RideNow Group, Inc. (RDNW) Q2 2018 Earnings Report, Transcript and Summary

My name is Cheryl. And I will be your conference operator today. At this time, I would like to welcome everyone to the RumbleON, Inc., 2Q 2018 Earnings Conference 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. Steve Berrard, CFO. You may begin your conference.

Thank you. Good afternoon and thank you for joining our second quarter earnings conference call. On the call with me today is Marshall Chesrown, our President and Chief Executive Officer. Hopefully by now, most of you have had an opportunity to have access to our second quarter Shareholder Letter, which we attempted to file prior to the call. In some respects, it's our first time, so we have to work out through our pages. Those of you that are looking on our website, I think you need to go to Shareholder Letter in our Investor Section. And if that doesn't work, you can go to the sec.gov and it should be out there under RambleON. Before we begin, let me remind you that part of our discussion today may include forward-looking statements which are based on the expectations, estimates and projections of management as of today. The various forward-looking statements and our discussions are subject to various assumptions, risks, uncertainties and other factors that are difficult to predict which could cause actual results to differ materially from those expressed or implied in the forward-looking statements. These statements are not guarantees of future performance and therefore undue reliance should not be placed upon them. We refer all of you to our 2017 Form10-K and other recent filings with the SEC for a more detailed discussion of the risks that could impact the future operating results and financial condition of RumbleON, Inc. We disclaim any intention or obligation to update or revise any forward-looking statements except as required by law. I would like to turn the call now over to Marshall. Marshall?

Thank you, Steve. And welcome everyone to our second quarter earnings call. We are very excited to share a strong Q2 results with you today. Hopefully, you've all had a chance to read our Shareholder Letter, which is available on our Investor Relations site. We decided to issue a Shareholder Letter prior to our call to give you all the information you need and to ensure you have time to digest it prior to the call, so we can focus more time on answering all of your questions. We exceeded our prior unit sales guidance, achieved rapid revenue growth, improved unit economics, and demonstrated operating leverage across the business. We are proud of our strong second quarter results and the growth trajectory of the Company. Let me start, RumbleON’s mission was to change the way people buy and sell pre-owned recreational vehicle. RumbleON was founded on the concept that consumers were tired of the core experience in buying and selling recreational vehicles and would prefer to buy and sell pre-owned vehicles through a well designed simple online solution with a broad selection of vehicles at extremely competitive prices. We recognized that there was a huge opportunity to disrupt the current supply chain solutions for consumers to gain liquidity as over two-thirds of all transactions were being completed through the inefficient peer-to-peer private party resale market. The markets appetite for such a solution has been extremely encouraging and we are quickly scaling our online model for the acquisition and distribution of vehicles in a meaningful way. Our strong second quarter results and our forecasted growth trajectory are clear evidence of that. We made measurable progress towards our four key objectives in the first half of the year. To reiterate those, our objectives are; the revenue and vehicle unit sales, increased total profit margin per vehicle, achieve operating leverage, and strengthen our capital structure. In Q2, we sold 2,013 total units, a 129% increase over Q1. Total revenue increase of 72% and a total gross profit increase of 126%. We believe unit sales as an important measure of the strength of our business and our results clearly demonstrate the correlation between growth and unit sales and gross profit. These sequential improvements were driven by a 105% surge in demand for cash offers. Cash offers is a low cost vehicle acquisition channel that we believe is an important driver of our business and we are seeing incredible momentum. In fact, we have provided more than 50,000 cash offers as we started in June of 2017. In Q2 alone, we processed over 29,000 cash offers, almost 2.5 times the 12,000 cash offers made during Q1, and we expect to more than double that again in Q3. Another important driver of gross profit is days of sale, which we improved to 28 days in the second quarter, which is unheard of in vehicle distribution. We are quickly becoming the largest reseller of motorcycles and other powersports vehicles in the country, across both consumer and dealer channels, thanks primarily to our cash offer tool, which creates liquidity in a market that has been lacking. To cash offers we are able to optimize our inventory to meet demand and believe that our inventory mixing and competitive pricing will drive acceleration in our consumer channel, an incredible growth engine that represents a massive market opportunity as we progress. During Q2, we strengthened our partner network and now serve 11 different geographic locations strategically place to capture markets with the highest density of both population and motorcycle ownership. Our partner network accomplishes our goal of developing and operate the only through 100% online capital and infrastructure light, vehicle acquisition and distribution marketplace available today. We have no retail locations, no recommissioning centers, no vending machines, nor the people in fixed cost associated with them. In short, no one at RumbleON physically sees or touches any of our inventory either at the time of purchase or the time in between. In Q2, we continue to invest heavily in cost effective marketing, particularly in digital, social and search marketing campaigns to further ensure consumer and dealer loyalty that RumbleON by driving high participation in the buying and selling process increasing referrals and attracting new customers. Our agnostic multi-channel approach to consumers and dealers utilizes brand building and direct response channels to effectively source and scale our addressable markets. This approach has allowed us to become a national brand presence within the industry in less than a year. We participate in an industry dominated by very engaged and passionate users. We are creating sticky relationships with current and future customers through Facebook and other social media outlets, which are our largest and most cost effective lead generation tool for buying and selling. We surpassed 100,000 Facebook followers in the second quarter, which is incredible testament to our ability to quickly and effectively drive the brand recognition. We believe that we have an immense opportunity in front of us. In alignment with our goal to completely disrupt the way consumers buy and sell vehicles today, we have a whole pipeline of product enhancements and expansion initiative that we plan to launch in the second half of 2018, well ahead of our original plan. Our comprehensive roadmap will position RumbleON for long-term success and tremendous scale. Some of the initiatives we have developed and are developing will launch in the second half of 2018, or number one, RumbleON website and application enhancement. In August, we'll release a new version of the RumbleOn website and our mobile app that includes significant improvements to both the consumer experience and backend functionality. Specifically, we have refined our proprietary cash offer and pricing algorithm optimized our database and technology stack to a more modern lightning fast and scalable platform and develops a more user friendly mobile first design that provides a robust customer experience across all devices. Who is RumbleON Dealer Direct? We will also launch RumbleON’s Dealer Direct tool in the third quarter. Dealer Direct was created to make powersport vehicles available to dealers in an online platform daily instead of monthly. The RumbleOn Dealer Direct platform allows dealers to use our web or mobile applications to view, bid and buy inventory when and where they want, not just on auction day. Our software accommodates all mobile platforms, allows dealers to search certain organize their favorite vehicle features both buy it now and live auction functionality and includes a multitude of real time notifications focused on alternating buyers when they are out bid or have purchased a vehicle. And most excited is RumbleON classifieds.com, which is launching in Q4, and it is the consumer only lifting site that allows vehicle owners who do not accept the RumbleOn cash offer to alternatively list their vehicle efficiently in the peer-to-peer extension of our marketplace. By making it a consumer only site, RumbleON will be able to provide a level of transparency and data never offered to customers before including additional services that help in completing a transaction, such as financing, trades, value information, shipping and pricing guidance. We intend to build the absolute best and largest customer only listing side available today that is modern easy-to-use and most importantly technology driven. This platform will enable us to continue to monetize and disrupt the tremendous peer-to-peer market in a very short period of time. During summary we have a unique and compelling business model that is – that able best to carve out a niche in a highly fragmented recreational vehicle marketplace. Our game changing 100% online marketplace is delivering impressive growth and we are committed to executing on our business plan as we drive further expansion. Our exceptional management team clearly believes there is an even bigger opportunity to dominate the market than our already high original expectations contemplated. We intend to move very quickly to disrupt and dominate the market in a very compelling way. Now, I’d like to turn it back over to Steve for some brief remarks.

Thank you, Marshall. Before I begin, I like to remind everyone that there were only nine vehicles sold during Q2 of 2017, but we will not discuss much in the way of year-over-year comparisons. Full details on our second quarter financial results are available in our shareholder letter. The letter contains a great deal of financial information. So rather than repeating the numbers, my comments will be brief and focused on our financial model and the significant momentum we are experiencing. All of us at RumbleON are excited about the financial model, which combines rapid revenue growth, increasing gross margins, and improving operating efficiencies. This creates an attractive model that we believe will result in significant profitability and substantial creation of shareholder value. We believe retail unit sold with a single most important measure of success and traction in our business. In Q2, we sold 2,013 units, a 129% increase over Q1, resulting in vehicle sales revenue of $13.9 million on an average unit selling price is $7,113. In Q3, we expect unit sales to exceed 3,500 and we are in pace for unit sales to exceed 12,000 for the full-year 2018. In Q2, we continue to focus on gross profit expansion. Total gross profit was approximately $1.3 million or a 126% increase over Q1. Consistent with the Company's accounting policy, Q2 gross profit was reduced by $171,000 for freight costs on units held for sale in ending inventory at June 30, compared to a reduction of $78,000 for the prior quarter ending March 31. Gross margin per unit was 11.2% as compared to 8.6% in Q1, 260 basis point increase. The increase was primarily driven by a shift in sales mix volume from Harley Davidson to lower priced higher gross margin non-Harley Davidson brands, lower reconditioning cost resulting from cost efficiencies, and lower freight costs associated with the expansion of our partner network. We expect a sequential quarter-to-quarter growth in gross profit per unit to continue into the second half of 2018. Fact that we do not need retail locations, reconditioning centers or warehouse or distribution facilities conduct our business makes our model highly scalable and capital efficient, which allows us to effectively leverage our investment and technology, brand, reconditioning, logistics and corporate infrastructure. In Q2 2018, we continue to make significant investments in various areas in connection with the growth of the business, including developing new technologies, building out our partner network, expanding our analytical capabilities, and investing in corporate infrastructure. Despite the substantial investment, we achieved meaningful operating leverage from our 129% unit sales growth. In the quarter, total SG&A as a percentage of revenue decreased to 39.9% as compared to 48% in Q2 more than 8 point drop. As our business continues this rapid growth, we believe we will experience increases in operating cost and expense in absolute dollar terms, but will continue to see sequential improvements as a percentage of total revenue. Finally, in terms of our capital structure, we continue to enhance our liquidity position in order to continue our aggressive pursuit in execution of our strategy and fund the rapid growth of our business. Since the beginning of 2018, we have closed a $25 million floor plan line with Allied Bank, closed a term loan with Hercules Capital was up $15 million of availability, and we recently completed a $14 million public operating. In respect to that public operating, we need to explain why we chose to do it at that time. Simply the opportunity presented itself. It was primarily being offered to retail investors, which was appealing in terms of a larger shareholder base and increased trading volume. We had a number of industry changing technologies developments which Marshall just discussed with you that we desire to accelerate. We've always operate in on-premise that when the opportunity to raise capital to present itself, particularly in a startup, you should sees it. And finally to balance all of these thoughts against where the stock was trading and decided that potential upside for the stock that we could create with the access and the utilization of this capital was more than justify the dilution created and put ourselves in a position to take a longer view of our current business plan as any potential capital needs are fulfilled. The process from these debt and equity – proceeds from these debt and equity transactions are being used for technology development, acquisition of inventory, continued aggressive marketing spend, and for working capital purposes. As we look forward to the remainder of 2018, we are excited about the opportunities ahead. We are on track to achieve unit sales in excess of 12,000 units for the full-year 2018, which would result in a revenue run rate of more than $150 million by the end of 2018, and our plan is to double unit sales by the end of 2019. We intend to remain intently focused on our objective of revenue and unit growth, sequential quarter-to-quarter increases in profit and margin per unit, and capitalizing on the operating leverage that our capital and infrastructure light model provides. Thank you. And now, we'll take questions.

[Operator Instructions] Your first question comes from the line of Nehal Chokshi of Maxim Group. Please go ahead. Your line is open.

Thank you. Good quarter by the way and great to see the gross profit – gross margin go up. When you look at the gross profit per unit, it was up 1% [indiscernible]. I think that's great in terms of showing that the gross profit is consistent, a slight decline in ASP, and that’s reflective of the consistent value you guys are delivering to sellers [indiscernible] ASP. But you also published this interim data in June that indicated the gross profit per unit was indeed going up especially from the consumer channel and dealer channel. And so could you help bridge the gap on why we didn't actually see that in terms of consolidated gross profit per unit?

I am not sure I understand the question.

All right. I don't remember the exact numbers that was in that June 8 presentation, but there was a gross profit per unit for 1Q to 2Q for the consumer channel, the dealer channel and auction channel. And gross profit per unit for the dealer channel and the consumer channel was up a substantial amount. I don’t remember how much, but a substantial amount. And so one would expect that the gross profit per unit on a consolidated basis would be up, but when I run through the actual reported numbers that you provided, it looks like it was up only 1% [indiscernible]. So question is, what’s the bridge between those components seemingly haven’t been up significantly as oppose to the consolidated numbers?

Again, I am confused, so maybe I’ll [indiscernible]. Not sure I’m going to get your question, but it is – part of it is mix. There’re more dealer and consumer sales in Q1 and Q2. That would be the one answer I’ll give you on top of my head. As far as margin percentage, the dollars were about the sale on a blended basis, but the average selling price was down $2000.

Okay. What was actually the – no you answered. I expect that answer would be mix actually. What was the actual mix in Q2 than between the three channels?

It was up 7% consumer, about 3% dealer and the rest was auction to dealers.

Okay.

It’s nothing to keep on mind that one of the delta items is going to be that inventory that we have in cost of sales. That really is inventories that’s on the balance sheet with $170,000 I talked about is 1.5% of margin line.

Got it. Okay, all right.

[Indiscernible]

And then, your OpEx did jump to the $5.5 million, are there any one-time items or substantial stock-based competition expense that would be aware?

Most of it is on marketing spend and technology development. We did increase – we accelerated our project, so we do have a – we don’t have as much in the P&L but we certainly have quite a bit capitalized for new projects, and we did up the marketing spend and we will continue to do so in the rest of the year, but there is no real – maybe stock option expense is $385,000 number, but other than that there was no real non-significant operating expenses.

Okay. And then in order – in the Shareholder Letter you did mention that driving percentage of sales to consumers up is a significant focus for driving the margin up. But could you detail what will be done to actually drive percent of sales to consumers up?

Well, yes, obviously when we started on the March to increase the consumer sales because they are increasing dramatically. It’s the first thing we have to do is, we had that meaningful inventory because that creates search desire to drive traffic to the website, which you can see what those traffic increases are in the Shareholder Letter that we've provided. So we do anticipate going forward a much higher percentage of retail. And the margins are performing at what our expectations were. But it really was a function of having the inventory and having the inventory at a place that it was available for sale. We had several different processes that we do this secure the fact that the customer knows exactly what they're acquiring. We have condition report process, updated total process and so forth. So we clearly see the retail channel as the largest opportunity for growth, but considering we started in November with 122 bites we really didn't have meaningful inventory for selection. We are starting to migrate a larger percentage of our marketing budget to the retail channel. Most of it is to-date has been spent around acquisitions because you can't sell what’s you don't have. So we had to get the inventory to the levels we're at now. We're running fairly consistently over 1,000 vehicles on our website at this time and keep in mind that’s all owned inventory. But we're also targeting extremely fast with a 28 day supply. So we see the retail channel as probably our largest growth opportunity by far. But keep in mind we're growing our entire unit sales at a very rapid rate. So even though our percentage of sale doesn’t look that much different, it's still a pretty meaningful number because it had to increase obviously 2.5 times at the same rate that the rest days.

Gotcha. Okay. Thank you very much.

Your next question comes from the line of Darren Aftahi of ROTH Capital Market. Please go ahead. Your line is open.

Hi, thanks for taking my call. This [indiscernible] on for Darren, couple for me, on the average selling price, do you still think that there is room, I know in 1Q sort of guided average selling price to roughly say 9,000 in this quarter, it coming in around 7,000. So granted – you're seeing stronger demand around those non-Harley Davidson bikes, do you think they're still room to the ASP increase because most of that I would assume would go straight to gross profit. Yes, let me covered the real quick. Obviously we think the inventory is normalized. We're running anywhere from 50% to 53% Harley Davidson. Harley Davidson represents 50% of the current market. But we think we've stabilized to what the market represents. I would expect and we think it will – we’ll probably definitely seen a stabilized because we obviously we have a 1,000 vehicles in inventory right now. We know where we’re at there. I would expect between inventory mix, which you know we don't we drives our inventory mix is the – what the customer puts into the funnel and would make sense right that it’s a 50/50 market. It’s going to be somewhere around that. I would expect that from the 7,100, I wouldn't see it go going probably in the near-term, plus or minus $500 from at 7,100. Keep in mind there are seasonality adjustments. We've adjusted average cost right now by about 7% for seasonality for based on seasonality data that we have. So anyway that’s that piece of one thing I do want explained or make sure I am sure you understand. But lower ASP is a positive, because it drives significant unit sales and the reason for that is it creates affordability. If you take pretty much any automotive or any vehicle retailer out there today, if you ask them when you rather have a lower selling price or higher selling price, the obvious answer is a lower selling price because the lower you go, the more people they can afford with you up or the sell. So we didn't have anything static’s or data really to support where this ended up when we got to 50/50 mark? Harley’s we’re hanging in about where we expected to Harley to be. But the opportunity to buy really deep on the non-Harley side of it, it’s extremely profitable. Last thing I’d say on ASP, is keep in mind, ASP is come down a significant percentage, while margin has gone up. I think anybody can see that that is a significant better model. Couple real quick points, cost of carry goes down. The ability for us to carry more units at a lesser price increases our opportunities for business. And obviously, at the end of the day the winner online is always the low cost provider. So – although, we think we’ve level that. It's around 7,000. We don't see it going much lower. Retail will drive higher. So as we get a higher retail mix, you'll see that ASP move upwards, but it's clearly a function of additional growth margin, if that makes sense.

I understood. Got it. That was helpful. And then as a follow-up, around the strength in cash offers are you seeing anything in particular that’s driven that outside of a pick up in marketing. And then when you do watch that new classified – I think you called that classified.com, the peer-to-peer sales marketplace. Do you have sort of estimates about how many of those non-acceptance cash offers would go to that marketplace? Or do you directly file them to NIM? Just sort of some clarification on how that’s going to work?

Two part question. First piece of it is our actual conversion from cash offer to purchase is holding in with the increased input. And we think that we will continue to increase that, what we call capture rate over time simply because our data is getting stronger and stronger, and as we can bring in those guardrail of algorithm into being more accurate on valuations. We think that we can dramatically increase that. The talk about the classified real quick and what the opportunity is? Where this comes from? Just to use round numbers. 10% of the people choose to actually transact with us and sell us just right from the cash offer. If they don't accept in the 72 hours, 90% of these people are basically being walked away from and we're pushing them to the likes of Craigslist and so forth. So the vision here is to not only have a website has never been produced, but also keep a higher percentage of the total people under the tent if you will of RumbleON. So what will happen is once that three-day cash offer expires, they will get an immediate opportunity to list with RumbleON – at RumbleON classified.com. Why would you want to list there? Well I’ve been a whole bunch of time, but I will tell you that the level of service is something that hasn't been seen in the listing space. Listing sites today have no desire to have you sell your assets because once you sell the asset, the opportunity for them to create revenue thesis. And you can tell that by looking at some of the recreational vehicle sites, where vehicles have been on for years not months. So what we want to do there is, once they decide to do that, why would you do it? Well, first off we're going to give them data and information about where they should value their bike that they've never seen before. Secondly, we'll extend our cash offer for some reasonable period of time. So that if they want to try to get more money for it, that's fine, they already chose to not accept our cash offer, but they're going to choose the list. We just wanted to list with us so that we can manage that process. Secondly, why don't listing sell on traditional websites? Primarily they don't because they don't provide financing, and that's what makes – the financing and trade is what makes it totally inefficient. But without spending a much of time on that particular pieces in future quarters, we're going to have a lot of opportunity to talk about it in depth. I do want to make perfectly clear that to make no mistake RumbleON is about buying and selling thousands of vehicles at whatever price point that free market provides us and no one can argue that a higher ASP or this additional website is not a smart move to keep these people like I said under the RumbleON tent. So that's the whole purpose of it. I've always been – just came from my automotive experience. I've been perplexed even with CarMax that 70% of the people that go into a CarMax and spend an hour and a half, choose to not sell to them, for some of the same reasons they don't sell to us, they owe more than it's worth, they think the offer is too low whatever it might be. But we want to have a brand at the end of the day that says to a consumer. We'll give you a cash offer and by the way we're the only one, who will give you cash offer. You can look at a Kelly Blue Book or an NADA book, and you can shake it until the cash come on. There's not going to be a check following out of it, okay. We are the only one to create that give you a cash offer and then we're going to give you the data if you choose not to do business with us on the cash offer side, we are going to give you the data, and why not monetize that additional 90% of the people that aren’t choosing to take our cash offer.

Understood. Just a quick follow-up on that. So they’re paying you Steven to go to that marketplace, so when they sell it’s almost very high on gross margin to be accretive to overall gross margin?

Yes. What we think will happen, first off, yes, there is a listing fee just like anywhere, okay. And keep in mind, one important thing is by the time we launched the site, we will have issued over 100,000 cash offers. There will be 90,000 people that we estimate didn't take our cash offer. Of those, [Allianz share] still own their asset, it's still sitting in their garage. So we will see this website with a short-term free offer to everybody since inception that has given us the opportunity to give them a cash offer, with a thank you and so on and so forth. Why is that important? Well first off, these numbers were about two weeks old. So that might be plus or minus a little, but Craigslist is dominant in a space, which that in itself is obviously amazing since we first landed on the powersport space. They have about 23,000 listing nationally and you have to dig to find those. But these are private party listings only, so that’s what we're talking about. Secondly, the cycle trader was about 8,000. We believe that we could surpass the 23,000 of the number one position in a fairly short window of time if not immediately. And that's going to be meaningful from the standpoint of other opportunities to generate additional revenue from advertising, relationships with insurance companies, parts and service companies, all those types of things.

Very good. Thank you.

Your next question comes from the line of Rommel Dionisio of Aegis. Please go ahead. Your line is open.

Thanks. Good afternoon. On your conference call earlier this week, Harley talked about how used bike prices remain soft, and especially with the prospect for potential price increases on new bikes because of the tariffs are – are you guys increased velocity four years by transactions because of this current potentially growing gap between new bike prices and used bike prices? Thanks.

Because of the price spread of a new bike and the amount of margin that they have which I don’t think the average consumer understand is significantly different than our market like automotive. So we see a tremendous opportunity in the retail channel with late model bikes especially in from of Harley Davidson, because we can create so much price spread between a new one. With regards to affecting our business, when new sellers have issues, okay whether that's tariffs, whether that decreasing production or whatever, it typically always plays well into the pre-owned space. Keep in mind, we only play in pre-owned. So if you take Harley Davidson as an example, there's estimated over $7 million Harley Davidson sitting in people's projects of which about $3 million of permit license play. So that will tell you one thing, but if Harley reduces their production, if they cut it in half, if they took 75,000 units a year, out of the mix. It would take literally decades or to effect the total pool of available inventory for RumbleON to participate in. So problems not that we wish anybody, any problems, but problems on the new vehicle side, we think long-term could actually be a market share opportunity for us to gain market share.

Okay. So just a quick follow-up, is Sturgis coming up just a few days, necessarily found that, but in terms of reduce some quick preview in terms of potential marketing initiatives you guys have planned for next week?

Yes, I'd love to. It’s of course the marketing stuff is always the most fun thing that we do, right. We join with City of Sturgis this year as the major response early event. So when you see anything that we produce around that event, we use the logo, the official logo of the 78 Rally. We leased a property from the City as part of the transaction that is about a half a city block and it’s directly across the street from Harley Davidson, which is next to Indian and Polaris and the rest. And we like that relationship because we're not positioning ourselves as a used bike seller. We’ll position ourselves as a marketplace provider, inventory provider. At that site, we've got all kinds of consumer interaction, you probably it will see in our letter some of the photos you'll see from the stuff. But we have all kinds of consumer interaction everything from simple things like charging stations for cell phone to $3 beer. That’s a good one. The City gave us he gave us a 9-day beer permit license and so we’re going to sell beer significantly cheaper than anybody in town. Live music, we have our trucks and trailers there where we have 80-inch flat screens, where when you shop our inventory online, when you look at a picture of a motorcycle, you're looking at a life size picture on the new 80-inch flat screen. Obviously, we will be generating cash offers, which we always do. We will be incentivizing people to download our application. We give away now. In all these events, we do a photo for free that people are lining up by the hundreds to get because we're stamping it with the date and the event that’s on it. And so a lot of people go to multiple events. As sooner they get there, they are now going to our site – to your location, so that they can get those photographs. We are going to have a representation of inventory, so people can see the quality of the bikes we have and they would actually be able to buy one and right at home they still choose, and it could go on and on. We have a couple custom bike builders that are there. We really feel that it's a huge opportunity. And keep in mind, [tell me] whose estimate you look that, let's say a half a million people. Where in marketing do you get the opportunity to find the demographic, but 100% of the people, 500,000 people have the opportunity to see you and all of them are passionate about what you buy and sell, and in fact they are sitting on it and taking their time off, their vacation and everything to enjoy it. So it is super exciting. It's been really, really powerful. We're seeing – when we first started this a year-ago started this was our first event, we just did it a much smaller scale. We saw a lot of people, and we just felt that long-term, it was a great marketing opportunity for us and we see the opportunity.

Great. Thanks very much, and best of luck at Sturgis. End of Q&A

Thank you for your participation. This concludes today's conference call. You may now disconnect.