LAZY - LAZYDAYS REPORTS FIRST QUARTER 2023 FINANCIAL RESULTS

April, 27 2023 06:30 AM Lazydays Holdings Inc.

PR Newswire

TAMPA, Fla. , April 27, 2023 /PRNewswire/ -- Lazydays (NasdaqCM: LAZY) today reported financial results for the first quarter ended March 31, 2023 .

First quarter 2023 revenue decreased to $295 .7 million from $376 .2 million in the first quarter ended March 31, 2022.

First quarter 2023 net loss was $1 .5 million, compared to net income of $27 .1 million in the first quarter of 2022. First quarter 2023 adjusted net income, a non-GAAP measure, was $1 .2 million, compared to $28 .2 million for the same period in 2022. First quarter 2023 net loss per diluted share was $0.17 compared to net income per diluted share of $1.17 in the first quarter of 2022. Adjusted first quarter 2022 net income per diluted share was $0.00 compared to net income per diluted share of $1.27 for the same period in 2022.

As shown in the attached non-GAAP reconciliation tables included in this press release, the 2023 first quarter adjusted results exclude a net non-core charge of $0.17 related to the effects of changes in fair value of warrant liabilities, our LIFO adjustment, acquisition expenses, certain severance and transition costs and an impairment charge related to internally developed software. The 2022 first quarter adjusted results exclude a net non-core charge of $0.10 related to the effects of changes in fair value of warrant liabilities, our LIFO adjustment, and acquisition expenses.

Corporate Development

On April 24, 2023 , we opened our Council Bluffs, Iowa , greenfield location with estimated annual revenues of $35 million . We remain on track to open three additional greenfield locations in the back half of 2023.

Balance Sheet Update

We ended the first quarter with total estimated liquidity of $175.1 million including $41.0 million of cash on hand, $20.0 million of availability on our revolving line of credit, $62.5 million of immediately available cash on our floor plan offset account and $60.8 million of unfinanced real estate that we estimate could provide approximately $51.6 million of liquidity.

During the quarter we received approximately $30.5 million of proceeds from the exercise of approximately 4.0 million outstanding common share warrants, resulting in 2.7 million shares of common stock at an exercise price of $11.50 per share. The remaining 300,000 common share warrants expired on March 15, 2023 .

Conference Call Information:

We have scheduled a conference call at 8:30 AM Eastern Time on Thursday April 27, 2023 that will also be broadcast live over the internet.

The conference call may be accessed by telephone at (877) 407-8029 / +1 (201) 689-8029. To listen live on our website or for replay, visit https://www.lazydays.com/investor-relations .

About Lazydays RV

As an iconic brand in the RV industry, Lazydays, The RV Authority, consistently provides outstanding RV sales, service, and ownership experience, which is why RVers and their families become Customers for Life. Lazydays continues to add locations at a rapid pace as it executes its geographic expansion strategy that includes both acquisitions and greenfields.

Since 1976, Lazydays has built a reputation for providing an outstanding customer experience with exceptional service excellence and unparalleled product expertise, along with being a preferred place to rest and recharge with other RVers. By offering the largest selection of RV brands from the nation's leading manufacturers, state-of-the-art service facilities, and thousands of accessories and hard-to-find parts, Lazydays RV provides everything RVers need and want.

Lazydays Holdings, Inc. is a publicly listed company on the Nasdaq stock exchange under the ticker "LAZY."

Forward-Looking Statements

This press release includes "forward-looking statements" within the meaning of the "Safe-Harbor" provisions of the Private Securities Litigation Reform Act of 1995. Forward looking statements include statements regarding our goals, plans, projections and guidance regarding our financial position, results of operations, market position, pending and potential future acquisitions and business strategy, and often contain words such as "project," "outlook," "expect," "anticipate," "intend," "plan," "believe," "estimate," "may," "seek," "would," "should," "likely," "goal," "strategy," "future," "maintain," "continue," "remain," "target" or "will" and similar references to future periods. Examples of forward-looking statements in this press release include, among others, statements regarding:

Anticipated revenues from acquired and open point stores; and
Anticipated availability of liquidity from our credit facility and unfinanced operating real estate.

By their nature, forward-looking statements involve risks and uncertainties because they relate to events that depend on circumstances that may or may not occur in the future. Forward-looking statements are not guarantees of future performance, and our actual results of operations, financial condition and liquidity and development of the industry in which we operate may differ materially from those made in or suggested by the forward-looking statements in this press release. The risks and uncertainties that could cause actual results to differ materially from estimated or projected results include, without limitation, future economic and financial conditions (both nationally and locally), changes in customer demand, our relationship with, and the financial and operational stability of, vehicle manufacturers and other suppliers, risks associated with our indebtedness (including available borrowing capacity, compliance with financial covenants and ability to refinance or repay indebtedness on favorable terms), acts of God or other incidents which may adversely impact our operations and financial performance, government regulations, legislation and others set forth throughout "Part II, Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations" and in "Part I, Item 1A. Risk Factors" of our most recent Annual Report on Form 10-K, and from time to time in our other filings with the SEC. We urge you to carefully consider this information and not place undue reliance on forward-looking statements. We undertake no duty to update our forward-looking statements, including our earnings outlook, which are made as of the date of this release.

Non-GAAP Financial Measures

This presentation contains non-GAAP financial measures such as adjusted net income, adjusted diluted earnings per share, adjusted cost of goods sold, adjusted income before taxes, adjusted income tax benefit, adjusted SG&A, adjusted SG&A as a percentage of revenue, adjusted SG&A as a percentage of gross profit, adjusted operating income as a percentage of revenue, adjusted operating income as a percentage of gross profit, adjusted pre-tax income as a percentage of revenue and adjusted net income as a percentage of revenue. Non-GAAP measures do not have definitions under GAAP and may be defined differently by and not comparable to similarly titled measures used by other companies. As a result, we review any non-GAAP financial measures in connection with a review of the most directly comparable measures calculated in accordance with GAAP. We caution you not to place undue reliance on such non-GAAP measures, but also to consider them with the most directly comparable GAAP measures. We present cash flows from operations in the following tables, adjusted to include the change in non-trade floor plan debt to improve the visibility of cash flows related to vehicle financing. As required by SEC rules, we have reconciled these measures to the most directly comparable GAAP measures in the attachments to this release. We believe the non-GAAP financial measures we present improve the transparency of our disclosures; provide a meaningful presentation of our results from core business operations, because they exclude items not related to core business operations and other non-cash items; and improve the period-to-period comparability of our results from core business operations. These presentations should not be considered an alternative to GAAP measures.

Contact :
Angela Johnson
+1 (813) 204-4099
investors@lazydays.com

Results of Operations






Three months ended March 31,


(In thousands except share and per share amounts)

2023

2022

% Change
Revenue






New vehicle retail

176,747

217,436

(18.7) %
Pre-owned vehicle retail

84,775

116,500

(27.2) %
Vehicle wholesale

1,708

6,524

(73.8) %
Finance and insurance

16,881

21,635

(22.0) %
Service, body and parts and other

15,545

14,066

10.5 %
Total revenue

295,656

376,161

(21.4) %







Cost applicable to revenues






New vehicle retail

153,331

172,605

(11.2) %
Pre-owned vehicle retail

67,528

88,283

(23.5) %
Vehicle wholesale

1,721

6,579

(73.8) %
Finance and insurance

693

697

(0.6) %
Service, body and parts and other

7,181

6,720

6.9 %
LIFO

1,311

2,460

(46.7) %
Total cost applicable to revenue

231,765

277,344

(16.4) %
Gross profit

63,891

98,817

(35.3) %







Depreciation and amortization

4,403

4,084

7.8 %
Selling, general, and administrative expenses

53,532

56,104

(4.6) %
Income from operations

5,956

38,629

(84.6) %
Other income (expense)






Floor plan interest expense

(5,531)

(976)

466.7 %
Other interest expense

(1,700)

(1,936)

(12.2) %
Change in fair value of warrant liabilities

856

1,540

(44.4) %
Total other expense, net

(6,375)

(1,372)

364.7 %
(Loss) income before income tax expense

(419)

37,257

(101.1) %
Income tax benefit (expense)

143

(8,973)

(101.6) %
Net (loss) income

(276)

28,284

(101.0) %
Dividends on Series A Convertible Preferred Stock

(1,184)

(1,184)

— %
Net (loss) income and comprehensive (loss) income attributable to common stock and participating securities

(1,460)

27,100

(105.4) %







EPS:






Basic

(0.12)

1.44

(108.3) %
Diluted

(0.17)

1.17

(114.5) %
Weighted average shares outstanding:






Basic

11,988,899

12,798,100

(6.3) %
Diluted

11,988,899

20,561,136

(41.7) %

Total Results Summary







Three months ended March 31,





2023

2022

Change

Gross profit margin







New vehicle retail

13.2 %

20.6 %

(737)
bps
Pre-owned vehicle retail

20.3 %

24.2 %

(388)
bps
Vehicle wholesale

(0.8) %

(0.8) %

8
bps
Finance and insurance

95.9 %

96.8 %

(88)
bps
Service, body and parts and other

53.8 %

52.2 %

158
bps
Total gross margin

21.6 %

26.3 %

(466)
bps
Total gross margin, excluding LIFO

22.1 %

26.9 %

(487)
bps








Retail units sold







New vehicle retail

1,980

2,270

(12.8) %

Used vehicle retail

1,304

1,478

(11.8) %

Total retail units sold

3,284

3,748

(12.4) %









Average selling price per retail unit







New vehicle retail

89,266

95,787

(6.8) %

Used vehicle retail

65,012

78,823

(17.5) %









Average gross profit per retail unit (excluding LIFO)







New vehicle retail

11,826

19,749

(40.1) %

Used vehicle retail

13,227

19,091

(30.7) %

Finance and insurance

4,929

5,586

(11.8) %









Revenue mix







New vehicle retail

59.8 %

57.8 %



Pre-owned vehicle retail

28.7 %

31.0 %



Vehicle wholesale

0.6 %

1.7 %



Finance and insurance

5.7 %

5.8 %



Service, body and parts and other

5.2 %

3.7 %





100.0 %

100.0 %











Gross profit mix







New vehicle retail

36.7 %

45.4 %



Pre-owned vehicle retail

27.0 %

28.6 %



Vehicle wholesale

— %

(0.1) %



Finance and insurance

25.3 %

21.2 %



Service, body and parts and other

13.1 %

7.4 %



LIFO

(2.1) %

(2.5) %





100.0 %

100.0 %

Other Metrics











Adjusted

As Reported


Three months ended March 31,

Three months ended March 31,


2023

2022

2023

2022
SG&A as a % of revenue

17.6 %

14.9 %

18.1 %

14.9 %
SG&A as % of gross profit, excluding LIFO

79.7 %

55.4 %

82.1 %

55.4 %
Income from operations as a % of revenue

3.0 %

10.9 %

2.0 %

10.3 %
Income from operations as a % of gross profit, excluding LIFO

13.5 %

40.6 %

9.1 %

38.1 %
Income (loss) before income taxes as % of revenue

0.5 %

10.2 %

(0.1) %

9.9 %
Net income (loss) as a % of revenue

0.4 %

7.5 %

(0.1) %

7.5 %

Other Highlights



As of


March 31, 2023

December 31, 2022
Dealerships

19

18





Days Supply*




New vehicle inventory

207

250
Used vehicle inventory

77

78

* Days supply calculated based on current inventory levels and a 90 day historical average cost of sales level.

Financial Covenants

As of

Requirement

March 31, 2023

Fixed charge coverage ratio

Not less than 1.25 to 1

2.57 to 1

Leverage ratio

Not more than 3.0 to 1

0.63 to 1

Current ratio

Not less than 1.15 to 1

1.24 to 1

Same-Store Results Summary







Three months ended March 31,



($ in thousands, except per vehicle data)

2023

2022

Change

Revenues







New vehicle retail

167,966

217,436

(22.8) %

Pre-owned vehicle retail

81,961

116,500

(29.6) %

Vehicle wholesale

1,708

6,524

(73.8) %

Finance and insurance

16,129

21,635

(25.4) %

Service, body and parts and other

14,950

14,066

6.3 %

Total revenues

282,714

376,161

(24.8) %









Gross profit







New vehicle retail

22,336

44,831

(50.2) %

Pre-owned vehicle retail

16,672

28,217

(40.9) %

Vehicle wholesale

(13)

(55)

(76.4) %

Finance and insurance

15,466

20,938

(26.1) %

Service, body and parts and other

8,032

7,346

9.3 %

LIFO

(1,311)

(2,460)

(46.7) %

Total gross profit

61,182

98,817

(38.1) %









Gross profit margins







New vehicle retail

13.3 %

20.6 %

(732)
bps
Pre-owned vehicle retail

20.3 %

24.2 %

(388)
bps
Vehicle wholesale

(0.8) %

(0.8) %

8
bps
Finance and insurance

95.9 %

96.8 %

(89)
bps
Service, body and parts and other

53.7 %

52.2 %

150
bps
Total gross profit margin

21.6 %

26.3 %

(463)
bps
Total gross profit margin (excluding LIFO)

22.1 %

26.9 %

(482)
bps








Retail units sold







New vehicle retail

1,841

2,270

(18.9) %

Used vehicle retail

1,248

1,478

(15.6) %

Total retail units sold

3,089

3,748

(17.6) %









Average selling price per retail unit







New vehicle retail

91,236

95,787

(4.8) %

Used vehicle retail

65,674

78,823

(16.7) %









Average gross profit per retail unit (excluding LIFO)







New vehicle retail

12,132

19,749

(38.6) %

Used vehicle retail

13,359

19,091

(30.0) %

Finance and insurance

5,007

5,586

(10.4) %

NM - Not meaningful

Condensed Consolidated Balance Sheets



(In thousands)

As of March 31, 2023

As of December 31, 2022
Current assets




Cash

41,049

61,687
Receivables, net

28,405

25,053
Inventories

419,136

378,881
Other current assets

14,029

11,228
Total current assets

502,619

476,849





Long-term assets




Property and equipment, net

177,818

158,991
Goodwill and intangible assets, net

168,960

165,125
Other assets

28,744

29,753
Total assets

878,141

830,718





Current liabilities




Floor plan notes payable

342,280

348,735
Other current liabilities

54,622

50,890
Total current liabilities

396,902

399,625





Long-term liabilities




Financing liability, non-current portion, net

90,694

89,770
Revolving line of credit

30,000

—
Long-term debt, non-current portion, net

306

10,131
Other long-term liabilities

37,156

39,197
Total liabilities

555,058

538,723





Series A Convertible Preferred Stock

54,983

54,983
Stockholders' Equity

268,100

237,012
Total liabilities and stockholders' equity

878,141

830,718

Condensed Statements of Cash Flows




For the three months ended March 31,
(In thousands)

2023

2022
Cash Flows From Operating Activities




Net (loss) income

(276)

28,284
Adjustments to reconcile net (loss) income to net cash used in operating activities:




Stock based compensation

797

523
Bad debt expense

7

11
Depreciation of property and equipment

2,570

2,277
Amortization of intangible assets

1,833

1,807
Amortization of debt discount

91

108
Non-cash lease expense

22

36
Loss on sale of property and equipment

—

6
Change in fair value of warrant liabilities

(856)

(1,540)
Tax benefit related to stock-based awards

—

(74)
Impairment charges

538

—
Changes in operating assets and liabilities (net of acquisitions and dispositions):




Receivables

(3,359)

(20,838)
Inventories

(33,650)

(41,412)
Prepaid expenses and other

(2,766)

113
Income tax receivable/payable

(146)

9,051
Other assets

(603)

76
Accounts payable

2,642

3,578
Accrued expenses and other current liabilities

4,324

561
Total Adjustments

(28,556)

(45,717)
Net Cash Used In Operating Activities

(28,832)

(17,433)












For the three months ended March 31,
(In thousands)

2023

2022
Net Cash Used In Operating Activities




As reported

(28,832)

(17,433)
Net borrowings (repayments) on floor plan notes payable

(6,495)

38,066
Minus borrowings on floor plan notes payable associated with acquired new inventory

(4,271)

—
Plus net increase to floor plan offset account

40,000

—
Net cash (used in) provided by operating activities, as adjusted

402

20,633

Reconciliation of Non-GAAP Measures



Three months ended March 31, 2023

($ in thousands, except per share amounts)

As reported

Gain on change in fair value of warrant liabilities

LIFO

Acquisition expense

Severance and transition costs

Impairment charge

Adjusted
Costs applicable to revenues

231,765

—

(1,311)

—

—

—

230,454
Selling, general and administrative expenses

53,532

—

—

(262)

(653)

(629)

51,988
Income from operations

5,956

—

1,311

262

653

629

8,811
Gain on change in fair value of warrant liabilities

856

(856)

—

—

—

—

—















(Loss) income before income taxes

(419)

(856)

1,311

262

653

629

1,580
Income tax benefit (expense)

143

—

(248)

(50)

(124)

(119)

(398)
Net (loss) income

(276)

(856)

1,063

212

529

510

1,182















Diluted (loss) income per share

(0.17)











—
Shares used for diluted calculation

11,988,899



Three months ended March 31, 2022
($ in thousands, except per share amounts)

As reported

Gain on change in fair value of warrant liabilities

LIFO

Acquisition expense

Adjusted
Costs applicable to revenues

277,344

—

(2,460)

—

274,884
Selling, general and administrative expenses

56,104

—

—

(34)

56,070
Income from operations

38,629

—

2,460

34

41,123
Gain on change in fair value of warrant liabilities

1,540

(1,540)

—

—

—











Income (loss) before income taxes

37,257

(1,540)

2,460

34

38,211
Income tax expense

(8,973)

—

(984)

(14)

(9,971)
Net income (loss)

28,284

(1,540)

1,476

20

28,240











Diluted earnings per share

1.17







1.27
Shares used for diluted calculation

20,561,136

* In periods where the change in fair value of warrants is a gain, the diluted EPS calculation is not affected by this line item.

SOURCE Lazydays Holdings, Inc.

Company Name:	Lazydays Holdings Inc.
Stock Symbol:	LAZY
Market:	NASDAQ

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