Sentiment Analysis of the earnings transcript to help figure out if there are any bullish or bearish sentiments that could be gathered from it. We're doing ML and AI based analysis on the earnings call to get some more insights.
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| Statement |
|---|
| We believe the size of the capital raise in the format are well suited to achieve these two goals |
| First, I've been very impressed with the passion of our team |
| We've proven that acquiring underperforming dealerships and optimizing our operations with the right processes, personnel and inventory management which have now perfected over a 30-plus years span will yield here results for the company and its shareholders |
| We're pleased to have such a proven leader join RumbleON at such an important time in our history |
| Mike is a seasoned executive with a proven track record in the powersports industry |
| I've known Mike for many years, and I'm confident that with his expertise and successful background in the field, he is uniquely qualified to lead RumbleON's transformation plan and enhance value for our shareholders |
| As most of you know, there have been a lot of change in recent months here at RumbleON, and I'm convinced that the team is focused and is excited about what we can accomplish together |
| Second, I'm confident that we will deliver an efficient operation and deploy our capital smartly for the benefit of shareholders |
| Our team is committed to clearing out the 2023 products and feel confident these actions are setting us up for a strong 2024 and forward |
| Additionally, we believe we will sell our finance portfolio before year-end 2023 and are confident we will be able to pay off an additional $15 million of Oaktree debt from the proceeds of this sale as well as eliminate the finance company's line of credit that supported this loan portfolio, further reducing costs, simplifying our company and reducing debt |
| We have put the company back on solid ground with a plan for growth and value creation for shareholders |
| Mark is an incredibly successful and smart businessman, and I look forward to building on the momentum that he has created here |
| These changes will increase the right vehicle yield, helping us to achieve a better balance of new and used inventory |
| And by the end of the year, I think it was our target to really try to get our used inventory lined up, I think we're in a really good shape |
| In particular, once the rights offering is completed, in a little over 3 weeks, our balance sheet will be greatly strengthened, and we'll be in a position to go on the offense acquiring dealerships and expanding our footprint |
| We're confident that he will manage our turnaround plan efficiently and effectively by instituting further cost-saving initiatives, repositioning our inventory management process, strengthening our balance sheet, and executing a more disciplined and strategic approach to acquisitions |
| Second, we continue to improve our inventory management |
| As the team has detailed, we continue to execute on our strategy during the quarter and are pleased with the progress we have made despite having to make some tough decisions |
| We will take advantage of these programs and enhance them through increased digital strategy, on-site events, stronger staff incentives and the movement of excess products into higher-performing consumer markets |
| This strategy has produced strong returns in the past, and we believe it is vital to the long-term success of the company |
| We're doing well in moving the '23 product |
| As you know, we have implemented $30 million in annualized cost reductions and have identified another $12 million, totaling annualized cost savings of $42 million, with the effect of these measures benefiting 2024 |
| And I don't want to give you too much of the secret sauce, but we're really looking at fine-tuning the process that's already in place, we're being very successful with that |
| Third, we are actively strengthening our balance sheet |
| The guidance right now is [53.50] [ph], which is pretty squarely in the middle of where we're at right now and anticipate that we will start to see improved margins in used in 2024, but that could be partially offset by new inventory margins, which quite frankly, we've got a lot of new inventory at this point |
| They are assisting, as I said earlier, with incentives, rebates, some additional buydown on the financing, so we're seeing good activity on those promotions |
| And so – Mark Tkach We have got 24 products coming in, it is holding a better margin |
| Despite the challenges that exist, we have the utmost confidence that our team of dealership professionals will rise to the occasion, and we look forward with confidence to the future |
| We're happy with that ratio |
| We plan to make more room for the 2024 model year and are making progress by aggressively marketing the non-current model year product |
| Statement |
|---|
| Adjusted EBITDA was $13.2 million in the third quarter, down 44% from the second quarter of 2023, driven by normal seasonality and a lag in expense reductions made during the quarter |
| Total third quarter gross profit was $91.9 million, down $14.5 million from the prior quarter |
| Gross margin has troughed and normalized |
| Moving to revenue in the third quarter, we generated $338.1 million, which is down 11.7% or $44.6 million from the prior quarter due to normal seasonality |
| The quarter-over-quarter reduction in gross profit dollars was driven entirely by reduced vehicle sales due to normal seasonality as all other profit centers, which include F&I, parts and accessories and service tend to flow in concert with vehicle sales |
| Adjusted net loss from continuing operations was $11.9 million and adjusted diluted earnings per share was negative $0.71 |
| We sold 17,573 retail units including 10,851 new units and 5,619 used units, down 13.3% from the prior quarter due primarily to normal seasonality |
| And then on the used side, we've still got some overhang there |
| Not to diminish the challenges that exist, which are real, heightened interest rates, non-current inventory, inflationary and economic pressures on our consumers and geopolitical unrest to name a few, while options to finance our discretionary products remain available and plentiful, rates are certainly higher, and we are seeing increased pressure on the lower credit consumers |
| With very few exceptions, new inventories back to pre-pandemic levels |
| We have slowed down a little bit on our acquisitions, but at that time of year |
| Total third quarter SG&A expenses were $85 million down $15.4 million or 15.3% sequentially, related primarily to a reduction in compensation, professional fees in general and administrative, partially offset by increased facilities |
| We will see some margin compression on the noncurrent products, but with higher 2024 product GPUs being delivered in the quarter that will help counter a portion of that compression |
| And as far as our covenant, with Oaktree, we did have relief for Q2 and Q3 being in the form of not even being tested |
| And now I've never been closer to that excitement |
| Again, the dollars are probably in line and the days supply are in line, but we've got some aging issues, and we hope to flush that out in Q4 |
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