RDNW 8-K
RideNow Group, Inc. (RDNW)
8-K
2020-11-10
For: 2020-11-10
View Original
Added on
April 12, 2026
UNITED STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT
REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of
Report (Date of earliest event reported): November 10,
2020
RumbleOn, Inc.
(Exact
name of registrant as specified in its charter)
|
Nevada
|
001-38248
|
46-3951329
|
|
(State
or Other Jurisdiction of Incorporation)
|
(Commission File
Number)
|
(I.R.S.
Employer Identification No.)
|
|
901
W. Walnut Hill Lane Irving, Texas
|
75038
|
|
(Address
of Principal Executive Offices)
|
(Zip
Code)
|
(214) 771-9952
(Registrant’s
Telephone Number, Including Area Code)
(Former
Name or Former Address, If Changed Since Last Report)
Check
the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant
under any of the following provisions:
☐ Written communications pursuant to Rule 425
under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12
under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to
Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2
(b))
☐ Pre-commencement communications pursuant to
Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4
(c))
Securities
registered pursuant to Section 12(b) of the Act:
|
Title of each class
|
Trading Symbol(s)
|
Name
of each exchange on which registered
|
|
Class B
Common Stock, $0.001 par value
|
RMBL
|
The
Nasdaq Stock Market LLC
|
Indicate
by check mark whether the registrant is an emerging growth company
as defined in Rule 405 of the Securities Act of 1933 (17 CFR
§230.405) or Rule 12b-2 of the Securities Exchange Act of 1934
(17 CFR §240.12b-2).
Emerging
growth company ☐
If an
emerging growth company, indicate by check mark if the registrant
has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided
pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02 Results of Operations and Financial
Condition.
On
November 10, 2020, RumbleOn, Inc. (the “Company”)
issued a press release reporting its results for the third quarter
of 2020. A copy of the press release is furnished as Exhibit 99.1
to this report.
The
information furnished pursuant to this Item 2.02, including
Exhibit 99.1, shall not be deemed “filed” for
purposes of Section 18 of the Securities Exchange Act of 1934,
as amended (the “Exchange Act”), or otherwise subject
to the liabilities under that section and shall not be deemed to be
incorporated by reference into any filing of the Company under the
Securities Act of 1933, as amended, or the Exchange Act, except as
shall be expressly set forth by specific reference in such
filing.
Item 9.01. Financial Statements and
Exhibits.
(d)
Exhibits
|
Exhibit No.
|
|
Description
|
|
|
Press
release dated November 10, 2020
|
SIGNATURES
Pursuant to the
requirements of the Securities Exchange Act of 1934, the registrant
has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
|
|
RUMBLEON, INC.
|
|
|
|
|
|
|
|
|
Date:
November 10, 2020
|
By:
|
/s/
Steven R. Berrard
|
|
|
|
|
Steven
R. Berrard
|
|
|
|
|
Chief
Financial Officer
|
|
Exhibit 99.1
RumbleOn Reports Record Gross Profit Margin and Earnings per Share
for the Third Quarter 2020
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
DALLAS
- 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
o
Powersports revenue
was $7.3 million
o
Automotive revenue
was $99.3 million
o
Transportation and
Vehicle Logistics revenue was $10.4 million
o
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
o
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.
o
Powersports gross
profit per powersport vehicle sold was $2,271
o
Automotive gross
profit per automotive vehicle sold was $3,652
o
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)
|
Investor Relations:
The
Blueshirt Group
Dylan
Solomon