three largest shareholders announced this morning, which includes a commitment for a $10 million fully backstop equity rates offering will enable full repayment of the convertible notes as they come due on January 1, 2025, and help position us for successful refinancing. This incremental financial support from our largest shareholders shows a full team's alignment with our objectives. In the meantime, we continue to gain traction on our operational strategy of running the best-performing Powersports dealerships in America and feel great with what the future has in store for us.

我們已經聘請了一家投資銀行來探索公司債務的再融資，並繼續明確去槓桿化資產負債表和降低資本成本的可行途徑。我們相信，今天上午我們三大股東宣布的3000 萬美元增量資本承諾，其中包括承諾提供1000 萬美元的完全支持股本利率發行，將使可轉換票據在2025 年1 月1 日到期時得到全額償還，並幫助我們成功進行再融資。我們最大股東的這種增量財務支持表明整個團隊與我們的目標一致。同時，我們繼續推動在美國營運表現最好的 Powersports 經銷商的營運策略，並對我們的未來感到滿意。

From an operations perspective, I'm incredibly proud of the RumbleOn team's performance in the third quarter. In our Powersports Group, while the quarter's landscape became incrementally more challenging from start to finish, we made significant improvements and progress in the business. Our automotive transport business, Wholesale Express, was able to deliver growth across the board on units delivered, revenue generated, and gross profit earned.

從營運角度來看，我對 RumbleOn 團隊第三季的表現感到非常自豪。在我們的 Powersports 集團，雖然本季的情況自始至終變得越來越具有挑戰性，但我們在業務方面取得了重大改進和進展。我們的汽車運輸業務批發快遞能夠在交付量、產生的收入和賺取的毛利方面實現全面增長。

Before turning the call over to Tiffany Kice, I'll walk you through a few of those highlights, specifically around our inventories, cost optimization initiatives, M&A strategy, and cash flow from operations. Our core strategy revolves around leveraging our national scale to run the best-performing dealerships in America, supported by an aligned and efficient corporate office. We continue to focus on this goal and as a result, the team's efforts have consistently delivered positive free cash flow during the first nine months of 2024. Although we remain laser-focused on achieving our Vision 2026 goals, which we outlined in March. We recognize that industry growth trends and the M&A opportunity set may influence the timing of reaching our goals. The current macro environment remains difficult, but we are proud of the gains we have made to date and continue to build positive momentum.

在將電話轉交給 Tiffany Kice 之前，我將向您介紹其中的一些亮點，特別是圍繞我們的庫存、成本優化計劃、併購策略和營運現金流。我們的核心策略圍繞著利用我們的全國規模在美國運營表現最好的經銷商，並得到一致且高效的公司辦公室的支持。我們繼續專注於此目標，因此，團隊的努力在 2024 年前 9 個月持續帶來了正的自由現金流。儘管我們仍然專注於實現我們在 3 月概述的 2026 年願景目標。我們認識到行業成長趨勢和併購機會可能會影響實現我們目標的時間。當前的宏觀環境仍然困難，但我們對迄今為止的成果感到自豪，並繼續建立積極的勢頭。

We set a goal to reduce new inventories by $50 million for the full year 2024. As you review the balance sheet, you'll see a 53.8% reduction in total inventory as of September as compared to the prior year. While that number represents our total inventories, which includes new vehicles, preowned vehicles, parks and accesses and apparel, it gives you a clear indication that we are headed in the right direction. As we strive to rightsize our inventories during the third quarter, we experienced margin compression. As a result, we're now positioning margins to improve in the business going forward.

我們設定的目標是 2024 年全年減少 5,000 萬美元的新庫存。當您查看資產負債表時，您會發現截至 9 月的總庫存比前一年減少了 53.8%。雖然這個數字代表了我們的總庫存，其中包括新車、二手車、停車場、通道和服裝，但它清楚地表明我們正朝著正確的方向前進。當我們在第三季努力調整庫存規模時，我們經歷了利潤率壓縮。因此，我們現在正在調整利潤率，以提高未來業務的水平。

Our OEM partners have been constructive in helping us address the inventory overhang, which has further accelerated our progress. Although there's still more work to be done in optimizing our inventory levels and mix, I'd like to congratulate our team for making significant progress in this regard, and I'm confident we are on track to meet our year-end new inventory reduction target.

我們的 OEM 合作夥伴在幫助我們解決庫存過剩問題方面發揮了建設性作用，這進一步加快了我們的進展。儘管在優化我們的庫存水準和組合方面還有更多工作要做，但我要祝賀我們的團隊在這方面取得了重大進展，我相信我們有望實現年底新庫存削減目標目標。

I'm also pleased to share that we have fully executed on our $30 million of annualized cost savings announced on our Q2 earnings call. Congratulations to the team for proving our ability to move quickly and be agile in the current environment. As we have mentioned on prior calls, we take a continuous improvement approach to managing the business, and we see additional opportunities that we are addressing to both strengthen the team and drive more cost out of the business at the same time. Some of those opportunities come from our traction of our strategy of leveraging our scale to be the best in the industry and other aspects come from our alignment and clarity on what is most important to drive the business.

我還很高興地告訴大家，我們已經全面執行了第二季財報電話會議上宣布的 3000 萬美元的年度成本節約計劃。祝賀團隊證明了我們在當前環境中快速行動和敏捷的能力。正如我們在先前的電話會議中提到的，我們採取持續改進的方法來管理業務，並且我們看到了我們正在解決的更多機會，以加強團隊並同時降低業務成本。其中一些機會來自我們利用規模成為行業最佳策略的牽引力，而其他方面則來自我們對推動業務最重要的因素的協調和明確。

A key measure for us in our cost optimization work is adjusted SG&A as a percent of gross profit dollars. As you see in the earnings release, adjusted SG&A as a percent of gross profit for the quarter was 86% versus 89% during the same period last year. From a year-to-date perspective, our adjusted SG&A as a percentage of GP was 84% versus 87% a year ago. These metrics improved even in the face of gross profit declines of 19% from Q3 2023 to Q3 2024, and 15% from a year-to-date to September 2023 to date September 2024. We would expect this KPI to improve even further in 2025 based on the actions executed and further cost optimization actions planned, which will set us up for a long-term target of 75% of SG&A as a percent of gross profit.

我們成本優化工作的關鍵指標是調整後的銷售及管理費用佔毛利的百分比。正如您在財報中看到的那樣，本季調整後的 SG&A 佔毛利的百分比為 86%，而去年同期為 89%。從年初至今的角度來看，我們調整後的 SG&A 佔 GP 的比例為 84%，而一年前為 87%。即使毛利從 2023 年第三季到 2024 年第三季下降了 19%，從年初至今到 2023 年 9 月至今下降了 15%，但這些指標仍然有所改善。我們預計，根據已執行的行動和計劃的進一步成本優化行動，該 KPI 將在 2025 年進一步改善，這將為我們設定 SG&A 佔毛利潤 75% 的長期目標。

Shifting gears, I want to provide an update on our M&A strategy and highlight a recent expansion in the Northeast. In August, we acquired Harley-Davidson viewership in West Bridgewater, Massachusetts, now named Revolution Road Harley-Davidson. This expansion showcase the team's ability to grow our network and our OEMs commitment to aligning with us. We are poised to continue growth via acquisitions and greenfield opportunities as they arise. We remain focused on our acquisition pipeline activity and are encouraged by the number of opportunities. That being said, we recognize the need for discipline in the current environment. We will be selective and only deploy capital where it makes financial sense and will be accretive to our per share value.

換個話題，我想介紹一下我們的併購策略的最新情況，並重點介紹最近在東北地區的擴張。8 月，我們在馬薩諸塞州西布里奇沃特獲得了哈雷戴維森的收視率，該地區現命名為哈雷戴維森革命之路。此次擴張展示了團隊發展網路的能力以及我們的原始設備製造商與我們合作的承諾。我們準備透過收購和綠地機會的出現來繼續成長。我們仍然專注於我們的收購通路活動，並對大量機會感到鼓舞。話雖這麼說，我們認識到在當前環境下需要遵守紀律。我們將選擇性地只在具有財務意義且能增加我們每股價值的地方部署資本。

Lastly, we're pleased to see the Federal Reserve interest rate reductions of 50 basis points on September 18 and a 25-basis point cut on November 7. The 75 basis points of cumulative rate reductions over the last few months will help us save approximately $3 million in cash interest expense in 2025, helping to improve our financial metrics and free cash flow. We are managing through the execution of our turnaround, the industry transition of a COVID and the broader macro challenges, and I'm both encouraged and optimistic about the progress we are making to improve the core operations of the company.

最後，我們很高興看到聯準會於 9 月 18 日降息 50 個基點，並於 11 月 7 日降息 25 個基點。過去幾個月累積降息 75 個基點將有助於我們在 2025 年節省約 300 萬美元的現金利息支出，有助於改善我們的財務指標和自由現金流。我們正在應對扭虧為盈、新冠疫情帶來的產業轉型以及更廣泛的宏觀挑戰，我對我們在改善公司核心營運方面所取得的進展感到鼓舞和樂觀。

We're focusing on what we can control to establish a strong foundation for the future, positioning ourselves to capitalize on a recovery in the industry. We are moving aggressively to improve the long-term earnings potential of the business and optimizing efficiencies and costs in an effort to drive free cash flow. We believe there is significant competitive advantage with our cash offer platform and being the largest power sports dealership network in North America, and we're confident in our long-term plan Vision 2026 strategy.

我們專注於我們可以控制的事情，為未來奠定堅實的基礎，定位自己以利用行業的復甦。我們正在積極採取行動，提高業務的長期獲利潛力，優化效率和成本，以推動自由現金流。我們相信，我們的現金報價平台以及作為北美最大的強力體育經銷商網絡具有顯著的競爭優勢，並且我們對我們的長期計劃“2026 年願景”戰略充滿信心。

And with that said, I'd like to turn the call over to Tiffany to walk us through this quarter's financial performance.

話雖如此，我想將電話轉給蒂芙尼，讓我們了解本季的財務表現。

Thank you, Mike, and good morning, everyone. I will start by reviewing our financial results for the third quarter of 2024, followed by an overview of our balance sheet.

謝謝你，麥克，大家早安。我將首先回顧我們 2024 年第三季的財務業績，然後概述我們的資產負債表。

We generated revenue of $295 million and adjusted EBITDA of $6.8 million in the third quarter of 2024. Revenue was down 12.7% year-over-year and adjusted EBITDA was down 26.1% year-over-year. Total company adjusted SG&A expenses was $64.3 million or 86.5% of gross profit compared to the same quarter last year of $82.1 million or 89.2% of gross profit. As a reminder, we are targeting adjusted SG&A to be 75% of gross profit within our Vision 2026 plan. Adjusted SG&A expenses were 21.7% lower than the same quarter last year.

2024 年第三季度，我們的營收為 2.95 億美元，調整後 EBITDA 為 680 萬美元。營收年減 12.7%，調整後 EBITDA 年減 26.1%。公司調整後的銷售、管理及行政費用總額為 6,430 萬美元，佔毛利的 86.5%，而去年同期為 8,210 萬美元，佔毛利的 89.2%。謹此提醒，我們的目標是在 2026 年願景計畫中調整後的銷售、管理及行政費用 (SG&A) 佔毛利的 75%。調整後的銷售、管理及行政費用比去年同期下降了 21.7%。

Moving on to our segmented performance. The powersports dealership group retailing approximately 14,300 total powersports major units during the quarter, which is down 13.2% from the same quarter last year. Total new powersports major unit sales were approximately 9,700, down 10.2% to the same quarter last year, while pre-owned unit sales totaled approximately 4,500, down 19%

繼續我們的分段表現。Powersports經銷商集團本季共零售約14,300輛Powersports主要單位，較去年同期下降13.2%。新 Powersports 主要銷量約 9,700 輛，比去年同期下降 10.2%，二手車銷量約 4,500 輛，下降 19%

Our new inventory levels have been heavy throughout the year. And as Mike mentioned earlier, we have made great progress in working down the inventory levels and believe our new inventory reduction target is in sight for the end of the year. Our team is working closely with our OEM partners to align new inventory levels to the current market environment. We have made significant progress during Q3 2024 and expect to meet our reduction goals in new inventories.

我們全年的新庫存水準一直很高。正如麥克之前提到的，我們在降低庫存水準方面取得了很大進展，並相信我們新的庫存削減目標將在年底實現。我們的團隊正在與 OEM 合作夥伴密切合作，使新的庫存水準適應當前的市場環境。我們在 2024 年第三季取得了重大進展，預計將實現新庫存削減目標。

Gross margins for major unit sales were challenged on new and preowned inventory in the third quarter. New unit gross margins for the quarter were 11.3% compared to 13.8% in the same quarter last year, driven by overstocking in the industry, compounded by our decision to exit noncore product lines and over assorted brands not aligned with Vision 2026. Pre-owned gross margins of 12.1% for the quarter compared to 13.6% in the same quarter last year. We continue to leverage right now's cash offer, our purchasing scale, and our industry relationships to improve the preowned business.

第三季主要單位銷售的毛利率受到新庫存和二手庫存的挑戰。本季新單位毛利率為 11.3%，去年同期為 13.8%，原因是產業庫存過剩，再加上我們決定退出非核心產品線和不符合 2026 年願景的各類品牌。本季二手貨毛利率為 12.1%，去年同期為 13.6%。我們繼續利用目前的現金報價、採購規模和行業關係來改善二手業務。

Our parts, service, and accessories or fixed operations business delivered $49.2 million of revenue and $22.7 million of gross profit or GPU of $1,589, down $49 or 3%. The decrease comes primarily from accessories and service. Our financing and insurance teams delivered $24.3 million in revenue or GPU of $1,701, down 4.3% year-over-year. The decrease was driven by a decline in unit volume. So all in, revenue from our powersports dealership group was $279.9 million, down 13.6% for the same quarter last year. The decrease in revenue is attributable to lower major unit volume. Total GPU for the group was $4,955, down $425 or 7.9% to the same quarter last year and in line with our expectations as we continue to manage the macro environment.

我們的零件、服務和配件或固定營運業務實現了 4,920 萬美元的收入和 2,270 萬美元的毛利，或 GPU 為 1,589 美元，下降了 49 美元或 3%。下降主要來自配件和服務。我們的融資和保險團隊實現了 2,430 萬美元的收入或 1,701 美元的 GPU，年減 4.3%。這一下降是由於單位銷售下降所致。總而言之，我們的 Powersports 經銷商集團的營收為 2.799 億美元，比去年同期下降 13.6%。收入減少是由於主要單位銷售下降。該集團的 GPU 總額為 4,955 美元，比去年同期下降 425 美元或 7.9%，符合我們繼續管理宏觀環境的預期。

Turning now to our asset-light vehicle transportation services operating group. For the third quarter, Wholesale Express revenue was up 7.9% as compared to the same quarter in the prior year, while gross profit increased 2.9% to $3.5 million. The increase was driven by an increase in number of vehicles transported.

現在談談我們的輕資產車輛運輸服務營運集團。第三季度，Wholesale Express 營收較去年同期成長 7.9%，毛利成長 2.9% 至 350 萬美元。這一增長是由於運輸車輛數量的增加所致。

Turning to our balance sheet. We ended the quarter with $66.7 million in total cash, inclusive of restricted cash and non-vehicle net debt was $217 million. Availability under our short-term revolving floor plan credit facilities totaled approximately $121.5 million as of September 30. Total available liquidity, defined as unrestricted cash plus availability under floor plan credit facilities on September 30 totaled $188.2 million.

轉向我們的資產負債表。本季結束時，我們的現金總額為 6,670 萬美元，其中包括限制性現金，非車輛淨債務為 2.17 億美元。截至 9 月 30 日，我們的短期循環平面圖信貸安排下的可用金額總計約為 1.215 億美元。可用流動性總額（定義為不受限制的現金加上 9 月 30 日平面圖信貸安排下的可用資金）總計 1.882 億美元。

Cash inflows from operating activities was $68.6 million for the nine months ended September 30 as compared to cash outflows of $8.5 million for the same period in 2023. This improvement is a direct result of our focus on efficiencies and cost optimization. I'm also happy to report that we signed a credit agreement amendment with our existing term loan lender, which relax certain covenants for the next quarter through June 30, 2026, providing further financial flexibility.

截至 9 月 30 日的九個月，經營活動現金流入為 6,860 萬美元，而 2023 年同期現金流為 850 萬美元。這項改進是我們注重效率和成本優化的直接結果。我還很高興地報告，我們與現有定期貸款機構簽署了一項信貸協議修正案，放寬了截至 2026 年 6 月 30 日的下一季的某些契約，從而提供了進一步的財務靈活性。

In connection with our credit agreement amendment, we have received incremental capital cost commitments for $30 million from our three largest shareholders, of which $10 million is in the form of a back-stopped common equity rights offering. This new capital commitment reaffirms our three largest shareholder support of the business and strengthens our cash position as we focus on repaying the convertible notes coming due on January 1, 2025, while maintaining debt covenant compliance.

根據我們的信貸協議修訂，我們已從三大股東處收到了 3000 萬美元的增量資本成本承諾，其中 1000 萬美元以普通股股權發行的形式提供。這項新的資本承諾重申了我們三大股東對業務的支持，並加強了我們的現金狀況，因為我們專注於償還2025 年1 月1 日到期的可轉換票據，同時保持債務契約合規性。

As we look ahead, we continue to actively evaluate different opportunities to optimize our capital structure, lower our cost of capital and extend the debt maturity profile of the company. As part of this process, we recently engaged an investment bank to explore a refinancing of the company's debt.

展望未來，我們將繼續積極評估不同的機會，以優化我們的資本結構、降低資本成本並延長公司的債務期限。作為這個過程的一部分，我們最近聘請了一家投資銀行來探索公司債務的再融資。

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

至此，我們開始問答環節。我現在會將電話轉回接線生以開通線路。

(Operator Instructions) Craig Kennison, Baird.

（操作員說明）Craig Kennison，Baird。

Hey. Good morning. Thanks for taking my question. Just following up on the capital infusion of $30 million. Can you give us a little more information about the terms of the $20 million and then the $10 million backstopped portion?

嘿。早安.感謝您提出我的問題。剛完成 3000 萬美元的注資。您能否向我們提供有關 2000 萬美元和 1000 萬美元支持部分條款的更多資訊？

Yeah. Sure, Craig. Let me start off. Thanks for the question. By the way, those details will be filed in the Q later on this afternoon and the 8-K this morning, sorry. But do you want to just talk a little bit about it, Tiffany?

是的。當然，克雷格。讓我開始吧。謝謝你的提問。順便說一句，這些詳細資訊將在今天下午晚些時候提交到 Q 中，並在今天早上提交到 8-K 中，抱歉。但蒂芙尼，你想談談這件事嗎？

Sure. So we filed an 8-K this morning that we'll describe the $30 million, $10 million of it is coming from a fully backstopped rights offering from our three largest shareholders, and we will execute on that prior to December 1, so we'll launch it prior to December 1. The remaining $20 million, $4 million of that comes from a sale leaseback of one of our properties in Florida and then the remaining $16 million of that is coming from a floor plan facility that's being provided by two of our largest shareholders.

當然。所以我們今天早上提交了一份 8-K 報告，我們將描述 3000 萬美元，其中 1000 萬美元來自我們三大股東的完全支持的配股發行，我們將在 12 月 1 日之前執行，所以我們'將於12 月1 日前啟動。剩下的 2000 萬美元，其中 400 萬美元來自我們在佛羅裡達州一處房產的售後回租，剩下的 1600 萬美元來自我們兩個最大股東提供的平面圖設施。

Okay. Thank you for that. And then I wanted to ask about a press release on the partnership with Octane and what you can share regarding the economics of that relationship?

好的。謝謝你。然後我想詢問有關與 Octane 合作關係的新聞稿，以及您可以分享有關這種關係的經濟效益的內容嗎？

Yeah. Craig, thanks for the follow question. Yes. We announced the relationship with Octane. It's a preliminary relationship. We're doing a lot of exciting things for our customers and for our stores in terms of offering services. It's a white label program that's going to be rolled out across all of our right now outlets. And it's just a really good partnership. We've been doing a lot of business with Octane over the last few years. They're a great partner of ours and just strengthen the partnership and open up opportunities for down the road.

是的。克雷格，感謝您提出以下問題。是的。我們宣布了與 Octane 的合作關係。這是初步的關係。在提供服務方面，我們正在為我們的客戶和我們的商店做很多令人興奮的事情。這是一個白標計劃，將在我們目前所有的門市推出。這是一個非常好的合作關係。過去幾年，我們與 Octane 開展了大量業務。他們是我們偉大的合作夥伴，只會加強合作關係並為未來開闢機會。

Okay. Great. Thank you.

好的。偉大的。謝謝。

Thanks, Craig.

謝謝，克雷格。

Eric Wold, B. Riley Securities.

沃爾德 (Eric Wold)，B. 萊利證券。

Thanks. Good morning, everyone. Appreciate taking my question. A couple of questions. I guess, I know you talked about you're working a lot with your OEM partners to reduce the new vehicle inventories with the goal of $50 million reduction by year-end. Can you maybe talk a little bit more about kind of your actions around used vehicles. I guess how -- just one, how aggressive -- maybe aggressive not the right word, but how aggressive are you being with the cash offer tool and willingness to take on used vehicle inventory? And then maybe what are you seeing from the consumers in terms of the velocity of vehicles being offered to you or kind of looking for an offer versus maybe what you saw six, 12 months ago?

謝謝。大家早安。感謝回答我的問題。有幾個問題。我想，我知道您談到您正在與 OEM 合作夥伴進行大量合作，以減少新車庫存，目標是到年底減少 5000 萬美元。能否多談談您在二手車方面的行動？我猜想如何 - 只是一個，多麼積極 - 也許“積極”這個詞不正確，但是您對現金報價工具和接受二手車庫存的意願有多積極？然後，與 6、12 個月前相比，您從消費者那裡看到的車輛速度或尋求報價的情況如何？

Yeah. Sure, Eric. Thank you. Appreciate the question. I can't really speak to your last point about what's changed over the last six months or so. Cash offer platform is a great tool for us. We think it's a competitive advantage. We're the largest purchaser of preowned products in the country by a long shot. And of course, as a reminder, right, we totally reengineered that process, and we're really pleased with the results. We entered the year with tight inventories from a day's supply perspective. We announced that early on in the year. We've been chipping away at that as we've gone through the year.

是的。當然，埃里克。謝謝。感謝這個問題。我無法真正談論您關於過去六個月左右發生的變化的最後一點。現金報價平台對我們來說是一個很好的工具。我們認為這是一個競爭優勢。毫無疑問，我們是全國最大的二手產品購買者。當然，提醒一下，我們完全重新設計了這個流程，我們對結果非常滿意。從一天的供應角度來看，我們進入了今年庫存緊張的狀態。我們在今年年初就宣布了這一點。這一年我們一直在努力解決這個問題。

And I would say we're comfortable with our days' supply of preowned today. And you can see the performance in the quarter was slightly better than Q2. And we're optimistic about that platform of incoming product and our ability to turn it at our stores. and then also leverage our national scale of dealerships where we also acquire a lot of product, own products direct from the customers, whether it's in the service lane, or trade-ins or just locally. So all in all, it's a phenomenal opportunity for us. We love the preowned business. It's a great avenue for us, and the margins have been pretty good this year, too. So we're pleased with it overall.

我想說，我們對今天的二手貨供應感到滿意。您可以看到本季的表現略好於第二季。我們對進貨產品的平台以及我們在商店中銷售產品的能力感到樂觀。然後也利用我們全國規模的經銷商，我們也直接從客戶那裡購買大量產品、自有產品，無論是在服務通道、以舊換新或在本地。總而言之，這對我們來說是一個非凡的機會。我們熱愛二手業務。這對我們來說是一個很好的途徑，而且今年的利潤率也相當不錯。所以我們總體上對它感到滿意。

Thank you. And then a follow-up question. I know you talked a little bit about the year-over-year changes in F&I and parts service accessories. But just looking the percentage of those revenues as a percentage of vehicle revenues was down kind of meaningfully year-over-year and kind of off trend from kind of what it's been in recent years. Anything to call out there? Was that a decision internally or the changes you're making, was that due to mix of product? Was that a shift in just consumer demand trying to understand kind of what drove those declines relative to unit sales year-over-year?

謝謝。然後是後續問題。我知道您談到了 F&I 和零件服務配件的同比變化。但只要看看這些收入佔汽車收入的百分比，年比就出現了明顯下降，並且與近年來的趨勢有所不同。那裡有什麼要喊的嗎？這是內部決定還是您正在做出的改變，是由於產品組合造成的嗎？這是否只是消費者需求的轉變，試圖了解導致銷售量年減的原因？

Yeah. No, it's a great question, Eric. I appreciate your paying attention because fixed operations are really, really important to our business, and we like that business because it's great customer engagement and relationship and then, of course, the margins are great as well. I think we're experiencing two things in that area. When your preowned volume drops, tends to sort of pull on that fixed operations because we're not pushing the volume of pre-owned motorcycles through the service department. So there's a little bit of that we're digesting.

是的。不，這是一個很好的問題，艾瑞克。我感謝您的關注，因為固定營運對我們的業務確實非常重要，我們喜歡這項業務，因為它有很好的客戶參與和關係，當然，利潤也很高。我認為我們在該領域正在經歷兩件事。當您的二手摩托車數量下降時，往往會拉動固定運營，因為我們不會透過服務部門推動二手摩托車的數量。我們正在消化其中的一些內容。

And then I think just think overall coming off of the extraordinary numbers from COVID and all those new customers that enter the market. I think -- I think that gets better as we turn to 2025. And our strategy of kind of focusing on in those areas has improved over the last quarter. So I would expect that to improve going forward.

然後我想，從總體上看，新冠疫情帶來的巨大數字以及所有進入市場的新客戶。我認為，隨著 2025 年的到來，情況會變得更好。我們專注於這些領域的策略在上個季度有所改善。所以我預計未來會有所改善。

Mike Baker, D.A. Davidson.

麥克貝克，D.A.戴維森。

Okay. Sorry. To get to the 75% ratio of SG&A to gross margin, is that more likely to come from gross profit dollars getting better? Or is there still significant cost savings that you're working on?

好的。對不起。為了達到 SG&A 與毛利率 75% 的比率，這是否更有可能來自於毛利的改善？或者您還在努力節省大量成本嗎？

Yeah. Great question, Mike. The answer is a little bit of both, right? That's -- we expect gross margin and gross profit dollars to improve going forward. And we also see opportunities to strengthen the team and continue to drive cost optimization out of the business. So it's -- I don't mean to kind of say it's both, but it is both, and we expect to get improvement on the GP side as well as the SG&A side going forward.

是的。好問題，麥克。答案是兩者兼而有之，對嗎？也就是說，我們預計未來毛利率和毛利將有所改善。我們也看到了加強團隊並繼續推動業務成本優化的機會。所以，我並不是說兩者兼而有之，但兩者都是，我們希望在 GP 方面以及 SG&A 方面取得進展。

Well, and to follow up on that, that $30 million that you've already taken out, I guess what you're saying is there's more to go, but any way to size that relative to what you've already been able to accomplish?

好吧，接下來，你已經拿出了 3000 萬美元，我想你的意思是還有更多的事情要做，但是相對於你已經能夠完成的事情，任何方式來衡量它的規模？

Yeah. Certainly not at that $30 million level. And again, as I've said from the beginning, right, my goal with the culture of this company and the senior leadership team is to develop a continuous improvement mindset. And we're going to wake up every day no matter how good yesterday was, we're going to have a mindset that we can do a little bit better tomorrow. And as our strategy takes traction, we're seeing opportunities whether it's on the marketing side of things or our cost per click, our cost per lead is coming down on the productivity side or effectiveness of closing those leads is going up. driving test rides within our stores is improving.

是的。當然不是 3000 萬美元的水平。再說一遍，正如我從一開始就說過的，我對公司文化和高階領導團隊的目標是培養持續改善的心態。我們每天醒來，無論昨天有多好，我們都會有一種心態，明天我們可以做得更好一點。隨著我們的策略取得進展，我們看到了機會，無論是行銷方面還是每次點擊成本，我們的每個潛在客戶成本在生產力方面都在下降，或者關閉這些潛在客戶的有效性正在上升。我們商店內的試乘體驗正在改善。

And so we just think there's opportunities in a lot of different areas of the business to get better as well as take cost out and then as the business improves, the gross profit dollars will increase, especially coming off this inventory reduction, which I'm really proud of the team and the progress they made, but that certainly put some compressed pressure on gross margins on new categories.

因此，我們只是認為，在業務的許多不同領域都有機會變得更好並降低成本，然後隨著業務的改善，毛利將會增加，特別是在庫存減少之後，我認為我們對團隊和他們所取得的進步感到非常自豪，但這無疑給新類別的毛利率帶來了一些壓縮壓力。

Yes, makes sense. And if I could follow up one more on that inventory question and sorry if I missed it. The -- how -- how much -- where are you relative to that $50 million goal. We know where you are, obviously, in total inventories, but I guess where relative to the -- just on the new side. Thanks.

是的，有道理。如果我可以再跟進一下庫存問題，如果我錯過了，抱歉。相對於 5000 萬美元的目標，你的進度如何？顯然，我們知道您的總庫存處於什麼位置，但我猜相對於新一側而言。謝謝。

Yeah. No, good question. Thanks for asking. The team has done great work in this area, and I'll be totally transparent. At the end of Q2, I was a little nervous, and I was -- had some pretty heady conversations with my team around our progress and the team completely stepped up in Q3 and delivered.

是的。不，好問題。謝謝你的詢問。團隊在這一領域做了出色的工作，我將完全透明。在第二季末，我有點緊張，我與我的團隊圍繞著我們的進展進行了一些令人興奮的對話，團隊在第三季完全加快了步伐並交付了成果。

And by the way, I mentioned in my remarks, I want to mention again, our OEM partners have played a big role in that. They've been incredibly productive in helping us reset the right profiles and make sure our days' supply is at a healthy level. But the team at the end of the day, really delivered and moved out a lot of that product in Q3. So I feel very confident that we're going to achieve our $50 million target which was set out at the beginning of the year to achieve by the end of the year and proud of the team, what they've been deliver in that regard.

順便說一句，我在演講中提到，我想再次提及，我們的 OEM 合作夥伴在這方面發揮了重要作用。他們在幫助我們重新設定正確的配置並確保我們日常供應處於健康水平方面非常有效率。但最終，團隊在第三季真正交付並移出了許多該產品。因此，我非常有信心我們將實現年初設定的 5000 萬美元目標，並在年底前實現，並為我們的團隊感到自豪，他們在這方面所取得的成就。

Can you quantify where you are now or we're not breaking that out?

你能量化一下你現在的處境嗎？

Yeah, we're not bringing that out at this point. You'll see it in the year-end numbers, but yes, we just don't share that level of specificity right now.

是的，我們現在不會把它拿出來。你會在年終數據中看到這一點，但是，是的，我們現在只是不具備這種程度的特殊性。

Okay. Thank you.

好的。謝謝。

And this concludes our question-and-answer session. I would like to return the conference back over to Michael Kennedy for any closing comments.

我們的問答環節到此結束。我想將會議交還給邁克爾·肯尼迪以徵求結束意見。

Okay. Thank you, everyone. I'd like to close out, I just mentioned two important things. First, I want to take a moment to express my appreciation and gratitude to the entire team throughout the company. You continue to impress me by keeping our riders as our top priority and taking on the current macro environment with conviction and determination. Thank you very much, everyone.

好的。謝謝大家。我想結束了，我剛才提到了兩件重要的事情。首先，我想花一點時間向公司整個團隊表達讚賞和感謝。你們繼續將我們的車手作為我們的首要任務，並以堅定的信念和決心應對當前的宏觀環境，這繼續給我留下了深刻的印象。非常感謝大家。

Lastly, I'd like to emphasize that we are committed to Vision 2026 and maximizing our long-term per share value while confidence builds on delivering our key targets around annual revenue in excess of $1.7 billion, annual adjusted EBITDA of greater than $150 million and annual adjusted free cash flows of $90 million or more. And regardless of timing, we as a management team and the company are laser-focused on achieving Vision 2026, and we'll make decisions in the best interest of long-term per share value creation at every turn.

最後，我想強調的是，我們致力於實現 2026 年願景並最大化我們的長期每股價值，同時我們的信心建立在實現年收入超過 17 億美元、年度調整後 EBITDA 超過 1.5 億美元以及年度調整後自由現金流達到或超過9000 萬美元。無論時間如何，我們作為管理團隊和公司都將專注於實現 2026 年願景，並且我們將在每一次決策中都以創造長期每股價值的最佳利益為出發點。

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

非常感謝您今天抽出時間以及對 RumbleOn 的持續關注。我們的通話到此結束。

Thank you. As mentioned, the conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

謝謝。如前所述，會議現已結束。感謝您參加今天的演講。您現在可以斷開連線。