LAZYDAYS REPORTS FIRST QUARTER 2024 RESULTS
Lazydays (NasdaqCM: GORV) reported its first-quarter results for 2024, reflecting a net loss of $22.0 million compared to a $0.3 million loss in Q1 2023. Revenue fell to $270.6 million, down from $295.7 million the previous year. Adjusted net loss was $21.4 million, contrasting with an adjusted net income of $1.2 million in Q1 2023. The company anticipates a pre-tax loss for the full year but expects positive EBITDA and adjusted operational cash flow.
CEO John North highlighted the company's focus on maintaining a healthy inventory with over 90% of units being 2024 and 2025 models. A $15 million increase in their mortgage loan facility was secured to provide financial flexibility. The company issued warrants for 2 million shares at $5.25 each as part of this funding. Cash on hand totals $39 million, with potential for an additional $45 million from refinancing.
- Maintained healthy inventory with over 90% being 2024 and 2025 models.
- Secured a $15 million increase in mortgage loan facility for additional financial flexibility.
- Estimated capacity to generate $45 million from mortgage refinancing.
- Positive EBITDA and adjusted operational cash flow expected for the full year.
- Cash on hand of $39 million.
- Net loss for Q1 2024 was $22.0 million compared to $0.3 million in Q1 2023.
- Revenue decreased to $270.6 million from $295.7 million in Q1 2023.
- Adjusted net loss of $21.4 million compared to adjusted net income of $1.2 million in Q1 2023.
- Net loss per diluted share was $1.67, up from $0.17 in Q1 2023.
- Expectation of pre-tax loss for the full year.
Insights
Financial Performance: Lazydays reported a significant revenue drop to
Balance Sheet Health: The amendment to the syndicated credit facility and the mortgage loan increase from
Market Conditions: The RV market is highly seasonal and sensitive to economic fluctuations. Lazydays’ struggle to see increased unit volumes during the expected peak season (March and April) is concerning. This may reflect broader economic pressures, such as rising interest rates or diminished consumer spending power. The company's strategy to enhance its used vehicle inventory could tap into a more cost-conscious market segment, potentially stabilizing revenue streams.
Strategic Moves: By maintaining a healthy inventory of new 2024 and 2025 models, Lazydays positions itself well against competitors. The effort to procure more used units indicates a tactical shift to leverage the trade-in market and attract budget-focused buyers. This diversified approach could mitigate risks associated with new vehicle sales volatility.
Governance Actions: Establishing a special committee of independent directors to evaluate financing options is a prudent governance move. This ensures an unbiased assessment of the available financial strategies, enhancing transparency and protecting shareholders' interests. Engaging reputable legal advisors like Richards Layton & Finger, P.A. and Holland & Knight LLP, further strengthens the decision-making process.
Board Decisions: The unanimous approval of the mortgage loan facility and related warrant issuance demonstrates a coherent and unified board strategy. This approach reflects sound governance principles, aiming to balance immediate financial needs with long-term shareholder value. However, it is essential to monitor how these decisions impact shareholder equity and company leverage over time.
John North, Chief Executive Officer, commented, "As we discussed in March, we expected our results for the first quarter to reflect a focus on both reducing the quantity and improving the health of vehicle inventory on hand. To that end, we made significant progress in these areas and finished the first quarter with approximately
Commenting on 2024, John stated, "Given the current market conditions and the larger than expected losses in the first quarter, for the full year we anticipate a pre-tax loss but both positive EBITDA and adjusted operational cash flow. I want to personally thank our operational team in the field for remaining upbeat and focused on pursuing every opportunity we can identify in the market today. While we are navigating the current economic environment alongside our OEM partners and competing dealers, we strongly believe in the earnings power of our store base and look forward to unlocking its full earnings potential as the industry recovers."
Total revenue for the first quarter was
Net loss for the first quarter was
Adjusted results for the first quarter of 2024 exclude a net non-core charge of
Balance Sheet Update
Earlier this week, we executed an amendment to our syndicated credit facility providing us with additional covenant flexibility through the first quarter of 2025.
To facilitate the amendment, we agreed to raise an additional
Our board of directors established a special committee of independent directors and delegated to the special committee authority to evaluate and negotiate financing options as part of the amendment process. The special committee was advised by Richards Layton & Finger, P.A. and
Kelly Porter, Chief Financial Officer, stated, "We appreciate the continued flexibility from our syndicated lenders, as well as the increased support we received from Coliseum. With cash on hand of
Conference Call Information
We have scheduled a conference call at 8:30 AM Eastern Time on Thursday, May 16, 2024 that will also be broadcast live over the internet.
The conference call may be accessed by telephone at (877) 407-8029 / +1 (201) 689-8029. To listen live on our website or for replay, visit https://www.lazydays.com/investor-relations.
About Lazydays
Lazydays has been a prominent player in the RV industry since our inception in 1976, earning a stellar reputation for delivering exceptional RV sales, service, and ownership experiences. Our commitment to excellence has led to enduring relationships with RVers and their families who rely on us for all of their RV needs.
With a strategic approach to rapid expansion, we are growing our network through both acquisitions and new builds. Our wide selection of RV brands from top manufacturers, state-of-the-art service facilities, and an extensive range of accessories and parts ensure that Lazydays is the go-to destination for RV enthusiasts seeking everything they need for their journeys on the road. Whether you're a seasoned RVer or just starting your adventure, our dedicated team is here to provide outstanding support and guidance, making your RV lifestyle truly extraordinary.
Lazydays is a publicly listed company on the Nasdaq stock exchange under the ticker "GORV."
Forward-Looking Statements
This press release includes "forward-looking statements" within the meaning of the "Safe-Harbor" provisions of the Private Securities Litigation Reform Act of 1995. Forward looking statements include statements regarding our goals, plans, projections and guidance regarding our financial position, results of operations, market position, pending and potential future acquisitions and business strategy, and often contain words such as "project," "outlook," "expect," "anticipate," "intend," "plan," "believe," "estimate," "may," "seek," "would," "should," "likely," "goal," "strategy," "future," "maintain," "continue," "remain," "target" or "will" and similar references to future periods. Examples of forward-looking statements in this press release include, among others, statements regarding:
- Our efforts to procure more used units;
- First quarter and full year 2024 results;
- The earnings power of our store base, and our unlocking of its full earnings potential;
- Our use of funds from the transaction with Coliseum Capital Management;
- Our ability to generate additional mortgage loan proceeds; and
- Our foundation to navigate the current macroeconomic environment.
By their nature, forward-looking statements involve risks and uncertainties because they relate to events that depend on circumstances that may or may not occur in the future. Forward-looking statements are not guarantees of future performance, and our actual results of operations, financial condition and liquidity and development of the industry in which we operate may differ materially from those made in or suggested by the forward-looking statements in this press release. The risks and uncertainties that could cause actual results to differ materially from estimated or projected results include, without limitation, future economic and financial conditions (both nationally and locally), changes in customer demand, our relationship with, and the financial and operational stability of, vehicle manufacturers and other suppliers, risks associated with our indebtedness (including available borrowing capacity, compliance with financial covenants and ability to refinance or repay indebtedness on favorable terms), acts of God or other incidents which may adversely impact our operations and financial performance, government regulations, legislation and others set forth throughout "Part II, Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations" and in "Part I, Item 1A. Risk Factors" of our most recent Annual Report on Form 10-K, and from time to time in our other filings with the SEC. We urge you to carefully consider this information and not place undue reliance on forward-looking statements. We undertake no duty to update our forward-looking statements, including our earnings outlook, which are made as of the date of this release.
Non-GAAP Financial Measures
This press release contains non-GAAP financial measures such as EBITDA, adjusted cash flow from operations, adjusted costs applicable to revenue, adjusted net income (loss), adjusted net income (loss) per diluted share, adjusted income (loss) before income taxes, adjusted SG&A, and adjusted income (loss) from operations. Non-GAAP measures do not have definitions under GAAP and may be defined differently by and not comparable to similarly titled measures used by other companies. As a result, we review any non-GAAP financial measures in connection with a review of the most directly comparable measures calculated in accordance with GAAP. We caution you not to place undue reliance on such non-GAAP measures, and also to consider them with the most directly comparable GAAP measures. We present cash flows from operations in the following tables, adjusted to include the change in non-trade floor plan debt to improve the visibility of cash flows related to vehicle financing. As required by SEC rules, we have reconciled these measures to the most directly comparable GAAP measures in the attachments to this release. We believe the non-GAAP financial measures we present improve the transparency of our disclosures; provide a meaningful presentation of our results from core business operations, because they exclude items not related to core business operations and other non-cash items; and improve the period-to-period comparability of our results from core business operations. These presentations should not be considered an alternative to GAAP measures.
In addition, we have not reconciled our fiscal year 2024 EBITDA or adjusted operational cash flow expectations. These are provided on a non-GAAP basis and cannot be reconciled to the closest GAAP measures without unreasonable effort because of the unpredictability of the amounts and timing of events affecting the items we exclude from non-GAAP measures.
Contact:
investors@lazydays.com
Results of Operations | ||||
Three Months Ended March 31, | Variance | |||
(In thousands except share and per share amounts) | 2024 | 2023 | % | |
Revenues | ||||
New vehicle retail | $ 152,691 | $ 176,747 | (13.6) % | |
Pre-owned vehicle retail | 79,576 | 84,775 | (6.1) % | |
Vehicle wholesale | 6,249 | 1,708 | NM | |
Finance and insurance | 18,329 | 16,881 | 8.6 % | |
Service, body and parts and other | 13,741 | 15,545 | (11.6) % | |
Total revenues | 270,586 | 295,656 | (8.5) % | |
Cost applicable to revenues | ||||
New vehicle retail | 147,055 | 153,331 | (4.1) % | |
Pre-owned vehicle retail | 70,199 | 67,528 | 4.0 % | |
Vehicle wholesale | 8,460 | 1,721 | NM | |
Finance and insurance | 693 | 693 | — % | |
Service, body and parts and other | 6,287 | 7,181 | (12.4) % | |
LIFO | 126 | 1,311 | NM | |
Total cost applicable to revenues | 232,820 | 231,765 | 0.5 % | |
Gross profit | 37,766 | 63,891 | (40.9) % | |
Depreciation and amortization | 5,461 | 4,403 | 24.0 % | |
Selling, general, and administrative expenses | 48,886 | 53,532 | (8.7) % | |
(Loss) income from operations | (16,581) | 5,956 | (378.4) % | |
Other income (expense): | ||||
Floor plan interest expense | (7,676) | (5,531) | 38.8 % | |
Other interest expense | (4,523) | (1,700) | 166.1 % | |
Change in fair value of warrant liabilities | — | 856 | (100.0) % | |
Total other expense, net | (12,199) | (6,375) | 91.4 % | |
Loss before income taxes | (28,780) | (419) | NM | |
Income tax benefit | 6,800 | 143 | NM | |
Net loss | (21,980) | (276) | NM | |
Dividends on Series A Convertible Preferred Stock | (1,984) | (1,184) | 67.6 % | |
Net loss and comprehensive loss attributable to common stock | $ (23,964) | $ (1,460) | NM | |
Loss per share: | ||||
Basic | $ (1.67) | $ (0.12) | 1,291.7 % | |
Diluted | $ (1.67) | $ (0.17) | 882.4 % | |
Weighted average shares outstanding: | ||||
Basic | 14,368,677 | 11,988,899 | ||
Diluted | 14,368,677 | 11,988,899 | ||
*NM - not meaningful |
Total Results Summary | |||||
Three Months Ended March 31, | Variance | ||||
2024 | 2023 | % | |||
Gross profit margins | |||||
New vehicle retail | 3.7 % | 13.2 % | (950) | bps | |
Pre-owned vehicle retail | 11.8 % | 20.3 % | (850) | bps | |
Vehicle wholesale | (35.4) % | (0.8) % | NM | bps | |
Finance and insurance | 96.2 % | 95.9 % | 30 | bps | |
Service, body and parts and other | 54.2 % | 53.8 % | 40 | bps | |
Total gross profit margin | 14.0 % | 21.6 % | (760) | bps | |
Total gross profit margin (excluding LIFO) | 14.0 % | 22.1 % | NM | bps | |
Retail units sold | |||||
New vehicle retail | 2,055 | 1,980 | 3.8 % | ||
Pre-owned vehicle retail | 1,466 | 1,304 | 12.4 % | ||
Total retail units sold | 3,521 | 3,284 | 7.2 % | ||
Average selling price per retail unit | |||||
New vehicle retail | $ 74,263 | $ 89,266 | (16.8) % | ||
Pre-owned vehicle retail | 54,281 | 65,012 | (16.5) % | ||
Average gross profit per retail unit (excluding LIFO) | |||||
New vehicle retail | $ 2,704 | $ 11,826 | (77.1) % | ||
Pre-owned vehicle retail | 6,396 | 13,227 | (51.6) % | ||
Finance and insurance | 4,919 | 4,929 | (0.2) % | ||
Revenue mix | |||||
New vehicle retail | 56.4 % | 59.8 % | |||
Pre-owned vehicle retail | 29.4 % | 28.7 % | |||
Vehicle wholesale | 2.3 % | 0.6 % | |||
Finance and insurance | 6.8 % | 5.7 % | |||
Service, body and parts and other | 5.1 % | 5.3 % | |||
100.0 % | 100.0 % | ||||
Gross profit mix | |||||
New vehicle retail | 14.9 % | 36.6 % | |||
Pre-owned vehicle retail | 24.8 % | 27.0 % | |||
Vehicle wholesale | (5.9) % | — % | |||
Finance and insurance | 46.7 % | 25.3 % | |||
Service, body and parts and other | 19.7 % | 13.1 % | |||
LIFO | (0.3) % | (2.1) % | |||
100.0 % | 100.0 % | ||||
Other Metrics | |||||
Adjusted | As Reported | ||||
Three Months Ended March 31, | Three Months Ended March 31, | ||||
2024 | 2023 | 2024 | 2023 | ||
SG&A as a % of revenue | 17.8 % | 17.6 % | 18.1 % | 18.1 % | |
SG&A as % of gross profit, excluding LIFO | 127.6 % | 79.7 % | 129.3 % | 82.1 % | |
(Loss) income from operations as a % of revenue | (5.8) % | 3.0 % | (6.1) % | 2.0 % | |
(Loss) income from operations as a % of gross profit, | (41.8) % | 13.5 % | (43.9) % | 9.1 % | |
(Loss) income before income taxes as % of revenue | (10.3) % | 0.5 % | (10.6) % | NM | |
Net (loss) income as a % of revenue | (7.9) % | 0.4 % | (10.6) % | NM | |
*NM - not meaningful |
Other Highlights | |||
March 31, 2024 | December 31, 2023 | ||
Store Count | |||
Dealerships | 25 | 24 | |
Days Supply* | |||
New vehicle inventory | 195 | 380 | |
Pre-owned vehicle inventory | 64 | 132 | |
*Days supply calculated based on current inventory levels and a 90-day historical average cost of sales level. |
Financial Covenants | |||
Requirement | March 31, 2024 | ||
Current ratio (excluding LIFO reserve as of March 31, 2024) | 1.05 | 1.07 | |
Minimum liquidity | 30,000,000 | 39,350,000 | |
Same-Store Results Summary | ||||||
Three Months Ended March 31, | Variance | |||||
($ in thousands except per vehicle data) | 2024 | 2023 | % | |||
Revenues | ||||||
New vehicle retail | $ 130,744 | $ 167,966 | (22.2) % | |||
Pre-owned vehicle retail | 66,715 | 81,961 | (18.6) % | |||
Vehicle wholesale | 5,046 | 1,708 | NM | |||
Finance and insurance | 15,221 | 16,129 | (5.6) % | |||
Service, body and parts and other | 11,866 | 14,950 | (20.6) % | |||
Total revenues | 229,592 | 282,714 | (18.8) % | |||
Gross profit | ||||||
New vehicle retail | 4,816 | 22,336 | (78.4) % | |||
Pre-owned vehicle retail | 7,729 | 16,672 | (53.6) % | |||
Vehicle wholesale | (1,526) | (13) | NM | |||
Finance and insurance | 14,615 | 15,466 | (5.5) % | |||
Service, body and parts and other | 6,511 | 8,032 | (18.9) % | |||
LIFO | (126) | (1,311) | NM | |||
Total gross profit | 32,019 | 61,182 | (47.7) % | |||
Gross profit margins | ||||||
New vehicle retail | 3.7 % | 13.3 % | (960) | bps | ||
Pre-owned vehicle retail | 11.6 % | 20.3 % | (870) | bps | ||
Vehicle wholesale | (30.2) % | (0.8) % | NM | bps | ||
Finance and insurance | 96.0 % | 95.9 % | 10 | bps | ||
Service, body and parts and other | 54.9 % | 53.7 % | 120 | bps | ||
Total gross profit margin | 13.9 % | 21.6 % | (770) | bps | ||
Total gross profit margin (excluding LIFO) | 14.0 % | 22.1 % | NM | bps | ||
Retail units sold | ||||||
New vehicle retail | 1,636 | 1,841 | (11.1) % | |||
Pre-owned vehicle retail | 1,190 | 1,248 | (4.6) % | |||
Total retail units sold | 2,826 | 3,089 | (8.5) % | |||
Average selling price per retail unit | ||||||
New vehicle retail | $ 79,917 | $ 91,236 | (12.4) % | |||
Pre-owned vehicle retail | 56,063 | 65,674 | (14.6) % | |||
Average gross profit per retail unit (excluding LIFO) | ||||||
New vehicle retail | $ 2,944 | $ 12,132 | (75.7) % | |||
Pre-owned vehicle retail | 6,495 | 13,359 | (51.4) % | |||
Finance and insurance | 5,172 | 5,007 | 3.3 % | |||
Condensed Consolidated Balance Sheets | |||
(In thousands) | March 31, 2024 | December 31, 2023 | |
Current assets | |||
Cash | 39,350 | 58,085 | |
Receivables, net of allowance for doubtful accounts | 27,244 | 22,694 | |
Inventories | 346,645 | 456,087 | |
Income tax receivable | 9,031 | 7,416 | |
Prepaid expenses and other | 1,421 | 2,614 | |
Total current assets | 423,691 | 546,896 | |
Long-term assets | |||
Property and equipment, net | 271,273 | 265,726 | |
Operating lease assets | 24,949 | 26,377 | |
Intangible assets, net | 78,276 | 80,546 | |
Other assets | 3,082 | 2,750 | |
Deferred income tax asset | 20,476 | 15,444 | |
Total assets | $ 821,747 | $ 937,739 | |
Current liabilities | |||
Floor plan notes payable | 357,832 | 446,783 | |
Revolving line of credit, current portion | 10,000 | — | |
Other current liabilities | 50,145 | 53,194 | |
Total current liabilities | 417,977 | 499,977 | |
Long-term liabilities | |||
Financing liability, non-current portion, net | 90,722 | 91,401 | |
Revolving line of credit, non-current portion | 39,500 | 49,500 | |
Long-term debt, non-current portion, net | 27,860 | 28,075 | |
Related party debt, non-current portion, net | 32,917 | 33,354 | |
Other long-term liabilities | 21,052 | 22,242 | |
Total liabilities | 630,028 | 724,549 | |
Series A Convertible Preferred Stock | 58,177 | 56,193 | |
Stockholders' Equity | 133,542 | 156,997 | |
Total liabilities and stockholders' equity | $ 821,747 | $ 937,739 | |
Condensed Consolidated Statements of Cash Flows | |||
Three Months Ended March 31, | |||
(In thousands) | 2024 | 2023 | |
Operating Activities | |||
Net loss | $ (21,980) | $ (276) | |
Adjustments to reconcile net loss to net cash provided by (used in) operating | |||
Stock-based compensation | 509 | 797 | |
Bad debt expense | 58 | 7 | |
Depreciation and amortization of property and equipment | 3,189 | 2,570 | |
Amortization of intangible assets | 2,271 | 1,833 | |
Amortization of debt discount | 74 | 91 | |
Non-cash operating lease (benefit) expense | (30) | 22 | |
Loss on sale of property and equipment | 29 | — | |
Deferred income taxes | (5,032) | — | |
Change in fair value of warrant liabilities | — | (856) | |
Impairment charges | — | 538 | |
Changes in operating assets and liabilities: | |||
Receivables | (4,608) | (3,359) | |
Inventories | 109,442 | (33,650) | |
Prepaid expenses and other | 1,193 | (2,766) | |
Income tax receivable/payable | (1,612) | (146) | |
Other assets | (333) | (603) | |
Accounts payable, accrued expenses and other current liabilities | (2,930) | 6,966 | |
Total adjustments | 102,220 | (28,556) | |
Net cash provided by (used in) operating activities | $ 80,240 | $ (28,832) | |
Three Months Ended March 31, | |||
(In thousands) | 2024 | 2023 | |
Net cash provided by (used in) operating activities, as reported | $ 80,240 | $ (28,832) | |
Net repayments on floor plan notes payable | (89,016) | (6,495) | |
Minus borrowings on floor plan notes payable associated with acquired new | — | (4,271) | |
Plus net increase to floor plan offset account | $ — | 40,000 | |
Net cash (used in) provided by operating activities, as adjusted | $ (8,776) | $ 402 | |
Reconciliation of Non-GAAP Measures | |||||
Three Months Ended March 31, 2024 | |||||
($ in thousands, except per share amounts) | As reported | LIFO | Transaction | Severance and | Adjusted |
Costs applicable to revenue | $ 232,820 | $ (126) | $ — | $ — | $ 232,694 |
Selling, general and administrative expenses | 48,886 | — | (557) | (92) | 48,237 |
(Loss) income from operations | (16,581) | 126 | 557 | 92 | (15,806) |
(Loss) income before income taxes | $ (28,780) | $ 126 | $ 557 | $ 92 | $ (28,005) |
Income tax benefit (expense) | 6,800 | (31) | (138) | (23) | 6,608 |
Net (loss) income | $ (21,980) | $ 95 | $ 419 | $ 69 | $ (21,397) |
Dividends on Series A Convertible Preferred | (1,984) | — | — | — | (1,984) |
Net loss and comprehensive loss attributable to | $ (23,964) | $ 95 | $ 419 | $ 69 | $ (23,381) |
Diluted loss per share | $ (1.67) | $ (1.63) | |||
Shares used for diluted calculation | 14,368,677 | 14,368,677 | |||
Three Months Ended March 31, 2023 | |||||||
($ in thousands, except per | As reported | Gain on | LIFO | Acquisition | Severance | Impairment | Adjusted |
Costs applicable to revenue | $ 231,765 | $ — | $ (1,311) | $ — | $ — | $ — | $ 230,454 |
Selling, general and | 53,532 | — | — | (262) | (653) | (629) | 51,988 |
Income from operations | 5,956 | — | 1,311 | 262 | 653 | 629 | 8,811 |
Gain on change in fair | 856 | (856) | — | — | — | — | — |
(Loss) income before | $ (419) | $ (856) | $ 1,311 | $ 262 | $ 653 | $ 629 | $ 1,580 |
Income tax benefit | 143 | — | (248) | (50) | (124) | (119) | (398) |
Net (loss) income | $ (276) | $ (856) | $ 1,063 | $ 212 | $ 529 | $ 510 | $ 1,182 |
Diluted (loss) per share | $ (0.17) | $ — | |||||
Shares used for diluted | 11,988,899 | 11,988,899 | |||||
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SOURCE Lazydays Holdings, Inc.
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