Lazydays Holdings, Inc. Reports Second Quarter 2019 Financial Results

TAMPA, Fla., Aug. 13, 2019 /PRNewswire/ -- Lazydays Holdings, Inc. (Lazydays" or the "Company") (NasdaqCM: LAZY) announced financial results for the second quarter ended June 30, 2019.

Second Quarter Financial Results and Highlights:

    --  On June 11, 2019, Lazydays announced entering into a letter of intent to
        acquire the assets of Alliance Coach Inc. ("Alliance") located near
        Ocala, Florida. The acquisition closed on August 1, 2019.
    --  Lazydays completed the construction of a 30,000 square foot
        state-of-the-art recreational vehicle ("RV") service facility adjacent
        to its Minnesota dealership. This new facility adds 20 additional
        service bays to the original eight at the Minnesota location, and
        commenced operations late in the second quarter.
    --  Revenues for the second quarter were $168.5 million; up $6.4 million, or
        4.0%, versus 2018. Revenue from sales of recreational vehicles was
        $149.0 million for the quarter, up $4.6 million, or 3.2%. RV unit sales
        excluding wholesale units, were 2,092 for the quarter, down 17 units, or
        0.8% versus 2018. The marginal decline in unit volume was offset by a
        3.5% increase in our average selling price per unit. Other revenues
        which includes finance and insurance ("F&I") revenues as well as other
        revenues including parts, accessories, and related services were up $1.7
        million. This increase is attributable to higher F&I revenue per vehicle
        sold, as well as our Tennessee and Minnesota locations acquired in the
        second half of 2018.
    --  Gross profit, which excludes depreciation and amortization, was $35.5
        million, down $0.2 million versus 2018. Gross margin declined slightly
        between the two periods, from 22.0% in 2018 to 21.0% in 2019, primarily
        driven by a mix shift towards new versus pre-owned unit sales.
    --  Excluding transaction costs, depreciation and amortization, and the
        amortization of stock-based compensation; selling, general and
        administrative expense ("SG&A") for the quarter was $25.2 million, up
        $0.3 million compared to the prior year related to expenses from our
        Tennessee and Minnesota dealerships acquired in 2018. Expense related to
        the amortization of stock-based compensation decreased by $1.5 million
        compared to the prior year, while depreciation and amortization remained
        relatively flat compared to the prior year. Stock-based compensation
        decreased as a result of the graded vesting schedule of the market-based
        awards issued to management in March of 2018.
    --  Adjusted EBITDA, a non-GAAP financial measure, was $9.9 million for the
        quarter, down slightly compared to $10.0 million in 2018. This was
        primarily driven by decreased gross profit from the decline in preowned
        vehicle unit sales.
    --  As of June 30, 2019, cash was $30.2 million, up $3.6 million from
        December 31, 2018. The increase was primarily the result of cash flows
        from operating activities net of Floorplan financing payoffs as we
        reduced our RV inventory by approximately $47.0 million since December
        31, 2018.

"Despite industry conditions that were consistent with the first quarter of 2019, we continued to maintain margins and actively manage our inventory levels in alignment with overall demand," stated Mr. William Murnane, Chairman and Chief Executive Officer of Lazydays. "We are also pleased with our continued service and geographic expansion progress. During the second quarter, we completed the construction and commenced operations of our state-of-the-art service facility - greatly expanding service capacity at our Minnesota dealership. Our acquisition of Alliance Coach adds a dealership with a strong service reputation and expands our footprint in a fast-growing area of Florida. The Alliance acquisition moved from a letter of intent, through due diligence, integration, and close in less than 60 days - demonstrating our capability to successfully execute our expansion strategy and our team's ability to quickly integrate acquired dealerships."

Conference Call Information:

The Company has scheduled a conference call at 10:00AM Eastern Time on August 13, 2019 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 2019 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 20, 2019 and may be accessed by calling 1-800-585-8367 or 1-416-621-4642 with a conference ID number of 2395566. The webcast will be archived in the Investor Relations section of the Company's website.

ABOUT LAZYDAYS RV

Lazydays, The RV Authority®, 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 Ocala, Florida; Tucson, Arizona; Minneapolis, Minnesota; Knoxville, Tennessee; and Loveland and Denver, Colorado. Offering the nation's largest selection of leading RV brands, Lazydays features nearly 3,000 new and pre-owned RVs, more than 400 service bays and two on-site campgrounds with over 700 RV campsites. Lazydays RV Accessories & More(TM) stores offer thousands of accessories and hard-to-find parts at dealership locations. In addition, Lazydays also has rental fleets in Colorado.

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, including statements regarding Lazydays' expectations for its Minnesota, Tennessee, and Ocala dealerships as well as its service business, 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' Securities and Exchange Commission 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, 2019 and June 30, 2018, the financial information presented represents the operating results of Lazydays Holdings, Inc. (labeled as "Successor" in the accompanying tables). For the six months ended June 30, 2019, the financial information presented represents the operating results of Lazydays Holdings, Inc. 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. (labeled as "Predecessor" in the accompanying tables) for the period from January 1, 2018 to March 14, 2018.

Results of Operations for the Three and Six Months Ended June 30, 2019 and 2018


                                                                                                                                        
          
              LAZYDAYS HOLDINGS, INC. AND SUBSIDIARIES


                                                                                                                                       
          
              CONDENSED CONSOLIDATED STATEMENTS OF INCOME


                                                                                                                                            
            
              (Dollar amounts in thousands)


                                                                                                                                                     
            
              (Unaudited)




                                                                                                                                          
           
              Successor                               
      
              Successor                         
     
              Successor                           
          
          Combined

                                                                                                                                                                                                                                                                                                   
          
          Successor and

                                                                                                                                                                                                                                                                                                    
          
          Predecessor



                                                                                                                                                 Three Months Ended June 30, 2019                      Three Months Ended June 30, 2018                Six Months Ended June 30, 2019                
          
          Six Months

                                                                                                                                                                                                                                                                                                     
          
          Ended June

                                                                                                                                                                                                                                                                                                        
          
          30, 2018








     Revenues



         New and pre-owned vehicles                                                                                          $149,046                                                      $144,361                                        $301,680                                       $302,639



         Other                                                                                                                                                                            19,500                                          17,753                                         39,923                                    37,319


                                                                         
     Total revenue                                                                                                    168,546                                         162,114                                        341,603                                   339,958




      Cost of revenues (excluding depreciation and amortization expense)



         New and pre-owned vehicles                                                                                                                                                     128,017                                         122,329                                        258,887                                   257,694



         Adjustments to LIFO reserve                                                                                              359                                                                                                          606                                            148



         Other                                                                                                                                                                             4,692                                           4,039                                          9,685                                     7,624



                                                                           Total cost of revenues (excluding depreciation and
                                                                            amortization)                                                                                                   133,068                                         126,368                                        269,178                                   265,466






     Gross profit (excluding depreciation and amortization)                                                                                                                              35,478                                          35,746                                         72,425                                    74,492





     Transaction costs                                                                                                                                                                       87                                             252                                            315                                     3,496



     Depreciation and amortization expense                                                                                                                                                2,640                                           2,691                                          5,335                                     4,304



     Stock-based compensation expense                                                                                                                                                     1,112                                           2,644                                          2,626                                     3,269



     Selling, general, and administrative expenses                                                                                                                                       25,151                                          24,918                                         51,603                                    51,285



                                                                         
     Income from operations                                                                                             6,488                                           5,241                                         12,546                                    12,138



     Other income/expenses



     (Loss)/gain on sale of property and equipment                                                                                                                                              10                                             (2)                                            11



     Interest expense                                                                                                                                                                   (2,531)                                        (2,233)                                       (5,558)                                  (4,937)



                                                                         
     Total other expense                                                                                              (2,531)                                        (2,223)                                       (5,560)                                  (4,926)



     Income before income tax expense                                                                                                                                                     3,957                                           3,018                                          6,986                                     7,212


                                                                         
     Income tax expense                                                                                               (2,099)                                        (1,176)                                       (3,284)                                  (2,343)



                                                                         
     Net income                                                                                                        $1,858                                          $1,842                                         $3,702                                    $4,869

Balance Sheets as of June 30, 2019 and December 31, 2018


                                                                           
            
                LAZYDAYS HOLDINGS, INC. AND SUBSIDIARIES


                                                                            
            
                CONDENSED CONSOLIDATED BALANCE SHEETS


                                                              
              
              (Dollar amounts in thousands except for share and per share data)




                                                                                                                                    
              
             As of                     
       
         As of


                                                                                                                                  
              
             June 30,                  
       
       December 31,



                                                                                                                                                               2019                                2018



                                                                                                                                 
              
             (Unaudited)



            
                ASSETS



            Current assets



            Cash                                                                                                                                           $30,152                             $26,603



            Receivables, net of allowance for doubtful accounts of $645 and  $687
      at June 30, 2019 and December 31, 2018, respectively


                               
              20,104                           16,967



            Inventories                                                                                                                                    118,547                             167,378



            Income tax receivable                                                                                                                            231                               2,630



            Prepaid expenses and other                                                                                                                    3,256                               3,166



                                                               Total
                                                                current
                                                                assets                                              172,290                                              216,744





            Property and equipment, net                                                                                                                   80,294                              78,043



            Goodwill                                                                                                                                        36,728                              36,762



            Intangible assets, net                                                                                                                        68,286                              70,189



            Other assets                                                                                                                                       255                                 358



                                                               Total
                                                                assets                                             $357,853                                             $402,096











                                                                           
            
                LAZYDAYS HOLDINGS, INC. AND SUBSIDIARIES


                                                                       
              
              CONDENSED CONSOLIDATED BALANCE SHEETS, CONTINUED


                                                              
              
              (Dollar amounts in thousands except for share and per share data)






                                                                                                                                    
              
             As of                     
       
         As of


                                                                                                                                  
              
             June 30,                  
       
       December 31,



                                                                                                                                                               2019                                2018



                                                                                                                                 
              
             (Unaudited)



            
                LIABILITIES AND STOCKHOLDERS' EQUITY



            Current liabilities



            Accounts payable, accrued expenses and other current liabilities                                                                          $21,517                             $22,599



            Dividends payable                                                                                                                                                                 1,210



            Floor plan notes payable, net of debt discount                                                                                              94,738                             143,469



            Financing liability, current portion                                                                                                            830                                 714



            Long-term debt, current portion                                                                                                               4,445                               4,408


                                                               Total
                                                                current
                                                                liabilities                                         121,530                                              172,400





            Long term liabilities



            Financing liability, non-current portion, net of debt discount                                                                             63,555                              60,533



            Long term debt, non-current portion, net of debt discount                                                                                  16,790                              19,013



            Deferred tax liability                                                                                                                        18,717                              18,717


                                                               Total
                                                                liabilities                                         220,592                                              270,663






            Commitments and Contingencies





            Series A Convertible Preferred Stock; 600,000 shares, designated,                                                                          57,692                              54,983



            issued, and outstanding as of June 30, 2019 and December 31, 2018;



            liquidation preference of $62,709 and $61,210 as of June 30, 2019



            and December 31, 2018, respectively





            Stockholders' Equity





            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, 2019



            and December 31, 2018, respectively



            Additional paid-in capital                                                                                                                    80,023                              80,606



            Accumulated deficit                                                                                                                            (454)                            (4,156)






                                                               Total
                                                                stockholders'
                                                                equity                                   79,569                                               76,450


                                                               Total liabilities
                                                                and stockholders'
                                                                equity                                          $357,853                                             $402,096

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 supplemental 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 our 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 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 other one-time charges, and loss or 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, 2019 and 2018 are shown (in thousands) in the tables below.




                                                                              
     
               Successor         
     
     Successor                                      
     
     Successor           
     
     Combined Successor and Predecessor



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


                                                                                                         2019                 2018                                                  2019                                          2018






     
                EBITDA and Adjusted EBITDA



     Net  income                                                                                      $1,858               $1,842                                                $3,702                                        $4,869



     Interest expense, net                                                                             2,531                2,233                                                 5,558                                         4,937



     Depreciation and amortization of property and equipment                                           1,687                1,897                                                 3,428                                         3,224



     Amortization of intangible assets                                                                   953                  794                                                 1,907                                         1,080



     Income tax expense                                                                                2,099                1,176                                                 3,284                                         2,343



     Subtotal EBITDA                                                                                   9,128                7,942                                                17,879                                        16,453




     Floor plan interest                                                                             (1,049)               (953)                                              (2,518)                                      (1,984)



     LIFO adjustment                                                                                     359                                                                       606                                           148



     Transaction costs                                                                                    87                  252                                                   315                                         3,496



     Loss (gain) on sale of property and equipment                                                                          (10)                                                    2                                          (11)



     Severance costs/Other                                                                               272                   79                                                   429                                            79



     Stock-based compensation                                                                          1,112                2,644                                                 2,626                                         3,269



     Adjusted EBITDA                                                                                  $9,909               $9,954                                               $19,339                                       $21,450











                                                                              
     
               Successor         
     
     Successor                                      
     
     Successor           
     
     Combined Successor and Predecessor



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


                                                                                                         2019                 2018                                                  2019                                          2018






     
                EBITDA margin and Adjusted EBITDA margin



     Net income margin                                                                                  1.1%                1.1%                                                 1.1%                                         1.4%



     Interest expense, net                                                                              1.5%                1.4%                                                 1.6%                                         1.5%



     Depreciation and amortization of property and equipment                                            1.0%                1.2%                                                 1.0%                                         0.9%



     Amortization of intangible assets                                                                  0.6%                0.5%                                                 0.6%                                         0.3%



     Income tax expense                                                                                 1.2%                0.7%                                                 1.0%                                         0.7%



     Subtotal EBITDA margin                                                                             5.4%                4.9%                                                 5.2%                                         4.8%




     Floor plan interest                                                                               -0.6%               -0.6%                                                -0.7%                                        -0.6%



     LIFO adjustment                                                                                    0.2%                0.0%                                                 0.2%                                         0.0%



     Transaction costs                                                                                  0.1%                0.2%                                                 0.1%                                         1.0%



     Loss (gain) on sale of property and equipment                                                      0.0%                0.0%                                                 0.0%                                         0.0%



     Severance costs/Other                                                                              0.2%                0.0%                                                 0.1%                                         0.0%



     Stock-based compensation                                                                           0.7%                1.6%                                                 0.8%                                         1.0%



     Adjusted EBITDA margin                                                                             5.9%                6.1%                                                 5.7%                                         6.3%






     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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SOURCE Lazydays Holdings, Inc.