DALLAS--(BUSINESS WIRE)--RumbleOn, Inc (NASDAQ: RMBL), an e-commerce company using innovative technology to aggregate and distribute pre-owned vehicles, today announced financial results for the three months ended June 30, 2021. Management is hosting an investor call to discuss results today, August 2, 2021 at 8:30 am ET.
Management Commentary:
“RumbleOn continued to execute in the second quarter, with gross margin expansion outpacing our 100% year-over-year revenue growth,” said Marshall Chesrown, Chief Executive Officer. “Not only are we hard at work on the pending business combination with RideNow, but we delivered across our strategic priorities. We continued to add new dealers to RumbleOn.com and have over 60,000 new, used and private party listings on our site today. And, with over 500 dealers using our services and our B2B functionality with more dealers in the pipeline to be onboarded, we are seeing strong demand and remain confident in our strategy to offer virtual inventory, quality leads and services to dealers nationwide.”
Second Quarter 2021 Financial Highlights
-
Total vehicle unit sales was 5,711, a 55% increase from 3,694 in Q2 2020, a 63% increase from 3,500 in Q1 2021
- Powersports unit sales was 2,411, up 181% from 859 units in Q2 2020, up 140% from 1,006 units in Q1 2021
- Automotive unit sales was 3,300, up 16% from 2,835 units in Q2 2020, up 32% from 2,494 units in Q1 2021
-
Total revenue was $168.3 million, a 100% increase from $84.3 million in Q2 2020, a 61% increase from $104.3 million in Q1 2021
- Powersports revenue was $28.0 million, up 233% from $8.4 million in Q2 2020, up 157% from $10.9 million in Q1 2021
- Automotive revenue was $127.3 million, up 86% from $68.3 million in Q2 2020, up 51% from $84.1 million in Q1 2021
- Transportation and vehicle logistics revenue was $13.1 million, up 71% from $7.7 million in Q2 2020, up 40% from $9.3 million in Q1 2021
-
Total gross profit was $19.5 million, for a total gross margin of 11.6%, up from 10.0% in Q2 2020, up from 10.7% in Q1 2021. Gross profit for our vehicle distribution business was $17.1 million or 11.0% gross margin, up 157% from $6.6 million in Q2 2020, up 86% from $9.2 million in Q1 2021.
- Gross profit per vehicle was $2,998, up from $1,802 in Q2 2020, and up from $2,626 in Q1 2021
- Powersports gross profit per powersport vehicle sold was $2,886, up from $994 in Q2 2020, down from $2,961 in Q1 2021
- Automotive gross profit per automotive vehicle sold was $3,081, up from $2,046 in Q2 2020 and up from $2,490 in Q1 2021
-
Sales, General and Administrative Expenses was $18.1 million, or 10.8% of revenue, down from 13.2% of revenue in Q2 2020, down from 12.9% of revenue in Q1 2021
- Advertising and Marketing expense was $2.0 million as compared to $0.5 million in Q2 2020 and $1.6 million in Q1 2021
- Technology development expense was $0.4 million as compared to $0.2 million in Q2 2020 and $0.4 million with Q1 2021
- General and Administrative expense was $6.3 million as compared to $4.2 million in Q2 2020 and $3.8 million in Q1 2021
- Operating income was $0.8 million, compared to $2.4 million in Q2 2020, which included $5.6 million of insurance proceeds related to the tornado damage in March 2020, and an improvement from an operating income of $(2.8) million in Q1 2021
-
Positive Adjusted EBITDA of $3.0 million based on net income of ($3.4) million.
- Represents an improvement from Adjusted EBITDA of $(1.3) million in Q2 2020 based on net income of $1.0 million.
- Represents an improvement from positive Adjusted EBITDA of $0.02 million in Q1 2021 based on net income of $(4.5) million
- Weighted average basic and fully diluted shares outstanding in Q2 were 3,242,616 shares of common stock outstanding
- As of June 30, 2021, RumbleOn had $28.0 million in cash, including $3.0 million in restricted cash and has over $9.2 million available on current lines of credit. We have recently received over $3.1 million in additional insurance proceeds that will be reflected in Q3 2021 financials.
A description of our results of operations for Q2 2021 compared to Q2 2020 will be included in the Quarterly Report on Form 10-Q to be filed later this week.
Adjusted EBITDA is a non-GAAP financial measure. Reconciliations of non-GAAP financial measures used in this release are provided in the attached financial tables.
Transaction Update and Outlook
On Friday, July 30, 2021, RumbleOn announced that its stockholders approved the proposed business combination with RideNow at the Special Meeting of Stockholders. The business combination is expected to close very soon subject to the satisfaction of the remaining closing conditions.
RumbleOn is providing certain preliminary Q2 2021 financial results for RideNow and will file full financial results with the SEC in the coming days. For the second quarter of 2021, RideNow sold 13,080 units and generated $268.2 million of total revenue. Net Income was $54.5 million, which included $19 million of forgiveness of its PPP loan debt. Exclusive of the debt forgiveness, RideNow’s net income would have been $35.5 million. Adjusted EBITDA, which excludes the debt forgiveness, was $36.8 million in the quarter.
Together, the combined company will have a dominant position in a $100+ billion powersports market. The only Omnichannel platform in powersports will enable the combined company to reach more consumers in a secularly growing - yet still highly fragmented market, that is benefitting from changing consumer behavior. The transaction is expected to propel revenue growth and drive meaningful cost synergies, leading to improved monetization and margin expansion.
The Company remains very confident in its full year 2021 guidance for the combined company. Assuming a combination as of January 1, 2021, RumbleOn expects combined company revenue in a range of $1.45 billion to $1.55 billion and adjusted EBITDA in a range of $110.0 million to $115.0 million.
Given the pending business combination with RideNow, RumbleOn will not be providing standalone guidance for the third quarter.
“As we announce these outstanding results and work toward closing our transformative transaction with RideNow, we are reminded of the unexpected and sudden passing of Steve Berrard, our co-founder, CFO and dear friend. RumbleOn would not be in the position it is today without his tremendous knowledge, experience, and contributions. Steve’s legacy lives on in our work at RumbleOn. I am so proud of the entire RumbleOn team for stepping up, supporting each other, and committing to our vision each and every day and delivering another quarter of strong results,” concluded Mr. Chesrown.
Conference Call Details
RumbleOn's management will host a conference call to discuss its financial results today, August 2, 2021 at 8:30 a.m. Eastern Time. A live and archived webcast can be accessed from RumbleOn's Investor Relations website at https://investors.rumbleon.com. To access the conference call telephonically, callers may dial 1-877-407-9716 or 1-201-493-6779 for callers outside of the United States and entering conference ID 13721389.
About RumbleOn
Founded in 2017, RumbleOn (NASDAQ: RMBL) is an e-commerce company using innovative technology to aggregate and distribute pre-owned vehicles. RumbleOn is disrupting the pre-owned vehicle supply chain by providing dealers with technology solutions such as virtual inventory, and a 24/7 distribution platform, and consumers with an efficient, timely and transparent transaction experience, without leaving home. Whether buying, selling, trading or financing a vehicle, RumbleOn enables dealers and consumers to transact without geographic boundaries in a transparent, fast and friction free experience. For more information, please visit http://www.rumbleon.com.
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. Non-GAAP financial measures for the three months ended June 30, 2021, June 30, 2020, and March 31, 2021 used in this release include: adjusted EBITDA.
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 and certain recoveries, charges and expenses, such as an insurance recovery, non-cash stock-based compensation costs, acquisition related 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 combined 2021 financial target for adjusted EBITDA, a reconciliation of this non-GAAP measure to the corresponding GAAP measure is not available without unreasonable effort due to the variability and complexity of the reconciling items described above that we exclude this non-GAAP target measure. The variability of these items may have a significant impact on our future GAAP financial results and, as a result, we are unable to prepare the forward-looking statement of income prepared in accordance with GAAP that would be required to produce such a reconciliation.
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.
RumbleOn, Inc. Condensed Consolidated Balance Sheets (Unaudited) |
||||||
|
As of
|
|
As of
|
|||
ASSETS |
|
|
|
|||
|
|
|
|
|||
Current assets: |
|
|
|
|||
Cash |
$ |
24,972,223 |
|
$ |
1,466,831 |
|
Restricted cash |
3,049,056 |
|
2,049,056 |
|||
Accounts receivable, net |
26,955,051 |
|
9,407,960 |
|||
Inventory |
19,675,990 |
|
21,360,441 |
|||
Prepaid expense and other current assets |
4,058,905 |
|
3,446,225 |
|||
Total current assets |
78,711,225 |
|
37,730,513 |
|||
|
|
|
|
|||
Property and equipment, net |
6,295,683 |
|
6,521,446 |
|||
Right-of-use assets |
5,007,605 |
|
5,689,637 |
|||
Goodwill |
26,886,563 |
|
26,886,563 |
|||
Deferred finance charge |
10,950,000 |
|
— |
|||
Other assets |
221,712 |
|
151,076 |
|||
Total assets |
$ |
128,072,788 |
|
$ |
76,979,235 |
|
|
|
|
|
|||
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
|||
|
|
|
|
|||
Current liabilities: |
|
|
|
|||
Accounts payable and accrued liabilities |
$ |
12,821,750 |
|
$ |
12,707,448 |
|
Accrued interest payable |
1,606,954 |
|
1,485,854 |
|||
Current portion of convertible debt |
415,113 |
|
562,502 |
|||
Current portion of long-term debt |
27,251,151 |
|
20,688,651 |
|||
Total current liabilities |
42,094,968 |
|
35,444,455 |
|||
|
|
|
|
|||
Long-term liabilities: |
|
|
|
|||
Note payable |
4,691,181 |
|
4,691,181 |
|||
Warrant liability |
13,174,216 |
|
— |
|||
Convertible debt, net |
28,079,484 |
|
27,166,019 |
|||
Derivative liabilities |
48,800 |
|
16,694 |
|||
Operating lease liabilities and other long-term liabilities |
4,022,292 |
|
5,090,221 |
|||
Total long-term liabilities |
50,015,973 |
|
36,964,115 |
|||
|
|
|
|
|||
Total liabilities |
92,110,941 |
|
72,408,570 |
|||
|
|
|
|
|||
Commitments and contingencies (Notes 6, 7, 8, 11, 16) |
|
|
|
|||
|
|
|
|
|||
Stockholders' equity: |
|
|
|
|||
Class B Preferred stock, $0.001 par value, 10,000,000 shares authorized, 0 and 0 shares issued and outstanding as of June 30, 2021 and December 31, 2020 |
— |
|
— |
|||
Common A stock, $0.001 par value, 50,000 shares authorized, 50,000 shares issued and outstanding as of June 30, 2021 and December 31, 2020 |
50 |
|
50 |
|||
Common B stock, $0.001 par value, 4,950,000 shares authorized, 3,343,062 and 2,191,633 shares issued and outstanding as of June 30, 2021 and December 31, 2020 |
3,343 |
|
2,192 |
|||
Additional paid-in capital |
148,180,750 |
|
108,949,204 |
|||
Accumulated deficit |
(112,222,296) |
|
(104,380,781) |
|||
Total stockholders' equity |
35,961,847 |
|
4,570,665 |
|||
|
|
|
|
|||
Total liabilities and stockholders' equity |
$ |
128,072,788 |
|
$ |
76,979,235 |
|
RumbleOn, Inc. Condensed Consolidated Statements of Operations (Unaudited) |
||||||||||||||||
|
Three-Months Ended June 30, |
Six-Months Ended June 30, |
||||||||||||||
|
2021 |
2020 |
2021 |
2020 |
||||||||||||
Revenue: |
|
|
|
|
||||||||||||
Pre-owned vehicle sales: |
|
|
|
|
||||||||||||
Powersports |
$ |
27,978,693 |
|
$ |
8,382,952 |
|
$ |
38,833,577 |
|
$ |
31,812,355 |
|
||||
Automotive |
127,286,568 |
|
68,294,841 |
|
211,357,422 |
|
181,927,108 |
|
||||||||
Transportation and vehicle logistics |
13,080,362 |
|
7,663,500 |
|
22,418,633 |
|
14,751,091 |
|
||||||||
Total revenue |
168,345,623 |
|
84,341,293 |
|
272,609,632 |
|
228,490,554 |
|
||||||||
|
|
|
|
|
||||||||||||
Cost of revenue |
|
|
|
|
||||||||||||
Powersports |
21,021,492 |
|
7,528,810 |
|
28,897,883 |
|
28,085,447 |
|
||||||||
Automotive |
117,117,721 |
|
62,493,015 |
|
194,977,530 |
|
170,572,680 |
|
||||||||
Transportation |
10,695,165 |
|
5,862,734 |
|
18,044,506 |
|
10,950,792 |
|
||||||||
Cost of revenue before impairment loss |
148,834,378 |
|
75,884,559 |
|
241,919,919 |
|
209,608,919 |
|
||||||||
Impairment loss on automotive inventory |
— |
|
— |
|
— |
|
11,738,413 |
|
||||||||
Total cost of revenue |
148,834,378 |
|
75,884,559 |
|
241,919,919 |
|
221,347,332 |
|
||||||||
|
|
|
|
|
||||||||||||
Gross profit |
19,511,245 |
|
8,456,734 |
|
30,689,713 |
|
7,143,222 |
|
||||||||
|
|
|
|
|
||||||||||||
Selling, general and administrative |
18,113,151 |
|
11,174,287 |
|
31,514,495 |
|
29,230,714 |
|
||||||||
|
|
|
|
|
||||||||||||
Insurance recovery |
— |
|
(5,615,268 |
) |
— |
|
(5,615,268 |
) |
||||||||
|
|
|
|
|
||||||||||||
Depreciation and amortization |
631,828 |
|
508,323 |
|
1,231,066 |
|
1,031,317 |
|
||||||||
|
|
|
|
|
||||||||||||
Operating income (loss) |
766,266 |
|
2,389,392 |
|
(2,055,848 |
) |
(17,503,541 |
) |
||||||||
|
|
|
|
|
||||||||||||
Interest expense |
(1,920,525 |
) |
(1,482,408 |
) |
(3,529,345 |
) |
(3,699,166 |
) |
||||||||
|
|
|
|
|
||||||||||||
Change in derivative liability |
(2,235,670 |
) |
137,488 |
|
(2,256,322 |
) |
20,673 |
|
||||||||
|
|
|
|
|
||||||||||||
Gain on early extinguishment of debt |
— |
|
— |
|
— |
|
188,164 |
|
||||||||
|
|
|
|
|
||||||||||||
Loss before provision for income taxes |
(3,389,929 |
) |
1,044,472 |
|
(7,841,515 |
) |
(20,993,870 |
) |
||||||||
|
|
|
|
|
||||||||||||
Benefit for income taxes |
— |
|
— |
|
— |
|
— |
|
||||||||
|
|
|
|
|
||||||||||||
Net income (loss) |
$ |
(3,389,929 |
) |
$ |
1,044,472 |
|
$ |
(7,841,515 |
) |
$ |
(20,993,870 |
) |
||||
|
|
|
|
|
||||||||||||
Weighted average number of common shares outstanding - basic and fully diluted |
3,242,616 |
|
2,214,241 |
|
3,242,616 |
|
2,130,332 |
|
||||||||
|
|
|
|
|
||||||||||||
Net income (loss) per share - basic and fully diluted |
$ |
(1.05 |
) |
$ |
0.47 |
|
$ |
(2.42 |
) |
$ |
(9.85 |
) |
||||
RumbleOn, Inc. Condensed Consolidated Statements of Cash Flows (Unaudited) |
||||||||
|
Six-Months Ended June 30, |
|||||||
|
2021 |
2020 |
||||||
CASH FLOWS FROM OPERATING ACTIVITIES |
|
|
||||||
Net loss |
$ |
(7,841,515 |
) |
$ |
(20,993,870 |
) |
||
Adjustments to reconcile net loss to net cash used in operating activities: |
|
|
||||||
Depreciation and amortization |
1,231,066 |
|
1,031,317 |
|
||||
Amortization of debt discounts |
1,150,076 |
|
1,051,898 |
|
||||
Share based compensation |
2,435,291 |
|
1,562,761 |
|
||||
Impairment loss on inventory |
— |
|
11,738,413 |
|
||||
Impairment loss on property and equipment |
— |
|
177,626 |
|
||||
Loss (gain) from change in value of derivatives |
2,256,322 |
|
(27,500 |
) |
||||
Gain on early extinguishment of debt |
— |
|
(188,164 |
) |
||||
Changes in operating assets and liabilities: |
|
|
||||||
(Increase) decrease in prepaid expenses and other current assets |
(612,680 |
) |
79,154 |
|
||||
Increase in inventory |
1,684,451 |
|
14,154,657 |
|
||||
(Increase) in accounts receivable |
(17,547,091 |
) |
(6,313,321 |
) |
||||
(Increase) decrease in other assets |
(80,550 |
) |
167,186 |
|
||||
Decrease in accounts payable and accrued liabilities |
(44,429 |
) |
(2,732,098 |
) |
||||
Decrease in other liabilities |
(217,250 |
) |
— |
|
||||
Increase in accrued interest payable |
121,100 |
|
869,800 |
|
||||
Net cash (used in) provided by operating activities |
(17,465,209 |
) |
577,859 |
|
||||
|
|
|
||||||
CASH FLOWS FROM INVESTING ACTIVITIES |
|
|
||||||
Purchase of property and equipment |
(100,000 |
) |
(174,786 |
) |
||||
Technology development |
(905,305 |
) |
(614,113 |
) |
||||
Net cash used in investing activities |
(1,005,305 |
) |
(788,899 |
) |
||||
|
|
|
||||||
CASH FLOWS FROM FINANCING ACTIVITIES |
|
|
||||||
Proceeds from notes payable |
2,500,000 |
|
8,272,375 |
|
||||
Payments on notes payable |
521,744 |
|
— |
|
||||
Net proceeds (payments) from lines of credit |
3,156,756 |
|
(20,627,794 |
) |
||||
Net Proceeds from sale of common stock |
36,797,406 |
|
10,780,080 |
|
||||
Net cash provided by financing activities |
42,975,906 |
|
2,079,681 |
|
||||
|
|
|
||||||
NET CHANGE IN CASH |
24,505,392 |
|
1,868,641 |
|
||||
|
|
|
||||||
CASH AND RESTRICTED CASH AT BEGINNING OF PERIOD |
3,515,887 |
|
6,726,282 |
|
||||
|
|
|
||||||
CASH AND RESTRICTED CASH AT END OF PERIOD |
$ |
28,021,279 |
|
$ |
8,594,923 |
|
||
RumbleOn, Inc. Reconciliation of Net Income (Loss) to Adjusted EBITDA |
||||||||||||
|
Three-Months Ended
|
Three-Months Ended
|
||||||||||
|
2021 |
2020 |
2021 |
|||||||||
Net income (loss) |
$ |
(3,389,929 |
) |
$ |
1,044,472 |
|
$ |
(4,451,586 |
) |
|||
Add back: |
|
|
|
|||||||||
Interest expense (including debt extinguishment) |
1,920,525 |
|
1,482,408 |
|
1,608,820 |
|
||||||
Depreciation and amortization |
631,828 |
|
508,322 |
|
599,240 |
|
||||||
Increase in derivative liability |
2,235,670 |
|
(137,488 |
) |
20,652 |
|
||||||
EBITDA |
1,398,094 |
|
2,897,714 |
|
(2,222,874 |
) |
||||||
Adjustments: |
|
|
|
|||||||||
Insurance recovery |
— |
|
(5,615,268 |
) |
— |
|
||||||
Non-cash-stock-based compensation |
701,275 |
|
716,391 |
|
1,026,216 |
|
||||||
Acquisition costs associated with the RideNow Agreement |
860,048 |
|
— |
|
1,096,653 |
|
||||||
Litigation expenses |
81,389 |
|
607,387 |
|
88,258 |
|
||||||
Other non-reoccurring costs |
— |
|
51,387 |
|
32,985 |
|
||||||
Adjusted EBITDA |
$ |
3,040,806 |
|
$ |
(1,342,389 |
) |
$ |
21,239 |
|
|||
