Lazydays Holdings, Inc. Reports Second Quarter 2018 Financial Results

TAMPA, Fla., Aug. 9, 2018 /PRNewswire/ -- Lazydays Holdings, Inc. ("Lazydays")(NasdaqCM: LAZY) announced financial results for the second quarter ended June 30, 2018.

Second Quarter Financial Results and Highlights:

    --  On May 21, 2018, Lazydays announced entering into an agreement to
        acquire Shorewood RV Center located in Anoka, Minnesota. This
        acquisition closed on August 7, 2018.
    --  Revenues decreased by $2.7 million, or 1.6%, from $164.8 million for the
        quarter ended June 30, 2017 to $162.1 million for the quarter ended June
        30, 2018. Revenue from sales of recreational vehicles decreased by $2.3
        million, or 1.6%, from $146.7 million for the three months ended June
        30, 2017 to $144.4 million for the three months ended June 30, 2018
        driven by decreased average selling price of new models due to the shift
        toward towable units as a greater portion of our sales mix.
    --  Gross profit increased by $1.9 million, or 5.7%, from $33.8 million for
        the quarter ended June 30, 2017 to $35.7 million for the quarter ended
        June 30, 2018. The increase in gross profit was primarily driven by a
        shift toward pre-owned vehicles sales and an increase in the volume of
        towables as a percentage of our new vehicle sales.
    --  Excluding transaction costs, selling, general, and administrative
        expenses increased by $4.7 million or 18.1%. This was primarily driven
        by increases in non-cash expenses including depreciation and
        amortization of property and equipment and amortization of intangible
        assets associated with the acquisition date accounting as well as the
        stock-based compensation expense related to options issued to management
        following the merger between Andina Acquisition Corp. II and Lazy Days'
        R.V. Center, Inc. on March 15, 2018.
    --  Adjusted EBITDA, a non-GAAP financial measure, increased by 2.5% from
        $9.7 million for the quarter ended June 30, 2017 to $10.0 million for
        the quarter ended June 30, 2018 primarily driven by the increase in
        gross profit described above.

"While we saw increases in volume during the second quarter, our topline revenues were lower driven by a shift toward towables. Despite the lower sales revenue, we were able to improve gross profit based upon our increased unit sales and our sales mix having higher margins as a percent of revenue," stated Mr. William Murnane, Chairman and Chief Executive Officer of Lazydays. Mr. Murnane continued, "We are excited to have completed our first acquisition as a public company. We closed our acquisition of the assets of Shorewood RV Center on August 7(th). This is an important milestone for Lazydays as geographic expansion into top tier RV markets is a key element of our growth strategy."

Conference Call Information:
The Company has scheduled a conference call at 10:00AM Eastern Time on August 9, 2018 that will also be broadcast live over the internet. The call can be accessed as follows:

Via phone by dialing 1-844-343-9114 for domestic callers and 1-647-689-5132 for international callers. Please dial in and request Lazydays Holdings, Inc. Second Quarter 2018 Financial Results Conference Call; also via webcast by clicking the link.

A live audio webcast of the conference call will be available online at https://www.lazydays.com/investor-relations.

A telephonic replay of the conference call will be available until August 16, 2018 and may be accessed by calling 1-800-585-8367 or 1-416-621-4642 with a conference ID number of 2377938. The webcast will be archived in the Investor Relations section of the Company's website.

About Lazydays
Lazydays, The RV Authority(TM), is an iconic brand in the RV industry. Home of the world's largest recreational dealership, based on 126 acres outside of Tampa, Florida, Lazydays also has dealerships located in Tucson, Arizona, Minneapolis, Minnesota, and Loveland, Denver and Longmont, Colorado. Offering the nation's largest selection of leading RV brands, Lazydays features more than 2,700 new and pre-owned RVs, over 300 service bays and two on-site campgrounds with over 700 RV campsites. Lazydays also has rental fleets in Florida, Minnesota and Colorado. In addition, Lazydays RV Accessories & More stores offer thousands of accessories and hard-to-find parts at all of our dealership locations.

Since 1976, Lazydays has built a reputation for providing an outstanding customer experience with exceptional service and product expertise, along with being a preferred place to rest and recharge with other RVers. Lazydays consistently provides the best RV purchase, service, rental and ownership experience, which is why more than a half-million RVers and their families visit Lazydays every year, making it their "home away from home."

Lazydays Holdings, Inc. is a publicly listed company on the NASDAQ stock exchange under the ticker "LAZY." Additional information can be found at https://www.lazydays.com/investor-relations.

Forward?Looking Statements
This news release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements other than statements of historical fact are, or may be deemed to be, forward-looking statements. Forward-looking statements describe Lazydays future plans, projections, strategies and expectations, and are based on assumptions and involve a number of risks and uncertainties, many of which are beyond the control of Lazydays. Actual results could differ materially from those projected due to various factors, including economic conditions generally, conditions in the credit markets and changes in interest rates, conditions in the capital markets, and other factors described from time to time in Lazydays' SEC reports and filings, which are available at www.sec.gov. Forward-looking statements contained in this news release speak only as of the date of this news release, and Lazydays undertakes no obligation to update these forward-looking statements to reflect subsequent events or circumstances, unless otherwise required by law.

Note on Presentation
For the three months ended June 30, 2018, the financial information presented represents the operating results of Lazydays Holdings, Inc. (labeled as "Successor" in the accompanying tables). For the three months ended June 30, 2017, the financial information presented represents the operating results of Lazy Days' R.V. Center, Inc. (labeled as "Predecessor" in the accompanying tables). For the six months ended June 30, 2018, the financial information presented represents the combined operating results of Lazydays Holdings, Inc. for the period from March 15, 2018 to June 30, 2018 with the operating results of Lazy Days' R.V. Center, Inc. for the period from January 1, 2018 to March 14, 2018. For the six months ended June 30, 2017, the financial information presented represents the operating results of Lazy Days' R.V. Center, Inc.

Results of Operations for the Second Quarter and First Six Months of 2018


                                                                              LAZYDAYS HOLDINGS, INC. AND SUBSIDIARIES

                                                                            CONDENSED CONSOLIDATED STATEMENTS OF INCOME

                                                                                   (Dollar amounts in thousands)

                                                                                            (Unaudited)




                                                                  Successor                                               Predecessor               Combined                        Predecessor
                                                                                                                                                  Successor and
                                                                                                                                                   Predecessor
                                                                                                                                                   -----------

                                                                                                     Three Months Ended June 30,                      Six Months Ended June 30,

                                                                                                                 2018                      2017                              2018                        2017
                                                                                                                 ----                      ----                              ----                        ----

    Revenues

        New and pre-owned vehicles                                                         $144,361                           $146,742                   $302,639                         $297,573

        Other                                                                                                  17,753                    18,019                            37,319                      37,153

                                           Total revenue                                                        162,114                   164,761                           339,958                     334,726


    Cost of revenues

        New and pre-owned vehicles                                                                            122,329                   126,662                           257,842                     257,507

        Other                                                                                                   4,039                     4,294                             7,624                       7,753
                                                                                                                -----                     -----                             -----                       -----

                                           Total cost of revenues                                               126,368                   130,956                           265,466                     265,260
                                                                                                              -------


    Gross profit                                                                                               35,746                    33,805                            74,492                      69,466


    Transaction costs                                                                                             252                        68                             3,496                         114

    Selling, general, and administrative expenses                                                              30,253                    25,609                            58,858                      52,642
                                                                                                               ------                    ------                            ------                      ------

                                           Income from operations                                                 5,241                     8,128                            12,138                      16,710

    Other income/expenses

    Gain on sale of property and equipment                                                                         10                        25                                11                          25

    Interest expense                                                                                          (2,233)                  (2,293)                          (4,937)                    (4,455)
                                                                                                               ------                    ------                            ------                      ------

                                           Total other expense                                                  (2,223)                  (2,268)                          (4,926)                    (4,430)

    Income before income tax expense                                                                            3,018                     5,860                             7,212                      12,280

                                           Income tax expense                                                   (1,176)                  (2,232)                          (2,343)                    (4,677)
                                                                                                              -------

                                           Net income                                                            $1,842                    $3,628                            $4,869                      $7,603
                                           ==========

Balance Sheets as of June 30, 2018 and December 31, 2017


                                                                                      LAZYDAYS HOLDINGS, INC. AND SUBSIDIARIES

                                                                                        CONDENSED CONSOLIDATED BALANCE SHEETS

                                                                                            (Dollar amounts in thousands)


                                                                                                                                           Successor            Predecessor
                                                                                                                                           ---------            -----------

                                                                                                                                             As of                 As of

                                                                                                                                           June 30,             December 31,
                                                                                                                                           --------             ------------

                                                                                                                                                           2018                      2017
                                                                                                                                                           ----                      ----

                                                                                                                               (Unaudited)

    ASSETS

    Current assets

    Cash                                                                                                                                                $35,569                   $13,292

    Receivables, net of allowance for doubtful accounts of $152 and $1,013
        at June 30, 2018 and December 31, 2017, respectively

                                                                           22,586 19,911

    Inventories                                                                                                                                       115,267                   114,170

    Income tax receivable                                                                                                                              3,188                         -

    Prepaid expenses and other                                                                                                                         2,656                     2,062
                                                                                                                                                       -----                     -----

                                       Total current assets                                                                                         179,266                   149,435


    Property and equipment, net                                                                                                                       71,952                    45,669

    Goodwill                                                                                                                                             28,513                    25,216

    Intangible assets, net                                                                                                                             67,274                    25,862

    Deferred tax asset                                                                                                                                      -                      144

    Other assets                                                                                                                                          275                       219

                                       Total assets                                                                                                $347,280                  $246,545
                                                                                                                                                   ========                  ========


                                                                                      LAZYDAYS HOLDINGS, INC. AND SUBSIDIARIES

                                                                                  CONDENSED CONSOLIDATED BALANCE SHEETS, CONTINUED

                                                                                            (Dollar amounts in thousands)


                                                                                                                                    Successor             Predecessor
                                                                                                                                    ---------             -----------

                                                                                                                                      As of                  As of

                                                                                                                                    June 30,             December 31,
                                                                                                                                    --------             ------------

                                                                                                                                                    2018                       2017
                                                                                                                                                    ----                       ----

                                                                                                                                   (Unaudited)

    LIABILITIES AND STOCKHOLDERS' EQUITY

    Current liabilities

    Accounts payable, accrued expenses and other current liabilities                                                                        $21,438                    $25,181

    Income tax payable                                                                                                                               -                     1,536

    Dividends payable                                                                                                                            1,425                          -

    Contingent liability, current portion                                                                                                          -                       667

    Financing liability, current portion                                                                                                         631                        595

    Floor plan notes payable, net of debt discount                                                                                           95,270                    104,976

    Long-term debt, current portion                                                                                                             2,905                      1,870

                                       Total current liabilities                                                                             121,669                    134,825


    Long term liabilities

    Long term debt, non-current portion, net of debt discount                                                                                16,324                      7,207

    Financing liability, non-current portion, net of debt discount                                                                           55,400                     53,680

    Deferred tax liability                                                                                                                      20,370                          -

                                       Total liabilities                                                                                     213,763                    195,712
                                                                                                                                             -------                    -------


    Commitments and Contingencies


    Series A Convertible Preferred Stock; 600,000 shares, designated,                                                                        54,983                          -

    issued, and outstanding as of June 30, 2018; liquidation

    preference of $61,425 as of June 30, 2018



    Stockholders' Equity


    Successor:

    Preferred Stock, $0.0001 par value; 5,000,000 shares authorized;                                                                              -                         -

    Common stock, $0.0001par value; 100,000,000 shares authorized;

    8,471,608 shares issued and outstanding at June 30, 2018

                                                                                                                                                                                 -

    Additional paid-in capital                                                                                                                 78,534                          -

    Accumulated deficit                                                                                                                              -                         -


    Predecessor:

    Preferred stock, $0.001 par value 150,000 shares authorized:

    Senior Preferred Stock, convertible and 8% cumulative

    dividend; 10,000 shares designated; -0- issued

    and outstanding; liquidation preference  $0

    at December 31, 2017                                                                                                                            -                         -

    Common stock, $0.001par value; 4,500,000 shares authorized;

    3,333,331 and 3,333,166 shares issued and outstanding at December 31, 2017                                                                    -                         3

    Additional paid-in capital                                                                                                                      -                    49,756

    Treasury stock, 165 shares, at cost                                                                                                             -                      (11)

    Retained earnings                                                                                                                                -                     1,085
                                                                                                                                                   ---                     -----

                                       Total stockholders' equity                                                                            78,534                     50,833

                                       Total liabilities and stockholders' equity                                                          $347,280                   $246,545
                                                                                                                                           ========                   ========

Non-Gaap Financial Measures

We use certain non-GAAP financial measures, such as EBITDA, Adjusted EBITDA, and Adjusted EBITDA Margin to enable us to analyze our performance and financial condition. We utilize these financial measures to manage our business on a day-to-day basis and believe that they are useful measures of performance. We believe that these measures are commonly used by analysts, investors and other interested parties to evaluate companies in our industry. We believe these non-GAAP measures provide expanded insight to measure revenue and cost performance, in addition to the standard GAAP-based financial measures. The presentation of non-GAAP financial information should not be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP.

Our use of EBITDA, Adjusted EBITDA, and Adjusted EBITDA Margin may not be comparable to other companies within the industry due to different methods of calculation. We compensate for these limitations by using each of EBITDA, Adjusted EBITDA, and Adjusted EBITDA Margin as only one of several measures for evaluating our business performance. In addition, capital expenditures, which impact depreciation and amortization, interest expense, and income tax expense, are reviewed separately by management. We may incur expenses in the future that are the same or similar to some of those adjusted in this presentation.

EBITDA is defined as net income excluding depreciation and amortization of property and equipment, interest expense, net, amortization of intangible assets, and income tax expense.

Adjusted EBITDA is defined as net income excluding depreciation and amortization of property and equipment, non-floor plan interest expense, amortization of intangible assets, income tax expense, stock-based compensation, transaction costs and other supplemental adjustments which for the periods presented includes LIFO adjustments, severance costs, and gain on sale of property and equipment.

Adjusted EBITDA Margin is defined as Adjusted EBITDA as a percentage of total revenues.

Reconciliations from Net Income per the Consolidated Statements of Income to EBITDA, Adjusted EBITDA, and Adjusted EBITDA Margin for the three and six months ended June 30, 2018 and 2017 are shown in the tables below.


                                                                                     Successor                 Predecessor                                    Combined Successor and           Predecessor
                                                                                                                                                                    Predecessor
                                                                                                                                                                    -----------

                                                                            Three Months Ended June 30,                             Six Months Ended June 30,

                                                                                                          2018                 2017                                                       2018                   2017
                                                                                                          ----                 ----                                                       ----                   ----


    EBITDA

    Net income                                                                                          $1,842               $3,628                                                     $4,869                 $7,603

    Interest expense, net                                                                                2,233                2,293                                                      4,937                  4,455

    Depreciation and amortization of property and equipment                                              1,897                1,349                                                      3,224                  2,696

    Amortization of intangible assets                                                                      794                  185                                                      1,080                    372

    Income tax expense                                                                                   1,176                2,232                                                      2,343                  4,677

      Subtotal EBITDA                                                                                    7,942                9,687                                                     16,453                 19,803
                                                                                                         -----                -----                                                     ------                 ------

    Floor plan interest                                                                                  (953)             (1,043)                                                   (1,984)               (1,935)

    LIFO adjustment                                                                                          -                 575                                                        148                  1,151

    Transactions costs                                                                                     252                   68                                                      3,496                    114

    Gain on sale of property and equipment                                                                (10)                (25)                                                      (11)                  (25)

    Severance costs                                                                                         79                  325                                                         79                    325

    Stock-based compensation                                                                             2,644                  122                                                      3,269                    241

    Adjusted EBITDA                                                                                     $9,954               $9,709                                                    $21,450                $19,674
                                                                                                        ======               ======                                                    =======                =======





                                                                                     Successor                 Predecessor                                    Combined Successor and           Predecessor
                                                                                                                                                                    Predecessor
                                                                                                                                                                    -----------

                                                                            Three Months Ended June 30,                             Six Months Ended June 30,

                                                                                                          2018                 2017                                                       2018                   2017
                                                                                                          ----                 ----                                                       ----                   ----


    EBITDA margin

    Net income margin                                                                                     1.1%                2.2%                                                      1.4%                  2.3%

    Interest expense, net                                                                                 1.4%                1.4%                                                      1.5%                  1.3%

    Depreciation and amortization of property and equipment                                               1.2%                0.8%                                                      0.9%                  0.8%

    Amortization of intangible assets                                                                     0.5%                0.1%                                                      0.3%                  0.1%

    Income tax expense                                                                                    0.7%                1.4%                                                      0.7%                  1.4%

      Subtotal EBITDA margin                                                                              4.9%                5.9%                                                      4.8%                  5.9%
                                                                                                           ---                  ---                                                        ---                    ---

    Floor plan interest                                                                                  -0.6%               -0.6%                                                     -0.6%                 -0.6%

    LIFO adjustment                                                                                       0.0%                0.3%                                                      0.0%                  0.3%

    Transactions costs                                                                                    0.2%                0.0%                                                      1.0%                  0.0%

    Gain on sale of property and equipment                                                                0.0%                0.0%                                                      0.0%                  0.0%

    Severance costs                                                                                       0.0%                0.2%                                                      0.0%                  0.1%

    Stock-based compensation                                                                              1.6%                0.1%                                                      1.0%                  0.1%

    Adjusted EBITDA margin                                                                                6.1%                5.9%                                                      6.3%                  5.9%
                                                                                                           ===                  ===                                                        ===                    ===


    Note: Figures in the table may not recalculate exactly due to rounding.

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

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