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RumbleOn Reports Second Quarter 2023 Financial Results

RumbleOn, Inc. (NASDAQ: RMBL) (the “Company” or “RumbleOn”), the nation's first, and largest, publicly traded powersports platform (dealership group), today announced operational and financial results for the three months ended June 30, 2023. RumbleOn management is hosting an earnings call to discuss the Company’s results today, August 9, 2023, at 7:30 am CT (8:30 am ET).

Second Quarter 2023 Financial and Operational Highlights

  • Total Unit Sales of 20,277, comprised of 13,126 New Units and 7,151 Used Units, resulting in New:Used ratio of 1.8x, a slight increase from the prior quarter and more in line with a normal post-Covid ratio
  • Total Company Revenue of $382.7 million, up 14.5% sequentially, driven primarily by a rebound in new powersports vehicle sales and normal seasonal trends
  • Total Company Gross Profit of $106.4 million; Total Company Gross Profit Margin of 27.8% increased 80 bps sequentially
  • Net Loss from Continuing Operations of $(12.8) million with Loss per Share from Continuing Operations of $(0.78)
  • Adjusted Net Income of $0.3 million with Adjusted Diluted Earnings per Share of $0.02
  • Adjusted EBITDA of $23.6 million, impacted by lower used unit sales and GPU, and a lag in the impact of SG&A reductions
  • Company to invite Stone House Capital Management’s Mark Cohen to join Board of Directors, subject to the Company's governance procedures
  • Reached agreement with primary creditor for revised leverage covenants
  • Signed a letter of intent for sale leaseback of Real Estate portfolio
  • Signed a letter of intent to sell finance company credit portfolio

Management Commentary

Mark Tkach, RumbleOn's interim Chief Executive Officer, stated, “In a very short period of time, we’ve taken meaningful proactive measures to better position the business for 2023 and beyond. We have restructured our financing agreement, taken decisive actions to improve our balance sheet, cost structure and corporate governance, giving us additional flexibility to execute on our strategies.”

Mr. Tkach continued, “Our highly motivated team has a set of priorities to capitalize on the substantial opportunity in the fragmented powersports landscape. I am confident that our efforts will drive improved, and more consistent, sales and profitability performance over the long-term.”

Second 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 June 30, 2023, as compared to the three months ended March 31, 2023. The following table provides operating highlights related to continuing operations.

 

(Unaudited)

$ in millions except per share amounts

Three Months Ended

 

Change

 

Jun 30, 2023

 

Mar 31, 2023

 

Jun 30, 2022

 

Sequential

 

Year-over-Year

Total Unit Sales (#)

20,277

 

17,221

 

20,713

 

17.7%

 

(2)%

 

 

 

 

 

 

 

 

 

 

Total Revenue

$382.7

 

$334.4

 

$412.2

 

14.5%

 

(7)%

Gross Profit

$106.4

 

$90.3

 

$133.1

 

17.8%

 

(20)%

Gross Profit Margin

27.8%

 

27.0%

 

32.3%

 

80 bps

 

(450) bps

 

 

 

 

 

 

 

 

 

 

Income (loss) from continuing operations

$(12.8)

 

$(16.7)

 

$13.6

 

(23.2)%

 

nm

Diluted Earnings (Loss) per Share from continuing operations

$(0.78)

 

$(1.03)

 

$0.85

 

(24.3)%

 

nm

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA

$23.6

 

$10.8

 

$43.6

 

118.6%

 

(46)%

Adjusted Net Income (Loss)

$0.3

 

$(9.4)

 

$18.9

 

nm

 

(98)%

Adjusted Diluted Earnings (Loss) per Share

$0.02

 

$(0.58)

 

$1.17

 

nm

 

(98)%

 

nm = not meaningful

 

Total Unit Sales 20,277 units increased 17.7%, driven by typical seasonality in the powersports business and strong growth of new vehicle sales, offset by lower than expected used unit sales.

Total Revenue of $382.7 million increased 14.5%.

Total Gross Profit of $106.4 million increased 17.8% and Gross Profit Margin was 27.8%, up from 27.0%. Sequential increase in gross profit margin was in line with our prior expectations.

Operating Expenses were $105.6 million, or 27.6% of revenue, compared to $91.0 million, or 27.2% of revenue. Total stock-based compensation was $4.9 million up from $2.1 million in the prior quarter. If expenses related to key one-time occurrences were excluded, second quarter Operating Expenses would have remained flat sequentially while revenue increased $48.3 million.

Loss from Continuing Operations was $(12.8) million, or (3.4)% of revenue, compared to $(16.7) million, or (5.0)% of revenue. Loss per diluted share was $(0.78) compared to $(1.03).

Adjusted Net Income (Loss) was $0.3 million, or 0.1% of revenue, compared to $(9.4) million or (2.8)% of revenue. Adjusted net income per diluted share was $0.02 compared to $(0.58).

Adjusted EBITDA was $23.6 million, compared to $10.8 million. The sequential increase in adjusted EBITDA of 118.6% was driven by expected seasonality in the Powersports segment coupled with early effects of recently implemented cost reductions.

Cash and Restricted Cash as of June 30, 2023 was approximately $57.1 million, and total debt was $374.9 million. Availability under our short-term revolving floorplan credit facilities to finance inventory totaled approximately $150.0 million.

Total Available Liquidity, defined as unrestricted cash plus availability under floorplan credit facilities for inventory on hand at June 30, 2023, totaled approximately $89.7 million.

Cash Flow used in Operating Activities was $(6.3) million for the six months ended June 30, 2023.

Weighted Average Basic and Diluted Shares of Class A and Class B common stock outstanding were 16,462,079 and 16,343,758 for the three months and six months ended June 30, 2023, respectively. As of June 30, 2023, RumbleOn had 16,565,389 total shares of Class B common stock, and 50,000 shares of Class A common stock outstanding.

Full Year 2023 — Financial Outlook

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

  • Total Powersports and Transportation Revenue of $1.38 billion to $1.48 billion, compared to Powersports and Transportation Revenue of $1.46 billion in 2022.
  • Powersports GPU of approximately $5,300 to $5,400 compared to $6,159 in 2022.
  • Adjusted EBITDA of $55 million to $65 million, compared to $120 million in 2022..

Management Commentary

Blake Lawson, RumbleOn’s CFO, stated, “I am thrilled to be partnered once again with Mark Tkach as we endeavor to improve the capital structure, reduce costs and grow the business sensibly. The steps that we have already taken position us well to create substantial future shareholder value."

Second Quarter 2023 — Segment Results

Unless otherwise noted, all comparisons are on a sequential basis for the three months ended June 30, 2023, as compared to the three months ended March 31, 2023.

Powersports Segment

 

(Unaudited)

$ in millions except per unit

Three Months Ended

 

Change

 

Jun 30, 2023

 

Mar 31, 2023

 

Jun 30, 2022

 

Sequential

 

Year-over-Year

Unit Sales (#)

 

 

 

 

 

 

 

 

 

New

13,126

 

10,436

 

11,366

 

25.8%

 

15.5%

Used

7,151

 

6,785

 

9,347

 

5.4%

 

(23.5)%

Total Powersports Unit Sales

20,277

 

17,221

 

20,713

 

17.7%

 

(2.1)%

 

 

 

 

 

 

 

 

 

 

Revenue

 

 

 

 

 

 

 

 

 

New

$185.6

 

$156.4

 

$173.2

 

18.7%

 

7.2%

Used

$84.1

 

$76.9

 

$121.4

 

9.4%

 

(30.7)%

Finance & Insurance, net

$33.2

 

$27.2

 

$36.8

 

22.1%

 

(9.8)%

Parts, Services, and Accessories

$65.4

 

$59.1

 

$65.3

 

10.7%

 

0.2%

Total Powersports Revenue

$368.3

 

$319.6

 

$396.7

 

15.2%

 

(7.2)%

 

 

 

 

 

 

 

 

 

 

Gross Profit

 

 

 

 

 

 

 

 

 

New

$28.6

 

$23.8

 

$37.3

 

20.2%

 

(23.3)%

Used

$10.9

 

$8.5

 

$24.5

 

28.2%

 

(55.5)%

Finance & Insurance, net

$33.2

 

$27.2

 

$36.8

 

22.1%

 

(9.8)%

Parts, Services, and Accessories

$30.4

 

$27.3

 

$31.4

 

11.4%

 

(3.2)%

Total Powersports Gross Profit

$103.1

 

$86.7

 

$130.0

 

18.9%

 

(20.7)%

Powersports GPU1

$5,349

 

$5,349

 

$6,504

 

—%

 

(17.8)%

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, increased 5.4% sequentially, primarily due to expected seasonality.

Used Powersports Revenue increased 9.4% sequentially due to anticipated seasonality.

Used Powersports Gross Profit increased 28.2% sequentially due primarily to stronger pricing power in the quarter.

New Powersports Revenue increased 18.7% sequentially, as the result of a 25.8% increase in unit sales, driven by increased supply of new inventory and favorable price mix in consumer demand.

New Powersports Gross Profit increased 20.2% sequentially due primarily to the substantial increase in new unit sales.

Powersports GPU was $5,349, flat sequentially.1

Vehicle Logistics Segment

 

(Unaudited)

$ in millions

Three Months Ended

 

Change

 

Jun 30, 2023

 

Mar 31, 2023

 

Jun 30, 2022

 

Sequential

 

Year-over-Year

Vehicles Transported (#)

20,990

 

23,608

 

23,503

 

(11.1)%

 

(10.7)%

Vehicle Logistics Revenue

$14.4

 

$14.8

 

$15.5

 

(2.7)%

 

(7.1)%

Vehicle Logistics Gross Profit

$3.4

 

$3.6

 

$3.2

 

(5.6)%

 

6.3%

Revenue from the Vehicle Logistics Segment decreased 2.7% sequentially, driven by an 11.1% decrease in the number of vehicles transported, partially offset by a slight increase in revenue per vehicle transported to $687 in the second quarter.

Gross profit for this segment was down sequentially, driven by a 11.1% decrease in the number of vehicles transported.

Conference Call Details

RumbleOn's management will host a conference call to discuss its operational and financial results on August 9, 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, and largest, publicly traded powersports dealership group. 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)

 

 

 

June 30, 2023

 

December 31, 2022

ASSETS

 

 

 

 

Current assets:

 

 

 

 

Cash

 

$

44,373

 

 

$

46,762

 

Restricted cash

 

 

12,776

 

 

 

10,000

 

Accounts receivable, net

 

 

37,402

 

 

 

28,040

 

Inventory

 

 

325,268

 

 

 

323,473

 

Prepaid expense and other current assets

 

 

7,336

 

 

 

7,422

 

Assets held for sale

 

 

24,883

 

 

 

33,662

 

Current assets of discontinued operations

 

 

272

 

 

 

11,377

 

Total current assets

 

 

452,310

 

 

 

460,736

 

Property and equipment, net

 

 

81,249

 

 

 

76,078

 

Right-of-use assets

 

 

170,733

 

 

 

161,822

 

Goodwill

 

 

23,897

 

 

 

21,142

 

Intangible assets, net

 

 

242,387

 

 

 

247,413

 

Deferred tax assets

 

 

64,603

 

 

 

58,115

 

Assets of discontinued operations

 

 

35

 

 

 

23

 

Other assets

 

 

1,645

 

 

 

1,881

 

Total assets

 

$

1,036,859

 

 

$

1,027,210

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

Current liabilities:

 

 

 

 

Accounts payable and other current liabilities

 

$

84,626

 

 

$

79,439

 

Vehicle floor plan note payable

 

 

246,438

 

 

 

220,176

 

Current portion of long-term debt and line of credit

 

 

18,186

 

 

 

3,645

 

Current liabilities of discontinued operations

 

 

714

 

 

 

8,434

 

Total current liabilities

 

 

349,964

 

 

 

311,694

 

Long-term liabilities:

 

 

 

 

Senior secured note

 

 

322,763

 

 

 

317,494

 

Convertible debt, net

 

 

33,394

 

 

 

31,890

 

Line of credit and notes payable

 

 

586

 

 

 

25,000

 

Operating lease liabilities

 

 

138,282

 

 

 

126,695

 

Other long-term liabilities

 

 

9,230

 

 

 

8,422

 

Total long-term liabilities

 

 

504,255

 

 

 

509,501

 

Total liabilities

 

 

854,219

 

 

 

821,195

 

Commitments and contingencies (Notes 2, 3, 5, 6, 9, and 11)

 

 

 

 

Stockholders’ equity:

 

 

 

 

Class A Common Stock, $0.001 par value, 50,000 shares authorized, 50,000 shares issued and outstanding as of June 30, 2023 and December 31, 2022

 

 

0

 

 

 

0

 

Class B Common Stock, $0.001 par value, 100,000,000 shares authorized, 16,565,389 and 16,184,264 shares issued and outstanding as of June 30, 2023 and December 31, 2022, respectively

 

 

17

 

 

 

16

 

Additional paid-in capital

 

 

593,051

 

 

 

585,937

 

Accumulated deficit

 

 

(406,109

)

 

 

(375,619

)

Class B Common Stock in treasury, at cost, 123,089 shares as of June 30, 2023 and December 31, 2022

 

 

(4,319

)

 

 

(4,319

)

Total stockholders’ equity

 

 

182,640

 

 

 

206,015

 

Total liabilities and stockholders’ equity

 

$

1,036,859

 

 

$

1,027,210

 

 

RumbleOn, Inc.

Condensed Consolidated Statements of Operations

(Unaudited)

(Dollars in thousands, except per share amounts)

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

 

2023

 

 

 

2022

 

 

 

2023

 

 

 

2022

 

Revenue:

 

 

 

 

 

 

 

Powersports vehicles

$

269,721

 

 

$

294,591

 

 

$

503,004

 

 

$

534,505

 

Parts, service and accessories

 

65,409

 

 

 

65,315

 

 

 

124,478

 

 

 

120,052

 

Finance and insurance, net

 

33,178

 

 

 

36,759

 

 

 

60,370

 

 

 

64,261

 

Vehicle logistics

 

14,423

 

 

 

15,517

 

 

 

29,263

 

 

 

27,868

 

Total revenue

 

382,731

 

 

 

412,182

 

 

 

717,115

 

 

 

746,686

 

Cost of revenue:

 

 

 

 

 

 

 

Powersports

 

230,263

 

 

 

232,747

 

 

 

431,303

 

 

 

426,258

 

Parts, service and accessories

 

34,998

 

 

 

33,945

 

 

 

66,788

 

 

 

63,400

 

Vehicle logistics

 

11,069

 

 

 

12,349

 

 

 

22,322

 

 

 

22,216

 

Total cost of revenue

 

276,330

 

 

 

279,041

 

 

 

520,413

 

 

 

511,874

 

 

 

 

 

 

 

 

 

Gross profit

 

106,401

 

 

 

133,141

 

 

 

196,702

 

 

 

234,812

 

 

 

 

 

 

 

 

 

Selling, general and administrative

 

100,313

 

 

 

96,233

 

 

 

186,600

 

 

 

170,605

 

Depreciation and amortization

 

5,269

 

 

 

5,862

 

 

 

9,996

 

 

 

10,319

 

Operating income

 

819

 

 

 

31,046

 

 

 

106

 

 

 

53,888

 

 

 

 

 

 

 

 

 

Other income (expense):

 

 

 

 

 

 

 

Interest expense

 

(18,326

)

 

 

(12,751

)

 

 

(35,928

)

 

 

(23,413

)

Other income

 

101

 

 

 

204

 

 

 

133

 

 

 

204

 

Change in derivative liability

 

 

 

 

 

 

 

 

 

 

39

 

Total other expense

 

(18,225

)

 

 

(12,547

)

 

 

(35,795

)

 

 

(23,170

)

 

 

 

 

 

 

 

 

Income (loss) from continuing operations before income taxes

 

(17,406

)

 

 

18,499

 

 

 

(35,689

)

 

 

30,718

 

 

 

 

 

 

 

 

 

Income taxes provision (benefit) from continuing operations

 

(4,573

)

 

 

4,852

 

 

 

(6,150

)

 

 

7,487

 

 

 

 

 

 

 

 

 

Income (loss) from continuing operations, net

 

(12,833

)

 

 

13,647

 

 

 

(29,539

)

 

 

23,231

 

 

 

 

 

 

 

 

 

Income (loss) from operations of discontinued operations

 

(878

)

 

 

404

 

 

 

(1,100

)

 

 

(294

)

Income tax provision (benefit) from discontinued operations

 

(123

)

 

 

18

 

 

 

(149

)

 

 

(237

)

Income (loss) from discontinued operations, net

 

(755

)

 

 

386

 

 

 

(951

)

 

 

(57

)

 

 

 

 

 

 

 

 

Net income (loss)

$

(13,588

)

 

$

14,033

 

 

$

(30,490

)

 

$

23,174

 

 

 

 

 

 

 

 

 

Weighted average number of common shares outstanding - basic

 

16,462,079

 

 

 

16,059,288

 

 

 

16,343,758

 

 

 

15,778,461

 

Earnings (loss) per share - basic from continuing operations

$

(0.78

)

 

$

0.85

 

 

$

(1.81

)

 

$

1.47

 

Earnings (loss) per share - basic from discontinued operations

$

(0.05

)

 

$

0.02

 

 

$

(0.06

)

 

$

(0.01

)

Weighted average number of common shares outstanding - fully diluted

 

16,462,079

 

 

 

16,095,862

 

 

 

16,343,758

 

 

 

15,841,346

 

Earnings (loss) per share - diluted from continuing operations

$

(0.78

)

 

$

0.85

 

 

$

(1.81

)

 

$

1.47

 

Earnings (loss) per share - basic from discontinued operations

$

(0.05

)

 

$

0.02

 

 

$

(0.06

)

 

$

(0.01

)

 

RumbleOn, Inc.

Condensed Consolidated Statements of Cash Flows

(Unaudited)(Dollars in thousands)

 

 

Six Months Ended June 30,

 

 

2023

 

 

 

2022

 

CASH FLOWS FROM OPERATING ACTIVITIES

 

 

 

Net income (loss)

$

(30,490

)

 

$

23,174

 

Loss from discontinued operations

 

(951

)

 

 

(57

)

Net income (loss) from continuing operations

$

(29,539

)

 

$

23,231

 

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

 

 

 

Depreciation and amortization

 

9,996

 

 

 

10,285

 

Amortization of debt discount

 

4,764

 

 

 

3,523

 

Stock based compensation expense

 

7,821

 

 

 

4,632

 

Gain from change in value of derivatives

 

 

 

 

(39

)

Deferred taxes

 

(6,488

)

 

 

4,023

 

Originations of loan receivables, net of principal payments received

 

2,623

 

 

 

(12,973

)

Write-down of loan receivable assets

 

6,156

 

 

 

 

Changes in operating assets and liabilities, net of acquisitions:

 

 

 

Accounts receivable

 

(9,362

)

 

 

3,052

 

Inventory

 

3,103

 

 

 

(26,820

)

Prepaid expenses and other current assets

 

97

 

 

 

(511

)

Other assets

 

213

 

 

 

(19,112

)

Other liabilities

 

4,001

 

 

 

(3,807

)

Accounts payable and accrued liabilities

 

1,377

 

 

 

15,329

 

Floor plan trade note borrowings

 

(1,056

)

 

 

28,140

 

Net cash provided by (used in) operating activities of continuing operations

 

(6,294

)

 

 

28,953

 

CASH FLOWS FROM INVESTING ACTIVITIES

 

 

 

Acquisitions, net of cash received

 

(3,300

)

 

 

(64,188

)

Purchase of property and equipment

 

(6,004

)

 

 

(1,464

)

Technology development

 

(1,066

)

 

 

(3,462

)

Net cash used in investing activities of continuing operations

 

(10,370

)

 

 

(69,114

)

CASH FLOWS FROM FINANCING ACTIVITIES

 

 

 

Proceeds from new secured debt

 

 

 

 

84,500

 

Proceeds from ROF credit facility for the purchase of consumer finance loans

 

 

 

 

13,650

 

Repayment of debt and line of credit

 

(8,371

)

 

 

(32,791

)

Repayment of note payables

 

 

 

 

(2,091

)

Increase in borrowings from non-trade floor plans

 

25,192

 

 

 

1,548

 

Net cash provided by financing activities of continuing operations

 

16,821

 

 

 

64,816

 

CASH FLOWS FROM DISCONTINUED OPERATIONS

 

 

 

Net cash provided by operating activities

 

3,667

 

 

 

7,371

 

Net cash used in financing activities

 

(5,254

)

 

 

(6,318

)

Net cash provided by (used in) discontinued operations

 

(1,587

)

 

 

1,053

 

NET INCREASE (DECREASE) IN CASH

 

(1,430

)

 

 

25,708

 

Cash and restricted cash at beginning of period

 

58,579

 

 

 

51,974

 

Cash and restricted cash at end of period

$

57,149

 

 

$

77,682

 

 

RumbleOn, Inc.

Reconciliation of Net Income (Loss) to Adjusted EBITDA

(Unaudited)

(Dollars in thousands)

 

 

Three Months Ended June 30,

Six Months Ended June 30,

 

 

2023

 

 

 

2022

 

 

2023

 

 

 

2022

 

Net income (loss)

$

(13,588

)

 

$

14,033

 

$

(30,490

)

 

$

23,174

 

Income (loss) from discontinued operations, net

 

(755

)

 

 

386

 

 

(951

)

 

 

(57

)

Income (loss) from continuing operations, net

 

(12,833

)

 

 

13,647

 

 

(29,539

)

 

 

23,231

 

Add back:

 

 

 

 

 

 

 

Interest expense

 

18,326

 

 

 

12,751

 

 

35,928

 

 

 

23,413

 

Depreciation and amortization

 

5,269

 

 

 

5,862

 

 

9,996

 

 

 

10,319

 

Income tax provision (benefit)

 

(4,573

)

 

 

4,852

 

 

(6,150

)

 

 

7,487

 

EBITDA

 

6,189

 

 

 

37,112

 

 

10,235

 

 

 

64,450

 

Adjustments:

 

 

 

 

 

 

 

Change in derivative liability

 

 

 

 

 

 

 

 

 

(39

)

Charges related to proxy contest and Board of Directors reorganization

 

4,729

 

 

 

 

 

4,729

 

 

 

 

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

 

271

 

 

 

 

 

542

 

 

 

 

Litigation settlement expenses

 

 

 

 

 

 

79

 

 

 

 

Loss associated with RumbleOn Finance loan receivables

 

3,342

 

 

 

 

 

5,371

 

 

 

 

Other non-recurring costs

 

334

 

 

 

2,479

 

 

888

 

 

$

4,176

 

Personnel restructuring costs

 

3,833

 

 

 

 

 

4,725

 

 

 

 

Purchase accounting related

 

 

 

 

592

 

 

 

 

 

592

 

Transaction costs

 

12

 

 

 

687

 

 

34

 

 

 

1,403

 

Stock based compensation

 

4,910

 

 

 

2,753

 

 

7,821

 

 

 

4,632

 

Adjusted EBITDA

$

23,620

 

 

$

43,623

 

$

34,424

 

 

$

75,214

 

 

For the three and six months ended June 30, 2023 and 2022, adjustments to Adjusted EBITDA are primarily comprised of:

  • Income associated with the change in value of derivative liability as reported on the Condensed Consolidated Statement of Operations,
  • Charges related to the proxy contest and reorganization of our Board of Directors, which includes the reimbursement of advisor fees incurred by shareholders in connection with the proxy contest of $2,500,
  • Lease expense associated with favorable related party leases in excess of contractual lease payments,
  • Charges associated with litigation outside of our ongoing operations,
  • Loss associated with the fair value of the RumbleOn Finance loan receivables portfolio, which are anticipated to be sold during the second half of 2023,
  • Other non-recurring costs, which include one-time expenses incurred. For the three and six months ended June 30, 2023, the balance was comprised of integration costs and professional fees associated with acquisitions, and a death benefit to the estate of the Company's former Chief Financial Officer and director. 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 Freedom Powersports and RideNow acquisitions, technology implementation, and establishment of the RumbleOn Finance secured loan facility.
  • Personnel restructuring costs, comprised of severance and charges associated with the separation of former executives, including the Company's former President and Chief Operating Officer, and Chief Financial Officer,
  • Purchase accounting adjustments, which represent one-time charges related to the Freedom Transaction and RideNow Transaction,
  • Transaction costs associated with acquisitions, 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 June 30,

 

Six Months Ended June 30,

 

 

2023

 

 

 

2022

 

 

 

2023

 

 

 

2022

 

Net income (loss)

$

(13,588

)

 

$

14,033

 

 

$

(30,490

)

 

$

23,174

 

Income (loss) from discontinued operations, net

 

(755

)

 

 

386

 

 

 

(951

)

 

 

(57

)

Income (loss) from continuing operations, net

 

(12,833

)

 

 

13,647

 

 

 

(29,539

)

 

 

23,231

 

Adjustments:

 

 

 

 

 

 

 

Charges related to proxy contest and Board of Directors reorganization

 

4,729

 

 

 

 

 

 

4,729

 

 

 

 

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

 

271

 

 

 

 

 

 

542

 

 

 

 

Litigation settlement expenses

 

 

 

 

 

 

 

79

 

 

 

 

Loss associated with sale of RumbleOn Finance loan receivables

 

3,342

 

 

 

 

 

 

5,371

 

 

 

 

Other non-recurring costs

 

334

 

 

 

2,479

 

 

 

888

 

 

 

4,176

 

Purchase accounting related

 

2,994

 

 

 

3,881

 

 

 

5,988

 

 

 

6,182

 

Personnel restructuring costs

 

6,105

 

 

 

 

 

 

6,998

 

 

 

 

Transaction costs

 

12

 

 

 

687

 

 

 

34

 

 

 

1,403

 

Income tax expense

 

(4,674

)

 

 

(1,804

)

 

 

(4,187

)

 

 

(3,571

)

Adjusted Net Income (Loss)

$

280

 

 

$

18,890

 

 

$

(9,097

)

 

$

31,421

 

 

 

 

 

 

 

 

 

Weighted average number of common shares outstanding - basic

 

16,462,079

 

 

 

16,059,288

 

 

 

16,343,758

 

 

 

15,778,461

 

Earnings (loss) per share - basic from continuing operations

$

(0.78

)

 

$

0.85

 

 

$

(1.81

)

 

$

1.47

 

Adjusted earnings (loss) per share - basic

$

0.02

 

 

$

1.18

 

 

$

(0.56

)

 

$

1.99

 

 

 

 

 

 

 

 

 

Weighted average number of common shares outstanding - diluted

 

16,462,079

 

 

 

16,095,862

 

 

 

16,343,758

 

 

 

15,841,346

 

Earnings (loss) per share - diluted from continuing operations

$

(0.78

)

 

$

0.85

 

 

$

(1.81

)

 

$

1.47

 

Adjusted earnings (loss) per share - diluted

$

0.02

 

 

$

1.17

 

 

$

(0.56

)

 

$

1.98

 

 

For the three and six months ended June 30, 2023 and 2022, adjustments to net income (loss) are primarily comprised of:

  • Charges related to the proxy contest and reorganization of our Board of Directors, which includes the reimbursement of advisor fees incurred by shareholders in connection with the proxy contest of $2,500,
  • Lease expense associated with favorable related party leases in excess of contractual lease payments,
  • Charges associated with litigation outside of our ongoing operations,
  • Loss associated with the fair value of the RumbleOn Finance loan receivables portfolio, which are anticipated to be sold during the second half of 2023,
  • Other non-recurring costs, which include one-time expenses incurred. For the three and six months ended June 30, 2023, the balance was comprised of integration costs and professional fees associated with acquisitions, and a death benefit to the estate of the Company's former Chief Financial Officer and director. 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 Freedom Powersports and RideNow acquisitions, technology implementation, and establishment of the RumbleOn Finance secured loan facility.
  • Purchase accounting adjustments associated with the RideNow Transaction and Freedom Transaction,
  • Personnel restructuring costs, comprised of severance and charges associated with the separation of former executives, including the Company's former President and Chief Operating Officer, and Chief Financial Officer,
  • Transaction costs associated with acquisitions, 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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