Lazydays Holdings, Inc. Reports Third Quarter 2018 Financial Results
TAMPA, Fla., Nov. 8, 2018 /PRNewswire/ -- Lazydays Holdings, Inc. ("Lazydays") (NasdaqCM: LAZY) announced financial results for the third quarter ended September 30, 2018.
Third Quarter Financial Results and Highlights:
-- On August 7, 2018, Lazydays closed on the acquisition of Shorewood RV
Center located in Ramsey, Minnesota. The Company had announced on May
21, 2018 that it had entered into an agreement to acquire Shorewood RV
Center. The dealership is now known as Lazydays RV of Minneapolis.
-- On October 23, 2018, Lazydays announced entering into an agreement to
acquire Tennessee RV Supercenter located just outside Knoxville,
Tennessee.
-- Revenues for the third quarter were $142.4 million; down $1.2 million,
or 0.8%, versus 2017. Revenue from sales of recreational vehicles was
$125.3 million for the quarter, down $1.5 million, or 1.1%. RV unit
sales excluding wholesale units, were 1,801, down 18 units, or 1.0%.
-- Gross profit, excluding last-in first-out ("LIFO") adjustments, was
$31.2 million, down $0.7 million versus 2017. Gross margin excluding
LIFO adjustments was down slightly between the two periods, from 22.2%
to 21.9%, primarily driven by a decrease in pre-owned motorized vehicle
sales. Gross profit for the quarter including LIFO adjustments was $30.3
million; down $4.4 million, or 12.8%. This gross profit decline was due
to a $3.7 million net change related to LIFO adjustments in the two
periods;
-- Excluding transaction costs, stock-based compensation, and depreciation
and amortization, SG&A for the quarter was $23.8 million, up $0.4
million compared to the prior year attributable to the acquired
Minnesota location. Stock-based compensation and depreciation and
amortization increased $2.7 million and $1.0 million, respectively,
compared to the prior year. These non-cash expense increases stemmed
from the March 2018 merger between Andina Acquisition Corp. II and Lazy
Days' R.V. Center, Inc., which included options issued to management and
increases in tangible and intangible asset valuations.
-- Adjusted EBITDA, a non-GAAP financial measure, was $6.3 million for the
quarter, compared to $7.6 million in 2017. This was primarily driven by
the decrease in revenue and associated gross profit described above.
-- As of September 30, 2018, cash was $37.4 million, up $1.8 million from
June 30, 2018. The increase in cash was primarily driven by cash flows
from operations of $4.5 million.
"The third quarter highlighted the benefits of successfully executing our geographic expansion strategy and diversifying our revenue base geographically. While we were adversely impacted by market conditions in the Southeastern United States, we were able to maintain our year-to-date top line due to contributions from markets outside the Southeast," stated Mr. William Murnane, Chairman and Chief Executive Officer of Lazydays. Mr. Murnane continued, "We are excited to have announced our second planned acquisition this year and to continue our geographic expansion into Tennessee. We expect to close the Tennessee acquisition before the end of the year. The opportunities for continued geographic expansion remain robust and we expect to continue our geographic expansion throughout 2019."
Conference Call Information:
The Company has scheduled a conference call at 10:00AM Eastern Time on November 8, 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. Third 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 November 15, 2018 and may be accessed by calling 1-800-585-8367 or 1-416-621-4642 with a conference ID number of 1769427. The webcast will be archived in the Investor Relations section of the Company's website.
ABOUT LAZYDAYS RV
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 and Colorado. In addition, Lazydays RV Accessories & More stores offer thousands of accessories and hard-to-find parts at our 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 here.
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 September 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 September 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 nine months ended September 30, 2018, the financial information presented represents the combined operating results of Lazydays Holdings, Inc. for the period from March 15, 2018 to September 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 nine months ended September 30, 2017, the financial information presented represents the operating results of Lazy Days' R.V. Center, Inc.
Results of Operations for the Third Quarter and First Nine Months of 2018 and 2017
LAZYDAYS HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollar amounts in thousands)
(Unaudited)
Successor
Predecessor
Combined
Predecessor
Successor and
Predecessor
Three Months
Three Months
Nine Months
Nine Months
Ended Ended Ended Ended
September 30, September 30, September 30, September
2018 2017 2018 30, 2017
Revenues
New and pre-owned vehicles $125,348 $126,796 $427,987 $424,369
Other 17,035 16,778 54,354 53,928
Total revenue 142,383 143,574 482,341 478,297
Cost of revenues
New and pre-owned vehicles (including adjustments to the LIFO 108,333 104,989 366,175 362,496
reserve of $884, ($2,863), $1,032, and ($1,712), respectively)
Other 3,776 3,849 11,400 11,602
Total cost of revenues 112,109 108,838 377,575 374,098
Gross profit 30,274 34,736 104,766 104,199
Transaction costs 243 390 3,738 504
Depreciation and amortization expense 2,532 1,507 6,836 4,575
Stock-based compensation expense 2,857 171 6,126 412
Selling, general, and administrative expenses 23,793 23,380 75,078 72,713
---
Income from operations 849 9,288 12,988 25,995
Other income/expenses
Gain on sale of property and equipment (9) 2 25
Interest expense (2,428) (2,255) (7,365) (6,710)
---
Total other expense (2,437) (2,255) (7,363) (6,685)
Income before income tax expense (1,588) 7,033 5,625 19,310
Income tax expense (1,141) (2,750) (3,484) (7,427)
Net (loss) income $(2,729) $4,283 $2,141 $11,883
Balance Sheets as of September 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
September 30,
December 31,
2018 2017
(Unaudited)
ASSETS
Current assets
Cash $37,401 $13,292
Receivables, net of allowance for doubtful accounts of $403 and 20,948 19,911
$1,013 at September 30, 2018 and December 31, 2017, respectively
Inventories 127,213 114,170
Income tax receivable 2,999
Prepaid expenses and other 2,921 2,062
Total current assets 191,482 149,435
Property and equipment, net 76,970 45,669
Goodwill 29,501 25,216
Intangible assets, net 67,696 25,862
Deferred tax asset 144
Other assets 276 219
Total assets $365,925 $246,545
LAZYDAYS HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS, CONTINUED
(Dollar amounts in thousands)
Successor
Predecessor
As of
As of
September 30,
December 31,
2018 2017
(Unaudited)
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable, accrued expenses and other current liabilities $24,349 $25,181
Income tax payable 1,536
Dividends payable 1,210
Floor plan notes payable, net of debt discount 106,196 104,976
Contingent liability, current portion 667
Financing liability, current portion 676 595
Long-term debt, current portion 3,454 1,870
Total current
liabilities 135,885 134,825
Long term liabilities
Financing liability, non-current portion, net of debt discount 60,482 53,680
Long term debt, non-current portion, net of debt discount 16,752 7,207
Deferred tax liability 20,370
Total liabilities 233,489 195,712
Commitments and Contingencies
Series A Convertible Preferred Stock; 600,000 shares, designated, 54,983 -
issued, and outstanding as of September 30, 2018; liquidation
preference of $61,210 as of September 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 September 30, 2018
Additional paid-in capital 79,184
Accumulated deficit (1,731)
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 77,453 50,833
Total liabilities and stockholders'
equity $365,925 $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 as they reflect certain operating drivers of the business, such as sales growth, operating costs, selling and administrative expense and other operating income and expense. 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 of the underlying operating results and trends and overall understanding of financial performance and prospects for the future. 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 (loss) 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 (loss) 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 (Loss) Income per the Consolidated Statements of Income to EBITDA, Adjusted EBITDA, and Adjusted EBITDA Margin for the three and nine months ended September 30, 2018 and 2017 are shown in the tables below.
Successor
Predecessor
Combined
Predecessor
Successor and
Predecessor
Three Months Ended September 30, Nine Months Ended September 30,
2018 2017 2018 2017
EBITDA and Adjusted EBITDA
Net (loss) income $(2,729) $4,283 $2,141 $11,883
Interest expense, net 2,428 2,255 7,365 6,710
Depreciation and amortization of property and equipment 1,704 1,320 4,928 4,016
Amortization of intangible assets 828 187 1,908 559
Income tax expense 1,141 2,750 3,484 7,428
Subtotal EBITDA 3,372 10,795 19,826 30,596
Floor plan interest (1,066) (912) (3,050) (2,847)
LIFO adjustment 884 (2,863) 1,032 (1,712)
Transaction costs 243 390 3,738 504
Loss on sale of property and equipment 9 (2) (25)
Severance costs 79 325
Stock-based compensation 2,857 171 6,126 412
Adjusted EBITDA $6,299 $7,581 $27,749 $27,253
Successor
Predecessor
Combined
Predecessor
Successor and
Predecessor
Three Months Ended September 30, Nine Months Ended September 30,
2018 2017 2018 2017
EBITDA margin and Adjusted EBITDA Margin
Net (loss) income margin -1.9% 3.0% 0.4% 2.5%
Interest expense, net 1.7% 1.6% 1.5% 1.4%
Depreciation and amortization of property and equipment 1.2% 0.9% 1.0% 0.8%
Amortization of intangible assets 0.6% 0.1% 0.4% 0.1%
Income tax expense 0.8% 1.9% 0.7% 1.6%
Subtotal EBITDA margin 2.4% 7.5% 4.1% 6.4%
Floor plan interest -0.7% -0.6% -0.6% -0.6%
LIFO adjustment 0.6% -2.0% 0.2% -0.4%
Transaction costs 0.2% 0.3% 0.8% 0.1%
Gain on sale of property and equipment 0.0% 0.0% 0.0% 0.0%
Severance costs 0.0% 0.0% 0.0% 0.1%
Stock-based compensation 2.0% 0.1% 1.3% 0.1%
Adjusted EBITDA 4.4% 5.3% 5.8% 5.7%
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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