Ladies and gentlemen, thank you for standing by and welcome to the RumbleON First Quarter 2020 Earnings Conference Call. [Operator Instructions] I would now like to hand the conference over to your speaker today, Whitney Kukulka, Director of Investor Relations. Ma'am, please go ahead.

Thank you, operator. Good morning, ladies and gentlemen. Thank you for joining us on this conference call to discuss RumbleON’s first quarter 2020 financial results. Joining me on the call today are Marshall Chesrown, Chairman and Chief Executive Officer; and Steve Berrard, Chief Financial Officer. This is our first fully remote earnings conference call. So please pardon any technical difficulties. Full details of our results and additional management commentary are available in our earnings release, which can be found on the Investor Relations section of the website at investors.rumbleon.com. 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. 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 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 statements can be found in RumbleON’s periodic SEC filings. The forward-looking statements and risks in this conference call, include 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 may contain non-GAAP financial measures. For a reconciliation of these non-GAAP financial measures, please see our earnings release. And now, I will turn the call over to Marshall. Marshall?

Thanks, Whitney. Good morning, everyone, and thank you for joining our call today. First and foremost, I want to hope everyone is healthy and safe. Keeping our employees and their families safe has been our top priority, and we are proud of how the entire RumbleON team stepped up to support their communities. The COVID-19 pandemic has upset the American economy drastically changing consumer and business spending across many sectors, including the preowned vehicle market. We had a strong start to the year with January and February tracking consistently – consistent with our initiatives as our strategy of opportunistically building inventory in Q4 for the anticipated acceleration in sales in 2020 and it began to pay off. Beginning in March, the industry and our business experienced imbalances in both supply and demand. While we work quickly to adjust our business operations during this unprecedented time, our business was negatively impacted and we saw trends that were consistent with others in our industry. In addition to the general business pressures resulting from the shelter-in-place orders and broader economic uncertainty, our business was further impacted from a direct hit by a tornado that struck Nashville on March 3. January and February were strong, but the combination of these events reduced our March revenue by about 50% as compared to February of this year. Steve will detail the impact of these events had on our consolidated financials shortly. Despite the macro events I just discussed, total unit sales and total revenue in Q1 was 7,420 units and $144.4 million respectively, up from 6,218 units and $127 million in Q4 2019. Adjusted gross margin for the quarter was 8.1%, and gross margin on vehicles sold was 6.8%. Powersports revenue and gross profit grew roughly 40% quarter-over-quarter. Automotive gross profit per unit grew approximately 30%…

Thank you, Marshall and good morning everyone. Our Q1 results are detailed in the press release we issued this morning. As Marshall discussed, our business was impacted by several events that were extraneous to our underlying operations. The trends we saw in the recent months track with the broader industry trends and consistent with goals we outlined last fall. We have taken prescriptive measures to drive gross margin expansion, gross profit per unit improvement and reduce operating expenses. While there is certainly noise in Q1’s result as a result of the tornado damage and general business pressures resulting from the shelter-in-place orders and broad economic uncertainty, our underlying Q1 results demonstrate the progress we have made as we position our business for sustainable profitability. Business in January and February was strong, but the combination of the extraneous events reduced our March revenue by 51.7% as compared to February of this year. Despite the decline in March, we sold 7,420 units in Q1 and generated revenue of $144.4 million in Q1, up from 6,200 units and $127 million in revenue in Q4. Q1 2020 powersport gross profit per vehicle grew 13.8% sequentially and 8.2% year-over-year, while automotive gross profit per vehicle grew 11.3% sequentially and 28.7% year-over-year. Consistent with our objectives, we took a disciplined approach to sales volumes and we expanded our gross profit per unit as we continue to take the steps to accelerate profitability. While March unit sales were negatively impacted due to the tornado damage and COVID-19, we believe our Q1 2020 results demonstrate our commitment to achieving profitability and the progress we have made. We have not closed Q2 yet, but we have remained pragmatic in our approach to sales volume and margin expansion and our preliminary June results demonstrate further margin expansion and significant bottom…

Thank you. [Operator Instructions] Our first question comes from the line of Ron Josey from JMP Securities. Your line is open.

Great. Thanks for taking the question. I have got three, and I will be relatively quick. Glad everyone is safe. So the first topic here just on acquiring inventory and you talked about, Marshall, highest gross margins ever and acquisition of inventory is accelerating, but can you just talk about how you are seeing demand, how you are receiving the demand for the inventory for your cash offers? We are seeing reports from wholesale and auction houses talking about pricing increases, so just want to get an insight on what you are seeing on acquiring inventory? And then on the third generation of RumbleON coming out expected for 3Q, just any more details around the improved dealer tools, strategic alliances, I think you said the launch was this fall, but also looking for announcements here in the coming weeks, so just understanding a little bit more on how you are viewing the rollout here for the third generation? And then lastly, Steve, and I will go back to the queue, just can you review the RumbleON’s liquidity again and remind us what restricted cash is? Thank you.

Yes, thanks Ron. I will take the first two there and will pass it to Steve. First off, the market rebound, I think for all involved and what you are reading in the most of the press information -- market information is correct. It rebounded significantly stronger than anybody was predicting or saw. Some of it is driven apparently by the lack of new vehicle inventory since the plants were shutdown and so forth, so late model pre-owned have been very, very strong. Keep in mind when you look at those numbers though, we had over a 20% drop in value at the time of COVID, and the rebound although it looks dramatic if you were sitting on inventory in January, it wouldn’t have that dramatic of a gross profit enhancement. So, what we are happy about is the fact that we did get extremely aggressive in eliminating inventory as we saw the storm, if you will, but the rebound has been significant and thus inventory turn is at an all-time high and thus gross margins are equally improved. With regards to the – what we are referring to as the third generation of RumbleON.com, what we are doing is giving dealers the ability to participate on our platform in more of a transactional basis revenue. We aren’t changing what we are doing, but we are adding it on as additional content, because we think that it will drive significant traffic and we think that the power – again, much like we have done in the past, we are starting with powersports, but we do believe that the powersports market is really at a major disadvantage from a technology perspective as compared to what’s available for most dealers in the move to online sales. Obviously, the move to online sales has played well for us in this period of time as it has for other online providers in the vehicle business, but for the average powersports dealer, they haven’t had the opportunity to compete. So, we do expect that to come out or be launched in the August timeframe, potentially early in August, but we are moving quickly to do that. Our hope is to launch that -- a public launch of it while at Sturgis the first week of August and we have already made significant moves with regards to sign up of the majority of the powerful dealers in the country and so forth. So, we are excited about it. We think it’s just further leverage and monetization of our software on our platform. I think it just enhances our overall business opportunity. So, with that Steve, you can take the third one?

Sure. Ron, to go back through what I said, $9.7 million of cash, of which $5.5 million is restricted, that is the positive we have up with our floor plan lender to support our line of credit for the floorplan. The $1.2 million is availability under a credit facility that we have with RumbleON Finance. And back on the floor plan, we have got almost $20 million of availability, which is more than adequate for what we need going forward. I think the real issue on liquidity is we have come through the COVID crisis and losing a large part of our business and have been able to maintain relatively good liquidity. When we look at June and beyond and we look at SG&A where it currently is at and where we think it will be remainder of the year, our cash burn is going to be significantly lower in Qs 3 and 4. And so as a result, we also believe at some point in that period we will receive the insurance proceeds that we expect. I think the important thing about the insurance proceeds, half the vehicles that we are entitled to get proceeds on have already been sold. So, there will be no net out-of-pocket netting, I guess, for that cash receipt, because the vehicles are no longer here, but we are entitled to insurance.

Got it. Thank you very much.

I would now like to hand the call over to Marshall Chesrown for closing remarks.

Well, I want to thank everybody for joining us on this early Monday morning and we are certainly looking forward to the rest of 2020. It’s been certainly been a challenging first couple of quarters due to unforeseen opportunities or challenges with COVID etcetera, but we do see a significant rebound and we are looking forward to the rest of the year. With that, thank you so much for joining us. And as you all know, we are very approachable. So, if you have any questions, any further questions or comments, just reach out to Steve or I and we are happy to respond. So have a great day. Thanks again.

Ladies and gentlemen, this concludes today’s conference call. Thank you for participating. You may now disconnect.