RumbleON Inc.
12/03/2021 | Press release | Distributed by Public on 12/03/2021 15:51
Supplemental RumbleOn/RideNow Metrics Schedule and Financial Overview - Form 8-K
Supplemental RumbleOn/RideNow Metrics Schedule and Financial Overview
RumbleOn, Inc. (the "Company" or "RumbleOn") completed its business combination with RideNow (the "RideNow Transaction") on August 31, 2021 (the "Closing Date"). This Supplemental RumbleOn/RideNow Metrics Schedule and Financial Overview (collectively, the "Metrics Schedule") is being filed with this Current Report on Form 8-K to present such metrics as if the RideNow Transaction was completed on January 1, 2020. All dollars are reported in thousands except per unit amounts.
This Metrics Schedule is provided for informational purposes only and is not intended to represent or be indicative of the consolidated results of operations or financial position the Company would have reported had the RideNow Transaction closed on January 1, 2020 and should not be taken as representative of our anticipated future consolidated results of operations or financial position.
This Metrics Schedule and the Pro Forma Adjusted EBITDA table set forth below should be read together with the Company's audited historical financial statements, which are included in the Company's Annual Report on Form 10-K for the year ended December 31, 2020, and its unaudited quarterly financial statements included in the Company's Quarterly Reports on Form 10-Q for the quarters ended March 31, 2021 and 2020, June 30, 2021 and 2020, and September 30, 2021 and 2020, and RideNow's audited historical financial statements, which were included in RumbleOn's Current Report on Form 8-K filed on April 8, 2021, and its unaudited quarterly financial statements, which were included in the Company's Current Reports on Form 8-K filed on June 21, 2021 and August 4, 2021.
Supplemental RumbleOn/RideNow Metrics Schedule
| 2020 | 2021 | 2021 | |||||||||||||||||
| Qtr1 | Qtr2 | Qtr3 | Qtr4 | Qtr1 | Qtr2 | Qtr3 |
Nine-Months Ended 9/30/2021 |
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| Powersports | Revenue | New vehicle | $91,747 | $163,624 | $125,196 | $135,258 | $143,257 | $142,732 | $126,127 | $412,116 | |||||||||
| Retail used vehicle | 35,691 | 37,109 | 28,819 | 26,427 | 38,135 | 55,012 | 59,052 | 152,199 | |||||||||||
| Wholesale1 | 26,385 | 12,643 | 12,895 | 13,011 | 11,381 | 28,821 | 21,642 | 61,844 | |||||||||||
| Total used vehicle revenue | 62,076 | 49,752 | 41,714 | 39,438 | 49,516 | 83,833 | 80,694 | 214,043 | |||||||||||
| Finance and insurance, net | 14,669 | 22,455 | 16,501 | 19,093 | 19,735 | 22,125 | 19,911 | 61,771 | |||||||||||
| Parts and service and other | 36,724 | 40,534 | 43,836 | 43,802 | 43,529 | 47,481 | 48,297 | 139,307 | |||||||||||
| Total revenue | $205,216 | $276,365 | $227,247 | $237,591 | $256,037 | $296,171 | $275,029 | $827,237 | |||||||||||
| Gross Profit | New vehicle | $11,340 | $26,841 | $22,511 | $25,786 | $27,878 | $29,920 | $25,863 | $83,661 | ||||||||||
| Retail used vehicle | 5,456 | 6,849 | 6,735 | 6,526 | 7,054 | 10,397 | 9,818 | 27,269 | |||||||||||
| Wholesale1 | 1,917 | 438 | 1,601 | 1,091 | 2,840 | 6,772 | 3,711 | 13,323 | |||||||||||
| Total used vehicle | 7,373 | 7,287 | 8,336 | 7,617 | 9,894 | 17,169 | 13,529 | 40,592 | |||||||||||
| Finance and insurance, net | 14,669 | 22,455 | 16,501 | 19,093 | 19,735 | 22,125 | 19,911 | 61,771 | |||||||||||
| Parts and service and other | 17,527 | 18,388 | 17,525 | 20,440 | 20,053 | 22,775 | 21,098 | 63,926 | |||||||||||
| Total gross profit | $50,909 | $74,971 | $64,873 | $72,936 | $77,560 | $91,989 | $80,401 | $249,950 | |||||||||||
| Vehicle Sales | New vehicle | 6,247 | 11,413 | 8,109 | 8,603 | 9,028 | 9,215 | 7,524 | 25,767 | ||||||||||
| Retail used vehicle | 3,245 | 3,440 | 2,645 | 2,285 | 2,866 | 3,865 | 4,044 | 10,775 | |||||||||||
| Wholesale | 3,074 | 970 | 956 | 1,057 | 1,084 | 2,532 | 1,779 | 5,395 | |||||||||||
| Total used vehicle | 6,319 | 4,410 | 3,601 | 3,342 | 3,950 | 6,397 | 5,823 | 16,170 | |||||||||||
| Total vehicles sold | 12,566 | 15,823 | 11,710 | 11,945 | 12,978 | 15,612 | 13,347 | 41,937 | |||||||||||
| New-to-Used Ratio | 0.99x | 2.59x | 2.25x | 2.57x | 2.29x | 1.44x | 1.29x | 1.59x | |||||||||||
| Revenue per vehicle | New vehicle | $14,687 | $14,337 | $15,439 | $15,722 | $15,868 | $15,489 | $16,763 | $15,994 | ||||||||||
| Retail used vehicle | $10,999 | $10,788 | $10,896 | $11,565 | $13,306 | $14,233 | $14,602 | $14,125 | |||||||||||
| Wholesale | $8,583 | $13,034 | $13,488 | $12,309 | $10,499 | $11,383 | $12,165 | $11,463 | |||||||||||
| Used vehicle | $9,824 | $11,282 | $11,584 | $11,801 | $12,536 | $13,105 | $13,858 | $13,237 | |||||||||||
| Finance and insurance, net | $1,545 | $1,512 | $1,534 | $1,754 | $1,659 | $1,692 | $1,721 | $1,690 | |||||||||||
| Parts and service and other | $3,869 | $2,729 | $4,076 | $4,023 | $3,660 | $3,630 | $4,175 | $3,812 | |||||||||||
| Total revenue per vehicle3 | $21,620 | $18,607 | $21,131 | $21,821 | $21,527 | $22,643 | $23,775 | $22,638 | |||||||||||
| Gross Profit per vehicle | New vehicle | $1,815 | $2,352 | $2,776 | $2,997 | $3,088 | $3,247 | $3,437 | $3,247 | ||||||||||
| Used vehicle | $1,167 | $1,652 | $2,315 | $2,279 | $2,505 | $2,684 | $2,323 | $2,510 | |||||||||||
| Finance and insurance | $1,545 | $1,512 | $1,534 | $1,754 | $1,659 | $1,692 | $1,721 | $1,690 | |||||||||||
| Parts and service | $1,847 | $1,238 | $1,630 | $1,877 | $1,686 | $1,741 | $1,824 | $1,749 | |||||||||||
| Total gross profit4 | $3,517 | $3,810 | $4,403 | $4,821 | $4,835 | $5,292 | $5,126 | $5,091 | |||||||||||
| Automotive | Revenue | $113,632 | $68,295 | $99,315 | $55,843 | $84,071 | $127,287 | $105,298 | $316,656 | ||||||||||
| Gross profit2 | $5,553 | $5,802 | $12,842 | $4,088 | $6,211 | $10,169 | $6,525 | $22,905 | |||||||||||
| Vehicles sold | 4,603 | 2,835 | 3,516 | 1,787 | 2,494 | 3,300 | 3,028 | 8,822 | |||||||||||
| Revenue per vehicle | $24,687 | $24,090 | $28,247 | $31,250 | $33,709 | $38,572 | $34,775 | $35,894 | |||||||||||
| Gross profit per vehicle | $1,206 | $2,047 | $3,652 | $2,288 | $2,490 | $3,082 | $2,155 | $2,596 | |||||||||||
| Transportation | Revenue1 | $8,990 | $8,252 | $11,415 | $7,230 | $10,030 | $14,518 | $11,597 | $36,145 | ||||||||||
| Gross profit | $2,000 | $1,801 | $2,067 | $1,749 | $1,989 | $2,385 | $2,455 | $6,829 | |||||||||||
| Vehicles transported | 21,027 | 19,191 | 21,238 | 13,989 | 18,907 | 23,502 | 20,284 | 62,693 | |||||||||||
| Revenue per vehicle transported | $428 | $430 | $537 | $517 | $530 | $618 | $572 | $577 | |||||||||||
| Gross profit per vehicle transported | $95 | $94 | $97 | $125 | $105 | $101 | $121 | $109 |
| 1 - | Intercompany revenue and cost of sales for transportation services provided by Wholesale Express and vehicle sales between RumbleOn and RideNow before the Closing Date are included in this Metrics Schedule. These amounts are summarized in the Intercompany Transaction Table below. |
| 2 - | The Automotive segment Gross Profit includes the benefit of inventory reserve adjustments established after the Nashville Tornado of $2,935, $7,788, and $1,964 for Q1, Q2 and Q3 of 2020, respectively. |
| 3 - | Total revenue per vehicle for powersports represents total revenue divided by the number of retail powersports units sold. |
| 4 - | Total gross profit per vehicle for powersports represents the gross profit attributable to both (a) new and used powersport sales and (b) finance and insurance, net divided by the number of retail powersport units sold. |
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RumbleOn/RideNow Financial Overview
| 2020 | 2021 | 2021 | ||||||||||||||
| Qtr1 | Qtr2 | Qtr3 | Qtr4 | Qtr1 | Qtr2 | Qtr3 |
Nine-Months Ended 9/30/2021 |
|||||||||
| Revenue | $325,934 | $352,324 | $337,001 | $300,058 | $344,266 | $417,479 | $383,495 | $1,145,240 | ||||||||
| Adjusted revenue1 | ||||||||||||||||
| Powersports | $168,492 | $235,831 | $183,411 | $193,789 | $212,508 | $248,690 | $226,732 | $687,930 | ||||||||
| Automotive | 113,632 | 68,295 | 99,315 | 55,843 | 84,071 | 127,287 | 105,298 | 316,656 | ||||||||
| Transportation and logistics | 8,990 | 8,252 | 11,415 | 7,230 | 10,030 | 14,518 | 11,597 | 36,145 | ||||||||
| Parts and service and other | 36,724 | 40,534 | 43,836 | 43,802 | 43,529 | 47,481 | 48,297 | 139,307 | ||||||||
| Total adjusted revenue | $327,838 | $352,912 | $337,977 | $300,664 | $350,138 | $437,976 | $391,924 | $1,180,038 | ||||||||
| Gross profit | $58,462 | $82,574 | $79,782 | $78,773 | $85,407 | $103,977 | $87,857 | $277,241 | ||||||||
| Adjusted gross profit1 | ||||||||||||||||
| Powersports | $33,382 | $56,583 | $47,348 | $52,496 | $57,507 | $69,214 | $59,303 | $186,024 | ||||||||
| Automotive | 5,553 | 5,802 | 12,842 | 4,088 | 6,211 | 10,169 | 6,525 | 22,905 | ||||||||
| Transportation and logistics | 2,000 | 1,801 | 2,067 | 1,749 | 1,989 | 2,385 | 2,455 | 6,829 | ||||||||
| Parts and service and other | 17,527 | 18,388 | 17,525 | 20,440 | 20,053 | 22,775 | 21,098 | 63,926 | ||||||||
| Total adjusted gross profit | $58,462 | $82,574 | $79,782 | $78,773 | $85,760 | $104,543 | $89,381 | $279,684 |
| 1 - | Intercompany revenue and cost of sales for transportation services provided by Wholesale Express and vehicle sales between RumbleOn and RideNow before the Closing Date are included in this Financial Overview. These amounts are summarized in the Intercompany Transactions Table below. |
Intercompany Transactions Table
In the normal course of operations, RumbleOn utilizes transportation services of Wholesale Express. The following table provides the intercompany revenue and cost of revenue for these transportation services. In addition, during the nine-months ended September 30, 2021, and prior to the Closing Date, there were vehicle sales between RumbleOn and RideNow.
The Company believes including the transactions between RumbleOn and RideNow until the Closing Date provides the reader a better understanding of how the companies performed by recognizing the robust used powersports wholesale market through which both RumbleOn could have sold vehicles and RideNow could have purchased vehicles and thereby recognizing the actual volume of business both entities achieved pre-closing. It is important to note that aggregate gross margin is not duplicative in such analysis.
The intercompany revenue and cost of revenue for these sales is summarized in the table below.
| 2020 | 2021 | 2021 | ||||||||||||||
| Qtr1 | Qtr2 | Qtr3 | Qtr4 | Qtr1 | Qtr2 | Qtr3 |
Nine-Months Ended 9/30/2021 |
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| Transportation Services Provided by Wholesale Express | ||||||||||||||||
| Revenue | $1,904 | $588 | $976 | $606 | $692 | $1,437 | $1,228 | $3,357 | ||||||||
| Cost of Revenue | $1,904 | $588 | $976 | $606 | $692 | $1,437 | $1,228 | $3,357 | ||||||||
| Vehicle Sales Between RumbleOn and RideNow | ||||||||||||||||
| Revenue | - | - | - | - | $5,180 | $19,060 | $7,201 | $31,441 | ||||||||
| Cost of Revenue | - | - | - | - | $4,827 | $18,494 | $5,677 | $28,998 |
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Pro Forma Adjusted EBITDA
Pro Forma Adjusted EBITDA is a non-GAAP financial measure and should not be considered as an alternative to Pro Forma Net Income (loss) 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.
Pro Forma Adjusted EBITDA is defined as Pro Forma Net Income (loss) adjusted to add back interest expense (including debt extinguishment), depreciation and amortization, changes in derivative liability, interest income and miscellaneous income, income taxes, 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 the Company's core business operations and are not an indicator of ongoing, future company performance. Pro Forma Net Income (loss) as set forth below was prepared pursuant to Article 11 of Regulation S-X.
Pro Forma Adjusted EBITDA is one of the primary metrics used by management to evaluate the financial performance of the Company's business. The Company presents Pro Forma Adjusted EBITDA because it believes it is frequently used by analysts, investors and other interested parties to evaluate companies in the Company's industry. Further, the Company believes it is helpful in highlighting trends in the Company's 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.
The following table reconciles Pro Forma Net Income (loss) to Pro Forma EBITDA for the periods presented:
| 2020 | 2021 | 2021 | ||||||||||||||
| Qtr1 | Qtr2 | Qtr3 | Qtr4 | Qtr1 | Qtr2 | Qtr3 |
Nine-Months Ended 9/30/2021 |
|||||||||
| Pro forma net income (loss) | $(16,392) | $17,735 | $9,547 | $8,024 | $11,553 | $30,013 | $(16,731) | $24,835 | ||||||||
| Add Back: | ||||||||||||||||
| Interest expense (incl debt extinguishment) | 12,063 | 10,780 | 11,014 | 13,455 | 10,666 | 10,811 | 10,572 | 32,049 | ||||||||
| Depreciation and amortization | 3,238 | 3,301 | 2,704 | 4,364 | 3,257 | 3,379 | 3,409 | 10,045 | ||||||||
| Interest income and miscellaneous income | (648) | (458) | (680) | (181) | (733) | (389) | (269) | (1,391) | ||||||||
| Income taxes | (5,464) | 5,912 | 3,182 | 2,675 | 3,851 | 10,004 | (5,577) | 8,278 | ||||||||
| EBITDA | (7,203) | 37,270 | 25,767 | 28,337 | 28,594 | 53,818 | (8,596) | 73,816 | ||||||||
| Adjustments: | ||||||||||||||||
| Impairment loss due to Nashville tornado | 11,738 | - | - | - | - | - | - | - | ||||||||
| Impairment loss on fixed assets | 178 | - | - | - | - | - | - | - | ||||||||
| Insurance recovery proceeds | - | (5,615) | - | - | - | - | (3,135) | (3,135) | ||||||||
| Stock-based compensation | 1,098 | 963 | 1,114 | 805 | 1,275 | 947 | 24,813 | 27,035 | ||||||||
| Change in derivative liability | 117 | (137) | 14 | (4) | 21 | 2,235 | 6,518 | 8,774 | ||||||||
| Costs related to acquisition of RideNow | - | - | - | - | 1,097 | 860 | 1,558 | 3,515 | ||||||||
| Other non-recurring costs | 278 | 469 | 332 | 268 | 121 | 81 | 1,449 | 1,651 | ||||||||
| PPP loan forgiveness | - | - | - | - | - | (19,039) | (572) | (19,611) | ||||||||
|
Pro forma adjusted EBITDA |
6,206 | 32,950 | 27,227 | 29,406 | 31,108 | 38,902 | 22,035 | 92,045 | ||||||||
| Pro forma adjustments1 | 31 | 31 | 31 | 31 | 383 | 597 | 1,545 | 2,525 | ||||||||
| Pro forma EBITDA1 | $6,237 | $32,981 | $27,258 | $29,437 | $31,491 | $39,499 | $23,580 | $94,570 |
| 1 - | Pro Forma EBITDA represents the EBITDA of RumbleOn and RideNow before the net effects of the pro forma adjustments. |
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Pro Forma Adjustments:
The historical financial statements of RumbleOn and RideNow have been adjusted in the Pro Forma Adjusted EBITDA table above to give effect to pro forma events that are (i) directly attributable to the business combination; (ii) are factually supportable; and (iii) expected to have a continuing impact on the combined results following the business combination. The following pro forma adjustments were made to compile this Pro Forma Adjusted EBITDA table:
| 1. | Intercompany revenue and cost of sales for transportation services provided by Wholesale Express and vehicle sales between RumbleOn and RideNow before the Closing Date have been eliminated in the Pro Forma Adjusted EBITDA table above. These amounts are summarized in the Intercompany Transaction Table above. |
| 2. | Amortization of preliminary valuation of intangible assets. |
| 3. | Amortization of stock-based compensation awarded in connection with the RideNow Transaction. |
| 4. | Interest expense, debt discount amortization and amortization of fees related to the Credit Agreement, dated August 30, 2021, among the Company, as borrower, the lenders party thereto, and Oaktree Fund Administration, LLC, as administrative agent and collateral agent. |
| 5. | Tax provisions (benefits) based on a blended federal and state statutory tax rate of 25%. |
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