RDNW - NASDAQ

RG

RideNow Group, Inc.

RDNW·NASDAQ

$3.71

+0.0000%
Consumer CyclicalAuto - Dealerships

RumbleON, Inc. operates a technology-based omnichannel platform to aggregate and distribute pre-owned vehicles in North America. It operates through three segments: Powersports, Automotive, and Vehicle Logistics. The Powersports segment distributes motorcycles. The Automotive segment distributes cars and trucks. The Vehicle Logistics segment provides automotive transportation services between dealerships and auctions. Its platform offers ability to buy, sell, trade, and finance new and pre-owned vehicles online or in store for dealers and consumers. The company was formerly known as Smart Server, Inc. and changed its name to RumbleON, Inc. in February 2017. RumbleON, Inc. was incorporated in 2013 and is based in Irving, Texas.

StatementsValue Model

At a Glance

Live Snapshot
Market Cap$140.99M
EPS-0.8500
P/E Ratio-0.68
Earnings Date11/11/2025

Earnings Call Transcript

RDNW • 2024 • Q1

Operator
[Operator Instructions] Your first question comes from the line of Eric Wold from B. Riley Securities.
Eric Wold
A few questions. I guess, first off, I know that the March quarter is typically one of inventory build kind of into the selling season. I mean we saw that in the numbers. But can you talk about, I guess, how that compared to what you would normally see in a build period in prior years and then if you also remain on track for your goal of reducing inventories by $60 million this year?
Eric Wold
Perfect. And then the new stand-alone pre-owned retail center, can you talk about the plans are for that location? I guess -- and what do you expect to see from -- is this to act as a hub for kind of acquiring refurbishing vehicles for other dealerships or will essentially be acting as kind of a stand-alone autonomous operation and not do anything for other dealerships?
Eric Wold
Taking the other part of the question, that location is essentially just going to be acquiring vehicles for it and it only? Or will there be some acquisition of vehicles that we refurbish in that location and then send to other dealerships in the network?
Blake Lawson
Eric, this is Blake. If I understand your question correctly, it's not going to be like a distribution center for other dealerships where we do the used vehicle reconditioning there. It's going to be a location where we acquire, through our Cash Offer tool, a lot of good quality inventory in that market and put it in that particular dealership.
Eric Wold
Perfect. That helps, Blake. And then just the final question for me. Obviously, you continue to pay down debt in the first quarter. I know it's [indiscernible] to talk about guidance out there for '24. But is there some level of an estimate of how much additional debt you think you can pay down this year, maybe at a minimum? And when do you think you'll be in a position if the market accommodates to restructure, refinance the higher-rate [ OG ] debt?
Eric Wold
I mean obviously, one of the risks -- one of the issues you had is it's not a revolving credit facility. So I get that you probably would not want to pay down that with cash. You would not be able to get back until you got to restructure that to more accommodating structured. When do you think that might come into play? And how much does the -- prepayment period or the needs of better interest rates or market environment, this is something you think you'd do in the back half of this year. This might be more in 2025, but when do you get to like, say, address that?
Blake Lawson
We're looking at all options right now. I think it's probably depending on what we can structure. It's probably an early 2025 thing. The prepayment runs out in August, if there -- it's only 1%. So -- but we're definitely exploring all of our options right now to be ready to do that when the time is right.
Operator
Your next question is from the line of Seth Basham from Wedbush Securities.
Seth Basham
My first question is on the new market. If you could provide some color on how you think the spring season is shaping up updates on incentives and promotional pressure in the industry, that would be helpful.
Seth Basham
That's helpful. And on the pre-owned side, how much of the decline in units is being driven by the market versus your own inventory initiatives? And when should we see some stabilization in used volumes?
Seth Basham
Okay. And then lastly -- go ahead, sorry, Blake.
Seth Basham
That's helpful. And that's a good segue to my last question. Just thinking about those GPUs on pre-owned. How different are they for the units acquired via Cash Offer versus trade-in versus other methods?
Blake Lawson
Yes. So we -- as you can imagine, we did a deep-dive on that particular question because we wanted to just make sure that the inventory reset that we did at year-end wasn't the sole driver. And when we looked at the 5,000-plus units that we sold in the first quarter, half of them came through Cash Offer roughly, and the other half came through the normal channels. And the Cash Offer margin was right up there with the trade-ins in the 20 -- 19%, 20% range. And the write-down units were actually around 17%. So the units that we're taking in right now through Cash Offer are actually very strong in margin, and we anticipate that will continue.
Operator
[Operator Instructions] Your next question is from the line of Mike Baker from D.A. Davidson.
Michael Baker
I just wanted to ask about where you think you are in terms of the expense savings. Remind us how much in cost you think you've taken out, and you had said in the prepared remarks that you think there's more to go. So if you could just help us frame that up.
Michael Kennedy
Yes. I think in our previous remarks back in March -- Blake, remind me, I think we said -- what was the total annualized cost taken out? Was it...
Blake Lawson
We were north of $50 million.
Michael Baker
Got it. Okay. That makes sense. One more question, if I could. Any color on trends by product category, in other words, off-road versus on-road or even by brands? There was a lot of excitement around Harley-Davidson's new launch. Any color on how that's performed?
Operator
Your next question is from the line of Kevin Condon from Baird.
Kevin Condon
This is Kevin on for Craig. I think in the prepared remarks, you mentioned rationalizing out some other brands or tertiary brands of inventory that you had taken on amid some of the shortages. I'm just wondering if there's a way to think about how far into that process you are and maybe what portion of the inventory that you're going to work down is going to come from that versus just managing inventory lower across the board.
Transcript from May 8, 2024

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