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LAZYDAYS REPORTS THIRD QUARTER 2022 FINANCIAL RESULTS

TAMPA, Fla., Nov. 3, 2022 — Lazydays (NasdaqCM: LAZY) today reported financial results for the third quarter ended September 30, 2022.

Third quarter revenue increased to $333.8 million from $318.7 million in the third quarter of 2021.

Third quarter 2022 net income per diluted share was $0.35 compared to $1.16 in the third quarter of 2021. Adjusted third quarter 2022 net income per diluted share was $0.54 compared to $1.16 for the same period in 2021. Third quarter net income for the quarter was $7.7 million, compared to $31.0 million in the third quarter of 2021. Third quarter 2022 adjusted net income was $11.1 million, compared to $28.8 million for the same period in 2021.

As shown in the attached non-GAAP reconciliation tables, the 2022 third quarter adjusted results exclude a net non-core charge of $0.19 related to the effects of our LIFO adjustment, changes in fair value of warrant liabilities, and certain compliance, legal and executive transition costs. Net non-core charges had no impact on 2021 per share third quarter adjusted results.

Corporate Development

In July 2022 we acquired Dave’s Claremore RV in Tulsa, Oklahoma. In October 2022 we added sales operations to our existing service store in Houston, Texas. We estimate these locations will add anticipated annual revenues of over $60 million. With these additions, we operate 18 stores across the United States.

Balance Sheet Update and Share Repurchases

We ended the third quarter with $100.8 million in cash and $61.7 million in availability under our credit facility. Additionally, approximately $20 million of our real estate is currently unfinanced, which we estimate could provide $15 million in capital, for total potential liquidity of $177.5 million.

Year to date through November 3, 2022, we have deployed $44.3 million to repurchase approximately 2.7 million shares of common stock at a weighted average price of $16.54 per share. This represents 18.6% of shares outstanding. Under our existing repurchase authorization, approximately $13.7 million remains available.

Leadership Updates

As previously announced, John North was named Chief Executive Officer on September 6, 2022. Nick Tomashot announced his intention to resign as Chief Financial Officer effective November 15, 2022. He will remain as an advisor through October 31, 2023.

Kelly Porter joined Lazydays on October 31, 2022. She will assume the role of Chief Financial Officer upon the resignation of Mr. Tomashot. In connection with the commencement her service, Lazydays granted Ms. Porter a restricted stock unit award covering 55,762 shares of common stock. This award was granted as an inducement material to Ms. Porter becoming a new employee in accordance with The Nasdaq Stock Market Listing Rule 5635(c)(4). This restricted stock unit award will vest over three years, with one-third of the award vesting annually on October 31, 2023, 2024 and 2025.

Conference Call Information:

The Company has scheduled a conference call at 10:00 AM Eastern Time on Thursday, November 3, 2022 that will also be broadcast live over the internet.

The conference call may be accessed by telephone at (888) 440-6203 using Conference ID 1488544. To listen live on our website or for replay, visit https://www.lazydays.com/investor-relations.

ABOUT LAZYDAYS RV

As an iconic brand in the RV industry, Lazydays, The RV Authority, consistently provides the best RV sales, service, and ownership experience, which is why RVers and their families become Customers for Life. Lazydays continues to add locations at a rapid pace as it executes its geographic expansion strategy that includes both acquisitions and greenfields.

Since 1976, Lazydays RV has built a reputation for providing an outstanding customer experience with exceptional service excellence and unparalleled product expertise, along with being a preferred place to rest and recharge with other RVers. By offering the largest selection of RV brands from the nation’s leading manufacturers, state-of-the-art service facilities, and thousands of accessories and hard-to-find parts, Lazydays RV provides everything RVers need and want.

Lazydays Holdings, Inc. is a publicly listed company on the Nasdaq stock exchange under the ticker “LAZY.”

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 ability to improve store performance;
  • Anticipated acquisition opportunities and additions of dealership locations to our portfolio in the future, and our ability to improve earnings and achieve returns on investments;
  • Anticipated revenues from acquired and open point stores; and
  • Anticipated availability of liquidity from our credit facility and unfinanced operating real estate.

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 presentation contains non-GAAP financial measures such as adjusted net income and diluted earnings per share, adjusted SG&A as a percentage of revenue and gross profit, adjusted operating margin, adjusted operating profit as a percentage of revenue and gross profit, adjusted pre-tax margin and net profit margin, EBITDA, adjusted EBITDA, leveraged EBITDA and adjusted total debt. 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, but also to consider them with the most directly comparable GAAP measures. We present cash flows from operations in the attached 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.

Contact:
Angela Johnson
+1 (813) 204-4099
investors@lazydays.com

Results of Operations

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

For the Three Months Ended
September 30

%
Increase

For the Nine Months Ended
September 30,

%
Increase

2022

2021

(Decrease)

2022

2021

(Decrease)

Revenues

New vehicle retail

$ 203,456

$ 181,395

12.2 %

$ 640,078

$ 550,366

16.3 %

Pre-owned vehicle retail

90,725

101,189

(10.3 %)

319,655

260,592

22.7 %

Vehicle wholesale

6,622

3,197

107.1 %

18,850

9,917

90.1 %

Finance and insurance

18,574

20,130

(7.7 %)

61,591

54,476

13.1 %

Service, body and parts, other

14,381

12,817

12.2 %

43,297

37,161

16.5 %

Total revenues

333,758

318,728

4.7 %

1,083,471

912,512

18.7 %

Cost of sales

New vehicle

169,447

144,220

17.5 %

517,161

446,746

15.8 %

Pre-owned vehicle

70,468

74,526

(5.4 %)

242,378

194,424

24.7 %

Vehicle wholesale

6,812

3,085

120.8 %

19,226

9,391

104.7 %

Finance and insurance

681

611

11.5 %

2,227

1,795

24.1 %

Service, body and parts, other

6,603

6,678

(1.1 %)

19,932

18,152

9.8 %

LIFO

3,904

(655)

NM

8,230

1,409

NM

Total cost of sales

257,915

228,465

12.9 %

809,154

671,917

20.4 %

Depreciation and amortization

4,202

3,717

13.0 %

12,338

10,276

20.1 %

Selling, general, and administrative expenses

55,820

48,407

15.3 %

174,569

132,452

31.8 %

Income from operations

15,821

38,139

(58.5 %)

87,410

97,867

(10.7 %)

Other income/expenses

PPP loan forgiveness

–

–

–

6,626

(100.0 %)

Interest expense

(4,603)

(2,006)

129.5 %

(10,900)

(5,733)

90.1 %

Change in fair value of warrant liabilities

(521)

2,162

(124.1 %)

10,671

(11,090)

(196.2 %)

Inducement Loss on Warrant Conversion

–

–

–

(246)

(100.0 %)

Total other income (expense)

(5,124)

156

NM

(229)

(10,443)

NM

Income before income tax expense

10,697

38,295

(72.1 %)

87,181

87,424

(0.3 %)

Income tax expense

(3,032)

(7,326)

(58.6 %)

(19,388)

(22,299)

(13.1 %)

Net income

$ 7,665

$ 30,969

(75.2 %)

$ 67,793

$ 65,125

4.1 %

Dividends on Series A Convertible Preferred Stock

(1,210)

(1,210)

0.0 %

(3,590)

(3,591)

(0.0 %)

Net income attributable to common stock and participating securities

$ 6,455

$ 29,759

(78.3 %)

$ 64,203

$ 61,534

4.3 %

EPS:

Basic

$ 0.38

$ 1.69

(77.5 %)

$ 3.57

$ 3.58

(0.3 %)

Diluted

$ 0.35

$ 1.16

(69.8 %)

$ 2.39

$ 2.90

(17.6 %)

Weighted average shares outstanding:

Basic

11,132,317

11,556,423

(3.7 %)

11,930,649

11,146,020

7.0 %

Diluted

11,883,985

14,924,531

(20.4 %)

13,351,591

13,774,331

(3.1 %)

NM – Not meaningful

Total Results Summary

Three Months Ended

%

Nine months ended

%

September 30

Increase

September 30

Increase

2022

2021

(Decrease)

2022

2021

(Decrease)

Gross Margin

New Vehicle Retail

16.7 %

20.5 %

(378) bps

19.2 %

18.8 %

38 bps

Pre-Owned Vehicle Retail

22.3 %

26.3 %

(402)

24.2 %

25.4 %

(122)

Vehicle Wholesale

(2.9 %)

3.5 %

(637)

(2.0 %)

5.3 %

(730)

Finance & Insurance

96.4 %

97.0 %

(61)

96.4 %

96.7 %

(30)

Service, Body & Parts

54.1 %

47.9 %

617

54.0 %

51.2 %

280

Total Gross Margin

22.7 %

28.3 %

(560)

25.3 %

26.4 %

(105)

Total Gross Margin (Ex-LIFO)

23.9 %

28.1 %

(422)

26.1 %

26.5 %

(44)

Unit Sales

New Vehicle Retail

2,377

2,192

8.4 %

7,103

7,097

0.1 %

Used Vehicle Retail

1,335

1,417

(5.8 %)

4,410

3,917

12.6 %

Total Retail Units Sold

3,712

3,609

2.9 %

11,512

11,010

4.6 %

Average Selling Price

New Vehicle Retail

$85,594

$82,753

3.4 %

$90,126

$77,571

16.2 %

Used Vehicle Retail

67,959

71,411

(4.8 %)

72,484

66,562

8.9 %

Average Gross Profit Per Unit (ex-LIFO)

New Vehicle Retail

$14,308

$16,959

(15.6 %)

$17,307

$14,604

18.5 %

Used Vehicle Retail

15,174

18,816

(19.4 %)

17,523

16,901

3.7 %

Finance and Insurance

4,820

5,408

(10.9 %)

5,157

4,785

7.8 %

Total Vehicle Retail

19,388

23,128

(16.2 %)

22,514

20,254

11.2 %

Revenue Mix

New Vehicle Retail

61.0 %

56.9 %

59.1 %

60.3 %

Pre-Owned Vehicle Retail

27.2 %

31.7 %

29.5 %

28.6 %

Vehicle Wholesale

2.0 %

1.0 %

1.7 %

1.1 %

Finance & Insurance

5.6 %

6.3 %

5.7 %

6.0 %

Service, Body & Parts, Other

4.2 %

4.1 %

4.0 %

4.0 %

100.0 %

100.0 %

100.0 %

100.0 %

Gross Profit Mix

New Vehicle Retail

44.8 %

41.2 %

44.8 %

43.1 %

Pre-Owned Vehicle Retail

26.7 %

29.5 %

28.2 %

27.5 %

Vehicle Wholesale

(0.3 %)

0.1 %

(0.1 %)

0.2 %

Finance & Insurance

23.6 %

21.6 %

21.6 %

21.9 %

Service, Body & Parts, Other

10.3 %

6.8 %

8.5 %

7.9 %

LIFO

(5.1 %)

0.8 %

(3.0 %)

(0.6 %)

100.0 %

100.0 %

100.0 %

100.0 %

Other Metrics

Adjusted

As Reported

Adjusted

As Reported

Three months ended
September 30,

Three months ended
September 30,

Nine months ended
September 30,

Nine months ended
September 30,

2022

2021

2022

2021

2022

2021

2022

2021

SG&A as a % of revenue

17 %

15 %

16 %

15 %

16 %

14 %

16 %

14 %

SG&A as a % of gross profit

73 %

53 %

73 %

53 %

63 %

54 %

63 %

54 %

Operating income as a % of revenue

6 %

12 %

5 %

12 %

9 %

11 %

8 %

11 %

Operating income as a % of gross profit

25 %

43 %

21 %

42 %

35 %

42 %

32 %

41 %

Pre-tax income as a % of revenue

4 %

12 %

3 %

12 %

8 %

10 %

8 %

10 %

Net income as a % of revenue

3 %

9 %

2 %

10 %

6 %

8 %

6 %

7 %

Same-Store Results Summary

Three months ended

%

Nine months ended

%

September 30

Increase

September 30

Increase

2022

2021

(Decrease)

2022

2021

(Decrease)

Revenue

New Vehicle Retail

$183.8

$181.4

1.3 %

$550.9

$550.4

0.1 %

Pre-Owned Vehicle Retail

83.3

101.2

(17.7 %)

289.0

260.6

10.9 %

Vehicle Wholesale

6.2

3.2

93.5 %

17.4

9.9

75.7 %

Finance & Insurance

17.0

20.1

(15.5 %)

54.2

54.5

(0.5 %)

Service, Body & Parts, Other

13.3

12.8

3.5 %

38.0

37.2

2.4 %

Total Revenue

303.5

318.7

(4.8 %)

949.5

912.5

4.1 %

Gross Profit

New Vehicle Retail

$30.4

$37.2

(18.2 %)

$103.6

$103.6

(0.0 %)

Pre-Owned Vehicle Retail

18.3

26.7

(31.3 %)

68.4

66.2

3.3 %

Vehicle Wholesale

(0.2)

0.1

NM

(0.4)

0.5

NM

Finance & Insurance

16.4

19.5

(15.9 %)

52.3

52.7

(0.7 %)

Service, Body & Parts, Other

7.2

6.1

17.8 %

20.7

19.0

8.8 %

LIFO

(3.9)

0.7

NM

(8.2)

(1.4)

NM

Total Gross Profit

68.3

90.3

(24.4 %)

236.3

240.6

(1.8 %)

Gross Margin

New Vehicle Retail

16.5 %

20.5 %

(395) bps

18.8 %

18.8 %

(2) bps

Pre-Owned Vehicle Retail

22.0 %

26.3 %

(435)

23.7 %

25.4 %

(173)

Vehicle Wholesale

(3.2 %)

3.5 %

(668)

(2.3 %)

5.3 %

(759)

Finance & Insurance

96.5 %

97.0 %

(43)

96.5 %

96.7 %

(18)

Service, Body & Parts

54.5 %

47.9 %

666

54.4 %

51.2 %

324

Total Gross Margin

22.5 %

28.3 %

(582)

24.9 %

26.4 %

(148)

Total Gross Margin (Ex-LIFO)

23.8 %

28.1 %

(433)

25.8 %

26.5 %

(76)

Unit Sales

New Vehicle Retail

2,123

2,192

(3.1 %)

5,950

7,095

(16.1 %)

Used Vehicle Retail

1,212

1,417

(14.5 %)

3,900

3,915

(0.4 %)

Total Retail Units Sold

3,335

3,609

(7.6 %)

9,850

11,010

(10.5 %)

Average Selling Price

New Vehicle Retail

$86,569

$82,753

4.6 %

$92,584

$77,571

19.4 %

Used Vehicle Retail

68,718

71,411

(3.8 %)

74,093

66,562

11.3 %

Average Gross Profit Per Unit (ex-LIFO)

New Vehicle Retail

$14,319

$16,959

(15.6 %)

$17,408

$14,604

19.2 %

Used Vehicle Retail

15,118

18,816

(19.7 %)

17,532

16,901

3.7 %

Finance and Insurance

4,925

5,408

(8.9 %)

5,312

4,785

11.0 %

Total Vehicle Retail

19,475

23,128

(15.8 %)

22,728

20,254

12.2 %

NM – Not meaningful

Other Highlights

As of

September 30, 2022

December 31, 2021

September 30, 2021

Store Count

Dealership

17

15

15

Service Center

1

1

1

Days Supply*

New vehicle inventory

136

83

91

Used vehicle inventory

109

58

89

* Days supply calculated based on current inventory levels and a 90 day historical average cost of sales level.

Financial Covenants

Requirement

As of
September 30, 2022

Fixed charge coverage ratio

Not less than 1.25 to 1

2.94 to 1

Leverage ratio

Not more than 3.0 to 1

0.21 to 1

Condensed Consolidated Balance Sheets

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

As of

As of

September 30, 2022

December 31, 2021

Cash

$ 100,774

$ 98,120

Receivables, net

25,079

30,604

Inventories

319,436

242,906

Other current assets

9,616

4,005

Total current assets

454,905

375,635

Property and equipment, net

145,217

120,748

Intangible assets, net

166,958

168,118

Other assets

29,986

33,627

Total assets

$ 797,066

$ 698,128

Floor plan notes payable, net

290,298

192,220

Other current liabilities

58,514

74,130

Total current liabilities

348,812

266,350

Financing liability, non-current portion, net

108,990

102,466

Long term debt, non-current portion, net

10,924

13,684

Other current liabilities

41,231

54,519

Total liabilities

509,957

437,019

Series A Convertible Preferred Stock

54,983

54,983

Stockholders’ Equity

232,126

206,126

Total liabilities and stockholders’ equity

$ 797,066

$ 698,128

Condensed Statements of Cash Flows

(Dollar amounts in thousands)

For the nine months ended
September 30, 2022

For the nine months ended
September 30, 2021

Cash Flows From Operating Activities

Net income

$ 67,793

$ 65,125

Adjustments to reconcile net income to net cash

provided by operating activities:

Stock based compensation

2,083

815

Bad debt expense

76

11

Depreciation and amortization of property and equipment

6,893

6,068

Amortization of intangible assets

5,445

4,208

Amortization of debt discount

248

178

Non-cash lease expense

131

42

Loss (gain) on sale of property and equipment

(18)

136

PPP loan forgiveness

–

(6,626)

Change in fair value of warrant liabilities

(10,671)

11,090

Inducement loss on warrant conversion

–

246

Changes in operating assets and liabilities:

Receivables

5,884

(8,770)

Inventories

(68,046)

(4,801)

Prepaid expenses and other

(1,027)

(1,229)

Income tax receivable/payable

(4,584)

2,976

Other assets

(591)

(109)

Accounts payable, accrued expenses

and other current liabilities

(11,124)

16,872

Total Adjustments

(75,301)

21,107

Net Cash (Used In) Provided By Operating Activities

(7,508)

86,232

For the nine months ended
September 30, 2022

For the nine months ended
September 30, 2021

Net cash provided by operating activities

As Reported

$ (7,508)

$ 86,232

Floor plan notes payable, net

89,835

(23,995)

Adjusted

$ 82,327

$ 62,237

Reconciliation of Non-GAAP Adjustments

Three months ended

Nine months ended

September 30

September 30

2022

2021

2022

2021

Net Income

$7.7

$31.0

$67.8

$65.1

Basic Earnings per share

$0.38

$1.69

$3.57

$3.58

Fully diluted earnings per share

$0.35

$1.16

$2.39

$2.90

Adjustments (pre-tax)

LIFO Adjustment

$3.9

($0.7)

$8.2

$1.4

Transaction costs

–

0.7

0.1

1.5

PPP Loan forgiveness

–

–

–

(6.6)

Gain/(Loss) on sale of property and equipment

–

–

–

–

Loss (gain) on change in fair value of warrant liabilities *

0.5

(2.2)

(10.7)

11.1

Inducement loss on warrant conversions

–

–

–

0.2

Compliance/Legal costs/Executive Transitions

0.1

–

0.6

–

Tax impact of adjustments at effective rate

(1.1)

(0.0)

(2.0)

0.8

Net Adjustments

$3.4

($2.1)

($3.8)

$8.4

Adjusted Net Income

$11.1

$28.8

$64.0

$73.5

Basic Earnings per share

$0.58

$1.69

$3.36

$4.07

Fully diluted earnings per share

$0.54

$1.16

$2.74

$3.29

* In periods where the change in fair value of warrant liabilities is a gain, the diluted EPS calculation is not

affected by this line item

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SOURCE Lazydays Holdings, Inc.