Achieved Record Earnings per Share Profit of
$0.67 versus $(7.66) Loss per Share in Q3 2019
Grew Total Gross Profit per Vehicle 261%
Year-over-Year
For the First Time, Company Reports Adjusted
EBITDA positive quarter at $4.7 million; Net Income of $1.5
million
RumbleOn, Inc (NASDAQ: RMBL), an e-commerce company using
innovative technology to aggregate and distribute pre-owned
vehicles to and from both consumers and dealers, today announced
financial results for the three months ended September 30,
2020.
“Q3 was another record-breaking quarter for RumbleOn,” said
Marshall Chesrown, RumbleOn’s CEO. “We generated positive adjusted
EBITDA for the first time in the Company’s history and grew total
gross profit per vehicle more than 260% year-over-year.”
“In Q3, we reported $117.3 million in revenue, a 39% increase
from Q2, on 4,263 units. Additionally, we grew overall gross margin
to 14.3% and gross margin on vehicles sold to 13.6%, both of which
are records for RumbleOn, demonstrating continued progress towards
long term sustainable profitability. RumbleOn has had an incredible
year thus far operationally and financially, and I’m very pleased
to report that despite the unique challenges presented to the
company and the economy during 2020, our strategy is working,”
continued Chesrown.
Third Quarter 2020 Financial Highlights
A year ago, in Q3 2019, the Company set a goal of achieving an
adjusted EBITDA positive quarter in 2020, a goal that was reached
in the third quarter. Despite the impact of COVID-19, which has
resulted in significantly reduced commercial activity and total
inventory in the market, the Company’s third quarter results are
the strongest in its short history.
Unless otherwise noted, all comparisons are on a year-over-year
basis for the three months ended September 30, 2020.
- Total vehicle unit sales of 4,263, down from 10,894
- Total revenue was $117.3 million, down from $220.3 million
- Powersports revenue was $7.3 million
- Automotive revenue was $99.3 million
- Transportation and Vehicle Logistics revenue was $10.4
million
- Other revenue was $0.3 million
- Gross profit was $16.8 million or 14.3% of revenue, as compared
to $12.0 million or 5.5% of revenue
- Gross margin on vehicles sold was 13.6%, the highest in the
Company’s history, and up from 4.8%. Gross profit per vehicle was
$3,411 per vehicle, up 260.7% compared to 2019.
- Powersports gross profit per powersport vehicle sold was
$2,271
- Automotive gross profit per automotive vehicle sold was
$3,652
- Transportation and Vehicle Logistics gross profit per vehicle
delivered was $97
- Sales, general and administrative expenses were $13.3 million,
or 11.3% of revenue, a decrease of 30.1% from $19.0 million
- Operating income was $3.0 million, or 2.5% of total revenue, up
from operating loss of $(7.5) million or (3.4)% of revenue
- Net Income was $1.5 million, or $0.67 per basic and fully
diluted share, as compared to net loss of $8.9 million or a loss of
$(7.66) per share. Weighted average basic and fully diluted shares
outstanding in Q3 were 2,234,838 shares of common stock outstanding
and 1,158,915 shares in Q3 2019
- Adjusted EBITDA was $4.7 million in Q3, compared to a loss of
$(4.8) million
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.
Business Highlights
- RumbleOn launched the newest generation of its platform,
RumbleOn 3.0 in August. As of today, there are more than 37,000
total listings available on RumbleOn.com from powersports dealers
in over 200 locations, across 36 states.
- Late in Q3 RumbleOn began adding Boats and personal watercraft
listings. There are already nearly 500 listings available today
with many more in the pipeline as boat-specific dealers are brought
onto the platform. RV listings began being tested in Q3 as a
further potential opportunity for expansion in 2021.
- RumbleOn began business to business dealer-only weekly auctions
in Q3. This method of redistribution is beneficial for both
RumbleOn and the dealers and decreases vehicle time to sale.
Fourth Quarter 2020 Commentary and Outlook
“In 2019 we demonstrated our ability to scale revenue, in 2020
we are demonstrating we can achieve profitability, and we look
forward to demonstrating our ability to scale with sustainable
profitability in 2021 and beyond,” said Marshall Chesrown. “Another
objective we outlined in 2019 was to reach EBITDA profitability on
a full year basis in 2021, and we believe we have the right
strategy in place to reach that goal.”
Chesrown continued, “During the three-months ended September 30,
2020, average selling prices increased as market prices remained
high industry-wide. The effect of these higher market prices
resulted in lower levels of inventory available to purchase for
resale, causing a decline in unit sales beginning in September as
compared to July and August. We believe this supply and demand
imbalance will continue to impact seasonally adjusted fourth
quarter volume, particularly given the worldwide rise in COVID-19
cases.”
Given the uncertainty of the ongoing impact and unprecedented
conditions surrounding the COVID-19 pandemic, we cannot predict the
overall effect to RumbleOn, our customers, regional business
partners, and others that we work with. As a result, we believe it
is prudent to continue to withhold guidance until we can better
gauge market conditions and have a clearer understanding of the
lasting impact from the COVID-19 pandemic.
Conference Call Details
RumbleOn’s management will host a conference call to discuss its
financial results on Tuesday, November 10, 2020 at 8:30 a.m.
Eastern Time. A live webcast of the call can be accessed from
RumbleOn’s Investor Relations website. An archived version will be
available on the website after the call. Investors and analysts can
participate in the conference call by dialing (877) 242-2259, or
(212) 231-2903 for callers outside of the United States. A
telephonic replay will be available for seven days, beginning two
hours after the call. To listen to the replay please dial (844)
512-2921, or (412) 317-6671 for callers outside the United States
(replay pin: 21971989).
About RumbleOn
Founded in 2017, RumbleOn (NASDAQ: RMBL) is an e-commerce
company using innovative technology to aggregate and distribute
pre-owned automotive and powersport vehicles to and from both
consumers and dealers, 100% online. 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 and nine months ended September 30, 2020
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 or loss adjusted to add
back interest expense including debt extinguishment and
depreciation and amortization, and certain charges and expenses,
such as non-cash compensation costs, acquisition related costs,
derivative income, financing activities, litigation expenses,
severance, new business development costs, technology
implementation costs and expenses, and facility closure and lease
termination costs, as these 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.
Cautionary Note Regarding 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 RumbleOn’s
expectations as of the date of this report and speak only as of the
date of this report and are advised to consider the factors listed
under the heading “Forward-Looking Statements” and “Risk Factors”
in RumbleOn’s SEC filings, as may be updated and amended from time
to time. RumbleOn undertakes 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
September 30,
2020
As of
December 31,
2019
ASSETS
Current assets:
Cash
$
3,412,772
$
49,660
Restricted cash
5,545,892
6,676,622
Accounts receivable, net
11,342,600
8,482,707
Inventory
11,424,094
57,381,281
Prepaid expense and other current
assets
2,506,910
1,210,474
Total current assets
34,232,268
73,800,744
Property and equipment, net
6,494,940
6,427,674
Right-of-use assets
5,926,393
6,040,287
Goodwill
26,886,563
26,886,563
Other assets
174,457
237,823
Total assets
$
73,714,621
$
113,393,091
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and other accrued
liabilities
$
10,720,627
$
12,421,094
Accrued interest payable
807,360
749,305
Current portion of convertible debt
960,338
1,363,590
Current portion of long-term debt
17,640,426
59,160,970
Total current liabilities
30,128,751
73,694,959
Long-term liabilities:
Note payable
1,974,218
1,924,733
Convertible Debt
26,681,826
20,136,229
Derivative liabilities
20,345
27,500
Other long-term liabilities
5,399,716
4,722,101
Total long-term liabilities
34,076,105
26,810,563
Total liabilities
64,204,856
100,505,522
Commitments and contingencies (Notes 4, 7,
8, 9, 13, 18)
Stockholders' equity:
Class B Preferred stock, $0.001 par value,
10,000,000 shares authorized, 0 and 0 shares issued and outstanding
as of September 30, 2020 and December 31, 2019
-
-
Common A stock, $0.001 par value, 50,000
shares authorized, 50,000 shares issued and outstanding as of
September 30, 2020 and December 31, 2019
50
50
Common B stock, $0.001 par value,
4,950,000 shares authorized, 2,191,633 and 1,111,681 shares issued
and outstanding as of September 30, 2020 and December 31, 2019
2,192
1,112
Additional paid in capital
108,396,284
92,268,213
Accumulated deficit
(98,888,761
)
(79,381,806
)
Total stockholders' equity
9,509,765
12,887,569
Total liabilities and stockholders'
equity
$
73,714,621
$
113,393,091
RumbleOn, Inc.
Condensed Consolidated
Statements of Operations
(Unaudited)
Three-Months Ended September
30,
Nine-Months Ended September
30,
2020
2019
2020
2019
Revenue:
Pre-owned vehicle sales:
Powersports
$
7,303,131
$
27,144,202
$
38,641,607
$
84,379,049
Automotive
99,315,335
187,108,303
281,242,442
611,871,819
Transportation and vehicle logistics
10,440,367
6,058,546
25,191,459
17,417,846
Other
198,571
9,272
672,450
9,272
Total revenue
117,257,404
220,320,323
345,747,958
713,677,986
Cost of revenue:
Powersports
5,606,366
24,280,599
33,691,814
74,367,614
Automotive
86,473,154
179,672,614
257,045,834
585,163,984
Transportation and vehicle logistics
8,373,829
4,352,585
19,324,621
12,523,281
Cost of revenue before impairment loss
100,453,349
208,305,798
310,062,269
672,054,879
Impairment loss on automotive
inventory
-
-
11,738,413
Total cost of revenue
100,453,349
208,305,798
321,800,682
672,054,879
Gross profit
16,804,055
12,014,525
23,947,276
41,623,107
Selling, general and administrative
13,279,151
19,010,939
42,509,865
64,458,520
Insurance recovery proceeds
-
-
(5,615,268
)
-
Depreciation and amortization
536,381
473,670
1,567,697
1,283,333
Operating income (loss)
2,988,523
(7,470,084
)
(14,515,018
)
(24,118,746
)
Interest expense
(1,488,090
)
(2,031,697
)
(5,187,256
)
(5,351,689
)
Change in derivative liability
(13,518
)
630,000
7,155
820,000
Gain (Loss) on early extinguishment of
debt
-
-
188,164
(1,499,250
)
Income (loss) before provision for income
taxes
1,486,915
(8,871,781
)
(19,506,955
)
(30,149,685
)
Benefit for income taxes
-
-
-
-
Net income (loss)
$
1,486,915
$
(8,871,781
)
$
(19,506,955
)
$
(30,149,685
)
Weighted average number of common shares
outstanding - basic and fully diluted
2,234,838
1,158,915
2,165,167
1,098,809
Net income (loss) per share - basic and
fully diluted
$
0.67
$
(7.66
)
$
(9.01
)
$
(27.44
)
RumbleOn, Inc.
Condensed Consolidated
Statements of Cash Flows
(Unaudited)
Nine-Months Ended September
30,
2020
2019
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss
$
(19,506,955
)
$
(30,149,685
)
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation and amortization
1,567,697
1,283,333
Amortization of debt discounts
1,498,690
1,308,061
Share based compensation
2,425,316
2,335,242
Impairment loss on inventory
11,738,413
-
Impairment loss on fixed assets
177,626
-
Loss from change in value of
derivatives
(7,155
)
(820,000
)
Loss (gain) from extinguishment of
debt
(188,164
)
1,499,250
Changes in operating assets and
liabilities:
(Increase) in prepaid expenses and other
current assets
(1,296,436
)
(261,207
)
(Increase) decrease in inventory
34,218,774
5,530,532
(Increase) in accounts receivable
(2,859,892
)
(1,564,145
)
Decrease in other assets
63,366
(18,403
)
Decrease in accounts payable and accrued
liabilities
(1,691,839
)
(5,824,733
)
Increase in accrued interest payable
58,055
888,821
Net cash provided by (used in) operating
activities
26,197,496
(25,792,934
)
CASH FLOWS FROM INVESTING ACTIVITIES
Cash used for acquisitions; net of cash
received
-
(835,000
)
Purchase of property and equipment
(174,786
)
-
Proceeds from sales of property and
equipment
-
40,620
Technology development
(1,598,067
)
(2,619,551
)
Net cash used in investing activities
(1,772,853
)
(3,413,931
)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from notes payable and
convertible debt
8,272,375
27,455,537
Payments on notes payable
(1,713,825
)
(11,134,695
)
Net repayments on lines of credit
(44,707,736
)
(4,660,270
)
Net proceeds from sale of common stock
10,780,080
15,155,547
Proceeds from PPP loan
5,176,845
-
Net cash (used in) provided by financing
activities
(22,192,261
)
26,816,119
NET CHANGE IN CASH
2,232,382
(2,390,746
)
CASH AND RESTRICTED CASH AT BEGINNING OF
PERIOD
6,726,282
15,784,902
CASH AND RESTRICTED CASH AT END OF
PERIOD
$
8,958,664
$
13,394,156
RumbleOn, Inc.
Reconciliation of Net Income
(Loss) to Adjusted EBITDA
Three-Months Ended
September 30,
Nine-Months Ended
September 30,
2020
2019
2020
2019
Net income (loss)
$
1,486,915
$
(8,871,781
)
$
(19,506,955
)
$
(30,149,685
)
Add back:
Interest expense (including debt
extinguishment)
1,488,090
2,031,697
4,999,092
6,850,939
Depreciation and amortization
536,381
473,670
1,567,697
1,283,333
EBITDA
3,511,386
(6,366,414
)
(12,940,166
)
(22,015,413
)
Adjustments
Impairment loss on automotive
inventory
-
-
11,738,413
-
Impairment loss on fixed assets
-
-
177,626
-
Insurance recovery proceeds
-
-
(5,615,268
)
-
Non-cash-stock-based compensation
862,555
689,130
2,425,316
2,335,242
Acquisition related costs
-
-
-
378,208
Change in derivative liability
13,518
(630,000
)
(7,155
)
(820,000
)
Severance
-
1,079,438
-
1,079,438
New business development
-
426,885
-
1,173,928
Litigation expenses
280,842
-
1,027,689
61,446
Other non-reoccurring costs
51,387
48,676
51,387
1,441,603
Adjusted EBITDA
$
4,719,688
$
(4,752,285
)
$
(3,142,158
)
$
(16,365,548
)
View source
version on businesswire.com: https://www.businesswire.com/news/home/20201110005511/en/
Investor Relations: The Blueshirt Group Dylan Solomon
investors@rumbleon.com
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