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Edited Transcript of RMBL earnings conference call or presentation 29-Jun-20 12:30pm GMT

Q1 2020 RumbleON Inc Earnings Call

CHARLOTTE Jun 29, 2020 (Thomson StreetEvents) -- Edited Transcript of RumbleON Inc earnings conference call or presentation Monday, June 29, 2020 at 12:30:00pm GMT

TEXT version of Transcript

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Corporate Participants

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* Marshall Chesrown

RumbleON, Inc. - Founder, Chairman & CEO

* Steven R. Berrard

RumbleON, Inc. - CFO & Director

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Conference Call Participants

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* Ronald Victor Josey

JMP Securities LLC, Research Division - MD & Equity Research Analyst

* Whitney Kukulka

The Blueshirt Group, LLC - MD

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Presentation

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Operator [1]

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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. Thank you. Please go ahead.

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Whitney Kukulka, The Blueshirt Group, LLC - MD [2]

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Thank you, operator. Good morning, ladies and gentlemen. Thank you for joining us on this conference call to discuss RumbleON 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 results of our -- 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?

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Marshall Chesrown, RumbleON, Inc. - Founder, Chairman & CEO [3]

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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% on 9% revenue growth. Gross profit -- the gross profit growth in the automotive segment was driven by strength in the dealer sales channel. Automotive revenue for sales to dealers was up 12% quarter-over-quarter, and gross profit from automotive sales to dealers was up 163%, much of this strength is a result of the prescriptive steps we are taking to accelerate profitability. These include the continued implementation of our disciplined approach to sales volume and the reductions we made in SG&A.

We saw the bottom of the downturn in mid-April, with the largest unit sales decline and our lowest level of inventory acquisition for the period. Total unit sales for the month of April were down 66% from January levels. By the end of April, conditions began improving slowly at first and ramping quicker as the month of May progressed. The velocity of the rebound in May and thus far in June has been higher than anyone expected. And with the return of demand, we have likewise accelerated our inventory acquisition.

In May, unit sales increased more than 22% from April's lows. And based on initial June month-to-date results, we are expecting over a 30% increase in month-over-month unit sales in June as compared to April. While we are still off from the monthly unit volumes we had in January and February at present, RumbleON is tracking the highest vehicle gross margins on units sold of our entire operating history and significant operating income improvement from prior periods.

Let me begin discussing last year, one of our major profitability drivers is improving gross margin on units sold in GPU. We've made meaningful process improvements and leveraged our data to make disciplined acquisitions as we grow in the early stages of the company's evolution. A portion of the vehicle margin increase is driven by demand tailwinds and improved valuations across the industry. This dynamic is beneficial in the immediate term, but we don't believe the impact from improved valuations are sustainable over the long term, and we expect vehicle margins to stabilize as demand levels. That said, we expect the new normal to be an impressive improvement in GPU going forward. Until there is more clarity on COVID-19 in the economy, we will continue to take a conservative approach to sales volume for the rest of 2020 based on the unknown. We anticipate significant improvements over April and May, but we anticipate the return to business as usual will take some time.

With that context on our business results and recent trends, I want to take some time to discuss the steps we took behind the scenes over the past few months, and how we are emerging from this in a position of strength and positioning RumbleON for the future.

As you all know, there is no playbook for running a company during a pandemic. But one of RumbleON's key advantages is our highly experienced management team. We are committed to prudent management of our financial resources. And as such, we were decisive and quick to take action to protect our business from the onset of the pandemic. For example, we temporarily halted inventory acquisition early on and focused on selling down inventory in anticipation of lower demand and pricing uncertainty. In addition to temporarily suspending vehicle acquisitions, we took powersports inventory close to 0, and we are now truly mark-to-market with fresh and properly valued inventory with virtually no depreciation of values on our balance sheet. We also made operational changes, including adding temporary facilities in Nashville and developing enhanced virtual solutions for our dealers, which enabled us to reaccelerate our business of both buying and selling preowned vehicles as demand returned, and it became safe to resume operations in a meaningful way.

In the past several months, we significantly reduced our SG&A spend by successfully rebalancing our cost structure and aligning marketing spend with demand. As part of our broader expense reduction initiatives, we adjusted compensation and made the difficult decision to lay off approximately 65% of our national team in April. Additionally, we reduced our advertising spend per unit to less than $400, down from more than $150 from Q1 of 2019. We scaled marketing spend back in March and shut down paid marketing for a period of time subsequent to the quarter, which enabled us to get a clear picture of how much of our current traffic is purely organic and how sticky our customer base really is with both first-time visitors and the incredible amount of repeat visitors as well.

We will take a measured approach to increasing our marketing spend over time as the stability of the market comes more into focus. In a time when many are in need of cash due to layoffs and unforeseen personal and business circumstances, we've provided great service and support to our customers with our cash offer tool, providing thousands of cash offers to consumers nationwide. We believe the entire experience of COVID-19 and the Nashville tornado provided us with a great baseline of data to manage marketing spend going forward.

Before Steve provides details on the financials. I'd like to discuss RumbleON's evolution over the last 2-plus years and our vision for the third-generation of rumbleon.com. We built RumbleON with ambitious plans and scale the business quickly. Our initial vision of the first-generation of RumbleON was to disrupt the entire vehicle supply chain through the development of innovative software. As we began scaling RumbleON, we recognized the opportunity to leverage our technology to replicate traditional preowned vehicle sales entirely online.

In the first-generation, RumbleON quickly became the single largest reseller of powersports in the country by providing hundreds of thousands of cash offers to consumers and dealers across the 48 states. From the beginning, we bought vehicles from consumers, filling the need for consumers to sell their vehicles quickly, painlessly at a fair price without lengthy negotiations, while also allowing consumers to discover the true value of their assets instantly and from the comfort of their living room. This program has been wildly successful. To date, we have completed hundreds of thousands of cash offers on powersports and cars and trucks since the program's inception.

We found that many consumers who choose not to accept our cash offer were moving directly to listing sites such as craigslist and Cycle Trader in an attempt to sell in a peer-to-peer fashion. Peer-to-peer transactions have dominated the powersports resale market for many years due largely to a lack of efficient solutions unlike with auto transactions, where there are many effective options. Thus, we created RumbleON Classifieds. And in less than 1 year, our classifieds offering surpassed eBay to become the third largest consumer powersports listing site available today.

As we work with more and more dealers, we found that a major pain point for them was waiting for monthly auctions to replenish or -- and/or reduce inventory as well as the lack of convenient locations to assist in that effort. This suggested what we thought was a clear opportunity to leverage our platform to create a real-time wholesale acquisition and distribution platform for more efficient inventory management. Thus, we created RumbleON Dealer Direct, the first ever online solution for dealers to access virtual inventory in real-time anytime. We found that dealers not only used it for that 1 special unit they needed for a specific customer, but also used it for their daily stocking needs.

The size of the powersports vehicle market is limited when compared to the gigantic automotive market, but we sought to translate our success in powersports into cars and trucks. The second-generation of rumbleon.com, which we rolled out last year, did just that. We incorporated cars and trucks into our online platform, creating a broader offering for consumers and dealers alike. We also recognized the strong demand for simplified financing options and explored the opportunity to underwrite retail financing in real-time as part of an online buying process. We launched RumbleON Finance as additional functionality for the second-generation of rumbleon.com, which created a seamless retail financing solution for online vehicle sales.

From the beginning, we've continuously been asked by many, many dealers across the country, how can I use the cash offer tool to drive quality leads to my leadership, enhance my website and give customers this opportunity to sell us their vehicle without the need to buy one in exchange? How can I gain access to this quality inventory before it goes to auction? How can I access RumbleON Finance, so my customers can get preapproved from their home or their office 24/7 365? And how can I list my inventory on RumbleON for lead generation? These questions demonstrated to us the need for a more robust solution in this industry and to illustrate just a few of the ways that RumbleON can help, reduce friction for our dealers and thus all end users, the retail consumer.

During the COVID-19 slowdown, our technology team worked tirelessly around the clock to answer these opportunities for enhancements to rumbleon.com. We anticipate the third-generation of rumbleon.com will go live in the third quarter of this year. We are excited to share more details of this initiative with everyone over the coming months, including the strategic relationships and monetization opportunities we expect it to create. The enhancements we are making will allow dealers to list both new and used powersports on our site as well as giving them access to our unparalleled technology with cash offers, RumbleON Finance and an enhanced Dealer Direct platform, offering a wholesale transaction along with virtual inventory. These enhancements to the present RumbleON platform will improve powersports dealers' ability to compete in the aggressive March to online-only transactions in a space void of consumer offerings of this time, all while expanding RumbleON's opportunity for monetization of its technology and overall platform.

We are currently registering hundreds of dealers to participate on the site, which has functionality and capabilities matched by no one in the market today. Our agnostic model, sophisticated technology and proven processes leave us uniquely positioned to support dealers no matter how big or small for all their sales' needs. RumbleON is about innovation. We are still in our early days, and we look forward to years of innovation ahead of us. We will continue making enhancements that position us to execute on our mission through the use of innovative technology and the third-generation of our website, we believe, will do just that.

We look forward to seeing all of our industry friends and customers at the 2020 Sturgis Motorcycle Rally in early August, where we are partnering with some of the largest dealers in the country to host 8 days of dealer and consumer-focused events and outreach. We have partnered with the City of Sturgis for the third straight year and are positioned in the heart of the rally, along with all the major powersports, OEMs and suppliers.

We are seeing a stronger rebound than we previously expected. Although we are optimistic, we remain cautious. We expect continued fluctuations in market trends that will impact our business throughout the remainder of this year and don't anticipate sales level getting completely back to normal until potentially late in the year or early 2021.

Due to this uncertainty, we are not giving guidance for the back half of the year today. However, thus far, our preliminary results for the month of June show our highest gross margin on units sold in our history and significant bottom line improvement from previous periods, reflecting the progress we are making. For now, we will continue to take a conservative approach to sales volume and closely monitor market conditions. As early as this past weekend, we've had to roll back some of our reopening plans in Texas due to the new outbreaks. And last week, suspended for the second time, our Phoenix operations, we are -- where we are, again, in work-from-home status until further notice. We anticipate significant improvements over April and May, but we recognize the return to business as usual will take time.

In the meantime, we continue to build RumbleON for the long term. Near term, we are focused on the successful launch of the third-generation of rumbleon.com in Q3 and are continuing to have discussions with potential strategic alliances involved in several areas and segments of the vehicle market. We are committed to maintaining industry low customer acquisition costs, making improvements to SG&A and making sustainable GPU improvements as we execute on our strategy to be the first to achieve profitability. Our nimble business model enabled us to make operational changes necessary to withstand the deepest demand slowdown, the vehicle market has probably ever seen, and we believe we will emerge as strong opposition as ever.

Lastly, we anticipate key strategic relationship announcements over the coming weeks and months as we prepare to launch the enhancements discussed today to rumbleon.com.

With that, I'd like to turn the call over to Steve, who will provide a financial update. After which, we will open the call for questions. Steve?

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Steven R. Berrard, RumbleON, Inc. - CFO & Director [4]

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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, tracked 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 reduced 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've 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 revenue in Q4.

Q1 2020 powersports 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 volume, 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 so 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 line improvements both month-over-month and year-over-year.

Adjusted gross profit in Q1 of 2020 was $10.4 million or 7.2% before an $11.7 million noncash impairment loss on damage sustained on automotive inventory and a $1.2 million adjustment to reflect the write-down of inventory at March 31, 2020 to net realizable value compared to $14 million or 6.3% in Q1 of 2019.

After giving effect of the noncash impairment and net realizable value adjustments, total gross margin reported for the quarter was a negative $0.09 of 1%. The $12.9 million impairment and net realizable value inventory adjustments consistent of the $11.7 million noncash impairment loss, which included $4.5 million of cost per vehicles that were a total loss and $7.3 million for the cost to repair damaged vehicles. Though we maintain adequate insurance coverage for the damage incurred, under GAAP, we are required to record the entire $11.7 million insurance loss in Q1 as a charge to cost of sales, but we were unable to record the recoveries that we expect to receive from the insurance carrier until the final amounts and timing of the recovery has been determined. Any such recovery will be recorded as a separate component of income from continuing operations in the period and what sets recovery is recognizable.

$1.2 million write-down of vehicle inventory to the lower of cost or net realizable value at March 31, 2020 was comprised of $878,000 in automotive and $340,000 for powersports and was a result of the negative impact on our sales channels from COVID-19 and related effects of sheltering in place and significant reduced commercial activity.

Total -- as a reminder, our insurance coverage includes $43 million certificate of insurance to inventory loss and $6 million of business interruption coverage. We believe we will recover the full amount of our losses.

Now on to expenses. Total SG&A was $18.1 million in Q1 compared to $20.4 million for the same period in 2019. The reduction in SG&A was a result of our continued approach taking the steps needed to accelerate profitability, resulting in the sale of fewer vehicles, but also a corresponding reduction in related selling expenses and marketing spend for the 3 months ended March 31, 2020 as compared to the same period of 2019. The negative impact of COVID-19 resulting from sheltering in place and significantly reduced commercial activity resulted in a reduction in discretionary growth expenditures on new hiring travel and facilities. In addition, we reduced our staffing and applied an adjusted purchasing levels to align with demand and market conditions.

As we've discussed over the past several quarters, we view rationalizing our cost structure as a significant driver of reaching our goal of becoming the first online vehicle provider to achieve profitability. Q1 net loss was $22 million versus $15 million in Q4 of 2019. The primary driver for the increase in net loss was the net realizable value adjustments to March 31, 2020 inventory of $12.9 million, which I just discussed.

Adjusted EBITDA was a loss of $6.5 million in Q1 after onetime and nonrecurring adjustments, which included litigation costs and the previous discussed damage-related and mark-to-market inventory adjustments. We have a strong focus on preserving liquidity, particularly now in light of the impact of COVID-19 on the economy, and we took steps to improve our liquidity during the first half of the year.

In Q1, closed a public offering of 1.035 million Class B shares for net proceeds of $10.9 million, entered into a note exchange agreement pursuant to which the company exchanged $30 million of old notes in exchange for a new series of 6.75% convertible senior notes due in 2025 and issued an additional $8.750 million of new notes, which resulted in net proceeds after costs and expenses of $8.3 million and temporarily reduced our discretionary growth expenditures on new hiring, travel facilities while adjusting purchasing levels to align with demand and market condition. Subject to the -- subsequent to the quarter, we also applied for and received $5.2 million of PPP loan proceeds and significantly reduced our staffing by laying off 169 associates.

As you can see in our 10-K, which was filed with the SEC on June 2, RumbleON consolidated financial statements have been and continue to be prepared, assuming that we will continue as a going concern, which assumes the continuity of operations, the realization of assets and satisfaction of liabilities as they come due in the normal course of business. Although the company believes that we'll be able to generate sufficient liquidity from the measures described above, our orders have raised about our ability to continue as a going concern. We have positioned our business today to be lean and flexible in this period of lower demand and higher uncertainty with the goal of preparing the company for a strong recovery as the crisis is contained. We've already taken initial actions to improve our liquidity position, and we are evaluating additional actions.

As of June 26, 2020, the company has approximately $9.7 million of cash of which $5.5 million is restricted, approximately $19.900 million of remaining availability under the inventory financing credit line and $1.2 million of availability under the $1.5 million RumbleON Finance facility.

Additionally, the company expects to receive recovery of its insured losses. However, no assurance can be given regarding the amounts. If any, that will also be recovered or when such amounts, if any, will be recovered.

Despite the noise in Q1, the prescriptive action that we took during the period of weak demand left us well positioned to accelerate operations in a disciplined manner as market demand begins to recover. This materialized in our preliminary results for the month of June, which believe demonstrates that we are well on our way to achieving profitability. As Marshall discussed, though we are still below the monthly unit volumes experienced in January and February, our preliminary results for the month of June show our highest gross margin on unit sold in our history and significant operating income improvement from prior periods, reflecting the progress we are making on our objective of a more disciplined approach to sales volume as we take the steps to achieve our goal of accelerating profitability.

Given the uncertainty of the ongoing impact in unprecedented conditions surrounding the COVID-19 pandemic, we cannot predict the overall effect to RumbleON, our customers, regional business partners and others that we work with. As a result, we believe it is prudent to withhold guidance for the back half of the year until we can better gauge market conditions and have a clear understanding of the lasting impact from the COVID-19 pandemic.

I want to expressly say we intend to continue our disciplined approach to unit sales in favor of margin enhancements. We are committed to our goal of achieving profitability through margin expansion and SG&A improvements and continue to believe we will be the first in our industry to reach profitability.

Thank you. And with that, we'll now open the call up for questions.

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Questions and Answers

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Operator [1]

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(Operator Instructions) Our first question comes from the line of Ron Josey from JMP Securities.

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Ronald Victor Josey, JMP Securities LLC, Research Division - MD & Equity Research Analyst [2]

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I've got 3, and I'll be relatively quick. Glad everyone is safe. So first topic here, just on acquiring inventory, and you talked about, Marshall, highest gross margins ever and the acquisition of inventory is accelerating. But can you just talk about how you're seeing demand, how you're receiving the demand for the inventory for your cash offers? We're seeing reports from wholesale and auction, how they're talking about pricing increases? So I just want to get an insight on what you're 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're viewing the rollout here for the third-generation? And then lastly, Steve, and I'll go back to the queue. Just can you review the RumbleON's liquidity again and remind us what restricted cash is?

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Marshall Chesrown, RumbleON, Inc. - Founder, Chairman & CEO [3]

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Yes. Thanks, Ron. I'll take the first 2 there, and we'll pass it to Steve. First off, the market rebound, I think we're all involved in what you're 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 shut down and so forth. So late-model preowned 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 were 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're referring to as the third-generation of rumbleon.com. It's -- what we're doing is giving dealers the ability to participate on our platform in more of a transactional basis revenue. We are changing what we're doing. We're 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've done in the past, we've started 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 time frame, potentially early in August, but we're 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're excited about it. We think it's just further leverage and monetization of our software and our platform and think it just enhances our overall business opportunity.

So with that, Steve, you can take the third one.

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Steven R. Berrard, RumbleON, Inc. - CFO & Director [4]

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Sure. Ron, 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 floorplan lender to support our line of credit for floorplan. The $1.2 million is availability under a credit facility that we have with RumbleON Finance. And back on the floorplan, we've 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've 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, we're currently at and where we think it will be the 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 that 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're entitled to insurance.

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Operator [5]

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

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Marshall Chesrown, RumbleON, Inc. - Founder, Chairman & CEO [6]

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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, et cetera. But we do see a significant rebound, and we're looking forward to the rest of the year.

With that, thank you so much for joining us. And as you all know, we're very approachable. So if you have any questions, any further questions or comments, just reach out to Steve or I, and we're happy to respond. So have a great day. Thanks, again.

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Operator [7]

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