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    RMBL   US7813863054

RUMBLEON, INC.

(RMBL)
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RumbleON : Supplemental RumbleOn/RideNow Metrics Schedule and Financial Overview - Form 8-K

12/03/2021 | 05:02pm EDT

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
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.

2

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
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

3

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.

4

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%.

5

Disclaimer

RumbleON Inc. published this content on 03 December 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 03 December 2021 22:01:18 UTC.


© Publicnow 2021
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