Q4 2024 RumbleOn Inc Earnings Call

Greetings and welcome to Rumble on Inc, fourth quarter and full year 'twenty 'twenty four earnings conference call.

Operator: Greetings and welcome to the RumbleON Inc fourth quarter and full year 2024 earnings conference call. At this time, all participants are in a listen-only mode.

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

Operator: A brief question and answer session will follow the formal presentation. As a reminder, this conference is being recorded.

A brief question and answer session will follow the formal presentation.

As a reminder, this conference is being recorded.

Elliott Wagner: It is now my pleasure to introduce your host, Elliott Wagner, Vice President of Finance. Thank you, please go ahead. Thank you, operator. Good morning, everyone. And thank you for joining us on this conference call to discuss RumbleON's fourth quarter and full year 2024 financial results. Joining me on the call today are Mike Korteri, RumbleON's Chief Executive Officer, and Tiffany Kice, RumbleON's Chief Financial Officer. Our Q4 and full-year results are detailed in the press release we issued this morning, and supplemental information will be available in our Form 10-K once submitted.

Speaker Change: It is now my pleasure to introduce your House Elliott Wagner Vice President of Finance. Thank you. Please go ahead.

Speaker Change: Thank you operator.

Speaker Change: Everyone and thank you for joining us on this conference call to discuss Rumble on fourth quarter and full year 2024 financial results.

Speaker Change: Joining me on the call today are Mike Baur, Terry <unk>, Chief Executive Officer, and Tiffany Kite Rumble Longe Chief Financial Officer.

Speaker Change: Our Q4 and full year results are detailed in the press release, we issued this morning and supplemental information will be available in our Form 10-K once filed.

Elliott Wagner: 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 involves 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 files. 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.

Speaker Change: 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 and involves risks and uncertainties that may cause actual results to differ materially from those discussed here.

Speaker Change: Additional information that could cause actual results to differ from forward looking statements can be found in rumble on periodic and other SEC filings.

Speaker Change: The forward looking statements and risks in this conference call, including responses to your questions are based on current expectations as of today and Rumble on assumes no obligation to update or revise them, whether as a result of new developments or otherwise except as required by law.

Elliott Wagner: Also, the following discussion contains non-GAAP financial measures. For a reconciliation of those non-GAAP financial measures, please see our earnings release issued earlier this month.

Speaker Change: Also the following discussion contains non-GAAP financial measures.

For a reconciliation of those non-GAAP financial measures. Please see our earnings release issued earlier this morning.

Mike Korteri: Now I'll turn the call over to Mike Portieri, RumbleON's CEO. Mike? Good morning, everyone, and thank you for joining us for RumbleON's fourth quarter and full year earnings call.

Speaker Change: Now I will turn the call over to Mike for Terry Rumble on CEO Mike.

Mike: Good morning, everyone and thank you for joining us for <unk> fourth quarter and full year earnings call. It's great to be here with you on my first earnings call with the company I'm very excited to have taken over the reins of Rumble on and honored that the board has placed their trust in me to lead the company.

Mike Korteri: It's great to be here with you on my first earnings call with the company. I'm very excited to have taken over the reins of RumbleON and honored that the board has placed its trust in me to lead the company. As CEO of the leading consolidator of power sports dealerships in the country, I'm drawing on my experiences within publicly traded companies such as Dave & Buster's, Las Vegas Sands, and Scientific Games. My roles within these companies gave me hands-on experience managing multi-unit, consumer-facing operations, value-creating M&A, and balance sheet optimization, as well as on overall financial rigor and discipline, focused on driving free cash flow and delivering shareholder value.

Speaker Change: As CEO of the leading consolidator of power sports dealerships in the country I'm drawing on my experiences within publicly traded companies such as Dave <unk>, Buster's, Las Vegas Sands and scientific games.

Speaker Change: I rolled within these companies gave me hands on experience managing multi unit consumer facing operations.

Speaker Change: <unk>, creating M&A and balance sheet optimization as well as an overall financial rigor and discipline focus on driving free cash flow and delivering shareholder value.

Mike Korteri: When I joined the board back in April, I developed a high-level view of the business and recognized that while there were challenges, there were also a large opportunity to improve our overall execution. Over the last two months, I've had the opportunity to visit a number of our dealerships and meet with the teams that drive the business on a daily basis. We have identified key work streams and efficiency opportunities, and are prioritizing specific initiatives, all with a focus on delivering improved results, driving free cash flow, and creating value.

Speaker Change: When I joined the board back in April I developed a high level view of the business and recognize that while there are challenges. There are also a large opportunity to improve our overall execution.

Speaker Change: Over the last two months I've had the opportunity to visit a number of our dealerships and meet with the teams that drive the business on the daily basis.

Speaker Change: We have identified key work streams and efficiency opportunities and are prioritizing specific initiatives all with the focus on delivering improved results.

Speaker Change: Driving free cash flow and creating value.

Mike Korteri: It is my goal to foster a high-performance culture within our company. To that end, I'm excited to be partnering with Cam Tack, our newly appointed Chief Operating Officer. Cam grew up in the power sports dealership business and has a lifetime of hands-on experience in all aspects of our frontline operations. In the short term, I believe there are immediate opportunities to enhance revenue, right-size the organization, and grow EBITDA and free cash flow. It is critical we build a strong foundation for future growth by streamlining our cost structure and further standardizing our systems and processes. Over time, I expect to accelerate our growth, both via acquisitions and organic avenues, and we will allocate our capital to the highest return opportunity.

Speaker Change: It is my goal to foster a high performance culture within our company.

Speaker Change: To that end I am excited to be partnering with Cam tag our newly appointed Chief Operating Officer, Ken grew up in the power sports dealership business and has a lifetime of hands on experience in all aspects of our frontline operations.

In the short term I believe there are immediate opportunities to enhance revenue rightsize, the organization and grow EBITDA and free cash flow. It is critical we build a strong foundation for future growth by streamlining our cost structure and further standardizing our systems and processes.

Speaker Change: Over time, I expect to accelerate our growth both via acquisition and organic avenues, and we will allocate our capital to the highest return opportunities.

Speaker Change: It's no secret we are operating in a difficult environment from a macro and industry perspective.

Mike Korteri: It is no secret we are operating in a difficult environment from a macro and industry perspective. That being said, I am proud of the team's performance, especially our frontline teams in our stores. And I believe the actions we are taking during this difficult time for our industry will enable us to emerge a much stronger company.

Speaker Change: That being said I am proud of the team's performance, especially our frontline teams in our stores and I believe the actions. We are taken during this difficult time for our industry will enable us to emerge a much stronger company.

Mike Korteri: As we mentioned on previous calls, we set a goal to reduce new inventories by $50 million for the full year 2024. We have exceeded that inventory reduction goal, reducing new inventories by over 80 million, and believe we are going into 2025 with the appropriate level of new inventory. Regarding cost and efficiency, while the company took steps last year to lower our expense structure, having been in the seat for two months now, I believe there is further opportunity to lower our cost.

Speaker Change: As we mentioned on previous calls we set a goal to reduce new inventories by $50 million for the full year 2024, we have exceeded that inventory reduction goal, reducing new inventories by over $80 million and believe we are going into 2025 with the appropriate level of new inventory.

Speaker Change: Regarding cost and efficiency, while the company took steps last year to lower our expense structure, having been in the seat for two months now I believe there is further opportunity to lower our costs.

Speaker Change: Our asset light vehicle transportation brokerage business wholesale express was.

Mike Korteri: Our asset light vehicle transportation brokerage business, Wholesale Express, was able to deliver growth in units transported in 2024. However, a change in leadership in this segment and the subsequent exiting of nearly all of our sales teams, known as brokers, in the first quarter of 2025 will likely result in a significant reduction in volumes in 2025. We've taken immediate and decisive actions to mitigate the effects of this turnover. We've recruited a new experience management team to lead the operation and they are moving forward with solid traction in attracting new brokers. Although we expect 2025 results from this segment to take a large step back from 2024, We are expecting to achieve positive EBITDA from this segment in 2025 and believe that the operation is far better positioned for more sustainable long-term growth and potential further integration into our power sports division.

Speaker Change: It was able to deliver growth in units transported in 2024.

Speaker Change: However, a change in leadership in this segment and the subsequent exiting of nearly all of our sales team known as brokers in the first quarter of 2025 will likely result in a significant reduction in volumes in 2025.

Speaker Change: We've taken immediate and decisive actions to mitigate the effect of this turnover.

Speaker Change: We've recruited a new experienced management team to lead the operation and they are moving forward with solid traction in attracting new brokers.

Speaker Change: Although we expect 2025 results from this segment to take a large step back from 24.

Speaker Change: We are expecting to achieve positive EBITDA from this segment in 2025 and believe that the operation is far better positioned for more sustainable long term growth and potential further integration into our power Sports Division.

Speaker Change: Looking forward, we are going to discontinue any reference to the vision 2026 plan laid out by our prior management.

Mike Korteri: Looking forward, we are going to discontinue any reference to the Vision 2026 plan laid out by our prior managers. In my experience, while it's good to have aspirational goals in mind, our focus needs to remain on driving profitability, growing the company, and creating shareholder value day in and day out. Over time, our results will speak for themselves.

Speaker Change: In my experience, while it's good to have aspirational goals in mind, our focus needs to remain on driving profitability growing the company and creating shareholder value day in and day out.

Speaker Change: Over time, our results will speak for themselves.

Mike Korteri: Furthermore, the global tariff landscape is dynamic and rapidly changing. Assuming currently contemplated tariffs are enacted and persist, affordability of certain products we sell could be hampered, negatively impacting customer demand. I'll conclude by saying again that I'm very excited to be here. I'm focused on instilling a high-performance women's culture and building a strong foundation for growth while improving profitability.

Speaker Change: More of the global tariff landscape is dynamic and rapidly changing.

Speaker Change: Assuming currently contemplated tariffs are enacted in persist affordability of certain products, we sell could be hampered negatively impacting customer demand.

Speaker Change: Ill conclude by saying again that I am very excited to be here.

Speaker Change: Focus on instilling a high performance, winning culture and building a strong foundation for growth while improving profitability.

Mike Korteri: Two of our largest shareholders, Mark Tack and Bill Coulter, founded the core of RumbleON over 30 years ago through their company, RightNow, which was acquired by RumbleON a few years ago. Under Mark and Bill, right now with a well-run and profitable business. As I take over the helm as CEO, my overarching goal is to return the company to operational excellence and re-instill that winning culture that existed for so many years. with 55% of outstanding shares owned by members of the board. Rest assured, we and the board will continue to make decisions in the best interest of long-term per share value creation.

Speaker Change: Two of our largest shareholders Mark tack and Bill culture founded the core of Rumble on over 30 years ago through their company right now, which was acquired by Rumble on a few years ago.

Speaker Change: Under Mark and Bill right now with a well run and profitable business as I take over the helm as CEO. My overarching goal is to return the company to operational excellence and re instill that winning culture that existed for so many years with.

Speaker Change: With 55% of outstanding shares owned by members of the board.

Speaker Change: Rest assured we and the board will continue to make decisions in the best interest of long term per share value creation.

Tiffany Kice: Now I'd like to turn the call over to Tiffany to walk us through the fourth quarter financial performance in detail. Thank you, Mike, and good morning, everyone. I will start by reviewing our financial results for the fourth quarter of 2024, followed by an overview of our balance sheet. We generated revenue of $269.6 million and adjusted EBITDA of $2.2 million in the fourth quarter of 2024. Revenue was down 13.4% year-over-year and adjusted EBITDA was up year-over-year as compared to a slight loss in the same quarter last year. Total company adjusted SG&A expenses were $62.3 million, or 92.3% of gross profit, compared to the same quarter last year of $80.8 million, or 113.5% of gross profit.

Speaker Change: Now I'd like to turn the call over to Tiffany to walk us through the fourth quarter financial performance in detail.

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

Tiffany: We generated revenue of $269 6 million and adjusted EBITDA of $2 2 million in the fourth quarter 2024.

Tiffany: Revenue was down 13, 4% year over year, adjusted EBITDA was up year over year as compared to a slight loss in the same quarter last year.

Tiffany: Total company adjusted SG&A expenses were $62 3 million or <unk> 92, 3% of gross profit compared to the same quarter last year of $80 8 million or 113, 5% of gross profit.

Tiffany Kice: We continue to target adjusted SG&A to be 75% of gross profit in the long term. Adjusted SG&A expenses were 22.9% lower than the same quarter last year. Moving on to our segmented performance, the PowerSports dealership group retailed approximately 14,100 total PowerSports major units during the quarter, which is down 9.3% from the same quarter last year. Total new PowerSports major unit sales were approximately 10,200, down 9.5% to the same quarter last year, while pre-owned unit sales totaled approximately 3,900, down 8.8%. As Mike mentioned earlier, we have made great progress in working down our new inventory levels, over 80 million from 2023 to 2024.

Tiffany: We continue to target adjusted SG&A to be 75% of gross profit in the long term.

Tiffany: Adjusted SG&A expenses were 22, 9% lower than the same quarter last year.

Tiffany: Moving onto our segment performance the power sports dealership group retailed approximately 14100 total power sports major units during the quarter, which is down nine 3% from the same quarter last year.

Tiffany: Total new power sports major unit sales were approximately 10200 down nine 5% to the same quarter last year, while pre owned unit sales totaled approximately 3900 down eight 8%.

Tiffany: As Mike mentioned earlier, we have made great progress in working down our new inventory levels over $80 million from 2023 to 2024.

Tiffany Kice: Our team is working closely with our OEM partners to ensure new inventory levels are aligned to the current market environment going forward. Gross margins for major unit sales continue to be challenged on new and pre-owned inventory in the fourth quarter. New unit gross margins for the quarter were 10.8% compared to 13.2% in the same quarter last year, driven by overstocking in the industry, compounded by our decision to exit non-core product lines and over-assorted brands. Pre-owned gross margins of 9.8% for the quarter compared to negative 10.3% in the same quarter last year, which may not be comparable due to an inventory write-down in the fourth quarter of 2021.

Tiffany: Our team is working closely with our OEM partners to ensure our new inventory levels are aligned to the current market environment going forward.

Tiffany: Gross margins for major unit sales continued to be challenged on new and pre owned inventory in the fourth quarter.

Tiffany: New unit gross margins for the quarter or 10, 8% compared to 13, 2% in the same quarter last year, driven by Overstocking and industry compounded by our decision to exit noncore product lines and over assorted brands.

Tiffany: Pre owned gross margins of nine 8% for the quarter compared to negative 10, 3% in the same quarter last year, which may not be comparable due to an inventory write down in the fourth quarter of 2023.

Tiffany Kice: We continue to leverage Ridenow's cash offer technology, our purchasing scale, and our industry relationships to improve the pre-owned business. Our parts, service and accessories, or fixed operations business delivered $47.2 million of revenue and $22 million of gross profit, or GPU, of $1,554 down $91, or 5.6%. The decrease comes primarily from accessories and service. Our financing and insurance teams delivered $22.6 million in revenue, a GPU of 1,600, down 8.9% year-over-year. The decrease was driven by a decline in unit volume. So all in, revenue from our PowerSports dealership group was $256.2 million, down 14.1% to the same quarter last year.

Tiffany: We continue to leverage right now cash offer technology, our purchasing scale in our industry relationships to improve the pre owned business.

Tiffany: Our parts service and accessories for fixed operations business delivered $47 2 million of revenue and $22 million of gross profit our GPU of 1550, $4091 or five 6%. The decrease comes primarily from accessories and service.

Tiffany: Our financing and insurance teams delivered $22 6 million in revenue our GPU of 1600 down eight 9% year over year. The decrease was driven by a decline in unit volume.

Tiffany: So all in revenue from our power Sports dealership group was $256 2 million down 14, 1% for the same quarter last year.

Tiffany Kice: The decrease in revenue is attributed to the lower major unit volume. Total GPU for the group was $4,547, up $197, or 4.5% to the same quarter last year.

Tiffany: The decrease in revenue was attributed lower major unit volume.

Tiffany: Total GPU for the group was 4547 up a $197 four 5% the same quarter last year.

Tiffany Kice: Turning now to our Asset Light Vehicle Transportation Services Operating Group. For the fourth quarter, Wholesale Express revenue was up 3.1% as compared to the same quarter in the prior year, while gross profit decreased 2.9% to $3.3 million. The increase was driven by an increase in the number of vehicles transported.

Tiffany: Turning now to our asset light vehicle transportation services operating group for.

Tiffany: For the fourth quarter wholesale express revenue was up three 1% as compared to the same quarter in the prior year, while gross profit decreased two 9% to $3 3 million.

Tiffany: The increase was driven by an increase in the number of vehicles transported.

Tiffany Kice: Looking at the full year total company revenue in adjusted EBITDA was approximately $1.2 billion and $32.9 million respectively, as compared to $1.4 billion and $37.4 million in the prior year. Revenue was down 11.5% year-over-year and adjusted EBITDA was down 12%.

Tiffany: Looking at the full year total company revenue and adjusted EBITDA was approximately $1 2 billion and $32 9 million respectively as.

Tiffany: As compared to $1 4 billion and $37 4 million in the prior year.

Revenue was down 11, 5% year over year, and adjusted EBITDA was down 12%.

Tiffany Kice: Total power sports units retailed for the year were approximately $42,500 and $22,500 for new and pre-owned, respectively, as compared to $45,700 and $27,000 for new and pre-owned in the prior year. New unit sales were down 7.1% for the year, while pre-owned units were down 16.4%.

Tiffany: Total power sports units retailed for the year were approximately 42000 522500 for new and pre owned respectively as compared to 45720 $7000 for new and pre owned in the prior year.

Tiffany: Our unit sales were down seven 1% for the year, while pre owned units were down 16, 4%.

Tiffany: Turning now to our balance sheet, we ended the quarter with $96 $7 million in total cash inclusive of restricted cash in non vehicle debt was $182 1 million our cash balance at fiscal yearend was benefited by the completion of our previously announced $30 million capital raised in the form of a 10 million.

Tiffany Kice: Turning now to our balance sheet, we ended the quarter with $96.7 million in total cash, inclusive or restricted cash, and non-vehicle debt was $182.1 million. Our cash balance at fiscal year-end was benefited by the completion of our previously announced $30 million capital raise in the form of a $10 million rights offering, $4 million related party property sale and lease back, and $16 million related party pre-owned floor plan facility. Availability under our short-term revolving floor plan credit facilities totaled approximately $146.2 million as of December 31. Total Available Liquidity, defined as total cash plus availability under four plant credit facilities on December 31st, totaled $242.9 million.

Tiffany: Rights offering $4 million related party property sale, and leaseback and $16 million related party pre owned floor plan facility.

Tiffany: Availability under our short term revolving floorplan credit facilities totaled approximately $146 2 million as of December 31.

Tiffany: Total available liquidity defined as total cash plus availability under <unk> credit facility on December 31 totaled $242 9 million.

Tiffany Kice: Cash inflows from operating activities were $99.4 million for the 12 months ended December 31st, as compared to cash outflows of $38.9 million for the same period in 2020.

Tiffany: Cash inflows from operating activities were $99 4 million for the 12 months ended December 31, as compared to cash outflow of $38 9 million for the same period in 2023.

Tiffany Kice: I am also pleased to announce that shortly after the close of fiscal 2024, we repaid all of our outstanding $38.8 million of convertible notes, which matured on January 1, 2025, from our $85.3 million of unrestricted cash as of 12-31-2024. 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 For more information visit www.FEMA.gov As we mentioned last quarter, we've engaged an investment bank to help explore refinancing of the company's debt, and those conversations continue to be ongoing.

Tiffany: I'm also pleased to announce that shortly after the close of fiscal 2024, we repaid all of our outstanding $38 8 million of convertible notes, which matured on January one 2025 from our to $85 3 million of unrestricted cash as of 12 31 2024.

Tiffany: 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.

Tiffany: As we mentioned last quarter, we have engaged an investment bank to help explore a refinancing of the company's debt and those conversations continue to be ongoing.

Elliott Wagner: With that, we would like to begin the question and answer session.

Tiffany: With that we would like to begin the question and answer session I will turn the call back over to the operator now to open the lines.

Elliott Wagner: I will turn the call back over to the operator now to open the line.

Tiffany: We will now begin the question and answer session.

Operator: We will now begin the question and answer session. To ask a question, you may press star then 1 on your touchtone phone. If you are using a speakerphone, please pick up your handset before pressing the key.

Tiffany: To ask a question you May Press Star then one on your Touchtone phone.

Tiffany: If you are using a speakerphone please pick up your handset before pressing the keys.

Operator: If at any time your question has been addressed and you would like to withdraw your question, please press star then 2. We ask that you please limit yourself to one question and one follow-up.

Tiffany: If at any time. Your question has been addressed and you would like to withdraw your question. Please press Star then two.

Tiffany: We ask that you please limit yourself to one question and one follow up.

Tiffany: At this time, we will pause momentarily to assemble our roster.

Operator: At this time, we will pause momentarily to assemble our roster.

Speaker Change: The first question today comes from Jeff fashion with Wedbush Securities. Please go ahead.

Jeff Basham: The first question today comes from Jeff Basham with Wedbush Securities. Please go ahead.

Matt McCartney: Hi, This is Matt Mccartney on for SaaS.

Matt McCartney: Hi, this is Matt McCartney on for Seth. Just a couple questions for you. I guess let's just get the tariffs or question out of the way here. Sure, it's on everyone's mind. If you give some more color on your exposure there, the sort of key OEMs that have the largest exposure and how you think about sort of handling the cost increase that might come through. Yeah, look, obviously it's a question that's on top of mind for a lot of people, but I think the best way to answer that is we look at our top three OEMs. It's Polaris, BRP, and Harley-Davidson.

Speaker Change: Just a couple of questions for you I guess, let's just get the tariffs are a question on the way here curious on everyone's mind, if you could give some more color on your exposure there the sort of key Oems that have the largest exposure and how you think about sort of handling the cost increase that might come through.

Speaker Change: Yes look it obviously, it's a question that's on top of mind for a lot of people, but I think the best way to answer that is when we look at our top three Oems is polaris be ERP and Harley Davidson historically.

Matt McCartney: Historically, they basically run, call it, 60% to 65% of our sales. So, given their background and where their distribution is from a manufacturing perspective, I think it's difficult at our time to really gauge the magnitude of the impact, given the level of uncertainty and the fact that it changes just about every day. Obviously, when we look at it in the short run, there's two ends to the extreme. They're either the OEMs are going to accept 100% of the tariff, or they're going to pass 100% on to the consumer. And so we're going to be sandwiched in the middle of it.

Speaker Change: Basically run call it 60% to 65% of our sales.

Speaker Change: Given their background and where their distribution is from manufacturing perspective.

Speaker Change: I think it's difficult at our time to really gauge the magnitude of the impact given the level of uncertainty and the fact that it changes just about every day.

Speaker Change: Obviously, when we look at it in the short run there's two wins due to the extreme there either the Oems are going to accept 100% of the tariff or theyre going to pass 100% on to the consumer and so we're going to be sandwiched in the middle of that so there's going to be a push and pull that just takes place and I think that push and pulls could be dynamic.

Matt McCartney: So there's going to be a push and pull that just takes place, and I think that push and pull is going to be dynamic. You know, basically be ever changing. So at this point to quantify any type of impact of that, I think it's just way too early to tell.

Speaker Change: Basically the ever changing so at this point to quantify any type of impact of that I think is just way too early to tell.

Speaker Change: Okay fair enough.

Matt McCartney: Okay, fair enough. I guess though, just the you know, we've seen a lot of consumer issues crop up here in the last couple months, and you know, consumer confidence and sort of the thought of tariffs having impact on the consumer. So wondering if there's anything quarter to date that you could kind of share if you're seeing a similar sort of slowdown in the business or anything you can add to help us understand how things are going so far this year?

Speaker Change: Yes, so just the we've seen a lot of.

Speaker Change: Consumer issues crop up here in the last couple of months and consumer confidence in sort of the thought of tariffs having impact on the consumer I was wondering if theres anything quarter to date that you could kind of share.

Speaker Change: Youre seeing a similar sort of slow down the business or anything you can add to help us understand how things are going so far this year.

Speaker Change: Yeah look I think I'll comment on one we don't give inter quarter commentary on results since we don't give out guidance, but yes, we're not any different than anybody else from a consumer perspective, yes. There is a multitude of factors that are impacting consumers, whether it's interest rates their overall help from a spending perspective.

Mike Korteri: Yeah, look, I think I'll comment on one, we don't give, you know, inter-quarter commentary on results since we don't give out guidance, but, you know, we're not any different than anybody else from a consumer perspective, you know, there's a multitude of factors that are impacting consumers, whether it's interest rates, their overall health from a spending perspective, obviously the potential impact of tariffs, any other impact from any other new policy or potential policy changes from the new administration, so the one thing we can do is control what takes place within our four walls, and that's what we're doing.

Speaker Change: Obviously, the potential impact of tariffs.

Speaker Change: Any other impact from any other new policy or potential policy changes from the new administration. So.

Speaker Change: The one thing we can do is control what takes place within our four walls and Thats what were doing.

Speaker Change: The next question comes from Craig Kennison with Baird. Please go ahead.

Craig Kennison: The next question comes from Craig Kennison with Baird. Please go ahead. Good morning, thanks for taking my questions. I think you mentioned that you feel comfortable now with your the level of inventory in your dealerships. I'm curious how you feel about the rest of the inventory or the industry. Yeah, I think from a overall inventory perspective, like we said, we were very comfortable with the measures we took place a year ago to get the new inventory in line with where we thought expectations should be. So we're very happy and confident with where we're sitting there.

Craig Kennison: Good morning, Thanks for taking my questions. I think you mentioned that you feel comfortable now with your the level of inventory in your dealerships I am curious how you feel about the rest of the inventory.

Speaker Change: Industry inventory.

Speaker Change: Yes, I think from a overall inventory perspective, like we said we were very comfortable with the measures we took place a year ago to get the.

Speaker Change: New inventory in line with where we thought expectation should be so we're very happy and confident with where we're sitting there.

Mike Korteri: I think from a parts inventory perspective, it's probably a little still too high, but that's not a material component of our operation from a balance sheet perspective.

Speaker Change: I think from a parts inventory perspective, it's probably a little still too high but.

Speaker Change: But thats not a material component of our operation from a balance sheet perspective today.

Speaker Change: Do you feel like the rest of the industry is at your level or will do well there continue to be promotional activity that depresses gross margin.

Mike Korteri: Do you feel like the rest of the industry is at your level or will there will there continue to be promotional activity that depresses gross margins? I think there will always be that factor sitting out there. You know, one of the offsets of that is, you know, what the impact of tariffs are going to be on that as well.

Speaker Change: I think there'll always be.

Speaker Change: That factor sitting out there.

Speaker Change: One of the offset to that is what the impact of tariffs are going to be on that as well. So it's going to be an ever evolving operation of what we're seeing from not only our competitors, but what our Oems are going to be providing us to help move product depending on what the impact of all of this will be.

Mike Korteri: So it's going to be an ever-evolving operation of what we're seeing from not only our competitors, but what our OEMs are going to be providing us to help move product, depending on what the impact of all of this This concludes our question and answer session and concludes the conference call. Thank you for attending today's presentation. You may now disconnect. © BF-WATCH TV 2021

Speaker Change: This concludes our question and answer session and concludes the conference call. Thank you for attending today's presentation. You may now disconnect.

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