RDNW - NASDAQ

Greetings, and welcome to the RumbleOn First Quarter 2022 Earnings Call. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Will Newell. Please go ahead.

Thank you, operator. Good morning, ladies and gentlemen, and thank you for joining us on this conference call to discuss RumbleON's First Quarter 2022 Financial Results. Joining me on the call today are Marshall Chesrown, RumbleOn's Chairman and Chief Executive Officer; and Narinder Sahai, RumbleOn's Chief Financial Officer. Our Q1 results are detailed in the press release we issued this morning and supplemental information will be available in our first quarter Form 10-Q that will be filed later today. Before we start, I'd 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 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 non-GAAP financial measures, please see our earnings release issued earlier this morning. Now I will turn the call over to Marshall. Marshall?

Thank you, Will. Good morning, everyone, and thank you for joining us today. I'm very pleased to be reporting on our strong financial and operational results for the first quarter 2022. The -- we enhanced our omnichannel customer offering, expanded our national footprint, deepened our leadership position in powersports and delivered on our financial goals while keeping our focus firmly on our North Star, providing customers an unparalleled choice of products and services as well as an unmatched buying and selling experience, both online and in our retail locations. We sold over 19,000 total units in the quarter alone, delivered nearly $460 million in revenue and generated over $105 million in gross profit. We recorded over $9 million of net income and over $31 million in adjusted EBITDA, while making strategic investments to strengthen RumbleOn's core and execute on our mission. We are confident in our strategy and are reiterating our outlook for the entire year. Creating a best-in-class customer experience in powersports begins with building a fantastic end-to-end ownership experience with focus on lifetime relationships with our customers. At RumbleON, we do not have a one-and-done transactional mentality as our goal to become a powersports destination of choice for participants in the space throughout their buying future. That starts with building trust, not only through professionalism, transparent pricing, quality assurance and superior customer service, but also in our promise to provide the best selection of high-quality inventory from all of our manufacturing partners and unparalleled selection of used products of all makes and models, courteous and on-time service and market-leading financing options. Our cash offer tool is a key differentiator for RumbleOn. Since the beginning, our proprietary technology and process has enabled us to acquire high-quality used vehicles directly from consumers anywhere in the country. We've rolled out our cash offer tool in all 55 RumbleON locations and continue to increase our capture rates dramatically. In addition to this highly efficient acquisition channel for used units, the significant expansion of our footprint has enabled us to funnel most of our used powersports inventory to our retail locations. This is reducing our previous dependence on the wholesale channel and increasing our market share in the higher-margin retail channel. The strong demand environment, combined with our efficient inventory strategy helped us expand sales of used retail powersports again in Q1. We -- we sold 43% more used retail units than in Q4 of '21 and delivered 80% growth in gross profit from that channel. Despite this impressive growth, the majority of our stores are still in need of additional used inventory, and we're working hard to acquire more and accelerate days supply in our highest performing locations. We are continuing to work on the implementation of our new fulfillment system that will provide near real-time inventory replenishment to ensure that the right vehicle is in the right place at the right time with the right price. Our fulfillment system will also prioritize ensuring we have consistent photos, videos and descriptions of each vehicle, further enhancing our omnichannel customer experience. We are on track to complete our digital inventory system and full integration of our retail location websites later this year, which will further support our retail growth strategy. We also continue to see strong demand for new inventory, and we sold more than 9,600 new units in Q1. New inventory continues to be dependent upon manufacturers production and distribution constraints for the foreseeable future. Due to this dynamic and ongoing supply chain challenges, we expect new powersports retail unit sales in 2022 to be consistent with last year. While we are still in the early innings, we will continue our work to bring our new-to-use ratio to 1:1. Long term, we are focused on both new and used. However, our unique access to a broad array of high-quality used retail powersports units presents the greatest near-term opportunity. It provides some insulation from supply chain disruptions experienced across the industry today and is an important differentiator for us in any market environment. Used vehicles due primarily to affordability, provide a great entry point into powersports for both newer and younger users, which builds a base of new riders into the sport. By offering the best customer experience, compelling price points of products and the ease of RumbleON finance, we believe these lifetime relationships will be significant. Before I turn the call over to Narinder, I'd like to reiterate the 3 key investment areas that we outlined in our last earnings call. First, implementing our customer experience center for efficient inventory acquisition and distribution as well as fulfillment for new, used, parts and merchandise. Our customer experience centers will enable us to become a destination for powersports enthusiasts to interact and engage with not only the products they desire, but also with both the broader powersports community and with our brand. The customer experience centers will also serve the dual purpose of fulfillment and inventory acquisition, reconditioning and distribution. We plan to open our first experience center in the Dallas-Fort Worth market later this year. And over time, we look to replicate that playbook in other geographic areas that are important to our omnichannel growth strategies. Second, expanding and enhancing our technology stack. As I just discussed, optimizing and integrating our inventory is critical to ensuring we're the leading destination for powersports consumers. The near-term focus areas here are better leveraging the robust data we collect from online and in-store transactions and integrating our technology across our retail locations. Our real-time pricing and sales data from in-store transactions will enable us to further optimize offers and pricing across the entire ecosystem. We are also upgrading our technology infrastructure to enhance connectivity and collaboration across our retail locations and improve the customer shopping experience. We will continue to expand and enhance our technology stack throughout 2022 and beyond. And third, developing our people and processes to attract and retain the best talent and build a scalable organization. As with our technology development, we are thoughtfully investing in people and process to strengthen our foundation and prepare us for our next stage of growth. We implemented our regional management structure in Q1 and not only are our regional directors working more closely with one another, they're also sharing ideas and developing best practices, but we are realizing important efficiencies that will enhance our integration efforts going forward. We are also investing to build out our critical functional competencies as well as systems to support these functional areas. Our omnichannel strategy, combined with our unique ability to source and distribute high-quality used inventory at affordable prices are the cornerstones of our model. Amid increasing affordability concerns, inflation, the absence of government stimulus packages, negative consumer settlement and some of the highest fuel prices in history, consumers are responding to our offering, and we are delivering a superior product and experience to our customers while driving profitable growth. We believe that there is significant pent-up demand, which will continue to offset potential macro headwinds in the foreseeable future. We are building the premier destination for powersports enthusiasts and we'll continue to optimize our business and unlock opportunities to gain market share. With that, I will turn the call over to our CFO, Narinder Sahai, to provide you with further details on our recent financial performance and an update on our outlook. Narinder?

Thank you, Marshall, and good morning, everyone. Our first quarter results reflect strong momentum and demonstrate our commitment to executing on our plans, realizing integration benefits and delivering profitable growth. Please refer to our earnings press release and 10-Q to be filed later today for full details of the quarter. Unless otherwise specified, all of the first quarter growth figures cited in my remarks today are quarter-over-quarter or sequential comparisons. Moving on to some key highlights. We are pleased to report a quarter of strong growth in used retail powersports unit sales. In the first quarter, we sold over 19,300 total units, up nearly 14% from the fourth quarter of last year, led by over 43% growth in used retail powersports unit sales. Our growth in used retail powersports unit sales was driven by continued strong execution in acquiring used powersports units from consumers and channeling this inventory through our retail locations. Excluding the contribution in the first quarter of powersports unit sales due to Freedom Powersports acquisition, which closed on February 18, 2022, new retail powersports unit sales increased 5%, used powersports unit sales increased 23% and total powersports unit sales increased 12% sequentially. In the first quarter, we delivered nearly $460 million of revenue, a record, up approximately 7% sequentially. Our first quarter revenue growth was driven by strength across the powersports segment, which was up 22%, but offset by the decline in revenue from the automotive segment. Revenue from finance and insurance net grew 24% and parts and services, accessories and merchandise increased 7.6% sequentially. I'll note that we are reporting finance and insurance revenue net of cost in this quarter, and we'll be reporting finance and insurance revenue on a net basis going forward. For comparison purposes, we have calculated prior quarter's finance and insurance revenue on a net basis in our earnings press release. In the first quarter, total gross profit was approximately $105 million, a record, up 17% from approximately $90 million in the prior quarter. Total gross profit margin was 23%, up from 21% in the fourth quarter of last year. Sequential increases were driven by strength across the powersports segment, particularly across the used retail unit sales, which is the high-margin sales channel. The increase in retail sales also contributed to revenue and gross profit growth in finance and insurance net and parts, services, accessories and merchandise. Operating expenses were $82.6 million or nearly 18% of revenue compared to over $74 million or 17% of revenue in the prior quarter. Our first quarter operating expenses include early investments in technology, facilities and people and processes we are making to scale RumbleON. Within operating expenses, total stock-based compensation was approximately $1.9 million, down from $2.1 million in the fourth quarter of last year. Income from operations, our operating income was $22.7 million compared to nearly $16 million in the prior quarter. Net income was $9.1 million compared to $20.7 million in the prior quarter, which was helped by a tax benefit of approximately $11 million and a $2 million onetime benefit from PPP loan forgiveness. Adjusted EBITDA was $31.4 million, up 29% sequentially from $24.3 million in the prior quarter. As of March 31, 2022, cash and cash equivalents, including restricted cash, was approximately $69 million. Total available liquidity, which is defined as cash and cash equivalents, including restricted cash, plus availability under our inventory financing credit facilities was over $201 million. And we generated $31.3 million in cash flow from operating activities. Now turning to our outlook. We are encouraged by the positive trends we saw over the last several quarters. In regards to new powersports units, given the strong consumer demand and the ongoing supply constraints that manufacturers are broadly experiencing, our new inventory levels are down from the end of the fourth quarter. We expect new powersports supply to continue to be constrained throughout the year. While new powersports unit sales may fluctuate quarter-to-quarter, we now expect full year 2022 levels will be flat to slightly down on a comparable basis with the prior year. We expect that this dynamic in new powersports unit sales will be offset with used retail powersports unit sales as we continue to acquire used powersports units directly from consumers on our online platform and channel this used powersports inventory through our retail locations. We continue to expect in excess of 50% year-over-year growth in used retail powersports unit sales. As a result, we are reiterating our full year 2022 outlook, which already reflects our visibility into the supply chain environment and a tough macro backdrop for consumers marked by higher inflation, rising interest rates and consequently impacted affordability. For 2022, we continue to expect to deliver total revenue in the range of $1.9 billion to $2 billion and adjusted EBITDA of at least $145 million, which includes up to $20 million of incremental operating and capital investments over the course of the year. We remain on track with making these investments in a thoughtful manner. Additionally, our guidance does not include any incremental contribution from future acquisitions. Now let me turn it back to Marshall before we open up the call for questions.

Thanks, Narinder. I'd like to finish by reiterating we are laser-focused on the execution of our strategy. We hope to have the opportunity to meet with you over the next several weeks as we attend several investor conferences. We'll be at the B. Riley Conference in L.A. on May 25, Jefferies in New York on May 26 and the Baird Conference in New York in June. Lastly, and certainly most important from my perspective in creating shareholder value, I want to thank our entire team of nearly 2,400 members across the country. For us to have tremendous success in following our North Star of providing customer experience second to none, we must first provide an opportunity for the ones responsible for the mission, a team culture that is second to none with unparalleled opportunities for growth and professional development. The response to these critical days of integration has been very encouraging and the fact that we have had virtually no attrition speaks volumes to the opportunities we have ahead of us. As I've said many times, many can dream with great vision, great teams determine whether vision becomes reality. To the RumbleOn team, your support has been unbelievable. We are performing at all-time record levels, and we are thankful for everyone's incredible efforts and the passion you show for our business. Thanks again to everyone tuning in today. And operator, we're ready for questions.

[Operator Instructions] Our first question is from Eric Wold of B. Riley.

I guess first -- 2 questions. I guess, first question, I sort of connected the dots between the reaffirmed 2022 guidance and the comments at the end made by Narinder around unit guidance reflecting kind of inflationary risk and potential pressure on consumers. One of the more consistent concerns we've heard recently around kind of used automotive and leisure vehicle space that consumers are facing these headwinds of elevated ASPs and potentially reduced affordability. Are you seeing anything that would indicate those same pressures? Are you seeing consumer shift towards -- more towards you versus new? Or are they trading down in price? Are they looking to finance more than paying cash, anything that would indicate this pressure is starting to resonate with consumers?

Yes. Eric, this is Marshall. I'll take that one. Let's start with the headwinds. I mean, we're reading the same reports you are from various different vehicle segments, whether that be boats, RVs, cars and trucks, whatever. I can tell you from a traffic perspective, we have not experienced the same. However, when we break it down into headwinds and tailwinds, I think, obviously, the headwinds are the economic pressures, be it interest rates, inflation, which obviously drive suspendible income and supply chain challenges. We certainly have built that into our thought process and our modeling because it's not realistic to think that we aren't going to experience those or the outcome of those. But I think some things from a tailwind perspective, tend -- from our perspective, tend to be offsetting it in some ways. Number one, we still have a significant supply and demand issue. We have much higher supply have much higher demand than we have supply, and that's continuing. And we don't really see -- but again, we haven't seen a reduction in traffic into the stores at this point. I think our focus on used and basically the accretiveness of what we're bringing to the table with preowned. We started with a business that was really not in the business. So we brought kind of a whole new segment to them for potential growth. And having those additional units online is creating significant traffic and momentum in the stores. Obviously, there's a lots of competition on the used side, and there's also, I think, affordability. I want to just -- the one thing to focus, I think, on or what might be helping our business is 2 things. Number one, the demographic of who we sell. We sell everything from a mini bike to a 9-year old for $499 all the way to a Trike to a 75 -- Harley Trike to a 75-year-old that could be $50,000 or $60,000. I think that what we really represent with a lower ASP is what I would call affordable fund. And I don't think that necessarily all the other segments are participated in that affordability piece. Two more things on the tailwind side. Obviously, we're just at the very beginning of the RumbleON finance, but it is growing significantly. And we clearly can see that the RumbleON finance is bringing incremental transactions primarily on the pre-owned side. The new vehicle side had aggressive financing, but the preowned side was certainly short from our perspective, and we've been able to backfill that and we think we can continue to grow that dramatically. And then I would say also that as -- again, my experience in the car business would say that when new vehicles slow down because of supply or demand or whatever it might be, typically, your service business increases, and we're certainly seeing that. And the concept there is if I don't trade it in today because I don't want to spend additional monthly payment or whatever, I'm more than likely going to need to service it. So we have all those levers to pull, which is, I think, unique to our space in that we have new, used finance parts, service and merchandise. And when you match this to autos, boats, RVs or whatever, very few match up to have that many high gross margin opportunity levers to pull. So I think the next piece would be positive seasonality as far as a tailwind. January and February is always a little suspect in powersports. And March, obviously, made up a significant amount of the quarter. But as we go into Q2 and Q3, we are -- we have the tailwind of seasonality for sure, which, again, if you take all these different items, I think that it just all adds up to a position that we can continue to grow the company despite some of these economic pressures.

That's perfect. And then last question. As we think about the $20 million -- up to $20 million you may spend on technology investments this year, how much has been spent or committed to date? How much flexibility is there in potentially pushing some of that in the next year, if necessary? And then of that 20%, what is onetime this year versus what could be considered recurring that you'd spend kind of in '23 and beyond every year?

Yes, Eric. Thanks for the question. So first, I would say the $20 million of investments we outlined are not just on technology alone. And in the 3 key areas Marshall mentioned. One is our facilities upgrades and experience center. Clearly, technology is a key part. And then finally, scaling our organization and people and processes. So if you look at these buckets, we are still kind of very early stage. So let's take maybe one by one. If I look at facilities and experience center, we signed a lease on the Dallas fulfillment center in the quarter, and we are kind of in the process of getting that up and going. And as you know, it's going to be a combination of lease expense flowing through the income statement, but then we will have some capitalized improvements. So it's going to be a combination of that, but most of that will be capitalized. And if you move to technology, you already see in the statement of cash flows, $1.7 million capitalized in the quarter for technology investments. And we continue to move forward thoughtfully on those investments as well. So it's going to be a combination of unit expense that goes through the income statement and a majority of that would be capitalized as well. And then finally, people and processes, that obviously flows through the P&L as we scale our systems, scale our organization, especially in key functional areas of finance and accounting and compliance. So that obviously goes through the P&L. So if you look at all of this, I would say, early on, I would say, majority of that would be on the balance sheet. But again, a significant portion will still flow through the income statement. In terms of onetime items, clearly, the investment we're going to make in the fulfillment center this year would be onetime unless we obviously want to do more and see how that goes. So that can continue. We have a technology road map that we are going to continue to invest in. And then on the people and processes side, once we get over the hump on that and we in-source a lot of the work that is currently being outsourced, then I would expect that to create some leverage on the SG&A side.

Our next question is from Seth Basham of Wedbush Securities.

This is Nathan Friedman on for Seth. My first is regarding your initiatives. You shared several steps you were taking to build the company. I know that you have the Dallas facility coming later this year, but can you share any other updates in regards to these initiatives and updated timetables to these, if any?

Yes. I think that we're in the design phases right now with Dallas. So we will learn a lot as we go through that. That has happened in Q1 and obviously stretching into current. We are anticipating to be fully operational this year. And we are identifying other market opportunities. I think in our last quarter, we mentioned that I think if you look at the saturation of physical locations that could benefit from fulfillment, especially you would identify the Arizona market, certainly the Texas market where we're starting and for sure, the Florida market. But if you stretch it out past then, obviously, there's some organic opportunities in big population markets that we aren't represented in presently, one be at the Northeast. We are investigating opportunities there as well. And we are working with multiple manufacturers on some opportunities on the organic side. Because when you look at this from a market consolidation perspective, this isn't just about consolidating existing dealers. This is really about creating a model that is an organic opportunity to kind of dominate the space, if you will. So we will continue on the consolidation side. We will continue on the experience center. We think the experience center is really about what does the retailing of power sports vehicles look like 5 years from now. And that's really what we are addressing. We aren't addressing -- it also is going to take care of a short-term need, right? We have a significant need of fulfillment, but we have a great opportunity on these experience centers.

Makes sense. And I appreciate the color there. My second question is regarding the supply chain. Can you share the current message you're hearing from your OEM partners on inventory and how you're navigating in both new and used environments as supply chain risk potentially reintensifies -- and do you feel like you may have some priority over other smaller competitors?

We never expect that we're going to be treated any different than anybody. We do -- we are considering presently about our days supply. Our inventory has come down, as Narinder pointed out, but our sales are up. We do want to continue that because we do believe supplies will come back. And if, in fact, we're on an even allocation basis, my experience is that the retailers that do the best job of taking care of the customer and accelerating market share, will get the lion's share of the opportunity. As far as the supply chain itself, it's a little bit of a mixed message. So I'll kind of just keep my comments to kind of the major players because as you know, we represent -- by the time you get down with all the manufacturing, probably well over 20 manufacturers. But there's probably a handful that are the lion's share. And it really is a mixed message. We have some that are signaling 20% improvement in 2023 and even potential improvement in 2022. And then you can read, obviously, of the public manufacturers, some of them are representing reductions of probably up to 25%. So it really is a mixed message. I think ours is about -- if you look at the thousands of units we have in inventory, continuing to accelerate that turn rate, if you will, making sure that I think our objective is to right now is to have empty showrooms. We also think that there's an interesting move in consumer behavior and employee behavior from the standpoint that these powersports dealers are now becoming very, very good at taking offers which really plays into our hand as we move forward with virtual selling on the pre-owned side. All of a sudden, they've become very astute at selling a product that doesn't have to be sitting right in front of them on the showroom floor. So we're taking many more offers -- deposits than we used to on product that's coming in. There are some new products that are out there with a couple of the manufacturers I don't want to name names, but there are new products that are coming to the market that are sold out pretty much indefinitely right now. So it looks like supply is going to continue to be under constraint, but we really believe we can maintain at the levels we are, and we are seeing some that are improving.

Got it. And one more, if I may. It seems like you experienced favorable gross margin improvement sequentially this quarter. You mentioned that it was primarily due to stronger used retail sales. Can you maybe go into deeper color behind the improvement and whether gross margin expectations have changed given it seems your used retail unit sales guidance is a little bit better than previously.

I'd like to give you a real scientific answer, but I'm going to give you a real simple one. It's about inventory availability. This is a business -- and our stores are still -- not across the board, but the majority of our stores are still very, very short on inventory to fill the demand. And so we continue -- if you look at our marketing spend, as an example, it is really focused on acquisition to drive more traffic and to spend marketing dollars, as an example, to drive more traffic into the showroom floor right now would be fairly futile with not a lot of ROI. Our ROI right now for marketing purely comes from driving more into our cash offer tool and buying more vehicles. We are continuing to ramp that dramatically. We are -- we've had nearly $1 million people put all of their information in with their vehicle. We are remarketing to those people, whether that be e-mail or remarketing through Google, and that's really our focus right now because we believe that we are even close to the opportunity, and we believe there are millions and millions of these assets sitting in people's garages, barns and sheds that are not being utilized. And now they have an opportunity, I would say, similar to car backs in the early days, right, when they made their whole focus on, we'll buy your car, whether you buy from us or not. We're really, really attacking that marketplace, and we think we can get a real stronghold because we aren't really the only one that offers it. You'll see several on the web that say, we'll pay cash for your unit. But every one of them that we're aware of is lead generation for a horrible customer experience. We're going to grab that lead. We're going to send it to a traditional dealer and the consumer is going to go through the normal process. Ours is not that. Ours is a true cash offer. It's not an opinion of value, and it's a very, very friction-free process to get the money ACHed into your bank account.

Thanks so much for the time. Congrats on a nice quarter and best of luck.

[Operator Instructions] Our next question is from Mike Baker of D.A. Davidson.

I have a couple. First one, I'll ask you about the -- it looks like there was a change in strategy mid-quarter in terms of how you're listing third-party product on your website. I think your -- the number of vehicles on the website was down about 1/3, somewhere mid-quarter. Can you talk about that change in strategy? And then of the roughly 60,000 units listed on your site, how much of that is third party versus a product that you own?

Okay. First part of the question is we made a strategic decision to eliminate several dealers for a plethora of reasons that we probably don't want to detail here. But it was not a cancellation of dealers. It was our choice to basically get away from that. I would say, as you're well aware, that is not a profit center for us, but it is a great opportunity to connect with dealers to gather data, which really, really helps our cash offer business, knowing what is for sale in the marketplace without having to scrape websites and do all those kinds of things. So that's the primary move there. And I'm sorry, what was the second piece, I'm sorry, what was your second piece?

The mix of product, so now as I look at right now, 62,000 roughly vehicles on the website. How much of that is you -- is inventory that you own versus still some of that third-party just listings?

You can see the exact numbers on our balance sheet. But just to give you a wag, I would say, it's probably in the range of 14,000 total belong to our retail outlets.

Okay. That's helpful. A couple of other questions. I just wanted to ask about -- since the last time we reported it and you gave your guidance, it's great that you guys are reiterating it really different than a lot of others. But the world has changed quite a bit in the last 2 months or so since you gave that guidance. Can you just characterize since you only give annual numbers, not quarterly numbers, how was the first quarter relative to your expectations? Was it in line? Was it better? Was it worse? And understanding that the guidance hasn't really changed in some tweak in new versus used. But are you more confident, less confident and equally confident than you were a few months ago with all the changes in the macro economy?

Well, first off, Mike, as you know, I'm a half-full guy. So always on the positive side of the equation. But we are being -- we are cautiously optimistic as they say. We certainly recognize the challenges that are out there that we mentioned earlier. Thankfully, we are not seeing the effects of those in any kind of meaningful way. And if we do, we think that it will probably fall on the new vehicle side. And with what we see coming through the pipeline from a pre-owned perspective, we think we are confident that we can more than offset it. So I would say, for Q1, it was a little bit messy, if you will, from the standpoint that we had a fair amount of drama during the quarter. We were -- we closed the Freedom deal on the 18th, about the same period of time. We launched our regional management structure, which, by the way, has gone off extremely well. And so I think March was kind of our first full month. It's also kind of the first full month of spring. So if we were sharing the entire quarter, you would probably see that March was a big part of it. We are heading into the 2 quarters of the year that from a seasonality perspective, are always strong. And we are highly confident. We didn't -- this wasn't a debate of whether we reiterate guidance or not internally. We are very, very comfortable with it. But because of what everybody else is singling out there, we do want to be cautiously optimistic, but we are extremely optimistic internally.

Yes. And if -- Mike, if I can add to that, we are focused on delivering profitable growth. So we're going to be very thoughtful about it. As you saw, we delivered over $9 million of GAAP net income, $31 million of adjusted EBITDA and over $31 million of cash from operations. So that's where we are focused, what can we do, what's in our control, and we continue to drive that.

I think one other thing, Mike, that I'll add is, it does appear that making money is back in vogue. And I think that plays well into our business plan because we are -- as we like to say, we're laser-focused on that. But we just -- the opportunities are clear, right? You've got market consolidation of existing and organic opportunities. You've got improving an antiquated customer service that I don't believe anybody can debate. And you have an industry that's void of technology that we're bringing in not just from a customer perspective, the customer-facing piece but also operationally to streamline our operations and become significantly more scalable. And we think all 3 of those are competitive advantages.

We have no further questions from the lines. Ladies and gentlemen, we have reached the end of the question-and-answer session. I would like to turn the call back to Marshall Chesrown for closing remarks.

Well, again, I'd like to thank everybody for joining us today. We look forward to our next quarter call. We're excited about the quarter already, and we look forward to hearing from you. And hopefully, we get to see a lot of you at the conferences coming up shortly. So thank you again for your time. Have a great day.