EX-99.1 2 ea156901ex99-1_rumbleon.htm PRESS RELEASE, DATED MARCH 16, 2022

Exhibit 99.1

 

RumbleOn Reports Record Operational and Financial Results for the Fourth Quarter and Full Year 2021

 

●4Q Pro forma Used Retail Powersports Revenue up 164%, Used Retail Unit Sales up 87%

 

●4Q Revenue of $440.9 million; Full Year Pro forma Revenue of $1,586.1 million, reaching the high end of the Revenue guidance range

 

●4Q Net Income of $20.7 million and fully diluted Earnings Per Share of $1.35

 

●Full Year Pro forma Net Income of $45.5 million with Pro forma Adjusted EBITDA of $117.4 million

 

●Management to host a conference call today, March 16, 2022, at 8:30 am ET

 

IRVING, Texas – March 16, 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 and twelve months ended December 31, 2021. RumbleOn management is hosting an investor call to discuss the Company’s results today, March 16, 2022, at 8:30 am ET. The Company issued a Shareholder Letter with management commentary and financial information, which is available on RumbleOn’s Investor Relations website.

 

Marshall Chesrown, RumbleOn’s Chief Executive Officer commented, “We are excited to report a record year for RumbleOn, as we accelerated the flow through of inventory acquired online through our retail locations. We generated $117.4 million in pro forma adjusted EBITDA, while delivering nearly $1.6 billion in pro forma revenue, all the while making meaningful strides towards our long-term objectives.”

 

“Consumers are demanding convenience, personalization, and affordability everywhere they shop, and Powersports is no different. We are reimagining the customer experience, both online and in the showroom, and we are making great strides in our mission to build the future of Powersports. Our strategy to combine the online with the in-store experience is working. On a comparable pro forma basis in Q4, we sold 87% more used retail Powersports units and generated 164% more revenue from these sales compared to the same quarter last year. We are laser-focused on building an unparalleled customer experience in Powersports, and we are confident that this is the most durable way to deliver long term value to our stakeholders,” concluded Mr. Chesrown.

 

Shareholder Letter

 

RumbleOn issued a shareholder letter with operational and financial results, outlook, and management commentary that can be accessed on the quarterly results page of the Company’s Investor Relations website at https://investors.rumbleon.com/quarterly-results.

 

Conference Call Details

 

RumbleOn’s management will host a conference call to discuss its operational and financial results, and provide a detailed outlook on March 16, 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 1-877-407-9716 (or 1-201-493-6779 for callers outside of the United States) and enter conference ID 13727311.

 

 

 

 

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 powersport 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.

 

As disclosed in a Form 12b-25 filed earlier today, as RumbleOn completes its first year 404 assessment of internal control over financial reporting, the Company currently anticipates that it will disclose in its Form 10-K for the year ended December 31, 2021, a material weakness relating to general controls over information technology. RumbleOn does not expect this material weakness will impact the financial information reported in this press release. Furthermore, RumbleOn has performed additional analyses and other procedures to enable management to conclude that the financial information included in this press release fairly presents, in all material respects, RumbleOn’s financial condition and results of operations as of and for the quarterly period and year ended December 31, 2021, however RumbleOn can provide no assurance that a change to the financial information will not be required or that the Company will not identify other material weaknesses. RumbleOn expects that it will file the Form 10-K within the 15-day extension period provided by Rule 12b-25.

 

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. Non-GAAP financial measures for the three months and years ended December 31, 2021 and December 31, 2020 used in this release are pro forma and as reported 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.

 

Investor Relations Contact:

 

Will Newell

investors@rumbleon.com

Source: RumbleOn, Inc.

 

2

 

 

RumbleOn, Inc.

Reconciliation of Net Income (Loss) to Adjusted EBITDA 

(dollars in thousands)

 

   As Reported
(unaudited)		   Pro Forma
(unaudited)		 
   4Q 2021   4Q 2020   FY 2021   FY 2020   4Q 2021   4Q 2020   FY 2021   FY 2020 
                                 
Net income (loss)  $20,660   $(5,490)  $(9,725)  $(24,999)   $20,660   $8,025   $45,495   $18,914 
Add back:                                        
Interest expense (including debt extinguishment)   7,355    1,451    15,462    6,450    7,355    13,455    39,404    47,312 
Depreciation and amortization   3,155    575    6,103    2,143    3,155    4,364    13,200    13,607 
Interest income and miscellaneous income   —    —    —    —    —    (181)   (1,391)   (1,967)
Change in derivative liability   25    (4)   8,799    (11)   25    (4)   8,799    (10)
Income taxes   (10,984)   —    (21,665)   —    (10,984)   2,675    (2,706)   6,305 
EBITDA   20,211    (3,468)   (1,026)   (16,417)   20,211    28,334    102,801    84,161 
Adjustments:                                        
Impairment loss on automotive inventory   —    —    —    11,738    —    —    —    11,738 
Insurance recovery   —    —    —    178    —    —    —    178 
Insurance proceeds   —    —    (3,135)   (5,615)   —    805    (3,135)   (4,810)
Stock-based compensation1   2,054    553    29,219    2,978    2,054    553    29,219    3,175 
Acquisition costs associated with the RideNow transaction   766    —    4,281    —    766    —    4,281    — 
Other non-recurring costs   374    267    2,025    1,347    374    267    2,025    1,347 
PPP loan forgiveness   (2,110)   —    (2,682)   —    (2,110)   —    (21,721)   — 
Purchase accounting related   1,388    —    1,388    —    1,388    —    1,388    — 
Adjusted EBITDA   22,683    (2,648)   30,070    (5,791)   22,683    29,959    114,858    95,789 
Pro forma adjustments   —    —    —    —    —    31    2,525    124 
Pro forma adjusted EBITDA  $22,683   $(2,648)  $30,070   $(5,791)  $22,683   $29,990   $117,383   $95,913 

 

 
1Stock based compensation includes the vesting of all then outstanding RSU awards upon the closing of the RideNow transaction.

 

3

 

 

RumbleOn, Inc.
Consolidated Balance Sheets

(unaudited)

(dollars in thousands; except per share amounts)

 

   December 31, 
   2021   2020 
ASSETS        
Current assets:        
Cash  $48,974   $1,467 
Restricted cash   3,000    2,049 
Accounts receivable, net   41,619    9,408 
Inventory   201,666    21,360 
Prepaid expense and other current assets   6,335    3,446 
Total current assets   301,594    37,730 
Property and equipment, net   21,417    6,521 
Right-of-use assets   133,112    5,690 
Goodwill   260,922    26,887 
Intangible assets, net   302,066    46 
Other assets   26,207    105 
Total assets   1,045,318    76,979 
LIABILITIES AND STOCKHOLDERS’ EQUITY          
Current liabilities:          
Accounts payable and accrued liabilities   62,040    14,193 
Vehicle floor plan notes payable   97,278    17,812 
Accrued interest payable   —    — 
Current portion lease liabilities   20,249    — 
Current portion of long-term and convertible debts   4,322    3,440 
Total current liabilities   183,889    35,445 
Long-term liabilities:          
Senior secured debt   253,438    — 
Convertible debt, net   29,396    27,166 
Notes payable   150    4,691 
Derivative liabilities   66    17 
Long-term portion of operating lease liabilities   114,687    4,370 
Long-term portion of financing lease liabilities   2,869    — 
Deferred tax liabilities   8,138    — 
Other long-term liabilities   21,396    720 
Total long-term liabilities   430,140    36,964 
Total liabilities   614,029    72,409 
Commitments and contingencies          
Stockholders’ equity:          
Preferred stock, $0.001 par value, 10,000,000 shares authorized, none issued and outstanding as of December 31, 2021 and 2020   —    — 
Class A common stock, $0.001 par value, 50,000 shares authorized, 50,000 shares issued and outstanding as of December 31, 2021 and 2020   —    — 
Class B common stock, $0.001 par value, 100,000,000 shares authorized, 14,882,022 and 2,191,633 shares issued and outstanding as of December 31, 2021 and 2020   15    2 
Additional paid-in capital   549,699    108,949 
Accumulated deficit   (114,106)   (104,381)
Class B common stock in treasury, at cost 123,089 and 0 shares as of December 31, 2021 and 2020   (4,319)   — 
Total stockholders’ equity   431,289    4,570 
Total liabilities and stockholders’ equity  $1,045,318   $76,979 

 

4

 

 

RumbleOn, Inc.
Consolidated Statements of Operations

(unaudited)

(dollars in thousands, except per share amounts)

 

   Three months ended
December 31,		   Twelve months ended
December 31,		 
   2021   2020   2021   2020 
Revenue:                
Vehicles Sales                
Powersports  $202,002   $8,012   $323,303   $46,654 
Automotive   144,232    55,843    460,888    337,085 
Parts, service and accessories   50,889    200    66,969    872 
Vehicle logistics   11,090    6,625    43,878    31,816 
Finance and insurance, net   32,695    —    39,693    — 
Total revenue   440,908    70,680    934,731    416,427 
Cost of revenue                    
Powersports   167,679    6,369    264,872    40,061 
Automotive   136,391    51,755    430,142    308,801 
Parts, service and accessories   38,417    —    47,262    — 
Vehicle logistics   8,320    4,875    34,278    24,200 
Cost of revenue before impairment loss   350,807    62,999    776,554    373,062 
Impairment loss on automotive inventory   —    —    —    11,738 
Total cost of revenue   350,807    62,999    776,554    384,800 
Gross profit   90,101    7,681    158,177    31,627 
Selling, general and administrative   69,946    10,596    135,801    50,681 
Stock-based compensation and other issuances   2,054    553    29,219    2,978 
Insurance recovery   —    —    (3,135)   (5,615)
Depreciation and amortization   3,155    575    6,103    2,143 
Operating income (loss)   14,946    (4,043)   (9,811)   (18,560)
Interest expense   (7,355)   (1,451)   (15,462)   (6,450)
Forgiveness of PPP loan   2,110    —    2,682    — 
Change in derivative liability   (25)   4    (8,799)   11 
Other   —    —    —    — 
Income (loss) before benefit for income taxes   9,676    (5,490)   (31,390)   (24,999)
Benefit for income taxes   (10,984)   —    (21,665)   — 
Net income (loss)  $20,660   $(5,490)  $(9,725)  $(24,999)
Weighted average number of common shares outstanding - basic   15,055,084    2,241,633    6,920,318    2,184,441 
Weighted average number of common shares outstanding - fully diluted   15,263,736    —    —    — 
Net income (loss) per share - basic  $1.37   $(2.45)  $(1.41)  $(11.44)
Net income (loss) per share - fully diluted  $1.35   $—   $—   $— 

 

5

 

 

RumbleOn, Inc.
Condensed Consolidated Statements of Cash Flows

For the Two Years Ended December 31, 2021

(unaudited)

(dollars in thousands)

 

   2021   2020 
CASH FLOWS FROM OPERATING ACTIVITIES        
Net loss  $(9,725)  $(24,999)
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:          
Depreciation and amortization   6,103    2,143 
Amortization of debt discounts   4,386    2,027 
Forgiveness of PPP loan   (2,682)   — 
Bad debt expense   —    311 
Share based compensation   29,219    2,978 
Impairment loss on inventory   —    11,738 
Impairment loss on property and equipment   —    178 
Loss (gain) from change in value of derivatives   8,799    (11)
Gain on early extinguishment of debt   —    (188)
Deferred taxes   (19,910)   — 
Changes in operating assets and liabilities:          
Increase in accounts receivable   (5,978)   (1,236)
(Increase) decrease in inventory   (63,554)   24,282 
Increase in prepaid expenses and other current assets   (1,102)   (2,236)
(Increase) decrease in other assets   (25,983)   87 
Increase in accounts payable and accrued liabilities   12,174    1,349 
Increase in other liabilities   17,147    720 
(Decrease) in floor plan trade note borrowings   15,119    — 
Net cash (used in) provided by operating activities   (35,987)   17,143 
CASH FLOWS FROM INVESTING ACTIVITIES          
Cash used for acquisition, net of cash received   (366,967)   — 
Purchase of property and equipment   (7,718)   (175)
Proceeds from sales of property and equipment   —    38 
Technology development   (1,871)   (2,145)
Net cash used in investing activities   (376,556)   (2,282)
CASH FLOWS FROM FINANCING ACTIVITIES          
Proceeds from convertible note   —    8,272 
Proceeds from senior secured debt   261,451    — 
Repayments of notes payable   (10,413)   (1,768)
Increase (decrease) in borrowings from non-trade floor plans   18,722    (40,533)
Net proceeds from PPP loan   —    5,178 
Net proceeds from sale of common stock   191,241    10,780 
Net cash provided by (used in) financing activities   461,001    (18,071)
NET INCREASE IN CASH   48,458    (3,210)
CASH AND RESTRICTED CASH AT BEGINNING OF PERIOD   3,516    6,726 
CASH AND RESTRICTED CASH AT END OF PERIOD  $51,974   $3,516 

 

 

6