RideNow Group, Inc. (RDNW) Q2 2020 Earnings Report, Transcript and Summary

Ladies and gentlemen, thank you for standing by and welcome to the RumbleON Second Quarter 2020 Earnings Call. [Operator Instructions] I would now like to hand the conference over to our speaker today, Whitney Kukulka. Please go ahead.

Thank you, operator. Good morning, ladies and gentlemen. Thank you for joining us on this conference call to discuss RumbleON’s second quarter 2020 financial results. Joining me on the call today are Marshall Chesrown, Chairman and Chief Executive Officer; and Steve Berrard, Chief Financial Officer. 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 periodic SEC filings. And now, I will turn the call over to Marshall. Marshall?

Thanks, Whitney. Good morning, everyone. Thanks for joining our call today. I hope you and your loved ones are staying safe and healthy. We’ve demonstrated solid progress on our march to profitability the past several quarters. And I'm pleased to report that we generated double-digit gross margin for the first time in our history and reported positive net income of $1 million in the quarter despite the challenging macroeconomic backdrop. In 2019, we demonstrated our ability to rapidly scale RumbleON and set our sights on achieving profitability. We have taken prescriptive measures to drive gross margin expansion, gross profit per unit improvements and reduce operating expenses since then. And our second quarter results are more evidence of our ability to rationalize our expense profile and take advantage of market trends cost effectively. It's been about six weeks since our last call and even in just that short time, a lot has changed in our economy. For many customers, selling or buying a vehicle is an important component of their business or personal needs. Our online technology allows dealers and consumers to sell or buy a vehicle without ever coming into physical contact with another person. We believe this is the safest way to transact, and it certainly appears to be the way of the future. Our touchless buying and selling processes allowed dealers and consumers to buy or sell a vehicle from their business or home, complete their transaction on their phone, tablet or computer, and have the vehicle picked up or delivered without coming into physical contact with anyone along the way. There's no doubt that COVID-19 pandemic has created headwinds in the industry, but there are also tailwinds and new opportunities being created. Thus far in the third quarter, we are experiencing the highest online activity, strongest demand, and highest valuations we have seen in our history as a company. We continue to see fluctuations in market trends, but our nimble business model and fast inventory turn has enabled us to make operational changes that we believe will enable us to emerge stronger than ever. Very early on in the pandemic, we decided to reduce inventory dramatically because of macro uncertainty. Further, before the COVID pandemic proliferated across our country, our facilities were struck by a tornado destroying or severely damaging a large portion of our auto inventory located at our Nashville hub. Consistent with what others in the industry are reporting, inventory acquisition is competitive, thus expensive. Between uncertainty due to COVID, damaged inventory in Nashville and a supply and demand imbalances, we had the perfect trifecta of challenging circumstances. Off the cuff, this may sound insurmountable, but our management team's significant experience in the industry allowed us to leverage past experience to our advantage. We made quick adjustments in expense reduction and inventory sell off, and we have been able to continue to make great progress towards our near-term profitability goals. Our decision to liquidate inventory early on means that we don't have over-aged depreciating inventory on our hands today. Instead, our quick turnover has resulted in our inventory being truly mark-to-market. When valuations are moving around as they have been since March, a mark-to-market approach and fast inventory turnover is advantageous and it's key to profitability. We continue to prioritize margin expansion and bottom line improvements. So we are taking a very disciplined approach to vehicle acquisition, focusing on the highest margin inventory available. Additionally, we temporarily reduce discretionary growth expenditures and adjusted purchasing levels to align with demand and market conditions, while closely monitoring key metrics to determine when and how quickly to adjust. All of which are reflected in our Q2 margins. We also recently received our first proceeds from the insurance company for some of the losses we sustained from the tornado, which you can see in our bottom line results. Through all of this, our most important priority is the well-being of our employees and customers. We have taken several steps to provide a healthy working environment, including implementing work-from-home policies for many employees, eliminating non-essential travel and implementing social distancing policies. As such, we did not attend Sturgis this year as planned, but we hope to return in 2021. We have made prudent decisions and quick changes to our operating model and expense profile. And I am proud of our team for everything they've accomplished in the past several months, especially with all these changes occurring amid those challenging times. Our 100% online business model allowed us to quickly respond to changes in market demand and the industry landscape as we position RumbleON for sustainable, profitable growth over the long-term. At the time of the tornado on March 3, 2020, and the issuance of stay-at-home orders soon thereafter due to COVID-19, we were swift to roll back ad spend dramatically, and we did so aggressively. As it played out, not only was it a prudent idea to control spend as dramatically as we did, it also gave us another view into our true organic traffic, a rare opportunity for a young company. The results were better-than-expected and although there was an obvious slowdown, we had an accurate baseline to build from for our future ad spend as demand returns. Further, the rollback of ad spend led to massive customer acquisition cost improvements during the quarter. In Q2, our customer acquisition cost was $147, down from $428 in Q2 of 2019. In July, we began to ramp marketing spend in support of the launch of RumbleON 3.0, and early successes are being realized. The addition of thousands of vehicles listed by dealers and consumers on our site, we'll increase the amount of vehicles available, which will benefit consumers who are looking for their perfect vehicle as dealers navigate inventory scarcity. In addition to new paid ads, we expect our inventory aggregation to strengthen the organic traffic. We expect pre-owned vehicle sales to begin to increase from Q2 level as we begin to increase our brand building and utilize direct response channels to efficiently source and scale our addressable markets. Since we are not providing guidance, we want to offer some additional color about monthly trends thus far this year. We experienced what we believe was the bottom of the downturn in mid April with the largest unit sales decline and our lowest level of inventory acquisition during the quarter. Total unit sales for the month of April were down 66% from January levels. By the end of April, conditions began improving slowly and began ramping quicker as the month of May progressed. The velocity of the rebound in May and June was higher than expected. And as demand has returned, our acquisition of inventory has accelerated. In May, unit sales increased more than 22% from April's lows and we experienced a 46% increase in June as compared to April. Though, we are still below the monthly unit volumes experienced in January and February, our results for the month of June, July show our highest gross margin on units sold in our history and significant operating income improvement from prior periods. We don't believe the June and July levels of gross margin are sustainable over the long-term. However, we do expect vehicle margins will stabilize as demand normalizes. In the meantime, we will continue to take a disciplined approach to benefit gross profit per unit and continue our March towards our near-term profitability goals. While we are seeing increased demand, there is still much uncertainty in the macro environment that could impact our industry, and we anticipate the return to business as usual will take some time. As we all learned to navigate a new normal, COVID-19 has dramatically accelerated the digital transformation across all industries around the world. Now more than ever, consumers and businesses are operating exclusively online. All retailers need new ways to reach customers and dealers need access to tools and technology to stay competitive in the new normal market of online transactions. RumbleON's technology was purpose built to enable a simple streamline and 100% online experience, bringing all elements of transactions online. Companies that really took a hard look at their digital strategy early on and invested in technology solutions are leading in this environment. Those who didn't need to buy or build it now and rapidly implement new technology and process. We are super excited to add the content of multiple dealers and drive increased traffic to the new rumbleon.com. With the launch of RumbleON 3.0 in the coming days, our technology platform, tools and ancillary products and services will be available to powersports dealers, enabling their digital transformation. RumbleON's dealer centric offering will improve participating powersports dealers ability to compete in online only transactions and our cash offer tool, RumbleON consumer financing, logistics, and inspection capabilities will help generate higher quality leads with a greater likelihood of conversion to sale for all dealers. We're not only bringing them high quality leads similar to the best listing sites, but we are bringing them the tools, technology and services that will give them access to online transactions. For most of them, this will be a first. We added this functionality at the request of many dealers who are struggling with the demand from consumers to transact online rather than in a showroom. Every dealer we have presented this opportunity to is excited and clearly sees the value in our approach as they’re looking to rumbleon.com to significantly improve and accelerate their online capabilities and generate incremental sales. The launch will be with powersports only. However, always keep in mind, our technology was designed to be effective with anything with even, including autos, boats and RVs, once we're ready to launch those verticals. In July, we announced that more than a 100 dealers across 29 States will participate in rumbleon.com 3.0 when we go alive and we anticipate accelerated growth quickly thereafter. Rumbleon.com 3.0 will also improve the customer experience. These franchise and independent powersports dealers maintain thousands of new and used powersports listings, which will be available on rumbleon.com, offering tens of thousands of listings for consumers in one marketplace. And we anticipate the tremendous increase in content on the site will further accelerate our online traffic, all while creating incremental monetization and margin opportunities as we continue to scale our core business. There are several ways we can monetize rumbleon.com 3.0, listing fees, vehicle acquisition fees, distribution fees, logistics, and transportation, backend technology, and support advertising and more. As we have mentioned before, we see similar business dynamics and opportunities in both in RVs as in powersports and fully intend to enter those segments when the timing is appropriate. In the meantime, the market opportunity to continue our dominance in powersports is paramount. And our automotive distribution model has incredible scalability from where we are at today. Our ability to backstop trades and consumer purchases for dealers online allows them to manage seasonality and inventory shifts much more effectively. In our early days of entering the automobile space, there were many questions around the timing of that move. Management at the time and even more so today felt that building the best distribution platform for anything with a VIN was the first step to assure our long-term business strategy is successful and we believe this will even be more valuable with RumbleON 3.0. Further, our wholesale Express business, which moved over a 100,000 vehicles in the last 12 month continues to grow and as a meaningful part of our profitability profile going forward. We are proud of our commitment to investing in software development and that ongoing investment is one thing that we never backed down from even during our tornado loss and the onset of COVID. Due to that relentless commitment to technology development, we now have the ability to buy, sell, trade and finance, not only just RumbleON own inventory, but now any dealer's inventory. Building our technology and a best-of-breed distribution platform first has led to and we believe will lead to many more strategic relationships going forward. And in fact, we continue in talks with many. For example, we recently announced a pilot program with CarGurus that not only validates the strength of our technology, but it demonstrates the agility of our business model. CarGurus is leveraging RumbleON's technology, logistics and distribution services to facilitate the testing of an inventory acquisition for dealers to source inventory directly from consumers, a 100% online. We look forward to further opportunities with them in addition to other strategic business relationships as we continue to leverage what we have built in our company's brief history. We believe there are boundless opportunities ahead of us, and this is yet another example of how we are executing on our disruptive strategy. Our proprietary technology suite has underpinned our offering since day one. We have strong relationships with dealers and our agnostic business model has propelled our rapid expansion in both power sports and automotive. From our perspective, online transactions were already accelerating rapidly, but COVID-19 has kicked the acceleration into overdrive. There are a handful of beneficiaries of this rapid industry change, and we feel our strategy and supporting technology will lead the way. Our entire team is excited like never before about the future, and management is confident, we have the team of highly experienced professionals that will make it happen, especially with the recent additions to our management team and Board of Directors. Our team is well versed in the industry we are disrupting, and the newest members of our leadership team are already participating in a big way. We believe they will be instrumental to our organization going forward. Lastly, I want to stress loud and clear that profitability is key, and we are committed to managing our business to achieve sustainable, profitable revenue growth and deliver shareholder value over the long-term. As the same goes, we are running a marathon, not a 100 yard dash. And in our short 3-year history, we feel we have barely left the starting dates. And with that, I'll turn the call over to Steve to discuss our financial results. Steve?

Thank you, Marshall. Our Q2 results are detailed in the press release we issued this morning. So I will address some of the key metrics and the progress being made towards achieving our profitability targets. Additional supplemental information is available in our second quarter Form 10-Q, which we filed after the market closes today. While we are experiencing COVID related headwinds, that are consistent with the broader industry, we've been quick to adapt and are using the market trends to our advantage. Long before COVID, we made the decision to take prescriptive steps to accelerate profitability by taking a disciplined approach to vehicle acquisition and sales volume in favor of gross margin. We are beginning to experience meaningful progress towards our goal of achieving sustainable profitability. As a reminder, in Q2 of last year, we reported revenues record unit sales of 13,928 and recorded revenue of $270.2 million, making top line year-over-year comparisons challenging. We believe that by prioritizing our near-term profitability, goals and despite the adverse impact of significantly reduced commercial activity from the COVID-19 pandemic, which resulted in a decrease in unit purchases and sales of vehicles, our results demonstrate the operational improvements we’ve made across the organization. For the three months ended June 30, 2020, we saw 3,694 units and generated revenue of $84.3 million. Out total overall gross margin of 10% included a gross margin on vehicles sold of 8.5% for a profit of $1,752 per vehicle, a 74% increase over the same period of 2019. Both the gross margin and gross profit per unit was the highest in the company's history and were driven by particularly strong gross margin from sales to dealers, reducing our inventory levels early in the pandemic, leveraging our technology and robust database to acquire high margin inventory and supply and demand imbalances due to the increased demand and the limited availability of new inventory by OEMs are still operating at reduced capacity. The secular trends are beneficial in the near-term. However, as Marshall discussed, we don't believe the impact in supply and demand imbalances and higher valuations are sustainable over the long-term. While we expect vehicle margins to stabilize congruent with demand, we believe we will drive sustainable margin enhancements to the operational initiatives we've discussed. Total SG&A in the quarter was $11.2 million, a decrease of 55% year-over-year and 38% from Q1. The decrease was a result of the sale of fuel vehicles, which was due in part to our continued disciplined approach to sales volume in connection with the prescriptive steps we've implemented to accelerate profitability and the damage sustained to our operating facilities and inventory held for sale in Nashville as a result of the March 3, 2020 tornado. In turn, the sale of fewer vehicles resulted in a corresponding reduction in related selling expenses, sales related compensation and marketing spend for the quarter. And a reduction in staff levels and adjusted purchasing levels to align with demand and market conditions and the deferral discretionary growth expenditures such as travel, facility expenses and other business costs and expenses due to the significantly reduced commercial activity resulting from the impact of COVID-19. For the first time in RumbleON's history with the help of the receipt of $5.6 million in insurance proceeds, we've generated positive earnings per share. In Q2, operating margins was 2.8%, up 6.5 points over last year. Net income was $1 million or 1.2% of revenue versus a net loss of $13 million or negative 4.8% of revenue last year. Our adjusted EBITDA loss, which excludes the $5.6 million insurance payment was $1.3 million in Q2 2020 compared to a loss of $6.9 million in Q2, 2019. We continue to review damages and coverage with our insurance carrier, resulting from the damage to our Nashville facilities, including inventory held for sale. The loss on inventory has been assessed by the insurance carrier at approximately $13 million. On July 23, 2020, the insurer made an advance against the final settlement of the damage claim on inventory of $5.6 million. Under GAAP, this recovery has been recorded as a separate component of income from continuing operations for the 6-month period ended June 30, 2020, and is included in accounts receivable at June 30, 2020. We maintain full insurance coverage for damage to facilities and inventory, as well as business interruption insurance. And we maintain our view that we were covering the full value of the impairment. Turning to cash. We have a strong focus on preserving liquidity as we move closer to our goal of achieving sustained positive cash flow from operations. In Q2, we generated a $600,000 net increase in cash during the quarter. As of August 13, 2020, the company had approximately $11.1 million of cash, of which $5.5 million is restricted and approximately $31 million of remaining availability under our next year credit line. Additionally, the company expects to receive the remainder of our insured losses. However, no assurance can be given regarding the amounts, if any, that will be ultimately recovered, or when such amounts, if any, will be recovered. As Marshall discussed, we created rumbleon.com 3.0 to participate in transactions that will be incremental to our current business model and require less capital commitment. With our focus on high margin and profitable transactions, we will continue to maintain our disciplined and data driven approach to revenue generation. Given the uncertainty of the ongoing impact and unprecedented conditions surrounding the COVID-19 pandemic, we cannot predict the overall effect to RumbleON, our customers, regional partners, and others that we work with. As a result, we believe it's prudent to continue to withhold guidance until we can better gauge market conditions and have a clear understanding of the lasting impact from COVID-19 pandemic. We are making steady progress towards our near-term profitability target and positive cash flows. And we are confident that sustained profitability is in our line of sight, but we still have work to do. We view the progress we've made thus far and the improvement in cash use during the quarter as beneficial near-term catalysts on our march to profitability, but we are always looking ahead. We're committed to our financial objectives, drive sustainable and profitable growth, generate positive cash flows and deliver long-term shareholder value. Thank you. We will now open the call up to questions. Operator?

[Operator Instructions] Our first question comes from the line of Ron Josey with JMP Securities. Go ahead please. Your line is open.

Great. Thanks for taking the question. Hi, Marshall. Hi, Steve. I've got three questions that there's a rifle through them, and we can go one-by-one, but at least provide the topics. So first question, Marshall, can you talk just about the quarterly cadence? Understood the April, May and June commentary, but maybe give us some insight on July and August. That would be helpful, just given your commentary around highest online activity and strongest demand. And then the second question is on Rumble 3.0. You said launching in the next coming days, you just talk about the rollout here, the focus on powersports only, what needs to happen to expand the auto? And then, Steve, you just sort of reiterated one of the benefits was to focus on less margin commitment here. Can you just expand that a little bit more as to why that's the case? And then the last question, hopefully this makes sense. Just on CarGurus, can you provide just some update on the pilot in terms of how CarGurus is helping the -- helping dealers source more customer inventory, specifically, maybe talk about the rollout process, how CarGurus is promoting a product? I think it's just a pilot Massachusetts, but just any feedback and how this could expand would be helpful. So quarterly cadence, Rumble 3.0 and margins, and then CarGurus, that'd be helpful. Thank you guys.

Okay, great. This is Marshall. I'll take -- I'll start there with the beginning. Yes, I think what we described as far as the cadence of April and May and into June is kind of setting the tone for where it's headed. Keep in mind when we had the tornado loss, COVID is one thing, COVID would have for a short period of time slowed down demand. And we would have been still sitting with inventory, but just prior to COVID, we lost about 70% of our automotive capacity due to the tornado. So -- and continue to work through that in a very efficient -- in a very efficient manner. We believe here within the next couple of weeks, we'll have a very, very small percentage of those vehicles left to liquidate. So with that said, I think that you've heard from others, we're experiencing the same thing. Business has been vibrant to say the least. The dealer demand out there because -- I believe because of their lack of new vehicle inventory has been excessive. Typically in the last, say 30 days, we'll see, 3x the amount of dealers inquiring on purchase of our vehicles. And so the inventory turn is also been as vibrant as we have seen it. We developed a lot of software along the way. I think we discussed a couple of quarters ago about a software tool that we developed that can look at masses of inventory and determine individual opportunities, and we utilize that software today in a very, very big way. And it does allow us to acquire inventory sometimes in remote locations that has been extremely profitable and effective. So we're excited about Q3, but there's still a lot of the quarter left. And we are starting to see a little normalization, especially on the value side. Values were like way out of whack. The rebound was significant. And again, I'm not saying anything that everybody else hasn't said. But we are starting to see it normalize a little bit, but the demand kind of remains really, really high. 3.0 and why the emphasis on powersports. It's from a few different things. Number one, as you know, when we launched the company as a whole, we launched our original website as well as V2 of the website last year, we always start with a focus on powersports. And the reason from our perspective is powersports we really don't have any competition in what we do, and it gives us a really good glance at what the opportunity truly is and what kind of market share we can grab. We also have tremendous proprietary data now from the -- well in excess of a $0.5 million cash offers that we've provided and the amount of powersports that we have now redistributed into the marketplace, our data is very, very robust in that regard. So we felt it was a very strong move. The second piece of why is because with the addition of dealers to be able to list, there is a lot of opportunities on the automotive side. And we're going to talk about CarGurus in a second. We believe they're the leaders in the space. And they're looking forward on what that opportunity looks like for them as well. They are purely automotive focused. We are agnostic to all makes, models and segments of vehicles long-term. So we felt that with everything that we had going on the direction of using powersports as the lead was consistent with what we've done in the past and really the best move for us. That does not mean that we might quickly add other segments. But as you know, you've heard me talk many times about boats and RVs. Boats and RVs, there is really almost no competition in that regard from an online perspective and the people that are buying an RV want to be able to do the same transaction online that people are demanding today on the car side of the business. So we think the faster we can get there, the better off we'll all be. 3.0 is, today, you'll be able to, you can still put an automotive VIN into the system. You can still get a cash offer on a car, all the functionality that was there in the second -- in the previous -- or in the current version, because we haven't launched 3.3 yet. And when we say the following day, just the next few days, we will launch. It's completely tested and baked and ready to roll. We're just working on some finalization on integration primarily, integrating hundreds of dealers and thousands and thousands of vehicles into your platform, required both some technology advances as well as working through some challenges. On the powersports side, unlike the automotive side, a lot of these guys do not have the level of any technology on their end. And so we've had been -- we've had to adapt to being able to push inventory supply into our website from a plethora of DMSs and some of them, you'd be hard rest to even call them the DMS. So that hopefully -- that answers that piece of it. CarGurus real quick. CarGurus, we've mentioned for the last couple of quarters that we've been working on different strategic relationships and we are -- we can't be -- the other ones that we're well down the road on, we've got to be very, very careful because obviously you do those negotiations through MDA. We know a lot about CarGurus and CarGurus now knows a lot about us, and it wouldn't be right for us to discuss internal strategies and those types of things. But I would tell you that we met with them probably a year ago now for the first time. And we've been in constant contact and talking about the future, and the future of both companies and what the role might be and how we see dealers transacting in this whole online onslaught. And I think we are in agreement on a lot of different things of what we see the future to be. So right now we are doing a test where we have basically became the backstop. They're not in a position nor are they equipped, nor do they want to be equipped at this point to do things like take title and be responsible for logistics of moving these vehicles, whether it be from mom and dad's house to a dealer or from a dealer to an auction or whatever it might be. And then the -- just a pure distribution of it, our numbers prove that we are a very, very effective redistributor of cars and trucks. And certainly in motorcycles, we lead by a giant amount. So the CarGurus test is really us supplying kind of, I call it a backstop for all of the functionality that they don't presently have. But they see a huge opportunity as we do to be more to their dealer partners than just a place to list your vehicles and get click throughs with regards to -- it's easier to have a blue one, or whatever the question might be to actually generating quality leads that transact into incremental sales. And what that means is when -- one of the things that we've talked about openly is the whole comparison to the mortgage industry. Very few people go out and shop for a home today without being preapproved and knowing what they can buy. And I think Carvana has proven that consumers want that same level of service. And that was the reason for us forming RumbleON Finance. These are all things that we now have the platform and we can leverage, but it's all driven by what the customer's demand is. And make no mistake about it, CarGurus is like us. We all believe that at the end of the day, whether your business model is going to work in this new normal we're calling it, is going to be the judge and jury is out, and the judge and jury is in the hands of the consumer. And so that's a long answer to the CarGurus, but we see some great things coming out of that. We have great relationship with them. We like them a lot. We think a lot the same, and we think there's going to be a lot of opportunity and things that we'd like to do we're good at. We have the tools to do, and they might or might not ever want to do those things. And we're going to be there to be able to provide whatever level of service we can. And we're going to be testing a whole lot of things because a motor -- a powersports dealer that we're going to be offering this huge level of service and all these pre-qualified finance leads and all these things, these are all things that could be done on steroids and in the automotive space. Now whether that's them or us or both, the market is plenty big for a whole bunch of winners. So I hope I answered those. You want to answer the financial question?

Ron, just to touch on the margins, I think Marshall approached it a little bit with the tools that we've created, allowing us to go back through those 500,000 cash offers that we received. If we're looking for something that's trending in the market, we're able to go back and solve those offers. Since those people in many respects have not yet sold the vehicle. We've also changed our pay plan. Now we've got the Wholesale link business well integrated and tucked in. We've changed our pay plan that is much more margin driven and the fact that we're not chasing after top line growth necessarily at the expense of margins, I think we've been more disciplined in what we buy when we buy it and how we buy it.

That's great. Thank you, guys. Appreciate it.

I might add, Ron, just one more thing. I might add with regards to gross margin. Obviously, we don't feel we are competitors with the likes of Vroom and Carvana and CarMax, but for whatever reason, because we're in the space, everybody wants to do comparisons. And with regards to gross margin, I'd urge you to look at Q2 results being primarily dealer driven. And again, remember powersports have a -- and they're in our numbers. Powersports have one-third of the ASP that a car does, but yet I think the spread as I saw it in Q2 was Carvana at 27.26, RumbleON at 22.89, Vroom at 6.86. And the only reason I point that out is because if you look at -- you guys have heard me say before, if you look at the SG&A and the expense from infrastructure, people, marketing, name it, to create a dealer sale versus a retail sale, it's world different. And what we've been able to do is turn inventory extremely fast because of this ultra high dealer demand. And again, that's what I mentioned earlier that we think that will normalize, but I would tell you it has not normalized as of yet. So with that, that's -- is there anything else Ron, from you?

I'll just go back in the queue. Thank you. Very helpful.

And with that, ladies and gentlemen, we do conclude today's conference. We thank you for joining. You may now disconnect.