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.