Greeting 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. A brief question-and-answer session will follow the formal presentation. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host Elliot Wagner, Vice President of Finance. Thanks 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 Michael Quartieri, 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-Q once filed. Before we start, I would like to remind you that the following discussion contains forward-looking statements, including, but not limited to, RumbleOn's market opportunities and future financial results and involve risks and uncertainties that may cause actual results to differ materially from those discussed here. Additional information that could cause actual results to differ from forward-looking statements can be found in RumbleOn's periodic and other SEC filings. The forward-looking statements and risks in this conference call, including responses to your questions, are based on current expectations as of today, and RumbleOn assumes no obligation to update or revise them, whether as a result of new developments or otherwise, except as required by law. Also, the following discussion contains non-GAAP financial measures. For a reconciliation of these non-GAAP financial measures, please see our earnings release issued earlier this morning. Now I'll turn the call over to Michael Quartieri, RumbleOn's CEO. Mike?

Good morning everyone and thank you for joining us for RumbleOn’s 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 range 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. 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 the 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. It is my goal to foster a high-performance culture within our company. To that end, I'm excited to be partnering with Cam Tkach, 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…

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. 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. 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. 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 continued 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,…

We will now begin the question-and-answer session. [Operator Instructions] The first question today comes from [Seth Basham] (ph) with Wedbush Securities. Please go ahead.

Hi this is Matt Mccartney on for Seth. Just a couple of questions for you. I guess let's just get the tariffs or question out of the way here. I'm sure it's 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?

Yes, 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 if we look at our top three OEMs, it's Polaris, BRP, and Harley-Davidson. 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 that. 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 and 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.

Okay, fair enough. I guess though, just the, we've seen a lot of consumer issues crop up here in the last couple months in consumer confidence and sort of the thought of tariffs having impact on the consumer. I was 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 that can help us understand how things are going so far this year?

Yes, 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 we're not any different than anybody else from a consumer perspective. 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.

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 the level of inventory in your dealerships? I'm curious how you feel about the rest of the inventory -- the industry and inventory?

Yes, I think from an 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. 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 balancing perspective today.

Do you feel like the rest of the industry is at your level, or will there continue to be promotional activity that depresses gross margin?

I think there will always be that factor sitting out there. One of the offsets of that is, you know, 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.

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