Q2 2020 RumbleON Inc Earnings Call

Yeah.

Ladies and gentlemen, thank you for standing by and welcome to the Ramble on second quarter 2020 earnings call.

At this time, all participants are in listen only mode.

The speakers presentation, there will be a question and answer session asked the question drink session, you'll need to press Star then one on your telephone keypad.

Please be advised the today's conference is being recorded.

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I'd now like to hand, the conference over to our speaker today Whitney Kukulka.

Please go ahead.

Thank you operator, good morning, ladies and gentlemen, thank you for joining US on this conference call to discuss ramble on second quarter 2020 financial results.

Joining me on the call today are Marshall, Ceftriaxone, Chairman, and Chief Executive Officer, and Steve Berard, Chief Financial Officer.

Full details of our results and additional management commentary are available in our earnings release, which can be found on the Investor Relations section of the website investors that ramble on dot com.

Note that this call will be simultaneously webcast on the Investor Relations section of the company's corporate website. This conference call at the property of Rumble on any peeping or other reproduction is expressly prohibited without prior written consent.

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

Additional information that could cause actual results could differ from forward looking statements can be found in Milan periodic SBC filing the forward looking statements and risks in this conference call, including responses to your question are based on current expectations as of today and rumbling assumes no obligation to update or revise.

Whether as a result, new developments or otherwise except as required by law also the following discussion may contain non-GAAP financial measures for a reconciliation of these non-GAAP financial measure. Please see our periodic FTC filing and now I'll turn the call over to Marshall or so.

Thanks Whitney good morning, everyone. Thanks for joining our call today I Hope you in your loved ones are staying safe and healthy.

We have demonstrated solid progress on our marched profitability the past several quarters and I'm pleased to report that we generated double digit gross margin for the first time in our history and reported positive net income of $1 million in the quarter. Despite the challenging macroeconomic backdrop.

2019, we demonstrated our ability to rapidly scale run belong and set our sights on achieving profitability. We have taken prescriptive measures to drive gross margin expansion gross profit per unit improvements and reduce operating expenses. Since then and our second quarter results are more evidence of our ability to rationalize.

As our expense profile and take advantage of market trends cost effectively.

It's been about six weeks since our last call and even adjust that short time, a lot has changed in our economy for many customers selling or buying a vehicle is an important component of their business or personal needs. Our online technology allows dealers and consumers to sell or by a vehicle without ever coming into physical contact with another person.

We believe this is the safest way to transact and it certainly appears to be the way of the future, our touchless buying and selling processes allow dealers and consumers to buy or sell the vehicle from their business or home complete their transaction on their phone tablet or computer and have the vehicle picked up or delivered without coming into physical contact.

With anyone along the way.

There's no doubt the cold at 19 pandemic has created headwinds in the industry, but they're also tailwinds the new opportunities being created thus far in the third quarter, we're experiencing the highest online activity strongest demand and highest valuations we have seen in our history as a company.

We continue to see fluctuations in market trends, but our nimble business model and fast inventory turn has enabled us to make operational changes that we believe will enable us to emerge stronger than ever.

Very early on in the pandemic, we decided to reduce inventory dramatically because of macro uncertainty further before the cobot pandemic proliferated across our country. Our facilities were struck by a tornado destroying or severely damaged in a large portion of our auto inventory located at our Nashville hub consistent.

With what others in the industry are reporting inventory acquisition is competitive that's expensive between uncertainty due to coated damaged inventory in Nashville, and a supply and demand imbalances, we had the perfect trifecta of challenging circumstances off the cuff. This may sound insurmountable, but our management team significant experience in the.

Industry allowed us to leverage past experience to our advantage. We made quick adjustments in expense reduction and inventory sell off and we have been able to continue to make great progress towards our near term profitability goals.

Our decision to liquidate inventory early on means that we don't have overage depreciating inventory on our hands today instead, our quick turnover has resulted in our inventory being truly mark to market. When valuations are moving around as they have been since March a mark to market approach and fast inventory turnover is advantageous and is.

Key to profitability.

We continue to prioritize margin expansion and bottom line improvement. So we are taking a very disciplined approach to vehicle acquisition focusing on the highest margin inventory available.

Additionally, we temporarily reduced discretionary growth expenditures and adjusted purchasing levels to align with demand and market conditions, while closely monitoring key metrics to determine when and how quickly to adjust.

All of which are reflected in our Q2 margins. We also recently received our first proceeds from the insurance company for some of the losses, we sustained from a tornado, which you can see in our bottom line results.

Through all of this our most important priority as the wellbeing of our employees and customers. We have taken several steps to provide a healthy working environment, including implementing work from home policies for many employees, eliminating non essential travel and implementing social distance in policies as such we did not attend sturges this year as per.

Plan, but we hope to return in 2021.

We have made prudent decisions and quit changes to our operating model and expense profile and I am proud of our team for everything they've accomplished in the past several months, especially with all these changes occurring amid those challenging times.

Our 100% online business model allowed us to quickly respond to changes in market demand and the industry landscape as we position Rumble on for sustainable profitable growth over the long term.

At the turn of the tornado in March Threerd 2020, and the issuance of stay at home order. Soon thereafter due to covert 19, we were swift to roll back AD spend dramatically and we did so aggressively as it played out not only was it a prudent idea to control spend as dramatically as we did it also gave us another view.

And to our true organic traffic a rare opportunity for a young company. The results were better than expected and although there was an obvious slowdown we have an accurate baseline to build from for our future AD spend as demand returns.

Further the rollback of AD spend led to massive customer acquisition cost improvements during the quarter in Q2, our customer acquisition cost was $147 down from $428 in Q2 2019.

In July we began to ramp marketing spend in support of the launch of Rumble on 3.0 and early successes are being realized. The addition of thousands of vehicles lifted by dealers and consumers on our site will increase the amount of vehicles available, which will benefit consumers who are looking for their perfect vehicle as you'll.

Hey inventories scarcity. In addition to new paid ads, we expect our inventory aggregation to strengthen the organic traffic. We expect pre owned vehicle sales to begin to increase from Q2 level as we begin to increase our brand building and utilize direct response channels to efficiently source.

And scale our addressable markets.

Since we're not providing guidance we want to offer some additional color about monthly trends. Thus far this year, we experienced what we believe was the bottom of the downturn in mid April with the largest unit sales decline and our lowest level of inventory acquisition during the quarter total unit sales for the month of April were down.

66% from January levels by the end of April conditions began improving slowly and began ramping quicker as the month of May progressed, the velocity of the rebound in May and June was higher than expected and as demand has returned our acquisition of inventory has accelerated in May unit sales increased more than two.

22% from April's lows and we experienced a 46% increase in June as compared to April.

No. We are still below the monthly unit volumes experienced in January and February our results for the month of June July show, our highest gross margin on units sold in our history and significant operating income improvement from prior periods. We don't believe the June and July levels and gross margin are sustainable over the long term. However, we do expect.

For margins will stabilize as demand normalizes.

In the meantime, we will continue to take a disciplined approach to benefit gross profit per unit and continue our march towards our near term profitability goals. While we are seeing increased demand. There is still much uncertainty in the macro environment that could impact our industry and we anticipate the return to business as usual, we'll take some time.

As we learn to navigate a new normal coded 19 has dramatically accelerated the digital transformation across all industries around the world now more than ever consumers and businesses, our operating exclusively online.

All retailers need new ways to reach customers and dealers need access to tools and technology to stay competitive in the new normal market of online transactions.

Rumbles technology was purpose built to enable a simple streamline and 100% online experience, bringing all elements of transactions online companies that really took a hard look at their digital strategy early on and invested in technology solutions are leading in this environment those who didn't need.

By or build it now and rapidly implement new technology and process.

We're super excited to add the content of multiple dealers and drive increased traffic to the new Rumble on dotcom with the launch of Rumble on 3.0 in the coming days, our technology platform tools and ancillary products and services will be available to power sports dealers, enabling their digital transformation.

Rumble laws dealer centric offering will improve participating power sports dealers ability to compete in online only transactions and our cash offer tool Rumble on consumer financing logistics and inspection capabilities will help generate higher quality leads with a greater likelihood of conversion to say.

Sale for all dealers.

We're not only bringing them high quality leads similar to the best listing sites, but we are bringing them to tools technology and services that will give them access to online transactions for most of them. This will be a first.

How did this functionality at the request of many dealers who are struggling with the demand from consumers to transact online rather than in a showroom every dealer we have presented this opportunity to as excited and clearly sees the value in our approach as they are looking to rumble on dotcom to significantly improve and accelerate their online capabilities.

And generate incremental sales.

The launch will be with power sports only however, always keep in mind, our technology was designed to be effective with anything with the Vin included autos boats and rvs once we're ready to launch those verticals.

In July we announced that more than 100 dealers across 20, United States will participate in Rumble on Dotcom 3.0, when we go live and we anticipate accelerated growth quickly thereafter.

Rumble on Dotcom 3.0 will also improve the customer experience. These franchise, an independent power sports dealers maintain thousands of new and used powersports listings, which will be available on rumble on dot com offering tens of thousands of listings for consumers in one marketplace and we anticipate the tremendous increasing costs.

Ted on the site will further accelerate our online traffic.

All while creating incremental monetization and margin opportunities as we continue to scale our core business.

There are several ways, we can monetize rumble on dot com 3.0 listing fees vehicle acquisition fees distribution fees logistics and transportation back in technology and support advertising and more.

As we've mentioned before we see similar business dynamics and opportunities in both in Rvs as in power sports and fully intend to enter those segments when the timing as appropriate in the meantime, the market opportunity to continue our dominance in power sports is Paramount and our automotive distribution model has incredible scalability from.

Where we're at today.

Our ability to backstop trades and consumer purchases for dealers online allows them to manage seasonality and inventory shifts much more effectively.

In our early days of entering the automobile space there were many questions around the timing of that move.

Management at the time and even more so today tilted building the best distribution platform for anything with event was the first step to assure our long term business strategy is successful and we believe this will even be more valuable with Rumble on 3.0.

Further our wholesale express business, which moved over 100000 vehicles in the last 12 month continues to grow and is a meaningful part of our profitability profile going forward.

We are proud of our commitment to investing in software development and that ongoing investment is one thing that we never back down from even during our tornado losses and the onset of cobot.

Due to that relentless commitment to technology development, we now have the ability to buy sell trade and finance not only just rumble on on inventory, but now any dealers' inventory building, our technology and a best of breed distribution platform first has led to and we believe will lead to many more.

One chips going forward and in fact, we continue in talks with many.

For example, we recently announced a pilot program with car gurus that not only validates the strength of our technology, but it demonstrates the agility of our business model cargo Roses, leveraging Rumble launched technology logistics and distribution services to facilitate the testing of an inventory acquisition for dealers to source inventory.

Directly from consumers a 100% online.

We look forward to further opportunities with them. In addition to other strategic business relationships as we continue to leverage we have built in our company's brief history.

We believe there are boundless opportunities ahead of us and this is yet. Another example of how we are executing on our disruptive strategy.

Our proprietary technology suite has underpinned our offerings since day, one we have strong relationships with dealers and are agnostic business model has propelled our rapid expansion in both power sports and automotive from our perspective online transactions were already accelerating rapidly, but covidien 18.

As kick the acceleration into overdrive.

There are a handful of beneficiaries of this rapid industry change and we feel our strategy and supporting technology will lead the way.

Our entire team is excited like never before about the future and management is confident we have the team of highly experienced professionals that will make it happen, especially with the recent additions to our management team and board of directors.

Our team as well versed in the industry, we are disrupting and the newest members of our leadership team are already participating in a big way, we believe they will be instrumental to our organization going forward.

Lastly, I want to stress loud and clear that profitability is key and we are committed to managing our business to achieve sustainable profitable revenue growth and deliver shareholder value over the long term.

As the same goes we're running a marathon not 100 yard dash and in our short three year history. We feel we have barely left the starting date.

And with that I'll turn the call over to Steve to discuss our financial results Steve.

Thank you Marshall our Q2 results are detailed in the press release, we issued this morning, So I will address some of the key metrics and the progress being made towards achieving our profitability targets additional supplemental information is available in our second quarter form 10-Q, which we filed after the market closes today.

While we are experiencing cobot related headwinds that are consistent with the broader industry may have been quick to adapt our using the market trends to our advantage long before cobot, we made the decision to take restrictive steps to accelerate profitability by taking a disciplined approach to vehicle acquisition has sales volume.

In favor of gross margin, we are beginning to experienced meaningful progress towards our goal of achieving sustainable profitability.

As a reminder, in Q2 of last year, we reported record unit sales at 13928 and recorded revenue of 270.2 million, making topline year over year comparisons challenging we believe that by prioritizing our near term profitability goals and despite the.

Adverse impact of significantly reduce commercial activity from the Covance 19, pandemic, which resulted in a decrease in unit purchases and sales of vehicles. Our results demonstrate the operational improvements we've made across the organization.

For the three months ended June Thirtyth 2020, we sold 3694 units and generated revenue of 84 point Threemillion.

Our total overall gross margin of 10% included a gross margin on vehicle sold of 8.5% right profit of $1752 per vehicle, a 74% increase over the same period of 2019.

The gross margin in gross profit per unit with the highest in the company's history and were driven by particularly strong gross margin from sales to dealers, reducing our inventory levels early in the pandemic, leveraging our technology and robust database to acquire high margin inventory and supply and demand imbalances.

Due to increased demand and the limited availability of new inventory, but Oems are still operating have reduced capacity.

The secular trends are beneficial in the near term however, as Marshall discussed we don't believe the impact from supply demand imbalances and higher valuations are sustainable over the long term, while we expect vehicle margins to stabilize and growing with demand. We believe we will drive sustainable margin.

Hansen's through the operational initiatives we've discussed.

Total asked DNA in the quarter was 11.2 million a decrease of 55% year over year and 38% from Q1. The decrease was the result of the sale of fuel vehicles, which is due in part to our continued disciplined approach to sales volume in connection with the prescriptive steps.

Implemented to accelerate profitability and the damage sustained to our operating facilities and inventory held for sale in Nashville, as a result of the March Threerd 2020 tornado and turn the sale of fuel vehicles resulted in a corresponding reduction in related selling expenses sales related compensation and.

Marketing spend for the quarter and a reduction in staff levels and adjusted purchasing levels to align with demand and market conditions and the deferral discretionary growth expenditures such as travel facility expenses and other business cost and expenses due to the significantly reduce commercial activity, resulting from the Empire.

Back to covert 19.

For the first line than Rumble wants history with the health of the receipt of $5.6 million and insurance proceeds we generated positive earnings per share in Q2 operating margins were 2.8% of six and a half points over last year net income was 1 million or 1.2.

<unk> percent revenue versus a net loss of 13 million or negative 4.8% of revenue last year.

Our adjusted EBITDA loss, which excludes the 5.6 million dollar insurance payment was a million three in Q2 2020 compared to a loss of 6.9 million in Q2 2019.

We continue to review damages and coverage with our insurance carrier, resulting from the damage to our Nashville facilities, including inventory held for sale. The loss our inventory has been assessed by the insurance carrier at approximately $13 million on July 20, Threerd 2020, the ensure made in advance against.

A final settlement of the damage claim on inventory of 5.6 million under GAAP. This recovery has been recorded as a separate component of income from continuing operations for the six month period ended June Thirtyth 2020 is included in accounts receivable at June Thirtyth 2020.

We maintain pool insurance coverage for damage to facilities and inventory as well as business interruption insurance and we maintain our view that we were cover the full value of the impairment.

Turning to cash.

We have a strong focus on preserving liquidity as we move closer to our goal of achieving sustained positive cash flow from operations in Q2, we generated a $600000 increase and cash during the quarter.

As of August 13, 2020, the company at approximately 11.1 million of cash of which 5.5 million as restricted and approximately 31 million of remaining availability under our next year credit line.

Additionally, the company expects to receive the remainder of our insured losses. However, no assurance can be given regarding amounts if any that ultimately recovered or when such amounts if any will be recovered.

As Mark will discuss we created ramble on dotcom 3.0 to participate in transactions that will be incremental to our current business model and require less capital commitment.

With our focus on high margin and profitable transactions, we will continue to maintain our disciplined and data driven approach to revenue generation given the uncertainty of ongoing impact and unprecedented condition surrounding the covert 19 pandemic, we cannot predict the overall effect tour on Milan, our custom.

Mers regional partners and others that we work with as a result, we believe is prudent to continue to withhold guidance until we can better gauge market conditions and have a clear understanding of the lasting impact from cobot Nineteens pandemic.

We're making steady progress towards our near term profitability target and positive cash flows and we are confident and sustained profitability isn't our line of sight, but we still have work to do.

We view the progress we made thus far and the improvement in cash use during the quarter as beneficial near term catalysts on our March the profitability, but we are always looking ahead, we are committed to our financial objectives drive sustainable and profitable growth generate positive cash flows and deliver.

Long term shareholder value.

Thank you, we'll now open the call up for questions operator.

At this time I'd like to remind everyone in order to ask a question. Please press star followed by the number one on your telephone keypad and we'll pause for a moment, while we compile the Q in a roster.

And again as a reminder, if you'd like to ask a question. Please press Star then one on your telephone keypad. Our first question comes from the line of Ron Josey with JMP Securities Go ahead. Please your line is open.

Great. Thanks for taking the question Hi, Marshall High Steve I've got I've got three questions that.

Others right through and then we can go one by one but all these provide the the topics. So first question Marshall can you talk just about the quarterly cadence understood. The April may and June commentary, but maybe give us some insight on July and August.

That would be helpful. Just given your commentary around highest online activity in strongest demand and then the second question is on Rumble 3.0, you said launching in the next coming days you talk about the rollout here the focus on power sports only what needs to happen to expand the auto then Steve you could just sort of reiterated.

One of the benefits was to focus on less margin commitment here. These expand that a little bit more as to why that's the case and then the last question hopefully this makes sense just on car viewers.

Can you provide you some update on the pilot on in terms of how cargo is helping to helping dealers source or customer inventory, specifically, maybe talking about the rollout process. How car gurus is promoting the product I think it's just a pilot, Massachusetts, but just any any early feedback and how this could expand would be helpful. So quarterly cadence Rumble 3.0 in margin.

And then cargo carriers would be helpful. Thank you guys.

Okay great.

Marshall to.

I'll start beginning.

Yes, I think what we described as far as the cadence of of April and May.

In June.

Kind of setting the tone for whereas where it's headed.

Keep in mind when we when we had the tornado lost cobot is one thing coded would have for a short period of time slowed down demand and we would have been still sitting with inventory, but just prior to co bid we lost about 70% of our automotive capacity due to the tornadoes so.

And continue to work through that in a very efficient in a very efficient manner. We believe here within the next couple of weeks, we'll have a very very small percentage of those.

Vehicles left to to liquidate so.

With that said I think that.

You've heard from others were experiencing the same thing.

Business has been vibrant to say the least.

The dealer demand out there because I believe because of their lack of new vehicle inventory has been excessive.

Typically in the last say 30 days.

We'll see.

Three times the amount of dealers.

Acquiring.

On purchase of our of our vehicles.

And so the inventory turn is also been as vibrant as well as we've seen it.

You know we developed a lot of software along the way I think we discussed a couple of quarters ago about about of software tool that we developed.

That Tim look at masses of inventory and determine individual opportunities and we utilize that software today in a very very big way and it does allow us to acquire inventory sometimes in remote locations that has been extremely profitable.

So.

You know, we're we're excited about Q3.

But there's still a lot of the of the quarter left and we are starting to see a little normalization, especially on the value side values were like way out of whack. The rebound was significant and again I'm not saying everybody else hasn't said, but.

But we are starting to see it normalize a little bit but the demand remains really really hot.

3.0, and why the emphasis on power sports.

It's from a few different things number one as you know when we launched the company as a whole we launched our original website as well as as of the two of the website last year, we always start with a focus on power sports and the reason from our perspective is power sports, we really don't have any competition and what we do.

It gives us a really good glance at what the opportunity truly is and what kind of market share we can grab.

We also have tremendous proprietary data now from the well in excess of a half a million cash offers that we provided and the amount of power sports that we have now redistributed into the marketplace. Our data is very very robust in that regard so.

We felt it was.

Very strong mode. The second piece of why is because with the addition of dealers to be able to list. There is a lot of opportunities on the automotive side.

And we're going to talk about cargo is in a second we believe there the leaders in the space.

And and they're looking forward on what that what that opportunity looks like for them as well they are purely automotive focused.

We are agnostic to all makes models and segments of vehicles long term.

So we felt that with everything that we had going on the the direction of of.

Using power sports is the lead was consistent with what we've done in the past and really of the best move for us that does not mean that we might quickly.

Add other segments, but as you know you've heard me talked many times about.

Boats, and Rvs boats and Rvs there is.

There is really almost no competition in that regard from an online perspective, and the people that are buying an RV want to be able to do the same transaction online that people are demanding today and on the car side of the business. So we think the faster we can get there is a better off we'll all be.

3.0 is today, you'll be able to you can still put the automotive in into the system you can still get a cash offer on a car all the functionality that was there in the set in the previous burned to current version because we haven't launched three three yet and when we say the following days in just the next few days, we will launch it's it's completely test.

Baked and ready to roll.

We're just working on some finalization on integration primarily.

Integrating hundreds of dealers and thousands and thousands of vehicles into your platform.

Required both some technology advances as well as working through some.

Some challenges on the power sports side. Unlike the automotive side a lot of these guys do not have the level of any technology on their end and so we've had the been we've had to adapt to being able to push inventory supply into our website from a plethora of Dms is in some of them you'd be hard pressed to even call.

On the Dms, so that hopefully that answers that piece of the car gurus real quick.

Cargo as we've mentioned for the last couple of quarters that we've been working on different strategic relationships and we are we can't be.

The other ones that we are well down the road on we've got to be very very careful because obviously you do those negotiations through end da we know a lot about car gurus in cargo is now no knows a lot about us and it wouldn't be right for us it to discuss internal strategies and those types of things, but I wouldn't tell you that we we met with them.

Probably a year ago now for the first time and we've been in constant contact and talking about the future in the future of both companies and what the roll My D. and how we see dealers transacting in this whole in this whole online on slot and I think we are in agreement on a lot of differ.

And things of what we see the future to be so right. Now we are doing a test where we have basically became the backstop, they're not in a position nor the equip nor are they want to be equipped at this point to do things like take title and be responsible for logistics of moving these vehicles, whether it be from.

And that is house to a dealer or from a dealer to an auction or whatever it might be.

And then the just the pure distribution of it our numbers proves that we are a very very effective re distributor of cars and trucks as and certainly in motorcycles, we lead by by a giant amount so.

The cargo was test is really a supply and kind of I call. It a backstop.

For all of the functionality that they don't presently have but they see a huge opportunity as we do to be more to their dealer.

Partners.

Then just a place to list your vehicles and get.

Click throughs with regards to yell Geez, you have a blue one or whatever the question might be to actually generating quality leads that transact into incremental sales and what what that what that means is when you don't have the things that we've talked about openly is the whole <unk>.

Comparison to the mortgage industry very few people go out and shop for a home today without being pre approved and knowing what they combined and I think carvana has proven that consumers want that same level of service and that was the reason for us forming ramble on finance.

These are all things that we now have the platform and we can leverage but it's all driven by what the customer's demand is and make no mistake about it cargo rose like US we all believe that at the end of the day, whether your business model is going to work in this new normal recalling it.

It was going to be the judge and jury is out in the judge and jury is in the hands of the consumer and.

So that's a long answer to the car gurus, but we see some great things coming out of that we have great relationship with them. We like on a lot. We think a lot the same and we think theres going be a lot of opportunity and things that we'd like to do we're good at we have the tools to do and they might or might not ever want to do those things.

And then we're going to be there to be able to provide whatever level of service, we can and we're going to be testing a whole lot of things because you know a motor a power sports dealer that we're going to be offer and is huge level of service and all these pre qualified finance leads and all these things. These are all things that could be done on steroids in the automotive space now whether that's now.

Them or us are both the market is plenty big for a whole bunch of winners.

So hopefully I answered those you want to answer the financial question, Ron just touch on the margins I think Marshall approach to order with the tools that we've created allowing us to go back to those 500000 cash offers that we received we're looking for something that's trending in the market. We're able to go back against all those offers as those people in may.

The respects have not yet so the vehicle. We've also changed our day planned out we've got the wholesaling business well integrated and tucked in we've changed our pay plan is much more margin driven and the fact that were not chasing after topline growth necessarily at the expense of margins I think we've been more disciplined and what we buy when we buy it and held by it.

Okay.

That's great. Thank you guys appreciate it.

I might add Ron just one more thing I might add with regards to gross margin.

Obviously, we don't feel we are competitors with the likes of bromine Carvana and carmax, but for whatever reason because we're in the space everybody wants to do comparisons and with regards to gross margin I'd urge you to look at Q2 results.

Being primarily dealer driven and again remember power sports have a and they are there in our numbers power sports have one third of the hsp that a car does but yet I think the I think the spread as I thought in Q2 was carvana at times.

80, 726 Rumble on at 22, 89 room at 686, and only reason I point that out is because.

If you look at you guys have heard me say before if you look at the SGN, a and the expense from from infrastructure people.

Marketing name it to create a dealer sale versus a retail sale, it's worlds difference and what we've been able to do is turn inventory extremely fast because of this ultra high dealer demand and again Thats. What I mentioned earlier that we think that will will normalize but I would tell you it has not normal.

As of yet.

So with that that's.

Anything else rough permit.

I'll just go back in the queue. Thank you very helpful.

Ladies and gentlemen, we do conclude today's conference. We thank you for joining you may now disconnect.

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