Form 8-K RumbleOn, Inc. For: Aug 09
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E-mailUNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 9, 2022
(Exact name of registrant as specified in its charter)
(State or Other Jurisdiction of Incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) | ||||||
(Address of Principal Executive Offices) | (Zip Code) | |||||||
Registrant’s telephone number, including area code (214 ) 771-9952
Not Applicable
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |||||
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |||||
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2 (b)) | |||||
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4 (c)) | |||||
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter). Emerging growth company ¨
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Item 2.02. Results of Operations and Financial Condition.
On August 9, 2022, RumbleOn, Inc. (the “Company”) issued a press release reporting its results for the three and six months ended June 30, 2022. A copy of the press release is furnished as Exhibit 99.1 to this report.
The information furnished pursuant to this Item 2.02, including Exhibit 99.1, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities under that section and shall not be deemed to be incorporated by reference into any filing of the Company under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
Item 9.01. Financial Statements and Exhibits.
(d)Exhibits
| Exhibit No. | Description | |||||||
Press Release, date August 9, 2022. | ||||||||
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). | |||||||
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| RUMBLEON, INC. | ||||||||
| Date: August 9, 2022 | By: | /s/ Marshall Chesrown | ||||||
| Marshall Chesrown Chief Executive Officer | ||||||||
Exhibit 99.1
RumbleOn Reports Record Second Quarter 2022 Financial Results
•Delivered Record Revenue of $546.1 million — over Half a Billion in a Quarter for the First Time
•Generated Gross Profit of $138.0 million, an Increase of 31% Sequentially
•Reported Diluted Earnings per Share of $0.87 and Adjusted Diluted Earnings per Share of $1.20
IRVING, Texas – August 9, 2022 – RumbleOn, Inc. (NASDAQ: RMBL) (the “Company” or “RumbleOn”), the nation's first technology-based omnichannel powersports platform, today announced operational and financial results for the three months ended June 30, 2022. RumbleOn management is hosting an investor call to discuss the Company’s results today, August 9, 2022, at 7:30 am CT (8:30 am ET).
Financial and Operational Highlights for the Second Quarter 2022
•Total Unit Sales of 23,330 across Powersports and Automotive segments increased 20.4% sequentially
•Strong Powersports Unit growth of 23.6% sequentially resulting in 20,713 total Powersports Units sold driven by sustained momentum in Used Retail Powersports Units which increased 41.3% sequentially to 8,619 units
•Record Total Company Revenue of $546.1 million, up 18.7% sequentially, driven by exceptional Powersports segment Revenue of $414.8 million, an increase of 23.2% sequentially
•Gross Profit of $138.0 million, an increase of over 31.1% sequentially, and Gross Profit Margin of 25.3%, an increase of 240 bps sequentially
•Net Income of $14.0 million increased 53.5% sequentially with Diluted Earnings per Share of $0.87
•Excluding charges and credits but including stock-based compensation expense, Adjusted Net Income of $19.3 million increased 59.5% sequentially with Adjusted Diluted Earnings per Share of $1.20
•Adjusted EBITDA of $44.3 million increased 41.0% sequentially
•Continued strong cash generation with Cash Flow from Operating Activities of $50.0 million for the six months ended June 30, 2022, while accelerating strategic investments in facilities, technology, and people & processes aimed at building scale
•Significant financial flexibility with cash and cash equivalents, including restricted cash, of $77.7 million and total available liquidity of $270.0 million as of June 30, 2022, which excludes equity in owned Used Powersports inventory of over $86.0 million
•Outlook reaffirmed for Full Year 2022 Revenue of $1.9 Billion to $2.0 Billion and Adjusted EBITDA of at least $145.0 million
Management Commentary
Marshall Chesrown, RumbleOn's Chairman and Chief Executive Officer commented, “In a quarter marked by macroeconomic uncertainty, RumbleOn executed. We saw strong demand for our offering in Q2 and delivered another quarter of profitable growth while driving gross margin expansion and robust cash generation. We are building the future of powersports by delivering an unparalleled customer experience, both online and in the showroom, through our unique onmnichannel offering, and we continue to capture market share."
"We are keeping our eyes firmly focused on our North Star: providing customers an unparalleled choice of products and services, and an unmatched buying experience both online and in our retail locations, while we strengthen our foundation to support future growth,” concluded Chesrown.
Second Quarter 2022 — Summary Financial Results
Reconciliation of GAAP to non-GAAP financial measures are provided in accompanying financial schedules.
Unless otherwise noted, all comparisons are on a sequential basis for the three months ended June 30, 2022, as compared to the three months ended March 31, 2022.
| (Unaudited) | |||||||||||||||||||||||||||||
| $ in millions except per share amounts | Three Months Ended | Change | |||||||||||||||||||||||||||
| Jun 30, 2022 | Mar 31, 2022 | Jun 30, 2021 | Sequential | Year-over-Year | |||||||||||||||||||||||||
| Total Unit Sales (#) | 23,330 | 19,380 | 5,711 | 20.4% | 309% | ||||||||||||||||||||||||
| Total Revenue | $546.1 | $459.9 | $168.3 | 18.7% | 224% | ||||||||||||||||||||||||
| Gross Profit | $138.0 | $105.2 | $19.5 | 31.1% | 608% | ||||||||||||||||||||||||
| Gross Profit Margin | 25.3% | 22.9% | 11.6% | 240 bps | 1,370 bps | ||||||||||||||||||||||||
| Net Income (Loss) | $14.0 | $9.1 | $(3.4) | 53.5% | nm | ||||||||||||||||||||||||
| Diluted Earnings (Loss) per Share | $0.87 | $0.58 | $(1.05) | 50.0% | nm | ||||||||||||||||||||||||
| Adjusted EBITDA | $44.3 | $31.4 | $3.0 | 41.0% | nm | ||||||||||||||||||||||||
| Adjusted EBITDA Margin | 8.1% | 6.8% | 1.8% | 130 bps | 630 bps | ||||||||||||||||||||||||
| Adjusted Net Income (Loss) | $19.3 | $12.1 | $(2.4) | 59.5% | nm | ||||||||||||||||||||||||
| Adjusted Diluted Earnings (Loss) per Share | $1.20 | $0.77 | $(0.76) | 55.8% | nm | ||||||||||||||||||||||||
nm = not meaningful
Total unit sales grew 20.4% to 23,330 units. Powersports segment made up approximately 88.8% of total unit sales in the second quarter and the automotive segment made up the remaining approximately 11.2%.
Total revenue grew 18.7% to $546.1 million, driven primarily by strength across the powersports segment. Powersports segment revenue made up approximately 76.0% of total revenue in the second quarter, the automotive segment made up approximately 21.2%, and the vehicle logistics segment made up approximately 2.8%.
Gross profit grew 31.1% to $138.0 million and gross profit margin was 25.3%, up from 22.9%. Increases were driven by broad based strength across all three business segments. The powersports segment contributed approximately 94.3% of total gross profit in the second quarter, and the automotive and vehicle logistics segments made up approximately 3.4% and 2.3%, respectively.
Operating expenses were $106.0 million, or 19.4% of revenue, compared to $82.6 million, or 17.9% of revenue. Total stock-based compensation was $2.8 million up from $1.9 million in the prior quarter.
Net income was $14.0 million, or 2.6% of revenue, up 53.5% from $9.1 million, or 2.0% of revenue. Earnings per basic diluted share was $0.87 compared to $0.58.
Adjusted net income was $19.3 million, or 3.5% of revenue, up from $12.1 million or 2.6% of revenue. Adjusted earnings per diluted share was $1.20 compared to $0.77.
Adjusted EBITDA was $44.3 million, or 8.1% of revenue, up 41.0% from $31.4 million, or 6.8% of revenue.
Cash and cash equivalents as of June 30, 2022, including restricted cash, was approximately $77.7 million, and total debt was $385.4 million. Availability under our short-term revolving credit facilities totaled approximately $192.3
2
million. Total available liquidity, defined as cash and cash equivalents, including restricted cash, plus availability under our short-term revolving credit facilities totaled approximately $270.0 million.
Cash flow from operating activities was $50.0 million for the six months ended June 30, 2022.
Weighted average basic shares of Class B common stock outstanding were 16,059,288 and weighted average diluted shares of Class B common stock outstanding were 16,095,862. As of June 30, 2022, RumbleOn had 15,940,866 total shares of Class B common stock, and 50,000 shares of Class A common stock outstanding.
Full Year 2022 — Financial Outlook
Narinder Sahai, RumbleOn’s Chief Financial Officer commented, “We delivered exceptional growth during the seasonally strongest second quarter and are pleased to reiterate our full year Revenue and Adjusted EBITDA guidance. Despite a tough macroeconomic backdrop, we continue to see robust demand as consumers turn to our differentiated omnichannel platform. While we are not immune to macro headwinds, we are confident in our ability to respond to changes quickly and prudently."
"RumbleOn has a durable business model with unique advantages enabling us to continue to deliver revenue growth and profitability, with strong unit economics, and robust cash generation," concluded Sahai.
RumbleOn is reiterating its outlook for the full year 2022:
•Total revenue within the range of $1.9 to $2.0 billion.
•Adjusted EBITDA of at least $145 million which includes up to $20 million of incremental operating and capital investments in key strategic areas.
While there is minimal seasonality between the first half and second half of the year, RumbleOn does experience seasonality on a quarterly basis, with the second quarter being the seasonally strongest quarter of the year, and the third quarter being the weakest. As such, the Company anticipates a sequential decline in the third quarter revenue, with a return to sequential revenue growth in the fourth quarter.
Including Freedom Powersports, New Powersports Unit Sales in the first half of this year declined in the mid-single digits on a year-over-year comparable pro forma basis. Given New Powersports Unit Sales in the first half of this year have materialized at levels below RumbleOn's original forecast of flat to slightly down year-over-year due to manufacturer's supply chain constraints, the Company's reaffirmed guidance now contemplates a decline in New Powersports Unit Sales in the mid-single digits for the full year.
RumbleOn is benefiting from a strong demand for Used Powersports. The Company continues to align its inventory acquisition with demand, adjusting Used Powersports inventory levels, and leveraging its omnichannel platform to channel Used Powersports units through its retail locations. Consistent with its prior expectations, the Company anticipates the growth in Used Retail Powersports Unit Sales to be in excess of 50% year-over-year, offsetting the year-over-year decline in New Powersports Unit Sales for the year.
RumbleOn now expects the revenue from non-powersports segments in the second half of the year to be approximately consistent with that in the first half of the year.
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Second Quarter 2022 — Segment Results
Unless otherwise noted, all comparisons are on a sequential basis for the three months ended June 30, 2022, as compared to the three months ended March 31, 2022.
Powersports Segment
| (Unaudited) | |||||||||||||||||||||||||||||
| $ in millions except per unit | Three Months Ended | Change | |||||||||||||||||||||||||||
| Jun 30, 2022 | Mar 31, 2022 | Jun 30, 2021 | Sequential | Year-over-Year | |||||||||||||||||||||||||
| Unit Sales (#) | |||||||||||||||||||||||||||||
| New | 11,366 | 9,677 | — | 17.5% | nm | ||||||||||||||||||||||||
| Used | 9,347 | 7,080 | 2,411 | 32.0% | 288% | ||||||||||||||||||||||||
| Total Powersports Unit Sales | 20,713 | 16,757 | 2,411 | 23.6% | 759% | ||||||||||||||||||||||||
| Revenue | |||||||||||||||||||||||||||||
| New | $184.1 | $162.2 | $— | 13.5% | nm | ||||||||||||||||||||||||
| Used | $128.6 | $92.4 | $27.5 | 39.2% | 368% | ||||||||||||||||||||||||
| Finance & Insurance, net | $36.8 | $27.5 | $0.5 | 33.8% | nm | ||||||||||||||||||||||||
| Parts, Services, and Accessories | $65.3 | $54.7 | $— | 19.4% | nm | ||||||||||||||||||||||||
| Total Powersports Revenue | $414.8 | $336.8 | $28.0 | 23.2% | 1,381% | ||||||||||||||||||||||||
| Gross Profit | |||||||||||||||||||||||||||||
| New | $37.3 | $31.2 | $— | 19.6% | nm | ||||||||||||||||||||||||
| Used | $24.5 | $15.2 | $6.5 | 61.2% | 277% | ||||||||||||||||||||||||
| Finance & Insurance, net | $36.8 | $27.5 | $0.5 | 33.8% | nm | ||||||||||||||||||||||||
| Parts, Services, and Accessories | $31.4 | $25.3 | $— | 24.1% | nm | ||||||||||||||||||||||||
| Total Powersports Gross Profit | $130.0 | $99.2 | $7.0 | 31.0% | 1,757% | ||||||||||||||||||||||||
Powersports GPU 1 | $4,938 | $4,681 | $— | 5.5% | nm | ||||||||||||||||||||||||
1 Powersports GPU represents powersports gross profit per retail vehicle. “Powersports GPU” is the gross profit attributable to powersports vehicles sold, inclusive of finance & insurance, net, divided by retail powersports units sold. Note that Powersports GPU excludes gross profit from Parts, Services, and Accessories.
nm = not meaningful
Used Powersports Units, which includes used retail and wholesale Powersports Units, grew 32.0% sequentially. RumbleOn continued to benefit from strength in acquiring used powersports units from consumers, significant expansion of its retail locations, and a strong demand environment. As such, RumbleOn placed more used powersports inventory in its retail locations, which drove an increase in used retail unit sales.
•Used Retail Powersports Units grew approximately 41.3% sequentially. Revenue from Used Retail Powersports Units increased 41.8% and Gross Profit from Used Retail Powersports Units increased 51.3% sequentially.
•Used Wholesale Powersports Units and Revenue were down 25.6% and 1.1%, respectively. Used Wholesale Powersports Gross Profit was up 384.0% sequentially.
New Powersports Unit growth sequentially was driven by the contribution from Freedom Powersports acquisition, which closed on February 18, 2022.
4
Powersports GPU was $4,938, as compared to $4,681 in the prior quarter. Powersports GPU is the gross profit attributable to Powersports Units sold, inclusive of Finance & Insurance, net, divided by New and Used Retail Powersports Units sold. Note that Powersports GPU excludes gross profit from Parts, Services, and Accessories.
Automotive Segment
| (Unaudited) | |||||||||||||||||||||||||||||
| $ in millions | Three Months Ended | Change | |||||||||||||||||||||||||||
| Jun 30, 2022 | Mar 31, 2022 | Jun 30, 2021 | Sequential | Year-over-Year | |||||||||||||||||||||||||
| Automotive Unit Sales (#) | 2,617 | 2,623 | 3,300 | (0.2)% | (20.7)% | ||||||||||||||||||||||||
| Automotive Revenue | $115.7 | $110.7 | $127.3 | 4.5% | (9.1)% | ||||||||||||||||||||||||
| Automotive Gross Profit | $4.7 | $3.4 | $10.2 | 38.2% | (53.9)% | ||||||||||||||||||||||||
Revenue from the automotive segment increased 4.5% sequentially, primarily driven by a 4.8% increase in revenue per automotive unit sold in the quarter. Automotive Gross Profit was up due to an increase in gross profit per vehicle.
Vehicle Logistics Segment
| (Unaudited) | |||||||||||||||||||||||||||||
| $ in millions | Three Months Ended | Change | |||||||||||||||||||||||||||
| Jun 30, 2022 | Mar 31, 2022 | Jun 30, 2021 | Sequential | Year-over-Year | |||||||||||||||||||||||||
| Vehicles Transported (#) | 25,472 | 21,831 | 23,502 | 16.7% | 8.4% | ||||||||||||||||||||||||
| Vehicle Logistics Revenue | $16.6 | $13.6 | $14.5 | 22.1% | 14.5% | ||||||||||||||||||||||||
| Vehicle Logistics Gross Profit | $3.2 | $2.6 | $2.4 | 23.1% | 33.3% | ||||||||||||||||||||||||
Revenue from the Vehicle logistics segment was up 22.1% sequentially, driven by an increase in the number of vehicles transported and increased revenue per vehicle transported which reached $653.0 in the second quarter.
Gross profit for this segment was up sequentially, driven primarily by an increase in gross profit per vehicle transported and an increase in vehicles transported.
Conference Call Details
RumbleOn's management will host a conference call to discuss its operational and financial results, and provide a detailed outlook on August 9, 2022 at 8:30 a.m. Eastern Time. A live and archived webcast can be accessed from RumbleOn's Investor Relations website. To access the conference call telephonically, callers may dial 1-855-327-6837 (or 1-631-891-4304 for callers outside of the United States) and enter conference ID 10019789.
5
About RumbleOn
RumbleOn, Inc. is the nation's first technology-based omnichannel powersports platform. Headquartered in the Dallas Metroplex, RumbleOn is revolutionizing the customer experience for outdoor enthusiasts across the country and making Powersports vehicles accessible to more people, in more places than ever before. To learn more please visit us online at https://www.rumbleon.com/.
Cautionary Note on Forward-Looking Statements
This press release may contain "forward-looking statements" as that term is defined under the Private Securities Litigation Reform Act of 1995 (PSLRA), which statements may be identified by words such as "expects," "projects," "will," "may," "anticipates," "believes," "should," "intends," "estimates," and other words of similar meaning. Readers are cautioned not to place undue reliance on these forward-looking statements, which are based on our expectations as of the date of this press release and speak only as of the date of this press release and are advised to consider the factors listed under the heading "Forward-Looking Statements" and "Risk Factors" in the Company's SEC filings, as may be updated and amended from time to time. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
Use of Non-GAAP Financial Measures
As required by the rules of the Securities and Exchange Commission ("SEC"), we provide reconciliations of the non-GAAP financial measures contained in this press release to the most directly comparable measure under GAAP, which are set forth in the financial tables attached to this release.
Adjusted EBITDA is a non-GAAP financial measure and should not be considered as an alternative to operating income or net income as a measure of operating performance or cash flows or as a measure of liquidity. Non-GAAP financial measures are not necessarily calculated the same way by different companies and should not be considered a substitute for or superior to U.S. GAAP.
Adjusted EBITDA is defined as net income (loss) adjusted to add back interest expense (including debt extinguishment), depreciation and amortization, changes in derivative liability, non-cash stock-based compensation costs, transaction costs, litigation expenses, and other non-recurring costs, as these recoveries, charges and expenses are not considered a part of our core business operations and are not an indicator of ongoing, future company performance.
Adjusted EBITDA is one of the primary metrics used by management to evaluate the financial performance of our business. We present adjusted EBITDA because we believe it is frequently used by analysts, investors and other interested parties to evaluate companies in our industry. Further, we believe it is helpful in highlighting trends in our operating results, because it excludes, among other things, certain results of decisions that are outside the control of management, while other measures can differ significantly depending on long-term strategic decisions regarding capital structure and capital investments.
With respect to our 2022 adjusted EBITDA target, a reconciliation of this non-GAAP measure to the corresponding GAAP measure is not available without unreasonable effort due to the complexity of the reconciling items that we exclude from this non-GAAP measure.
Investor Relations Contact:
Will Newell
investors@rumbleon.com
6
RumbleOn, Inc.
Condensed Consolidated Balance Sheets
Condensed Consolidated Balance Sheets
(Unaudited)
(Dollars in thousands; except per share amounts)
| June 30, 2022 | December 31, 2021 | |||||||||||||
| ASSETS | ||||||||||||||
| Current assets: | ||||||||||||||
Cash | $ | 68,182 | $ | 48,974 | ||||||||||
Restricted cash | 9,500 | 3,000 | ||||||||||||
Accounts receivable, net | 51,771 | 40,166 | ||||||||||||
Inventory | 247,711 | 201,666 | ||||||||||||
Prepaid expense and other current assets | 6,911 | 6,335 | ||||||||||||
Total current assets | 384,075 | 300,141 | ||||||||||||
Property and equipment, net | 77,690 | 21,417 | ||||||||||||
Right-of-use assets | 171,565 | 133,112 | ||||||||||||
Goodwill | 253,415 | 260,922 | ||||||||||||
Intangible assets, net | 359,265 | 302,066 | ||||||||||||
Other assets | 25,547 | 10,091 | ||||||||||||
Total assets | 1,271,557 | 1,027,749 | ||||||||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||||||||
Current liabilities: | ||||||||||||||
Accounts payable and accrued liabilities | 83,310 | 57,068 | ||||||||||||
Vehicle floor plan note payable | 138,986 | 97,278 | ||||||||||||
| Current portion lease liabilities | 22,831 | 20,249 | ||||||||||||
Current portion of long-term, convertible debts, and notes payable | 2,534 | 4,476 | ||||||||||||
Total current liabilities | 247,661 | 179,071 | ||||||||||||
Long-term liabilities: | ||||||||||||||
Senior secured note | 338,751 | 253,438 | ||||||||||||
Convertible debt, net | 30,509 | 29,242 | ||||||||||||
Line of credit and notes payable | 13,650 | 150 | ||||||||||||
Operating lease liabilities | 135,964 | 114,687 | ||||||||||||
Deferred tax liabilities | 11,608 | 7,586 | ||||||||||||
Other long-term liabilities | 7,451 | 11,930 | ||||||||||||
Total long-term liabilities | 537,933 | 417,033 | ||||||||||||
| 785,594 | 596,104 | |||||||||||||
Commitments and contingencies (Notes 2, 3, 6, and 11) | ||||||||||||||
Stockholders’ equity: | ||||||||||||||
Preferred stock, $0.001 par value, 10,000,000 shares authorized, none issued and outstanding as of June 30, 2022 and December 31, 2021 | — | — | ||||||||||||
Common A stock, $0.001 par value, 50,000 shares authorized, 50,000 shares issued and outstanding as of June 30, 2022 and December 31, 2021 | 0 | 0 | ||||||||||||
Class B stock, $0.001 par value, 100,000,000 shares authorized, 15,940,866 and 14,882,022 shares issued and outstanding as of June 30, 2022 and December 31, 2021, respectively | 16 | 15 | ||||||||||||
Additional paid-in capital | 581,198 | 550,055 | ||||||||||||
Accumulated deficit | (90,932) | (114,106) | ||||||||||||
Class B stock in treasury, at cost 125,535 and 123,089 shares as of June 30, 2022 and December 31, 2021, respectively | (4,319) | (4,319) | ||||||||||||
Total stockholders’ equity | 485,963 | 431,645 | ||||||||||||
Total liabilities and stockholders’ equity | $ | 1,271,557 | $ | 1,027,749 | ||||||||||
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RumbleOn, Inc.
Condensed Consolidated Statements of Operations
Condensed Consolidated Statements of Operations
(Unaudited)
(Dollars in thousands, except per share amounts)
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
| Revenue: | |||||||||||||||||||||||
| Vehicles sales | |||||||||||||||||||||||
| Powersports | $ | 312,685 | $ | 27,487 | $ | 567,318 | $ | 38,015 | |||||||||||||||
| Automotive | 115,730 | 127,286 | 226,459 | 211,357 | |||||||||||||||||||
| Parts, service and accessories | 65,315 | — | 120,052 | — | |||||||||||||||||||
| Finance and insurance, net | 36,848 | 491 | 64,318 | 818 | |||||||||||||||||||
| Vehicle logistics | 15,517 | 13,081 | 27,868 | 22,419 | |||||||||||||||||||
| Total revenue | 546,095 | 168,345 | 1,006,015 | 272,609 | |||||||||||||||||||
Cost of revenue: | |||||||||||||||||||||||
Powersports | 250,840 | 21,021 | 459,071 | 28,898 | |||||||||||||||||||
Automotive | 110,998 | 117,118 | 218,152 | 194,978 | |||||||||||||||||||
Parts, service and accessories | 33,945 | — | 63,400 | — | |||||||||||||||||||
| Vehicle logistics | 12,349 | 10,695 | 22,216 | 18,044 | |||||||||||||||||||
| Total cost of revenue | 408,132 | 148,834 | 762,839 | 241,920 | |||||||||||||||||||
Gross profit | 137,963 | 19,511 | 243,176 | 30,689 | |||||||||||||||||||
Selling, general and administrative | 100,155 | 18,114 | 178,231 | 31,515 | |||||||||||||||||||
Depreciation and amortization | 5,879 | 632 | 10,353 | 1,231 | |||||||||||||||||||
Operating income (loss) | 31,929 | 765 | 54,592 | (2,057) | |||||||||||||||||||
Interest expense | (13,275) | (1,920) | (24,456) | (3,529) | |||||||||||||||||||
| Other income (expense) | 249 | — | 249 | — | |||||||||||||||||||
Change in derivative liability | — | (2,235) | 39 | (2,256) | |||||||||||||||||||
| Income (loss) before provision for income taxes | 18,903 | (3,390) | 30,424 | (7,842) | |||||||||||||||||||
Income tax provision | 4,870 | — | 7,250 | — | |||||||||||||||||||
Net income (loss) | $ | 14,033 | $ | (3,390) | $ | 23,174 | $ | (7,842) | |||||||||||||||
Weighted average number of common shares outstanding - basic | 16,059,288 | 3,242,616 | 15,778,461 | 2,775,665 | |||||||||||||||||||
Earnings (loss) per share - basic | $ | 0.87 | $ | (1.05) | $ | 1.46 | $ | (2.83) | |||||||||||||||
Weighted average number of common shares outstanding - diluted | 16,095,862 | 3,242,616 | 15,841,346 | 2,775,665 | |||||||||||||||||||
Earnings (loss) per share - diluted | $ | 0.87 | $ | (1.05) | $ | 1.46 | $ | (2.83) | |||||||||||||||
8
RumbleOn, Inc.
Condensed Consolidated Statements of Cash Flows
Condensed Consolidated Statements of Cash Flows
(Unaudited)
(Dollars in thousands)
| Six Months Ended June 30, | |||||||||||
| 2022 | 2021 | ||||||||||
| CASH FLOWS FROM OPERATING ACTIVITIES | |||||||||||
Net income (loss) | $ | 23,174 | $ | (7,842) | |||||||
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | |||||||||||
Depreciation and amortization | 10,353 | 1,231 | |||||||||
Amortization of debt discount | 3,369 | 1,150 | |||||||||
Stock based compensation expense | 4,632 | 2,435 | |||||||||
(Gain) loss from change in value of derivatives | (39) | 2,256 | |||||||||
Deferred taxes | 4,023 | — | |||||||||
| Changes in finance receivable related assets and liabilities: | |||||||||||
Proceeds from ROF credit facility for the purchase of consumer finance loans | 13,650 | — | |||||||||
| Originations of finance receivables | (15,021) | — | |||||||||
| Principal payments received on finance receivables | 2,048 | — | |||||||||
Changes in operating assets and liabilities, excluding impact of acquisitions: | |||||||||||
Accounts receivable | 3,626 | (17,547) | |||||||||
Inventory | (20,157) | 1,684 | |||||||||
| Prepaid expenses and other current assets | (363) | (613) | |||||||||
| Other assets | (19,126) | (81) | |||||||||
Other liabilities | (3,807) | (217) | |||||||||
| Accounts payable and accrued liabilities | 15,472 | 77 | |||||||||
Floor plan trade note borrowings | 28,140 | — | |||||||||
Net cash provided by (used in) operating activities | 49,974 | (17,467) | |||||||||
CASH FLOWS FROM INVESTING ACTIVITIES | |||||||||||
Acquisitions, net of cash received | (64,188) | — | |||||||||
Purchase of property and equipment | (1,464) | (100) | |||||||||
| Technology development | (3,462) | (905) | |||||||||
Net cash used in investing activities | (69,114) | (1,005) | |||||||||
CASH FLOWS FROM FINANCING ACTIVITIES | |||||||||||
| Proceeds from new secured debt | 84,500 | — | |||||||||
| Repayment of debt and mortgage notes | (32,791) | — | |||||||||
| Repayments of (proceeds from) issuance of notes | (2,091) | 2,500 | |||||||||
(Decrease) increase in borrowings from non-trade floor plans | (4,770) | 3,679 | |||||||||
| Net proceeds from sale of common stock | — | 36,797 | |||||||||
Net cash provided by financing activities | 44,848 | 42,976 | |||||||||
NET CHANGE IN CASH | 25,708 | 24,504 | |||||||||
| Cash and restricted cash at beginning of period | 51,974 | 3,516 | |||||||||
| Cash and restricted cash at end of period | $ | 77,682 | $ | 28,020 | |||||||
9
RumbleOn, Inc.
Reconciliation of Net Income (Loss) to Adjusted EBITDA
(Unaudited)
(Dollars in thousands)
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
Net income (loss) | $ | 14,033 | $ | (3,390) | $ | 23,174 | $ | (7,842) | |||||||||||||||
Add back: | |||||||||||||||||||||||
Interest expense | 13,275 | 1,921 | 2 | 24,456 | 3,529 | ||||||||||||||||||
Depreciation and amortization | 5,879 | 632 | 10,353 | 1,231 | |||||||||||||||||||
| Interest income and miscellaneous income | (249) | — | (249) | — | |||||||||||||||||||
| Income tax provision | 4,870 | — | 7,250 | — | |||||||||||||||||||
EBITDA | 37,808 | (837) | 64,984 | (3,082) | |||||||||||||||||||
Adjustments: | |||||||||||||||||||||||
Stock based compensation | 2,753 | 701 | 4,632 | 1,727 | |||||||||||||||||||
Transaction costs - RideNow and Freedom | 687 | 860 | 1,403 | 1,957 | |||||||||||||||||||
| Purchase accounting related | 592 | — | 592 | — | |||||||||||||||||||
Other non-recurring costs | 2,479 | 81 | 4,176 | 203 | |||||||||||||||||||
Change in derivative and warrant liabilities | — | 2,236 | (39) | 2,256 | |||||||||||||||||||
Adjusted EBITDA | $ | 44,319 | $ | 3,041 | $ | 75,748 | $ | 3,061 | |||||||||||||||
Adjusted EBITDA Margin | 8.1 | % | 1.8 | % | 7.5 | % | 1.1 | % | |||||||||||||||
For the three and six months ended June 30, 2022 and 2021, adjustments to Adjusted EBITDA are primarily comprised of:
•Non-cash stock-based compensation expense as reported in the Condensed Consolidated Statement of Operations,
•Acquisition costs associated with the RideNow Transaction and Freedom Transactions, which primarily include professional fees and third-party costs, and
•Other non-recurring costs, which include one-time expenses incurred. For the three and six months ended June 30, 2022, the balance was primarily related to various integration costs and professional fees associated with the RideNow and Freedom Transactions, technology implementation, and establishment of the RumbleOn Finance (ROF) secured loan facility. For the three and six months ended June 30, 2021, the balance was primarily related to litigation expenses.
10
RumbleOn, Inc.
Reconciliation of Net Income (Loss) to Adjusted Earnings (Loss) and
Earnings (Loss) per share to Adjusted Earnings (Loss) per share
(Unaudited)
(Dollars in thousands, except per share amounts)
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
Net income (loss) | $ | 14,033 | $ | (3,390) | $ | 23,174 | $ | (7,842) | |||||||||||||||
Adjustments: | |||||||||||||||||||||||
Stock based compensation | — | — | — | — | |||||||||||||||||||
Transaction costs - RideNow and Freedom | 687 | 860 | 1,403 | 1,957 | |||||||||||||||||||
| Purchase accounting related | 3,881 | — | 6,182 | — | |||||||||||||||||||
Other non-recurring costs | 2,479 | 81 | 4,176 | 203 | |||||||||||||||||||
| Less: Income tax expense | (1,804) | — | (3,571) | — | |||||||||||||||||||
Adjusted Net Income (Loss) | $ | 19,276 | $ | (2,449) | $ | 31,364 | $ | (5,682) | |||||||||||||||
Adjusted Net Income (Loss) Margin | 3.5 | % | (1.5) | % | 3.1 | % | (2.1) | % | |||||||||||||||
| Weighted average number of common shares outstanding - basic | 16,059,288 | 3,242,616 | 15,778,461 | 2,775,665 | |||||||||||||||||||
| Earnings (loss) per share - basic | $ | 0.87 | $ | (1.05) | $ | 1.46 | $ | (2.83) | |||||||||||||||
| Adjusted Earnings (loss) per share - basic | $ | 1.20 | $ | (0.76) | $ | 1.99 | $ | (2.05) | |||||||||||||||
| Weighted average number of common shares outstanding - diluted | 16,095,862 | 3,242,616 | 15,841,346 | 2,775,665 | |||||||||||||||||||
| Earnings (loss) per share - diluted | $ | 0.87 | $ | (1.05) | $ | 1.46 | $ | (2.83) | |||||||||||||||
| Adjusted Earnings (loss) per share - diluted | $ | 1.20 | $ | (0.76) | $ | 1.98 | $ | (2.05) | |||||||||||||||
For the three and six months ended June 30, 2022 and 2021, adjustments to Net income (loss) are primarily comprised of:
•Acquisition costs associated with the RideNow Transaction and Freedom Transaction, which primarily include professional fees and third-party costs, and
•Other non-recurring costs, which include one-time expenses incurred. For the three and six months ended June 30, 2022, the balance was primarily related to various integration costs and professional fees associated with the RideNow and Freedom Transactions, technology implementation, and establishment of the RumbleOn Finance (ROF) secured loan facility. For the three and six months ended June 30, 2021, the balance was primarily related to litigation expenses.
11
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