Lazydays Holdings, Inc. Reports Second Quarter 2018 Financial Results

TAMPA, Fla., Aug. 9, 2018 — Lazydays Holdings, Inc. (“Lazydays”)(NasdaqCM: LAZY) announced financial results for the second quarter ended June 30, 2018.

(PRNewsfoto/Lazydays)

Second Quarter Financial Results and Highlights:

  • On May 21, 2018, Lazydays announced entering into an agreement to acquire Shorewood RV Center located in Anoka, Minnesota. This acquisition closed on August 7, 2018.
  • Revenues decreased by $2.7 million, or 1.6%, from $164.8 million for the quarter ended June 30, 2017 to $162.1 million for the quarter ended June 30, 2018. Revenue from sales of recreational vehicles decreased by $2.3 million, or 1.6%, from $146.7 million for the three months ended June 30, 2017 to $144.4 million for the three months ended June 30, 2018 driven by decreased average selling price of new models due to the shift toward towable units as a greater portion of our sales mix.
  • Gross profit increased by $1.9 million, or 5.7%, from $33.8 million for the quarter ended June 30, 2017 to $35.7 million for the quarter ended June 30, 2018. The increase in gross profit was primarily driven by a shift toward pre-owned vehicles sales and an increase in the volume of towables as a percentage of our new vehicle sales.
  • Excluding transaction costs, selling, general, and administrative expenses increased by $4.7 million or 18.1%. This was primarily driven by increases in non-cash expenses including depreciation and amortization of property and equipment and amortization of intangible assets associated with the acquisition date accounting as well as the stock-based compensation expense related to options issued to management following the merger between Andina Acquisition Corp. II and Lazy Days’ R.V. Center, Inc. on March 15, 2018.
  • Adjusted EBITDA, a non-GAAP financial measure, increased by 2.5% from $9.7 million for the quarter ended June 30, 2017 to $10.0 million for the quarter ended June 30, 2018 primarily driven by the increase in gross profit described above.

“While we saw increases in volume during the second quarter, our topline revenues were lower driven by a shift toward towables. Despite the lower sales revenue, we were able to improve gross profit based upon our increased unit sales and our sales mix having higher margins as a percent of revenue,” stated Mr. William Murnane, Chairman and Chief Executive Officer of Lazydays. Mr. Murnane continued, “We are excited to have completed our first acquisition as a public company. We closed our acquisition of the assets of Shorewood RV Center on August 7th. This is an important milestone for Lazydays as geographic expansion into top tier RV markets is a key element of our growth strategy.”

Conference Call Information:
The Company has scheduled a conference call at 10:00AM Eastern Time on August 9, 2018 that will also be broadcast live over the internet. The call can be accessed as follows:

Via phone by dialing 1-844-343-9114 for domestic callers and 1-647-689-5132 for international callers. Please dial in and request Lazydays Holdings, Inc. Second Quarter 2018 Financial Results Conference Call; also via webcast by clicking the link.

A live audio webcast of the conference call will be available online at https://www.lazydays.com/investor-relations.

A telephonic replay of the conference call will be available until August 16, 2018 and may be accessed by calling 1-800-585-8367 or 1-416-621-4642 with a conference ID number of 2377938. The webcast will be archived in the Investor Relations section of the Company’s website.

About Lazydays
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 Tucson, Arizona, Minneapolis, Minnesota, and Loveland, Denver and Longmont, Colorado. Offering the nation’s largest selection of leading RV brands, Lazydays features more than 2,700 new and pre-owned RVs, over 300 service bays and two on-site campgrounds with over 700 RV campsites. Lazydays also has rental fleets in Florida, Minnesota and Colorado. In addition, Lazydays RV Accessories & More stores offer thousands of accessories and hard-to-find parts at all of our dealership locations.

Since 1976, Lazydays has built a reputation for providing an outstanding customer experience with exceptional service and product expertise, along with being a preferred place to rest and recharge with other RVers. Lazydays consistently provides the best RV purchase, service, rental and ownership experience, which is why more than a half-million RVers and their families visit Lazydays every year, making it their “home away from home.”

Lazydays Holdings, Inc. is a publicly listed company on the NASDAQ stock exchange under the ticker “LAZY.” Additional information can be found at https://www.lazydays.com/investor-relations.

Forward Looking Statements
This news release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements other than statements of historical fact are, or may be deemed to be, forward-looking statements. Forward-looking statements describe Lazydays future plans, projections, strategies and expectations, and are based on assumptions and involve a number of risks and uncertainties, many of which are beyond the control of Lazydays. Actual results could differ materially from those projected due to various factors, including economic conditions generally, conditions in the credit markets and changes in interest rates, conditions in the capital markets, and other factors described from time to time in Lazydays’ SEC reports and filings, which are available at www.sec.gov. Forward-looking statements contained in this news release speak only as of the date of this news release, and Lazydays undertakes no obligation to update these forward-looking statements to reflect subsequent events or circumstances, unless otherwise required by law.

Note on Presentation
For the three months ended June 30, 2018, the financial information presented represents the operating results of Lazydays Holdings, Inc. (labeled as “Successor” in the accompanying tables). For the three months ended June 30, 2017, the financial information presented represents the operating results of Lazy Days’ R.V. Center, Inc. (labeled as “Predecessor” in the accompanying tables). For the 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. for the period from January 1, 2018 to March 14, 2018. For the six months ended June 30, 2017, the financial information presented represents the operating results of Lazy Days’ R.V. Center, Inc.

Results of Operations for the Second Quarter and First Six Months of 2018

LAZYDAYS HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Dollar amounts in thousands)

(Unaudited)

Successor

Predecessor

Combined
Successor and
Predecessor

Predecessor

Three Months Ended June 30,

Six Months Ended June 30,

2018

2017

2018

2017

Revenues

New and pre-owned vehicles

$ 144,361

$ 146,742

$ 302,639

$ 297,573

Other

17,753

18,019

37,319

37,153

Total revenue

162,114

164,761

339,958

334,726

Cost of revenues

New and pre-owned vehicles

122,329

126,662

257,842

257,507

Other

4,039

4,294

7,624

7,753

Total cost of revenues

126,368

130,956

265,466

265,260

Gross profit

35,746

33,805

74,492

69,466

Transaction costs

252

68

3,496

114

Selling, general, and administrative expenses

30,253

25,609

58,858

52,642

Income from operations

5,241

8,128

12,138

16,710

Other income/expenses

Gain on sale of property and equipment

10

25

11

25

Interest expense

(2,233)

(2,293)

(4,937)

(4,455)

Total other expense

(2,223)

(2,268)

(4,926)

(4,430)

Income before income tax expense

3,018

5,860

7,212

12,280

Income tax expense

(1,176)

(2,232)

(2,343)

(4,677)

Net income

$ 1,842

$ 3,628

$ 4,869

$ 7,603

Balance Sheets as of June 30, 2018 and December 31, 2017

LAZYDAYS HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Dollar amounts in thousands)

Successor

Predecessor

As of

As of

June 30,

December 31,

2018

2017

(Unaudited)

ASSETS

Current assets

Cash

$ 35,569

$ 13,292

Receivables, net of allowance for doubtful accounts of $152 and $1,013
at June 30, 2018 and December 31, 2017, respectively

22,586

19,911

Inventories

115,267

114,170

Income tax receivable

3,188

Prepaid expenses and other

2,656

2,062

Total current assets

179,266

149,435

Property and equipment, net

71,952

45,669

Goodwill

28,513

25,216

Intangible assets, net

67,274

25,862

Deferred tax asset

144

Other assets

275

219

Total assets

$ 347,280

$ 246,545

LAZYDAYS HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS, CONTINUED

(Dollar amounts in thousands)

Successor

Predecessor

As of

As of

June 30,

December 31,

2018

2017

(Unaudited)

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities

Accounts payable, accrued expenses and other current liabilities

$ 21,438

$ 25,181

Income tax payable

1,536

Dividends payable

1,425

Contingent liability, current portion

667

Financing liability, current portion

631

595

Floor plan notes payable, net of debt discount

95,270

104,976

Long-term debt, current portion

2,905

1,870

Total current liabilities

121,669

134,825

Long term liabilities

Long term debt, non-current portion, net of debt discount

16,324

7,207

Financing liability, non-current portion, net of debt discount

55,400

53,680

Deferred tax liability

20,370

Total liabilities

213,763

195,712

Commitments and Contingencies

Series A Convertible Preferred Stock; 600,000 shares, designated,

54,983

issued, and outstanding as of June 30, 2018; liquidation

preference of $61,425 as of June 30, 2018

Stockholders’ Equity

Successor:

Preferred Stock, $0.0001 par value; 5,000,000 shares authorized;

Common stock, $0.0001par value; 100,000,000 shares authorized;

8,471,608 shares issued and outstanding at June 30, 2018

Additional paid-in capital

78,534

Accumulated deficit

Predecessor:

Preferred stock, $0.001 par value 150,000 shares authorized:

Senior Preferred Stock, convertible and 8% cumulative

dividend; 10,000 shares designated; -0- issued

and outstanding; liquidation preference $0

at December 31, 2017

Common stock, $0.001par value; 4,500,000 shares authorized;

3,333,331 and 3,333,166 shares issued and outstanding at December 31, 2017

3

Additional paid-in capital

49,756

Treasury stock, 165 shares, at cost

(11)

Retained earnings

1,085

Total stockholders’ equity

78,534

50,833

Total liabilities and stockholders’ equity

$ 347,280

$ 246,545

Non-Gaap Financial Measures

We use certain non-GAAP financial measures, such as EBITDA, Adjusted EBITDA, and Adjusted EBITDA Margin to enable us to analyze our performance and financial condition. We utilize these financial measures to manage our business on a day-to-day basis and believe that they are useful measures of performance. We believe that these measures are commonly used by analysts, investors and other interested parties to evaluate companies in our industry. We believe these non-GAAP measures provide expanded insight to measure revenue and cost performance, in addition to the standard GAAP-based financial measures. 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 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, 2018 and 2017 are shown in the tables below.

Successor

Predecessor

Combined Successor and
Predecessor

Predecessor

Three Months Ended June 30,

Six Months Ended June 30,

2018

2017

2018

2017

EBITDA

Net income

$ 1,842

$ 3,628

$ 4,869

$ 7,603

Interest expense, net

2,233

2,293

4,937

4,455

Depreciation and amortization of property and equipment

1,897

1,349

3,224

2,696

Amortization of intangible assets

794

185

1,080

372

Income tax expense

1,176

2,232

2,343

4,677

Subtotal EBITDA

7,942

9,687

16,453

19,803

Floor plan interest

(953)

(1,043)

(1,984)

(1,935)

LIFO adjustment

575

148

1,151

Transactions costs

252

68

3,496

114

Gain on sale of property and equipment

(10)

(25)

(11)

(25)

Severance costs

79

325

79

325

Stock-based compensation

2,644

122

3,269

241

Adjusted EBITDA

$ 9,954

$ 9,709

$ 21,450

$ 19,674

Successor

Predecessor

Combined Successor and
Predecessor

Predecessor

Three Months Ended June 30,

Six Months Ended June 30,

2018

2017

2018

2017

EBITDA margin

Net income margin

1.1%

2.2%

1.4%

2.3%

Interest expense, net

1.4%

1.4%

1.5%

1.3%

Depreciation and amortization of property and equipment

1.2%

0.8%

0.9%

0.8%

Amortization of intangible assets

0.5%

0.1%

0.3%

0.1%

Income tax expense

0.7%

1.4%

0.7%

1.4%

Subtotal EBITDA margin

4.9%

5.9%

4.8%

5.9%

Floor plan interest

-0.6%

-0.6%

-0.6%

-0.6%

LIFO adjustment

0.0%

0.3%

0.0%

0.3%

Transactions costs

0.2%

0.0%

1.0%

0.0%

Gain on sale of property and equipment

0.0%

0.0%

0.0%

0.0%

Severance costs

0.0%

0.2%

0.0%

0.1%

Stock-based compensation

1.6%

0.1%

1.0%

0.1%

Adjusted EBITDA margin

6.1%

5.9%

6.3%

5.9%

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