RumbleOn Announces Full Year 2020 Financial Results

Rhea-AI Summary

RumbleOn, Inc (NASDAQ: RMBL) reported its financial results for the year ending December 31, 2020. Total revenue decreased to $416.4 million, down from $840.6 million in 2019, while total vehicle unit sales dropped to 18,024. However, gross profit increased by over 100% compared to 2019, reaching $31.6 million with a gross margin of 7.6%. RumbleOn's management emphasized the success of RumbleOn 3.0, contributing to improved margins and profitability. The net loss narrowed to $25 million, an improvement from $45.2 million in 2019. A conference call is scheduled for March 15, 2021, at 8:30 a.m. ET.

Positive

• Gross profit increased by over 100% year-over-year.
• Gross margin improved from 6.0% in 2019 to 7.6% in 2020.
• Operating loss improved from $(37.8) million in 2019 to $(18.6) million in 2020.
• Adjusted EBITDA improved from $(26.4) million (3.1% of revenue) in 2019 to $(5.8) million (1.4% of revenue) in 2020.

Negative

• Total revenue decreased from $840.6 million in 2019 to $416.4 million in 2020.
• Total vehicle unit sales fell from 43,143 in 2019 to 18,024 in 2020.
• Net loss narrowed but remained substantial at $(25.0) million, down from $(45.2) million in 2019.

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 year ended December 31, 2020. Management is hosting an investor call to discuss results today, March 15, 2021 at 8:30am ET.

“Less than seven months after launching RumbleOn 3.0 its clear the newest generation of RumbleOn has been a great success,” said Marshall Chesrown, Chief Executive Officer. “RumbleOn 3.0 has increased overall listings on RumbleOn.com which has led to an improvement in gross profit on vehicles sold of more than 100% in 2020 as compared to 2019.”

Chesrown concluded, “The prescriptive steps we’ve taken to improve margins and expand our offering over the past year have quickly cemented RumbleOn as a Powersports leader in the United States.”

Full Year 2020 Financial Highlights

RumbleOn’s decision to focus on profitability in 2020, combined with the impact of COVID-19 has resulted in significantly reduced commercial activity and total inventory in the market. Despite these factors the Company's full year results demonstrate improvements in margin and EBITDA.

Unless otherwise noted, all comparisons are on a year-over-year basis for the twelve months ended December 31, 2020.

• Total vehicle unit sales was 18,024, a decrease from 43,143 in 2019
• Total revenue was $416.4 million, a decrease from $840.6 million in 2019
  • Powersports revenue was $46.7 million
  • Automotive revenue was $337.1 million
  • Transportation and vehicle logistics revenue was $31.8 million
• Total gross profit was $31.6 million, or a total gross margin of 7.6%, an increase from 6.0% in 2019
  • Gross margin on vehicles sold (excluding the impairment loss on automotive inventory) was 9.6%, up from 5.4%. Gross profit per vehicle was $2,047 per vehicle, a 100.4% increase from 2019
  • Powersports gross profit per powersport vehicle sold was $1,478
  • Automotive gross profit per automotive vehicle sold was $2,282
• Sales, General and Administrative Expenses was $53.7 million, a decrease from $86.6 million in 2019
  • Compensation expense was $25.7 million
  • Advertising and Marketing expense was $5.3 million
  • Professional fees were $3.2 million
  • Technology development expense was $1.4 million
  • General and Administrative expense was $18.1 million
• Operating loss was $(18.6) million, an improvement from $(37.8) million in 2019
• Net loss was $(25.0) million, an improvement from $(45.2) million in 2019
• Adjusted EBITDA was $(5.8) million or (1.4)% of revenue, an improvement from $(26.4) million or (3.1)% of revenue in 2019
• Net loss per basic and fully diluted Class B share was $(11.44), an improvement from $(40.53) in 2019

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.

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.

Conference Call Details

RumbleOn’s management will host a conference call today, Monday, March 15, 2021 at 8:30 a.m. ET. A live and archived webcast can be accessed from RumbleOn's Investor Relations website at https://investors.rumbleon.com. To access the conference call telephonically, callers may dial (877) 407-9716, or (201) 493-6779 for callers outside of the United States and entering conference ID 13716962.

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 twelve months ended December 31, 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 goodwill impairment, impairment loss on automotive inventory, impairment loss on plant & equipment, insurance recovery proceeds, non-cash stock-based compensation, change in derivative liability, litigation expenses, severance, new business development 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.

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 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.

Consolidated Balance Sheets
December 31, 2020 and 2019
(Unaudited)
			2020				2019
ASSETS
Current assets:
Cash			$	1,466,831			$	49,660
Restricted cash				2,049,056				6,676,622
Accounts receivable, net				9,407,960				8,482,707
Inventory				21,360,441				57,381,281
Prepaid expense and other current assets				3,446,225				1,210,474
Total current assets				37,730,513				73,800,744
Property and equipment, net				6,521,446				6,427,674
Right-of-use assets				5,689,637				6,040,287
Goodwill				26,886,563				26,886,563
Other assets				151,076				237,823
Total assets			$	76,979,235			$	113,393,091
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued liabilities			$	12,707,448			$	12,421,094
Accrued interest payable				1,485,854				749,305
Current portion of convertible debt, net				562,502				1,363,590
Current portion of long-term debt				20,688,651				59,160,970
Total current liabilities				35,444,455				73,694,959
Long -term liabilities:
Notes payable				4,691,181				1,924,733
Convertible debt, net				27,166,019				20,136,229
Derivative liabilities				16,694				27,500
Operating lease liabilities and other long-term liabilities				5,090,221				4,722,101
Total long-term liabilities				36,526,615				26,810,563
Total liabilities				71,408,570				100,505,522
Stockholders' equity:
Class B Preferred stock, $0.001 par value, 10,000,000 shares authorized, no shares issued and outstanding as of December 31, 2020 and 2019, respectively				-				-
Common A stock, $0.001 par value, 50,000 shares authorized, 50,000 shares issued and outstanding as of December 31, 2020 and 2019, respectively				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 December 31, 2020 and 2019, respectively				2,192				1,112
Additional paid in capital				108,949,204				92,268,213
Accumulated deficit				(104,380,781	)			(79,381,806	)
Total stockholders' equity				4,570,665				12,887,569
Total liabilities and stockholders' equity			$	76,979,235			$	113,393,091

Consolidated Statements of Operations
For the Years Ended December 31, 2020 and 2019
(Unaudited)
		2020				2019
Revenue:
Pre-owned Vehicle Sales:
Powersports		$	46,653,668			$	101,008,976
Automotive			337,084,959				717,042,511
Transportation and vehicle logistics			31,816,157				22,577,860
Other			872,459				-
Total revenue			416,427,243				840,629,347
Cost of revenue:
Powersports			40,060,571				88,673,515
Automotive			308,800,631				685,313,894
Transportation and vehicle logistics			24,200,229				16,023,962
Cost of revenue before impairment loss			373,061,431				790,011,371
Impairment loss on automotive inventory			11,738,413				-
Total cost of revenue			384,799,844				790,011,371
Gross profit			31,627,399				50,617,976
Selling, general and administrative			53,659,348				86,624,249
Insurance recovery proceeds			(5,615,268	)			-
Depreciation and amortization			2,142,939				1,786,426
Operating loss			(18,559,620	)			(37,792,699	)
Interest expense			(6,638,325	)			(7,187,604	)
Decrease in derivative liability			10,806				1,302,500
Gain (loss) on early extinguishment of debt			188,164				(1,499,250	)
Net loss before provision for income taxes			(24,998,975	)			(45,177,053	)
Benefit for income taxes			-				-
Net loss		$	(24,998,975	)		$	(45,177,053	)
Weighted average number of common shares outstanding - basic and fully diluted			2,184,441				1,114,714
Net loss per share - basic and fully diluted		$	(11.44	)		$	(40.53	)

Consolidated Statements of Cash Flows
For the Years Ended December 31, 2020 and 2019
(Unaudited)
		2020				2019
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss		$	(24,998,975	)		$	(45,177,053	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization			2,142,939				1,786,426
Amortization of debt discount			2,027,046				1,664,000
Bad debt expense			310,721				1,123,739
Stock based compensation expense			2,978,236				3,836,518
Impairment loss on inventory			11,738,413				-
Impairment loss on property and equipment			177,626				-
(Gain) from change in value of derivative liability			(10,806	)			(1,302,500	)
Loss from extinguishment of debt			(188,164	)			1,499,250
Goodwill impairment			-				1,850,000
Changes in operating assets and liabilities:
Decrease (increase) in accounts receivable			(1,235,974	)			2,037,023
(Increase) decrease in inventory			24,282,427				(2,327,754	)
(Increase) in prepaid expenses and other current assets			(2,235,751	)			(113,529	)
(Increase) decrease in other assets			86,747				(135,645	)
Increase in other liabilities			720,067				-
(Decrease) increase in accounts payable and accrued liabilities			152,126				(5,031,073	)
Increase in accrued interest payable			1,196,549				543,268
Net cash provided by (used in) operating activities			17,143,227				(39,747,330	)
CASH FLOWS FROM INVESTING ACTIVITIES
Net cash used for acquisitions			-				(835,000	)
Proceeds from sales of property and equipment			38,436				169,268
Technology development			(2,145,055	)			(3,085,743	)
Purchase of property and equipment			(174,786	)			(119,748	)
Net cash used in investing activities			(2,281,405	)			(3,871,223	)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from notes payable and convertible debt			8,272,375				27,455,537
Repayments for notes payable			(1,767,758	)			(10,857,500	)
Net proceeds from (payments on) lines of credit			(40,533,759	)			2,788,469
Proceeds from PPP Loan			5,176,845				-
Proceeds from sale of common stock			10,780,080				15,173,427
Net cash provided by (used in) financing activities			(18,072,217	)			34,559,933
NET CHANGE IN CASH			(3,210,395	)			(9,058,620	)
CASH AND RESTRICTED CASH AT BEGINNING OF PERIOD			6,726,282				15,784,902
CASH AND RESTRICTED CASH AT END OF PERIOD		$	3,515,887			$	6,726,282

Reconciliation of Non-GAAP Measures
Reconciliation of Adjusted EBITDA to Net Loss
RumbleOn, Inc.
(Unaudited)
		2020				2019
Net loss		$	(24,998,975	)		$	(45,177,053	)
Add back:
Interest expense (including debt extinguishment)			6,450,161				8,686,854
Depreciation and amortization			2,142,939				1,786,426
EBITDA			(16,405,875	)			(34,703,773	)
Adjustments
Goodwill impairment							1,850,000
Impairment loss on automotive inventory			11,738,413				-
Impairment loss on plant & equipment			177,626				-
Insurance recovery proceeds			(5,615,268	)			-
Non-cash stock-based compensation			2,978,236				3,836,518
Change in derivative liability			(10,806	)			(1,302,500	)
Litigation expenses			1,295,717				61,446
Severance			-				1,079,438
New business development			-				1,224,523
Other Non-recurring costs			51,387				1,578,220
Adjusted EBITDA		$	(5,790,570	)		$	(26,376,128	)

 

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FAQ

What were RumbleOn's total revenues for 2020?

RumbleOn's total revenue for 2020 was $416.4 million, down from $840.6 million in 2019.

How much did RumbleOn improve its gross profit in 2020?

RumbleOn's gross profit increased by over 100% in 2020, reaching $31.6 million.

What was RumbleOn's operating loss for 2020?

RumbleOn reported an operating loss of $(18.6) million for 2020, improved from $(37.8) million in 2019.

When is RumbleOn's investor conference call?

RumbleOn's investor conference call is scheduled for March 15, 2021, at 8:30 a.m. ET.

What is RumbleOn's net loss for the year 2020?

RumbleOn's net loss for 2020 was $(25.0) million, a reduction from $(45.2) million in 2019.