Cover
Cover - shares | 9 Months Ended | |
Sep. 30, 2022 | Nov. 08, 2022 | |
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2022 | |
Document Transition Report | false | |
Entity File Number | 001-38248 | |
Entity Registrant Name | RumbleOn, Inc. | |
Entity Incorporation, State or Country Code | NV | |
Entity Tax Identification Number | 46-3951329 | |
Entity Address, Address Line One | 901 W Walnut Hill Lane | |
Entity Address, City or Town | Irving | |
Entity Address, State or Province | TX | |
Entity Address, Postal Zip Code | 75038 | |
City Area Code | 214 | |
Local Phone Number | 771-9952 | |
Title of 12(b) Security | Class B Common Stock, $0.001 par value | |
Trading Symbol | RMBL | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Amendment Flag | false | |
Entity Central Index Key | 0001596961 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q3 | |
Common Class B | ||
Entity Common Stock, Shares Outstanding | 16,143,685 | |
Common Class A | ||
Entity Common Stock, Shares Outstanding | 50,000 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Current assets: | ||
Cash | $ 39,715 | $ 48,974 |
Restricted cash | 9,500 | 3,000 |
Accounts receivable, net | 35,394 | 40,166 |
Inventory | 323,832 | 201,666 |
Prepaid expense and other current assets | 7,079 | 6,335 |
Total current assets | 415,520 | 300,141 |
Property and equipment, net | 77,091 | 21,417 |
Right-of-use assets | 161,171 | 133,112 |
Goodwill | 266,059 | 260,922 |
Intangible assets, net | 352,880 | 302,066 |
Other assets | 31,861 | 10,091 |
Total assets | 1,304,582 | 1,027,749 |
Current liabilities: | ||
Accounts payable and accrued liabilities | 76,266 | 57,068 |
Vehicle floor plan note payable | 175,296 | 97,278 |
Current portion of lease liabilities | 23,324 | 20,249 |
Current portion of long-term, convertible debts, and notes payable | 3,645 | 4,476 |
Total current liabilities | 278,531 | 179,071 |
Long-term liabilities: | ||
Senior secured note | 330,752 | 253,438 |
Convertible debt, net | 31,185 | 29,242 |
Line of credit and notes payable | 22,925 | 150 |
Operating lease liabilities | 126,941 | 114,687 |
Deferred tax liabilities | 15,147 | 7,586 |
Other long-term liabilities | 7,494 | 11,930 |
Total long-term liabilities | 534,444 | 417,033 |
Total liabilities | 812,975 | 596,104 |
Commitments and contingencies (Notes 2, 3, 5, 8, and 10) | ||
Stockholders' equity: | ||
Preferred stock, $0.001 par value, 10,000,000 shares authorized, none issued and outstanding as of September 30, 2022 and December 31, 2021 | 0 | 0 |
Additional paid-in capital | 583,803 | 550,055 |
Accumulated deficit | (87,893) | (114,106) |
Class B stock in treasury, at cost, 123,089 shares as of September 30, 2022 and December 31, 2021 | (4,319) | (4,319) |
Total stockholders' equity | 491,607 | 431,645 |
Total liabilities and stockholders' equity | $ 1,304,582 | $ 1,027,749 |
Treasury stock (in shares) | 123,089 | 123,089 |
Common Class A | ||
Stockholders' equity: | ||
Common stock value | $ 0 | $ 0 |
Common Class B | ||
Stockholders' equity: | ||
Common stock value | $ 16 | $ 15 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Sep. 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) | 123,089 | 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) | 16,135,190 | 14,882,022 |
Common stock, shares, outstanding (in shares) | 16,135,190 | 14,882,022 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Revenues [Abstract] | ||||
Total revenue | $ 470,272 | $ 221,214 | $ 1,476,287 | $ 493,823 |
Total cost of revenue | 353,926 | 183,827 | 1,116,765 | 425,747 |
Gross profit | 116,346 | 37,387 | 359,522 | 68,076 |
Selling, general and administrative | 96,185 | 61,507 | 274,416 | 93,020 |
Insurance recovery | 0 | (3,135) | 0 | (3,135) |
Depreciation and amortization | 6,570 | 1,717 | 16,923 | 2,948 |
Operating income (loss) | 13,591 | (22,702) | 68,183 | (24,757) |
Interest expense | (12,603) | (4,577) | (37,059) | (8,107) |
Other income (expense) | 38 | 0 | 287 | 0 |
Change in derivative liability | 0 | (6,518) | 39 | (8,774) |
PPP loan forgiveness | 2,509 | 572 | 2,509 | 572 |
Income (loss) before provision for income taxes | 3,535 | (33,225) | 33,959 | (41,066) |
Income tax provision (benefit) | 496 | (10,681) | 7,746 | (10,681) |
Net income (loss) | $ 3,039 | $ (22,544) | $ 26,213 | $ (30,385) |
Weighted average number of common shares outstanding - basic (in shares) | 16,020,296 | 6,939,708 | 15,859,134 | 4,178,932 |
Earnings (loss) per share - basic (in dollars per share) | $ 0.19 | $ (3.25) | $ 1.65 | $ (7.27) |
Weighted average number of common shares outstanding - diluted (in shares) | 16,067,395 | 6,939,708 | 15,922,484 | 4,178,932 |
Earnings (loss) per share - diluted (in dollars per share) | $ 0.19 | $ (3.25) | $ 1.65 | $ (7.27) |
Powersports | ||||
Revenues [Abstract] | ||||
Total revenue | $ 291,491 | $ 83,292 | $ 858,809 | $ 121,307 |
Total cost of revenue | 241,246 | 68,295 | 700,317 | 97,193 |
Automotive | ||||
Revenues [Abstract] | ||||
Total revenue | 69,974 | 105,298 | 296,433 | 316,655 |
Total cost of revenue | 68,091 | 98,773 | 286,243 | 293,751 |
Parts, service and accessories | ||||
Revenues [Abstract] | ||||
Total revenue | 62,217 | 16,075 | 182,269 | 16,075 |
Total cost of revenue | 33,073 | 8,845 | 96,473 | 8,845 |
Finance and insurance, net | ||||
Revenues [Abstract] | ||||
Total revenue | 31,588 | 6,180 | 95,906 | 6,998 |
Vehicle logistics | ||||
Revenues [Abstract] | ||||
Total revenue | 15,002 | 10,369 | 42,870 | 32,788 |
Total cost of revenue | $ 11,516 | $ 7,914 | $ 33,732 | $ 25,958 |
Condensed Consolidated Statem_2
Condensed Consolidated Statement of Stockholders' Equity - USD ($) $ in Thousands | Total | Common Class A | Common Class B | Common Stock Common Class A | Common Stock Common Class B | Additional Paid in Capital | Accumulated Deficit | Treasury Stock |
Beginning balance (in shares) at Dec. 31, 2020 | 50,000 | 2,191,633 | ||||||
Beginning balance, amount at Dec. 31, 2020 | $ 4,570 | $ 0 | $ 2 | $ 108,949 | $ (104,381) | $ 0 | ||
Beginning balance (in shares) at Dec. 31, 2020 | 0 | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Issuance of common stock for restricted stock units (in shares) | 877,618 | |||||||
Issuance of common stock for restricted stock units | 0 | $ 1 | (1) | |||||
Issuance of common stock, net of issuance cost (in shares) | 6,102,027 | |||||||
Issuance of common stock, net of issuance cost | 191,240 | $ 6 | 191,234 | |||||
Issuance of common stock in acquisition (in shares) | 5,833,333 | |||||||
Issuance of common stock in acquisition | 200,958 | $ 6 | 200,952 | |||||
Stock-based compensation | 27,166 | 27,166 | ||||||
Issuance of warrant | 19,700 | 19,700 | ||||||
Treasury stock purchases (in shares) | 123,089 | 123,089 | ||||||
Treasury stock purchases | (4,319) | $ (4,319) | ||||||
Net income (loss) | (30,385) | (30,385) | ||||||
Ending balance (in shares) at Sep. 30, 2021 | 50,000 | 14,881,522 | ||||||
Ending balance, amount at Sep. 30, 2021 | 408,930 | $ 0 | $ 15 | 548,000 | (134,766) | $ (4,319) | ||
Ending balance (in shares) at Sep. 30, 2021 | 123,089 | |||||||
Beginning balance (in shares) at Jun. 30, 2021 | 50,000 | 3,343,062 | ||||||
Beginning balance, amount at Jun. 30, 2021 | 35,962 | $ 0 | $ 3 | 148,181 | (112,222) | $ 0 | ||
Beginning balance (in shares) at Jun. 30, 2021 | 0 | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Issuance of common stock for restricted stock units (in shares) | 775,187 | |||||||
Issuance of common stock for restricted stock units | 0 | $ 1 | (1) | |||||
Issuance of common stock, net of issuance cost (in shares) | 5,053,029 | |||||||
Issuance of common stock, net of issuance cost | 154,443 | $ 5 | 154,438 | |||||
Issuance of common stock in acquisition (in shares) | 5,833,333 | |||||||
Issuance of common stock in acquisition | 200,958 | $ 6 | 200,952 | |||||
Stock-based compensation | 24,730 | 24,730 | ||||||
Issuance of warrant | 19,700 | 19,700 | ||||||
Treasury stock purchases (in shares) | 123,089 | 123,089 | ||||||
Treasury stock purchases | (4,319) | $ (4,319) | ||||||
Net income (loss) | (22,544) | (22,544) | ||||||
Ending balance (in shares) at Sep. 30, 2021 | 50,000 | 14,881,522 | ||||||
Ending balance, amount at Sep. 30, 2021 | 408,930 | $ 0 | $ 15 | 548,000 | (134,766) | $ (4,319) | ||
Ending balance (in shares) at Sep. 30, 2021 | 123,089 | |||||||
Beginning balance (in shares) at Dec. 31, 2021 | 50,000 | 14,882,022 | 50,000 | 14,882,022 | ||||
Beginning balance, amount at Dec. 31, 2021 | $ 431,645 | $ 0 | $ 15 | 550,055 | (114,106) | $ (4,319) | ||
Beginning balance (in shares) at Dec. 31, 2021 | 123,089 | 123,089 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Issuance of common stock for restricted stock units (in shares) | 206,896 | |||||||
Issuance of common stock in acquisition (in shares) | 1,048,718 | |||||||
Issuance of common stock in acquisition | $ 26,512 | $ 1 | 26,511 | |||||
Stock-based compensation | 7,237 | 7,237 | ||||||
Escrow shares cancelled in connection with Freedom acquisition (in shares) | (2,446) | |||||||
Net income (loss) | 26,213 | 26,213 | ||||||
Ending balance (in shares) at Sep. 30, 2022 | 50,000 | 16,135,190 | 50,000 | 16,135,190 | ||||
Ending balance, amount at Sep. 30, 2022 | $ 491,607 | $ 0 | $ 16 | 583,803 | (87,893) | $ (4,319) | ||
Ending balance (in shares) at Sep. 30, 2022 | 123,089 | 123,089 | ||||||
Beginning balance (in shares) at Jun. 30, 2022 | 50,000 | 15,940,866 | ||||||
Beginning balance, amount at Jun. 30, 2022 | $ 485,962 | $ 0 | $ 16 | 581,197 | (90,932) | $ (4,319) | ||
Beginning balance (in shares) at Jun. 30, 2022 | 123,089 | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Issuance of common stock for restricted stock units (in shares) | 194,324 | |||||||
Stock-based compensation | 2,606 | 2,606 | ||||||
Net income (loss) | 3,039 | 3,039 | ||||||
Ending balance (in shares) at Sep. 30, 2022 | 50,000 | 16,135,190 | 50,000 | 16,135,190 | ||||
Ending balance, amount at Sep. 30, 2022 | $ 491,607 | $ 0 | $ 16 | $ 583,803 | $ (87,893) | $ (4,319) | ||
Ending balance (in shares) at Sep. 30, 2022 | 123,089 | 123,089 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net income (loss) | $ 26,213 | $ (30,385) |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||
Depreciation and amortization | 16,923 | 2,948 |
Amortization of debt discount | 3,936 | 2,284 |
Forgiveness of PPP loan | (2,509) | (572) |
Stock based compensation expense | 7,237 | 27,165 |
(Gain) loss from change in value of derivatives | (39) | 8,774 |
Deferred taxes | 3,946 | (10,969) |
Changes in finance receivable related assets and liabilities: | ||
Proceeds from ROF credit facility for the purchase of consumer finance loans | 22,925 | 0 |
Originations of finance receivables, net of principal payments received | (23,676) | 0 |
Changes in operating assets and liabilities, excluding impact of acquisitions: | ||
Accounts receivable | 5,964 | (6,476) |
Inventory | (97,357) | (33,343) |
Prepaid expenses and other current assets | (330) | 486 |
Other assets | (3,779) | (3,452) |
Other liabilities | (2,471) | 1,406 |
Accounts payable and accrued liabilities | 8,927 | 16,306 |
Floor plan trade note borrowings | 38,746 | (3,951) |
Net cash provided by (used in) operating activities | 4,656 | (29,779) |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Acquisitions, net of cash received | (65,976) | (365,946) |
Purchase of property and equipment | (4,334) | (7,613) |
Technology development | (6,188) | (1,266) |
Net cash used in investing activities | (76,498) | (374,825) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Proceeds from new secured debt | 84,500 | 261,451 |
Repayments of debt and mortgage notes | (34,235) | 0 |
Repayments of (proceeds from) issuance of notes | (2,116) | (7,974) |
Increase in borrowings from non-trade floor plans | 20,934 | 27,688 |
Net proceeds from sale of common stock | 0 | 191,240 |
Net cash provided by financing activities | 69,083 | 472,405 |
NET CHANGE IN CASH | (2,759) | 67,801 |
Cash and restricted cash at beginning of period | 51,974 | 3,516 |
Cash and restricted cash at end of period | $ 49,215 | $ 71,317 |
DESCRIPTION OF BUSINESS AND SIG
DESCRIPTION OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Sep. 30, 2022 | |
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 thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 (the “2021 Form 10-K”). The results of operations for the three and nine months ended September 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 nine months ended September 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. The Company finalized its accounting for consideration transferred, assets acquired, and liabilities assumed in the third quarter of 2022; all adjustments were recorded within the measurement period, that ended on August 31, 2022. During the third quarter of 2022, the Company’s third-party valuation of certain assets and liabilities was completed. The Company recorded the following measurement period adjustments to finalize the purchase accounting for RideNow during the third quarter of 2022: • Identified intangible assets consisting of franchise rights and non-compete agreements were increased by a total of $13,719 attributed to finalizing the valuation reports of such assets. • Deferred taxes increased by $6,055. The above adjustments collectively resulted in a corresponding goodwill adjustment (reduction) of $(7,664). 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 September 30, 2022. The Company recorded the following measurement period adjustments to the provisional purchase accounting for the Freedom Entities the during the third quarter of 2022: • Inventory was decreased by $1,079. • Identified intangible assets consisting of franchise rights and non-compete agreements were decreased by a total of $17,825. • Accounts payable, accrued expenses, and other current liabilities acquired increased by $1,404. • Other minimal changes and refinements to identified assets. The above adjustments collectively resulted in a corresponding goodwill adjustment (reduction) of $20,308. 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, and 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. |
ACQUISITIONS
ACQUISITIONS | 9 Months Ended |
Sep. 30, 2022 | |
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. 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. The Company also recorded a payable for amounts owed to RideNow equity holders. 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 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 5 - Notes Payable and Lines of Credit). The remaining funds received from these financing transactions were used for working capital purposes. Also see Note 12 – Subsequent Events. The following table summarizes the final components of consideration transferred by the Company for the RideNow Transaction: 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 purchase price consideration $ 604,885 RideNow Estimated Fair Value of Assets and Liabilities Assumed All of RideNow’s acquired assets and liabilities, including 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. The Company finalized its valuation of assets acquired, including intangible assets, and has recorded appropriate adjustments to the purchase price allocation during the measurement period. 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 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 final determination of the fair value of the identifiable assets acquired and liabilities assumed as a result of the RideNow Transaction. Estimated fair value of assets: Cash $ 34,436 Contracts in transit 10,878 Accounts receivable 10,142 Inventory 127,080 Prepaid expenses 1,785 Right-of-use assets 22,912 Right-of-use assets - related parties 124,243 Property & equipment 18,707 Franchise rights 296,542 Other intangible assets, net 21,558 Other assets 92 Total assets acquired $ 668,375 Estimated fair value of liabilities assumed: Accounts payable, accrued expenses and other current liabilities $ 39,883 Notes payable - floor plan 47,161 Lease liabilities 22,912 Lease liabilities - related parties 106,966 Notes payable 4,382 Notes payable - related parties 2,167 Deferred tax liabilities 41,484 Other long-term liabilities 6,210 Total liabilities assumed 271,165 Total net assets acquired 397,210 Goodwill 207,675 Total purchase price consideration $ 604,885 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 September 30, 2022. The Company expects it will be able to amortize, for tax purposes, $105,000 of goodwill. Freedom Transaction On November 8, 2021, RumbleOn entered into a Membership Interest Purchase Agreement to acquire 100% of the equity interests of the Freedom Entities, and completed the acquisition (the “Freedom Transaction”) on the Freedom Closing Date. 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 Class B common stock with a value of $26,511 on the Freedom Closing Date. On June 22, 2022, 2,446 shares of Class B common stock held in escrow were cancelled as part of the final purchase price adjustment. The following table summarizes the provisional consideration transferred by the Company for the Freedom Transaction: 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 The table below represents, as of September 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 18, 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; and (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. Estimated fair value of assets: Cash $ 6,381 Contracts in transit 1,170 Accounts receivable 1,089 Inventory 24,809 Prepaid expenses 214 Property & equipment 50,228 Right-of-use assets 2,876 Other intangible assets 2,167 Franchise rights 39,661 Other assets 79 Total assets acquired $ 128,674 Estimated fair value of liabilities assumed: Accounts payable, accrued expenses and other current liabilities $ 5,407 Notes payable - floor plan 18,337 Lease liabilities 2,002 Deferred revenues 3,495 Mortgage notes 26,809 Notes payable 4,693 Total liabilities assumed 60,743 Total net assets acquired 67,931 Goodwill 29,306 Total provisional purchase price consideration $ 97,237 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, $29,306 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 $159,645 and pre-tax earnings of $19,896 for the nine months ended September 30, 2022. Acquisition related costs of $1,263 were incurred for the nine months ended September 30, 2022 and are included in Selling, General and Administrative expenses in the Condensed Consolidated Statement of Operations. Pro Forma Information for Acquisitions The following unaudited pro forma financial information presents consolidated information of the Company as if the RideNow Transaction and Freedom Transaction were completed at December 31, 2020. Nine Months Ended September 30, 2022 2021 (unaudited) Pro forma revenue $ 1,501,117 $ 1,319,726 Pro forma net income $ 26,416 $ 31,530 Earnings per share-basic $ 1.67 $ 1.99 Weighted average number of shares-basic 15,859,162 15,859,162 Earnings per share diluted $ 1.66 $ 1.98 Weighted average number of shares diluted 15,922,513 15,922,513 |
LEASES
LEASES | 9 Months Ended |
Sep. 30, 2022 | |
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: Leases Classification September 30, 2022 December 31, 2021 Assets: Operating Right of use assets $ 161,171 $ 133,112 Finance Property and equipment, net — 3,240 Total right-of-use assets $ 161,171 $ 136,352 Liabilities: Current: Operating Current portion of lease liabilities $ 23,324 $ 19,155 Finance Current portion of lease liabilities — 1,094 Non-Current: Operating Long-term portion of operating lease liabilities 126,941 114,687 Finance Other long-term liabilities — 2,869 Total lease liabilities $ 150,265 $ 137,805 The weighted-average remaining lease term and discount rate for the Company's operating and financing leases are as follows: September 30, 2022 Weighted average lease term-operating leases 14.8 years Weighted average discount rate-operating leases 14.0% The following table provides information related to the lease costs of finance and operating leases for three months and nine months ended September 30, 2022 and 2021: Lease Expense Income Statement Classification Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Operating Selling, general and administrative expenses $ 7,894 $ 2,364 $ 22,961 $ 3,544 Finance: Amortization of ROU assets Depreciation and amortization expense — 170 — 170 Interest on lease liabilities Interest expense — 511 — 511 Total lease costs $ 7,894 $ 3,045 $ 22,961 $ 4,225 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 September 30, 2022: Leases Classification September 30, 2022 Assets: Operating Right of use assets – related party $ 104,368 Operating All other right of use assets 56,803 Total right-of-use assets $ 161,171 Liabilities: Current: Operating Current portion of lease liabilities – related party $ 14,465 Operating Current portion of lease liabilities – all other leases 8,859 Total current liabilities $ 23,324 Non-Current: Operating Long-term portion of lease liabilities – related party 92,848 Operating Long-term portion of lease liabilities – all other leases 34,093 Total non-current liabilities $ 126,941 Total lease liabilities $ 150,265 Supplemental cash flow information related to operating leases for the nine months ended September 30, 2022 was as follows: Nine Months Ended September 30, 2022 Cash payments for operating leases $ 18,643 ROU assets obtained in exchange for new operating lease liabilities $ 15,912 The following table summarizes the future minimum payments for operating leases at September 30, 2022 due in each year ending December 31: Year Operating Leases 2022 $ 6,726 2023 27,125 2024 26,598 2025 25,012 2026 23,639 Thereafter 290,066 Total lease payments 399,166 Less: imputed interest 248,901 Present value of operating lease liabilities $ 150,265 |
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: Leases Classification September 30, 2022 December 31, 2021 Assets: Operating Right of use assets $ 161,171 $ 133,112 Finance Property and equipment, net — 3,240 Total right-of-use assets $ 161,171 $ 136,352 Liabilities: Current: Operating Current portion of lease liabilities $ 23,324 $ 19,155 Finance Current portion of lease liabilities — 1,094 Non-Current: Operating Long-term portion of operating lease liabilities 126,941 114,687 Finance Other long-term liabilities — 2,869 Total lease liabilities $ 150,265 $ 137,805 The weighted-average remaining lease term and discount rate for the Company's operating and financing leases are as follows: September 30, 2022 Weighted average lease term-operating leases 14.8 years Weighted average discount rate-operating leases 14.0% The following table provides information related to the lease costs of finance and operating leases for three months and nine months ended September 30, 2022 and 2021: Lease Expense Income Statement Classification Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Operating Selling, general and administrative expenses $ 7,894 $ 2,364 $ 22,961 $ 3,544 Finance: Amortization of ROU assets Depreciation and amortization expense — 170 — 170 Interest on lease liabilities Interest expense — 511 — 511 Total lease costs $ 7,894 $ 3,045 $ 22,961 $ 4,225 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 September 30, 2022: Leases Classification September 30, 2022 Assets: Operating Right of use assets – related party $ 104,368 Operating All other right of use assets 56,803 Total right-of-use assets $ 161,171 Liabilities: Current: Operating Current portion of lease liabilities – related party $ 14,465 Operating Current portion of lease liabilities – all other leases 8,859 Total current liabilities $ 23,324 Non-Current: Operating Long-term portion of lease liabilities – related party 92,848 Operating Long-term portion of lease liabilities – all other leases 34,093 Total non-current liabilities $ 126,941 Total lease liabilities $ 150,265 Supplemental cash flow information related to operating leases for the nine months ended September 30, 2022 was as follows: Nine Months Ended September 30, 2022 Cash payments for operating leases $ 18,643 ROU assets obtained in exchange for new operating lease liabilities $ 15,912 The following table summarizes the future minimum payments for operating leases at September 30, 2022 due in each year ending December 31: Year Operating Leases 2022 $ 6,726 2023 27,125 2024 26,598 2025 25,012 2026 23,639 Thereafter 290,066 Total lease payments 399,166 Less: imputed interest 248,901 Present value of operating lease liabilities $ 150,265 |
INTANGIBLE ASSETS AND GOODWILL
INTANGIBLE ASSETS AND GOODWILL | 9 Months Ended |
Sep. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
INTANGIBLE ASSETS AND GOODWILL | INTANGIBLE ASSETS AND GOODWILLThe carrying amount of goodwill, franchise rights, and other intangible assets as of September 30, 2022 and December 31, 2021 is as follows: September 30, 2022 December 31, 2021 Goodwill $ 266,059 $ 260,922 Other Intangible Assets Franchise rights - indefinite life $ 339,071 $ 282,350 Other intangibles - definite lived 23,750 22,175 362,821 304,525 Less accumulated amortization 9,941 2,459 Intangible assets, net $ 352,880 $ 302,066 The following summarizes the changes in the carrying amount of goodwill by reportable segment from December 31, 2021 to September 30, 2022. Powersports Automotive Vehicle Logistics Total Balance at December 31, 2021 $ 234,035 $ 26,039 $ 848 $ 260,922 RideNow purchase price adjustments (24,193) — — (24,193) Freedom Powersports Transaction 29,330 — — 29,330 Balance at September 30, 2022 $ 239,172 $ 26,039 $ 848 $ 266,059 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 September 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 September 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. During the fourth quarter of 2022, we changed the date of our annual impairment test for goodwill and indefinite-lived intangible assets from December 31 st to October 1 st . This voluntary change was made to better align the timing of the assessment with the Company’s planning and forecasting process that now incorporates the operations of the Freedom Entities and RideNow that were acquired in 2022 and 2021, respectively, and to give the Company additional time to complete the annual assessment in advance of year-end reporting. We believe this change in accounting principle measurement date is preferable under the circumstances. The Company has commenced its annual impairment process as of October 1, 2022, which includes engaging a third party valuation specialist to assist in determining the fair value of the Company’s reporting units. The Company’s annual impairment analysis as of October 1 is incomplete at this time, and management expects to finalize this assessment in the fourth quarter. Estimated annual amortization expense related to other intangibles: 2022 $ 2,341 2023 7,908 2024 3,436 2025 99 Thereafter — $ 13,784 |
NOTES PAYABLE AND LINES OF CRED
NOTES PAYABLE AND LINES OF CREDIT | 9 Months Ended |
Sep. 30, 2022 | |
Debt Disclosure [Abstract] | |
NOTES PAYABLE AND LINES OF CREDIT | NOTES PAYABLE AND LINES OF CREDIT Notes payable consisted of the following as of September 30, 2022 and December 31, 2021: September 30, 2022 December 31, 2021 Term Loan Credit Agreement maturing on August 31, 2026. Amortization payments are required quarterly. The interest rate at September 30, 2022 was 10.77%. $ 334,397 $ 253,438 RumbleOn Finance line of credit dated February 4, 2022 and maturing on February 4, 2025. Interest rate at September 30, 2022 was 8.09%. 22,925 — PPP Loans maturing on April 1, 2025. Balance was forgiven during the quarter ended September 30, 2022. — 2,534 Unsecured note payable to P&D Motorcycles. — 1,031 Unsecured notes payable to RideNow Management, LLLP, a related party through equal ownership by former two directors of the Company. — 907 Total notes payable and lines of credit 357,322 257,910 Less: Current portion 3,645 4,322 Long-term portion $ 353,677 $ 253,588 Floor plan notes payable as of September 30, 2022 and December 31, 2021: September 30, 2022 December 31, 2021 Floor plans notes payable - trade $ 53,865 $ 15,119 Floor plans notes payable - non-trade 121,431 82,159 Floor plan notes payable $ 175,296 $ 97,278 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 $26,669, 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 September 30, 2022, was 10.77%. Interest expense for the three and nine months ended September 30, 2022 and 2021 were $9,605 and $29,305, and $2,666 and $2,666, respectively, which included amortization of $596 and $4,388, and $509 and $509, 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 September 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 September 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 exercise price was adjusted during the third quarter to $31.50 and the expiration date was extended to July 25, 2023. 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 September 30, 2022. Interest expense on the Wholesale Floorplan Lines for the three and nine months ended September 30, 2022 and 2021 were $275 and $1,032, $325 and $969, respectively. The balance of the AFC Credit Line as of September 30, 2022 and 2021 was $20,508 and $28,336, 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 $22,925 on the secured loan facility as of September 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 was forgiven by the SBA during the quarter ended September 30, 2022. 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 nine months ended September 30, 2022 and 2021 were $0 and $39, and $(6,518) and $(8,774), respectively, and is included in change in derivative liability in the Condensed Consolidated Statement of Operations. The value of the derivative liability as of September 30, 2022 and December 31, 2021 was $26 and $66, respectively. |
STOCKHOLDER EQUITY
STOCKHOLDER EQUITY | 9 Months Ended |
Sep. 30, 2022 | |
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 September 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. The cost of the acceleration of these RSU awards and other stock issuances of $23,943 was included in the Condensed Consolidated Statement of Operations during the three and nine months ended September 30, 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 nine months ended September 30, 2022 and September 30, 2021: Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Restricted Stock Units $ 2,605 $ 24,722 $ 7,237 $ 27,142 Stock Options — 8 — 23 Total stock-based compensation $ 2,605 $ 24,730 $ 7,237 $ 27,165 As of September 30, 2022, there was 812,386 RSUs outstanding. The total unrecognized compensation expense related to outstanding equity awards was approximately $19,120, which the Company expects to recognize over a weighted-average period of approximately 15 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. 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 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 |
SUPPLEMENTAL CASH FLOW INFORMAT
SUPPLEMENTAL CASH FLOW INFORMATION | 9 Months Ended |
Sep. 30, 2022 | |
Supplemental Cash Flow Information [Abstract] | |
SUPPLEMENTAL CASH FLOW INFORMATION | SUPPLEMENTAL CASH FLOW INFORMATION The following table includes supplemental cash flow information, including noncash investing and financing activity for the nine months ended September 30, 2022 and 2021: Nine Months Ended September 30, 2022 2021 Cash paid for interest $ 36,021 $ 3,553 Fair value of 1,048,718 Class B common stock issued in the Freedom Transaction $ 26,511 $ — The following table shows the cash and restricted cash reported within the accompanying Condensed Consolidated Balance Sheets as of September 30, 2022 and December 31, 2021: September 30, 2022 December 31, 2021 Cash and cash equivalents $ 39,715 $ 48,974 Restricted cash (1) 9,500 3,000 Total cash, cash equivalents, and restricted cash $ 49,215 $ 51,974 (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. |
INCOME TAXES
INCOME TAXES | 9 Months Ended |
Sep. 30, 2022 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXESThe Company’s effective tax rate for the three and nine months ended September 30, 2022 was 14.0% and 22.8%, respectively. The effective tax rate for the three and nine months ended September 30, 2021 was 32.1% and 26.0%, 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 nine months ended September 30, 2022 was primarily due to income tax benefit from non-taxable PPP loan forgiveness, offset by 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 September 30, 2021 was primarily due to the release of the Company's valuation allowance against its deferred tax assets recorded during the quarter ended |
EARNINGS PER SHARE
EARNINGS PER SHARE | 9 Months Ended |
Sep. 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, warrants to purchase 1,212,121 shares of Class B common stock having an exercise price of $31.50 per share are considered common stock equivalents which are antidilutive at September 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. Additionally, the Company’s senior unsecured convertible notes were antidilutive for the period ended September 30, 2022. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 9 Months Ended |
Sep. 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 September 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 September 30, 2022 and disclosed in Note 3 - 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 nine months ended September 30, 2022. The related party relationship ended February 1, 2022. Payments to RideNow Management, LLLP The Company made $2 and $233 in payments to RideNow Management, LLLP, an entity owned equally by two former directors and executive officers during the three and nine months ended September 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. T he 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 $3,600 for the license during the nine months ended September 30, 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. |
SEGMENT REPORTING
SEGMENT REPORTING | 9 Months Ended |
Sep. 30, 2022 | |
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 reporting units and 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. Powersports Automotive Vehicle Logistics Eliminations (1) Total Three Months Ended September 30, 2022 Total assets $ 2,104,086 $ 41,144 $ 19,277 $ (859,925) $ 1,304,582 Revenue $ 385,341 $ 69,994 $ 15,526 $ (589) $ 470,272 Operating income (loss) $ 12,734 $ (476) $ 1,398 $ (65) $ 13,591 Depreciation and amortization $ 6,543 $ 17 $ 10 $ — $ 6,570 Interest expense $ (12,209) $ (394) $ — $ — $ (12,603) Three Months Ended September 30, 2021 Total assets $ 1,189,868 $ 443,084 $ 14,210 $ (635,310) $ 1,011,852 Revenue $ 105,547 $ 105,298 $ 11,597 $ (1,228) $ 221,214 Operating income (loss) $ (27,524) $ 3,835 $ 987 $ — $ (22,702) Depreciation and amortization $ 1,684 $ 23 $ 10 $ — $ 1,717 Interest expense $ (4,073) $ (503) $ (1) $ — $ (4,577) Change in derivative liability $ (6,518) $ — $ — $ — $ (6,518) Nine Months Ended September 30, 2022 Total assets $ 2,104,086 $ 41,144 $ 19,277 $ (859,925) $ 1,304,582 Revenue $ 1,136,972 $ 296,510 $ 45,774 $ (2,969) $ 1,476,287 Operating income $ 64,322 $ 90 $ 3,746 $ 25 $ 68,183 Depreciation and amortization $ 16,842 $ 51 $ 30 $ — $ 16,923 Interest expense $ (35,621) $ (1,437) $ (1) $ — $ (37,059) Change in derivative liability $ 39 $ — $ — $ — $ 39 Nine Months Ended September 30, 2021 Total assets $ 1,189,868 $ 443,084 $ 14,210 $ (635,310) $ 1,011,852 Revenue $ 144,380 $ 316,655 $ 36,145 $ (3,357) $ 493,823 Operating income (loss) $ (35,604) $ 8,234 $ 2,613 $ — $ (24,757) Depreciation and amortization $ 2,855 $ 76 $ 17 $ — $ 2,948 Interest expense $ (6,651) $ (1,451) $ (5) $ — $ (8,107) Change in derivative liability $ (8,774) $ — $ — $ — $ (8,774) (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. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 9 Months Ended |
Sep. 30, 2022 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTS Used Powersports Inventory Financing Credit Facility with J.P. Morgan On October 26, 2022, the Company entered into a $75,000 used powersports inventory financing credit facility with J.P. Morgan. Strategic Alternatives for Automotive Segment On November 2, 2022, the Board of Directors reached a decision to explore strategic alternatives for the Company's automotive segment. The Company intends to continue operating the automotive segment while the review is ongoing, and does not have an estimate on the impact of a potential transaction or divestiture on future results. Global Settlement with Former RideNow Owners On November 8, 2022, the Company reached a comprehensive global and binding settlement agreement with former primary RideNow owners. The settlement agreement resolves all claims currently pending before the Delaware Chancery Court, releases certain potential and future claims between the parties, and results in no incremental consideration exchanging hands. |
DESCRIPTION OF BUSINESS AND S_2
DESCRIPTION OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Sep. 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 thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 (the “2021 Form 10-K”). The results of operations for the three and nine months ended September 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 | 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 |
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 |
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. The Company finalized its accounting for consideration transferred, assets acquired, and liabilities assumed in the third quarter of 2022; all adjustments were recorded within the measurement period, that ended on August 31, 2022. During the third quarter of 2022, the Company’s third-party valuation of certain assets and liabilities was completed. The Company recorded the following measurement period adjustments to finalize the purchase accounting for RideNow during the third quarter of 2022: • Identified intangible assets consisting of franchise rights and non-compete agreements were increased by a total of $13,719 attributed to finalizing the valuation reports of such assets. • Deferred taxes increased by $6,055. The above adjustments collectively resulted in a corresponding goodwill adjustment (reduction) of $(7,664). 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 September 30, 2022. The Company recorded the following measurement period adjustments to the provisional purchase accounting for the Freedom Entities the during the third quarter of 2022: • Inventory was decreased by $1,079. • Identified intangible assets consisting of franchise rights and non-compete agreements were decreased by a total of $17,825. • Accounts payable, accrued expenses, and other current liabilities acquired increased by $1,404. • Other minimal changes and refinements to identified assets. The above adjustments collectively resulted in a corresponding goodwill adjustment (reduction) of $20,308. 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, and 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. |
ACQUISITIONS (Tables)
ACQUISITIONS (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
Schedule of Business Acquisitions, by Acquisition | The following table summarizes the final components of consideration transferred by the Company for the RideNow Transaction: 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 purchase price consideration $ 604,885 The following table summarizes the provisional consideration transferred by the Company for the Freedom Transaction: 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 Estimated fair value of assets: Cash $ 6,381 Contracts in transit 1,170 Accounts receivable 1,089 Inventory 24,809 Prepaid expenses 214 Property & equipment 50,228 Right-of-use assets 2,876 Other intangible assets 2,167 Franchise rights 39,661 Other assets 79 Total assets acquired $ 128,674 Estimated fair value of liabilities assumed: Accounts payable, accrued expenses and other current liabilities $ 5,407 Notes payable - floor plan 18,337 Lease liabilities 2,002 Deferred revenues 3,495 Mortgage notes 26,809 Notes payable 4,693 Total liabilities assumed 60,743 Total net assets acquired 67,931 Goodwill 29,306 Total provisional purchase price consideration $ 97,237 |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The following amounts represent the final determination of the fair value of the identifiable assets acquired and liabilities assumed as a result of the RideNow Transaction. Estimated fair value of assets: Cash $ 34,436 Contracts in transit 10,878 Accounts receivable 10,142 Inventory 127,080 Prepaid expenses 1,785 Right-of-use assets 22,912 Right-of-use assets - related parties 124,243 Property & equipment 18,707 Franchise rights 296,542 Other intangible assets, net 21,558 Other assets 92 Total assets acquired $ 668,375 Estimated fair value of liabilities assumed: Accounts payable, accrued expenses and other current liabilities $ 39,883 Notes payable - floor plan 47,161 Lease liabilities 22,912 Lease liabilities - related parties 106,966 Notes payable 4,382 Notes payable - related parties 2,167 Deferred tax liabilities 41,484 Other long-term liabilities 6,210 Total liabilities assumed 271,165 Total net assets acquired 397,210 Goodwill 207,675 Total purchase price consideration $ 604,885 |
Schedule of Business Acquisition, Pro Forma Information | The following unaudited pro forma financial information presents consolidated information of the Company as if the RideNow Transaction and Freedom Transaction were completed at December 31, 2020. Nine Months Ended September 30, 2022 2021 (unaudited) Pro forma revenue $ 1,501,117 $ 1,319,726 Pro forma net income $ 26,416 $ 31,530 Earnings per share-basic $ 1.67 $ 1.99 Weighted average number of shares-basic 15,859,162 15,859,162 Earnings per share diluted $ 1.66 $ 1.98 Weighted average number of shares diluted 15,922,513 15,922,513 |
LEASES (Tables)
LEASES (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Leases [Abstract] | |
Lease, Cost | The following table reflects the balance sheet presentation of our lease assets and liabilities: Leases Classification September 30, 2022 December 31, 2021 Assets: Operating Right of use assets $ 161,171 $ 133,112 Finance Property and equipment, net — 3,240 Total right-of-use assets $ 161,171 $ 136,352 Liabilities: Current: Operating Current portion of lease liabilities $ 23,324 $ 19,155 Finance Current portion of lease liabilities — 1,094 Non-Current: Operating Long-term portion of operating lease liabilities 126,941 114,687 Finance Other long-term liabilities — 2,869 Total lease liabilities $ 150,265 $ 137,805 The weighted-average remaining lease term and discount rate for the Company's operating and financing leases are as follows: September 30, 2022 Weighted average lease term-operating leases 14.8 years Weighted average discount rate-operating leases 14.0% The following table provides information related to the lease costs of finance and operating leases for three months and nine months ended September 30, 2022 and 2021: Lease Expense Income Statement Classification Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Operating Selling, general and administrative expenses $ 7,894 $ 2,364 $ 22,961 $ 3,544 Finance: Amortization of ROU assets Depreciation and amortization expense — 170 — 170 Interest on lease liabilities Interest expense — 511 — 511 Total lease costs $ 7,894 $ 3,045 $ 22,961 $ 4,225 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 September 30, 2022: Leases Classification September 30, 2022 Assets: Operating Right of use assets – related party $ 104,368 Operating All other right of use assets 56,803 Total right-of-use assets $ 161,171 Liabilities: Current: Operating Current portion of lease liabilities – related party $ 14,465 Operating Current portion of lease liabilities – all other leases 8,859 Total current liabilities $ 23,324 Non-Current: Operating Long-term portion of lease liabilities – related party 92,848 Operating Long-term portion of lease liabilities – all other leases 34,093 Total non-current liabilities $ 126,941 Total lease liabilities $ 150,265 |
Schedule of Supplemental Cash Flow Information Related to Operating Leases | Supplemental cash flow information related to operating leases for the nine months ended September 30, 2022 was as follows: Nine Months Ended September 30, 2022 Cash payments for operating leases $ 18,643 ROU assets obtained in exchange for new operating lease liabilities $ 15,912 |
Lessee, Operating Lease, Liability, Maturity | The following table summarizes the future minimum payments for operating leases at September 30, 2022 due in each year ending December 31: Year Operating Leases 2022 $ 6,726 2023 27,125 2024 26,598 2025 25,012 2026 23,639 Thereafter 290,066 Total lease payments 399,166 Less: imputed interest 248,901 Present value of operating lease liabilities $ 150,265 |
INTANGIBLE ASSETS AND GOODWILL
INTANGIBLE ASSETS AND GOODWILL (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
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 September 30, 2022 and December 31, 2021 is as follows: September 30, 2022 December 31, 2021 Goodwill $ 266,059 $ 260,922 Other Intangible Assets Franchise rights - indefinite life $ 339,071 $ 282,350 Other intangibles - definite lived 23,750 22,175 362,821 304,525 Less accumulated amortization 9,941 2,459 Intangible assets, net $ 352,880 $ 302,066 |
Schedule of Goodwill | The following summarizes the changes in the carrying amount of goodwill by reportable segment from December 31, 2021 to September 30, 2022. Powersports Automotive Vehicle Logistics Total Balance at December 31, 2021 $ 234,035 $ 26,039 $ 848 $ 260,922 RideNow purchase price adjustments (24,193) — — (24,193) Freedom Powersports Transaction 29,330 — — 29,330 Balance at September 30, 2022 $ 239,172 $ 26,039 $ 848 $ 266,059 |
Finite-lived Intangible Assets Amortization Expense | Estimated annual amortization expense related to other intangibles: 2022 $ 2,341 2023 7,908 2024 3,436 2025 99 Thereafter — $ 13,784 |
NOTES PAYABLE AND LINES OF CR_2
NOTES PAYABLE AND LINES OF CREDIT (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | Notes payable consisted of the following as of September 30, 2022 and December 31, 2021: September 30, 2022 December 31, 2021 Term Loan Credit Agreement maturing on August 31, 2026. Amortization payments are required quarterly. The interest rate at September 30, 2022 was 10.77%. $ 334,397 $ 253,438 RumbleOn Finance line of credit dated February 4, 2022 and maturing on February 4, 2025. Interest rate at September 30, 2022 was 8.09%. 22,925 — PPP Loans maturing on April 1, 2025. Balance was forgiven during the quarter ended September 30, 2022. — 2,534 Unsecured note payable to P&D Motorcycles. — 1,031 Unsecured notes payable to RideNow Management, LLLP, a related party through equal ownership by former two directors of the Company. — 907 Total notes payable and lines of credit 357,322 257,910 Less: Current portion 3,645 4,322 Long-term portion $ 353,677 $ 253,588 Floor plan notes payable as of September 30, 2022 and December 31, 2021: September 30, 2022 December 31, 2021 Floor plans notes payable - trade $ 53,865 $ 15,119 Floor plans notes payable - non-trade 121,431 82,159 Floor plan notes payable $ 175,296 $ 97,278 |
STOCKHOLDER EQUITY (Tables)
STOCKHOLDER EQUITY (Tables) | 9 Months Ended |
Sep. 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 nine months ended September 30, 2022 and September 30, 2021: Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Restricted Stock Units $ 2,605 $ 24,722 $ 7,237 $ 27,142 Stock Options — 8 — 23 Total stock-based compensation $ 2,605 $ 24,730 $ 7,237 $ 27,165 |
SUPPLEMENTAL CASH FLOW INFORM_2
SUPPLEMENTAL CASH FLOW INFORMATION (Tables) | 9 Months Ended |
Sep. 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 nine months ended September 30, 2022 and 2021: Nine Months Ended September 30, 2022 2021 Cash paid for interest $ 36,021 $ 3,553 Fair value of 1,048,718 Class B common stock issued in the Freedom Transaction $ 26,511 $ — |
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 September 30, 2022 and December 31, 2021: September 30, 2022 December 31, 2021 Cash and cash equivalents $ 39,715 $ 48,974 Restricted cash (1) 9,500 3,000 Total cash, cash equivalents, and restricted cash $ 49,215 $ 51,974 (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. |
SEGMENT REPORTING (Tables)
SEGMENT REPORTING (Tables) | 9 Months Ended |
Sep. 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. Powersports Automotive Vehicle Logistics Eliminations (1) Total Three Months Ended September 30, 2022 Total assets $ 2,104,086 $ 41,144 $ 19,277 $ (859,925) $ 1,304,582 Revenue $ 385,341 $ 69,994 $ 15,526 $ (589) $ 470,272 Operating income (loss) $ 12,734 $ (476) $ 1,398 $ (65) $ 13,591 Depreciation and amortization $ 6,543 $ 17 $ 10 $ — $ 6,570 Interest expense $ (12,209) $ (394) $ — $ — $ (12,603) Three Months Ended September 30, 2021 Total assets $ 1,189,868 $ 443,084 $ 14,210 $ (635,310) $ 1,011,852 Revenue $ 105,547 $ 105,298 $ 11,597 $ (1,228) $ 221,214 Operating income (loss) $ (27,524) $ 3,835 $ 987 $ — $ (22,702) Depreciation and amortization $ 1,684 $ 23 $ 10 $ — $ 1,717 Interest expense $ (4,073) $ (503) $ (1) $ — $ (4,577) Change in derivative liability $ (6,518) $ — $ — $ — $ (6,518) Nine Months Ended September 30, 2022 Total assets $ 2,104,086 $ 41,144 $ 19,277 $ (859,925) $ 1,304,582 Revenue $ 1,136,972 $ 296,510 $ 45,774 $ (2,969) $ 1,476,287 Operating income $ 64,322 $ 90 $ 3,746 $ 25 $ 68,183 Depreciation and amortization $ 16,842 $ 51 $ 30 $ — $ 16,923 Interest expense $ (35,621) $ (1,437) $ (1) $ — $ (37,059) Change in derivative liability $ 39 $ — $ — $ — $ 39 Nine Months Ended September 30, 2021 Total assets $ 1,189,868 $ 443,084 $ 14,210 $ (635,310) $ 1,011,852 Revenue $ 144,380 $ 316,655 $ 36,145 $ (3,357) $ 493,823 Operating income (loss) $ (35,604) $ 8,234 $ 2,613 $ — $ (24,757) Depreciation and amortization $ 2,855 $ 76 $ 17 $ — $ 2,948 Interest expense $ (6,651) $ (1,451) $ (5) $ — $ (8,107) Change in derivative liability $ (8,774) $ — $ — $ — $ (8,774) (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. |
DESCRIPTION OF BUSINESS AND S_3
DESCRIPTION OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES (Details) $ in Thousands | 3 Months Ended |
Sep. 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, intangibles | $ 13,719 |
Measurement period adjustment, deferred taxes | 6,055 |
Measurement period adjustment, goodwill | $ (7,664) |
Freedom Transaction | |
Business Acquisition [Line Items] | |
Number of retail locations | retailLocation | 13 |
Measurement period adjustment, intangibles | $ 17,825 |
Measurement period adjustment, goodwill | 20,308 |
Measurement period adjustment, intangibles, inventory | 1,079 |
Measurement period adjustment, financial liabilities | $ 1,404 |
ACQUISITIONS - Narrative (Detai
ACQUISITIONS - Narrative (Details) $ in Thousands | Jun. 22, 2022 shares | Feb. 18, 2022 USD ($) shares | Aug. 31, 2021 USD ($) note entity subsidiary corporation shares | Sep. 30, 2022 USD ($) note |
Director | ||||
Business Acquisition [Line Items] | ||||
Number of promissory notes | note | 2 | 2 | ||
Notes payable, related parties | $ 2,200 | |||
Credit Agreement | ||||
Business Acquisition [Line Items] | ||||
Proceeds from lines of credit | $ 261,000 | |||
Public Stock Offering | ||||
Business Acquisition [Line Items] | ||||
Sale of stock, number of shares issued in transaction (in shares) | shares | 5,053,029 | |||
Sale of stock, consideration received on transaction | $ 154,443 | |||
Public Stock Offering | Director | ||||
Business Acquisition [Line Items] | ||||
Sale of stock, number of shares issued in transaction (in shares) | shares | 13,636 | |||
RideNow | ||||
Business Acquisition [Line Items] | ||||
Number of subsidiaries created | subsidiary | 5 | |||
Number of surviving corporations from acquisition | corporation | 5 | |||
Percentage of voting interests acquired | 100% | |||
Number of entities acquired | entity | 21 | |||
Cash | $ 400,400 | |||
Business acquisition, number of shares issued to acquire business (in shares) | shares | 5,833,333 | |||
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 | |||
Business acquisition, goodwill, expected tax deductible amount | 105,000 | |||
Total purchase price consideration | $ 604,885 | |||
RideNow | Merged RideNow Entities | ||||
Business Acquisition [Line Items] | ||||
Percentage of voting interests acquired | 30% | |||
RideNow | Acquired RideNow Entities | ||||
Business Acquisition [Line Items] | ||||
Percentage of voting interests acquired | 70% | |||
Freedom Transaction | ||||
Business Acquisition [Line Items] | ||||
Percentage of voting interests acquired | 100% | |||
Cash | $ 70,569 | |||
Business acquisition, number of shares issued to acquire business (in shares) | shares | 1,048,718 | |||
Class B common stock | $ 26,511 | |||
Acquiree transaction expenses paid by the Company at closing | 157 | |||
Total purchase price consideration | 97,237 | |||
Consideration transferred, cash and certain transaction expenses | 70,726 | |||
Shares returned related to business acquisition (in shares) | shares | 2,446 | |||
Mortgage notes and notes payable assumed | 31,502 | |||
Revenue | 159,645 | |||
Earnings | 19,896 | |||
Acquisition costs | $ 1,263 | |||
Freedom Transaction | Delayed Draw Term Loan Facility | Line of Credit | ||||
Business Acquisition [Line Items] | ||||
Proceeds from lines of credit | 84,500 | |||
Freedom Powersports Real Estate LLC, Acquisition And Transaction Expenses | ||||
Business Acquisition [Line Items] | ||||
Cash | 14,253 | |||
Business acquisition, goodwill, expected tax deductible amount | $ 29,306 |
ACQUISITIONS - Purchase Price C
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 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 purchase price consideration | $ 97,237 |
ACQUISITIONS - Allocation of Pu
ACQUISITIONS - Allocation of Purchase Price (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 | Aug. 31, 2021 |
Estimated fair value of liabilities assumed: | |||
Goodwill | $ 266,059 | $ 260,922 | |
RideNow | |||
Estimated fair value of assets: | |||
Cash | $ 34,436 | ||
Contracts in transit | 10,878 | ||
Accounts receivable | 10,142 | ||
Inventory | 127,080 | ||
Prepaid expenses | 1,785 | ||
Property & equipment | 18,707 | ||
Franchise rights | 296,542 | ||
Other intangible assets, net | 21,558 | ||
Other assets | 92 | ||
Total assets acquired | 668,375 | ||
Estimated fair value of liabilities assumed: | |||
Accounts payable, accrued expenses and other current liabilities | 39,883 | ||
Notes payable - floor plan | 47,161 | ||
Lease liabilities | 22,912 | ||
Deferred tax liabilities | 41,484 | ||
Other long-term liabilities | 6,210 | ||
Total liabilities assumed | 271,165 | ||
Total net assets acquired | 397,210 | ||
Goodwill | 207,675 | ||
Total purchase price consideration | 604,885 | ||
RideNow | Not A Related Party | |||
Estimated fair value of assets: | |||
Right-of-use assets | 22,912 | ||
Estimated fair value of liabilities assumed: | |||
Notes payable | 4,382 | ||
RideNow | Related Party | |||
Estimated fair value of assets: | |||
Right-of-use assets | 124,243 | ||
Estimated fair value of liabilities assumed: | |||
Notes payable | 2,167 | ||
RideNow | Affiliated Entity | |||
Estimated fair value of liabilities assumed: | |||
Lease liabilities | $ 106,966 | ||
Freedom Transaction | |||
Estimated fair value of assets: | |||
Cash | 6,381 | ||
Contracts in transit | 1,170 | ||
Accounts receivable | 1,089 | ||
Inventory | 24,809 | ||
Prepaid expenses | 214 | ||
Right-of-use assets | 2,876 | ||
Property & equipment | 50,228 | ||
Franchise rights | 39,661 | ||
Other intangible assets, net | 2,167 | ||
Other assets | 79 | ||
Total assets acquired | 128,674 | ||
Estimated fair value of liabilities assumed: | |||
Accounts payable, accrued expenses and other current liabilities | 5,407 | ||
Notes payable - floor plan | 18,337 | ||
Lease liabilities | 2,002 | ||
Deferred revenues | 3,495 | ||
Mortgage notes | 26,809 | ||
Notes payable | 4,693 | ||
Total liabilities assumed | 60,743 | ||
Total net assets acquired | 67,931 | ||
Goodwill | 29,306 | ||
Total purchase price consideration | $ 97,237 |
ACQUISITIONS - Pro Forma Inform
ACQUISITIONS - Pro Forma Information (Details) - RideNow and Freedom - USD ($) $ / shares in Units, $ in Thousands | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Business Acquisition [Line Items] | ||
Pro forma revenue | $ 1,501,117 | $ 1,319,726 |
Pro forma net income | $ 26,416 | $ 31,530 |
Earnings per share - basic (in dollars per share) | $ 1.67 | $ 1.99 |
Weighted-average number of shares - basic (in shares) | 15,859,162 | 15,859,162,000 |
Earnings per share diluted (in dollars per share) | $ 1.66 | $ 1.98 |
Weighted average number of shares diluted (in shares) | 15,922,513 | 15,922,513,000 |
LEASES - Balance Sheet Classifi
LEASES - Balance Sheet Classification (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Leases, Operating [Abstract] | ||
Right-of-use assets | $ 161,171 | $ 133,112 |
Current portion of lease liabilities | 23,324 | 19,155 |
Operating lease liabilities, noncurrent | 126,941 | 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 | 161,171 | 136,352 |
Total lease liabilities | $ 150,265 | $ 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 of lease liabilities | Current portion of lease liabilities |
Finance Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration] | Current portion of lease liabilities | Current portion of lease liabilities |
LEASES - Lease Details (Details
LEASES - Lease Details (Details) | Sep. 30, 2022 |
Leases [Abstract] | |
Weighted average lease term-operating leases | 14 years 9 months 18 days |
Weighted average discount rate-operating leases | 14% |
LEASES - Lease Costs (Details)
LEASES - Lease Costs (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Leases [Abstract] | ||||
Operating | $ 7,894 | $ 2,364 | $ 22,961 | $ 3,544 |
Amortization of ROU assets | 0 | 170 | 0 | 170 |
Interest on lease liabilities | 0 | 511 | 0 | 511 |
Total lease costs | $ 7,894 | $ 3,045 | $ 22,961 | $ 4,225 |
LEASES - Related Parties Balanc
LEASES - Related Parties Balance Sheet Classification (Details) $ in Thousands | Sep. 30, 2022 USD ($) | Dec. 31, 2021 USD ($) | Aug. 31, 2021 lease |
Lessee, Lease, Description [Line Items] | |||
Right-of-use assets | $ 161,171 | $ 133,112 | |
Current portion of lease liabilities | 23,324 | 19,155 | |
Operating lease liabilities, noncurrent | 126,941 | $ 114,687 | |
Total lease liabilities | 150,265 | ||
RideNow Leases | Director | |||
Lessee, Lease, Description [Line Items] | |||
Number of leases | lease | 24 | ||
Related Party | |||
Lessee, Lease, Description [Line Items] | |||
Right-of-use assets | 104,368 | ||
Current portion of lease liabilities | 14,465 | ||
Operating lease liabilities, noncurrent | 92,848 | ||
Not A Related Party | |||
Lessee, Lease, Description [Line Items] | |||
Right-of-use assets | 56,803 | ||
Current portion of lease liabilities | 8,859 | ||
Operating lease liabilities, noncurrent | $ 34,093 |
LEASES - Supplemental Cash Flow
LEASES - Supplemental Cash Flow Information (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2022 USD ($) | |
Leases [Abstract] | |
Cash payments for operating leases | $ 18,643 |
ROU assets obtained in exchange for new operating lease liabilities | $ 15,912 |
LEASES - Maturity Lease Schedul
LEASES - Maturity Lease Schedule (Details) $ in Thousands | Sep. 30, 2022 USD ($) |
Leases [Abstract] | |
2022 | $ 6,726 |
2023 | 27,125 |
2024 | 26,598 |
2025 | 25,012 |
2026 | 23,639 |
Thereafter | 290,066 |
Total lease payments | 399,166 |
Less: imputed interest | 248,901 |
Present value of operating lease liabilities | $ 150,265 |
INTANGIBLE ASSETS AND GOODWIL_2
INTANGIBLE ASSETS AND GOODWILL - Schedule of Goodwill and Intangible Assets (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Goodwill [Line Items] | ||
Goodwill | $ 266,059 | $ 260,922 |
Other Intangible Assets | 362,821 | 304,525 |
Less accumulated amortization | 9,941 | 2,459 |
Intangible assets, net | 352,880 | 302,066 |
Other Intangible Assets | ||
Goodwill [Line Items] | ||
Other Intangible Assets | 23,750 | 22,175 |
Franchise Rights | ||
Goodwill [Line Items] | ||
Other Intangible Assets | $ 339,071 | $ 282,350 |
INTANGIBLE ASSETS AND GOODWIL_3
INTANGIBLE ASSETS AND GOODWILL - Schedule of Goodwill by Segment (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2022 USD ($) | |
Goodwill [Roll Forward] | |
Beginning balance | $ 260,922 |
Ending balance | 266,059 |
RideNow | |
Goodwill [Roll Forward] | |
RideNow purchase price adjustments | (24,193) |
Freedom Transaction | |
Goodwill [Roll Forward] | |
Freedom Powersports Transaction | 29,330 |
Ending balance | 29,306 |
Powersports | |
Goodwill [Roll Forward] | |
Beginning balance | 234,035 |
Ending balance | 239,172 |
Powersports | RideNow | |
Goodwill [Roll Forward] | |
RideNow purchase price adjustments | (24,193) |
Powersports | Freedom Transaction | |
Goodwill [Roll Forward] | |
Freedom Powersports Transaction | 29,330 |
Automotive | |
Goodwill [Roll Forward] | |
Beginning balance | 26,039 |
Ending balance | 26,039 |
Automotive | RideNow | |
Goodwill [Roll Forward] | |
RideNow purchase price adjustments | 0 |
Automotive | Freedom Transaction | |
Goodwill [Roll Forward] | |
Freedom Powersports Transaction | 0 |
Vehicle logistics | |
Goodwill [Roll Forward] | |
Beginning balance | 848 |
Ending balance | 848 |
Vehicle logistics | RideNow | |
Goodwill [Roll Forward] | |
RideNow purchase price adjustments | 0 |
Vehicle logistics | Freedom Transaction | |
Goodwill [Roll Forward] | |
Freedom Powersports Transaction | $ 0 |
INTANGIBLE ASSETS AND GOODWIL_4
INTANGIBLE ASSETS AND GOODWILL - Future Amortization Expense (Details) $ in Thousands | Sep. 30, 2022 USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2022 | $ 2,341 |
2023 | 7,908 |
2024 | 3,436 |
2025 | 99 |
Thereafter | 0 |
Other intangible assets | $ 13,784 |
NOTES PAYABLE AND LINES OF CR_3
NOTES PAYABLE AND LINES OF CREDIT (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 | May 01, 2020 |
Debt Instrument [Line Items] | |||
Total notes payable and lines of credit | $ 357,322 | $ 257,910 | |
Less: Current portion | 3,645 | 4,322 | |
Long-term portion | 353,677 | 253,588 | |
Notes payable | 175,296 | 97,278 | |
Term Loan Credit Agreement | |||
Debt Instrument [Line Items] | |||
Total notes payable and lines of credit | $ 334,397 | 253,438 | |
Term Loan Credit Agreement | Base Rate | |||
Debt Instrument [Line Items] | |||
Effective interest rate | 10.77% | ||
ROV SPV | |||
Debt Instrument [Line Items] | |||
Total notes payable and lines of credit | $ 22,925 | 0 | |
ROV SPV | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate | |||
Debt Instrument [Line Items] | |||
Variable interest rate | 8.09% | ||
PPP Loans | |||
Debt Instrument [Line Items] | |||
Total notes payable and lines of credit | $ 0 | 2,534 | |
Notes payable | $ 5,177 | ||
P&D Motorcycles Notes Payable | |||
Debt Instrument [Line Items] | |||
Total notes payable and lines of credit | 0 | 1,031 | |
RideNow Management Notes Payable | |||
Debt Instrument [Line Items] | |||
Total notes payable and lines of credit | $ 0 | $ 907 |
NOTES PAYABLE AND LINES OF CR_4
NOTES PAYABLE AND LINES OF CREDIT - Floor Plan Notes Payable (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Debt Instrument [Line Items] | ||
Floor plan notes payable | $ 175,296 | $ 97,278 |
Floor plans notes payable - trade | ||
Debt Instrument [Line Items] | ||
Floor plan notes payable | 53,865 | 15,119 |
Floor plans notes payable - non-trade | ||
Debt Instrument [Line Items] | ||
Floor plan notes payable | $ 121,431 | $ 82,159 |
NOTES PAYABLE AND LINES OF CR_5
NOTES PAYABLE AND LINES OF CREDIT - Narrative (Details) | 3 Months Ended | 9 Months Ended | ||||||||||
Feb. 04, 2022 USD ($) | Aug. 31, 2021 USD ($) | Jan. 10, 2020 USD ($) $ / Unit | Sep. 30, 2022 USD ($) $ / shares | Sep. 30, 2021 USD ($) | Jun. 30, 2021 USD ($) | Mar. 31, 2021 USD ($) | Sep. 30, 2022 USD ($) $ / shares | Sep. 30, 2021 USD ($) | Dec. 31, 2021 USD ($) | Mar. 15, 2021 USD ($) $ / shares | May 01, 2020 USD ($) | |
Debt Instrument [Line Items] | ||||||||||||
Warrants and rights outstanding | $ 40,000,000 | |||||||||||
Interest expense | $ 12,603,000 | $ 4,577,000 | $ 37,059,000 | $ 8,107,000 | ||||||||
Warrant exercise price (in dollars per share) | $ / shares | $ 31.50 | $ 31.50 | $ 33 | |||||||||
Fair value adjustment of warrants | $ 0 | |||||||||||
Notes payable | $ 175,296,000 | $ 175,296,000 | $ 97,278,000 | |||||||||
Derivative liability | 26,000 | 26,000 | $ 66,000 | |||||||||
Change in derivative liability | 0 | (6,518,000) | 39,000 | (8,774,000) | ||||||||
Term Loan Credit Agreement | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Debt discount | 26,669,000 | 26,669,000 | ||||||||||
Paid-in-kind interest percent | 1% | |||||||||||
Interest expense | 9,605,000 | 2,666,000 | 29,305,000 | 2,666,000 | ||||||||
Amortization of debt issuance costs and discounts | $ 596,000 | 509,000 | $ 4,388,000 | 509,000 | ||||||||
Term Loan Credit Agreement | Warrant | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Warrants and rights outstanding | $ 19,700,000 | $ 13,174,000 | $ 10,950,000 | |||||||||
Fair value adjustment of warrants | 6,526,000 | $ 2,224,000 | ||||||||||
Warrant liability reclassified to additional paid in capital | $ 19,700,000 | |||||||||||
Term Loan Credit Agreement | London Interbank Offered Rate (LIBOR) | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Variable interest rate | 1% | |||||||||||
Term Loan Credit Agreement | Base Rate | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Effective interest rate | 10.77% | 10.77% | ||||||||||
Term Loan Credit Agreement | Base Rate | Debt Instrument, Redemption, Period One | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Variable interest rate | 8.25% | |||||||||||
Term Loan Credit Agreement | Base Rate | Debt Instrument, Redemption, Period Two | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Variable interest rate | 7.25% | |||||||||||
PPP Loans | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Notes payable | $ 5,177,000 | |||||||||||
Convertible Notes | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Derivative liability | $ 20,673,000 | |||||||||||
Derivative liability stock price (in dollars per share) | $ / Unit | 14.60 | |||||||||||
Estimated volatility rate | 55% | |||||||||||
Derivative, term | 10 years | |||||||||||
Change in derivative liability | $ 0 | (6,518,000) | $ 39,000 | (8,774,000) | ||||||||
Line of Credit | Initial Term Loan Facility | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Line of credit, maximum borrowing capacity | $ 280,000,000 | |||||||||||
Line of Credit | Delayed Draw Term Loan Facility | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Line of credit, maximum borrowing capacity | 120,000,000 | |||||||||||
Line of Credit | Term Loan Credit Agreement | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Line of credit facility, incremental draws | $ 100,000,000 | |||||||||||
Line of Credit | AFC Credit Line | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Interest expense | 275,000 | 325,000 | 1,032,000 | 969,000 | ||||||||
Line of credit facility, current borrowing capacity | 29,000,000 | 29,000,000 | ||||||||||
Amount drawn on loan facility | $ 20,508,000 | $ 28,336,000 | $ 20,508,000 | $ 28,336,000 | ||||||||
Line of Credit | ROV SPV | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Line of credit, maximum borrowing capacity | $ 25,000,000 | |||||||||||
Prepayment period | 24 months | |||||||||||
Written notice | 30 days | |||||||||||
Prepayment fee percent | 1% | |||||||||||
Amount drawn on loan facility | $ 22,925,000 | |||||||||||
Line of Credit | ROV SPV | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Variable interest rate | 5% |
STOCKHOLDER EQUITY - Narrative
STOCKHOLDER EQUITY - Narrative (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||||||
Feb. 18, 2022 | Sep. 30, 2021 | Aug. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Mar. 15, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
RSUs outstanding (in shares) | 812,386 | ||||||||
Unrecognized stock based compensations related to outstanding awards | $ 19,120,000 | ||||||||
Period for recognition for awards not yet recognized | 15 months | ||||||||
Fair value of warrants and rights | $ 40,000,000 | ||||||||
Fair value adjustment of warrants | $ 0 | ||||||||
Freedom Transaction | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Business acquisition, number of shares issued to acquire business (in shares) | 1,048,718 | ||||||||
Class B common stock | $ 26,511,000 | ||||||||
Warrant | Term Loan Credit Agreement | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Fair value of warrants and rights | $ 19,700,000 | $ 13,174,000 | $ 10,950,000 | ||||||
Fair value adjustment of warrants | 6,526,000 | $ 2,224,000 | |||||||
Warrant liability reclassified to additional paid in capital | $ 19,700,000 | ||||||||
Restricted Stock Units (RSUs) | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Accelerated share-based compensation expense | $ 23,943,000 | $ 23,943,000 | |||||||
Common Class B | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Shares authorized for issuance under the Plan (in shares) | 2,700,000 | ||||||||
Common Class B | Estate Of Mr. Berrard | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Shares issued in period (in shares) | 154,731 |
STOCKHOLDER EQUITY - Stock-Base
STOCKHOLDER EQUITY - Stock-Based Compensation (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Share-Based Payment Arrangement [Abstract] | ||||
Restricted stock units | $ 2,605 | $ 24,722 | $ 7,237 | $ 27,142 |
Options | 0 | 8 | 0 | 23 |
Total stock-based compensation | $ 2,605 | $ 24,730 | $ 7,237 | $ 27,165 |
SUPPLEMENTAL CASH FLOW INFORM_3
SUPPLEMENTAL CASH FLOW INFORMATION - Schedule of Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands | 9 Months Ended | ||
Feb. 18, 2022 | Sep. 30, 2022 | Sep. 30, 2021 | |
Supplemental Cash Flow Information [Abstract] | |||
Cash paid for interest | $ 36,021 | $ 3,553 | |
Fair value of 1,048,718 Class B common stock issued in the Freedom Transaction | $ 26,511 | $ 0 | |
Freedom Transaction | |||
Business Acquisition [Line Items] | |||
Business acquisition, number of shares issued to acquire business (in shares) | 1,048,718 |
SUPPLEMENTAL CASH FLOW INFORM_4
SUPPLEMENTAL CASH FLOW INFORMATION - Schedule of Cash and Restricted Cash (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Dec. 31, 2020 |
Supplemental Cash Flow Information [Abstract] | ||||
Cash and cash equivalents | $ 39,715 | $ 48,974 | ||
Restricted cash | 9,500 | 3,000 | ||
Total cash, cash equivalents, and restricted cash | $ 49,215 | $ 51,974 | $ 71,317 | $ 3,516 |
INCOME TAXES (Details)
INCOME TAXES (Details) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Income Tax Disclosure [Abstract] | ||||
Effective income tax rate | 14% | 32.10% | 22.80% | 26% |
U.S. federal income tax rate | 21% | 21% |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - $ / shares | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Mar. 15, 2021 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||
Warrant exercise price (in dollars per share) | $ 31.50 | $ 31.50 | $ 33 | ||
Weighted average number of common shares outstanding - diluted (in shares) | 16,067,395 | 6,939,708 | 15,922,484 | 4,178,932 | |
Weighted average number of common shares outstanding - basic (in shares) | 16,020,296 | 6,939,708 | 15,859,134 | 4,178,932 | |
Common Class A | |||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||
Weighted average number of common shares outstanding - diluted (in shares) | 50,000 | ||||
Weighted average number of common shares outstanding - basic (in shares) | 50,000 | ||||
Common Class B | |||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||
Weighted average number of common shares outstanding - diluted (in shares) | 15,809,134 | ||||
Weighted average number of common shares outstanding - basic (in shares) | 15,809,134 | ||||
Series B Preferred Stock | |||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||
Weighted average number of common shares outstanding - diluted (in shares) | 0 | ||||
Weighted average number of common shares outstanding - basic (in shares) | 0 | ||||
Oaktree Warrant | |||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||
Antidilutive securities excluded from computation of earnings per share (in shares) | 1,212,121 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Jan. 19, 2022 USD ($) | Dec. 31, 2021 USD ($) | Aug. 31, 2021 USD ($) note lease $ / shares shares | Sep. 30, 2022 USD ($) note | Sep. 30, 2022 USD ($) note | |
Public Stock Offering | |||||
Related Party Transaction [Line Items] | |||||
Sale of stock, number of shares issued in transaction (in shares) | shares | 5,053,029 | ||||
Director | |||||
Related Party Transaction [Line Items] | |||||
Number of promissory notes | note | 2 | 2 | 2 | ||
Notes payable, related parties | $ 2,200 | ||||
Director | RNBeach, LLC | |||||
Related Party Transaction [Line Items] | |||||
Asset acquisition purchase price | $ 5,528 | ||||
Cash payments to acquire assets | $ 5,368 | ||||
Director | RideNow Leases | |||||
Related Party Transaction [Line Items] | |||||
Number of leases | lease | 24 | ||||
Operating lease, monthly cost | $ 1,229 | ||||
Operating lease term | 20 years | ||||
Operating lease, increase in rent, percent | 2% | ||||
Director | RideNow Reinsurance Product Sales | |||||
Related Party Transaction [Line Items] | |||||
Payments to affiliated entity | $ 139 | ||||
Director | RideNow Management LLLP | |||||
Related Party Transaction [Line Items] | |||||
Payments to affiliated entity | $ 2 | ||||
Director | Bidpath Software License | |||||
Related Party Transaction [Line Items] | |||||
License agreement | $ 3,600 | 3,600 | |||
Monthly support and maintenance fees | $ 30 | ||||
License agreement term | 36 months | ||||
License agreement termination notice | 60 days | ||||
Director | Public Stock Offering | |||||
Related Party Transaction [Line Items] | |||||
Sale of stock, number of shares issued in transaction (in shares) | shares | 13,636 | ||||
Sale of stock, price per share (in dollars per share) | $ / shares | $ 33 | ||||
Executive Officer | RideNow Management LLLP | |||||
Related Party Transaction [Line Items] | |||||
Payments to affiliated entity | $ 233 |
SEGMENT REPORTING - Narrative (
SEGMENT REPORTING - Narrative (Details) | 9 Months Ended |
Sep. 30, 2022 segment | |
Segment Reporting [Abstract] | |
Number of reportable segments | 3 |
SEGMENT REPORTING - Schedule of
SEGMENT REPORTING - Schedule of Segment Reporting Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Segment Reporting Information [Line Items] | |||||
Total assets | $ 1,304,582 | $ 1,011,852 | $ 1,304,582 | $ 1,011,852 | $ 1,027,749 |
Revenue | 470,272 | 221,214 | 1,476,287 | 493,823 | |
Operating income (loss) | 13,591 | (22,702) | 68,183 | (24,757) | |
Depreciation and amortization | 6,570 | 1,717 | 16,923 | 2,948 | |
Interest expense | (12,603) | (4,577) | (37,059) | (8,107) | |
Change in derivative liability | 0 | (6,518) | 39 | (8,774) | |
Intersegment Eliminations | |||||
Segment Reporting Information [Line Items] | |||||
Total assets | (859,925) | (635,310) | (859,925) | (635,310) | |
Revenue | (589) | (1,228) | (2,969) | (3,357) | |
Operating income (loss) | (65) | 0 | 25 | 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 | 2,104,086 | 1,189,868 | 2,104,086 | 1,189,868 | |
Revenue | 385,341 | 105,547 | 1,136,972 | 144,380 | |
Operating income (loss) | 12,734 | (27,524) | 64,322 | (35,604) | |
Depreciation and amortization | 6,543 | 1,684 | 16,842 | 2,855 | |
Interest expense | (12,209) | (4,073) | (35,621) | (6,651) | |
Change in derivative liability | (6,518) | 39 | (8,774) | ||
Automotive | Operating Segments | |||||
Segment Reporting Information [Line Items] | |||||
Total assets | 41,144 | 443,084 | 41,144 | 443,084 | |
Revenue | 69,994 | 105,298 | 296,510 | 316,655 | |
Operating income (loss) | (476) | 3,835 | 90 | 8,234 | |
Depreciation and amortization | 17 | 23 | 51 | 76 | |
Interest expense | (394) | (503) | (1,437) | (1,451) | |
Change in derivative liability | 0 | 0 | 0 | ||
Vehicle Logistics | Operating Segments | |||||
Segment Reporting Information [Line Items] | |||||
Total assets | 19,277 | 14,210 | 19,277 | 14,210 | |
Revenue | 15,526 | 11,597 | 45,774 | 36,145 | |
Operating income (loss) | 1,398 | 987 | 3,746 | 2,613 | |
Depreciation and amortization | 10 | 10 | 30 | 17 | |
Interest expense | $ 0 | (1) | (1) | (5) | |
Change in derivative liability | $ 0 | $ 0 | $ 0 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) | Oct. 26, 2022 USD ($) |
Powersports Inventory Financing | Subsequent Event | |
Subsequent Event [Line Items] | |
Line of credit, maximum borrowing capacity | $ 75,000 |