Rumbleon reports fourth quarter and full year 2022 financial results
Irving, texas--(business wire)--rumbleon, inc. (nasdaq: rmbl) (the “company” or “rumbleon”), the nation's first technology-based powersports platform, today announced operational and financial results for the three months and full year ended december 31, 2022. rumbleon management is hosting an investor call to discuss the company’s results today, march 16, 2023, at 7:30 am ct (8:30 am et). full-year 2022 financial and operational highlights total unit sales of 81,037 across powersports and automotive segments. total powersports unit sales of 73,413 with used powersports units of 31,764. powersports segment revenue of $1.4 billion, including the elimination of $71.0 million1, representing 78% of total company revenue of $1.8 billion. powersports segment gross profit of $429.9 million, comprising over 95% of total company gross profit. net loss of $(261.5) million with diluted loss per share of $(16.48). full-year gaap eps reflects a $350.3 million non-cash impairment charge. excluding the effects of the non-cash impairment charge and other non-recurring items, but including stock-based compensation expense, adjusted net income of $37.3 million with adjusted diluted earnings per share of $2.35. adjusted ebitda of $120.1 million, driven by powersports gross margin compression and reduced gross profit contribution from the automotive segment. fourth quarter 2022 financial and operational highlights total unit sales of 18,419 across powersports and automotive segments, impacted by the exiting of the automotive segment. total powersports unit sales of 17,550 with used powersports units of 6,917, resulting in new: used ratio of 1.54x, which increased slightly from the prior quarter. powersports segment revenue of $320.5 million, including the elimination of $18.6 million1. powersports segment revenue was 87% of total company revenue of $369.5 million, powersports segment gross profit of $89.7 million comprising over 96% of total company gross profit of $93.1 million; total company gross profit margin of 25.2% declined 60 bps sequentially. net loss of $(287.7) million with diluted loss per share of $(17.80). fourth quarter gaap eps reflects a $350.3 million pre-tax non-cash impairment charge. excluding the effects of the non-cash impairment charge and other non-recurring items, but including stock-based compensation expense, adjusted net loss of $(11.0) million with adjusted diluted loss per share of $(0.68). adjusted ebitda of $18.7 million, impacted by lower gross profit contribution from the automotive segment combined with modest gross margin compression in the powersports segment. significant financial flexibility with cash, including restricted cash, of $58.6 million and total available liquidity of $196.1 million as of december 31, 2022, inclusive of availability under powersports inventory financing credit facility of $75.0 million, announced on october 26, 2022. signed an engagement letter with jp morgan to review our balance sheet initiatives and options for 2023. completed 3 “tuck-in” acquisitions, 2 polaris and 1 honda franchise, in texas. these acquisitions were funded from operating cash for a total purchase price of $4.8 million. paid down $15 million of long-term debt. management commentary marshall chesrown, rumbleon's chairman and chief executive officer commented, “our fourth quarter results reflect forward-looking actions taken to better position the business for 2023 and beyond. we are aggressively addressing macroeconomic uncertainties, as we operate in an environment of normalized inventory levels and associated margin pressures. we are building a solid foundation for long-term profitable growth, all while making prudent, timely and disciplined investments in technology and customer experience improvements online and in our stores. further, the fulfillment process being rolled out will enable our operations and teams to become more agile to meet customer demand through diligent on time inventory management and customer selection and service.” “with an ongoing focus on maintaining financial health and a strong balance sheet, we remain committed to a completely self-funded business model for growth. in the fourth quarter, we pre-paid $15m in principal and recently signed an engagement letter with jp morgan to review our balance sheet initiatives and options for 2023. as we look to 2023 and beyond, we are continuing to implement our five pillar strategy to achieve our near and long term financial targets, driving sustainable shareholder value,” concluded chesrown. fourth quarter 2022 — summary financial results reconciliation of gaap to non-gaap financial measures are provided in accompanying financial schedules. unless otherwise noted, all comparisons in the narrative are on a sequential basis for the three months ended december 31, 2022, as compared to the three months ended september 30, 2022. (unaudited) $ in millions except per share amounts three months ended change dec 31, 2022 sep 30, 2022 dec 31, 2021 sequential year-over-year total unit sales (#) 18,419 19,908 17,037 (7.5)% 8.1% total revenue1 $369.5 $450.7 $430.3 (18.0)% (14.1)% gross profit $93.1 $116.3 $90.1 (20.0)% 3.3% gross profit margin 25.2% 25.8% 20.9% (60) bps 430 bps net income (loss) $(287.7) $3.0 $20.7 nm nm diluted earnings (loss) per share $(17.80) $0.19 $1.35 nm nm adjusted ebitda $18.7 $25.7 $24.3 (27.3)% (23.0)% adjusted net income (loss) $(11.0) $4.4 $9.0 (350.0)% (222)% adjusted diluted earnings (loss) per share $(0.68) $0.27 $0.60 (351.9)% (213)% nm = not meaningful total unit sales of 18,419 declined (7.5)%, driven by the company's strategic decision to purchase fewer automotive units during the quarter, combined with the anticipated seasonal impact experienced in powersports. the powersports segment made up approximately 95.3% of total unit sales in the fourth quarter with the automotive segment comprising the remaining approximately 4.7%. total revenue of $369.51 million declined (18.0)%. the powersports segment revenue made up approximately 86.8% of total revenue in the fourth quarter, the automotive segment made up approximately 10.2%, and the vehicle logistics segment made up approximately 3.0%. total gross profit of $93.1 million declined (20.0)%. the powersports segment contributed approximately 96.4% of total gross profit in the fourth quarter, and the vehicle logistics and automotive segments made up approximately 2.9% and 0.7%, respectively. operating expenses were $98.1 million, or 26.6% of revenue, compared to $102.8 million, or 21.9% of revenue. total stock-based compensation was $2.1 million down from $2.6 million in the prior quarter. net loss was $(287.7) million, reflecting a $350.3 million pre-tax non-cash impairment charge. earnings (loss) per diluted share was $(17.80) compared to $0.19. adjusted net income (loss) was $(11.0) million, or 3% of revenue, compared to $4.4 million or 1% of revenue. adjusted earnings per diluted share was $(0.68) compared to $0.27. adjusted ebitda was $18.7 million compared to $25.7 million. the (27.3)% sequential decrease in adjusted ebitda was primarily driven by modest gross margin compression in the powersports segment and lower gross profit contribution from the automotive segment. cash as of december 31, 2022, including restricted cash, was approximately $58.6 million, and total debt was $635.2 million. availability under our short-term revolving credit facilities totaled approximately $137.5 million. total available liquidity, defined as cash and cash equivalents, including restricted cash, plus availability under our short-term revolving credit facilities totaled approximately $196.1 million. cash flow used in operating activities was $(18.9) million for the year ended december 31, 2022, which was negatively impacted by $45.1 million of cash used for inventory purchases not financed by trade floorplan credit facilities. weighted average basic and diluted shares of class b common stock outstanding were 15,871,005 for the year ended december 31, 2022. as of december 31, 2022, rumbleon had 16,184,264 total shares of class b common stock and 50,000 shares of class a common stock outstanding. full year 2023 — financial outlook rumbleon is providing its outlook for the full year 2023 as follows: total powersports and transportation revenue of $1.4 billion to $1.6 billion, compared to powersports and transportation revenue of $1.46 billion in 2022. powersports gpu of approximately $5,700 compared to $6,159 in 20222. adjusted ebitda of $95 million to $105 million. our financial guidance includes the following assumptions: combined powersports new and used retail unit growth of approximately 5%. we expect continued gross margin pressure in the first half as new unit supply imbalances normalize. the $15 million sg&a reductions will begin to benefit our business in early 2023. this does not include any growth from acquisitions or tuck-ins, nor does it have a built-in overlay from fulfillment or technological opportunities that we create over the course of 2023. fourth quarter 2022 — segment results unless otherwise noted, all comparisons are on a sequential basis for the three months ended december 31, 2022, as compared to the three months ended september 30, 2022. powersports segment (unaudited) $ in millions except per unit three months ended change dec 31, 2022 sep 30, 2022 dec 31, 2021 sequential year-over-year unit sales (#) new 10,633 9,973 8,070 6.6% 32% used 6,917 8,420 5,408 (17.9)% 28% total powersports unit sales 17,550 18,393 13,478 (4.6)% 30% revenue ` new $149.8 $165.4 $126.7 (9.4)% 18% used $77.8 $106.5 $74.5 (26.9)% 4% finance & insurance, net $27.6 $31.6 $23.0 (12.7)% 20% parts, services, and accessories $65.3 $62.2 $50.9 5.0% 28% total powersports revenue $320.5 $365.7 $275.1 (12.4)% 17% gross profit new $25.3 $32.1 $25.1 (21.2)% 1% used $10.4 $18.2 $8.4 (42.9)% 24% finance & insurance, net $27.6 $31.6 $23.0 (12.7)% 20% parts, services, and accessories $26.4 $29.1 $23.0 (9.3)% 15% total powersports gross profit $89.7 $111.0 $79.5 (19)% 13% powersports gpu3 $5,420 $6,348 $6,445 (14.6)% (16)% used powersports units, which includes used retail and wholesale powersports units, declined (17.9)% sequentially. sequential declines are primarily the result of our decision to slow down used vehicle acquisition while new inventory normalized. used powersports revenue declined (26.9)% sequentially due to anticipated seasonality. used powersports gross profit declined (42.9)% sequentially, due primarily to lower unit sales and anticipated seasonality. new powersports revenue declined (9.4)% sequentially, despite a 6.6% increase in unit sales, driven by increased supply of new inventory and unfavorable price mix in consumer demand. new powersports gross profit declined (21.2)% sequentially, due primarily to higher inventory acquisition costs. powersports gpu was $5,420, as compared to $6,348 in the prior quarter.3 automotive segment (unaudited) $ in millions three-months ended change dec 31, 2022 sep 30, 2022 dec 31, 2021 sequential year-over-year automotive unit sales (#) 869 1,515 3,559 (42.6)% (75.6)% automotive revenue $37.8 $70.0 $144.2 (46.0)% (73.8)% automotive gross profit $0.7 $1.9 $7.8 (63.2)% (91.0)% revenue from the automotive segment declined (46.0%) sequentially, primarily driven by the company's strategic decision to purchase fewer automotive units during the quarter and wind down its automotive business. gross profit was down due to a decrease in unit sales and gross profit per unit sold, driven by less favorable macroeconomic conditions and the company’s decision to focus on its powersports segment. vehicle logistics segment (unaudited) $ in millions three-months ended change dec 31, 2022 sep 30, 2022 dec 31, 2021 sequential year-over-year vehicles transported (#) 18,390 23,992 21,847 (23.3)% (15.8)% vehicle logistics revenue $11.5 $15.5 $12.7 (25.8)% (9.4)% vehicle logistics gross profit $2.9 $3.6 $2.8 (19.4)% 3.6% revenue from the vehicle logistics segment was down (25.8)% sequentially, driven by a decline in the number of vehicles transported, and a slight decline in revenue per vehicle transported from $647 in the third quarter to $628 in the fourth quarter. gross profit for this segment was down (19.4)% sequentially, driven by a decline in the number of vehicles transported, partially offset by a slight increase in gross profit per vehicle transported from $148 in the third quarter to $159 in the fourth quarter. conference call details rumbleon's management will host a conference call to discuss its operational and financial results on march 16, 2023 at 7:30 a.m. central time (8:30 a.m. eastern time). a live and archived webcast can be accessed from rumbleon's investor relations website. to access the conference call telephonically, callers may dial 1-877-407-9716 (or 1-201-493-6779 for callers outside of the united states) and enter conference id 13735860. about rumbleon rumbleon is the nation’s first technology-based powersports platform. headquartered in the dallas metroplex, rumbleon provides the only technology-led platform in powersports with a broad footprint of physical locations, full-line manufacturer representation and high-quality used inventory to transform the entire customer experience. our goal is to integrate the best of both the physical and digital, and make the transition between the two seamless. to learn more please visit us online at https://www.rumbleon.com/. cautionary note on forward-looking statements this press release may contain "forward-looking statements" as that term is defined under the private securities litigation reform act of 1995 (pslra), which statements may be identified by words such as "expects," "projects," "will," "may," "anticipates," "believes," "should," "intends," "estimates," and other words of similar meaning. readers are cautioned not to place undue reliance on these forward-looking statements, which are based on our expectations as of the date of this press release and speak only as of the date of this press release and are advised to consider the factors listed under the heading "forward-looking statements" and "risk factors" in the company's sec filings, as may be updated and amended from time to time. we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. use of non-gaap financial measures as required by the rules of the securities and exchange commission ("sec"), we provide reconciliations of the non-gaap financial measures contained in this press release to the most directly comparable measure under gaap, which are set forth in the financial tables attached to this release. adjusted ebitda, adjusted ebitda margin, adjusted net income (loss), and adjusted net income (loss) margin are non-gaap financial measures and should not be considered as alternatives to operating income or net income as a measure of operating performance or cash flows or as a measure of liquidity. non-gaap financial measures are not necessarily calculated the same way by different companies and should not be considered a substitute for or superior to u.s. gaap. adjusted ebitda is defined as net income (loss) adjusted to add back interest expense, depreciation and amortization, changes in derivative liability, non-cash stock-based compensation costs, transaction costs, litigation expenses, and other non-recurring costs, as these recoveries, charges and expenses are not considered a part of our core business operations and are not necessarily an indicator of ongoing, future company performance. adjusted ebitda is one of the primary metrics used by management to evaluate the financial performance of our business. we present adjusted ebitda because we believe it is frequently used by analysts, investors and other interested parties to evaluate companies in our industry. further, we believe it is helpful in highlighting trends in our operating results, because it excludes, among other things, certain results of decisions that are outside the control of management, while other measures can differ significantly depending on long-term strategic decisions regarding capital structure and capital investments. adjusted net income (loss) is defined as net income (loss) adjusted to add back transaction costs, purchase accounting adjustments and other non-recurring costs which include items not indicative of our ongoing operating performance. with respect to our 2023 adjusted ebitda target, a reconciliation of this non-gaap measure to the corresponding gaap measure is not available without unreasonable effort due to the complexity of the reconciling items that we exclude from this non-gaap measure. rumbleon, inc. condensed consolidated balance sheets (unaudited) (dollars in thousands; except per share amounts) december 31, 2022 december 31, 2021 assets current assets: cash $ 48,579 $ 48,974 restricted cash 10,000 3,000 accounts receivable, net 33,758 40,166 inventory 331,721 201,666 prepaid expense and other current assets 7,424 6,335 total current assets 431,482 300,141 property and equipment, net 76,078 21,417 right-of-use assets 161,822 133,112 goodwill 21,142 260,922 intangible assets, net 247,413 302,066 deferred tax assets 58,115 — other assets 31,158 10,091 total assets 1,027,210 1,027,749 liabilities and stockholders’ equity current liabilities: accounts payable and other current liabilities 82,618 77,317 vehicle floor plan note payable 225,431 97,278 current portion of long-term, convertible debts, and notes payable 3,645 4,476 total current liabilities 311,694 179,071 long-term liabilities: senior secured note 317,494 253,438 convertible debt, net 31,890 29,242 line of credit and notes payable 25,000 150 operating lease liabilities 126,695 114,687 deferred tax liabilities — 7,586 other long-term liabilities 8,422 11,930 total long-term liabilities 509,501 417,033 total liabilities 821,195 596,104 commitments and contingencies (notes 2, 8, 9, 10, 11, 12, 14,19, 21) stockholders’ equity: common a stock, $0.001 par value, 50,000 shares authorized, 50,000 shares issued and outstanding as of december 31, 2022 and december 31, 2021 0 0 class b stock, $0.001 par value, 100,000,000 shares authorized, 16,184,264 and 14,882,022 shares issued and outstanding as of december 31, 2022 and december 31, 2021, respectively 16 15 additional paid-in capital 585,937 550,055 accumulated deficit (375,619 ) (114,106 ) class b stock in treasury, at cost, 123,089 shares as of december 31, 2022 and december 31, 2021 (4,319 ) (4,319 ) total stockholders’ equity 206,015 431,645 total liabilities and stockholders’ equity $ 1,027,210 $ 1,027,749 rumbleon, inc. condensed consolidated statements of operations (unaudited) (dollars in thousands, except per share amounts) three months ended december 31, twelve months ended december 31, 2022 2021 2022 2021 revenue: vehicles sales powersports $ 227,537 $ 201,996 $ 1,033,919 $ 323,303 automotive 37,840 144,233 334,273 460,888 parts, service and accessories 65,294 59,971 247,562 66,969 finance and insurance, net 27,671 (3,655 ) 123,576 29,133 vehicle logistics 11,168 27,803 54,038 43,878 total revenue 369,510 430,348 1,793,368 924,171 cost of revenue: powersports 191,877 167,679 839,768 264,872 automotive 37,181 136,391 323,423 430,142 parts, service and accessories 38,884 27,857 135,358 36,702 vehicle logistics 8,428 8,320 42,160 34,278 total cost of revenue 276,370 340,247 1,340,709 765,994 gross profit 93,140 90,101 452,659 158,177 selling, general and administrative 91,972 71,056 366,387 164,077 impairment of goodwill and franchise rights 350,315 — 350,315 — insurance recovery — — — (3,135 ) depreciation and amortization 6,156 3,155 23,079 6,103 operating income (loss) (355,303 ) 15,890 (287,122 ) (8,868 ) interest expense (16,809 ) (8,299 ) (53,868 ) (16,405 ) other income 4,043 — 4,331 — change in derivative liability — (25 ) 39 (8,799 ) ppp loan forgiveness — 2,110 2,509 2,682 income (loss) before provision for income taxes (368,069 ) 9,676 (334,111 ) (31,390 ) income tax benefit (80,344 ) (10,984 ) (72,598 ) (21,665 ) net income (loss) $ (287,725 ) $ 20,660 $ (261,513 ) $ (9,725 ) weighted average number of common shares outstanding - basic 16,161,483 15,055,084 15,871,005 6,920,318 earnings (loss) per share - basic $ (17.80 ) $ 1.37 $ (16.48 ) $ (1.41 ) weighted average number of common shares outstanding - diluted 16,161,483 15,263,736 15,871,005 6,920,318 earnings (loss) per share - diluted $ (17.80 ) $ 1.35 $ (16.48 ) $ (1.41 ) rumbleon, inc. condensed consolidated statements of cash flows for the two years ended december 31, 2022 (unaudited) (dollars in thousands) 2022 2021 cash flows from operating activities net loss $ (261,513 ) $ (9,725 ) adjustments to reconcile net loss to net cash provided by (used in) operating activities: depreciation and amortization 23,079 6,103 amortization of debt discount 6,383 4,386 forgiveness of ppp loan (2,509 ) (2,682 ) stock based compensation expense 9,372 29,219 impairment loss on goodwill and franchise rights 350,315 — (gain) loss from change in value of derivatives (39 ) 8,799 deferred taxes (76,637 ) (22,545 ) principal payments received on finance receivables — — originations of loan receivables, net of principal payments received (27,934 ) — changes in operating assets and liabilities, net of acquisitions: accounts receivable 5,913 (9,756 ) inventory (102,323 ) (53,226 ) prepaid expenses and other current assets (248 ) (1,102 ) other assets 284 (4,528 ) other liabilities 1,606 4,748 accounts payable and accrued liabilities (4,904 ) 3,013 floor plan trade note borrowings 60,268 15,119 net cash used in operating activities (18,887 ) (32,177 ) cash flows from investing activities acquisitions, net of cash received (69,584 ) (371,314 ) purchase of property and equipment (5,617 ) (5,646 ) technology development (7,003 ) (1,871 ) net cash used in investing activities (82,204 ) (378,831 ) cash flows from financing activities proceeds from new secured debt 84,500 261,451 repayment of debt and mortgage notes (49,235 ) — repayments of (proceeds from) issuance of notes (2,117 ) (10,413 ) increase in borrowings from non-trade floor plans 49,548 17,187 proceeds from rumbleon finance (“rof”) credit facility for the purchase of consumer finance loans 25,000 — net proceeds from sale of common stock — 191,241 net cash provided by financing activities 107,696 459,466 net change in cash 6,605 48,458 cash and restricted cash at beginning of period 51,974 3,516 cash and restricted cash at end of period $ 58,579 $ 51,974 rumbleon, inc. reconciliation of net income (loss) to adjusted ebitda (unaudited) (dollars in thousands) three months ended twelve months ended dec 31, sept 30, dec 31, dec 31, dec 31, 2022 2022 2021 2022 2021 net income (loss) $ (287,726 ) $ 3,039 $ 20,660 $ (261,513 ) $ (9,725 ) add back: interest expense 16,810 12,603 8,298 53,869 16,405 depreciation and amortization 6,156 6,570 3,155 23,079 6,103 interest income and miscellaneous income 287 (38 ) — — — income tax provision (benefit) (80,344 ) 496 (10,984 ) (72,598 ) (21,665 ) ebitda (344,817 ) 22,670 21,129 (257,163 ) (8,882 ) adjustments: stock based compensation 2,135 2,605 2,762 9,372 29,219 transaction costs - ridenow and freedom 451 100 766 1,954 4,281 purchase accounting related (592 ) 177 1,388 177 1,388 lease expense associated with favorable related party leases in excess of contractual lease payments 1,340 — — 1,340 — impairment of goodwill and franchise rights 350,315 — — 350,315 — litigation settlement expenses 8,381 — (170 ) 8,381 — ppp loan forgiveness — (2,509 ) (2,110 ) (2,509 ) (2,682 ) insurance proceeds — — — — (3,135 ) costs attributable to abandoned fulfillment center project 2,141 — — 2,141 — other non-recurring costs 3,224 2,393 544 9,792 2,025 gain on sale of dealership (3,898 ) — — (3,898 ) — costs attributable to store openings and closures — 233 — 233 — change in derivative and warrant liabilities — — 25 (39 ) 8,799 adjusted ebitda $ 18,680 $ 25,669 $ 24,334 $ 120,096 $ 31,013 for the year ended december 31, 2022 and 2021 and the three months ended september 30, 2022, december 31, 2022 and 2021 adjustments to adjusted ebitda are primarily comprised of: non-cash stock-based compensation expense as reported in the consolidated statement of operations, transaction costs associated with the ridenow transaction and freedom transactions, which primarily include professional fees and third-party costs, purchase accounting adjustments, which represent one-time expenses related to the freedom transaction and ridenow transaction, forgiveness of the ppp loan, lease expense associated with favorable related party leases in excess of contractual lease payments, charges for the settlement of disputes and claims with former minority shareholders of ridenow, expenses attributable to a discontinued project in fort worth, texas, charges for impairment of goodwill and franchise rights, gain on the sale of a dealership, and other non-recurring costs, which include one-time expenses incurred. for the three and twelve months ended december 31, 2022, the balance was primarily comprised of integration costs and professional fees associated with the ridenow and freedom transactions, technology implementation, legal matters, establishment of the rumbleon finance secured loan facility, and a death benefit to the estate of the company's former chief financial officer and director. for the three and twelve months ended december 31, 2021, the balance was primarily related to litigation expenses and a death benefit to the estate of the company's former chief financial officer and director. rumbleon, inc. reconciliation of net income (loss) to adjusted net income (loss) and earnings (loss) per share to adjusted earnings (loss) per share (unaudited) (dollars in thousands, except per share amounts) three months ended twelve months ended dec 31, sept 30, dec 31, dec 31, dec 31, 2022 2022 2021 2022 2021 net income (loss) $ (287,726 ) $ 3,039 $ 20,660 $ (261,513 ) $ (9,725 ) adjustments: stock based compensation — — — — — transaction costs - ridenow and freedom 451 100 766 1,954 4,281 impairment of goodwill and franchise rights 350,315 — — 350,315 — litigation settlement expenses 8,381 — (170 ) 8,381 — ppp loan forgiveness — (2,509 ) (2,110 ) (2,509 ) (2,682 ) purchase accounting related 5,404 2,456 1,388 13,449 1,388 lease expense associated with favorable related party leases in excess of contractual lease payments — — — 1,340 — costs attributable to store openings and closures — — — 233 — cost attributable to fulfillment center 2,141 — — 2,141 — gain on sale of dealership (3,898 ) — — (3,898 ) — change in derivative liability 25 (39 ) 8,799 insurance proceeds — — — — (3,135 ) other non-recurring costs 3,972 2,625 544 9,792 2,025 less: income tax expense (90,052 ) (1,311 ) (12,065 ) (82,315 ) (26,273 ) adjusted net income (loss) $ (11,012 ) $ 4,400 $ 9,038 $ 37,331 $ (25,322 ) weighted average number of common shares outstanding - basic 16,161,483 16,020,296 15,055,084 15,871,005 6,920,318 earnings (loss) per share - basic $ (17.80 ) $ 0.19 $ 1.37 $ (16.48 ) $ (1.41 ) adjusted earnings (loss) per share - basic $ (0.68 ) $ 0.27 $ 0.60 $ 2.35 $ (3.66 ) weighted average number of common shares outstanding - diluted 16,161,483 16,067,395 15,263,736 15,871,005 6,920,318 earnings (loss) per share - diluted $ (17.80 ) $ 0.19 $ 1.35 $ (16.48 ) $ (1.41 ) adjusted earnings (loss) per share - diluted $ (0.68 ) $ 0.27 $ 0.59 $ 2.35 $ (3.66 ) for the three and twelve months ended december 31, 2022 and 2021 and the three months ended september 30, 2022, adjustments to net income (loss) are primarily comprised of: acquisition costs associated with the ridenow transaction and freedom transaction, which primarily include professional fees and third-party costs, charges for impairment of goodwill and franchise rights, forgiveness of the ppp loan, and other non-recurring costs, which include one-time expenses incurred. for the three and twelve months ended december 31, 2022, the balance was primarily comprised of integration costs and professional fees associated with the ridenow and freedom transactions, technology implementation, legal matters, establishment of the rumbleon finance secured loan facility, and a death benefit to the estate of the company's former chief financial officer and director. for the three and twelve months ended december 31, 2021, the balance was primarily related to litigation expenses and a death benefit to the estate of the company's former chief financial officer and director. _________________________ 1 during the year-end process, we identified and corrected a gross up of internal revenue and internal cost of sales for powersports, that has no net impact to gross profit, gross profit per unit, operating income (loss), net income (loss), or adjusted ebitda. the 2022 quarterly impact (in thousands) consists of a dollar-for-dollar reduction to both revenue and cost of revenue for each respective three month period and year then ended: $14,719 (q1), $18,094 (q2), $19,615 (q3), $18,569 (q4), and $70,997 (2022 total). 2 calculated as total powersports gross profit divided by new and used retail powersports units sold. 3 calculated as total powersports gross profit divided by new and used retail powersports units sold.
