Good afternoon. My name is Chris and I will be your conference operator today. At this time, I would like to welcome everyone to RumbleOn Fiscal 2018 Earnings Call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session. [Operator Instructions] Thank you. Whitney Kukulka, Investor Relations. You may begin the conference.

Thank you, operator. Good afternoon, everyone. Thank you for joining us on RumbleOn's 2018 financial results conference call. Please note that this call will be simultaneously webcast on the Investor Relations section of the company's corporate website. This conference call is the property of RumbleOn and any taping or other reproduction is expressly prohibited without prior written consent. Joining me on the call today are Marshall Chesrown, Founder, Chairman and Chief Executive Officer; and Steve Berrard, Chief Financial Officer. Before we start, I would like to remind you that the following discussion contains forward-looking statement including but not limited to RumbleOn's market opportunities and future financial results that 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 statement can be found in RumbleOn's periodic SEC filings including those factors discussed under the caption Factors Affecting Operating Results and Marketplace Stock in RumbleOn's most recent Form 10-K. The forward-looking statements and risks in this conference call 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. The company's independent registered public accounting firm has not completed its review of the company's results for the year-ended December 31, 2018. As such, the information provided on today's call is subject to change. Although the company currently expects that its final 2018 fourth quarter results will be as described on this call it’s possible that the company's final 2018 results will be different. The information in this letter represents the most current information available to management and is not meant to comprehensive statement of the company's financial results for the year ended December 31, 2018. With that, I will turn the call over to Marshall Chesrown, Chief Executive Officer. Marshall?

Thanks, Whitney, and thank you everyone for joining our 2018 earning call. We're very excited to share our 2018 results and expectations for 2019. Hopefully you have all had a chance to read our Shareholder Letter, which is available on our Investor Relations site. Our Shareholder Letter not only highlights our results, progress and future expectations, but it also details key components of our model and answers common questions that we hear from investors. We like the format because it's easily assessable, transparent and affords us more time for Q&A on our conference calls. Rather than repeating everything in the letter, I'll make brief comments on our strategy, opportunities and expectations and then Steve will provide some color on our financial results and we'll open it up for questions. 2018 was RumbleOn’s first full year in operations and was marked with many exciting milestones for our company. Not long ago we made our first sale. And since June of 2017, we haven't looked back. We went from generating less than $8 million in total revenue in 2017 to over $61 million of revenue from powersports in 2018, including the revenue contribution from the two months we owned Wholesale Inc and Wholesale Express, 2018 total revenue was over $156 million. And for Q1 2019 we're guiding total unit sales in the range of 11,500 to 11,800 units and total revenue in the range of $210 million to $215 million. Our organic growth rate in 2018 solidifies that we have a winning strategy. That said, as we outlined in the Shareholder Letter, we faced challenges throughout the year that impacted our results and caused our 2018 revenue and unit sales results from the Powersports segment to come in below our prior guidance. Even with those challenges taken into account, our results from…

Thank you, Marshall. Before we dive into the results and future expectations, I'd like to get some housekeeping out of the way. As you know we're reporting earnings later than we have historically. We have the heads down integrating the large acquisitions we've made including allocating time and resources to ensure in the accounting and ordering processes in place. We plan to file our 10-K on time on Monday, April 1, 2019 and anticipate to report Q1 2019 earnings in early May consistent with our historical practice. Now taking a brief look at our results. Revenue for the year was $156.4 million, which was comprised of powersports revenue of $61.2 million, automotive of $91.3 million and transportation of $3.8 million. Gross profit was $8.8 million or 5.6%, which included gross profit at powersports of $5.8 million or 9.4%, $5.7 million or 6.2% in automotive, and $1.1 million or 28.9% for transportation. We incurred operating loss of $8.7 million or a loss per share of a $1.70 based on 14.8 million weighted average shares For Q4 revenue was a $115.1 million which was comprised of power sports revenue of $19 .9 million, automotive of $91.3 million and transportation of $3.8 million. Gross profit was $8.8 million, or 5.6% which included gross profit for powersports of $2 million which was $806 gross profit per unit or 11.2%, automotive gross profit per unit was $1,021 or 5.3% and in Q4 we had an operating loss of $8.7 million or loss per share -- I don't have a number. We outlined many levers that we used to our advantage in Marshall's remarks as we continue to drive volume and revenue growth and as we continue to grow revenue and volume, we expect to expand gross margins over the long-term. As you heard from Marshall…

[Operator Instructions].

Let me clarify it was $0.86 per share in Q4.

Your first question comes from Steve Dyer with Craig Hallum. Your line is open.

Thanks, good afternoon, thanks for taking my questions. I guess just on the powersports side, going forward, just any indication as to what you're seeing in terms of -- and I know you don't want to give 500 different metrics every single quarter, but just generally speaking what are you seeing in terms of cash offers, terms of acceptances and sort of your ongoing ability to calibrate that sort of right number. And generally speaking sales to retail versus wholesale? So I don't want to pin you down to a whole bunch of things but generally if you could give us a flavor as to how that's evolved recently and how you sort of see that in Q1?

This is Marshall. The cash offers continue to grow quarter-over-quarter. And obviously we continue to get better and better data. Our averages of actual selling price, estimated selling price through our software is getting very, very close to zero sum. The desire for consumers to utilize the tool as I said continues to grow. I would say that probably on the Harley-Davidson’s side,we the biggest reason for not having tremendous increases in capture rate based on the improved data that we have, revolves around negative equity that a majority of those people tend to have. But again, it continues to grow, we definitely learned in the fourth quarter Steve that there is a huge opportunity to acquire inventory for the spring market. The difference in the -- you might have seen in the Shareholder Letter, but the peaks and valleys in this powersports space is from a valuation perspective are higher and deeper. And we're going to do a much better job of taking advantage of now that we have data -- good reliable data on high volume numbers to be able to do that. So we're going to -- we'll look at fourth quarter completely different going forward. Also in fourth quarter obviously I mean I don’t intend to give you a weather report and we know what the weather was but also with holiday falling in the middle of week it basically limited our opportunity for any live auctions the last two months of the quarter. So we did ramp inventory. You might have seen the inventories growing significantly into first quarter. And part of that was the function of not being able to sell efficiently. But continues to grow, I guess better and better our capture rates continue to increase. With regards to the retail versus dealer sales, consumer retail is growing at the same rates at our total business. We haven't seen a breakout at this point, but we also haven't put significant capital towards that with regards to marketing. We're still trying to buy everything that we can buy and funneling well managed advertising dollars towards acquisition, because we can clearly distribute the majority of it. And obviously instead of this rambling on, we have a lot more detail in the 10-K as well.

Got it. And then just to hopple auto, it sounds like cash offers here are eminent this quarter. What do you sort of expect that launch to be like? I mean do you expect the majority of it initially because of awareness and so on and so forth to be most of that sold back to Wholesale. Or just sort of some color as to how you think that kind of scales over the balance of the year?

Well launch, let's tackle real quick with automotive retail, because as I believe you're aware maybe not everyone, we did close Wholesale into bricks and mortar, off lots of they had in Nashville. And we took from a 100% online right at the end of the year. And it has been done with great success. The business is growing dramatically. And so we see a lot of opportunity in that regard. With regards to the acquisition side, we think there is a huge opportunity with the millions of people that now know who RumbleOn is to step into that -- in that position of buying cars and trucks direct from consumers. There is a lot of talk around that today with a lot of different competitors. Obviously we've discussed the difference between Carmax's model and Carmax driving those leads into their store for their retail traffic. There are some out there that are going after directly to the consumer online. I would tell you that if you will match -- when we launch match our usability for a consumer art school next to everything that's available out there and you will see processes that take three to five minutes versus competition that takes 20 to 30. And we know from our testing and all of the volume that we've done on the motorcycle side, every time you ask additional question, it's an additional friction and you have additional follow up. Further lowball offers, which I would contend a lot of them are, that your bottom 15 or whatever you want to call it, we just don't believe as a management team that you can do that today and garner any type of results because consumers have the ability with so much transparency on the Internet to know exactly where they're at. And so this isn't a business model that we're saying hey we're going to go out and buy cars cheaper than Carmax or anybody else. This is a model that says, we know how to aggregate one at a time better than anybody. We know how to process them in a more efficient, less expensive way and we certainly know how to distribute whether that be through retail or direct through the dealer, and then of course the addition of our Dealer Direct site and so on and so forth. So we just think we have the total package is significantly easier for people to use and we think we will benefit from the capture rates.

Got it, that’s helpful. And then just a couple of points of clarification on guidance and then I'll pass it along. On the Q1 unit guidance, are you willing to breakout powerstores versus auto in that?

We will clearly break that out in our call, when we actually announce the earnings.

Got you, okay. Not for guidance. And then secondly just an important clarification on Page 16 of your letter you had indicated you expect higher SG&A as a percentage of revenue this year, but I don't know if you're talking about pro forma or just powersports because it would imply something like $180 million SG&A number which seems almost impossible overall this year. Just want to make sure I'm thinking about that the right way?

Steve, I think the way you need to think about it is, we will leverage our operating expenses, the only one that may not decline at the same rate with the growth in revenue is marketing, but clearly we will see the leverage that one would expect with kind of revenue growth that we're talking about.

But just as it relates to that, I mean the streets have something like $60 million in SG&A this quarter and whether that's $5 million or $8 million or $10 million, too high or too low is one thing, but this would imply that we're all like $100 million plus to call, and I just want to make sure, are you talking about the -- what are you using for a base to grow off of, I guess the $35 million implies 22.5% or 22.4% of revenue, raising that percent of revenue on a whatever $850 million, $900 million revenue base would imply like I said 170 million, 200 million in SG&A. Am I thinking about that or am I reading that correctly?

I think the -- it's not going to be what you're explaining, it's going to continue to grow, it's going to be logging about the same percentage of revenue that’s out, that it has, I think we'll give a little clarification in our 10-K on that, on respect to that.

Your next question is from Darren Aftahi with ROTH Capital Partners. Your line is open.

So can you just expand a little bit on the commentary about seasonality and then sequential growth throughout the year.So now that you've got over a year under your belt at least on the powersport side, what beside the stuff you called out in the holiday should we be thinking about in terms of seasonal trends.And at least to my understanding you're saying sequential growth throughout the year but it seems like Q3 would be peak revenue for both these businesses. Am I thinking about that correctly?

Yes, Darren I think you are. I think obviously Q1 and Q2 with any vehicle provider, the numbers are available for you, you will see are always -- they are always peak months. We do think that we'll have sequential growth going forward. But the dynamic growth that we've had from Q4 to Q1, I certainly would look at that as something that could be done quarter-over-quarter over the fourth quarter period.

Okay.

I can expand on the seasonality I'm sorry. We certainly understood seasonality on the automobile side.And it follows, very closely to what we see in powersports. I think the difference is, like I said that the peak in the spring market is bigger percentage wise than it is in automotive. And the fall in the fourth quarter is deeper than automotive. Automotive sails all the way through New Year's Eve with all the end of the year sales and all those kinds of things. There's just a lot of activity in the marketplace. And because of both weather and this winter obviously we had a violent winter, there wasn't a lot of people thinking about riding the motorcycle in the month of December. I think the opportunity that we're excited about is what we now see with data and what we can buy during that time of the year at the price we can buy it for. I think you will see us in fourth quarter this year both in all the segments, cars, trucks and powersports, ramping inventory significantly for the spring market. Because we are seeing a major uptick even more than anticipated already in first quarter from a valuation perspective and the market appetite for what we sell. So the percentages being sold at a given location have increased dramatically in first quarter. We see it increasing again in second quarter and as we said in the Shareholder Letter, some level from a percentage basis of growth we still see it growing, but we do see a flattening through third and fourth quarter

That's helpful. And then just on classified. So you just rolled that out nationally and there's about 1,000 ads currently, I'm just curious with the -- I think roughly 100,000 cash offers that weren't accepted and maybe that numbers were off. I'm just curious at this point how you're looking at kind of conversions and any kind of color in terms of where we can see any kind of conversion rates and number of classified ads maybe, six, 12 months from now?

I think Darren we mentioned in the Shareholder Letter that it was a soft launch. That wasn't always the plan. But with everything that we had going with a major acquisition at the end of October, as you know we have a lot of irons in the fire. The resources, both human resources and capital resources have not been applied to that tool yet. We're very, very excited about it. I think you'll see major changes in the second quarter and really as we grow -- the last few days we have many things that are in preparation of launching, we will put some marketing spend behind it very soon. The one thing that's been the most positive is we originally came with a consumer-only site to try to keep people in the low RumbleOn tent for a period of time and these initial results are which you know as we get on the road we will be prepared hopefully to share some of this, is the initial results have been significant of the amount of people that didn't expect the first offer, chose to list their vehicle and then within a fairly reasonable period of time seven to 14 days are converting at high rates back into our core business which is the whole reason why we formed -- built a classified site to start with. The other thing I would share with you is that the size of these classifieds has been 100% organic. The one thing that we didn't suspect was that the offers because people have such a high expectation that some of the people opt out at the time we give them the cash offers. So they don't expect the cash offer and they opt out and we can't legally reach out to those people via our database, and others that still opted in but were totally blown away by the amount of the value, let's say we gave -- we said it was a $5,000 bike and they owed $10,000 they obviously weren't very happy and so as we approached them with more solicitation to list for free they haven't had a high likelihood of opening those communications. So we're working on a whole different way to capture more of those, get early, get in front of them earlier, some phone activity. There's just a whole bunch of things working and so we're still very excited about classifieds. We will be doing the same thing with cars and trucks, it'll be a very unique site. And last thing is we mentioned in the letter we're already with just not one dollar spent on promoting this thing with a thousand listings on the site. There are only three power sports sites with more consumer listings than we had at RumbleOn already, so not certainly where we wanted it, but I think you'll see explosive growth in that over the next couple of quarters.

Last one maybe for Steve, two things. One, what was the adjusted EBITDA number in the fourth quarter? And then what kind of revenue number quarterly do we need to be at to be at breakeven kind of a adjusted EBITDA?

We're not going to go there quite yet, we will get Q1 behind us and then we'll give a little bit -- maybe better guidance on that. I think it's lowering out and we -- as a point of thought, we not really look at the company on EBITDA basis, because most of our interest expense is foreplanned and we don’t have a tremendous amount of appreciation, so EBITDA number is probably in the neighborhood of $8 million, $8 million to $9 million.

Your next question is from Llya Grozvosky with National Securities. Your line is open.

Thanks. Just a couple of questions. On the fourth quarter I believe you guys put in a press release at some point over the past couple of months what the pro forma number looks like if you included the month of October for the acquired business. Can you just remind me what that was?

I would to say [$139 million].

No.You're saying $156 million is Q4 with just the two months, $156 million.So I'm saying if you if you do a pro forma -- and I'm pretty sure you had in a press release I'd have to dig it out, somewhere you guys said what the number would look like if you included it for the whole quarter not just from October 28th, what was that number?

We got two people looking for it right now, so.

So while you guys find that let's we'll come back to that then.The Q4 number, what percentage was the -- of the car revenues were from retail? I guess you guys said you closed down the lot at the end of the quarter but kind of what percentage of the cars were retail versus auction? And then also just we'll come back to the Q1, when you're talking about to $210 million to $215 million, how do you see the breakout between motorcycles, the powersports, cars, and Wholesale Express, those three pieces? Thanks.

Well, first off on the Q4 breakout, I think we're going to do -- we're going to give out in the 10-K right, the more detail on the actual breakdown of the powersports versus the automotive. I would tell on your retail question as a percent of the whole has stayed pretty steady with what was originally presented in the original filed numbers, with Wholesale Inc. However, I would tell you that the volumes are higher than they were with the bricks and mortar location by taking it 100% online and working out of a virtual inventory versus a physical inventory. And I think it also had a lot to do by eliminating that piece of the business, it also accelerated our days of sale in great improvement because we aren't carrying vehicles sitting on a lot that are aging, while we're waiting for a consumer to buy them.They now work online out of an entire virtual inventory. So -- but the initial results are about the same percentage as the whole but as you can see the sales have increased. I would say with regards to the increases at Wholesale Inc on the volume side, we haven't taken -- as we said, we haven't taken RumbleOn retail and acquisition on the site, we'll be doing that very shortly. But we have integrated a bunch of our technology that really, really helps that operations grow much faster than what we anticipated. There acceptance of it, the use of it is going extremely well. We're having a lot of success with process improvement via our software on the automotive side. And it allowed us to have a need to rollout our footprint much faster. We launched this week in Southern California. These were the objectives that we have met on the Wholesale side as far as our distribution footprint of being a national footprint have been highly accelerated and all but one are already rolled out operational and have inventory flowing into them as we speak.

So back to your question, about 12% of the automobile sales, which is consumers.

12%, you said 12.

Yes. 12%.

Okay.

Yes. And the number that we gave on for fulfillment basis was 165 million to 170 million.

165 million to 170 million. Got it.

Correct.

And then if you -- and then just on the last piece the Q1, kind of how do you see the breakout in this 210 million to 215 million between the motorcycles, the cars and Wholesale Express?

We'll do that on the earnings call when we announce. We will thourough breakout of both segments. The total and the segments broken out for automotive and powersports how we will represent both the revenue, the units ASP et cetera.

And I think, when we filed the K, I think the breakout and the number of metrics and the amount of data that we put in MD&A should allow people to putting on ship pretty close.

Your next question is from Sameet Sinha with B.Riley FBR. Your line is open.

A couple of questions actually. Let me understand, once you put out the cash offer tools on the auto business, where do you get the data to kind of jump start the offers? And is that something that you found at wholesaling or is that something that you can buy in and fine tune over time. Can you explain that? A second question is regarding adjusted EBITDA comment that you made that this is a year of investment. Can you elaborate on that where exactly are you planning to invest and what sort of efficiencies do you expect to see, because of that let's say in 2020?

Number one is software with regards to automotive acquisition. The data that is available out there through a plethora sources is very robust. So when we started in the powersports business there wasn't much to grab. Obviously we have a lot of Wholesale Inc data, but we also have all of the available retail data via scraping tools et cetera. And we also have all of the data feeds live real time from the likes of Manheim, ADESA and others. So we've got a lot of wholesale data, real time wholesale data, real time retail data to drive a much more robust platform to start with than what we had on the powersports side. So it's -- there's lots and lots of stuff out there. We have a lot of data feeds. And I would tell you too with regards to data, on the powersports side we already have a lot of people wanting access to our data. Obviously, we're not in a position to do that at this point. But we think we already -- because of the amount of cash offers we've done, we have a database of current real market values that would be extremely beneficial to a lot of people out there, whether they're new manufacturers or other users. And so over time we'll work through various different ways to leverage those. Second part of the question was, I'm sorry, long day. What was the second part of your question?

Investments that you’re going to make in 2019 if you can help us think about where exactly you’re investing there would be great?

Obviously we're investing in operations with a heavy emphasis on marketing. And I would tell you in the in the letter, we have some numbers in there about our marketing expense on a per unit basis. I think it's interesting to look at because if you look at other publics that are out there and look at what our current customer acquisition and total marketing and advertising spend on a per unit basis, you start to understand why a high volume lower margin with very little less G&A and CapEx all of a sudden makes significant financial sense. We have -- we posted a cap of under $400 a unit at this point. And I would tell you that for startups as an unheard of. But even in established mature public companies, $400 is a very, very reasonable number. And as fast as our volume is growing, it creates a very, very sizable budget to be able to spend money to support things like automotive acquisitions, and classifieds and so forth.

Final question from me, you're talking about ASPs in the powersports business obviously went up sequentially. Can you talk about what drove that? And secondly is that continuing into Q1? And also if you have to think about the Q1 higher margin, is that just primarily seasonality or are there other things in play may be higher consumer sales?

Yes, it’s seasonality, both consumers and dealers. The way the auction system works, obviously, the more people you have in the lane, the more people you have online, the higher the valuation. So -- and then consumers obviously are marked up from whatever those valuations are, whether that be us or other retailers. The -- you have, I'm sorry?

On the ASP in the quarter which is up have sequentially for powersports? Is that …?

Yes ASP on powersports, I am trying to guide everybody to using a plus or minus $7,000 number, you're going to see quarters where it is higher than that. I don't think you'll see a lot of quarters from our data. Now it's sizable enough. I think our low point was about $6,600. You will see in -- you saw it in fourth quarter it moved back up, you're likely to see it a little higher also in Q1. But that is driven by the mix of Harley Davidson and non-Harley Davidson. If you look at our website, if you see the percentage of Harley Davidson’s accelerate, the average cost of those is significantly higher than the non-Harley Davidson. So that's the cause of that. The ASP really isn't driven much by seasonality. When people need to sell they need to sell, it doesn't matter what time of year it is. So it's really more about mix that drives that.

This concludes the Q&A portion of the call. I will now turn things back over to Marshall for any closing remarks.

With that, we will make it short. With our proven competitive advantages, we're confident in our overarching strategy as we disrupt the $1 trillion vehicle supply chain in a very meaningful way. To say we're encouraged about the future would be a dramatic understatement. I want to thank you all for joining our call. We look forward to seeing everyone on the road very, very soon. Thanks again.

This concludes today's conference call. You may now disconnect.