Raised $100 Million through Rights Offering
Paid Down $50 Million of Debt in the
Quarter
RumbleOn, Inc. (NASDAQ: RMBL), today announced results for its
quarter and full year ended December 31, 2023.
FOURTH QUARTER AND FULL YEAR 2023 HIGHLIGHTS
- Total Revenue was $311.1 million for the fourth quarter,
down 6.2% from the prior year fourth quarter. For the year, revenue
decreased 6.3% to $1.366 billion.
- Total Powersport Vehicle Retail Sales were down 5.8%
compared to the prior year fourth quarter, with a total of 15,596
units, including 11,293 new units and 4,303 pre-owned units sold in
this year's fourth quarter. For the year, total Powersport vehicle
retail sales were down 3.2% with a total of 67,546 units comprised
of 45,706 new units and 21,840 pre-owned units.
- Total Gross Profit of $71.2 million for the fourth
quarter was down $21.2 million from the prior year, of which $12.6
million related to a pre-owned inventory adjustment. For the year,
total company gross profit decreased 18.5% to $359.9 million
compared to 2022.
- Total Gross Margin of 22.9% for the fourth quarter
compared to 27.9% in the prior year fourth quarter. For the year,
total gross margin was 26.3%, down from 30.3% in 2022.
- Total SG&A expenses for the fourth quarter declined
$14.4 million, or 15.9%, from the prior year fourth quarter and
were down 2.0% for 2023 compared to 2022.
- Loss from Continuing Operations of $168.4 million with
Diluted Loss per Share from Continuing Operations of $7.81
for the fourth quarter and loss from continuing operations of
$214.4 million with diluted loss per share from continuing
operations of $12.09 for the year.
- Adjusted EBITDA was $3.1 million for the fourth quarter
after adjusting for an impairment of goodwill and franchise rights,
an inventory write-down, and other non-cash or non-recurring
charges, compared to $19.7 million in the fourth quarter of 2022.
For the year, Adjusted EBITDA was $50.6 million, which compares to
Adjusted EBITDA of $120.8 million in 2022.
- Total available liquidity of $212.6 million as of
December 31, 2023, comprised of unrestricted cash of $58.9 million,
restricted cash of $18.1 million and availability under Powersports
inventory financing credit facilities of $135.6 million.
- Paid down $50 million of long-term debt during the
quarter as a result of the $100 million rights offering completed
in December and for the year, the Company paid down a total of
$111.7 million of debt. In early 2024, the Company paid down
additional debt and received proceeds from the sale of the loan
portfolio for RumbleOn Finance, putting the Company's non-vehicle
net debt at $218.5 million as of February 29, 2024.
Management Commentary
Michael W. Kennedy, RumbleOn's Chief Executive Officer stated,
“During the quarter, we were able to accomplish several capital and
balance sheet initiatives that put us in a favorable position to
start 2024, including successfully completing a $100 million rights
offering, selling non-core assets, making significant progress to
integrate our prior acquisitions, right-sizing pre-owned inventory
values and reducing term debt. We are proud of what the RumbleOn
team has accomplished in such a short period and are confident that
the foundation that we built positions us well to implement and
deliver our plan.”
Kennedy continued, “Today we are introducing our 3-year
operating plan called Vision 2026, which is the result of the work
by our team over the last few months. We expect the following to be
achieved by calendar year 2026, while maintaining a healthy balance
sheet within our target ratio of 1.5x to 2.5x net debt/Adjusted
EBITDA:
- Annual revenue in excess of $1.7 billion,
- Annual Adjusted EBITDA of greater than $150 million, and
- Annual Adjusted Free Cash Flow of $90 million or more.
While we believe that the prior Adjusted EBITDA guidance of $80
million to $90 million for 2024 is within our sight, we have
decided to stop the practice of giving annual guidance. Instead,
we'll point investors to our Vision 2026 plan and how we expect to
be able to shape the business to drive per share value over the
coming years. As a result, we are withdrawing prior guidance for
2024.”
FOURTH QUARTER 2023 — TOTAL COMPANY RESULTS
Reconciliation of GAAP to non-GAAP financial measures are
provided in accompanying financial schedules.
Unless otherwise noted, all comparisons in the narrative are
fourth quarter of 2023, as compared to fourth quarter of 2022.
(Unaudited)
$ in millions except per share amounts
Three Months Ended December
31
2023
2022
Change
Total Powersport Unit Sales (#) -
includes wholesale
17,591
17,550
0.2
%
Total Revenue
$
311.1
$
331.6
(6.2
)%
Gross Profit
71.2
92.4
(22.9
)%
Gross Margin
22.9
%
27.9
%
(500) bps
Income (loss) from continuing
operations
$
(168.4
)
$
(260.4
)
35.3
%
Diluted Earnings (Loss) per Share from
Continuing Operations
$
(7.81
)
$
(16.11
)
51.5
%
Non-GAAP Measure:
Adjusted EBITDA
$
3.1
$
19.7
(84.3
)%
Total Powersport Units Sold of 17,591 increased 0.2%.
Total Revenue of $311.1 million declined 6.2%, due to
lower selling prices on powersports vehicles sold.
Total Gross Profit of $71.2 million was down $21.2
million from the prior year, of which $12.6 million related to a
fourth quarter pre-owned inventory adjustment for certain pre-owned
vehicles that were purchased proactively at premium prices during a
challenging supply chain environment resulting from the COVID-19
pandemic. As demand has reached more pre-COVID-19 normalized
levels, powersports vehicles acquired at inflated prices during
that time period were written down to their net realizable
value.
Operating Expenses were $80.5 million, or 25.9% of
revenue, compared to $96.2 million, or 29.0% of revenue. Total
stock-based compensation was $1.1 million, or $1.0 million
lower.
Loss from Continuing Operations was $168.4 million,
including a $60.1 million pre-tax non-cash goodwill and franchise
rights impairment charge. Loss per diluted share was $7.81 compared
to $16.11.
Adjusted EBITDA was $3.1 million compared to $19.7
million. The decrease in Adjusted EBITDA was primarily driven by
lower selling prices and compressed margins in the Powersports
Segment.
Cash as of December 31, 2023, including restricted cash,
was approximately $77.0 million, and non-vehicle net debt was
$242.9 million. Availability under the Company's Powersports
inventory financing credit facilities totaled approximately $135.6
million.
Total Available Liquidity, defined as cash and cash
equivalents, including restricted cash, plus availability under
Powersports inventory financing credit facilities totaled
approximately $212.6 million.
Cash Flow used in Operating Activities was $38.9 million
for the year ended December 31, 2023.
Weighted Average Diluted Shares of Class B common stock
outstanding were 21,563,330 for the fourth quarter and 17,740,525
for the year. As of December 31, 2023, RumbleOn had 35,071,955
total shares of Class B common stock, reflecting an additional
18,181,818 shares issued under the rights offering, and 50,000
shares of Class A common stock outstanding.
Fourth Quarter 2023
Unless otherwise noted, all comparisons in the narrative are
fourth quarter of 2023, as compared to fourth quarter of 2022.
Powersports Segment
(Unaudited)
$ in millions except per unit
Three Months Ended December
31
2023
2022
Change
Units Sold (#)
New
11,293
10,633
6.2
%
Pre-owned (includes wholesale)
6,298
6,917
(8.9
)%
Total Powersports Units Sold
17,591
17,550
0.2
%
Revenue
New
$
157.0
$
149.8
4.8
%
Pre-owned
56.3
77.7
(27.5
)%
Finance & Insurance, net
27.4
27.6
(0.7
)%
Parts, Services, and Accessories
57.6
65.3
(11.8
)%
Total Powersports Revenue
$
298.3
$
320.4
(6.9
)%
Gross Profit
New
$
20.6
$
25.3
(18.6
)%
Pre-owned
(5.8
)
10.5
(155.2
)%
Finance & Insurance, net
27.4
27.6
(0.7
)%
Parts, Services, and Accessories
25.6
26.4
(3.0
)%
Total Powersports Gross Profit
$
67.8
$
89.8
(24.5
)%
Powersports GPU1
$
4,350
$
5,422
(19.8
)%
New Powersports Revenue increased 4.8% due primarily to
the increase in number of units sold.
New Powersports Gross Profit declined 18.6%, due
primarily to an unfavorable mix of powersports vehicles sold.
Pre-owned Powersports Units Sold, which includes
pre-owned retail and wholesale Powersports Units, declined 8.9%, as
we slowed down pre-owned vehicle acquisition.
Pre-owned Powersports Revenue declined 27.5%.
Pre-owned Powersports Gross Profit declined $16.3 million,
due primarily to the previously mentioned $12.6 million correction
on inventory prices and lower units sold.
Powersports GPU was $4,350, as compared to $5,422.1
Vehicle Logistics
Segment
(Unaudited)
$ in millions
Three-Months Ended December
31
2023
2022
Change
Vehicles Transported (#)
21,599
17,840
21.1
%
Vehicle Logistics Revenue
$
12.9
$
11.2
15.2
%
Vehicle Logistics Gross Profit
3.4
2.7
25.9
%
Revenue from Vehicle Logistics was up 15.2%, due
primarily to volume.
Gross profit for this business was up 25.9%, driven by
the increase in vehicles transported.
CONFERENCE CALL AND WEBCAST DETAILS
RumbleOn will host a conference call on March 14, 2024 at 7:00
a.m. Central Time (8:00 a.m. Eastern Time) to discuss its fourth
quarter 2023 results. To participate in the call, please dial
1-877-407-9716 (or 1-201-493-6779 for callers outside of the United
States) and enter Conference ID 13743245. A live webcast will be
available on the Investor Relations section of RumbleOn's website
at www.rumbleon.com. Please visit the webcast at least 20 minutes
before the call begins to register, download and install any
necessary audio software. A replay of the conference call and
archive of the webcast will be available shortly after the call on
the Investor Relations section of the Company's website at
www.rumbleon.com.
ABOUT RUMBLEON
RumbleOn, Inc. (NASDAQ: RMBL), operates through two operating
segments: the RideNow Powersports dealership group and Wholesale
Express, LLC, an asset-light transportation services provider
focused on the automotive industry. RideNow Powersports is the
largest powersports retail group in the United States (as measured
by reported revenue, major unit sales and dealership locations),
offering over 500 powersports franchises representing 52 different
brands of products. RideNow Powersports sells a wide selection of
new and pre-owned products, including parts, apparel, accessories,
finance & insurance products and services, and aftermarket
products. We are the largest purchaser of pre-owned powersports
vehicles in the United States and utilize our proprietary Cash
Offer technology to acquire vehicles directly from consumers.
To learn more, please visit us online at
https://www.rumbleon.com.
1 Calculated as total powersports gross profit divided by new
and used retail powersports units sold.
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, which statements may be identified by words such as
“expects,” “plans,” “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.
Other
As disclosed in a Form 12b-25 filed today, the Company is unable
to file its Annual Report on Form 10-K for the year ended December
31, 2023 (“2023 Form 10-K”) by the prescribed due date. The
Company's management is continuing to evaluate the effectiveness of
certain internal controls over financial reporting. Management has
identified certain deficiencies, but the classification of these
deficiencies has not been conclusively determined. The Company does
not expect that the final determination will impact the financial
information reported in the press release.
The Company has performed additional analyses and procedures
that have led management to conclude that the financial information
included in this press release fairly presents, in all material
respects, the Company's financial condition and results of
operations as of the end of and for the quarterly period and year
ended December 31, 2023. The Company expects that the 2023 Form
10-K, along with the audited financial statements for the year
ended December 31, 2023, will be filed 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.
Adjusted EBITDA, non-vehicle net debt, and Adjusted Free Cash
Flow 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.
We define Adjusted EBITDA as net income (loss) adjusted to add
back interest expense, depreciation and amortization, the impact of
income taxes, discontinued operations, non-cash stock-based
compensation costs, the non-cash impairment of goodwill and
franchise rights, transaction costs, certain litigation expenses
not associated with our ongoing operations, and other non-recurring
costs and credits, such as the gain on the sale of a dealership,
insurance proceeds and costs attributable to an abandoned project,
as such we do not consider such recoveries, charges and expenses to
be a part of our core business operations, and they 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.
We define non-vehicle net debt as the principal balance of our
term debt, convertible notes, and finance portfolio line of credit,
not inclusive of reductions for debt discount and unamortized
issuance costs, less unrestricted cash. We present non-vehicle net
debt because we believe it is frequently used by analysts,
investors and other interested parties to evaluate companies in our
industry.
We define Adjusted Free Cash Flow as cash flows from operating
activities plus cash flows from investing activities, excluding
cash flows used or received in acquisitions or divestitures.
With respect to our 2026 Adjusted EBITDA and Adjusted Free Cash
Flow targets, a reconciliation of these non-GAAP measures to the
corresponding GAAP measures is not available without unreasonable
effort due to the complexity of the reconciling items that we
exclude from the non-GAAP measure or the variables going into the
calculation of operating cash flows.
RumbleOn, Inc.
Condensed Consolidated
Statements of Operations
(Unaudited)
(in millions, except per share
amounts)
Three Months Ended December
31,
Twelve Months Ended December
31,
2023
2022
2023
2022
Revenue:
Powersports vehicles
$
213.2
$
227.5
$
951.4
$
1,033.9
Parts, service and accessories
57.6
65.3
241.8
247.6
Finance and insurance, net
27.4
27.6
117.0
123.4
Vehicle logistics
12.9
11.2
56.2
54.0
Total revenue
311.1
331.6
1,366.4
1,458.9
Cost of revenue:
Powersports vehicles
198.4
191.9
832.5
839.7
Parts, service and accessories
32.0
38.9
131.5
135.3
Vehicle logistics
9.5
8.4
42.5
42.2
Total cost of revenue
239.9
239.2
1,006.5
1,017.2
Gross profit
71.2
92.4
359.9
441.7
Selling, general and administrative
75.7
90.1
347.3
354.5
Impairment of goodwill and franchise
rights
60.1
324.3
60.1
324.3
Depreciation and amortization
4.8
6.1
22.0
23.0
Operating income (loss)
(69.4
)
(328.1
)
(69.5
)
(260.1
)
Non-operating income (expense):
Interest expense
(21.4
)
(16.5
)
(77.2
)
(52.1
)
Other income (expense)
(8.6
)
4.0
(8.4
)
4.2
PPP loan forgiveness
—
—
—
2.5
Total non-operating expense
(30.0
)
(12.5
)
(85.6
)
(45.4
)
Loss from continuing operations before
income taxes
(99.4
)
(340.6
)
(155.1
)
(305.5
)
Income tax expense (benefit)
69.0
(80.2
)
59.3
(72.0
)
Loss from continuing operations
(168.4
)
(260.4
)
(214.4
)
(233.5
)
Loss from discontinued operations, net
(0.1
)
(27.2
)
(1.1
)
(28.0
)
Net loss
$
(168.5
)
$
(287.6
)
$
(215.5
)
$
(261.5
)
Weighted average common shares
outstanding
21.56
16.16
17.74
15.87
Diluted loss per share from continuing
operations
$
(7.81
)
$
(16.11
)
$
(12.09
)
(14.71
)
RumbleOn, Inc.
Condensed Consolidated Balance
Sheets
(Unaudited)
($ in millions)
December 31, 2023
December 31, 2022
ASSETS
Current assets:
Cash
$
58.9
$
46.8
Restricted cash
18.1
10.0
Accounts receivable, net
50.3
28.0
Loans receivable held for sale
—
33.7
Inventory
347.5
323.5
Prepaid expense and other current
assets
6.0
7.4
Current assets of discontinued
operations
—
11.4
Total current assets
480.8
460.8
Property and equipment, net
76.8
76.1
Right-of-use assets
163.9
161.8
Goodwill
0.8
21.1
Intangible assets, net
202.5
247.4
Deferred tax assets
—
58.1
Other assets
1.5
1.9
Total assets
926.3
1,027.2
LIABILITIES AND STOCKHOLDERS’
EQUITY
Current liabilities:
Accounts payable and other current
liabilities
67.8
79.5
Vehicle floor plan note payable
291.3
220.1
Current portion of long-term debt
35.6
3.7
Current liabilities of discontinued
operations
0.3
8.4
Total current liabilities
395.0
311.7
Long-term liabilities:
Long-term debt
286.7
374.4
Operating lease liabilities
134.1
126.7
Deferred taxes
0.4
—
Other long-term liabilities
4.5
8.4
Total long-term liabilities
425.7
509.5
Total liabilities
820.7
821.2
Stockholders’ equity:
Class A common stock
—
—
Class B common stock
—
—
Additional paid-in capital
701.0
585.9
Accumulated deficit
(591.1
)
(375.6
)
Treasury stock
(4.3
)
(4.3
)
Total stockholders’ equity
105.6
206.0
Total liabilities and stockholders’
equity
$
926.3
$
1,027.2
RumbleOn, Inc.
Condensed Consolidated
Statements of Cash Flows
(Unaudited)
($ in Millions)
2023
2022
CASH FLOWS FROM OPERATING
ACTIVITIES
Net income (loss)
$
(215.5
)
$
(261.5
)
Loss from discontinued operations
(1.1
)
(28.0
)
Income (loss) from continuing
operations
(214.4
)
(233.5
)
Adjustments to reconcile income (loss)
from continuing operations to net cash provided by (used in)
operating activities:
Depreciation and amortization
22.0
23.0
Amortization of debt discount and deferred
financing costs
10.4
6.4
Inventory write-down
12.6
—
Forgiveness of PPP loan
—
(2.5
)
Stock based compensation expense
12.0
9.4
Impairment loss on goodwill and franchise
rights
60.1
324.3
Deferred taxes
58.5
(76.7
)
Valuation allowance charge for loans
receivable held for sale
7.6
—
Originations of loan receivables, net of
principal payments received
6.3
(27.9
)
Changes in operating assets and
liabilities, net of acquisitions:
Accounts receivable
(2.4
)
(4.6
)
Inventory
(31.7
)
(120.4
)
Prepaid expenses and other current
assets
1.4
(0.4
)
Other assets
0.3
0.3
Other liabilities
(3.7
)
1.6
Accounts payable and accrued
liabilities
(4.4
)
(6.0
)
Floor plan trade note borrowings
26.5
60.3
Net cash used in operating activities of
continuing operations
(38.9
)
(46.7
)
CASH FLOWS FROM INVESTING
ACTIVITIES
Acquisitions, net of cash received
(3.3
)
(69.6
)
Purchase of property and equipment
(13.7
)
(5.6
)
Technology development
(2.1
)
(7.0
)
Net cash used in investing activities of
continuing operations
(19.1
)
(82.2
)
CASH FLOWS FROM FINANCING
ACTIVITIES
Net proceeds from common stock rights
offering
98.4
—
Proceeds from sale-leaseback
transaction
50.0
—
Proceeds from debt issuances
2.2
84.5
Repayment of debt, including finance
lease
(111.7
)
(51.2
)
Net borrowings from non-trade floor
plans
42.5
77.9
Proceeds from RumbleOn Finance (“ROF”)
credit facility
—
25.0
Shares redeemed for employee tax
obligations
(1.4
)
—
Debt issuance costs
(1.8
)
—
Net cash provided by financing activities
for continuing operations
78.2
136.2
CASH FLOWS FROM DISCONTINUED
OPERATIONS
Net cash provided by operating activities
of discontinued operations
3.4
27.8
Net cash used in financing activities of
discontinued operations
(5.2
)
(28.5
)
Net cash used in discontinued
operations
(1.8
)
(0.7
)
NET CHANGE IN CASH
18.4
6.6
Cash and restricted cash at beginning of
period
58.6
52.0
Cash and restricted cash at end of
period
$
77.0
$
58.6
RumbleOn, Inc.
Reconciliation of Net Income
(Loss) to Adjusted EBITDA
(Unaudited)
($ in Millions)
Three Months Ended
Year Ended
Dec 31,
Dec 31,
Dec 31,
Dec 31,
2023
2022
2023
2022
Net income (loss)
$
(168.5
)
$
(287.6
)
$
(215.5
)
$
(261.5
)
Loss from discontinued operations,
net
(0.1
)
(27.2
)
(1.1
)
(28.0
)
Income (loss) from continuing
operations, net
(168.4
)
(260.4
)
(214.4
)
(233.5
)
Add back:
Interest expense
21.4
16.5
77.2
52.1
Depreciation and amortization
4.8
6.1
22.0
23.0
Interest income and miscellaneous
income
—
—
—
—
Income tax provision (benefit)
69.0
(80.2
)
59.3
(72.0
)
EBITDA
(73.2
)
(318.0
)
(55.9
)
(230.4
)
Adjustments:
Stock-based compensation expense
1.1
2.1
12.0
9.4
Transaction costs for acquisitions(1)
—
0.4
—
1.9
Purchase accounting related
—
0.1
—
0.2
Pre-owned vehicle inventory valuation
adjustment(2)
12.6
—
12.6
—
Lease expense associated with favorable
related party leases in excess of contractual lease payments
0.3
0.6
1.1
1.3
Charges related to proxy contest and
reorganization of the Board of Directors(3)
—
—
5.1
—
Loss related to sale of RumbleOn
receivables
1.6
7.6
—
Impairment of goodwill and franchise
rights
60.1
324.3
60.1
324.3
Litigation settlement expenses(4)
—
8.4
0.1
8.4
PPP Loan forgiveness(5)
—
—
—
(2.5
)
Costs attributable to abandoned
fulfillment center project(6)
—
2.1
—
2.1
Personnel restructuring costs
—
—
5.3
—
Other non-recurring costs(7)
0.6
3.6
2.7
10.0
Gain on sale of dealership
—
(3.9
)
—
(3.9
)
Adjusted EBITDA
$
3.1
$
19.7
$
50.6
$
120.8
(1)
Transaction costs associated with the
RideNow and Freedom Powersports acquisitions, which primarily
include professional fees and third-party costs
(2)
Reflects write-down to net realizable
value for pre-owned inventory purchased at elevated pandemic prices
that are no longer supported.
(3)
Charges in 2023 related to the shareholder
proposals for the Company's annual meeting of shareholders and
costs related to the reorganization in 2023 of our Board of
Directors
(4)
Charges associated with litigation outside
of our ongoing operations
(5)
Forgiveness of the Paycheck Protection
Program ("PPP") loan
(6)
Expenses attributable to a discontinued
project in Fort Worth, Texas
(7)
Other non-recurring costs, which include
one-time expenses incurred. In 2023, amounts primarily included
integration costs and professional fees associated with
acquisitions. Amounts in 2022 primarily included a death benefit to
the estate of a former officer and director and various integration
costs and professional fees associated with the Freedom Powersports
and RideNow acquisitions, technology implementation and the
establishment of the RumbleOn Finance secured loan facility.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240314492716/en/
Investor Relations Contact: investors@rumbleon.com
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