RumbleOn Announces Fiscal 2019 Operating Results
Provides Business Update and withdraws Prior 2020 Financial
Guidance
Dallas,
Texas, March 30, 2020 – RumbleOn,
Inc. (NASDAQ:RMBL), the e-commerce company using innovative
technology to simplify how dealers and consumers buy, sell, trade
or finance pre-owned vehicles, today announced operating results
for the year ended December 31, 2019. The Company also provided a
business update in response to the impact of the COVID-19 pandemic.
Furthermore, given the heightened uncertainty resulting from the
COVID-19 pandemic, RumbleOn is withdrawing its prior 2020 financial
guidance.
“Keeping
our employees and their families safe is our top priority. The
COVID-19 pandemic has created stark imbalances in both supply and
demand, drastically changing consumer and business spending across
many sectors. Companies across the country and around the world are
working to adjust business operations and financial forecasting
amid uncertainty during this unprecedented time,” said
RumbleOn CEO Marshall Chesrown.
“There
is no playbook for running a company during a pandemic, but
we are committed to prudent management
of our financial resources as we navigate this environment
and are taking certain actions to protect our business. As many
OEMs have suspended production, we’ve likewise temporarily
halted inventory acquisition. We have done proactive and direct
outreach to our customers and partners to reassure them that we are
operational and positioned to reaccelerate our business of both
buying and selling pre-owned vehicles when demand returns and it is
safe to resume operation,” continued Chesrown.
2019 Financial Results Commentary
“We
built RumbleOn with ambitious plans and scaled the business
quickly. With over $840 million in revenue in 2019, we now have a
national brand, and have bought and sold cars, trucks and
powersport vehicles to consumers and dealers across the
country,” continued Chesrown. “Our rapid growth impacted our operational
efficiency in various areas during the year. In line with
the plan we outlined on our last earnings call, we took a
disciplined approach to sales in the fourth quarter and
demonstrated significant improvements in both our retail mix and
gross margin in the fourth quarter.”
Summary of Preliminary Fiscal Year 2019 Financial Results
(Unaudited)
All
results are for the year ending December 31, 2019. RumbleOn’s
operating results are as follows:
●
Total vehicle unit
sales in 2019 was 43,143 units. Consistent with its previously
communicated plan, the company held back units in Q4 in order to
build inventory for the historically strong first half of the
year.
●
Total unit sales to
consumers was 3,747, 8.7% of total units sold.
●
Total revenue was
$840.6 million.
●
Total gross profit
was $50.6 million, for a total gross margin of 6.0%.
●
Total vehicle gross
profit per unit was $1,021.
●
Sales, General and
Administrative Expenses including depreciation were $86.6
million.
o
Advertising and
Marketing expense was $18.2 million.
o
Technology
development expenses were $2.4 million.
o
General and
Administrative expense was $29.9 million.
o
Compensation and
related costs were $33.5 million.
o
Professional fees
were $2.6 million.
●
Operating loss for
the year was $(37.8) million, or (4.5)% of revenue.
●
Net Loss was
$(45.2) million, or (5.4)% of revenue.
●
Adjusted EBITDA
loss of $(26.4) million.
●
Net loss per share
was $(2.03) based on 22,294,268 basic and fully diluted Class B
shares.
Adjusted
EBITDA is a non-GAAP financial measure. A reconciliation of
adjusted EBITDA is provided in the attached financial
tables.
Operating Metrics by Vehicle Type (Unaudited)
A
comparison of operating metrics by vehicle type for 2019 and 2018
is set forth below. As a reminder, RumbleOn entered the automotive
market in Q4 2018, therefore 2018 automotive results are inclusive
of results for the months of November and December 2018
only.
|
|
|
|
|
Powersports
Units
|
13,191
|
8,524
|
|
Automotive
Units
|
29,952
|
4,005
|
|
|
|
|
|
Powersports
Revenue ($000)
|
$101,009
|
$61,204
|
Automotive
Revenue ($000)
|
$717,043
|
$91,370
|
|
|
|
|
|
Powersports
Average Sales Price
|
$7,657
|
$7,180
|
|
Automotive
Average Sales Price
|
$23,940
|
$22,814
|
|
|
|
|
|
Powersports
Gross Profit per Unit
|
$935
|
$806
|
|
Automotive
Gross Profit per Unit
|
$1,059
|
$1,400
|
|
|
|
|
|
Powersports
Gross Margin per Unit (%)
|
12.2%
|
11.2%
|
|
Automotive
Gross Margin per Unit (%)
|
4.4%
|
6.1%
|
Outlook
RumbleOn’s operations and business have experienced
disruption due to the unprecedented conditions surrounding the
COVID-19 pandemic spreading throughout the United States. In
response to the COVID-19 pandemic, federal, state and local
governments are considering placing, or have placed, restrictions
on conducting or operating business activities. The Company
has been and will continue to be impacted by those
restrictions, including the closures of certain offices. Given that
the type, degree and length of such restrictions are not known at
this time, the Company cannot predict the overall impact of such
restrictions on the Company, its customers, its regional business
partners, and others that the Company works with or the overall
economic environment. As such, the impact these restrictions
may have on the Company’s financial position, operating
results and liquidity cannot be reasonably estimated at this time.
Also, the Company and its insurance carriers continue the
assessment of the costs and damages sustained by the
Company’s Nashville facilities and inventory from the
tornadoes on March 3, 2020.
“Given
the uncertainty of the ongoing impact
of these factors combined with the broader uncertainty in market
supply and demand, we have
taken immediate actions to mitigate the impact on our financial
performance. We believe it is prudent to suspend our
guidance until we can better gauge market conditions and have a
clearer understanding of the impact from the COVID-19
pandemic,” concluded Chesrown.
Annual Report
The
Company is delaying the filing of its Annual Report for the year
ended December 31, 2019 (the “Annual Report”) by up to
45 days in accordance with the U.S. Securities and Exchange
Commission’s (“SEC”) March 25, 2020 Order (which
extended and superseded a prior order issued on March 4, 2020),
pursuant to Section 36 of the Exchange Act (Release No. 34-88465)
(the “Order”), which allows for the delay of certain
filings required under the Exchange Act. In reliance upon the
Order, the Company expects to file its Annual Report no later than
May 14, 2020, which is 45 days after the original due date of the
Annual Report. If the Annual Report is filed by May 14, 2020, it
will be deemed timely filed by the SEC.
The
Company has not completed its Annual Report. As such, the
information in this press release and on the Company’s
website is subject to change. Although the Company currently
expects that its final 2019 results will be as described in this
press release and on its website, it is possible that the
Company’s final 2019 results will be different. The
information in this press release and on the Company’s
website represents the most current information available to
management and is not meant to be a comprehensive statement of the
Company’s financial results for the year ended December 31,
2019.
About RumbleOn
RumbleOn
(NASDAQ: RMBL) is an e-commerce company that uses innovative
technology to simplify how dealers and customers buy, sell, trade,
or finance pre-owned vehicles through RumbleOn’s 100% online
marketplace. Leveraging its capital-light network of 17 regional
partnerships and innovative technological solutions, RumbleOn is
disrupting the old-school pre-owned vehicle supply chain by
providing users with the most efficient, timely and transparent
transaction 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.
Adjusted
EBITDA is defined as net loss adjusted to add back interest expense
(including debt extinguishment) and depreciation and amortization,
and certain charges and expenses, such as goodwill impairment,
non-cash-stock-based compensation costs, derivative income,
severance, new business development costs, and other non-recurring
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.
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.
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. As a result of a
number of known and unknown risks and uncertainties, including the
unprecedented impact of COVID-19 pandemic on the Company’s
business, customers, employees, regional business partners and
other stakeholders, the Company’s actual results or
performance may be materially different from those expressed or
implied by these forward-looking statements. Readers are
cautioned not to place undue reliance on these forward-looking
statements, which are based on the Company’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 the Company’s SEC filings, as may be
updated and amended from time to time. The Company 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.
Investor
Relations:
The
Blueshirt Group
Whitney
Kukulka
investors@rumbleon.com
Source:
RumbleOn
RumbleOn, Inc.
Consolidated Statements of Operations
For the Two Years Ended December 31, 2019 and 2018
(Unaudited)
|
|
|
|
|
Revenue:
|
|
|
|
Pre-owned Vehicle
Sales:
|
|
|
|
Powersports
|
$101,008,976
|
$61,204,416
|
|
Automotive
|
717,042,511
|
91,369,996
|
|
Transportation and
Vehicle Logistics
|
22,577,860
|
3,823,819
|
|
Total
revenue
|
840,629,347
|
156,398,231
|
|
|
|
|
|
Cost of
revenue:
|
|
|
|
Powersports
|
88,673,515
|
54,334,066
|
|
Automotive
|
685,313,895
|
85,761,505
|
|
Transportation
|
16,023,961
|
2,755,856
|
|
Total cost of
revenue
|
790,011,371
|
142,851,427
|
|
|
|
|
|
Gross
profit
|
50,617,976
|
13,546,804
|
|
|
|
|
|
Selling, general
and administrative
|
86,624,249
|
35,963,930
|
|
|
|
|
|
Depreciation and
amortization
|
1,786,426
|
984,006
|
|
|
|
|
|
Operating
loss
|
(37,792,699)
|
(23,401,132)
|
|
|
|
|
|
Interest
expense
|
(7,187,604)
|
(1,780,685)
|
|
Decrease in
derivative liability
|
1,302,500
|
-
|
|
Loss on early
extinguishment of debt
|
(1,499,250)
|
-
|
|
Net loss before
provision for income taxes
|
(45,177,053)
|
(25,181,817)
|
|
|
|
|
|
Benefit for income
taxes
|
-
|
-
|
|
|
|
|
|
Net
loss
|
$(45,177,053)
|
$(25,181,817)
|
|
|
|
|
|
Weighted average
number of common shares outstanding - basic and fully
diluted
|
22,294,268
|
14,833,162
|
|
|
|
|
|
Net loss per share
- basic and fully diluted
|
$(2.03)
|
$(1.70)
|
Reconciliation of Non-GAAP Measures
RumbleOn, Inc.
Reconciliation of Adjusted EBITDA to Net Loss
(Unaudited)
|
|
|
|
|
Net loss
|
$(45,177,053)
|
$(25,181,817)
|
|
Add back:
|
|
|
|
Interest
expense (including debt extinguishment)
|
8,686,854
|
1,780,685
|
|
Depreciation
and amortization
|
1,786,426
|
984,006
|
|
EBITDA
|
(34,703,773)
|
(22,417,126)
|
|
Goodwill
impairment
|
1,850,000
|
-
|
|
Non-cash-stock-based
compensation
|
3,836,518
|
1,657,680
|
|
Derivative
income
|
(1,302,500)
|
-
|
|
Severance
|
1,079,438
|
-
|
|
New
business development
|
1,224,523
|
-
|
|
Other non-recurring costs (1)
|
1,639,666
|
765,060
|
|
Adjusted EBITDA
|
$(26,376,128)
|
$(19,994,386)
|
1These costs include
acquisition -related costs, financing activities, litigation
expenses, technology implementation costs and facility closure
costs that are not considered part of our core business operations
and are not an indicator of ongoing, future company
performance.