QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(Exact name of registrant as specified in its charter) | ||||||||||||||
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |||||||||||||
(Address of principal executive offices) | (Zip Code) |
( | ||
(Registrant's telephone number, including area code) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
Large accelerated filer | o | x | |||||||||
Non-accelerated filer | o | Smaller reporting company | |||||||||
Emerging growth company |
FINANCIAL INFORMATION | ||||||||
Financial Statements | ||||||||
Management's Discussion and Analysis of Financial Condition and Results of Operations | ||||||||
Quantitative and Qualitative Disclosures About Market Risk | ||||||||
Controls and Procedures | ||||||||
OTHER INFORMATION | ||||||||
Legal Proceedings | ||||||||
Risk Factors | ||||||||
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | |||||||
Item 3. | Defaults Upon Senior Securities | |||||||
Item 4. | Mine Safety Disclosures | |||||||
Other Information | ||||||||
Exhibits | ||||||||
June 30, 2022 | December 31, 2021 | ||||||||||
ASSETS | |||||||||||
Current assets: | |||||||||||
Cash | $ | $ | |||||||||
Restricted cash | |||||||||||
Accounts receivable, net | |||||||||||
Inventory | |||||||||||
Prepaid expense and other current assets | |||||||||||
Total current assets | |||||||||||
Property and equipment, net | |||||||||||
Right-of-use assets | |||||||||||
Goodwill | |||||||||||
Intangible assets, net | |||||||||||
Other assets | |||||||||||
Total assets | $ | $ | |||||||||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||||||
Current liabilities: | |||||||||||
Accounts payable and accrued liabilities | $ | $ | |||||||||
Vehicle floor plan note payable | |||||||||||
Current portion lease liabilities | |||||||||||
Current portion of long-term, convertible debts, and notes payable | |||||||||||
Total current liabilities | |||||||||||
Long-term liabilities: | |||||||||||
Senior secured note | |||||||||||
Convertible debt, net | |||||||||||
Line of credit and notes payable | |||||||||||
Operating lease liabilities | |||||||||||
Deferred tax liabilities | |||||||||||
Other long-term liabilities | |||||||||||
Total long-term liabilities | |||||||||||
Commitments and contingencies (Notes 2, 4, 7, and 10) | |||||||||||
Stockholders' equity: | |||||||||||
Preferred stock, $ | |||||||||||
Common A stock, $ | |||||||||||
Common B stock, $ | |||||||||||
Additional paid-in capital | |||||||||||
Accumulated deficit | ( | ( | |||||||||
Class B stock in treasury, at cost | ( | ( | |||||||||
Total stockholders' equity | |||||||||||
Total liabilities and stockholders' equity | $ | $ |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
Revenue: | |||||||||||||||||||||||
Vehicles sales | |||||||||||||||||||||||
Powersports | $ | $ | $ | $ | |||||||||||||||||||
Automotive | |||||||||||||||||||||||
Parts, service and accessories | |||||||||||||||||||||||
Finance and insurance, net | |||||||||||||||||||||||
Vehicle logistics | |||||||||||||||||||||||
Total revenue | |||||||||||||||||||||||
Cost of revenue: | |||||||||||||||||||||||
Powersports | |||||||||||||||||||||||
Automotive | |||||||||||||||||||||||
Parts, service and accessories | |||||||||||||||||||||||
Vehicle logistics | |||||||||||||||||||||||
Total cost of revenue | |||||||||||||||||||||||
Gross profit | |||||||||||||||||||||||
Selling, general and administrative | |||||||||||||||||||||||
Depreciation and amortization | |||||||||||||||||||||||
Operating income (loss) | ( | ||||||||||||||||||||||
Interest expense | ( | ( | ( | ( | |||||||||||||||||||
Other income (expense) | |||||||||||||||||||||||
Change in derivative liability | ( | ( | |||||||||||||||||||||
Income (loss) before provision for income taxes | ( | ( | |||||||||||||||||||||
Income tax provision | |||||||||||||||||||||||
Net income (loss) | $ | $ | ( | $ | $ | ( | |||||||||||||||||
Weighted average number of common shares outstanding - basic | |||||||||||||||||||||||
Earnings (loss) per share - basic | $ | $ | ( | $ | $ | ( | |||||||||||||||||
Weighted average number of common shares outstanding - diluted | |||||||||||||||||||||||
Earnings (loss) per share - diluted | $ | $ | ( | $ | $ | ( |
Class A Common Shares | Class B Common Shares | Additional Paid in Capital | Accumulated Deficit | Class B Common Shares in Treasury | Total Stockholders' Equity | ||||||||||||||||||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Shares | Amount | ||||||||||||||||||||||||||||||||||||||||||||||||
Balance as of March 31, 2022 | $ | $ | $ | $ | ( | $ | ( | $ | |||||||||||||||||||||||||||||||||||||||||||||
Issuance of common stock for restricted stock units | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
Escrow shares returned in connection with Freedom acquisition | — | — | ( | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
Balance as of June 30, 2022 | $ | $ | $ | $ | ( | $ | ( | $ |
Class A Common Shares | Class B Common Shares | Additional Paid in Capital | Accumulated Deficit | Class B Common Shares in Treasury | Total Stockholders' Equity | |||||||||||||||||||||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Shares | Amount | |||||||||||||||||||||||||||||||||||||||||||||||||||
Balance as of December 31, 2021 | $ | $ | $ | $ | ( | $ | ( | $ | ||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of common stock for restricted stock units | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of common stock in acquisition | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
Escrow shares returned in connection with Freedom acquisition | — | — | ( | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
Balance as of June 30, 2022 | $ | $ | $ | $ | ( | $ | ( | $ |
Class A Common Shares | Class B Common Shares | Additional Paid in Capital | Accumulated Deficit | Class B Common Shares in Treasury | Total Stockholders' Equity | ||||||||||||||||||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Shares | Amount | ||||||||||||||||||||||||||||||||||||||||||||||||
Balance as of March 31, 2021 | $ | $ | $ | $ | ( | — | $ | — | $ | ||||||||||||||||||||||||||||||||||||||||||||
Issuance of common stock for restricted stock units | — | — | 0 | 0 | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||
Issuance of common stock, net of issuance cost | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||
Balance as of June 30, 2021 | $ | $ | $ | $ | ( | — | $ | — | $ |
Class A Common Shares | Class B Common Shares | Additional Paid in Capital | Accumulated Deficit | Class B Common Shares in Treasury | Total Stockholders' Equity | |||||||||||||||||||||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Shares | Amount | |||||||||||||||||||||||||||||||||||||||||||||||||||
Balance as of December 31, 2020 | $ | $ | $ | $ | ( | — | $ | — | $ | |||||||||||||||||||||||||||||||||||||||||||||||
Issuance of common stock for restricted stock units | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||
Issuance of common stock, net of issuance cost | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||
Balance as of June 30, 2021 | $ | $ | $ | $ | ( | — | $ | — | $ |
Six Months Ended June 30, | |||||||||||
2022 | 2021 | ||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES | |||||||||||
Net income (loss) | $ | $ | ( | ||||||||
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | |||||||||||
Depreciation and amortization | |||||||||||
Amortization of debt discount | |||||||||||
Stock based compensation expense | |||||||||||
(Gain) loss from change in value of derivatives | ( | ||||||||||
Deferred taxes | |||||||||||
Changes in finance receivable related assets and liabilities: | |||||||||||
Proceeds from ROF credit facility for the purchase of consumer finance loans | |||||||||||
Originations of finance receivables | ( | ||||||||||
Principal payments received on finance receivables | |||||||||||
Changes in operating assets and liabilities, excluding impact of acquisitions: | |||||||||||
Accounts receivable | ( | ||||||||||
Inventory | ( | ||||||||||
Prepaid expenses and other current assets | ( | ( | |||||||||
Other assets | ( | ( | |||||||||
Other liabilities | ( | ( | |||||||||
Accounts payable and accrued liabilities | |||||||||||
Floor plan trade note borrowings | |||||||||||
Net cash provided by (used in) operating activities | ( | ||||||||||
CASH FLOWS FROM INVESTING ACTIVITIES | |||||||||||
Acquisitions, net of cash received | ( | ||||||||||
Purchase of property and equipment | ( | ( | |||||||||
Technology development | ( | ( | |||||||||
Net cash used in investing activities | ( | ( | |||||||||
CASH FLOWS FROM FINANCING ACTIVITIES | |||||||||||
Proceeds from new secured debt | |||||||||||
Repayments of debt and mortgage notes | ( | ||||||||||
Repayments of (proceeds from) issuance of notes | ( | ||||||||||
(Decrease) increase in borrowings from non-trade floor plans | ( | ||||||||||
Net proceeds from sale of common stock | |||||||||||
Net cash provided by financing activities | |||||||||||
NET CHANGE IN CASH | |||||||||||
Cash and restricted cash at beginning of period | |||||||||||
Cash and restricted cash at end of period | $ | $ |
Cash | $ | |||||||
Class B Common Stock | ||||||||
Acquiree transaction expenses paid by the Company at closing | ||||||||
Elimination of preexisting payable from RideNow to RumbleOn | ||||||||
Total provisional purchase price consideration | $ |
Estimated fair value of assets: | |||||
Cash | $ | ||||
Contracts in transit | |||||
Accounts receivable | |||||
Inventory | |||||
Prepaid expenses | |||||
Right-of-use assets | |||||
Right-of-use assets - related parties | |||||
Property & equipment | |||||
Franchise rights | |||||
Other intangible assets, net | |||||
Other assets | |||||
Total assets acquired | $ | ||||
Estimated fair value of liabilities assumed: | |||||
Accounts payable, accrued expenses and other current liabilities | $ | ||||
Notes payable - floor plan | |||||
Lease liabilities | |||||
Lease liabilities - related parties | |||||
Notes payable | |||||
Notes payable - related parties | |||||
Deferred tax liabilities | |||||
Other long-term liabilities | |||||
Total liabilities assumed | |||||
Total net assets acquired | |||||
Goodwill | |||||
Total provisional purchase price consideration | $ |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
Pro forma revenue | $ | $ | $ | $ | |||||||||||||||||||
Pro forma net income | $ | $ | $ | $ | |||||||||||||||||||
Earnings per share-basic | $ | $ | $ | $ | |||||||||||||||||||
Weighted average number of shares-basic | |||||||||||||||||||||||
Earnings per share diluted | $ | $ | $ | $ | |||||||||||||||||||
Weighted average number of shares diluted |
Cash | $ | |||||||
Class B Common Stock | ||||||||
Acquiree transaction expenses paid by the Company at closing | ||||||||
Total provisional purchase price consideration | $ |
Estimated fair value of assets: | |||||
Cash | $ | ||||
Contracts in transit | |||||
Accounts receivable | |||||
Inventory | |||||
Prepaid expenses | |||||
Property & equipment | |||||
Right-of-use assets | |||||
Other intangible assets | |||||
Franchise rights | |||||
Other assets | |||||
Total assets acquired | $ | ||||
Estimated fair value of liabilities assumed: | |||||
Accounts payable, accrued expenses and other current liabilities | $ | ||||
Notes payable - floor plan | |||||
Lease liabilities | |||||
Deferred revenues | |||||
Mortgage notes | |||||
Notes payable | |||||
Total liabilities assumed | |||||
Total net assets acquired | |||||
Goodwill | |||||
Total provisional purchase price consideration | $ |
June 30, 2022 | December 31, 2021 | ||||||||||
Goodwill | $ | $ | |||||||||
Other Intangible Assets | |||||||||||
Franchise rights - indefinite life | $ | $ | |||||||||
Other intangibles | |||||||||||
Less accumulated amortization | |||||||||||
Intangible assets, net | $ | $ |
Powersports | Automotive | Vehicle Logistics | Total | ||||||||||||||||||||
Balance at December 31, 2021 | $ | $ | $ | $ | |||||||||||||||||||
RideNow purchase price adjustments | ( | ( | |||||||||||||||||||||
Freedom Powersports Transaction | |||||||||||||||||||||||
Balance at June 30, 2022 | $ | $ | $ | $ |
2022 | $ | ||||
2023 | |||||
2024 | |||||
2025 | |||||
Thereafter | |||||
$ |
June 30, 2022 | December 31, 2021 | |||||||||||||
Term Loan Credit Agreement dated August 31, 2021. Amortization payments are required quarterly commencing in the quarter ended December 31, 2021. The initial Loan Term Facility matures on August 31, 2026. The interest rate at June 30, 2022 was | $ | $ | ||||||||||||
Notes Payable-PPP Loans dated May 1, 2020 with maturity of April 1, 2025. Payments of principal and interest were deferred as of June 30, 2022 while the outstanding principal balance is under Small Business Administration (“SBA”) review. | ||||||||||||||
Unsecured note payable to P&D Motorcycles in the original amount of $ | ||||||||||||||
Unsecured notes payable to RideNow Management, LLLP, a related party through equal ownership by former two directors; monthly principal payments ranging from $ | ||||||||||||||
RumbleOn Finance line of credit dated February 4, 2022. Interest accrues at | ||||||||||||||
Total notes payable and lines of credit | ||||||||||||||
Less: Current portion | ||||||||||||||
Long-term portion | $ | $ |
June 30, 2022 | December 31, 2021 | ||||||||||
Floor plans notes payable - trade | $ | $ | |||||||||
Floor plans notes payable - non-trade | |||||||||||
Floor plan notes payable | $ | $ |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
Restricted Stock Units | $ | $ | $ | $ | |||||||||||||||||||
Stock Options | |||||||||||||||||||||||
Total stock-based compensation | $ | $ | $ | $ |
Six Months Ended June 30, | |||||||||||
2022 | 2021 | ||||||||||
Cash paid for interest | $ | $ | |||||||||
Fair value of | $ | $ | |||||||||
Capital expenditures and technology development costs included in accounts payable and accrued liabilities | $ | $ |
June 30, 2022 | December 31, 2021 | ||||||||||
Cash and cash equivalents | $ | $ | |||||||||
Restricted cash (1) | |||||||||||
Total cash, cash equivalents, and restricted cash | $ | $ |
Leases | Classification | June 30, 2022 | December 31, 2021 | |||||||||||||||||
Assets: | ||||||||||||||||||||
Operating | Right of use assets | $ | $ | |||||||||||||||||
Finance | ||||||||||||||||||||
Total right-of-use assets | $ | $ | ||||||||||||||||||
Liabilities: | ||||||||||||||||||||
Current: | ||||||||||||||||||||
Operating | $ | $ | ||||||||||||||||||
Finance | ||||||||||||||||||||
Non-Current: | ||||||||||||||||||||
Operating | Long-term portion of operating lease liabilities | |||||||||||||||||||
Finance | Other long-term liabilities | |||||||||||||||||||
Total lease liabilities | $ | $ |
June 30, 2022 | |||||
Weighted average lease term-operating leases | |||||
Weighted average discount rate-operating leases | |||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
Operating lease costs | $ | $ | $ | $ | |||||||||||||||||||
Finance lease costs: | |||||||||||||||||||||||
Amortization of ROU assets | |||||||||||||||||||||||
Interest on lease liabilities | |||||||||||||||||||||||
Total lease costs | $ | $ | $ | $ |
Leases | Classification | June 30, 2022 | ||||||||||||
Assets: | ||||||||||||||
Operating | Right of use assets – related party | $ | ||||||||||||
Operating | All other right of use assets | |||||||||||||
Total right-of-use assets | $ | |||||||||||||
Liabilities: | ||||||||||||||
Current: | ||||||||||||||
Operating | Current portion of lease liabilities – related party | $ | ||||||||||||
Operating | Current portion of lease liabilities – all other leases | |||||||||||||
Total current liabilities | $ | |||||||||||||
Non-Current: | ||||||||||||||
Operating | Long-term portion of lease liabilities – related party | |||||||||||||
Operating | Long-term portion of lease liabilities – all other leases | |||||||||||||
Total non-current liabilities | $ | |||||||||||||
Total lease liabilities | $ |
Six Months Ended June 30, 2022 | |||||
Cash payments for operating leases | $ | ||||
ROU assets obtained in exchange for new operating lease liabilities | $ |
Year | Operating Leases | ||||
2022 | $ | ||||
2023 | |||||
2024 | |||||
2025 | |||||
2026 | |||||
Thereafter | |||||
Total lease payments | |||||
Less: imputed interest | |||||
Present value of operating lease liabilities | $ |
Powersports | Automotive | Vehicle Logistics | Eliminations(1) | Total | |||||||||||||||||||||||||
Three Months Ended June 30, 2022 | |||||||||||||||||||||||||||||
Total assets | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||
Revenue | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||
Operating income | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Depreciation and amortization | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Interest expense | $ | ( | $ | ( | $ | $ | $ | ( | |||||||||||||||||||||
Three Months Ended June 30, 2021 | |||||||||||||||||||||||||||||
Total assets | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||
Revenue | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||
Operating income (loss) | $ | ( | $ | $ | $ | $ | |||||||||||||||||||||||
Depreciation and amortization | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Interest expense | $ | ( | $ | ( | $ | ( | $ | $ | ( | ||||||||||||||||||||
Change in derivative liability | $ | ( | $ | $ | $ | $ | ( | ||||||||||||||||||||||
Six Months Ended June 30, 2022 | |||||||||||||||||||||||||||||
Total assets | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||
Revenue | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||
Operating income | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Depreciation and amortization | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Interest expense | $ | ( | $ | ( | $ | ( | $ | $ | ( | ||||||||||||||||||||
Change in derivative liability | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Six Months Ended June 30, 2021 | |||||||||||||||||||||||||||||
Total assets | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||
Revenue | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||
Operating income (loss) | $ | ( | $ | $ | $ | $ | ( | ||||||||||||||||||||||
Depreciation and amortization | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Interest expense | $ | ( | $ | ( | $ | ( | $ | $ | ( | ||||||||||||||||||||
Change in derivative liability | $ | ( | $ | $ | $ | $ | ( |
RumbleOn’s Representative Brands | ||||||||
Alumacraft | Honda | Sea-Doo | ||||||
Argo | Indian | Slingshot | ||||||
Benelli | Kawasaki | SSR | ||||||
BMW | Kayo Sports | Suzuki | ||||||
Can-Am | KTM | Spyder | ||||||
CF Moto | Manitou | TideWater | ||||||
Ducati | Polaris | Triumph | ||||||
Harley-Davidson | Ryker | Vanderhall | ||||||
Hisun | Scarab | Yamaha | ||||||
Three Months Ended June 30, | Six-months ended June 30, | ||||||||||||||||||||||||||||||||||
2022 | 2021 | YoY Change | 2022 | 2021 | YoY Change | ||||||||||||||||||||||||||||||
Financial Overview | |||||||||||||||||||||||||||||||||||
Revenue | |||||||||||||||||||||||||||||||||||
Powersports | $ | 312,685 | $ | 27,487 | $ | 285,198 | $ | 567,318 | $ | 38,015 | $ | 529,303 | |||||||||||||||||||||||
Automotive | 115,730 | 127,286 | (11,556) | 226,459 | 211,357 | 15,102 | |||||||||||||||||||||||||||||
Parts, service, accessories, merchandise | 65,315 | — | 65,315 | 120,052 | — | 120,052 | |||||||||||||||||||||||||||||
Finance and insurance, net | 36,848 | 491 | 36,357 | 64,318 | 818 | 63,500 | |||||||||||||||||||||||||||||
Vehicle Logistics | 15,517 | 13,081 | 2,436 | 27,868 | 22,419 | 5,449 | |||||||||||||||||||||||||||||
Total revenue | $ | 546,095 | $ | 168,345 | $ | 377,750 | $ | 1,006,015 | $ | 272,609 | $ | 733,406 | |||||||||||||||||||||||
Gross Profit | |||||||||||||||||||||||||||||||||||
Powersports | $ | 61,845 | $ | 6,466 | $ | 55,379 | $ | 108,246 | $ | 9,117 | $ | 99,129 | |||||||||||||||||||||||
Automotive | 4,733 | 10,169 | (5,436) | 8,308 | 16,380 | (8,072) | |||||||||||||||||||||||||||||
Vehicle Logistics | 3,168 | 2,385 | 783 | 5,652 | 4,374 | 1,278 | |||||||||||||||||||||||||||||
Parts, service, accessories, merchandise | 31,370 | — | 31,370 | 56,652 | — | 56,652 | |||||||||||||||||||||||||||||
Finance and insurance | 36,847 | 491 | 36,356 | 64,318 | 818 | 63,500 | |||||||||||||||||||||||||||||
Total Gross Profit | $ | 137,963 | $ | 19,511 | $ | 118,452 | $ | 243,176 | $ | 30,689 | $ | 212,487 | |||||||||||||||||||||||
Total Operating Expenses | $ | 106,034 | $ | 18,746 | $ | 87,288 | $ | 188,584 | $ | 32,746 | $ | 155,838 | |||||||||||||||||||||||
Operating Income (Loss) | $ | 31,929 | $ | 765 | $ | 31,164 | $ | 54,592 | $ | (2,057) | $ | 56,649 | |||||||||||||||||||||||
Net Income (Loss) | $ | 14,033 | $ | (3,390) | $ | 17,423 | $ | 23,174 | $ | (7,842) | $ | 31,016 | |||||||||||||||||||||||
Adjusted EBITDA (1) | $ | 44,319 | $ | 3,041 | $ | 41,278 | $ | 75,748 | $ | 3,061 | $ | 72,687 | |||||||||||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||||||||||||||
2022 | 2021 | YoY Change | 2022 | 2021 | YoY Change | ||||||||||||||||||||||||||||||
Revenue | |||||||||||||||||||||||||||||||||||
New retail vehicles | $ | 184,074 | $ | — | $ | 184,074 | $ | 346,257 | $ | — | $ | 346,257 | |||||||||||||||||||||||
Used vehicles: | |||||||||||||||||||||||||||||||||||
Used retail vehicles | 122,886 | — | 122,886 | 209,544 | — | 209,544 | |||||||||||||||||||||||||||||
Used wholesale vehicles | 5,725 | 27,488 | (21,763) | 11,517 | 38,015 | (26,498) | |||||||||||||||||||||||||||||
Total used vehicles | 128,611 | 27,488 | 101,123 | 221,061 | 38,015 | 183,046 | |||||||||||||||||||||||||||||
Finance and insurance, net | 36,847 | 491 | 36,356 | 64,318 | 818 | 63,500 | |||||||||||||||||||||||||||||
Parts, service, accessories, merchandise | 65,314 | — | 65,314 | 120,052 | — | 120,052 | |||||||||||||||||||||||||||||
Total revenue | $ | 414,846 | $ | 27,979 | $ | 386,867 | $ | 751,688 | $ | 38,833 | $ | 712,855 | |||||||||||||||||||||||
Gross Profit | |||||||||||||||||||||||||||||||||||
New retail vehicles | $ | 37,286 | $ | — | $ | 37,286 | $ | 68,478 | $ | — | $ | 68,478 | |||||||||||||||||||||||
Used vehicles: | |||||||||||||||||||||||||||||||||||
Used retail vehicles | 22,271 | — | 22,271 | 36,993 | — | 36,993 | |||||||||||||||||||||||||||||
Used wholesale vehicles | 2,275 | 6,466 | (4,191) | 2,746 | 9,118 | (6,372) | |||||||||||||||||||||||||||||
Total used vehicles | 24,546 | 6,466 | 18,080 | 39,739 | 9,118 | 30,621 | |||||||||||||||||||||||||||||
Finance and insurance | 36,847 | 491 | 36,356 | 64,318 | 818 | 63,500 | |||||||||||||||||||||||||||||
Parts, service, accessories, merchandise | 31,370 | — | 31,370 | 56,652 | — | 56,652 | |||||||||||||||||||||||||||||
Total gross profit | $ | 130,049 | $ | 6,957 | $ | 123,092 | $ | 229,187 | $ | 9,936 | $ | 219,251 | |||||||||||||||||||||||
Vehicle Unit Sales | |||||||||||||||||||||||||||||||||||
New retail vehicles | 11,366 | — | 11,366 | 21,043 | — | 21,043 | |||||||||||||||||||||||||||||
Used vehicles: | |||||||||||||||||||||||||||||||||||
Used retail vehicles | 8,619 | — | 8,619 | 14,720 | — | 14,720 | |||||||||||||||||||||||||||||
Used wholesale vehicles | 728 | 2,411 | (1,683) | 1,707 | 3,417 | (1,710) | |||||||||||||||||||||||||||||
Total used vehicles | 9,347 | 2,411 | 6,936 | 16,427 | 3,417 | 13,010 | |||||||||||||||||||||||||||||
Total vehicles sold | 20,713 | 2,411 | 18,302 | 37,470 | 3,417 | 34,053 | |||||||||||||||||||||||||||||
Revenue per vehicle | |||||||||||||||||||||||||||||||||||
New retail vehicles | $ | 16,195 | $ | — | $ | 16,195 | $ | 16,455 | $ | — | $ | 16,455 | |||||||||||||||||||||||
Used vehicles: | |||||||||||||||||||||||||||||||||||
Used retail vehicles | 14,258 | — | 14,258 | 14,235 | — | 14,235 | |||||||||||||||||||||||||||||
Used wholesale vehicles | 7,865 | 11,401 | (3,536) | 6,747 | 11,125 | (4,378) | |||||||||||||||||||||||||||||
Total used vehicles | 13,760 | 11,401 | 2,359 | 13,457 | 11,125 | 2,332 | |||||||||||||||||||||||||||||
Finance and insurance, net | 1,844 | — | 1,844 | 1,798 | — | 1,798 | |||||||||||||||||||||||||||||
Parts, service, accessories, merchandise | 3,268 | — | 3,268 | 3,357 | — | 3,357 | |||||||||||||||||||||||||||||
Total revenue per retail vehicle | $ | 20,758 | $ | — | $ | 20,758 | $ | 21,019 | $ | — | $ | 21,019 | |||||||||||||||||||||||
Gross Profit per vehicle | |||||||||||||||||||||||||||||||||||
New vehicles | $ | 3,280 | $ | — | N/A | $ | 3,254 | $ | — | N/A | |||||||||||||||||||||||||
Used vehicles | $ | 2,626 | $ | — | N/A | $ | 2,419 | $ | — | N/A | |||||||||||||||||||||||||
Finance and insurance, net | $ | 1,844 | $ | — | N/A | $ | 1,798 | $ | — | N/A | |||||||||||||||||||||||||
Parts, service, accessories, merchandise | $ | 1,570 | $ | — | N/A | $ | 1,584 | $ | — | N/A | |||||||||||||||||||||||||
Total gross profit per retail vehicle (1) | $ | 4,938 | $ | — | N/A | $ | 4,824 | $ | — | N/A |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||||||||||||||
2022 | 2021 | YoY Change | 2022 | 2021 | YoY Change | ||||||||||||||||||||||||||||||
Revenue | $ | 115,730 | $ | 127,286 | $ | (11,556) | $ | 226,459 | $ | 211,357 | $ | 15,102 | |||||||||||||||||||||||
Gross Profit (1) | $ | 4,733 | $ | 10,169 | $ | (5,436) | $ | 8,169 | $ | 16,380 | $ | (8,211) | |||||||||||||||||||||||
Vehicles sold | 2,617 | 3,300 | (683) | 5,240 | 5,794 | (554) | |||||||||||||||||||||||||||||
Revenue per vehicle | $ | 44,223 | $ | 38,572 | $ | 5,651 | $ | 43,217 | $ | 36,479 | $ | 6,738 | |||||||||||||||||||||||
Gross Profit per vehicle | $ | 1,809 | $ | 3,081 | $ | (1,272) | $ | 1,559 | $ | 2,827 | $ | (1,268) |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||||||||||||||
2022 | 2021 | YoY Change | 2022 | 2021 | YoY Change | ||||||||||||||||||||||||||||||
($ in 000s, except per unit) | |||||||||||||||||||||||||||||||||||
Revenue (1) | $ | 16,636 | $ | 14,518 | $ | 2,118 | $ | 30,248 | $ | 24,548 | $ | 5,700 | |||||||||||||||||||||||
Gross Profit | $ | 3,180 | $ | 2,385 | $ | 795 | $ | 5,820 | $ | 4,374 | $ | 1,446 | |||||||||||||||||||||||
Vehicles transported | 25,472 | 23,502 | 1,970 | 47,303 | 42,409 | 4,894 | |||||||||||||||||||||||||||||
Revenue per vehicle transported | $ | 653 | $ | 618 | $ | 35 | $ | 639 | $ | 579 | $ | 60 | |||||||||||||||||||||||
Gross Profit per vehicle transported | $ | 125 | $ | 101 | $ | 24 | $ | 123 | $ | 103 | $ | 20 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
Advertising, marketing and selling | $ | 9,355 | $ | 1,962 | $ | 16,202 | $ | 3,558 | |||||||||||||||
Compensation and related costs | 60,045 | 7,632 | 105,980 | 11,879 | |||||||||||||||||||
Facilities | 12,133 | 867 | 21,824 | 1,375 | |||||||||||||||||||
General and administrative | 14,903 | 6,526 | 27,995 | 11,439 | |||||||||||||||||||
Stock based compensation | 2,753 | 701 | 4,632 | 2,435 | |||||||||||||||||||
Technology development and software | 965 | 425 | 1,598 | 828 | |||||||||||||||||||
Total SG&A expenses | $ | 100,154 | $ | 18,113 | $ | 178,231 | $ | 31,514 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
Net income (loss) | $ | 14,033 | $ | (3,390) | $ | 23,174 | $ | (7,842) | |||||||||||||||
Add back: | |||||||||||||||||||||||
Interest expense | 13,275 | 1,921 | 24,456 | 3,529 | |||||||||||||||||||
Depreciation and amortization | 5,879 | 632 | 10,353 | 1,231 | |||||||||||||||||||
Interest income and miscellaneous income | (249) | — | (249) | — | |||||||||||||||||||
Income tax provision | 4,870 | — | 7,250 | — | |||||||||||||||||||
EBITDA | 37,808 | (837) | 64,984 | (3,082) | |||||||||||||||||||
Adjustments: | |||||||||||||||||||||||
Stock based compensation | 2,753 | 701 | 4,632 | 1,727 | |||||||||||||||||||
Transaction costs - RideNow and Freedom | 687 | 860 | 1,403 | 1,957 | |||||||||||||||||||
Purchase accounting related | 592 | — | 592 | — | |||||||||||||||||||
Other non-recurring costs | 2,479 | 81 | 4,176 | 203 | |||||||||||||||||||
Change in derivative and warrant liabilities | — | 2,236 | (39) | 2,256 | |||||||||||||||||||
Adjusted EBITDA | $ | 44,319 | $ | 3,041 | $ | 75,748 | $ | 3,061 |
June 30, 2022 | December 31, 2021 | |||||||||||||
Cash | $ | 68,182 | $ | 48,974 | ||||||||||
Restricted cash (1) | 9,500 | 3,000 | ||||||||||||
Total cash and restricted cash | 77,682 | 51,974 | ||||||||||||
Availability under short-term revolving facilities | 192,363 | 124,116 | ||||||||||||
Committed liquidity resources available | $ | 270,045 | $ | 176,090 |
(1) | Amounts included in restricted cash are primarily comprised of the deposits required under the Company's various floor plan lines of credit and ROF line of credit. |
June 30, 2022 | December 31, 2021 | ||||||||||
Asset-Based Financing: | |||||||||||
Inventory | $ | 138,986 | $ | 97,278 | |||||||
Total asset-based financing | 138,986 | 97,278 | |||||||||
Term loan facility | 361,978 | 279,300 | |||||||||
Unsecured senior convertible notes | 38,750 | 39,006 | |||||||||
Line of credit | 13,650 | — | |||||||||
PPP and other loans | 2,534 | 4,472 | |||||||||
Total debt | 555,898 | 420,056 | |||||||||
Less: unamortized discount and debt issuance costs | (34,764) | (35,471) | |||||||||
Total debt, net | $ | 521,134 | $ | 384,585 |
Six Months Ended June 30, | |||||||||||
2022 | 2021 | ||||||||||
Net cash provided by (used in) operating activities | $ | 49,974 | $ | (17,467) | |||||||
Net cash (used in) investing activities | (69,114) | (1,005) | |||||||||
Net cash provided by financing activities | 44,848 | 42,976 | |||||||||
Net increase in cash | $ | 25,708 | $ | 24,504 |
Exhibit Number | Description | |||||||
Certification of Principal Executive Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002* | ||||||||
Certification of Principal Financial Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002* | ||||||||
Certifications of Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002** | ||||||||
Certifications of Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002** | ||||||||
101.INS | XBRL Instance Document* | |||||||
101.SCH | XBRL Taxonomy Extension Schema* | |||||||
101.CAL | XBRL Taxonomy Extension Calculation Linkbase* | |||||||
101.DEF | XBRL Taxonomy Extension Definition Linkbase* | |||||||
101.LAB | XBRL Taxonomy Extension Label Linkbase* | |||||||
101.PRE | XBRL Taxonomy Extension Presentation Linkbase* | |||||||
104 | Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)* |
RUMBLEON, INC. | ||||||||
Date: August 9, 2022 | By: | /s/ Marshall Chesrown | ||||||
Marshall Chesrown | ||||||||
Chairman of the Board of Directors and Chief Executive Officer (Principal Executive Officer) | ||||||||
Date: August 9, 2022 | By: | /s/ Narinder Sahai | ||||||
Narinder Sahai | ||||||||
Chief Financial Officer | ||||||||
(Principal Financial Officer and Principal Accounting Officer) |
August 9, 2022 | By: | /s/ Marshall Chesrown | ||||||
Marshall Chesrown | ||||||||
Chairman and Chief Executive Officer |
August 9, 2022 | By: | /s/ Narinder Sahai | ||||||
Narinder Sahai | ||||||||
Chief Financial Officer |
August 9, 2022 | By: | /s/ Marshall Chesrown | ||||||
Marshall Chesrown | ||||||||
Chairman and Chief Executive Officer |
August 9, 2022 | By: | /s/ Narinder Sahai | ||||||
Narinder Sahai | ||||||||
Chief Financial Officer |
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Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares |
Jun. 30, 2022 |
Dec. 31, 2021 |
---|---|---|
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized (in shares) | 10,000,000 | 10,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Treasury stock (in shares) | 125,535 | 123,089 |
Common Class A | ||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 50,000 | 50,000 |
Common stock, shares, issued (in shares) | 50,000 | 50,000 |
Common stock, shares, outstanding (in shares) | 50,000 | 50,000 |
Common Class B | ||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 100,000,000 | 100,000,000 |
Common stock, shares, issued (in shares) | 15,940,866 | 14,882,022 |
Common stock, shares, outstanding (in shares) | 15,940,866 | 14,882,022 |
Condensed Consolidated Statements of Operations - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
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Jun. 30, 2021 |
Jun. 30, 2022 |
Jun. 30, 2021 |
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Revenues [Abstract] | ||||
Total revenue | $ 546,095 | $ 168,345 | $ 1,006,015 | $ 272,609 |
Total cost of revenue | 408,132 | 148,834 | 762,839 | 241,920 |
Gross profit | 137,963 | 19,511 | 243,176 | 30,689 |
Selling, general and administrative | 100,155 | 18,114 | 178,231 | 31,515 |
Depreciation and amortization | 5,879 | 632 | 10,353 | 1,231 |
Operating income (loss) | 31,929 | 765 | 54,592 | (2,057) |
Interest expense | (13,275) | (1,920) | (24,456) | (3,529) |
Other income (expense) | 249 | 0 | 249 | 0 |
Change in derivative liability | 0 | (2,235) | 39 | (2,256) |
Income (loss) before provision for income taxes | 18,903 | (3,390) | 30,424 | (7,842) |
Income tax provision | 4,870 | 0 | 7,250 | 0 |
Net income (loss) | $ 14,033 | $ (3,390) | $ 23,174 | $ (7,842) |
Weighted average number of common shares outstanding - basic (in shares) | 16,059,288 | 3,242,616 | 15,778,461 | 2,775,665 |
Earnings (loss) per share - basic (in dollars per share) | $ 0.87 | $ (1.05) | $ 1.46 | $ (2.83) |
Weighted average number of common shares outstanding - diluted (in shares) | 16,095,862 | 3,242,616 | 15,841,346 | 2,775,665 |
Earnings (loss) per share - diluted (in dollars per share) | $ 0.87 | $ (1.05) | $ 1.46 | $ (2.83) |
Powersports | ||||
Revenues [Abstract] | ||||
Total revenue | $ 312,685 | $ 27,487 | $ 567,318 | $ 38,015 |
Total cost of revenue | 250,840 | 21,021 | 459,071 | 28,898 |
Automotive | ||||
Revenues [Abstract] | ||||
Total revenue | 115,730 | 127,286 | 226,459 | 211,357 |
Total cost of revenue | 110,998 | 117,118 | 218,152 | 194,978 |
Parts, service and accessories | ||||
Revenues [Abstract] | ||||
Total revenue | 65,315 | 0 | 120,052 | 0 |
Total cost of revenue | 33,945 | 0 | 63,400 | 0 |
Finance and insurance, net | ||||
Revenues [Abstract] | ||||
Total revenue | 36,848 | 491 | 64,318 | 818 |
Vehicle logistics | ||||
Revenues [Abstract] | ||||
Total revenue | 15,517 | 13,081 | 27,868 | 22,419 |
Total cost of revenue | $ 12,349 | $ 10,695 | $ 22,216 | $ 18,044 |
DESCRIPTION OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES |
6 Months Ended |
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Accounting Policies [Abstract] | |
DESCRIPTION OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES | DESCRIPTION OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES Description of Business Unless the context requires otherwise, references in these financial statements to “RumbleOn,” the “Company,” “we,” “us,” and “our” refer to RumbleOn, Inc. and its consolidated subsidiaries. Overview RumbleOn, Inc. was incorporated in October 2013 under the laws of the State of Nevada and is currently headquartered in the Dallas Metroplex. Through our network of more than 55 locations, we are the nation’s largest Omnichannel marketplace platform in powersports, leveraging proprietary technology, a broad footprint of physical retail and fulfillment locations, a full line of manufacturer representation, and an experienced and innovative management team to transform the powersports supply chain to better serve customers and create shareholder value. Our goal is simple – to be outdoor enthusiasts’ dealer of choice when making any powersports purchase or sale. We will achieve that by (i) offering customers the largest selection of new and used inventory in-store, online or a seamless combination of both, (ii) providing a fair price and friction free online process for consumers looking to sell their powersports vehicle, and (iii) building a lasting relationship with our customers regarding parts, accessories and service. RumbleOn completed its business combinations with RideNow Powersports, the nation’s largest powersports retailer group with 42 retail locations, primarily across the Sunbelt (“RideNow”) on August 31, 2021 (the “RideNow Closing Date”). On February 18, 2022 (the “Freedom Closing Date”), the Company completed its acquisition of Freedom Powersports, LLC (“Freedom Powersports”) and Freedom Powersports Real Estate, LLC (“Freedom Powersports - RE” and together with Freedom Powersports, the "Freedom Entities"), a retailer group with 13 retail locations in Texas, Georgia, and Alabama (refer to Note 2 - Acquisitions). Basis of Presentation The accompanying unaudited Condensed Consolidated Financial Statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim information and with the instructions on Form 10-Q and Rule 10-01 of Regulation S-X pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). The Condensed Consolidated Financial Statements include the accounts of RumbleOn, Inc. and its subsidiaries, which are all wholly owned, including RideNow and the Freedom Entities from the dates these businesses were respectively acquired. In accordance with those rules and regulations, the Company has omitted certain information and notes required by U.S. GAAP for annual consolidated financial statements. In the opinion of management, the Condensed Consolidated Financial Statements contain all adjustments, except as otherwise noted, necessary for the fair presentation of the Company’s financial position and results of operations for the periods presented. The year-end condensed balance sheet data was derived from audited financial statements. These Condensed Consolidated Financial Statements should be read in conjunction with the audited Consolidated Financial Statements and Notes (the “2021 Form 10-K”) thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021. The results of operations for the three and six months ended June 30, 2022 are not necessarily indicative of the results expected for the entire fiscal year. All intercompany accounts and material intercompany transactions have been eliminated. Use of Estimates The preparation of these Condensed Consolidated Financial Statements in conformity with U.S. GAAP requires management to make estimates and assumptions. Certain accounting estimates involve significant judgments, assumptions and estimates by management that have a material impact on the carrying value of certain assets and liabilities, disclosures of contingent assets and liabilities and the reported amounts of revenue and expenses during the reporting period, which management considers to be critical accounting estimates. The judgments, assumptions and estimates used by management are based on historical experience, management’s experience, and other factors, which are believed to be reasonable under the circumstances. Because of the nature of the judgments and assumptions made by management, actual results could differ materially from these judgments and estimates. In particular, the continuing adverse impacts to macro economic conditions, as well as the Company’s operations, may impact future estimates including, but not limited to inventory valuations, fair value measurements, asset impairment charges and discount rate assumptions. These conditions include, but are not limited to, recession, inflation, interest rates, unemployment levels, the state of the housing market, gasoline prices, consumer credit availability, consumer credit delinquency and loss rates, personal discretionary spending levels, and consumer sentiment about the economy in general. These conditions and the economy in general could be affected by significant national or international events such as a global health crisis (like COVID-19), acts of terrorism, or acts of war. If these economic conditions worsen or stagnate, it can have a material adverse effect on consumer demand as well as the availability of credit to finance powersports and vehicle purchases, which could adversely impact our business and results of operations. Recent Pronouncements Adoption of New Accounting Standards In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (“ASU 2019-12”). ASU 2019-12 removes certain exceptions to the general principles in Topic 740 and also clarifies and amends existing guidance to improve consistent application. The Company adopted ASU 2019-12 for its fiscal year beginning January 1, 2021 and it did not have a material effect on its consolidated financial statements. In October 2021, the FASB issued ASU No. 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers (“ASU 2021-08”). ASU 2021-08 requires the company acquiring contract assets and contract liabilities obtained in a business combination to recognize and measure them in accordance with ASC 606, Revenue from Contracts with Customers. At the acquisition date, the company acquiring the business should record related revenue, as if it had originated the contract. Before the update such amounts were recognized by the acquiring company at fair value. The amendments in this update are effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. Early adoption is permitted, including in interim periods, for any financial statements that have not yet been issued. The Company early adopted these requirements prospectively in the first quarter of 2022. These accounting standards did not have a material impact on the Company’s financial statements during the six months ended June 30, 2022. Accounting for Business Combinations Total consideration transferred for acquisitions is allocated to the tangible and intangible assets acquired and liabilities assumed, if any, based on their fair values at the dates of acquisition. This purchase price allocation process requires management to make significant estimates and assumptions with respect to the acquisition date fair values of certain assets acquired and liabilities assumed. The fair value of identifiable intangible assets is based on third party valuations that use information and assumptions determined by management. Any excess of purchase price over the fair value of the net identifiable assets acquired is allocated to goodwill. While we use our best estimates and assumptions to accurately measure assets acquired and liabilities assumed at the acquisition date, the initial amounts recorded are provisional and may be subject to refinement. As a result, during the measurement period, which may be up to one year from the acquisition date, we may record adjustments to the fair value of consideration transferred, assets acquired and liabilities assumed. Upon conclusion of the measurement period or final determination of the fair values of consideration transferred, assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded to our Condensed Consolidated Statements of Operations. On August 31, 2021, the Company completed its acquisition of RideNow. Consideration transferred, assets acquired and liabilities assumed have been recorded on a provisional basis as of June 30, 2022. The Company recorded the following measurement period adjustments to the provisional purchase accounting for RideNow during the second quarter of 2022: •The provisional purchase price was increased by $3,527. •Total right-of-use assets assumed, which include right-of-use assets under leases with related parties, were increased by $20,269. •Acquired property and equipment was increased by $3,198. •Accounts payable, accrued expenses and other current liabilities assumed decreased by $3,526. •Other minimal changes and refinements. The above adjustments collectively resulted in a corresponding goodwill adjustment (reduction) of $19,113. On February 18, 2022, the Company completed its acquisition of the Freedom Entities. Consideration transferred for acquired assets and liabilities assumed has been recorded on a provisional basis as of June 30, 2022. The Company recorded the following measurement period adjustments to the provisional purchase accounting for the Freedom Entities the during the second quarter of 2022: •The provisional fair value of acquired property plant and equipment was increased to $50,228. •The Company allocated $59,653 of the purchase price to identifiable intangible assets consisting of franchise rights and non-compete agreements. •Other minimal changes and refinements to identified assets. The above adjustments collectively resulted in a corresponding goodwill adjustment (reduction) of $76,862. We use the income approach to determine the fair value of certain identifiable intangible assets including franchise rights. This approach determines fair value by estimating after-tax cash flows attributable to these assets over their respective useful lives and then discounting these after-tax cash flows back to a present value. We base our assumptions on estimates of future cash flows, expected growth rates, expected retention rates. We base the discount rates used to arrive at a present value as of the date of acquisition on the time value of money and certain industry-specific risk factors. We believe the estimated purchased franchise rights, non-competition agreements and other intangible asset amounts so determined represent the fair value at the date of acquisition.
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ACQUISITIONS |
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Business Combination and Asset Acquisition [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
ACQUISITIONS | ACQUISITIONS RideNow Transaction On the RideNow Closing Date, RumbleOn completed its business combination with RideNow (“RideNow Transaction”). Pursuant to the Plan of Merger and Equity Purchase Agreement, as amended (the “RideNow Agreement”), on the RideNow Closing Date, there were both mergers and transfers of ownership interests comprising in aggregate the RideNow Transaction. For the mergers, five newly-created RumbleOn subsidiaries were merged with and into five RideNow entities (“Merged RideNow Entities”) with the Merged RideNow Entities, comprising approximately 30% of RideNow retail locations, continuing as the surviving corporations. For the transfers of ownership interest, the Company acquired all the outstanding equity interests of 21 entities comprising the remaining 70% of the RideNow’s retail locations (“Acquired RideNow Entities,” and together with the Merged RideNow Entities, the “RideNow Entities”). As a result of the RideNow Transaction the Company obtained 100% of the voting equity interests of the RideNow Entities. Pursuant to the RideNow Agreement, on the RideNow Closing Date, the RideNow equity holders received cash consideration of $400,400 and 5,833,333 shares of RumbleOn’s Class B common stock, valued at $200,958 based on the closing price of the Company’s Class B common stock on the RideNow Closing Date. Additionally at closing, the Company paid $1,793 to satisfy certain transaction expenses incurred by RideNow and effectively settled a $1,734 payable from RideNow to RumbleOn arising from vehicle sales from RumbleOn to RideNow in the ordinary course of business prior to the RideNow Closing. Cash paid, acquiree transaction expenses paid at closing, and elimination of the preexisting payable from RumbleOn all approximate their fair value due to short-term nature of these items. The cash consideration of $400,400 includes funds against which the Company may make claims for indemnification; this amount is included in consideration transferred. The cash consideration for the RideNow Transaction was funded from (i) the Company’s underwritten public offering of 5,053,029 shares of Class B common stock, which resulted in net proceeds of approximately $154,443 (the “August 2021 Offering”), and (ii) net proceeds of approximately $261,000 pursuant to the Oaktree Credit Agreement entered into on the RideNow Closing Date (as further described in Note 4 - Notes Payable and Lines of Credit). The remaining funds received from these financing transactions were used for working capital purposes. The following table summarizes the provisional consideration transferred by the Company for the RideNow Transaction:
The provisional purchase price will be finalized upon determination of the amounts due to or from the Sellers (as defined in the RideNow Agreement), based upon post-closing adjustments stipulated by the RideNow Agreement (the “Final Purchase Price Adjustment”). Certain indebtedness and net working capital amounts as of the RideNow Closing Date are being disputed between the Company and Sellers as part of the Final Purchase Price Adjustment. The disputed amounts have been submitted by the parties to a mutually agreed upon independent accounting firm. The independent accounting firm will make a final determination of the disputed amounts based on the definitions and other applicable provisions of the RideNow Agreement. Based on the disputed amounts submitted to the independent auditor, the Final Purchase Price Adjustment will range from amounts owed by the Company of approximately $34,053 to amounts owed by the Sellers of approximately $29,393 (a $63,446 range of potential outcomes). At this time, the Company expects the final determination of the disputed amounts to be resolved before expiration of the measurement period for accounting purposes, at which time we expect the purchase consideration will be adjusted accordingly. On February 28, 2022, the Company delivered a Direct Claim Notice to Mark Tkach in his role as Sellers’ Representative under the RideNow Agreement. In the Direct Claim Notice, the Company stated that pursuant to the indemnification provisions set forth in the RideNow Agreement, the Company is entitled to indemnification from Sellers for breach of a covenant. On March 29, 2022, Mr. Tkach delivered Sellers’ response to the Direct Claim Notice, in which Sellers declined to accept the Company’s claims. On May 5, 2022, Mr. Tkach in his role as Sellers’ Representative delivered a Direct Claim Notice to the Company under the RideNow Agreement. In the Notice, Mr. Tkach stated that pursuant to the indemnification provisions set forth in the RideNow Agreement, the Sellers are entitled to indemnification from the Company for breach of a representation. On June 3, 2022, the Company delivered its response to the Direct Claim Notice, in which the Company declined to accept the Sellers’ Claims. On May 6, 2022, each Plaintiff (as defined below) provided RumbleOn notice to arrange for a mediation to resolve alleged disputes regarding the compensation and benefits to which the Plaintiffs are entitled under their respective employment agreements as a result of each Plaintiff’s resignation. RumbleOn has agreed to mediate these matters at a later date. On May 8, 2022, an action was filed in the Court of Chancery of the State of Delaware against the Company by the two former primary owners of the RideNow Entities (“Plaintiffs”) related to the RideNow Transaction. The action asserts claims for breach of contract and seeks only declaratory and injunctive relief from the Court related to each parties’ respective rights under the RideNow Agreement regarding the Final Purchase Price Adjustment process described above. On May 31, 2022, RumbleOn removed the action to the United Stated District Court for the District of Delaware, where the action remains pending. On June 7, 2022, RumbleOn filed a counterclaim against Plaintiffs alleging a breach by Plaintiffs of the RideNow Agreement regarding related party transactions. On June 24, 2022, Plaintiffs filed an amended complaint adding an additional claim for breach of certain representations in the RideNow Agreement. We believe the claims brought by Plaintiffs are meritless and we intend to defend the claims vigorously, however, we can provide no assurance regarding the outcome of these matters. RideNow Estimated Fair Value of Assets and Liabilities Assumed All of RideNow’s acquired assets and liabilities, including provisional goodwill recognized as a result of the RideNow Transaction, have been included in the Company’s Powersports reporting segment, as the RideNow business is entirely within the Company’s Powersports segment. As of June 30, 2022, we have performed a provisional valuation of the amounts below; however, our assessment of these amounts remains open for further review and completion. The preparation of the valuation required the use of significant assumptions and estimates. Critical estimates included, but were not limited to, future expected cash flows, including projected revenues and expenses, and the applicable discount rates. These estimates were based on assumptions that the Company believes to be reasonable. However, actual results may differ from these estimates. The final purchase price allocation may include changes to: (1) deferred tax liabilities, net; (2) allocations to intangible assets as well as goodwill; (3) final consideration paid related to working capital and other adjustments; and (4) other assets and liabilities. We are required to finalize our purchase price allocations by August 31, 2022. The Company uses the income approach to determine the fair value of certain identifiable intangible assets including franchise rights. This approach determines fair value by estimating after-tax cash flows attributable to these assets over their respective useful lives and then discounting these after-tax cash flows back to a present value. The Company bases its assumptions on estimates of future cash flows, expected growth rates, retention factors, etc. Discount rates used to arrive at a present value as of the date of acquisition are based on the time value of money and certain industry-specific risk factors. The Company believes the estimated purchased franchise rights and non-compete agreements amounts so determined represent the fair value at the date of acquisition, and do not exceed the amount a third-party would pay for such assets. The following amounts represent the preliminary determination of the fair value of the identifiable assets acquired and liabilities assumed as a result of the RideNow Transaction. Any potential adjustments made could be material in relation to the preliminary values that follow.
The Company assumed two promissory notes with aggregate principal and accrued interest of $2,200 as of the RideNow Closing Date due to entities controlled by former directors and executive officers of the Company. Amounts due under these notes have been paid in full as of June 30, 2022. The Company expects it will be able to amortize, for tax purposes, $108,000 of goodwill. RideNow Supplemental pro forma information The following unaudited supplemental pro forma information presents the financial results as if the RideNow Transaction was completed at January 1, 2021.
Freedom Transaction On November 8, 2021, RumbleOn entered into a Membership Interest Purchase Agreement to acquire 100% of the equity interests of Freedom Powersports, LLC and Freedom Powersports Real Estate, LLC completed the acquisition on February 18, 2022 (“Freedom Transaction”). The Freedom Entities own and operate powersports retail dealerships, including associated real estate, involving sales, financing, and parts and service of new and used motorcycles, ATVs, UTVs, scooters, side-by-sides, sport bikes, cruisers, watercraft, and other powersports vehicles. We accounted for the Freedom Transaction as a business combination under ASC 805, Business Combinations. Under the terms of the Membership Interest Purchase Agreement, all outstanding equity interests of the Freedom Entities were acquired for total provisional consideration of $97,237, consisting of $70,726 paid in cash, including certain transaction expenses paid on behalf of the Freedom Entities' equity holders, and issuance of 1,048,718 shares of RumbleOn Class B common stock with a value of $26,511 on the Freedom Closing Date. On June 22, 2022, 2,446 shares held in escrow were returned to Treasury as part of the final purchase price adjustment. The following table summarizes the provisional consideration transferred by the Company for the Freedom Transaction:
The table below represents, as of June 30, 2022, the provisional determination of the fair value of the identifiable assets acquired and liabilities assumed from the Freedom Entities, and as such, it remains subject to finalization. The Company is required to finalize the purchase price allocation no later than February 17, 2023 and until such time, there may be material changes to the provisional values below, including changes to: (1) inventories and deferred revenues (2) property and equipment; (3) right-of-use assets and lease liabilities; (4) deferred tax liabilities, net; (5) allocations to intangible assets as well as goodwill; (6) other assets and liabilities. All acquired assets and liabilities, including provisional goodwill, recognized as a result of the Freedom Transaction have been included in the Company’s Powersports reporting segment.
The Company assumed notes payable and mortgage notes liabilities of $31,502 on the Freedom Closing Date. The outstanding balance of these liabilities were repaid in the first quarter of 2022 and are reflected as cash outflows from financing activities in the Condensed Consolidated Statements of Cash Flows. The Company funded the cash portion of the Freedom Transaction, transaction expenses, notes payable, and mortgage note repayments through an $84,500 draw on the Oaktree Credit Agreement (as defined below) and use of approximately $14,253 of available cash resources. The Company expects it will be able to amortize, for tax purposes, $8,998 of goodwill. The results of operations of the Freedom Entities from the Freedom Closing Date forward are included in the accompanying Condensed Consolidated Financial Statements and include revenues of $96,458 and pre-tax earnings of $13,073 for the six months ended June 30, 2022. Acquisition related costs of $1,403 were incurred for the six months ended June 30, 2022 and are included in Selling, General and Administrative expenses in the Condensed Consolidated Statement of Operations.
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INTANGIBLE ASSETS AND GOODWILL |
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INTANGIBLE ASSETS AND GOODWILL | INTANGIBLE ASSETS AND GOODWILL The carrying amount of goodwill, franchise rights and other intangible assets as of June 30, 2022 and December 31, 2021 is as follows:
The following summarizes the changes in the carrying amount of goodwill by reportable segment from December 31, 2021 to June 30, 2022.
In addition to annual impairment testing, the Company continuously monitors for events and circumstances that could indicate that it is more likely than not that its goodwill, indefinite lived intangible assets, finite lived intangible assets, and other long-lived assets are impaired or not recoverable (a triggering event), requiring an interim impairment test. During the quarter ended June 30, 2022, the Company considered a number of factors including, but not limited to, current macroeconomic conditions such as inflation, economic growth, and interest rate movements, industry and market considerations, stock price performance (including performance relative to peers), and overall financial performance of the Company. Based on the analysis of relevant events and circumstances, the Company concluded a triggering event had not occurred as of June 30, 2022. The Company will continue to monitor both macroeconomic and company-specific events and circumstances in future periods and if a triggering event is identified prior to the Company’s fourth quarter annual impairment test, management will complete an interim impairment test at that time. Estimated annual amortization expense related to other intangibles:
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NOTES PAYABLE AND LINES OF CREDIT |
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NOTES PAYABLE AND LINES OF CREDIT | NOTES PAYABLE AND LINES OF CREDIT Notes payable consisted of the following as of June 30, 2022 and December 31, 2021:
Floor plan notes payable as of June 30, 2022 and December 31, 2021:
Term Loan Credit Agreement On the RideNow Closing Date, the Company entered into a new Term Loan Credit Agreement (the “Oaktree Credit Agreement”) among the Company, as borrower, the lenders party thereto, and Oaktree Fund Administration, LLC, as administrative agent and collateral agent (the “Administrative Agent”). The Oaktree Credit Agreement provides for secured credit facilities in the form of a $280,000 principal amount of initial term loans (the “Initial Term Loan Facility”) and a $120,000 in aggregate principal amount of delayed draw term loans (the “Delayed Draw Term Loans Facility”). The proceeds from the Initial Term Loan Facility were used to consummate the RideNow Transaction and to provide for working capital. The proceeds from the Delayed Draw Term Loans Facility, if drawn, will be used to finance acquisitions permitted by the Oaktree Credit Agreement and similar investments or “earn-outs” entered into in connection with acquisitions and to pay fees and expenses relating thereto. Loans under the Delayed Draw Term Loans Facility are subject to customary conditions precedent for facilities of this type including the need to meet certain financial tests and become available six (6) months after the RideNow Closing Date and are unavailable to be drawn after the eighteen (18) month anniversary of the RideNow Closing Date. The Oaktree Credit Agreement also provides for incremental draws for up to an additional $100,000 in accordance with the terms set forth in the Oaktree Credit Agreement, which may be used for acquisitions or working capital. The loan is reported on the balance sheet as senior secured debt net of debt discount and debt issuance costs of $23,226, including the fair value of stock warrants of $10,950. Borrowings under the Oaktree Credit Agreement bear interest at a rate per annum equal, at the Company’s option, to either (a) LIBOR (with a floor of 1.00%), plus an applicable margin of 8.25% or (b) a fluctuating adjusted base rate in effect from time to time, plus an applicable margin of 7.25%. At the Company’s option, one percent (1.00%) of such interest may be payable in kind. The interest rate on June 30, 2022, was 9.25%. Interest expense for the three and six months ended June 30, 2022 was $11,009 and $19,700, respectively, which included amortization of $1,960 and $3,236, respectively related to the discount and debt issuance costs. While the Oaktree Credit Agreement notes that Secured Overnight Financing Rate ("SOFR") may be selected as the alternative benchmark rate, this has not been determined as of June 30, 2022. As such, the Company cannot predict the effect of the discontinuance of LIBOR or the establishment and use of alternative rates or benchmarks on interest expense as of June 30, 2022. Obligations under the Oaktree Credit Agreement are secured by a first-priority lien on substantially all of the assets of the Company and its wholly-owned subsidiaries (the “Subsidiary Guarantors”) although certain assets of the Company and Subsidiary Guarantors are subject to a first-priority lien in favor of floor plan lenders, and such liens and priority are subject to certain other exceptions. The Subsidiary Guarantors also guarantee the obligations of the Company under the Oaktree Credit Agreement. In connection with providing the debt financing for the RideNow Transaction, and pursuant to the commitment letter executed on March 15, 2021, the Company issued a warrant to purchase $40,000 of shares at an exercise price of $33.00 per share of Class B common stock to Oaktree Capital Management, L.P. and its lender affiliates (the “Warrant”). The initial Warrant liability and deferred financing charge recognized was $10,950. The Warrant liability was subject to remeasurement at each balance sheet date and any change in fair value was reflected in the Condensed Consolidated Statements of Operations. The fair value of the Warrant was estimated using a Monte Carlo simulation based on a combination of level 1 and level 2 inputs. For the three months ended June 30, 2021, the fair value of the warrant liability was increased $2,224 to $13,174. On August 31, 2021, the fair value of the warrant liability was increased $6,526 to $19,700. Upon closing of the RideNow Transaction, the Warrant was considered equity linked contracts indexed to the Company’s stock and therefore met the equity classification guidance. As a result, the $19,700 was reclassified to additional paid-in-capital and the $10,950 deferred financing charge was reclassified as part of the debt discount related to the Oaktree Credit Agreement. The recognition of the warrant liability and deferred financing charge and the reclassification of the warrant liability to additional paid-in capital and the reclassification of the deferred financing charge to debt discount are non-cash items. Floor Plan Notes Payable The Company relies on its floorplan vehicle financing credit lines (“Floorplan Lines”) to finance new and used vehicle inventory at its retail locations and for the wholesale segment. Floor plan notes payable - trade reflects amounts borrowed to finance the purchase of specific new and, to a lesser extent, used vehicle inventory with corresponding manufacturers' captive finance subsidiaries (“trade lenders”). Floor plan notes payable-non-trade represents amounts borrowed to finance the purchase of specific new and used vehicle inventories with non-trade lenders. Changes in vehicle floor plan notes payable- trade are reported as operating cash flows and changes in floor plan notes payable-non-trade are reported as financing cash flows in the accompanying Consolidated Statements of Cash Flows. Inventory serves as collateral under floor plan notes payable borrowings. The inventory balance in its entirety also serves as collateral under the Oaktree Credit Agreement. On August 31, 2021, Wholesale, Inc. entered into a Floorplan Line with AFC (the “AFC Credit Line”) to replace an existing line of credit. Advances under the AFC Credit Line are limited to $29,000 as of June 30, 2022. Interest expense on the Wholesale Floorplan Lines for the three and six months ended June 30, 2022 and 2021 were $499 and $939, $525 and $829 respectively. Line of Credit - RumbleOn Finance ROF SPV I, LLC (“ROF SPV”), an indirect subsidiary of the Company, entered into a $25,000 secured loan facility on February 4, 2022 primarily to provide for the purchase by ROF SPV of consumer finance loans originated by RumbleOn Finance, LLC (“ROF”), the Company’s consumer finance subsidiary. Borrowings under the facility generally bear interest at a rate per annum equal to the lesser of SOFR plus an applicable margin of 5%. ROF SPV may prepay the full principal balance of the loan and all other obligations and terminate the loan agreement at any time after 24 months following the closing date (the “Revolving Period”), so long as, ROF SPV provides 30 days written notice. Additionally, ROF SPV may prepay the loan in certain circumstances where a loan portfolio is sold, so long as a 1% fee is paid to the lenders. ROF SPV has drawn $13,650 on the secured loan facility as of June 30, 2022. PPP Loans On May 1, 2020, the Company entered into loan agreements and related promissory notes (the “SBA Loan Documents”) to receive U.S. Small Business Administration Loans (the “SBA Loans”) pursuant to the Paycheck Protection Program (the “PPP”) established under the CARES Act, in the aggregate amount of $5,177 (the “Loan Proceeds”). The balance of the PPP loans of $2,534 remain under review by the SBA and the Company can provide no assurance that it will obtain forgiveness of this remaining balance in whole or in part. Payments on this remaining loan balance commenced on September 1, 2021, and the loans mature on April 1, 2025. Derivative Liability In connection with the convertible senior notes issued on January 10, 2020 (the “New Notes”), a derivative liability was recorded at issuance with an interest make-whole provision of $20,673 based on a lattice model using a stock price of $14.60, and estimated volatility of 55.0% and risk-free rates over the entire 10-year yield curve. The change in value of the derivative liability for the three and six months ended June 30, 2022 and 2021 were $39 and $(2,236), respectively, and is included in change in derivative liability in the Condensed Consolidated Statement of Operations. The value of the derivative liability as of June 30, 2022 and December 31, 2021 was $26 and $66, respectively.
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STOCKHOLDER EQUITY |
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Share-based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
STOCKHOLDER EQUITY | STOCKHOLDER EQUITY Share-Based Compensation On June 30, 2017, the Company’s shareholders approved a Stock Incentive Plan ( the “Plan”) allowing for the issuance of restricted stock units ("RSUs"), stock options, and other equity awards (collectively “Awards”). As of June 30, 2022, the number of shares authorized for issuance under the Plan was 2,700,000 shares of Class B common stock. In connection with, and on the same day as the closing of the RideNow Transaction, the Company accelerated the vesting of and waived any market-based vesting hurdles for all then outstanding RSU awards, and waived any market-based share price. This waiver was accounted for as a modification of the awards, with the fair value of the respective awards remeasured as of RideNow Closing Date and the change in fair value fully expensed during the year ended December 31, 2021. The Company estimates the fair value of all awards granted under the Plan on the date of grant. In the case of time or service based RSU awards, the fair value is based on the share price of the Class B common stock on the date of the award, with the fair value expense on a straight line basis over the vesting period. On September 30, 2021, the Company's Audit Committee approved the issuance of 154,731 shares of the Company’s Class B common stock as a gift of a death benefit to the estate of Mr. Steven R. Berrard, the Company’s former Chief Financial Officer and director. The following table reflects the stock-based compensation for the three and six months ended June 30, 2022 and June 30, 2021:
As of June 30, 2022, there are 250 Options and 819,447 restricted stock units ("RSUs") outstanding. The total unrecognized compensation expense related to outstanding equity awards was approximately $21,241, which the Company expects to recognize over a weighted-average period of approximately 16 months. Total unrecognized equity-based compensation expense will be adjusted for actual forfeitures. Security Offering As part of the Freedom Transaction, the Company issued to Freedom's security holders 1,048,718 shares of RumbleOn Class B common stock totaling $26,511. On June 22, 2022, 2,446 shares held in escrow were returned to treasury as part of the final purchase price adjustment. WarrantIn connection with providing the debt financing for the RideNow Transaction, and pursuant to the commitment letter executed on March 15, 2021, the Company issued the Warrant to purchase $40,000 of shares of Class B common stock. The initial warrant liability and deferred financing charge recognized was $10,950 with the warrant liability subject to remeasurement at each balance sheet date and any change in fair value recognized in the Condensed Consolidated Statements of Operations. The fair value of the Warrant was estimated using a Monte Carlo simulation based on a combination of level 1 and level 2 inputs. There was no gain or loss recorded related to the Warrant liability during the three-months ended March 31, 2021 as there was no significant changes in the fair value between March 15, 2021 and March 31, 2021. For the three months ended June 30, 2021, the fair value of the warrant liability was increased $2,224 to $13,174. On August 31, 2021, the fair value of the warrant liability was increased $6,526 to $19,700. Upon closing of the RideNow Transaction, the Warrant was considered equity linked contracts indexed to RumbleOn’s stock and therefore met the equity classification guidance under ASC 815-40. As a result, the $19,700 was reclassified to additional paid-in-capital and the $10,950 deferred financing charge was reclassified as part of the debt discount related to the Oaktree Credit Agreement.
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SUPPLEMENTAL CASH FLOW INFORMATION |
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SUPPLEMENTAL CASH FLOW INFORMATION | SUPPLEMENTAL CASH FLOW INFORMATION The following table includes supplemental cash flow information, including noncash investing and financing activity for the six months ended June 30, 2022 and 2021:
The following table shows the cash and restricted cash reported within the accompanying Condensed Consolidated Balance Sheets as of June 30, 2022 and December 31, 2021:
_______________________ (1)Amounts included in restricted cash are primarily comprised of the deposits required under the Company's various floor plan lines of credit and ROF line of credit.
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INCOME TAXES |
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Jun. 30, 2022 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES The Company’s effective tax rate for the three and six months ended June 30, 2022 was 25.8% and 23.8%, respectively. The effective tax rate for the three and six months ended June 30, 2021 was 0.0% and 0.0%, respectively. The difference between the U.S. federal income tax rate of 21.0% and RumbleOn’s overall income tax rate for the three and six months ended June 30, 2022 was primarily due to income tax expense on non-deductible expenses and state income taxes. The difference between the U.S. federal income tax rate of 21.0% and the Company’s overall income tax rate for the three months ended June 30, 2021 was primarily due to the change in valuation allowance for the period.
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EARNINGS PER SHARE |
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Jun. 30, 2022 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | EARNINGS PER SHARE The Company computes basic and diluted earnings per share attributable to common stockholders in conformity with the two-class method required for participating securities. Basic earnings per share attributable to common stockholders is calculated by dividing the net income attributable to common stockholders by the weighed-average number of shares of common stock outstanding during the period. Diluted earnings per share attributable to common stockholders is computed giving effect to all potential dilutive common stock equivalents outstanding for the period. For purposes of this calculation, 1,212,121 of warrants to purchase shares of Class B common stock at $33.00 per share are considered common stock equivalents which are antidilutive at June 30, 2022. Unvested RSUs have been included in the calculation of diluted earnings per share attributable to common stockholders to the extent the shares would be dilutive. The weighted average number of shares outstanding for the six months ended June 30, 2022 were 50,000, 15,728,461 and 0, respectively of Class A Common Stock, Class B Common Stock, and Series B Preferred Stock.
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RELATED PARTY TRANSACTIONS |
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Jun. 30, 2022 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | RELATED PARTY TRANSACTIONS Promissory Notes In connection with the acquisition of RideNow, the Company assumed two promissory notes totaling principal and accrued interest of $2,200 as of August 31, 2021 due to entities controlled by former directors and executive officers of the Company. Amounts due under these two promissory notes have been paid in full as of June 30, 2022. August 2021 Offering Denmar Dixon, a director of the Company, purchased 13,636 shares of Class B common stock in the August 2021 Offering at the public price of $33.00 per share. RideNow Leases In connection with the RideNow Transaction, the Company entered into related party leases for 24 properties. Each such lease is with a wholly owned subsidiary of the Company as the tenant and an entity controlled by a former director and executive officer of the Company, as the landlord. The initial aggregate base rent payment for all 24 leases is approximately $1,229 per month, and each lease commenced a new 20-year term on September 1, 2021, with each lease containing annual 2% increases on base rent. The fair value of the right-of-use assets and lease liabilities arising from the RideNow leases are included in the Condensed Consolidated Balance Sheet at June 30, 2022 and disclosed in Note 10 - Leases. The Company is still in the process of finalizing its purchase price allocation and related fair values of assets and liabilities, including the RideNow leases. RideNow Reinsurance Products The Company sells extended service contracts, prepaid maintenance, “GAP insurance,” theft protection and tire and wheel products on vehicles sold to customers. Affiliate reinsurance companies previously controlled by and owned primarily by former directors and executives officers of the Company participated in the profits of these products sold through the RideNow locations. The total amount paid by the Company to these affiliated companies totaled approximately $139 during the six months ended June 30, 2022. The related party relationship ended February 1, 2022. Payments to RideNow Management, LLLP The Company made $115 and $231 in payments to RideNow Management, LLLP, an entity owned equally by two former directors and executive officers during the three and six months ended June 30, 2022. Beach Agreement On December 31, 2021, the Company acquired all the business assets of RNBeach, LLC (“Beach”) from former directors and executive officers of the Company. The total purchase price to acquire all the business assets of Beach was approximately $5,528, and cash paid was approximately $5,368. Bidpath Software License On January 19, 2022 the Audit Committee approved, and the Company entered into two agreements with Bidpath Incorporated, a company owned by Adam Alexander, a director of the Company that provides the Company with (i) a perpetual, non-exclusive license to the then-current source code, as well as all future source code, of foundational technology for our inventory management platform, and (ii) support and maintenance services. The Company has made cash payments totaling $2,160 to date for the license, with another $1,440 due in the third quarter of 2022. The Company pays, on monthly basis since the agreement was signed, $30 for the support and maintenance services. The initial term is thirty-six (36) months but can be terminated by either party at any time by providing sixty (60) days' notice to the other party.
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LEASES |
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Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
LEASES | LEASES Lease Commitments We determine whether an arrangement is a lease at inception and whether such leases are operating or financing leases. For each lease agreement, the Company determines its lease term as the non-cancellable period of the lease and includes options to extend or terminate the lease when it is reasonably certain that it will exercise that option. We use these options in determining our capitalized financing and right-of-use assets and lease liabilities. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants. To determine the discount rate to use in determining the present value of the lease payments, we use the rate implicit in the lease if determinable, otherwise we use our incremental borrowing rate. The following table reflects the balance sheet presentation of our lease assets and liabilities:
The weighted-average remaining lease term and discount rate for the Company's operating and financing leases are as follows:
The following table provides information related to the lease costs of finance and operating leases for three months and six months ended June 30, 2022 and 2021:
In connection with the RideNow Transaction, the Company entered into related party leases for 24 properties. The following table provides information related to the portion of lease assets and liabilities which are attributable to related party leases at June 30, 2022:
Supplemental cash flow information related to operating leases for the six months ended June 30, 2022 was as follows:
The following table summarizes the future minimum payments for operating leases at June 30, 2022 due in each year ending December 31:
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LEASES | LEASES Lease Commitments We determine whether an arrangement is a lease at inception and whether such leases are operating or financing leases. For each lease agreement, the Company determines its lease term as the non-cancellable period of the lease and includes options to extend or terminate the lease when it is reasonably certain that it will exercise that option. We use these options in determining our capitalized financing and right-of-use assets and lease liabilities. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants. To determine the discount rate to use in determining the present value of the lease payments, we use the rate implicit in the lease if determinable, otherwise we use our incremental borrowing rate. The following table reflects the balance sheet presentation of our lease assets and liabilities:
The weighted-average remaining lease term and discount rate for the Company's operating and financing leases are as follows:
The following table provides information related to the lease costs of finance and operating leases for three months and six months ended June 30, 2022 and 2021:
In connection with the RideNow Transaction, the Company entered into related party leases for 24 properties. The following table provides information related to the portion of lease assets and liabilities which are attributable to related party leases at June 30, 2022:
Supplemental cash flow information related to operating leases for the six months ended June 30, 2022 was as follows:
The following table summarizes the future minimum payments for operating leases at June 30, 2022 due in each year ending December 31:
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SEGMENT REPORTING |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SEGMENT REPORTING | SEGMENT REPORTINGBusiness segments are defined as components of an enterprise about which discrete financial information is available that is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing operating performance. We have determined that we have three reportable segments as defined in generally accepted accounting principles for segment reporting: (1) Powersports, (2) Automotive, and (3) Vehicle Logistics. Our Powersports segment offers motorcycles, all-terrain vehicles, utility terrain vehicles, personal watercraft, and other powersports products, parts, apparel, and accessories, and related finance and insurance products. Our Automotive segment purchases vehicles from dealers or others and sells them through wholesale channels. Our Vehicle Logistics segment brokers nationwide automotive transportation services between dealerships and auctions. The following table summarizes revenue, operating income (loss), depreciation and amortization and interest expense which are the measure by which management allocates resources to its segments to each of our reportable segments.
(1)Intercompany investment balances related to the acquisitions of RideNow, Freedom Entities, Wholesale, Inc. and Wholesale Express, and receivables and other balances related intercompany freight services of Wholesale Express are eliminated in the Condensed Consolidated Balance Sheets. Revenue and costs for these intercompany freight services have been eliminated in the Condensed Consolidated Statements of Operations.
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SUBSEQUENT EVENTS |
6 Months Ended |
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Jun. 30, 2022 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTSSale of Store in Baton Rouge, LAOn July 19, 2022, the Company closed on the sale of its store in Baton Rouge, Louisiana for aggregate consideration of approximately $4,954. The store had been acquired by the Company as part of the RideNow Transaction. There was no material gain or loss associated with the transaction. |
DESCRIPTION OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES (Policies) |
6 Months Ended |
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Jun. 30, 2022 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited Condensed Consolidated Financial Statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim information and with the instructions on Form 10-Q and Rule 10-01 of Regulation S-X pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). The Condensed Consolidated Financial Statements include the accounts of RumbleOn, Inc. and its subsidiaries, which are all wholly owned, including RideNow and the Freedom Entities from the dates these businesses were respectively acquired. In accordance with those rules and regulations, the Company has omitted certain information and notes required by U.S. GAAP for annual consolidated financial statements. In the opinion of management, the Condensed Consolidated Financial Statements contain all adjustments, except as otherwise noted, necessary for the fair presentation of the Company’s financial position and results of operations for the periods presented. The year-end condensed balance sheet data was derived from audited financial statements. These Condensed Consolidated Financial Statements should be read in conjunction with the audited Consolidated Financial Statements and Notes (the “2021 Form 10-K”) thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021. The results of operations for the three and six months ended June 30, 2022 are not necessarily indicative of the results expected for the entire fiscal year. All intercompany accounts and material intercompany transactions have been eliminated.
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Use of Estimates | Use of Estimates The preparation of these Condensed Consolidated Financial Statements in conformity with U.S. GAAP requires management to make estimates and assumptions. Certain accounting estimates involve significant judgments, assumptions and estimates by management that have a material impact on the carrying value of certain assets and liabilities, disclosures of contingent assets and liabilities and the reported amounts of revenue and expenses during the reporting period, which management considers to be critical accounting estimates. The judgments, assumptions and estimates used by management are based on historical experience, management’s experience, and other factors, which are believed to be reasonable under the circumstances. Because of the nature of the judgments and assumptions made by management, actual results could differ materially from these judgments and estimates. In particular, the continuing adverse impacts to macro economic conditions, as well as the Company’s operations, may impact future estimates including, but not limited to inventory valuations, fair value measurements, asset impairment charges and discount rate assumptions. These conditions include, but are not limited to, recession, inflation, interest rates, unemployment levels, the state of the housing market, gasoline prices, consumer credit availability, consumer credit delinquency and loss rates, personal discretionary spending levels, and consumer sentiment about the economy in general. These conditions and the economy in general could be affected by significant national or international events such as a global health crisis (like COVID-19), acts of terrorism, or acts of war. If these economic conditions worsen or stagnate, it can have a material adverse effect on consumer demand as well as the availability of credit to finance powersports and vehicle purchases, which could adversely impact our business and results of operations.
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Recent Pronouncements | Recent Pronouncements Adoption of New Accounting Standards In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (“ASU 2019-12”). ASU 2019-12 removes certain exceptions to the general principles in Topic 740 and also clarifies and amends existing guidance to improve consistent application. The Company adopted ASU 2019-12 for its fiscal year beginning January 1, 2021 and it did not have a material effect on its consolidated financial statements. In October 2021, the FASB issued ASU No. 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers (“ASU 2021-08”). ASU 2021-08 requires the company acquiring contract assets and contract liabilities obtained in a business combination to recognize and measure them in accordance with ASC 606, Revenue from Contracts with Customers. At the acquisition date, the company acquiring the business should record related revenue, as if it had originated the contract. Before the update such amounts were recognized by the acquiring company at fair value. The amendments in this update are effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. Early adoption is permitted, including in interim periods, for any financial statements that have not yet been issued. The Company early adopted these requirements prospectively in the first quarter of 2022. These accounting standards did not have a material impact on the Company’s financial statements during the six months ended June 30, 2022.
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Accounting for Business Combinations | Accounting for Business Combinations Total consideration transferred for acquisitions is allocated to the tangible and intangible assets acquired and liabilities assumed, if any, based on their fair values at the dates of acquisition. This purchase price allocation process requires management to make significant estimates and assumptions with respect to the acquisition date fair values of certain assets acquired and liabilities assumed. The fair value of identifiable intangible assets is based on third party valuations that use information and assumptions determined by management. Any excess of purchase price over the fair value of the net identifiable assets acquired is allocated to goodwill. While we use our best estimates and assumptions to accurately measure assets acquired and liabilities assumed at the acquisition date, the initial amounts recorded are provisional and may be subject to refinement. As a result, during the measurement period, which may be up to one year from the acquisition date, we may record adjustments to the fair value of consideration transferred, assets acquired and liabilities assumed. Upon conclusion of the measurement period or final determination of the fair values of consideration transferred, assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded to our Condensed Consolidated Statements of Operations. On August 31, 2021, the Company completed its acquisition of RideNow. Consideration transferred, assets acquired and liabilities assumed have been recorded on a provisional basis as of June 30, 2022. The Company recorded the following measurement period adjustments to the provisional purchase accounting for RideNow during the second quarter of 2022: •The provisional purchase price was increased by $3,527. •Total right-of-use assets assumed, which include right-of-use assets under leases with related parties, were increased by $20,269. •Acquired property and equipment was increased by $3,198. •Accounts payable, accrued expenses and other current liabilities assumed decreased by $3,526. •Other minimal changes and refinements. The above adjustments collectively resulted in a corresponding goodwill adjustment (reduction) of $19,113. On February 18, 2022, the Company completed its acquisition of the Freedom Entities. Consideration transferred for acquired assets and liabilities assumed has been recorded on a provisional basis as of June 30, 2022. The Company recorded the following measurement period adjustments to the provisional purchase accounting for the Freedom Entities the during the second quarter of 2022: •The provisional fair value of acquired property plant and equipment was increased to $50,228. •The Company allocated $59,653 of the purchase price to identifiable intangible assets consisting of franchise rights and non-compete agreements. •Other minimal changes and refinements to identified assets. The above adjustments collectively resulted in a corresponding goodwill adjustment (reduction) of $76,862. We use the income approach to determine the fair value of certain identifiable intangible assets including franchise rights. This approach determines fair value by estimating after-tax cash flows attributable to these assets over their respective useful lives and then discounting these after-tax cash flows back to a present value. We base our assumptions on estimates of future cash flows, expected growth rates, expected retention rates. We base the discount rates used to arrive at a present value as of the date of acquisition on the time value of money and certain industry-specific risk factors. We believe the estimated purchased franchise rights, non-competition agreements and other intangible asset amounts so determined represent the fair value at the date of acquisition.
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ACQUISITIONS (Tables) |
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Business Combination and Asset Acquisition [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Business Acquisitions, by Acquisition | The following table summarizes the provisional consideration transferred by the Company for the RideNow Transaction:
The following table summarizes the provisional consideration transferred by the Company for the Freedom Transaction:
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Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The following amounts represent the preliminary determination of the fair value of the identifiable assets acquired and liabilities assumed as a result of the RideNow Transaction. Any potential adjustments made could be material in relation to the preliminary values that follow.
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Business Acquisition, Pro Forma Information | The following unaudited supplemental pro forma information presents the financial results as if the RideNow Transaction was completed at January 1, 2021.
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INTANGIBLE ASSETS AND GOODWILL (Tables) |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Intangible Assets and Goodwill | The carrying amount of goodwill, franchise rights and other intangible assets as of June 30, 2022 and December 31, 2021 is as follows:
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Schedule of Goodwill | The following summarizes the changes in the carrying amount of goodwill by reportable segment from December 31, 2021 to June 30, 2022.
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Finite-lived Intangible Assets Amortization Expense | Estimated annual amortization expense related to other intangibles:
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NOTES PAYABLE AND LINES OF CREDIT (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Debt | Notes payable consisted of the following as of June 30, 2022 and December 31, 2021:
Floor plan notes payable as of June 30, 2022 and December 31, 2021:
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STOCKHOLDER EQUITY (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Payment Arrangement, Cost by Plan | The following table reflects the stock-based compensation for the three and six months ended June 30, 2022 and June 30, 2021:
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SUPPLEMENTAL CASH FLOW INFORMATION (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Supplemental Cash Flow Information [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Cash Flow, Supplemental Disclosures | The following table includes supplemental cash flow information, including noncash investing and financing activity for the six months ended June 30, 2022 and 2021:
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Restrictions on Cash and Cash Equivalents | The following table shows the cash and restricted cash reported within the accompanying Condensed Consolidated Balance Sheets as of June 30, 2022 and December 31, 2021:
_______________________ (1)Amounts included in restricted cash are primarily comprised of the deposits required under the Company's various floor plan lines of credit and ROF line of credit.
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LEASES (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Lease, Cost | The following table reflects the balance sheet presentation of our lease assets and liabilities:
The weighted-average remaining lease term and discount rate for the Company's operating and financing leases are as follows:
The following table provides information related to the lease costs of finance and operating leases for three months and six months ended June 30, 2022 and 2021:
In connection with the RideNow Transaction, the Company entered into related party leases for 24 properties. The following table provides information related to the portion of lease assets and liabilities which are attributable to related party leases at June 30, 2022:
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Schedule of supplemental cash flow information related to operating leases | Supplemental cash flow information related to operating leases for the six months ended June 30, 2022 was as follows:
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Lessee, Operating Lease, Liability, Maturity | The following table summarizes the future minimum payments for operating leases at June 30, 2022 due in each year ending December 31:
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SEGMENT REPORTING (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Segment Reporting Information, by Segment | The following table summarizes revenue, operating income (loss), depreciation and amortization and interest expense which are the measure by which management allocates resources to its segments to each of our reportable segments.
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DESCRIPTION OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES - Narrative (Details) $ in Thousands |
3 Months Ended |
---|---|
Jun. 30, 2022
USD ($)
retailLocation
| |
Business Acquisition [Line Items] | |
Number of retail locations | retailLocation | 55 |
RideNow | |
Business Acquisition [Line Items] | |
Number of retail locations | retailLocation | 42 |
Measurement period adjustment, purchase price | $ 3,527 |
Measurement period adjustment, right-of-use asset | 20,269 |
Measurement period adjustment, property, plant, and equipment | 3,198 |
Measurement period adjustment, current liabilities | (3,526) |
Measurement period adjustment, goodwill | $ 19,113 |
Freedom Transaction | |
Business Acquisition [Line Items] | |
Number of retail locations | retailLocation | 13 |
Measurement period adjustment, property, plant, and equipment | $ 50,228 |
Measurement period adjustment, goodwill | 76,862 |
Measurement period adjustment, intangibles | $ 59,653 |
ACQUISITIONS - Purchase Price Consideration (Details) - USD ($) $ in Thousands |
Feb. 18, 2022 |
Aug. 31, 2021 |
---|---|---|
RideNow | ||
Business Acquisition [Line Items] | ||
Cash | $ 400,400 | |
Class B Common Stock | 200,958 | |
Acquiree transaction expenses paid by the Company at closing | 1,793 | |
Elimination of preexisting payable from RideNow to RumbleOn | 1,734 | |
Total provisional purchase price consideration | $ 604,885 | |
Freedom Transaction | ||
Business Acquisition [Line Items] | ||
Cash | $ 70,569 | |
Class B Common Stock | 26,511 | |
Acquiree transaction expenses paid by the Company at closing | 157 | |
Total provisional purchase price consideration | $ 97,237 |
ACQUISITIONS - Pro Forma Information (Details) - RideNow - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
Jun. 30, 2022 |
Jun. 30, 2021 |
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Business Acquisition [Line Items] | ||||
Pro forma revenue | $ 546,095 | $ 417,479 | $ 1,006,015 | $ 761,745 |
Pro forma net income | $ 14,033 | $ 30,013 | $ 23,174 | $ 41,566 |
Earnings per share - basic (in dollars per share) | $ 0.87 | $ 2.12 | $ 1.46 | $ 3.04 |
Weighted-average number of shares - basic (in shares) | 16,059,288 | 14,139,047 | 15,778,461 | 13,664,467,000 |
Earnings per share diluted (in dollars per share) | $ 0.87 | $ 2.10 | $ 1.46 | $ 3.00 |
Weighted average number of shares diluted (in shares) | 16,095,862 | 14,313,555 | 15,841,346 | 13,858,310,000 |
INTANGIBLE ASSETS AND GOODWILL - Schedule of Goodwill and Intangible Assets (Details) - USD ($) $ in Thousands |
Jun. 30, 2022 |
Dec. 31, 2021 |
---|---|---|
Goodwill [Line Items] | ||
Goodwill | $ 253,415 | $ 260,922 |
Other Intangible Assets | 366,927 | 304,525 |
Less accumulated amortization | 7,662 | 2,459 |
Intangible assets, net | 359,265 | 302,066 |
Other Intangible Assets | ||
Goodwill [Line Items] | ||
Other Intangible Assets | 23,745 | 22,175 |
Franchise Rights | ||
Goodwill [Line Items] | ||
Other Intangible Assets | $ 343,182 | $ 282,350 |
INTANGIBLE ASSETS AND GOODWILL - Narrative (Details) - USD ($) $ in Thousands |
Jun. 30, 2022 |
Dec. 31, 2021 |
---|---|---|
Goodwill [Line Items] | ||
Other intangible assets | $ 366,927 | $ 304,525 |
Other Intangible Assets | ||
Goodwill [Line Items] | ||
Other intangible assets | $ 23,745 | $ 22,175 |
INTANGIBLE ASSETS AND GOODWILL - Future Amortization Expense (Details) $ in Thousands |
Jun. 30, 2022
USD ($)
|
---|---|
Finite-Lived Intangible Assets [Line Items] | |
2022 | $ 4,680 |
2023 | 7,907 |
2024 | 3,397 |
2025 | 99 |
Thereafter | 0 |
Other intangible assets | $ 16,083 |
NOTES PAYABLE AND LINES OF CREDIT - Floor Plan Notes Payable (Details) - USD ($) $ in Thousands |
Jun. 30, 2022 |
Dec. 31, 2021 |
---|---|---|
Debt Instrument [Line Items] | ||
Floor plan notes payable | $ 138,986 | $ 97,278 |
Floor plans notes payable - trade | ||
Debt Instrument [Line Items] | ||
Floor plan notes payable | 43,259 | 15,119 |
Floor plans notes payable - non-trade | ||
Debt Instrument [Line Items] | ||
Floor plan notes payable | $ 95,727 | $ 82,159 |
STOCKHOLDER EQUITY - Stock-Based Compensation (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
Jun. 30, 2022 |
Jun. 30, 2021 |
|
Share-based Payment Arrangement [Abstract] | ||||
Restricted stock units | $ 2,753 | $ 695 | $ 4,632 | $ 2,421 |
Options | 0 | 6 | 0 | 14 |
Total stock-based compensation | $ 2,753 | $ 701 | $ 4,632 | $ 2,435 |
SUPPLEMENTAL CASH FLOW INFORMATION - Schedule of Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands |
6 Months Ended | ||
---|---|---|---|
Feb. 18, 2022 |
Jun. 30, 2022 |
Jun. 30, 2021 |
|
Supplemental Cash Flow Information [Abstract] | |||
Cash paid for interest | $ 21,775 | $ 2,258 | |
Fair value of 1,048,718 Class B common stock issued in the Freedom Transaction | 26,511 | 0 | |
Capital expenditures and technology development costs included in accounts payable and accrued liabilities | $ 1,500 | $ 0 | |
Freedom Transaction | |||
Business Acquisition [Line Items] | |||
Business acquisition, number of shares issued to acquire business (in shares) | 1,048,718 |
SUPPLEMENTAL CASH FLOW INFORMATION - Schedule of Cash and Restricted Cash (Details) - USD ($) $ in Thousands |
Jun. 30, 2022 |
Dec. 31, 2021 |
Jun. 30, 2021 |
Dec. 31, 2020 |
---|---|---|---|---|
Supplemental Cash Flow Information [Abstract] | ||||
Cash and cash equivalents | $ 68,182 | $ 48,974 | ||
Restricted cash | 9,500 | 3,000 | ||
Total cash, cash equivalents, and restricted cash | $ 77,682 | $ 51,974 | $ 28,020 | $ 3,516 |
INCOME TAXES (Details) |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
Jun. 30, 2022 |
Jun. 30, 2021 |
|
Income Tax Disclosure [Abstract] | ||||
Effective income tax rate | 25.80% | 0.00% | 23.80% | 0.00% |
U.S. federal income tax rate | 21.00% | 21.00% |
LEASES - Balance Sheet Classification (Details) - USD ($) $ in Thousands |
Jun. 30, 2022 |
Dec. 31, 2021 |
---|---|---|
Leases, Operating [Abstract] | ||
Right-of-use assets | $ 171,565 | $ 133,112 |
Current portion of lease liabilities | 22,831 | 19,155 |
Operating lease liabilities, noncurrent | 135,964 | 114,687 |
Leases, Finance [Abstract] | ||
Right-of-use assets | 0 | 3,240 |
Finance lease liabilities, current | 0 | 1,094 |
Finance lease liabilities, noncurrent | 0 | 2,869 |
Total right-of-use assets | 171,565 | 136,352 |
Total lease liabilities | $ 158,795 | $ 137,805 |
Finance Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration] | Property and equipment, net | Property and equipment, net |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List] | Current portion lease liabilities | Current portion lease liabilities |
Finance Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration] | Current portion lease liabilities | Current portion lease liabilities |
LEASES - Lease Details (Details) |
Jun. 30, 2022 |
---|---|
Leases [Abstract] | |
Weighted average lease term-operating leases | 14 years 10 months 24 days |
Weighted average discount rate-operating leases | 13.90% |
LEASES - Lease Costs (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
Jun. 30, 2022 |
Jun. 30, 2021 |
|
Leases [Abstract] | ||||
Operating lease costs | $ 7,565 | $ 627 | $ 14,428 | $ 1,180 |
Amortization of ROU assets | 0 | 0 | 41 | 0 |
Interest on lease liabilities | 0 | 0 | 124 | 0 |
Total lease costs | $ 7,565 | $ 627 | $ 14,593 | $ 1,180 |
LEASES - Related Parties Balance Sheet Classification (Details) $ in Thousands |
Jun. 30, 2022
USD ($)
|
Dec. 31, 2021
USD ($)
|
Aug. 31, 2021
lease
|
---|---|---|---|
Lessee, Lease, Description [Line Items] | |||
Right-of-use assets | $ 171,565 | $ 133,112 | |
Current portion of lease liabilities | 22,831 | 19,155 | |
Operating lease liabilities, noncurrent | 135,964 | $ 114,687 | |
Total lease liabilities | 158,795 | ||
RideNow Leases | Director | |||
Lessee, Lease, Description [Line Items] | |||
Number of leases | lease | 24 | ||
Related Party | |||
Lessee, Lease, Description [Line Items] | |||
Right-of-use assets | 115,767 | ||
Current portion of lease liabilities | 14,815 | ||
Operating lease liabilities, noncurrent | 100,642 | ||
Not A Related Party | |||
Lessee, Lease, Description [Line Items] | |||
Right-of-use assets | 55,798 | ||
Current portion of lease liabilities | 8,016 | ||
Operating lease liabilities, noncurrent | $ 35,322 |
LEASES - Supplemental Cash Flow Information (Details) $ in Thousands |
6 Months Ended |
---|---|
Jun. 30, 2022
USD ($)
| |
Leases [Abstract] | |
Cash payments for operating leases | $ 12,240 |
ROU assets obtained in exchange for new operating lease liabilities | $ 15,103 |
LEASES - Maturity Lease Schedule (Details) $ in Thousands |
Jun. 30, 2022
USD ($)
|
---|---|
Leases [Abstract] | |
2022 | $ 12,766 |
2023 | 26,461 |
2024 | 25,917 |
2025 | 24,311 |
2026 | 22,924 |
Thereafter | 281,200 |
Total lease payments | 393,579 |
Less: imputed interest | 245,904 |
Present value of operating lease liabilities | $ 147,675 |
SEGMENT REPORTING - Narrative (Details) |
6 Months Ended |
---|---|
Jun. 30, 2022
segment
| |
Segment Reporting [Abstract] | |
Number of reportable segments | 3 |
SEGMENT REPORTING - Schedule of Segment Reporting Information (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
Jun. 30, 2022 |
Jun. 30, 2021 |
Dec. 31, 2021 |
|
Segment Reporting Information [Line Items] | |||||
Total assets | $ 1,271,557 | $ 128,073 | $ 1,271,557 | $ 128,073 | $ 1,027,749 |
Revenue | 546,095 | 168,345 | 1,006,015 | 272,609 | |
Operating income | 31,929 | 765 | 54,592 | (2,057) | |
Depreciation and amortization | 5,879 | 632 | 10,353 | 1,231 | |
Interest expense | (13,275) | (1,920) | (24,456) | (3,529) | |
Change in derivative liability | 0 | (2,235) | 39 | (2,256) | |
Intersegment Eliminations | |||||
Segment Reporting Information [Line Items] | |||||
Total assets | (824,275) | (27,573) | (824,275) | (27,573) | |
Revenue | (1,119) | (1,437) | (2,380) | (2,129) | |
Operating income | 0 | 0 | 90 | 0 | |
Depreciation and amortization | 0 | 0 | 0 | 0 | |
Interest expense | 0 | 0 | 0 | 0 | |
Change in derivative liability | 0 | 0 | 0 | ||
Powersports | Operating Segments | |||||
Segment Reporting Information [Line Items] | |||||
Total assets | 2,027,155 | 99,476 | 2,027,155 | 99,476 | |
Revenue | 414,817 | 27,978 | 751,631 | 38,833 | |
Operating income | 29,820 | (2,906) | 51,588 | (8,082) | |
Depreciation and amortization | 5,852 | 598 | 10,299 | 1,171 | |
Interest expense | (12,750) | (1,331) | (23,412) | (2,577) | |
Change in derivative liability | (2,235) | 39 | (2,256) | ||
Automotive | Operating Segments | |||||
Segment Reporting Information [Line Items] | |||||
Total assets | 50,005 | 41,997 | 50,005 | 41,997 | |
Revenue | 115,761 | 127,287 | 226,516 | 211,357 | |
Operating income | 828 | 2,757 | 566 | 4,399 | |
Depreciation and amortization | 17 | 27 | 34 | 53 | |
Interest expense | (525) | (587) | (1,043) | (948) | |
Change in derivative liability | 0 | 0 | 0 | ||
Vehicle Logistics | Operating Segments | |||||
Segment Reporting Information [Line Items] | |||||
Total assets | 18,672 | 14,173 | 18,672 | 14,173 | |
Revenue | 16,636 | 14,517 | 30,248 | 24,548 | |
Operating income | 1,281 | 914 | 2,348 | 1,626 | |
Depreciation and amortization | 10 | 7 | 20 | 7 | |
Interest expense | $ 0 | (2) | (1) | (4) | |
Change in derivative liability | $ 0 | $ 0 | $ 0 |
SUBSEQUENT EVENTS (Details) $ in Thousands |
Jul. 19, 2022
USD ($)
|
---|---|
Subsequent Event | Disposal Group, Disposed of by Sale, Not Discontinued Operations | Store in Baton Rogue, Louisiana | |
Subsequent Event [Line Items] | |
Sale of store, consideration | $ 4,954 |
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