Lazydays Holdings, Inc. Reports Third Quarter 2019 Financial Results
TAMPA, Fla., Nov. 7, 2019 /PRNewswire/ -- Lazydays Holdings, Inc. ("Lazydays" or the "Company") (NasdaqCM: LAZY) announced financial results for the third quarter ended September 30, 2019.
Third Quarter Financial Results and Highlights:
-- On September 16, 2019, Lazydays announced that it will open its first
dedicated service center in the Houston, TX metro area. The Lazydays
Service of Houston service facility is currently under construction and
is expected to commence operations in the first quarter of 2020.
-- Revenues for the third quarter were $158.4 million; up $16.0 million
versus 2018, or 11.3%. Revenue from sales of recreational vehicles was
$138.9 million for the quarter, up $13.6 million, or 10.8%. RV unit
sales, excluding wholesale units, were 1,935 for the quarter, up 135
units versus 2018, or 7.5%. This increase in unit volume was partially
offset by a 0.4% decrease in our average selling price per unit
excluding wholesale unit sales. Wholesale revenue was up $4.0 million
versus 2018. Other revenues, which include finance and insurance ("F&I")
revenues as well as other revenues including parts, accessories, and
related services, were up $2.5 million. This increase is attributable
to higher F&I revenue per vehicle sold, as well as our three dealership
acquisitions since August 2018 in Minneapolis, MN, Knoxville, TN, and
The Villages, FL.
-- Gross profit, which excludes depreciation and amortization, was $30.5
million, up $0.2 million versus 2018. Gross margin declined between the
two periods, from 21.3% in 2018 to 19.3% in 2019. This decline was
driven by competitive end of model year pricing reducing RV sales gross
margins, as well as increased wholesale sales as a percentage of the
sales mix. In addition, the company believes that curtailment payments
required for aged inventory throughout the industry drove competitors to
aggressively price aged units to generate the required cash needed to
meet curtailment payments.
-- Excluding transaction costs, depreciation and amortization, and the
amortization of stock-based compensation; selling, general and
administrative expense ("SG&A") for the quarter was $25.6 million, up
$1.8 million compared to the prior year, related to expenses from our
three dealership acquisitions since August 2018 in Minnesota, Tennessee,
and The Villages, Florida. Amortization of stock-based compensation
decreased by $1.6 million compared to the prior year as a result of the
graded vesting schedule of the market-based awards issued to management
in March of 2018. Depreciation and amortization increased by $0.2
million compared to the prior year.
-- Adjusted EBITDA, a non-GAAP financial measure, was $5.3 million for the
quarter, versus $6.3 million in 2018. This decrease was primarily
driven by reduced RV sales margins from competitive pricing, as well as
SG&A associated with our new dealerships.
-- As of September 30, 2019, cash was $33.5 million, up $6.9 million from
December 31, 2018. This increase was primarily the result of cash flows
from operating activities net of Floorplan financing payoffs as we
reduced our inventory over this period by approximately $54.0 million
excluding the recently acquired inventory at The Villages, Florida.
"Despite continued softer industry conditions and the aggressive end of model year competitive pricing we saw in the market, we continue to manage our inventory levels to be in line with demand, and have maintained our cash and balance sheet capacity at levels we believe will enable us to continue to execute our growth strategy.," stated Mr. Murnane. "We continue to make progress on our growth strategy with the acquisition of Alliance Coach Inc. on August 1st of this year as well as with the announcement of our first dedicated service center in the Houston market."
Conference Call Information:
The Company has scheduled a conference call at 10:00AM Eastern Time on November 7, 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. Third 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 November 14, 2019 and may be accessed by calling 1-800-585-8367 or 1-416-621-4642 with a conference ID number of 2585355. 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 at The Villages, 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 symbol "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 the Villages 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 September 30, 2019 and September 30, 2018, the financial information presented represents the operating results of Lazydays Holdings, Inc. (labeled as "Successor" in the accompanying tables). For the nine months ended September 30, 2019, the financial information presented represents the operating results of Lazydays Holdings, Inc. 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. (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 Nine Months Ended September 30, 2019 and 2018
LAZYDAYS HOLDINGS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollar amounts in thousands)
(Unaudited)
Successor
Successor
Successor
Combined
Successor and
Predecessor
Three Months
Three Months
Nine Months
Nine Months
Ended Ended Ended Ended
September 30, September 30, September 30, September 30,
2019 2018 2019 2018
Revenues
New and pre-owned vehicles $138,861 $125,348 $440,541 $427,987
Other 19,541 17,035 59,464 54,354
Total revenue 158,402 142,383 500,005 482,341
Cost of revenues (excluding depreciation and amortization expense)
New and pre-owned vehicles 122,107 107,449 380,994 365,143
Adjustments to LIFO reserve 910 884 1,516 1,032
Other 4,841 3,776 14,526 11,400
Total cost of revenues (excluding depreciation and 127,858 112,109 397,036 377,575
amortization)
Gross profit (excluding depreciation and amortization) 30,544 30,274 102,969 104,766
Transaction costs 193 243 508 3,738
Depreciation and amortization expense 2,732 2,532 8,067 6,836
Stock-based compensation expense 1,286 2,857 3,912 6,126
Selling, general, and administrative expenses 25,570 23,793 77,173 75,078
Income from operations 763 849 13,309 12,988
Other income/expenses
Gain/(loss) on sale of property and equipment 13 (9) 11 2
Interest expense (2,321) (2,428) (7,879) (7,365)
Total other expense (2,308) (2,437) (7,868) (7,363)
(Loss) income before income tax expense (1,545) (1,588) 5,441 5,625
Income tax expense (941) (1,141) (4,225) (3,484)
Net (loss) income $(2,486) $(2,729) $1,216 $2,141
Balance Sheets as of September 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
September 30,
December 31,
2019 2018
(Unaudited)
ASSETS
Current assets
Cash $33,531 $26,603
Receivables, net of allowance for doubtful accounts of $435 and $687
at September 30, 2019 and December 31, 2018, respectively
21,399 16,967
Inventories 126,217 167,378
Income tax receivable 2,630
Prepaid expenses and other 2,957 3,166
Total current assets 184,104 216,744
Property and equipment, net 81,273 78,043
Goodwill 39,049 36,762
Intangible assets, net 69,900 70,189
Other assets 296 358
Total assets $374,622 $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
September 30,
December 31,
2019 2018
(Unaudited)
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable, accrued expenses and other current liabilities $24,223 $22,599
Income taxes payable 535
Dividends payable 1,210
Floor plan notes payable, net of debt discount 107,331 143,469
Financing liability, current portion 887 714
Long-term debt, current portion 5,955 4,408
Total current
liabilities 138,931 172,400
Long term liabilities
Financing liability, non-current portion, net of debt discount 63,808 60,533
Long term debt, non-current portion, net of debt discount 17,105 19,013
Deferred tax liability 18,717 18,717
Total liabilities 238,561 270,663
Commitments and Contingencies
Series A Convertible Preferred Stock; 600,000 shares, designated, 59,273 54,983
issued, and outstanding as of September 30, 2019 and December 31, 2018;
liquidation preference of $64,290 and $61,210 as of September 30, 2019
and December 31, 2018, respectively
Stockholders' Equity
Preferred Stock, $0.0001 par value; 5,000,000 shares authorized; -
Common stock, $0.0001 par value; 100,000,000 shares authorized;
8,471,608 shares issued and outstanding at September 30, 2019
and December 31, 2018, respectively
Additional paid-in capital 79,728 80,606
Accumulated deficit (2,940) (4,156)
Total stockholders' equity 76,788 76,450
Total liabilities and stockholders'
equity $374,622 $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 (loss)/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 (loss)/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 (Loss)/Income per the Consolidated Statements of Operations to EBITDA, Adjusted EBITDA, and Adjusted EBITDA Margin for the three and nine months ended September 30, 2019 and 2018 are shown (in thousands) in the tables below.
Successor
Successor
Successor
Combined Successor and
Predecessor
Three Months Ended September 30, Nine Months Ended September 30,
2019 2018 2019 2018
EBITDA and Adjusted EBITDA
Net (loss) income $(2,486) $(2,729) $1,216 $2,141
Interest expense, net 2,321 2,428 7,879 7,365
Depreciation and amortization of property and equipment 1,716 1,704 5,144 4,928
Amortization of intangible assets 1,016 828 2,923 1,908
Income tax expense 941 1,141 4,225 3,484
Subtotal EBITDA 3,508 3,372 21,387 19,826
Floor plan interest (874) (1,066) (3,392) (3,050)
LIFO adjustment 910 884 1,516 1,032
Transaction costs 193 243 508 3,738
(Gain)/loss on sale of property and equipment (13) 9 (11) (2)
Severance costs/Other 262 691 79
Stock-based compensation 1,286 2,857 3,912 6,126
Adjusted EBITDA $5,272 $6,299 $24,611 $27,749
Successor
Successor
Successor
Combined Successor and
Predecessor
Three Months Ended September 30, Nine Months Ended September 30,
2019 2018 2019 2018
EBITDA margin and Adjusted EBITDA margin
Net (loss) income margin -1.6% -1.9% 0.2% 0.4%
Interest expense, net 1.5% 1.7% 1.6% 1.5%
Depreciation and amortization of property and equipment 1.1% 1.2% 1.0% 1.0%
Amortization of intangible assets 0.6% 0.6% 0.6% 0.4%
Income tax expense 0.6% 0.8% 0.8% 0.7%
Subtotal EBITDA margin 2.2% 2.4% 4.3% 4.1%
Floor plan interest -0.6% -0.7% -0.7% -0.6%
LIFO adjustment 0.6% 0.6% 0.3% 0.2%
Transaction costs 0.1% 0.2% 0.1% 0.8%
(Gain)/loss 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 0.8% 2.0% 0.8% 1.3%
Adjusted EBITDA margin 3.3% 4.4% 4.9% 5.8%
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.
