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RumbleOn Reports First Quarter 2023 Financial Results

Announces 17,336 Q1 Total Unit Sales

$10-$15 Million Additional SG&A Expense Reduction Plan

Q1 GPU $5,349

Reiterates 2023 Full Year Outlook

RumbleOn, Inc. (NASDAQ: RMBL) (the “Company” or “RumbleOn”), the nation's first technology-based powersports platform, today announced operational and financial results for the three months ended March 31, 2023. RumbleOn management is hosting an earnings call to discuss the Company’s results today, May 10, 2023, at 7:30 am CT (8:30 am ET).

First Quarter 2023 Financial and Operational Highlights

  • Total Unit Sales of 17,336, primarily comprised of 10,436 New Units and 6,900 Used Units, resulting in New:Used ratio of 1.5x, similar to prior quarter
  • Total Company Revenue of $346.3 million
  • Total Company Gross Profit of $91.0 million; Total Company Gross Profit Margin of 26.3% increased 110 bps sequentially
  • Net Loss of $(16.9) million with Diluted Loss per Share of $(1.04)
  • Adjusted Net Income of $0.8 million with Adjusted Diluted Earnings per Share of $0.05
  • Adjusted EBITDA of $10.7 million, impacted by gross margin compression and a lag in the impact of SG&A reductions

Management Commentary

Marshall Chesrown, RumbleOn's Chairman and Chief Executive Officer commented, “In the first quarter, we experienced normal seasonality, delivering revenue and unit sales in line with our expectations. We achieved this in the face of unprecedented industry-wide new vehicle inventory rebalancing over the course of the Q4 and Q1 of this year, not to mention significant atypical seasonal weather disruptions. These factors have not altered our Five Pillar plan to profitably grow our Company. They have slowed us down a bit, but we proactively managed through these difficult headwinds and are back on plan in March and April.”

“In 2023, we will continue to implement the Five Pillars of our strategy: self-funding, reduction and refinancing of debt, technology, continuing to improve the customer experience, and increasing market share through organic growth and M&A. We are intently focused on striking the right balance between prudent investment in our business and expense control, given the current economic environment. We will see the effects of these SG&A reductions flow through the remainder of the year and are confident in the outlook we previously provided,” concluded Chesrown.

First Quarter 2023 — Summary Financial Results

Reconciliation of GAAP to non-GAAP financial measures are provided in accompanying financial schedules.

Unless otherwise noted, all comparisons in the narrative are on a sequential basis for the three months ended March 31, 2023, as compared to the three months ended December 31, 2022.

 

(Unaudited)

$ in millions except per share amounts

Three Months Ended

 

Change

 

Mar 31, 2023

 

Dec 31, 2022

 

Mar 31, 2022

 

Sequential

 

Year-over-Year

Total Unit Sales (#)

17,336

 

18,419

 

19,380

 

(5.9)%

 

(11)%

 

 

 

 

 

 

 

 

 

 

Total Revenue

$346.3

 

$369.5

 

$445.2

 

(6.3)%

 

(22)%

Gross Profit

$91.0

 

$93.1

 

$105.2

 

(2.3)%

 

(13)%

Gross Profit Margin

26.3%

 

25.2%

 

23.6%

 

110 bps

 

270 bps

 

 

 

 

 

 

 

 

 

 

Net Income (Loss)

$(16.9)

 

$(287.7)

 

$9.1

 

(94.1)%

 

nm

Diluted Earnings (Loss) per Share

$(1.04)

 

$(17.80)

 

$0.58

 

(94.2)%

 

nm

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA

$10.7

 

$18.7

 

$31.4

 

(42.5)%

 

(66)%

Adjusted Net Income (Loss)

$0.8

 

$(11.0)

 

$14.7

 

107.3%

 

(95)%

Adjusted Diluted Earnings (Loss) per Share

$0.05

 

$(0.68)

 

$0.94

 

107.4%

 

95%

nm = not meaningful

Total Unit Sales of 17,336 units declined (5.9)%, driven by typical seasonality in the powersports business.

Total Revenue of $346.3 million declined (6.3)%. The Powersports Segment revenue was essentially flat.

Total Gross Profit of $91.0 million declined (2.3)% and Gross Profit Margin was 26.3%, up from 25.2%. Sequential increase in gross profit margin was in line with our prior expectations.

Operating Expenses were $91.8 million, or 26.5% of revenue, compared to $98.1 million, or 26.6% of revenue. Total stock-based compensation was $2.9 million up from $2.1 million in the prior quarter.

Net Loss was $(16.9) million, or (4.9)% of revenue, compared to $(287.7) million, or (77.9)% of revenue. Loss per diluted share was $(1.04) compared to $(17.80).

Adjusted Net Income (Loss) was $0.8 million, or 0.2% of revenue, compared to $(11.0) million or (3.0)% of revenue. Adjusted net income (loss) per diluted share was $0.05 compared to $(0.68).

Adjusted EBITDA was $10.7 million, compared to $18.7 million. The sequential decrease in adjusted EBITDA of (42.5)% was driven by modest gross margin compression in the Powersports Segment, and lower gross profit contribution from the Automotive Segment.

Cash and Restricted Cash as of March 31, 2023 was approximately $61.8 million, and total debt was $376.8 million. Availability under our short-term revolving floorplan credit facilities totaled approximately $159.1 million.

Total Available Liquidity, defined as unrestricted cash plus availability under floorplan credit facilities for inventory on hand at March 31, 2023, totaled approximately $97.4 million.

Cash Flow provided by Operating Activities was $8.9 million for the three months ended March 31, 2023, which was positively impacted by $13.4 million of trade floorplan borrowings used for inventory purchases.

Weighted Average Basic and Diluted Shares of Class A and Class B common stock outstanding were 16,224,122 for the three months ended March 31, 2023. As of March 31, 2023, RumbleOn had 16,295,735 total shares of Class B common stock, and 50,000 shares of Class A common stock outstanding.

Full Year 2023 — Financial Outlook

RumbleOn is reaffirming its outlook for the full year 2023 as follows:

  • Total Powersports and Transportation Revenue of $1.4 billion to $1.6 billion, compared to Powersports and Transportation Revenue of $1.46 billion in 2022.
  • Powersports GPU of approximately $5,700 compared to $6,159 in 2022.
  • Adjusted EBITDA of $95 million to $105 million.

First Quarter 2023 — Segment Results

Unless otherwise noted, all comparisons are on a sequential basis for the three months ended March 31, 2023, as compared to the three months ended December 31, 2022.

Powersports Segment

 

(Unaudited)

$ in millions except per unit

Three Months Ended

 

Change

 

Mar 31, 2023

 

Dec 31, 2022

 

Mar 31, 2022

 

Sequential

 

Year-over-Year

Unit Sales (#)

 

 

 

 

 

 

 

 

 

New

10,436

 

10,633

 

9,677

 

(1.9)%

 

8%

Used

6,785

 

6,917

 

7,080

 

(1.9)%

 

(4)%

Total Powersports Unit Sales

17,221

 

17,550

 

16,757

 

(1.9)%

 

3%

 

 

 

 

 

 

 

 

 

 

Revenue

 

 

 

 

 

 

 

 

 

New

$156.4

 

$149.8

 

$152.6

 

4.4%

 

2%

Used

$76.9

 

$77.8

 

$87.3

 

(1.2)%

 

(12)%

Finance & Insurance, net

$27.2

 

$27.6

 

$27.5

 

(1.4)%

 

(1)%

Parts, Services, and Accessories

$59.1

 

$65.3

 

$54.7

 

(9.5)%

 

8%

Total Powersports Revenue

$319.6

 

$320.5

 

$322.1

 

(0.3)%

 

(1)%

 

 

 

 

 

 

 

 

 

 

Gross Profit

 

 

 

 

 

 

 

 

 

New

$23.7

 

$25.3

 

$31.2

 

(6.3)%

 

(24)%

Used

$8.5

 

$10.4

 

$15.2

 

(18.3)%

 

(44)%

Finance & Insurance, net

$27.2

 

$27.6

 

$27.5

 

(1.4)%

 

(1)%

Parts, Services, and Accessories

$27.3

 

$26.4

 

$25.3

 

3.4%

 

8%

Total Powersports Gross Profit

$86.7

 

$89.7

 

$99.2

 

(3.3)%

 

(13)%

Powersports GPU1

$5,349

 

$5,420

 

$6,284

 

(1.3)%

 

(15)%

1 Calculated as total powersports gross profit divided by new and used retail powersports units sold.

Used Powersports Units, which includes used retail and wholesale Powersports Units, declined (1.9)% sequentially. Sequential declines are primarily the result of our decision to slow down used vehicle acquisitions while new inventory normalized.

Used Powersports Revenue declined (1.2)% sequentially due to intentional slowing of used inventory acquisition and anticipated seasonality.

Used Powersports Gross Profit declined (18.3)% sequentially due primarily to modest mix shift towards wholesale in the quarter, as well as input cost inflation.

New Powersports Revenue increased 4.4% sequentially, despite a (1.9)% reduction in unit sales, driven by increased supply of new inventory and favorable price mix in consumer demand.

New Powersports Gross Profit declined (6.3)% sequentially due primarily to higher inventory acquisition costs.

Powersports GPU was $5,349, a decrease of (1.3)% sequentially.1

Vehicle Logistics Segment

 

(Unaudited)

$ in millions

Three Months Ended

 

Change

 

Mar 31, 2023

 

Dec 31, 2022

 

Mar 31, 2022

 

Sequential

 

Year-over-Year

Vehicles Transported (#)

23,775

 

18,390

 

21,831

 

29.3%

 

8.9%

Vehicle Logistics Revenue

$15.0

 

$11.5

 

$13.6

 

30.4%

 

10.3%

Vehicle Logistics Gross Profit

$3.7

 

$2.9

 

$2.6

 

27.6%

 

42.3%

Revenue from the Vehicle Logistics Segment increased 30.4% sequentially, driven by an increase in the number of vehicles transported and slight increase in revenue per vehicle transported to $631.0 in the first quarter.

Gross profit for this segment was up sequentially, driven by a 29.3% increase in the number of vehicles transported.

Automotive Segment

 

(Unaudited)

$ in millions

Three Months Ended

 

Change

 

Mar 31, 2023

 

Dec 31, 2022

 

Mar 31, 2022

 

Sequential

 

Year-over-Year

Automotive Unit Sales (#)

115

 

869

 

2,623

 

(86.8)%

 

(95.6)%

Automotive Revenue

$11.9

 

$37.8

 

$110.7

 

(68.5)%

 

(89.3)%

Automotive Gross Profit

$0.7

 

$0.7

 

$3.4

 

—%

 

(79.4)%

Revenue from the Automotive Segment declined (86.8)% sequentially, primarily driven by the Company's strategic decision to purchase and sell fewer automotive units, as this business continues to wind down.

Gross Profit was down due to a decrease in unit sales and high wholesale costs.

Conference Call Details

RumbleOn's management will host a conference call to discuss its operational and financial results on May 10, 2023 at 7:30 a.m. Central Time (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 1-877-407-9716 (or 1-201-493-6779 for callers outside of the United States) and enter conference ID 13737567.

About RumbleOn

RumbleOn is the nation’s first technology-based powersports platform. Headquartered in the Dallas Metroplex, RumbleOn provides the only technology-led platform in powersports with a broad footprint of physical locations, full-line manufacturer representation and high-quality used inventory to transform the entire customer experience. Our goal is to integrate the best of both the physical and digital, and make the transition between the two seamless. 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, Adjusted EBITDA margin, Adjusted net income (loss), and Adjusted net income (loss) margin are non-GAAP financial measures and should not be considered as alternatives 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, 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 necessarily 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.

Adjusted net income (loss) is defined as net income (loss) adjusted to add back transaction costs, purchase accounting adjustments and other non-recurring costs which include items not indicative of our ongoing operating performance.

With respect to our 2023 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.

RumbleOn, Inc.

Condensed Consolidated Balance Sheets

(Unaudited)

(Dollars in thousands; except per share amounts)

 
 

 

 

March 31, 2023

 

December 31, 2022

ASSETS

 

 

 

 

Current assets:

 

 

 

 

Cash

 

$

51,784

 

 

$

48,579

 

Restricted cash

 

 

10,000

 

 

 

10,000

 

Accounts receivable, net

 

 

34,086

 

 

 

33,758

 

Inventory

 

 

333,151

 

 

 

331,721

 

Prepaid expense and other current assets

 

 

38,092

 

 

 

7,424

 

Total current assets

 

 

467,113

 

 

 

431,482

 

Property and equipment, net

 

 

76,727

 

 

 

76,078

 

Right-of-use assets

 

 

163,556

 

 

 

161,822

 

Goodwill

 

 

24,003

 

 

 

21,142

 

Intangible assets, net

 

 

244,900

 

 

 

247,413

 

Deferred tax assets

 

 

59,814

 

 

 

58,115

 

Other assets

 

 

1,765

 

 

 

31,158

 

Total assets

 

$

1,037,878

 

 

$

1,027,210

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

Current liabilities:

 

 

 

 

Accounts payable and other current liabilities

 

$

85,535

 

 

$

82,618

 

Vehicle floor plan note payable

 

 

245,008

 

 

 

225,431

 

Current portion of long-term debt and line of credit

 

 

21,036

 

 

 

3,645

 

Total current liabilities

 

 

351,579

 

 

 

311,694

 

Long-term liabilities:

 

 

 

 

Senior secured note

 

 

322,727

 

 

 

317,494

 

Convertible debt, net

 

 

32,626

 

 

 

31,890

 

Line of credit and notes payable

 

 

430

 

 

 

25,000

 

Operating lease liabilities

 

 

129,518

 

 

 

126,695

 

Other long-term liabilities

 

 

8,974

 

 

 

8,422

 

Total long-term liabilities

 

 

494,275

 

 

 

509,501

 

Total liabilities

 

 

845,854

 

 

 

821,195

 

Commitments and contingencies (Notes 2, 3, 5, 8, and 10)

 

 

 

 

Stockholders’ equity:

 

 

 

 

Class A common stock, $0.001 par value, 50,000 shares authorized, 50,000 shares issued and outstanding as of March 31, 2023 and December 31, 2022

 

 

0

 

 

 

0

 

Class B common stock, $0.001 par value, 100,000,000 shares authorized, 16,295,735 and 16,184,264 shares issued and outstanding as of March 31, 2023 and December 31, 2022, respectively

 

 

16

 

 

 

16

 

Additional paid-in capital

 

 

588,848

 

 

 

585,937

 

Accumulated deficit

 

 

(392,521

)

 

 

(375,619

)

Class B common stock in treasury, at cost, 123,089 shares as of March 31, 2023 and December 31, 2022

 

 

(4,319

)

 

 

(4,319

)

Total stockholders’ equity

 

 

192,024

 

 

 

206,015

 

Total liabilities and stockholders’ equity

 

$

1,037,878

 

 

$

1,027,210

 

 

RumbleOn, Inc.

Condensed Consolidated Statements of Operations

(Unaudited)

(Dollars in thousands, except per share amounts)

 

 

 

 

 

 

Three Months Ended March 31,

 

 

2023

 

 

 

2022

 

Revenue:

 

 

 

Vehicles sales

 

 

 

Powersports

$

233,283

 

 

$

239,914

 

Automotive

 

11,885

 

 

 

110,729

 

Parts, service and accessories

 

59,069

 

 

 

54,737

 

Finance and insurance, net

 

27,227

 

 

 

27,470

 

Vehicle logistics

 

14,840

 

 

 

12,351

 

Total revenue

 

346,304

 

 

 

445,201

 

Cost of revenue:

 

 

 

Powersports

 

201,040

 

 

 

193,512

 

Automotive

 

11,186

 

 

 

107,154

 

Parts, service and accessories

 

31,790

 

 

 

29,455

 

Vehicle logistics

 

11,253

 

 

 

9,867

 

Total cost of revenue

 

255,269

 

 

 

339,988

 

 

 

 

 

Gross profit

 

91,035

 

 

 

105,213

 

 

 

 

 

Selling, general and administrative

 

87,095

 

 

 

78,076

 

Depreciation and amortization

 

4,741

 

 

 

4,474

 

 

 

 

 

Operating income (loss)

 

(801

)

 

 

22,663

 

 

 

 

 

Interest expense

 

(17,746

)

 

 

(11,181

)

Other income

 

42

 

 

 

 

Change in derivative liability

 

 

 

 

39

 

 

 

 

 

Income (loss) before provision for income taxes

 

(18,505

)

 

 

11,521

 

 

 

 

 

Income tax provision (benefit)

 

(1,603

)

 

 

2,380

 

Net income (loss)

$

(16,902

)

 

$

9,141

 

 

 

 

 

Weighted average number of common shares outstanding - basic

 

16,224,122

 

 

 

15,693,900

 

Earnings (loss) per share - basic

$

(1.04

)

 

$

0.58

 

Weighted average number of common shares outstanding - fully diluted

 

16,224,122

 

 

 

15,718,441

 

Earnings (loss) per share - fully diluted

$

(1.04

)

 

$

0.58

 

 

RumbleOn, Inc.

Condensed Consolidated Statements of Cash Flows

(Unaudited)

(Dollars in thousands)

 

 

Three Months Ended March 31,

 

 

2023

 

 

 

2022

 

CASH FLOWS FROM OPERATING ACTIVITIES

 

 

 

Net income (loss)

$

(16,902

)

 

$

9,141

 

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

 

 

 

Depreciation and amortization

 

4,741

 

 

 

4,474

 

Amortization of debt discount

 

2,324

 

 

 

1,935

 

Stock based compensation expense

 

2,911

 

 

 

1,879

 

Gain from change in value of derivatives

 

 

 

 

(39

)

Deferred taxes

 

(1,699

)

 

 

(1,966

)

Originations of loan receivables, net of principal payments received

 

(121

)

 

 

 

Changes in operating assets and liabilities, net of acquisitions:

 

 

 

Accounts receivable

 

(4,220

)

 

 

(10,565

)

Inventory

 

1,241

 

 

 

(1,279

)

Prepaid expenses and other current assets

 

2,612

 

 

 

658

 

Other assets

 

12

 

 

 

(12,276

)

Other liabilities

 

1,736

 

 

 

8,787

 

Accounts payable and accrued liabilities

 

2,844

 

 

 

17,304

 

Floor plan trade note borrowings

 

13,376

 

 

 

13,221

 

Net cash provided by operating activities

 

8,855

 

 

 

31,274

 

CASH FLOWS FROM INVESTING ACTIVITIES

 

 

 

Acquisitions, net of cash received

 

(3,300

)

 

 

(64,916

)

Purchase of property and equipment

 

(1,881

)

 

 

(1,319

)

Technology development

 

(502

)

 

 

(1,752

)

Net cash used in investing activities

 

(5,683

)

 

 

(67,987

)

CASH FLOWS FROM FINANCING ACTIVITIES

 

 

 

Proceeds from new secured debt

 

 

 

 

84,500

 

Repayment of debt and mortgage notes

 

(4,043

)

 

 

(31,597

)

Proceeds from issuance of notes

 

 

 

 

6,541

 

(Decrease) increase in borrowings from non-trade floor plans

 

4,076

 

 

 

(5,843

)

Net cash provided by financing activities

 

33

 

 

 

53,601

 

NET CHANGE IN CASH

 

3,205

 

 

 

16,888

 

Cash and restricted cash at beginning of period

 

58,579

 

 

 

51,974

 

Cash and restricted cash at end of period

$

61,784

 

 

$

68,862

 

 

RumbleOn, Inc.

Reconciliation of Net Income (Loss) to Adjusted EBITDA

(Unaudited)

(Dollars in thousands)

 

 

Three Months Ended

 

March 31,

 

Dec 31,

 

March 31,

 

 

2023

 

 

 

2022

 

 

 

2022

 

Net income (loss)

$

(16,902

)

 

$

(287,726

)

 

$

9,141

 

Add back:

 

 

 

 

 

Interest expense

 

17,746

 

 

 

16,810

 

 

 

11,181

 

Depreciation and amortization

 

4,741

 

 

 

6,156

 

 

 

4,474

 

Interest income and miscellaneous income

 

 

 

 

287

 

 

 

 

Income tax provision (benefit)

 

(1,603

)

 

 

(80,344

)

 

 

2,380

 

EBITDA

 

3,982

 

 

 

(344,817

)

 

 

27,176

 

Adjustments:

 

 

 

 

 

Change in derivative and warrant liabilities

 

 

 

 

 

 

 

(39

)

Costs attributable to abandoned fulfillment center project

 

 

 

 

2,141

 

 

 

 

Gain on sale of dealership

 

 

 

 

(3,898

)

 

 

 

Impairment of goodwill and franchise rights

 

 

 

 

350,315

 

 

 

 

Lease expense associated with favorable related party leases in excess of contractual lease payments

 

271

 

 

 

1,340

 

 

 

 

Litigation settlement expenses

 

79

 

 

 

8,381

 

 

 

 

Loss associated with sale of RumbleOn Finance loan receivables

 

2,029

 

 

 

 

 

 

 

Other non-recurring costs

 

554

 

 

 

3,224

 

 

 

1,697

 

Restructuring costs

 

893

 

 

 

 

 

 

 

Purchase accounting related

 

 

 

 

(592

)

 

 

 

Transaction costs - RideNow and Freedom

 

22

 

 

 

451

 

 

 

716

 

Stock based compensation

 

2,911

 

 

 

2,135

 

 

 

1,879

 

Adjusted EBITDA

$

10,741

 

 

$

18,680

 

 

$

31,429

 

For the three months ended March 31, 2023 and 2022 and the three months ended December 31, 2022, adjustments to Adjusted EBITDA are primarily comprised of:

  • Change in derivative and warrant liabilities,
  • Expenses attributable to a discontinued project in Fort Worth, Texas,
  • Gain on the sale of a dealership,
  • Charges for impairment of goodwill and franchise rights,
  • Lease expense associated with favorable related party leases in excess of contractual lease payments,
  • Charges associated with litigation outside of our ongoing operations, including for the settlement of disputes and claims with former minority shareholders of RideNow,
  • Loss associated with the fair value of the RumbleOn Finance loan receivables portfolio, which are anticipated to be sold during the second quarter of 2023,
  • Other non-recurring costs, which include one-time expenses incurred. For the three months ended March 31, 2023, the balance was comprised of integration costs and professional fees associated with the RideNow and Freedom Transactions, and a death benefit to the estate of the Company's former Chief Financial Officer and director. For the three months ended December 31, 2022 and March 31, 2022, the balances were comprised of integration costs and professional fees associated with the RideNow and Freedom Transactions, technology implementation, legal matters, establishment of the RumbleOn Finance secured loan facility, and a death benefit to the estate of the Company's former Chief Financial Officer and director, and
  • Personnel restructuring costs, primarily comprised with expenses associated with separation of the Company's former Chief Financial Officer,
  • Purchase accounting adjustments, which represent one-time charges related to the Freedom Transaction and RideNow Transaction,
  • Transaction costs associated with the RideNow Transaction and Freedom Transaction, which primarily include professional fees and third-party costs, and
  • Non-cash stock-based compensation expense as reported in the Condensed Consolidated Statement of Operations.

RumbleOn, Inc.

Reconciliation of Net Income (Loss) to Adjusted Net Income (Loss) and

Earnings (Loss) per share to Adjusted Earnings (Loss) per share

(Unaudited)

(Dollars in thousands, except per share amounts)

 

 

Three Months Ended

 

March 31,

 

Dec 31,

 

March 31,

 

 

2023

 

 

 

2022

 

 

 

2022

 

Net income (loss)

$

(16,902

)

 

$

(287,726

)

 

$

9,141

 

Adjustments:

 

 

 

 

 

Costs attributable to abandoned fulfillment center project

 

 

 

 

2,141

 

 

 

 

Gain on sale of dealership

 

 

 

 

(3,898

)

 

 

 

Impairment of goodwill and franchise rights

 

 

 

 

350,315

 

 

 

 

Lease expense associated with favorable related party leases in excess of contractual lease payments

 

271

 

 

 

 

 

 

 

Litigation settlement expenses

 

79

 

 

 

8,381

 

 

 

 

Loss associated with sale of RumbleOn Finance loan receivables

 

2,029

 

 

 

 

 

 

 

Other non-recurring costs

 

554

 

 

 

3,972

 

 

 

1,463

 

Purchase accounting related

 

2,994

 

 

 

5,404

 

 

 

4,580

 

Restructuring costs

 

893

 

 

 

 

 

 

 

Transaction costs - RideNow and Freedom

 

22

 

 

 

451

 

 

 

716

 

Income tax expense

 

10,841

 

 

 

(90,052

)

 

 

(1,154

)

Adjusted Net Income (Loss)

$

781

 

 

$

(11,012

)

 

$

14,746

 

 

 

 

 

 

 

Weighted average number of common shares outstanding - basic

 

16,224,122

 

 

 

16,161,483

 

 

 

15,693,900

 

Earnings (loss) per share - basic

$

(1.04

)

 

$

(17.80

)

 

$

0.58

 

Adjusted earnings (loss) per share - basic

$

0.05

 

 

$

(0.68

)

 

$

0.94

 

 

 

 

 

 

 

Weighted average number of common shares outstanding - diluted

 

16,224,122

 

 

 

16,161,483

 

 

 

15,718,441

 

Earnings (loss) per share - diluted

$

(1.04

)

 

$

(17.80

)

 

$

0.58

 

Adjusted earnings (loss) per share - diluted

$

0.05

 

 

$

(0.68

)

 

$

0.94

 

For the three months ended March 31, 2023 and 2022 and the three months ended December 31, 2022, adjustments to Net income (loss) are primarily comprised of:

  • Expenses attributable to a discontinued project in Fort Worth, Texas,
  • Gain on the sale of a dealership,
  • Charges for impairment of goodwill and franchise rights,
  • Lease expense associated with favorable related party leases in excess of contractual lease payments,
  • Charges associated with litigation outside of our ongoing operations, including for the settlement of disputes and claims with former minority shareholders of RideNow,
  • Loss associated with the anticipated sale of the RumbleOn Finance loan receivables portfolio during the second quarter of 2023,
  • Other non-recurring costs, which include one-time expenses incurred. For the three months ended March 31, 2023, the balance was comprised of integration costs and professional fees associated with the RideNow and Freedom Transactions, and a death benefit to the estate of the Company's former Chief Financial Officer and director. For the three months ended December 31, 2022 and March 31, 2022, the balances were comprised of integration costs and professional fees associated with the RideNow and Freedom Transactions, technology implementation, legal matters, establishment of the RumbleOn Finance secured loan facility, and a death benefit to the estate of the Company's former Chief Financial Officer and director,
  • Purchase accounting adjustments associated with the RideNow Transaction and Freedom Transaction,
  • Personnel restructuring costs, primarily comprised with expenses associated with separation of the Company's former Chief Financial Officer,
  • Transaction costs associated with the RideNow Transaction and Freedom Transaction, which primarily include professional fees and third-party costs, and
  • Income tax expense as reported on the Consolidated Statements of Operations.

 

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