DEF 14A: RumbleOn Aims for $1.7 Billion Revenue by 2026 with 'Vision 2026' Plan

RumbleOn unveils its 'Vision 2026' plan targeting significant revenue and profitability growth within three years, focusing on strategic pillars and capital allocation.

Summary

• RumbleOn has announced its 'Vision 2026' plan, a three-year operating strategy aimed at maximizing long-term per-share value.
• The company projects annual revenue exceeding $1.7 billion by the end of calendar year 2026.
• RumbleOn also anticipates achieving an annual Adjusted EBITDA greater than $150 million and Adjusted Free Cash Flow of $90 million or more by 2026.
• The plan focuses on leveraging national scale for dealership performance, growing the RideNow Cash Offer Technology for pre-owned business, and strategically allocating capital through accretive acquisitions.
• RumbleOn plans to pilot its first standalone, brick & mortar, pre-owned dealership in 2024.
• The company intends to maintain a healthy balance sheet with a target leverage ratio of 1.5x-2.5x net debt/EBITDA.
• Shareholders are invited to attend the virtual Annual Meeting on June 4, 2024, to vote on director elections, executive compensation, and auditor ratification.

Sentiment

Score: 7

Explanation: The document expresses optimism about the company's future prospects and strategic plan. However, it also acknowledges potential risks and challenges, resulting in a moderately positive sentiment score.

Positives

• The 'Vision 2026' plan provides clear financial targets and strategic direction for the company.
• Focus on pre-owned inventory market growth, which is considered a high-return area.
• Emphasis on efficient capital allocation to maximize long-term per-share value.
• Significant insider ownership (55% of common stock held by the Board of Directors) aligns management interests with shareholders.
• The company is committed to sound corporate governance principles and practices.

Negatives

• The document contains forward-looking statements that are subject to risks and uncertainties.
• The company acknowledges that achieving 'Vision 2026' may take longer due to macro or industry headwinds or OEM product lifecycle timing.
• A lawsuit has been filed against the company by former CEO Marshall Chesrown.
• The company has experienced changes in its independent registered public accounting firm.

Risks

• The forward-looking statements are subject to various risks and uncertainties that could cause actual results to differ materially.
• Macroeconomic conditions and industry headwinds could impact the company's ability to achieve its 'Vision 2026' goals.
• OEM product lifecycle timing could affect the company's performance.
• The lawsuit filed by former CEO Marshall Chesrown could result in financial and reputational costs.
• The company has had multiple changes in its independent registered public accounting firm, which could indicate instability or concerns about financial reporting.

Future Outlook

RumbleOn aims to achieve significant growth in revenue, profitability, and free cash flow by 2026 through strategic initiatives and efficient capital allocation, while maintaining a healthy balance sheet.

Management Comments

• CEO Michael Kennedy expresses excitement about leading RumbleOn and conviction in the company's opportunity.
• Management acknowledges the importance of employees, manufacturer partners, and shareholders in achieving the company's goals.
• The company will never take its eye off its First Principle at every stage of the journey; creating long-term per-share value for our shareholders.

Industry Context

RumbleOn's focus on the pre-owned powersports market aligns with the increasing demand for affordable and accessible recreational vehicles. The company's national scale and RideNow brand provide a competitive advantage in this market.

Comparison to Industry Standards

• Comparable companies in the powersports industry include Polaris, BRP (Bombardier Recreational Products), and Harley-Davidson.
• RumbleOn's 'Vision 2026' targets are ambitious but achievable given the company's growth potential and strategic focus.
• Polaris reported 2023 sales of $9.1 billion and net income of $467 million, while BRP reported fiscal year 2024 revenue of CAD 10.4 billion.
• Harley-Davidson reported 2023 revenue of $5.8 billion and net income of $770 million.
• RumbleOn's focus on pre-owned vehicles differentiates it from these manufacturers, which primarily focus on new vehicle sales.

Management Changes

Corporate Governance

Legal Proceedings

• Former CEO Marshall Chesrown has filed a lawsuit against the company in Delaware Superior Court, alleging that he resigned for Good Reason under his employment agreement.

Related Party Transactions

• The company engaged in several related party transactions, including leases with entities controlled by directors William Coulter and Mark Tkach, and payments to Coulter Management Group LLLP.
• The company issued shares to Standby Purchasers, including directors Mark Tkach and William Coulter, and Stone House Capital Management, LLC, in connection with a rights offering.
• The company made payments to Ready Team Grow, LLC, an entity owned by the domestic partner of the company's former CEO, Marshall Chesrown.

Stakeholder Impact

• Shareholders: The 'Vision 2026' plan aims to increase long-term per-share value.
• Employees: The company acknowledges the hard work of its employees in developing and implementing the 'Vision 2026' plan.
• Manufacturer Partners: The company emphasizes the importance of strong relationships with its manufacturer partners.
• Customers: The company aims to improve customer satisfaction through better dealership performance.

Next Steps

• Shareholders are encouraged to vote on the proposals outlined in the Proxy Statement.
• The company will focus on executing its 'Vision 2026' plan and achieving its financial targets.
• Management will continue to monitor macroeconomic conditions and industry trends to adapt its strategy as needed.

Key Dates

Keywords

Vision 2026, RumbleOn, Annual Meeting, Shareholders, Adjusted EBITDA, Adjusted Free Cash Flow, Powersports, RideNow, Acquisitions, Dealerships