Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2020 | May 06, 2020 | |
Document And Entity Information | ||
Entity Registrant Name | Lazydays Holdings, Inc. | |
Entity Central Index Key | 0001721741 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2020 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity's Reporting Status Current | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business Flag | true | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 8,506,666 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2020 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Current assets | ||
Cash | $ 43,269 | $ 31,458 |
Receivables, net of allowance for doubtful accounts of $374 and $382 at March 31, 2020 and December 31, 2019, respectively | 16,473 | 16,025 |
Inventories | 153,284 | 160,864 |
Income tax receivable | 326 | |
Prepaid expenses and other | 3,045 | 2,999 |
Total current assets | 216,071 | 211,672 |
Property and equipment, net | 87,048 | 86,876 |
Operating lease assets | 17,953 | |
Goodwill | 38,979 | 38,979 |
Intangible assets, net | 67,807 | 68,854 |
Other assets | 272 | 255 |
Total assets | 428,130 | 406,636 |
Current liabilities | ||
Accounts payable, accrued expenses and other current liabilities | 25,649 | 23,855 |
Income taxes payable | 974 | |
Floor plan notes payable, net of debt discount | 133,425 | 143,949 |
Financing liability, current portion | 982 | 936 |
Long-term debt, current portion | 17,332 | 5,993 |
Operating lease liability, current portion | 3,164 | |
Total current liabilities | 181,526 | 174,733 |
Long term liabilities | ||
Financing liability, non-current portion, net of debt discount | 68,158 | 63,557 |
Long term debt, non-current portion, net of debt discount | 7,746 | 15,573 |
Operating lease liability, non-current portion | 14,405 | |
Deferred tax liability | 16,450 | 16,450 |
Total liabilities | 288,285 | 270,313 |
Commitments and Contingencies | ||
Series A Convertible Preferred Stock; 600,000 shares, designated, issued, and outstanding as of March 31, 2020 and December 31, 2019; liquidation preference of $67,553 and $65,910 as of March 31, 2020 and December 31, 2019, respectively | 62,537 | 60,893 |
Stockholders' Equity | ||
Preferred Stock, $0.0001 par value; 5,000,000 shares authorized; | ||
Common stock, $0.0001 par value; 100,000,000 shares authorized; 8,506,666 shares issued and outstanding at March 31, 2020 and December 31, 2019, respectively | ||
Additional paid-in capital | 78,222 | 79,186 |
Treasury Stock, at cost, 122,729 and 78,000 shares at March 31, 2020 and December 31, 2019, respectively | (459) | (314) |
Accumulated deficit | (455) | (3,442) |
Total stockholders' equity | 77,308 | 75,430 |
Total liabilities and stockholders' equity | $ 428,130 | $ 406,636 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts | $ 374 | $ 382 |
Series A convertible preferred stock, shares designated | 600,000 | 600,000 |
Series A convertible preferred stock, shares issued | 600,000 | 600,000 |
Series A convertible preferred stock, shares outstanding | 600,000 | 600,000 |
Series A convertible preferred stock, liquidation preference, value | $ 67,553 | $ 65,910 |
Preferred stock, par value | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 8,506,666 | 8,506,666 |
Common stock, shares outstanding | 8,506,666 | 8,506,666 |
Treasury stock, shares | 122,729 | 78,000 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Income (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Revenues | ||
New and pre-owned vehicles | $ 167,188 | $ 152,634 |
Other | 23,666 | 20,423 |
Total revenues | 190,854 | 173,057 |
Cost applicable to revenues (excluding depreciation and amortization shown below) | ||
New and pre-owned vehicles (including adjustments to the LIFO reserve of $195 and $247, respectively) | 143,402 | 131,117 |
Other | 5,979 | 4,993 |
Total cost applicable to revenue | 149,381 | 136,110 |
Transaction costs | 256 | 228 |
Depreciation and amortization | 2,637 | 2,695 |
Stock-based compensation | 680 | 1,514 |
Selling, general, and administrative expenses | 31,116 | 26,452 |
Income from operations | 6,784 | 6,058 |
Other income/expenses | ||
Loss on sale of property and equipment | (2) | (2) |
Interest expense | (2,495) | (3,027) |
Total other expense | (2,497) | (3,029) |
Income before income tax expense | 4,287 | 3,029 |
Income tax expense | (1,300) | (1,185) |
Net income | 2,987 | 1,844 |
Dividends on Series A Convertible Preferred Stock | (1,644) | (1,184) |
Net income (loss) attributable to common stock and participating securities | $ 1,343 | $ 660 |
EPS: | ||
Basic and diluted income per share | $ 0.08 | $ 0.04 |
Weighted average shares outstanding - basic and diluted | 9,757,036 | 9,695,234 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Income (Unaudited) (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Income Statement [Abstract] | ||
Adjustments to LIFO reserve | $ 195 | $ 247 |
Condensed Consolidated Statem_3
Condensed Consolidated Statement of Stockholders' Equity (Unaudited) - USD ($) $ in Thousands | Common Stock [Member] | Treasury Stock [Member] | Additional Paid-In Capital [Member] | Accumulated Deficit [Member] | Total |
Balance at Dec. 31, 2018 | $ 80,606 | $ (4,156) | $ 76,450 | ||
Balance, shares at Dec. 31, 2018 | 8,471,608 | ||||
Repurchase of Unit Purchase Options | (500) | (500) | |||
Stock-based compensation | 1,514 | 1,514 | |||
Dividends on Series A preferred stock | (1,184) | (1,184) | |||
Repurchase of Treasury Stock | |||||
Net income | 1,844 | 1,844 | |||
Balance at Mar. 31, 2019 | 80,436 | (2,312) | 78,124 | ||
Balance, shares at Mar. 31, 2019 | 8,471,608 | ||||
Balance at Dec. 31, 2019 | $ (314) | 79,186 | (3,442) | 75,430 | |
Balance, shares at Dec. 31, 2019 | 8,506,666 | 78,000 | |||
Stock-based compensation | 680 | 680 | |||
Dividends on Series A preferred stock | (1,644) | (1,644) | |||
Repurchase of Treasury Stock | $ (145) | 145 | |||
Repurchase of Treasury Stock, shares | 44,729 | ||||
Net income | 2,987 | 2,987 | |||
Balance at Mar. 31, 2020 | $ (459) | $ 78,222 | $ (455) | $ 77,308 | |
Balance, shares at Mar. 31, 2020 | 122,729 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Cash Flows From Operating Activities | ||
Net income | $ 2,987 | $ 1,844 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Stock based compensation | 680 | 1,514 |
Bad debt expense | 7 | 23 |
Depreciation and amortization of property and equipment | 1,589 | 1,741 |
Amortization of intangible assets | 1,048 | 954 |
Amortization of debt discount | 43 | 132 |
Non-cash lease expense | (108) | |
Loss/(gain) on sale of property and equipment | 2 | 2 |
Changes in operating assets and liabilities: | ||
Receivables | (455) | (8,754) |
Inventories | 7,580 | 24,276 |
Prepaid expenses and other | (46) | 117 |
Income tax receivable/payable | 1,300 | 1,175 |
Other assets | (17) | 33 |
Accounts payable, accrued expenses and other current liabilities | 1,793 | 5,847 |
Operating lease liability | (276) | |
Total Adjustments | 13,140 | 27,060 |
Net Cash Provided By Operating Activities | 16,127 | 28,904 |
Cash Flows From Investing Activities | ||
Proceeds from sales of property and equipment | 4,932 | 20 |
Purchases of property and equipment | (1,774) | (3,128) |
Net Cash Used In Investing Activities | 3,158 | (3,108) |
Cash Flows From Financing Activities | ||
Net (repayments)/borrowings under M&T bank floor plan | (10,554) | (19,878) |
Borrowings under long term debt with M&T bank | 5,005 | |
Repayment of long term debt with M&T bank | (725) | (725) |
Proceeds from financing liability | 1,519 | |
Repayments of financing liability | (226) | (175) |
Payment of dividends on Series A preferred stock | (1,210) | |
Repurchase of Unit Purchase Options | (500) | |
Repurchase of Treasury Stock | (145) | |
Repayments of acquisition notes payable | (761) | (370) |
Loan issuance costs | (68) | |
Net Cash Used In Financing Activities | (7,474) | (21,339) |
Net Increase In Cash | 11,811 | 4,457 |
Cash - Beginning | 31,458 | 26,603 |
Cash - Ending | 43,269 | 31,060 |
Supplemental Disclosures of Cash Flow Information: | ||
Cash paid during the period for interest | 2,592 | 2,877 |
Cash paid during the period for income taxes net of refunds received | 10 | |
Non-Cash Investing and Financing Activities | ||
Rental vehicles transferred to inventory, net | 138 | |
Fixed assets purchased with accounts payable | 345 | |
Accrued dividends on Series A Preferred Stock | 1,644 | 1,184 |
Operating lease assets - ASC 842 adoption | (17,781) | |
Operating lease liabilities - ASC 842 adoption | $ 17,845 |
Business Organization and Natur
Business Organization and Nature of Operations | 3 Months Ended |
Mar. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Business Organization and Nature of Operations | NOTE 1 – BUSINESS ORGANIZATION AND NATURE OF OPERATIONS Lazydays Holdings, Inc. (the “Company” or “Holdings”), a Delaware corporation, was originally formed on October 24, 2017, as a wholly owned subsidiary of Andina Acquisition Corp. II (“Andina”), an exempted company incorporated in the Cayman Islands on July 1, 2015 for the purpose of entering into a merger, share exchange, asset acquisition, share purchase, recapitalization, reorganization or other similar business combination with one or more business targets. On October 27, 2017, a merger agreement was entered into by and among Andina, Andina II Holdco Corp. (“Holdco”), a Delaware corporation and wholly-owned subsidiary of Andina, Andina II Merger Sub Inc., a Delaware corporation, and a wholly-owned subsidiary of Holdco (“Merger Sub”), Lazy Days’ R.V. Center, Inc. (and its subsidiaries), a Delaware corporation (“Lazydays RV”), and solely for certain purposes set forth in the merger agreement, A. Lorne Weil (the “Merger Agreement”). The Merger Agreement provided for a business combination transaction by means of (i) the merger of Andina with and into Holdco, with Holdco surviving, changing its name to Lazydays Holdings, Inc. and becoming a new public company (the “Redomestication Merger”) and (ii) the merger of Lazydays RV with and into Merger Sub with Lazydays RV surviving and becoming a direct wholly-owned subsidiary of Holdings (the “Transaction Merger” and together with the Redomestication Merger, the “Mergers”). On March 15, 2018, the Mergers were consummated. Lazydays RV has subsidiaries that operate recreational vehicle (“RV”) dealerships in seven locations including two in the state of Florida, two in the state of Colorado, one in the state of Arizona, one in the state of Tennessee and one in the state of Minnesota. Lazydays RV also has a dedicated service center location near Houston, Texas which opened in February 2020. Through its subsidiaries, Lazydays RV sells and services new and pre-owned recreational vehicles, and sells related parts and accessories. It also offers to its customers such ancillary services as extended service contracts, overnight campground and restaurant facilities. The Company also arranges financing for vehicle sales through third-party financing sources. |
Significant Accounting Policies
Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) and the rules and regulations of the Securities and Exchange Commission (“SEC”). Accordingly, they do not include all the information and footnotes required by generally accepted accounting principles for complete financial statements. For additional information, these condensed consolidated financial statements should be read in conjunction with Lazydays Holdings, Inc.’s and Lazy Days’ R.V. Center, Inc.’s consolidated financial statements and notes as of December 31, 2019 and 2018 and for the years then ended, included in the Annual Report on Form 10-K filed with the SEC on March 20, 2020. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Principles of Consolidation The condensed consolidated financial statements include the accounts of Holdings, Lazydays RV and its wholly owned subsidiary LDRV Holdings Corp. LDRV Holdings Corp is the sole owner of Lazydays Land Holdings, LLC, Lazydays Tampa Land Holdings, LLC, Lazydays RV America, LLC, Lazydays RV Discount, LLC, Lazydays Mile Hi RV, LLC, LDRV of Tennessee LLC, Lazydays of Minneapolis LLC, Lazydays of Central Florida, LLC, Lone Star Acquisition LLC, Lone Star Diversified LLC, LDRV Acquisition Corp of Nashville LLC, and LDRV of Nashville LLC (collectively, the “Company”, “Lazydays” or “Successor”). All significant inter-company accounts and transactions have been eliminated in consolidation. Use of Estimates in the Preparation of Financial Statements The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates include the assumptions used in the valuation of the net assets acquired in business combinations, goodwill and other intangible assets, provision for charge-backs, inventory write-downs, allowance for doubtful accounts and stock-based compensation. Revenue Recognition In May 2014, the Financial Accounting Standards Board (“FASB”) issued accounting standard updates which clarified principles for recognizing revenue arising from contracts with customers (Accounting Standards Codification (“ASC”) 606 (“ASC 606”) which superseded existing accounting guidance for revenue recognition. The core principle of the revenue standard is that an entity recognizes revenue to depict the transfer of promised goods or services to clients in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The new guidance applies a five-step model for revenue measurement and recognition and also requires increased disclosures including the nature, amount, timing, and uncertainty of revenue and cash flows related to contracts with clients. The Company adopted the new revenue recognition standard at the beginning of the first quarter of fiscal 2019 using the modified retrospective method of adoption and applied the guidance to those contracts that were not completed as of December 31, 2018. Based on the evaluation, the Company did not identify customer contracts which will require different recognition under the new guidance. Revenues are recognized when control of the promised goods or services is transferred to the customers at the expected amount the Company is entitled to for such goods and services. Taxes collected on revenue producing transactions are excluded from revenue in the condensed consolidated statements of income. The following table represents the Company’s disaggregation of revenue: For the three For the three March 31, 2019 New vehicle revenue $ 102,444 $ 97,812 Preowned vehicle revenue 64,744 54,822 Parts, accessories, and related services 10,765 8,775 Finance and insurance revenue 11,272 9,715 Campground, rental, and other revenue 1,629 1,933 $ 190,854 $ 173,057 Revenue from the sale of vehicle contracts is recognized at a point in time on delivery, transfer of title and completion of financing arrangements. Revenue from the sale of parts, accessories, and related service is recognized as services and parts are delivered or as a customer approves elements of the completion of service. Revenue from the sale of parts, accessories, and related service is recognized in other revenue in the accompanying condensed consolidated statements of income. Revenue from the rental of vehicles is recognized pro rata over the period of the rental agreement. The rental agreements are generally short-term in nature. Revenue from rentals is included in other revenue in the accompanying condensed consolidated statements of income. Campground revenue is also recognized over the time period of use of the campground. The Company receives commissions from the sale of insurance and vehicle service contracts to customers. In addition, the Company arranges financing for customers through various financial institutions and receives commissions. The Company may be charged back (“charge-backs”) for financing fees, insurance or vehicle service contract commissions in the event of early termination of the contracts by the customers. The revenues from financing fees and commissions are recorded at the time of the sale of the vehicles and an allowance for future charge-backs is established based on historical operating results and the termination provision of the applicable contracts. The estimates for future chargebacks require judgment by management, and as a result there is an element of risk associated with these revenue streams. The Company recognized finance and insurance revenues, less the additions to the charge-back allowance, which is included in other revenue as follows (unaudited): For the three months ended March 31, 2020 For the three months ended March 31, 2019 Gross finance and insurance revenues $ 12,583 $ 10,678 Additions to charge-back allowance (1,311 ) (963 ) Net Finance Revenue $ 11,272 $ 9,715 The Company has an accrual for charge-backs which totaled $4,694 and $4,221 at March 31, 2020 and December 31, 2019, respectively, and is included in “Accounts payable, accrued expenses, and other current liabilities” in the accompanying condensed consolidated balance sheets. Deposits on vehicles received in advance are accounted for as a liability and recognized into revenue upon completion of each respective transaction. These contract liabilities are included in Note 5 – Accounts Payable, Accrued Expenses, and Other Current Liabilities as customer deposits. During the three months ended March 31, 2020, $1,374 of contract liabilities as of December 31, 2019 were recognized in revenue. Inventories Vehicle and parts inventories are recorded at the lower of cost or net realizable value, with cost determined by the last-in, first-out (“LIFO”) method. Cost includes purchase costs, reconditioning costs, dealer-installed accessories, and freight. For vehicles accepted in trades, the cost is the fair value of such used vehicles at the time of the trade-in. Retail parts, accessories, and other inventories primarily consist of retail travel and leisure specialty merchandise. The current replacement costs of LIFO inventories exceeded their recorded values by $3,910 and $3,719 as of March 31, 2020 and December 31, 2019, respectively. Cumulative Redeemable Convertible Preferred Stock The Company’s Series A Preferred Stock (See Note 10 – Preferred Stock) is cumulative redeemable convertible preferred stock. Accordingly, it is classified as temporary equity and is shown net of issuance costs and the relative fair value of warrants issued in conjunction with the issuance of the Series A Preferred Stock. Unpaid preferred dividends are accumulated, compounded at each quarterly dividend date and presented within the carrying value of the Series A Preferred Stock until a dividend is declared by the board of directors. Stock Based Compensation The Company accounts for stock-based compensation for employees and directors in accordance with ASC 718, Compensation. ASC 718 requires all share-based payments to employees, including grants of employee stock options, to be recognized in the statement of income based on their fair values. Under the provisions of ASC 718, stock-based compensation costs are measured at the grant date, based on the fair value of the award, and are recognized as expense over the employee’s requisite or derived service period. In accordance with ASC 718, excess tax benefits realized from the exercise of stock-based awards are classified as cash flows from operating activities. All excess tax benefits and tax deficiencies (including tax benefits of dividends on share-based payment awards) are recognized as income tax expense or benefit in the condensed consolidated statements of income. Earnings Per Share The Company computes basic and diluted earnings/(loss) per share (“EPS”) by dividing net earnings/(loss) by the weighted average number of shares of common stock outstanding during the period. The Company is required, in periods in which it has net income, to calculate EPS using the two-class method. The two-class method is required because the Company’s Series A Preferred Stock have the right to receive dividends or dividend equivalents should the Company declare dividends on its common stock. Under the two-class method, earnings for the period are allocated on a pro-rata basis to the common and preferred stockholders. The weighted-average number of common and preferred shares outstanding during the period is then used to calculate basic EPS for each class of shares. In periods in which the Company has a net loss, basic loss per share is calculated by dividing the loss attributable to common stockholders by the weighted-average number of common shares outstanding during the period. The two-class method is not used, because the preferred stock does not participate in losses. The following table summarizes net income attributable to common stockholders used in the calculation of basic and diluted income per common share: (Dollars in thousands - except share and per share amounts) For the three months ended March 31, 2020 For the three months ended March 31, 2019 Distributed earnings allocated to common stock $ - $ - Undistributed earnings allocated to common stock 799 409 Net earnings allocated to common stock 799 409 Net earnings allocated to participating securities 544 251 Net earnings allocated to common stock and participating securities $ 1,343 $ 660 Weighted average shares outstanding for basic earnings per common share 9,757,036 9,695,234 Dilutive effect of warrants and options - - Weighted average shares outstanding for diluted earnings per share computation 9,757,036 9,695,234 Basic income per common share $ 0.08 $ 0.04 Diluted income per common share $ 0.08 $ 0.04 For the three months ended March 31, 2020 and March 31, 2019, the denominator of the basic and dilutive EPS was calculated as follows: For the three months ended March 31, 2020 For the three months ended March 31, 2019 Weighted average outstanding common shares 8,417,537 8,355,735 Weighted average shares held in escrow - - Weighted average prefunded warrants 1,339,499 1,339,499 Weighted shares outstanding - basic and diluted 9,757,036 9,695,234 For the three months ended March 31, 2020 and March 31, 2019, the following common stock equivalent shares were excluded from the computation of the diluted income per share, since their inclusion would have been anti-dilutive: For the three months ended March 31, 2020 For the three months ended March 31, 2019 Shares underlying Series A Convertible Preferred Stock - - Shares underlying warrants 4,677,458 4,677,458 Stock options 3,798,818 3,823,421 Share equivalents excluded from EPS 8,476,276 8,500,879 As of March 31, 2020, the Company did not declare and pay the dividend. As a result, the Series A Convertible Preferred Stock was convertible into 6,713,367 shares of common stock. Upon conversion the Company has the option to pay accrued dividends in cash or allow conversion into common stock. Advertising Costs Advertising and promotion costs are charged to operations in the period incurred. Advertising and promotion costs totaled approximately $4,359 and $3,920 for the three months ended March 31, 2020 and March 31, 2019, respectively. Income Taxes The Company recognizes deferred tax liabilities and assets for the expected future tax consequences of events that have been included in the financial statements or tax returns. Deferred tax assets and liabilities are determined based on the difference between the financial statement and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The Company estimates the degree to which tax assets and credit carry forwards will result in a benefit based on expected profitability by tax jurisdiction. In its interim financial statements, the Company follows the guidance in ASC 270, “Interim Reporting” and ASC 740 “Income Taxes”, whereby the Company utilizes the expected annual effective tax rate in determining its income tax provisions for the interim periods. Seasonality The Company’s combined operations generally experience modestly higher vehicle sales in the first half of each year during the winter months at the Company’s largest location in Tampa, Florida. Vendor Concentrations The Company purchases its new recreational vehicles and replacement parts from various manufacturers. During the three months ended March 31, 2020, four major manufacturers accounted for 28.8%, 23.7%, 18.4% and 17.1% of RV purchases. During the three months ended March 31, 2019, four major manufacturers accounted for 43.6%, 19.0%, 16.4% and 11.0% of RV purchases. The Company is subject to dealer agreements with each manufacturer. The manufacturer is entitled to terminate the dealer agreement if the Company is in material breach of the agreement terms. Geographic Concentrations The percent of revenues generated by the Florida locations and the Colorado locations, which generate greater than 10% of revenues, were as follows (unaudited): For the three For the three Florida 75 % 75 % Colorado 11 % 10 % These geographic concentrations increase the exposure to adverse developments related to competition, as well as economic, demographic, weather and other changes in these regions. Subsequent Events Management of the Company has analyzed the activities and transactions subsequent to March 31, 2020 through the date these condensed consolidated financial statements were issued to determine the need for any adjustments to or disclosures within the financial statements. The Company did not identify any recognized or non-recognized subsequent events that would require disclosure in the condensed consolidated financial statements other than disclosed below. In March 2020, the World Health Organization declared the outbreak of a novel coronavirus (COVID-19) as a pandemic which continues to spread throughout the United States and globally. The Company is monitoring the outbreak of COVID-19 and the related business and travel restrictions and changes to behavior intended to reduce its spread, and its impact on operations, financial position, cash flows, inventory, supply chains, purchasing trends, customer payments, and the industry in general, in addition to the impact on its employees. Due to the rapid development and fluidity of this situation, the magnitude and duration of the pandemic and its impact on the Company’s operations and liquidity is uncertain as of the date of this report. While there could ultimately be a material impact on operations and liquidity of the Company, at the time of issuance of this quarterly report on Form 10-Q, the impact could not be determined. Due to the COVID-19 pandemic, the Company took a number of actions effective April 6, 2020 to adjust resources and costs to align with reduced demand caused by the pandemic. These actions include: ● Reduction of its workforce by 25%; ● Senior management will forgo 25% of their salary; ● Suspend 2020 annual pay increases; ● Suspend 401k match; ● Delay non-critical capital projects; ● Focus resources on core sales and service operations In order to further mitigate the effects of the COVID-19 pandemic, the Company entered into the Fourth Amendment to the M&T credit agreement on April 16, 2020. Pursuant to the Fourth Amendment, the parties agreed to a suspension of scheduled principal payments on the term loans and mortgage loans (to the extent the permanent loan period has begun for the mortgage loans) for the period from April 15, 2020 through June 15, 2020. Interest on the outstanding principal balances of the term loans and mortgage loans will continue to accrue and be paid at the applicable interest rate during the deferment period. At the end of the deferment period, the borrowers will resume making all required payments of principal on the term loans and mortgage loans. All principal payments of the term loans and mortgage loans deferred during the deferment period will be due and payable on the term loan maturity date or the mortgage loan maturity date, as applicable. Additionally, all principal payments deferred during the deferment period will be due and payable (a) as described above or (b) if earlier, the date all outstanding amounts are otherwise due and payable under the terms of the credit documents (including, without limitation, upon maturity, acceleration or, to the extent applicable under the credit documents, demand for payment). In addition, the amendment includes a temporary suspension of scheduled curtailment payments required by the credit agreement for the period from April 1, 2020 through June 15, 2020. Amounts related to floor plan unused commitment fees and interest on the outstanding principal balance of the M&T Floor Plan Line of Credit (as defined below) will continue to accrue and be paid at the applicable rate and on the terms set forth in the credit agreement during the suspension period. In response to continued economic uncertainty caused by the COVID-19 pandemic, subsidiaries of Lazydays Holdings, Inc. took the additional step of applying for loans (“PPP Loans”) under the Paycheck Protection Program of the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) with M&T Bank (the “Lender”). On April 28, 2020, certain of the Company’s subsidiaries executed promissory notes (the “Notes”) in favor of the Lender for PPP Loans in an aggregate amount of $6,831,250. Pursuant to the Notes, such PPP Loans will bear interest at a rate of 1.0% per year and will mature on April 28, 2022. Commencing on November 28, 2020, monthly payments of principal and interest will be required in amounts necessary to fully amortize the principal amount by the maturity date. The PPP Loans are unsecured and are non-recourse obligations. The Notes provide for customary events of default, and the PPP Loans may be accelerated upon the occurrence of an event of default. All or a portion of the PPP Loans may be forgiven upon application to the Lender for payroll and certain other costs incurred during the 8-week period beginning on the date each PPP Loan is disbursed, in accordance with the requirements and limitations under the CARES Act. The amount of the PPP Loan eligible for forgiveness will be reduced if the Company terminates employees or reduces salaries during the 8-week period. While the Company’s subsidiaries intend to use the entire amount of the PPP Loans for qualifying expenses, no assurance can be provided that forgiveness of any portion of the PPP Loans will be obtained. Applications were submitted by other subsidiaries of the Company, which resulted in the execution of a promissory note on April 30, 2020 for $1,236,040 and on May 4, 2020 for $636,665. The interest rate on the notes is 1.0% per year and the notes mature on April 30, 2022 and May 4, 2022, respectively. Commencing on November 30, 2020 and December 4, 2020, respectively, monthly payments of principal and interest will be required in amounts necessary to fully amortize the principal amount by the maturity date. Reclassifications Certain amounts in prior periods have been reclassified to conform to the current period presentation. These reclassifications had no effect on the previously reported net income. Recently Issued Accounting Standards The Company qualifies as an emerging growth company pursuant to the provision of the Jumpstart Our Business Startups (“JOBS”) Act. Section 107 of the JOBS Act provides that an emerging growth company can delay the adoption of certain new accounting standards until those standards would otherwise apply to private companies. The Company has elected to take advantage of the extended transition period provided by the JOBS Act for complying with new or revised accounting standards. Leases Adoption of new lease standard In February 2016, the Financial Accounting Standards Board (FASB) issued a new accounting standard that amends the guidance for the accounting and disclosure of leases. This new standard requires that lessees recognize the assets and liabilities that arise from leases on the balance sheet, including leases classified as operating leases, and disclose qualitative and quantitative information about leasing arrangements. The FASB subsequently issued additional amendments to address issues arising from the implementation of the new lease standard. We adopted this standard as of January 1, 2020, using the modified-retrospective method. This approach provides a method for recording existing leases at adoption. We used the adoption date as our date of initial application, and thus comparative-period financial information is not presented for periods prior to the adoption date. In addition, we elected the package of practical expedients permitted under the transition guidance within the new standard, which, among other things, allowed the Company to carry forward the historical lease classification. Adoption of the new standard resulted in total operating lease liabilities of $17,800 and operating lease assets of $17,800 as of January 1, 2020. The standard did not materially impact our Condensed Consolidated Statements of Income and had no impact on our Condensed Consolidated Statements of Cash Flows. Our accounting policies under the new standard are described below. See Note 6, Leases. Lease recognition At inception of a contract, we determine whether an arrangement is or contains a lease. For all leases, we determine the classification as either operating or financing. Operating lease assets represent our right to use an underlying asset for the lease term, and lease liabilities represent our obligation to make lease payments under the lease. Lease recognition occurs at the commencement date and lease liability amounts are based on the present value of lease payments over the lease term. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Because most of our leases do not provide information to determine an implicit interest rate, we use our incremental borrowing rate in determining the present value of lease payments. Operating lease assets also include any lease payments made prior to the commencement date and exclude lease incentives received. Operating lease expense is recognized on a straight-line basis over the lease term. We have lease agreements with both lease and non-lease components, which are generally accounted for together as a single lease component. |
Business Combination
Business Combination | 3 Months Ended |
Mar. 31, 2020 | |
Business Combinations [Abstract] | |
Business Combination | NOTE 3 – BUSINESS COMBINATION Acquisitions of Dealerships On August 1, 2019, the Company consummated its asset purchase agreement with Alliance Coach Inc. (“Alliance”). The purchase price consisted of cash and a note payable to the seller of Alliance. The note payable is a two year note which matures on August 1, 2021, which requires monthly payments of $134 in principal and interest. The note bears interest at 5.0% per year. As part of the acquisition, the Company acquired the inventory of Alliance and has added the inventory to the M&T Floor Plan Line of Credit (as defined below). The Company accounted for the asset purchase agreement as a business combination using the purchase method of accounting as it was determined that Alliance constituted a business. As a result, the Company determined its preliminary allocation of the fair value of the assets acquired and the liabilities assumed for Alliance as follows: 2019 Inventories $ 12,171 Accounts receivable and prepaid expenses 53 Property and equipment 77 Intangible assets 2,630 Total assets acquired 14,931 Accounts payable, accrued expenses and other current liabilities 243 Floor plan notes payable 11,434 Total liabilities assumed 11,677 Net assets acquired $ 3,254 2019 Purchase Price: $ 2,568 Cash consideration paid (107 ) Amounts due (from) to former owners Note payable issued to former owners 3,045 $ 5,506 Goodwill represents the excess of the purchase price over the estimated fair value assigned to tangible and identifiable intangible assets acquired and liabilities assumed from Alliance. Goodwill associated with the transaction is detailed below: 2019 Total consideration $ 5,506 Less net assets acquired 3,254 Goodwill $ 2,252 The following table summarizes the Company’s preliminary allocation of the purchase price to the identifiable intangible assets acquired as of the date of the closing in 2019. Gross Asset Amount at Acquisition Date Weighted Customer Lists $ 230 7 years Dealer Agreements $ 2,400 7 years The Company recorded approximately $14.0 million in revenue and $0.7 million in net income prior to income taxes during the period from January 1, 2020 to March 31, 2020 related to this acquisitions. Pro Forma Information The following unaudited pro forma financial information summarizes the combined results of operations for the Company as though the purchase of Alliance had been consummated on January 1, 2019. For the three months ended March 31, 2020 2019 Revenue $ 190,854 $ 186,076 Income before income taxes $ 4,287 $ 3,729 Net income $ 2,987 $ 2,397 The Company adjusted the combined income of Lazydays RV with Alliance and adjusted net income to eliminate business combination expenses as well as the incremental depreciation and amortization associated with the preliminary purchase price allocation to determine pro forma net income. |
Inventories
Inventories | 3 Months Ended |
Mar. 31, 2020 | |
Inventory Disclosure [Abstract] | |
Inventories | NOTE 4 – INVENTORIES Inventories consist of the following: As of As of March 31, 2020 December 31, 2019 (Unaudited) New recreational vehicles $ 121,357 $ 124,096 Pre-owned recreational vehicles 31,828 36,639 Parts, accessories and other 4,009 3,848 157,194 164,583 Less: excess of current cost over LIFO (3,910 ) (3,719 ) $ 153,284 $ 160,864 |
Accounts Payable, Accrued Expen
Accounts Payable, Accrued Expenses and Other Current Liabilities | 3 Months Ended |
Mar. 31, 2020 | |
Payables and Accruals [Abstract] | |
Accounts Payable, Accrued Expenses and Other Current Liabilities | NOTE 5 – ACCOUNTS PAYABLE, ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES Accounts payable, accrued expenses and other current liabilities consist of the following: As of As of March 31, December 31, 2020 2019 (Unaudited) Accounts payable $ 10,024 $ 11,231 Other accrued expenses 3,838 3,392 Customer deposits 3,161 2,267 Accrued compensation 3,640 2,388 Accrued charge-backs 4,694 4,221 Accrued interest 292 356 Total $ 25,649 $ 23,855 |
Leases
Leases | 3 Months Ended |
Mar. 31, 2020 | |
Leases [Abstract] | |
Leases | NOTE 6 – LEASES On January 1, 2019, we adopted a new accounting standard that amends the guidance for the accounting and reporting of leases. Certain required disclosures have been made on a prospective basis in accordance with the guidance of the standard. See Note 2, Significant Accounting Policies. The Company leases property and equipment throughout the United States primarily under operating leases. Leases with lease terms of 12 months or less are expensed on a straight-line basis over the lease term and are not recorded in the Condensed Consolidated Balance Sheets. Most leases include one or more options to renew, with renewal terms that can extend the lease term up to 20 years (some leases include multiple renewal periods). The exercise of lease renewal options is at our sole discretion. In addition, some of our lease agreements include rental payments adjusted periodically for inflation. Our lease agreements neither contain any residual value guarantees nor impose any significant restrictions or covenants. The Company leases properties for its RV retail locations through nine operating leases. The Company also leases billboards and certain of its equipment through operating leases. The related right-of-use (“ROU”) assets for these operating leases are included in operating lease assets. As of March 31, 2020, the weighted-average remaining lease term and weighted-average discount rate of operating leases was 5.8 years and 5.0%, respectively. Operating lease costs for the three month period ending March 31, 2020 was $0.9 million including variable lease costs, at March 31, 2020. There were no short term leases for the three months ended March 31, 2020. Maturities of lease liabilities as of March 31, 2020 were as follows: Maturity Date Operating Leases Remaining nine month ending December 31, 2020 $ 3,081 2021 3,820 2022 3,450 2023 3,312 2024 2,557 Thereafter 4,116 Total lease payments 20,336 Less: Imputed Interest 2,767 Present value of lease liabilities $ 17,569 The following presents supplemental cash flow information related to leases during 2020: For the three months ended March 31, 2020 Cash paid for amounts included in the measurement of lease liability: Operating cash flows for operating leases $ 878 ROU assets obtained in exchange for lease liabilities: Operating leases $ 633 On March 10, 2020, the Company entered into an agreement for the sale of land to LD Murfreesboro TN Landlord, LLC for $4.921 million. The Company has entered into a lease agreement with the buyer with lease payments to commence upon granting of a certificate of occupancy and completion of planned construction, the cost of which will be paid for by LD Murfreesboro TN Landlord, LLC. The commencement date of the lease will occur at the completion of construction. |
Debt
Debt | 3 Months Ended |
Mar. 31, 2020 | |
Debt Disclosure [Abstract] | |
Debt | NOTE 7 – DEBT M&T Financing Agreement On March 15, 2018, the Company terminated and replaced the Bank of America (“BOA”) credit facility with a $200,000 Senior Secured Credit Facility with M&T Bank (the “M&T Facility”). The M&T Facility includes a Floor Plan Facility (the “M&T Floor Plan Line of Credit”), a Term Loan (the “M&T Term Loan”), and a Revolving Credit Facility (the “M&T Revolver”). The M&T Facility will mature on March 15, 2021. The M&T Facility requires the Company to meet certain financial and other covenants and is secured by substantially all the assets of the Company. The costs of the M&T Facility were recorded as a debt discount. On March 15, 2018, the Company repaid $96,740 outstanding under the BOA floor plan notes payable and $8,820 outstanding under the BOA term loan with the proceeds of the M&T Facility. On March 6, 2020, the Company entered into the Third Amendment and Joinder to Credit Agreement (“Third Amendment”) on the M&T Facility. Pursuant to the Third Amendment, Lone Star Land of Houston, LLC (the "Mortgage Loan Borrower") and Lone Star Diversified, LLC (“Diversified"), wholly owned subsidiaries of LDRV, became parties to the Credit Agreement and were identified as Additional Loan Parties. The existing borrowers and guarantors also requested that the lenders provide a mortgage loan credit facility in the aggregate principal amount of acquisition, construction, and permanent mortgage financing for a property acquired by the Mortgage Loan Borrower. The mortgage loans maximum borrowing amount is $6,136. The mortgage shall bear interest at (a) LIBOR plus an applicable margin of 2.25% or (b) the Base Rate plus a margin of 1.25%. The mortgage requires monthly payments of principal of $0.03 million and matures on March 15, 2021 when all remaining principal and accrued interest payments become due. As of March 31, 2020, the mortgage balance was $5,006 and the interest rate was 3.312%. As of March 31, 2020, the payment of dividends by the Company (other than from proceeds of revolving loans) was permitted under the M&T Facility, so long as at the time of payment of any such dividend, no event of default existed under the M&T Facility, or would result from the payment of such dividend, and so long as any such dividend was permitted under the M&T Facility. As of March 31, 2020 and taking into account the effect of the Third Amendment to the Credit Agreement entered into on March 6, 2020, the maximum amount of cash dividends that the Company could make from legally available funds to its stockholders was limited to an aggregate of $9,886 pursuant to a trailing twelve month calculation as defined in the M&T Facility. Floor Plan Line of Credit The $175,000 M&T Floor Plan Line of Credit may be used to finance new vehicle inventory, but only $45,000 may be used to finance pre-owned vehicle inventory and $4,500 may be used to finance rental units. Principal becomes due upon the sale of the related vehicle. The M&T Floor Plan Line of Credit shall accrue interest at either (a) the fluctuating 30-day LIBOR rate plus an applicable margin which ranges from 2.00% to 2.30% based upon the Company’s total leverage ratio (as defined in the M&T Facility) or (b) the Base Rate plus an applicable margin ranging from 1.00% to 1.30% based upon the Company’s total leverage ratio (as defined in the M&T Facility). The Base Rate is defined in the M&T Facility as the highest of M&T’s prime rate, the Federal Funds rate plus 0.50% or one-month LIBOR plus 1.00%. In addition, the Company will be charged for unused commitments at a rate of 0.15%. As of March 31, 2020, the interest rate on the M&T Floor Plan Line of Credit was approximately 2.989%. The M&T Floor Plan Line of Credit consists of the following: As of March 31, 2020 As of December 31, 2019 (Unaudited) Floor plan notes payable, gross $ 133,577 $ 144,133 Debt discount (152 ) (184 ) Floor plan notes payable, net of debt discount $ 133,425 $ 143,949 Term Loan The $20,000 M&T Term Loan will be repaid in equal monthly principal installments of $242 plus accrued interest through the maturity date of March 15, 2021. The M&T Term Loan shall bear interest at (a) LIBOR plus an applicable margin of 2.25% to 3.00% based on the total leverage ratio (as defined in the M&T Facility) or (b) the Base Rate plus a margin of 1.25% to 2.00% based on the total leverage ratio (as defined in the M&T Facility). As of March 31, 2020, there was $14,200 outstanding under the M&T Term Loan. As of March 31, 2020, the interest rate on the M&T Term Loan was approximately 3.25%. Revolver The $5,000 M&T Revolver allows the Company to draw up to $5,000. The M&T Revolver shall bear interest at (a) 30-day LIBOR plus an applicable margin of 2.25% to 3.00% based on the total leverage ratio (as defined in the M&T Facility) or (b) the Base Rate plus a margin of 1.25% to 2.00% based on the total leverage ratio (as defined in the M&T Facility). The M&T Revolver is also subject to unused commitment fees at rates varying from 0.25% to 0.50% based on the total leverage ratio (as defined in the M&T Facility). During the three month period ended March 31, 2020, there were no outstanding borrowings under the M&T Revolver. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | NOTE 8 – INCOME TAXES The Company recorded a provision for federal and state income taxes of $1,300 for the three months ended March 31, 2020 and $1,185 for the three months ended March 31, 2019 which represent effective tax rates of approximately 30% and 39%, respectively. The Company’s effective tax rates differ from the federal statutory rate of 21% primarily due to local and state income tax rates, net of the federal tax effect as well as the non-deductibility of stock-based compensation expense and certain transaction costs. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | NOTE 9 - COMMITMENTS AND CONTINGENCIES Employment Agreements The Company entered into an employment agreement with the Chief Executive Officer (“CEO”) of the Company effective as of the consummation of the Mergers. The employment agreement with the CEO provides for an initial base salary of $540 subject to annual discretionary increases. In addition, the executive is eligible to participate in any employee benefit plans adopted by the Company from time to time and is eligible to receive an annual cash bonus based on the achievement of performance objectives. The CEO’s target bonus is 100% of his base salary. The employment agreement also provides that the executive is to be granted an option to purchase shares of common stock of the Company (See Note 11 – Stockholders’ Equity). The employment agreement provides that if the executive is terminated for any reason, he is entitled to receive any accrued benefits, including any earned but unpaid portion of base salary through the date of termination, subject to withholding and other appropriate deductions. In addition, in the event the executive resigns for good reason or is terminated without cause (all as defined in the employment agreement) prior to January 1, 2022, subject to entering into a release, the Company will pay the executive severance equal to two times the base salary and average bonus for the CEO. During May 2018, the Company entered into an offer letter with the Chief Financial Officer (the “CFO”) of the Company. The offer letter provides for an initial base salary of $325 per year subject to annual discretionary increases. In addition, the executive is eligible to participate in any employee benefit plans adopted by the Company from time to time and is eligible to receive an annual cash bonus based on the achievement of performance objectives. The CFO’s target bonus is 75% of his annual base salary (with a potential to earn a maximum of up to 150% of his target bonus). He was also provided with a relocation allowance of $100 which the CFO will be required to repay if he resigns from the Company or is terminated by the Company for cause within two years of his start date. If he is terminated without cause, he will receive twelve months of his base salary as severance. If he is terminated following a change in control, he is also eligible to receive a pro-rated bonus, if the board of directors determines that the performance objectives have been met. He also was granted an option to purchase shares of common stock of the Company (See Note 11- Stockholders’ Equity). Note that due to the COVID-19 pandemic, as of April 6, 2020, senior management has opted to forgo 25% of their salary in order to reduce costs to align with decreased demand in sales and services. See discussion in Subsequent Event section above. Director Compensation The Company’s non-employee members of the board of directors will receive annual cash compensation of $50 for serving on the board of directors, $5 for serving on a committee of the board of directors (other than the Chairman of each of the committees) and $10 for serving as the Chairman of any of the committees of the board of directors. Legal Proceedings The Company is a party to multiple legal proceedings that arise in the ordinary course of business. The Company has certain insurance coverage and rights of indemnification. The Company does not believe that the ultimate resolution of these matters will have a material adverse effect on the Company’s business, results of operations, financial condition, or cash flows. However, the results of these matters cannot be predicted with certainty and an unfavorable resolution of one or more of these matters could have a material adverse effect on the Company’s business, results of operations, financial condition, and/or cash flows. |
Preferred Stock
Preferred Stock | 3 Months Ended |
Mar. 31, 2020 | |
Equity [Abstract] | |
Preferred Stock | NOTE 10 – PREFERRED STOCK On March 15,2018, the Company consummated a private placement with institutional investors for the sale of convertible preferred stock, common stock, and warrants for an aggregate purchase price of $94,800 (the “PIPE Investment”). At the closing, the Company issued an aggregate of 600,000 shares of Series A Preferred Stock for gross proceeds of $60,000. The investors in the PIPE Investment were granted certain registration rights as set forth in the securities purchase agreements. The holders of the Series A Preferred Stock include 500,000 shares owned by funds managed by a member of the Company’s board of directors. The Series A Preferred Stock ranks senior to all outstanding stock of the Company. Holders of the Series A Preferred Stock are entitled to vote on an as-converted basis together with the holders of the common stock, and not as a separate class, at any annual or special meeting of stockholders. Each share of Series A Preferred Stock is convertible at the holder’s election at any time, at an initial conversion price of $10.0625 per share, subject to adjustment (as applicable, the “Conversion Price”). Upon any conversion of the Series A Preferred Stock, the Company will be required to pay each holder converting shares of Series A Preferred Stock all accrued and unpaid dividends, in either cash or shares of common stock, at the Company’s option. The Conversion Price will be subject to adjustment for stock dividends, forward and reverse splits, combinations and similar events, as well as for certain dilutive issuances. Dividends on the Series A Preferred Stock accrue at an initial rate of 8% per annum (the “Dividend Rate”), compounded quarterly, on each $100 of Series A Preferred Stock (the “Issue Price”) and are payable quarterly in arrears. Accrued and unpaid dividends, until paid in full in cash, will accrue at the then applicable Dividend Rate plus 2%. The Dividend Rate will be increased to 11% per annum, compounded quarterly, in the event that the Company’s senior indebtedness less unrestricted cash during any trailing twelve-month period ending at the end of any fiscal quarter is greater than 2.25 times earnings before interest, taxes, depreciation and amortization (“EBITDA”). The Dividend Rate will be reset to 8% at the end of the first fiscal quarter when the Company’s senior indebtedness less unrestricted cash during the trailing twelve-month period ending at the end of such quarter is less than 2.25 times EBITDA. If, at any time following the second anniversary of the issuance of the Series A Preferred Stock, the volume weighted average price of the Company’s common stock equals or exceeds $25.00 per share (as adjusted for stock dividends, splits, combinations and similar events) for a period of thirty consecutive trading days, the Company may elect to force the conversion of any or all of the outstanding Series A Preferred Stock at the Conversion Price then in effect. From and after the eighth anniversary of the issuance of the Series A Preferred Stock, the Company may elect to redeem all, but not less than all, of the outstanding Series A Preferred Stock in cash at the Issue Price plus all accrued and unpaid dividends. From and after the ninth anniversary of the issuance of the Series A Preferred Stock, each holder of Series A Preferred Stock has the right to require the Company to redeem all of the holder’s outstanding shares of Series A Preferred Stock in cash at the Issue Price plus all accrued and unpaid dividends. In the event of any liquidation, merger, sale, dissolution or winding up of the Company, holders of the Series A Preferred Stock will have the right to (i) payment in cash of the Issue Price plus all accrued and unpaid dividends, or (ii) convert the shares of Series A Preferred Stock into common stock and participate on an as-converted basis with the holders of common stock. So long as the Series A Preferred Stock is outstanding, the holders thereof, by the vote or written consent of the holders of a majority in voting power of the outstanding Series A Preferred Stock, shall have the right to designate two members to the board of directors. In addition, five-year warrants to purchase 596,273 shares of common stock at an exercise price of $11.50 per share were issued in conjunction with the issuance of the Series A Preferred Stock. The warrants may be exercised for cash or, at the option of the holder, on a “cashless basis” pursuant to the exemption provided by Section 3(a)(9) of the Securities Act. The warrants may be called for redemption in whole and not in part, at a price of $0.01 per share of common stock, if the last reported sales price of the Company’s common stock equals or exceeds $24.00 per share for any 20 trading days within a 30-day trading period ending on the third business day prior to the notice of redemption to warrant holders, if there is a current registration statement in effect with respect to the shares underlying the warrants. The Series A Preferred Stock, while convertible into common stock, is also redeemable at the holder’s option and, as a result, is classified as temporary equity in the condensed consolidated balance sheets. An analysis of its features determined that the Series A Preferred Stock was more akin to equity. While the embedded conversion option (“ECO”) was subject to an anti-dilution price adjustment, since the ECO was clearly and closely related to the equity host, it was not required to be bifurcated and it was not accounted for as a derivative liability under ASC 815, Derivatives and Hedging. After factoring in the relative fair value of the warrants issued in conjunction with the Series A Preferred Stock, the effective conversion price is $9.72 per share, compared to the market price of $10.29 per share on the date of issuance. As a result, a $3,392 beneficial conversion feature was recorded as a deemed dividend in the condensed consolidated statement of income because the Series A Preferred Stock is immediately convertible, with a credit to additional paid-in capital. The relative fair value of the warrants issued with the Series A Preferred Stock of $2,035 was recorded as a reduction to the carrying amount of the preferred stock in the condensed consolidated balance sheet. In addition, aggregate offering costs of $2,981 consisting of cash and the value of five-year warrants to purchase 178,882 shares of common stock at an exercise price of $11.50 per share issued to the placement agent were recorded as a reduction to the carrying amount of the preferred stock. The $632 value of the warrants was determined utilizing the Black-Scholes option pricing model using a term of 5 years, a volatility of 39%, a risk-free interest rate of 2.61%, and a 0% rate of dividends. The discount associated with the Series A Preferred Stock wasn’t accreted during the three months ended March 31, 2020 because redemption was not currently deemed to be probable. The Company’s board of directors did not declare a dividend payment on the Series A Preferred Stock of $1,644 for the period from January 1, 2020 to March 31, 2020. The dividends were $2.74 per share of Series A Preferred Stock. As a result, the amount was added to the carrying amount of the Series A Preferred Stock and the dividend rate is currently at 10% until such dividends are paid. |
Stockholders' Equity
Stockholders' Equity | 3 Months Ended |
Mar. 31, 2020 | |
Equity [Abstract] | |
Stockholders' Equity | NOTE 11 – STOCKHOLDERS’ EQUITY Authorized Capital The Company is authorized to issue 100,000,000 shares of common stock, $0.0001 par value, and 5,000,000 shares of preferred stock, $0.0001 par value. The holders of the Company’s common stock are entitled to one vote per share. The holders of Series A Preferred Stock are entitled to the number of votes equal to the number of shares of common stock into which the holder’s shares are convertible. These holders of Series A Preferred Stock also participate in dividends if they are declared by the board of directors. See Note 10 – Preferred Stock, for additional information associated with the Series A Preferred Stock. 2018 Long-Term Incentive Equity Plan On March 15, 2018, the Company adopted the 2018 Long-Term Incentive Equity Plan (the “2018 Plan”). The 2018 Plan reserves up to 13% of the shares of common stock outstanding on a fully diluted basis. The 2018 Plan is administered by the Compensation Committee of the board of directors, and provides for awards of options, stock appreciation rights, restricted stock, restricted stock units, warrants or other securities which may be convertible, exercisable or exchangeable for or into common stock. Due to the fact that the fair market value per share immediately following the closing of the Mergers was greater than $8.75 per share, the number of shares authorized for awards under the 2018 Plan was increased by a formula (as defined in the 2018 Plan) not to exceed 18% of shares of common stock then outstanding on a fully diluted basis. On May 20, 2019, the Company’s stockholders approved the adoption of the Lazydays Holdings, Inc. Amended and Restated 2018 Long Term Incentive Plan (the “Incentive Plan”). The Incentive Plan amends and restates the previously adopted 2018 Plan in order to replenish the pool of shares of common stock available under the Incentive Plan by adding an additional 600,000 shares of common stock and making certain changes in light of the Tax Cuts and Jobs Act and its impact on Section 162(m) of the Internal Revenue Code of 1986, as amended. As of March 31, 2020, there were 625,748 shares of common stock available to be issued under the Incentive Plan. 2019 Employee Stock Purchase Plan On May 20, 2019, the Company’s stockholders approved the 2019 Employee Stock Purchase Plan (the “ESPP”). The ESPP reserved 900,000 shares of common stock for purchase by participants in the ESPP. Participants in the plan may purchase shares of common stock at a purchase price which will not be less than the lesser of 85% of the fair market value per share of the common on the first day of the purchase period or the last day of the purchase period. The initial offering and purchase period under the ESPP commenced on July 7, 2019 with the first purchase date to be December 2, 2019. During the three months ended March 31, 2020, the Company recorded $38 of stock based compensation related to the ESPP. Warrants The Company had the following activity related to shares of common stock underlying warrants: Shares Underlying Weighted Warrants outstanding January 1, 2020 4,677,458 $ 11.50 Granted - $ - Cancelled or Expired - $ - Exercised - $ - Warrants outstanding March 31, 2020 4,677,458 $ 11.50 The table above excludes perpetual non-redeemable prefunded warrants to purchase 1,339,499 shares of common stock with an exercise price of $0.01 per share. Stock Options Stock option activity is summarized below: Shares Underlying Options Weighted Average Exercise Price Weighted Average Remaining Contractual Life Aggregate Intrinsic Value Options outstanding at January 1, 2020 3,798,818 $ 10.63 Granted 225,000 $ 8.50 Cancelled or terminated - $ - Exercised - $ - Options outstanding at March 31, 2020 4,023,818 $ 10.51 3.3 $ - Options vested at March 31, 2020 97,554 $ 8.08 3.6 $ - Awards with Market Conditions On March 16, 2018, the Company granted five-year incentive stock options to purchase 3,573,113 shares of common stock at an exercise price of $11.10 per share to employees pursuant to the 2018 Plan, including 1,458,414 shares of common stock underlying the CEO’s stock options and 583,366 shares of common stock underlying the former CFO’s stock options. A set percentage of the stock options shall vest upon the volume weighted average price (“VWAP”) of the common stock, as defined in the option agreements, being equal to or greater than a specified price per share for at least thirty (30) out of thirty-five (35) consecutive trading days, as follows and are exercisable only to the extent that they are vested: 30% of the options shall vest upon the VWAP exceeding $13.125 per share; an additional 30% of the options shall vest upon the VWAP exceeding $17.50 per share; an additional 30% of the options shall vest upon the VWAP exceeding $21.875 per share; and an additional 10% of the options shall vest upon exceeding $35.00 per share; provided that the option holder remains continuously employed by the Company (and/or any of its subsidiaries) from the grant date through (and including) the relevant date of vesting. On May 7, 2018, the Company hired a new CFO who received a stock option award exercisable into 583,366 shares of common stock underlying options under the same terms as the former CFO. On June 15, 2018, the former CFO forfeited her existing 583,366 options. The fair value of the awards issued on March 16, 2018 of $15,004 was determined using a Monte Carlo simulation based on a 5-year term, a risk-free rate of 2.62%, an annual dividend yield of 0%, and an annual volatility of 42.8%. The expense is being recognized over the derived service period of each vesting tranche which was determined to be 0.74 years, 1.64 years, 2.24 years, and 3.13 years. The fair value of the awards issued on May 7, 2018 of $2,357 was determined using a Monte Carlo simulation based on a 5- year term, a risk-free rate of 2.74%, an annual volatility of 54.70%, and an annual dividend yield of 0%. The expense is being recognized over the derived service period of each vesting tranche which was determined to be 0.97 years, 1.75 years, 2.15 years, and 2.96 years. The expense recorded for awards with market conditions was $554 during the three month period ended March 31, 2020 and $1,470 during the three month period ended March 31, 2019, which is included in operating expenses in the condensed consolidated statements of income. Awards with Service Conditions On March 16, 2018, the Company granted five-year stock options to purchase an aggregate of 99,526 shares of common stock at an exercise price of $11.10 per share to the non-employee directors of the Company, pursuant to the 2018 Plan. These options vest over three years with one-third vesting on each of the respective anniversary dates. On March 23, 2018, stock options to purchase 14,218 shares of common stock that had been issued to one non-employee director were canceled, while new five-year options to purchase 15,123 shares of common stock at an exercise price of $10.40 per share were issued to certain investment funds pursuant to an arrangement between the same non-employee director and the investment adviser to the funds. The new options vest over three years with one-third vesting on each of the respective anniversary dates. On May 31, 2018, a non-employee director resigned and options to purchase 15,123 shares of common stock were forfeited. The $350 fair value of these awards was determined using the Black-Scholes option pricing model based on a 3.5 year expected life, a risk-free rate of 2.42%, an annual dividend yield of 0%, and an annual volatility of 39%. The expense is being recognized over the three-year vesting period. The expected life was determined using the simplified method as the awards were determined to be plain-vanilla options. During the year ended December 31, 2019, stock options to purchase 505,000 shares of common stock were issued to employees. The options have exercise prices ranging from $4.50 to $8.50. The options had a five year life and a four year vesting period. The fair value of the awards of $957 was determined using the Black-Scholes option pricing model based on a 3.75 year expected life, a risk free rate of 1.70%-2.51%, an annual dividend yield of 0% and an annual volatility of 52%-55%. During the three months ended March 31, 2020, stock options to purchase 225,000 shares of common stock were issued to employees. The options have an exercise price of $8.50. The options had a five year life and a four year vesting period. The fair value of the awards of $145 was determined using the Black-Scholes option pricing model based on the following range of assumptions: For the three Risk free interest rate 0.43 % Expected term (years) 3.75 Expected volatility 55 % Expected dividends 0.00 % The expected life was determined using the simplified method as the awards were determined to be plain-vanilla options. The expense recorded for awards with service conditions was $88 from the three month period ended March 31, 2020 and $44 during the three month period ended March 31, 2019, which is included in operating expenses in the condensed consolidated statements of income. As of March 31, 2020, total unrecorded compensation cost related to all non-vested awards was $1,682 which is expected to be amortized over a weighted average service period of approximately 2.09 years. The weighted average grant date fair value of awards issued during to the three months ended March 31, 2020 was $0.65 per share. |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) and the rules and regulations of the Securities and Exchange Commission (“SEC”). Accordingly, they do not include all the information and footnotes required by generally accepted accounting principles for complete financial statements. For additional information, these condensed consolidated financial statements should be read in conjunction with Lazydays Holdings, Inc.’s and Lazy Days’ R.V. Center, Inc.’s consolidated financial statements and notes as of December 31, 2019 and 2018 and for the years then ended, included in the Annual Report on Form 10-K filed with the SEC on March 20, 2020. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. |
Principles of Consolidation | Principles of Consolidation The condensed consolidated financial statements include the accounts of Holdings, Lazydays RV and its wholly owned subsidiary LDRV Holdings Corp. LDRV Holdings Corp is the sole owner of Lazydays Land Holdings, LLC, Lazydays Tampa Land Holdings, LLC, Lazydays RV America, LLC, Lazydays RV Discount, LLC, Lazydays Mile Hi RV, LLC, LDRV of Tennessee LLC, Lazydays of Minneapolis LLC, Lazydays of Central Florida, LLC, Lone Star Acquisition LLC, Lone Star Diversified LLC, LDRV Acquisition Corp of Nashville LLC, and LDRV of Nashville LLC (collectively, the “Company”, “Lazydays” or “Successor”). All significant inter-company accounts and transactions have been eliminated in consolidation. |
Use of Estimates in the Preparation of Financial Statements | Use of Estimates in the Preparation of Financial Statements The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates include the assumptions used in the valuation of the net assets acquired in business combinations, goodwill and other intangible assets, provision for charge-backs, inventory write-downs, allowance for doubtful accounts and stock-based compensation. |
Revenue Recognition | Revenue Recognition In May 2014, the Financial Accounting Standards Board (“FASB”) issued accounting standard updates which clarified principles for recognizing revenue arising from contracts with customers (Accounting Standards Codification (“ASC”) 606 (“ASC 606”) which superseded existing accounting guidance for revenue recognition. The core principle of the revenue standard is that an entity recognizes revenue to depict the transfer of promised goods or services to clients in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The new guidance applies a five-step model for revenue measurement and recognition and also requires increased disclosures including the nature, amount, timing, and uncertainty of revenue and cash flows related to contracts with clients. The Company adopted the new revenue recognition standard at the beginning of the first quarter of fiscal 2019 using the modified retrospective method of adoption and applied the guidance to those contracts that were not completed as of December 31, 2018. Based on the evaluation, the Company did not identify customer contracts which will require different recognition under the new guidance. Revenues are recognized when control of the promised goods or services is transferred to the customers at the expected amount the Company is entitled to for such goods and services. Taxes collected on revenue producing transactions are excluded from revenue in the condensed consolidated statements of income. The following table represents the Company’s disaggregation of revenue: For the three For the three March 31, 2019 New vehicle revenue $ 102,444 $ 97,812 Preowned vehicle revenue 64,744 54,822 Parts, accessories, and related services 10,765 8,775 Finance and insurance revenue 11,272 9,715 Campground, rental, and other revenue 1,629 1,933 $ 190,854 $ 173,057 Revenue from the sale of vehicle contracts is recognized at a point in time on delivery, transfer of title and completion of financing arrangements. Revenue from the sale of parts, accessories, and related service is recognized as services and parts are delivered or as a customer approves elements of the completion of service. Revenue from the sale of parts, accessories, and related service is recognized in other revenue in the accompanying condensed consolidated statements of income. Revenue from the rental of vehicles is recognized pro rata over the period of the rental agreement. The rental agreements are generally short-term in nature. Revenue from rentals is included in other revenue in the accompanying condensed consolidated statements of income. Campground revenue is also recognized over the time period of use of the campground. The Company receives commissions from the sale of insurance and vehicle service contracts to customers. In addition, the Company arranges financing for customers through various financial institutions and receives commissions. The Company may be charged back (“charge-backs”) for financing fees, insurance or vehicle service contract commissions in the event of early termination of the contracts by the customers. The revenues from financing fees and commissions are recorded at the time of the sale of the vehicles and an allowance for future charge-backs is established based on historical operating results and the termination provision of the applicable contracts. The estimates for future chargebacks require judgment by management, and as a result there is an element of risk associated with these revenue streams. The Company recognized finance and insurance revenues, less the additions to the charge-back allowance, which is included in other revenue as follows (unaudited): For the three months ended March 31, 2020 For the three months ended March 31, 2019 Gross finance and insurance revenues $ 12,583 $ 10,678 Additions to charge-back allowance (1,311 ) (963 ) Net Finance Revenue $ 11,272 $ 9,715 The Company has an accrual for charge-backs which totaled $4,694 and $4,221 at March 31, 2020 and December 31, 2019, respectively, and is included in “Accounts payable, accrued expenses, and other current liabilities” in the accompanying condensed consolidated balance sheets. Deposits on vehicles received in advance are accounted for as a liability and recognized into revenue upon completion of each respective transaction. These contract liabilities are included in Note 5 – Accounts Payable, Accrued Expenses, and Other Current Liabilities as customer deposits. During the three months ended March 31, 2020, $1,374 of contract liabilities as of December 31, 2019 were recognized in revenue. |
Inventories | Inventories Vehicle and parts inventories are recorded at the lower of cost or net realizable value, with cost determined by the last-in, first-out (“LIFO”) method. Cost includes purchase costs, reconditioning costs, dealer-installed accessories, and freight. For vehicles accepted in trades, the cost is the fair value of such used vehicles at the time of the trade-in. Retail parts, accessories, and other inventories primarily consist of retail travel and leisure specialty merchandise. The current replacement costs of LIFO inventories exceeded their recorded values by $3,910 and $3,719 as of March 31, 2020 and December 31, 2019, respectively. |
Cumulative Redeemable Convertible Preferred Stock | Cumulative Redeemable Convertible Preferred Stock The Company’s Series A Preferred Stock (See Note 10 – Preferred Stock) is cumulative redeemable convertible preferred stock. Accordingly, it is classified as temporary equity and is shown net of issuance costs and the relative fair value of warrants issued in conjunction with the issuance of the Series A Preferred Stock. Unpaid preferred dividends are accumulated, compounded at each quarterly dividend date and presented within the carrying value of the Series A Preferred Stock until a dividend is declared by the board of directors. |
Stock Based Compensation | Stock Based Compensation The Company accounts for stock-based compensation for employees and directors in accordance with ASC 718, Compensation. ASC 718 requires all share-based payments to employees, including grants of employee stock options, to be recognized in the statement of income based on their fair values. Under the provisions of ASC 718, stock-based compensation costs are measured at the grant date, based on the fair value of the award, and are recognized as expense over the employee’s requisite or derived service period. In accordance with ASC 718, excess tax benefits realized from the exercise of stock-based awards are classified as cash flows from operating activities. All excess tax benefits and tax deficiencies (including tax benefits of dividends on share-based payment awards) are recognized as income tax expense or benefit in the condensed consolidated statements of income. |
Earnings Per Share | Earnings Per Share The Company computes basic and diluted earnings/(loss) per share (“EPS”) by dividing net earnings/(loss) by the weighted average number of shares of common stock outstanding during the period. The Company is required, in periods in which it has net income, to calculate EPS using the two-class method. The two-class method is required because the Company’s Series A Preferred Stock have the right to receive dividends or dividend equivalents should the Company declare dividends on its common stock. Under the two-class method, earnings for the period are allocated on a pro-rata basis to the common and preferred stockholders. The weighted-average number of common and preferred shares outstanding during the period is then used to calculate basic EPS for each class of shares. In periods in which the Company has a net loss, basic loss per share is calculated by dividing the loss attributable to common stockholders by the weighted-average number of common shares outstanding during the period. The two-class method is not used, because the preferred stock does not participate in losses. The following table summarizes net income attributable to common stockholders used in the calculation of basic and diluted income per common share: (Dollars in thousands - except share and per share amounts) For the three months ended March 31, 2020 For the three months ended March 31, 2019 Distributed earnings allocated to common stock $ - $ - Undistributed earnings allocated to common stock 799 409 Net earnings allocated to common stock 799 409 Net earnings allocated to participating securities 544 251 Net earnings allocated to common stock and participating securities $ 1,343 $ 660 Weighted average shares outstanding for basic earnings per common share 9,757,036 9,695,234 Dilutive effect of warrants and options - - Weighted average shares outstanding for diluted earnings per share computation 9,757,036 9,695,234 Basic income per common share $ 0.08 $ 0.04 Diluted income per common share $ 0.08 $ 0.04 For the three months ended March 31, 2020 and March 31, 2019, the denominator of the basic and dilutive EPS was calculated as follows: For the three months ended March 31, 2020 For the three months ended March 31, 2019 Weighted average outstanding common shares 8,417,537 8,355,735 Weighted average shares held in escrow - - Weighted average prefunded warrants 1,339,499 1,339,499 Weighted shares outstanding - basic and diluted 9,757,036 9,695,234 For the three months ended March 31, 2020 and March 31, 2019, the following common stock equivalent shares were excluded from the computation of the diluted income per share, since their inclusion would have been anti-dilutive: For the three months ended March 31, 2020 For the three months ended March 31, 2019 Shares underlying Series A Convertible Preferred Stock - - Shares underlying warrants 4,677,458 4,677,458 Stock options 3,798,818 3,823,421 Share equivalents excluded from EPS 8,476,276 8,500,879 As of March 31, 2020, the Company did not declare and pay the dividend. As a result, the Series A Convertible Preferred Stock was convertible into 6,713,367 shares of common stock. Upon conversion the Company has the option to pay accrued dividends in cash or allow conversion into common stock. |
Advertising Costs | Advertising Costs Advertising and promotion costs are charged to operations in the period incurred. Advertising and promotion costs totaled approximately $4,359 and $3,920 for the three months ended March 31, 2020 and March 31, 2019, respectively. |
Income Taxes | Income Taxes The Company recognizes deferred tax liabilities and assets for the expected future tax consequences of events that have been included in the financial statements or tax returns. Deferred tax assets and liabilities are determined based on the difference between the financial statement and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The Company estimates the degree to which tax assets and credit carry forwards will result in a benefit based on expected profitability by tax jurisdiction. In its interim financial statements, the Company follows the guidance in ASC 270, “Interim Reporting” and ASC 740 “Income Taxes”, whereby the Company utilizes the expected annual effective tax rate in determining its income tax provisions for the interim periods. |
Seasonality | Seasonality The Company’s combined operations generally experience modestly higher vehicle sales in the first half of each year during the winter months at the Company’s largest location in Tampa, Florida. |
Vendor Concentrations | Vendor Concentrations The Company purchases its new recreational vehicles and replacement parts from various manufacturers. During the three months ended March 31, 2020, four major manufacturers accounted for 28.8%, 23.7%, 18.4% and 17.1% of RV purchases. During the three months ended March 31, 2019, four major manufacturers accounted for 43.6%, 19.0%, 16.4% and 11.0% of RV purchases. The Company is subject to dealer agreements with each manufacturer. The manufacturer is entitled to terminate the dealer agreement if the Company is in material breach of the agreement terms. |
Geographic Concentrations | Geographic Concentrations The percent of revenues generated by the Florida locations and the Colorado locations, which generate greater than 10% of revenues, were as follows (unaudited): For the three For the three Florida 75 % 75 % Colorado 11 % 10 % These geographic concentrations increase the exposure to adverse developments related to competition, as well as economic, demographic, weather and other changes in these regions. |
Subsequent Events | Subsequent Events Management of the Company has analyzed the activities and transactions subsequent to March 31, 2020 through the date these condensed consolidated financial statements were issued to determine the need for any adjustments to or disclosures within the financial statements. The Company did not identify any recognized or non-recognized subsequent events that would require disclosure in the condensed consolidated financial statements other than disclosed below. In March 2020, the World Health Organization declared the outbreak of a novel coronavirus (COVID-19) as a pandemic which continues to spread throughout the United States and globally. The Company is monitoring the outbreak of COVID-19 and the related business and travel restrictions and changes to behavior intended to reduce its spread, and its impact on operations, financial position, cash flows, inventory, supply chains, purchasing trends, customer payments, and the industry in general, in addition to the impact on its employees. Due to the rapid development and fluidity of this situation, the magnitude and duration of the pandemic and its impact on the Company’s operations and liquidity is uncertain as of the date of this report. While there could ultimately be a material impact on operations and liquidity of the Company, at the time of issuance of this quarterly report on Form 10-Q, the impact could not be determined. Due to the COVID-19 pandemic, the Company took a number of actions effective April 6, 2020 to adjust resources and costs to align with reduced demand caused by the pandemic. These actions include: ● Reduction of its workforce by 25%; ● Senior management will forgo 25% of their salary; ● Suspend 2020 annual pay increases; ● Suspend 401k match; ● Delay non-critical capital projects; ● Focus resources on core sales and service operations In order to further mitigate the effects of the COVID-19 pandemic, the Company entered into the Fourth Amendment to the M&T credit agreement on April 16, 2020. Pursuant to the Fourth Amendment, the parties agreed to a suspension of scheduled principal payments on the term loans and mortgage loans (to the extent the permanent loan period has begun for the mortgage loans) for the period from April 15, 2020 through June 15, 2020. Interest on the outstanding principal balances of the term loans and mortgage loans will continue to accrue and be paid at the applicable interest rate during the deferment period. At the end of the deferment period, the borrowers will resume making all required payments of principal on the term loans and mortgage loans. All principal payments of the term loans and mortgage loans deferred during the deferment period will be due and payable on the term loan maturity date or the mortgage loan maturity date, as applicable. Additionally, all principal payments deferred during the deferment period will be due and payable (a) as described above or (b) if earlier, the date all outstanding amounts are otherwise due and payable under the terms of the credit documents (including, without limitation, upon maturity, acceleration or, to the extent applicable under the credit documents, demand for payment). In addition, the amendment includes a temporary suspension of scheduled curtailment payments required by the credit agreement for the period from April 1, 2020 through June 15, 2020. Amounts related to floor plan unused commitment fees and interest on the outstanding principal balance of the M&T Floor Plan Line of Credit (as defined below) will continue to accrue and be paid at the applicable rate and on the terms set forth in the credit agreement during the suspension period. In response to continued economic uncertainty caused by the COVID-19 pandemic, subsidiaries of Lazydays Holdings, Inc. took the additional step of applying for loans (“PPP Loans”) under the Paycheck Protection Program of the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) with M&T Bank (the “Lender”). On April 28, 2020, certain of the Company’s subsidiaries executed promissory notes (the “Notes”) in favor of the Lender for PPP Loans in an aggregate amount of $6,831,250. Pursuant to the Notes, such PPP Loans will bear interest at a rate of 1.0% per year and will mature on April 28, 2022. Commencing on November 28, 2020, monthly payments of principal and interest will be required in amounts necessary to fully amortize the principal amount by the maturity date. The PPP Loans are unsecured and are non-recourse obligations. The Notes provide for customary events of default, and the PPP Loans may be accelerated upon the occurrence of an event of default. All or a portion of the PPP Loans may be forgiven upon application to the Lender for payroll and certain other costs incurred during the 8-week period beginning on the date each PPP Loan is disbursed, in accordance with the requirements and limitations under the CARES Act. The amount of the PPP Loan eligible for forgiveness will be reduced if the Company terminates employees or reduces salaries during the 8-week period. While the Company’s subsidiaries intend to use the entire amount of the PPP Loans for qualifying expenses, no assurance can be provided that forgiveness of any portion of the PPP Loans will be obtained. Applications were submitted by other subsidiaries of the Company, which resulted in the execution of a promissory note on April 30, 2020 for $1,236,040 and on May 4, 2020 for $636,665. The interest rate on the notes is 1.0% per year and the notes mature on April 30, 2022 and May 4, 2022, respectively. Commencing on November 30, 2020 and December 4, 2020, respectively, monthly payments of principal and interest will be required in amounts necessary to fully amortize the principal amount by the maturity date. |
Reclassifications | Reclassifications Certain amounts in prior periods have been reclassified to conform to the current period presentation. These reclassifications had no effect on the previously reported net income. |
Recently Issued Accounting Standards | Recently Issued Accounting Standards The Company qualifies as an emerging growth company pursuant to the provision of the Jumpstart Our Business Startups (“JOBS”) Act. Section 107 of the JOBS Act provides that an emerging growth company can delay the adoption of certain new accounting standards until those standards would otherwise apply to private companies. The Company has elected to take advantage of the extended transition period provided by the JOBS Act for complying with new or revised accounting standards. |
Leases | Leases Adoption of new lease standard In February 2016, the Financial Accounting Standards Board (FASB) issued a new accounting standard that amends the guidance for the accounting and disclosure of leases. This new standard requires that lessees recognize the assets and liabilities that arise from leases on the balance sheet, including leases classified as operating leases, and disclose qualitative and quantitative information about leasing arrangements. The FASB subsequently issued additional amendments to address issues arising from the implementation of the new lease standard. We adopted this standard as of January 1, 2020, using the modified-retrospective method. This approach provides a method for recording existing leases at adoption. We used the adoption date as our date of initial application, and thus comparative-period financial information is not presented for periods prior to the adoption date. In addition, we elected the package of practical expedients permitted under the transition guidance within the new standard, which, among other things, allowed the Company to carry forward the historical lease classification. Adoption of the new standard resulted in total operating lease liabilities of $17,800 and operating lease assets of $17,800 as of January 1, 2020. The standard did not materially impact our Condensed Consolidated Statements of Income and had no impact on our Condensed Consolidated Statements of Cash Flows. Our accounting policies under the new standard are described below. See Note 6, Leases. Lease recognition At inception of a contract, we determine whether an arrangement is or contains a lease. For all leases, we determine the classification as either operating or financing. Operating lease assets represent our right to use an underlying asset for the lease term, and lease liabilities represent our obligation to make lease payments under the lease. Lease recognition occurs at the commencement date and lease liability amounts are based on the present value of lease payments over the lease term. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Because most of our leases do not provide information to determine an implicit interest rate, we use our incremental borrowing rate in determining the present value of lease payments. Operating lease assets also include any lease payments made prior to the commencement date and exclude lease incentives received. Operating lease expense is recognized on a straight-line basis over the lease term. We have lease agreements with both lease and non-lease components, which are generally accounted for together as a single lease component. |
Significant Accounting Polici_3
Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
Schedule of Disaggregation of Revenue | The following table represents the Company’s disaggregation of revenue: For the three For the three March 31, 2019 New vehicle revenue $ 102,444 $ 97,812 Preowned vehicle revenue 64,744 54,822 Parts, accessories, and related services 10,765 8,775 Finance and insurance revenue 11,272 9,715 Campground, rental, and other revenue 1,629 1,933 $ 190,854 $ 173,057 |
Schedule of Revenue Recognized of Finance and Insurance Revenues | The Company recognized finance and insurance revenues, less the additions to the charge-back allowance, which is included in other revenue as follows (unaudited): For the three months ended March 31, 2020 For the three months ended March 31, 2019 Gross finance and insurance revenues $ 12,583 $ 10,678 Additions to charge-back allowance (1,311 ) (963 ) Net Finance Revenue $ 11,272 $ 9,715 |
Summary of Net Income (Loss) Attribute to Common Stockholders | The following table summarizes net income attributable to common stockholders used in the calculation of basic and diluted income per common share: (Dollars in thousands - except share and per share amounts) For the three months ended March 31, 2020 For the three months ended March 31, 2019 Distributed earnings allocated to common stock $ - $ - Undistributed earnings allocated to common stock 799 409 Net earnings allocated to common stock 799 409 Net earnings allocated to participating securities 544 251 Net earnings allocated to common stock and participating securities $ 1,343 $ 660 Weighted average shares outstanding for basic earnings per common share 9,757,036 9,695,234 Dilutive effect of warrants and options - - Weighted average shares outstanding for diluted earnings per share computation 9,757,036 9,695,234 Basic income per common share $ 0.08 $ 0.04 Diluted income per common share $ 0.08 $ 0.04 |
Schedule of Denominator of Basic and Dilutive Earnings Per Share | For the three months ended March 31, 2020 and March 31, 2019, the denominator of the basic and dilutive EPS was calculated as follows: For the three months ended March 31, 2020 For the three months ended March 31, 2019 Weighted average outstanding common shares 8,417,537 8,355,735 Weighted average shares held in escrow - - Weighted average prefunded warrants 1,339,499 1,339,499 Weighted shares outstanding - basic and diluted 9,757,036 9,695,234 |
Schedule of Anti-dilutive Securities Excluded from Computation of Earnings Per Share | For the three months ended March 31, 2020 and March 31, 2019, the following common stock equivalent shares were excluded from the computation of the diluted income per share, since their inclusion would have been anti-dilutive: For the three months ended March 31, 2020 For the three months ended March 31, 2019 Shares underlying Series A Convertible Preferred Stock - - Shares underlying warrants 4,677,458 4,677,458 Stock options 3,798,818 3,823,421 Share equivalents excluded from EPS 8,476,276 8,500,879 |
Schedule of Geographic Concentration Risk Percentage | The percent of revenues generated by the Florida locations and the Colorado locations, which generate greater than 10% of revenues, were as follows (unaudited): For the three For the three Florida 75 % 75 % Colorado 11 % 10 % |
Business Combinations (Tables)
Business Combinations (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Business Combinations [Abstract] | |
Schedule of Fair Value of Assets Acquired and Liabilities Assumed | As a result, the Company determined its preliminary allocation of the fair value of the assets acquired and the liabilities assumed for Alliance as follows: 2019 Inventories $ 12,171 Accounts receivable and prepaid expenses 53 Property and equipment 77 Intangible assets 2,630 Total assets acquired 14,931 Accounts payable, accrued expenses and other current liabilities 243 Floor plan notes payable 11,434 Total liabilities assumed 11,677 Net assets acquired $ 3,254 |
Schedule of Fair Value of Consideration Paid | 2019 Purchase Price: $ 2,568 Cash consideration paid (107 ) Amounts due (from) to former owners Note payable issued to former owners 3,045 $ 5,506 |
Schedule of Goodwill Associated with Merger | Goodwill represents the excess of the purchase price over the estimated fair value assigned to tangible and identifiable intangible assets acquired and liabilities assumed from Alliance. Goodwill associated with the transaction is detailed below: 2019 Total consideration $ 5,506 Less net assets acquired 3,254 Goodwill $ 2,252 |
Schedule of Identifiable Intangible Assets Acquired | The following table summarizes the Company’s preliminary allocation of the purchase price to the identifiable intangible assets acquired as of the date of the closing in 2019. Gross Asset Amount at Acquisition Date Weighted Customer Lists $ 230 7 years Dealer Agreements $ 2,400 7 years |
Schedule of Pro Forma Financial Information | The following unaudited pro forma financial information summarizes the combined results of operations for the Company as though the purchase of Alliance had been consummated on January 1, 2019. For the three months ended March 31, 2020 2019 Revenue $ 190,854 $ 186,076 Income before income taxes $ 4,287 $ 3,729 Net income $ 2,987 $ 2,397 |
Inventories (Tables)
Inventories (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventories | Inventories consist of the following: As of As of March 31, 2020 December 31, 2019 (Unaudited) New recreational vehicles $ 121,357 $ 124,096 Pre-owned recreational vehicles 31,828 36,639 Parts, accessories and other 4,009 3,848 157,194 164,583 Less: excess of current cost over LIFO (3,910 ) (3,719 ) $ 153,284 $ 160,864 |
Accounts Payable, Accrued Exp_2
Accounts Payable, Accrued Expenses and Other Current Liabilities (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Payables and Accruals [Abstract] | |
Schedule of Accounts Payable, Accrued Expenses and Other Current Liabilities | Accounts payable, accrued expenses and other current liabilities consist of the following: As of As of March 31, December 31, 2020 2019 (Unaudited) Accounts payable $ 10,024 $ 11,231 Other accrued expenses 3,838 3,392 Customer deposits 3,161 2,267 Accrued compensation 3,640 2,388 Accrued charge-backs 4,694 4,221 Accrued interest 292 356 Total $ 25,649 $ 23,855 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Leases [Abstract] | |
Schedule of Maturities of Lease Liabilities | Maturities of lease liabilities as of March 31, 2020 were as follows: Maturity Date Operating Leases Remaining nine month ending December 31, 2020 $ 3,081 2021 3,820 2022 3,450 2023 3,312 2024 2,557 Thereafter 4,116 Total lease payments 20,336 Less: Imputed Interest 2,767 Present value of lease liabilities $ 17,569 |
Schedule of Supplemental Cash Flow Information Related to Leases | The following presents supplemental cash flow information related to leases during 2020: For the three months ended March 31, 2020 Cash paid for amounts included in the measurement of lease liability: Operating cash flows for operating leases $ 878 ROU assets obtained in exchange for lease liabilities: Operating leases $ 633 |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of Floor Plan Notes Payable | The M&T Floor Plan Line of Credit consists of the following: As of March 31, 2020 As of December 31, (Unaudited) Floor plan notes payable, gross $ 133,577 $ 144,133 Debt discount (152 ) (184 ) Floor plan notes payable, net of debt discount $ 133,425 $ 143,949 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Equity [Abstract] | |
Schedule of Warrants Activity | The Company had the following activity related to shares of common stock underlying warrants: Shares Underlying Weighted Warrants outstanding January 1, 2020 4,677,458 $ 11.50 Granted - $ - Cancelled or Expired - $ - Exercised - $ - Warrants outstanding March 31, 2020 4,677,458 $ 11.50 |
Schedule of Stock Option Activity | Stock option activity is summarized below: Shares Underlying Options Weighted Average Exercise Price Weighted Average Remaining Contractual Life Aggregate Intrinsic Value Options outstanding at January 1, 2020 3,798,818 $ 10.63 Granted 225,000 $ 8.50 Cancelled or terminated - $ - Exercised - $ - Options outstanding at March 31, 2020 4,023,818 $ 10.51 3.3 $ - Options vested at March 31, 2020 97,554 $ 8.08 3.6 $ - |
Schedule of Fair Value Assumptions of Awards | For the three Risk free interest rate 0.43 % Expected term (years) 3.75 Expected volatility 55 % Expected dividends 0.00 % |
Significant Accounting Polici_4
Significant Accounting Policies (Details Narrative) - USD ($) $ in Thousands | May 04, 2020 | Apr. 30, 2020 | Apr. 28, 2020 | Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | Jan. 02, 2020 |
Accrued charge-backs | $ 4,694 | $ 4,221 | |||||
Contract liabilities | 1,374 | ||||||
LIFO inventory value exceeds | 3,910 | 3,719 | |||||
Advertising and promotion costs | $ 4,359 | 3,920 | |||||
Reduction in workforce percentage | 25.00% | ||||||
Base salary percentage | 25.00% | ||||||
Operating lease liability | $ 17,569 | ||||||
Operating lease, right-of-use asset | $ 17,953 | ||||||
ASU 2016-02 (Topic 842) [Member] | |||||||
Operating lease liability | $ 17,800 | ||||||
Operating lease, right-of-use asset | $ 17,800 | ||||||
Subsequent Event [Member] | |||||||
Promissory notes aggregate amount | $ 636,665 | $ 1,236,040 | $ 6,831,250 | ||||
Note bear interest rate, percent | 1.00% | 1.00% | 1.00% | ||||
Note maturity date | May 4, 2022 | Apr. 30, 2022 | Apr. 28, 2022 | ||||
Vendor 1 [Member] | |||||||
Concentration risk, percentage | 28.80% | 43.60% | |||||
Vendor 2 [Member] | |||||||
Concentration risk, percentage | 23.70% | 19.00% | |||||
Vendor 3 [Member] | |||||||
Concentration risk, percentage | 18.40% | 16.40% | |||||
Vendor 4 [Member] | |||||||
Concentration risk, percentage | 17.10% | 11.00% | |||||
Series A Convertible Preferred Stock [Member] | |||||||
Convertible preferred stock converted into common stock | 6,713,367 |
Significant Accounting Polici_5
Significant Accounting Policies - Schedule of Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Revenue | $ 190,854 | $ 173,057 |
New Vehicle Revenue [Member] | ||
Revenue | 102,444 | 97,812 |
Preowned Vehicle Revenue [Member] | ||
Revenue | 64,744 | 54,822 |
Parts, Accessories, and Related Services [Member] | ||
Revenue | 10,765 | 8,775 |
Finance and Insurance Revenue [Member] | ||
Revenue | 11,272 | 9,715 |
Campground, Rental, and Other Revenue [Member] | ||
Revenue | $ 1,629 | $ 1,933 |
Significant Accounting Polici_6
Significant Accounting Policies - Schedule of Revenue Recognized of Finance and Insurance Revenues (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Accounting Policies [Abstract] | ||
Gross finance and insurance revenues | $ 12,583 | $ 10,678 |
Additions to charge-back allowance | (1,311) | (963) |
Net Finance Revenue | $ 11,272 | $ 9,715 |
Significant Accounting Polici_7
Significant Accounting Policies - Summary of Net Income (Loss) Attribute to Common Stockholders (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Accounting Policies [Abstract] | ||
Distributed earnings allocated to common stock | ||
Undistributed earnings allocated to common stock | 799 | 409 |
Net loss allocated to common stock | 799 | 409 |
Net loss allocated to participating securities | 544 | 251 |
Net loss allocated to common stock and participating securities | $ 1,343 | $ 660 |
Weighted average shares outstanding for basic earnings per common share | 9,757,036 | 9,695,234 |
Dilutive effect of warrants and options | ||
Weighted average shares outstanding for diluted earnings per share computation | 9,757,036 | 9,695,234 |
Basic loss per common share | $ 0.08 | $ 0.04 |
Diluted loss per common share | $ 0.08 | $ 0.04 |
Significant Accounting Polici_8
Significant Accounting Policies - Schedule of Denominator of Basic and Dilutive Earnings Per Share (Details) - shares | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Accounting Policies [Abstract] | ||
Weighted average outstanding common shares | 8,417,537 | 8,355,735 |
Weighted average shares held in escrow | ||
Weighted average prefunded warrants | 1,339,499 | 1,339,499 |
Weighted shares outstanding - basic and diluted | 9,757,036 | 9,695,234 |
Significant Accounting Polici_9
Significant Accounting Policies - Schedule of Anti-dilutive Securities Excluded from Computation of Earnings Per Share (Details) - shares | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Share equivalents excluded from EPS | 8,476,276 | 8,500,879 |
Series A Convertible Preferred Stock [Member] | ||
Share equivalents excluded from EPS | ||
Warrants [Member] | ||
Share equivalents excluded from EPS | 4,677,458 | 4,677,458 |
Stock Options [Member] | ||
Share equivalents excluded from EPS | 3,798,818 | 3,823,421 |
Significant Accounting Polic_10
Significant Accounting Policies - Schedule of Geographic Concentration Risk Percentage (Details) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Florida [Member] | ||
Statement Line Items [Line Items] | ||
Concentration risk percentage | 75.00% | 75.00% |
Colorado [Member] | ||
Statement Line Items [Line Items] | ||
Concentration risk percentage | 11.00% | 10.00% |
Business Combination (Details N
Business Combination (Details Narrative) - USD ($) $ in Thousands | Aug. 01, 2019 | Mar. 31, 2020 |
Acquisition of Dealership [Member] | ||
Revenue related to acquisitions | $ 14,000 | |
Net loss prior to income taxes related to acquisitions | $ 700 | |
Alliance Coach Inc. [Member] | ||
Debt instrument, maturity date | Aug. 1, 2021 | |
Monthly payments of principal and interest | $ 134 | |
Debt instrument, interest rate | 5.00% |
Business Combination - Schedule
Business Combination - Schedule of Fair Value of Assets Acquired and Liabilities Assumed (Details) - Acquisition of Dealership [Member] $ in Thousands | Dec. 31, 2019USD ($) |
Inventories | $ 12,171 |
Accounts receivable and prepaid expenses | 53 |
Property and equipment | 77 |
Intangible assets | 2,630 |
Total assets acquired | 14,931 |
Accounts payable, accrued expenses and other current liabilities | 243 |
Floor plan notes payable | 11,434 |
Total liabilities assumed | 11,677 |
Net assets acquired | $ 3,254 |
Business Combination - Schedu_2
Business Combination - Schedule of Fair Value of Consideration Paid (Details) - Acquisition of Dealership [Member] $ in Thousands | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Purchase Price: | $ 2,568 |
Cash consideration paid | (107) |
Amounts due (from) former owners | |
Note payable issued to former owners | 3,045 |
Total consideration | $ 5,506 |
Business Combination - Schedu_3
Business Combination - Schedule of Goodwill Associated with Merger (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Mar. 31, 2020 | |
Goodwill | $ 38,979 | $ 38,979 |
Acquisition of Dealership [Member] | ||
Total consideration | 5,506 | |
Less net assets acquired | 3,254 | |
Goodwill | $ 2,252 |
Business Combination - Schedu_4
Business Combination - Schedule of Identifiable Intangible Assets Acquired (Details) - Acquisition of Dealership [Member] $ in Thousands | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Customer Lists [Member] | |
Intangible Assets, Gross Asset Amount at Acquisition Date | $ 230 |
Intangible Assets, Weighted Average Amortization Period in Years | 7 years |
Dealer Agreements [Member] | |
Intangible Assets, Gross Asset Amount at Acquisition Date | $ 2,400 |
Intangible Assets, Weighted Average Amortization Period in Years | 7 years |
Business Combination - Schedu_5
Business Combination - Schedule of Pro Forma Financial Information (Details) - Acquisition of Dealership [Member] - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Revenue | $ 190,854 | $ 186,076 |
Income before income taxes | 4,287 | 3,729 |
Net income | $ 2,987 | $ 2,397 |
Inventories - Schedule of Inven
Inventories - Schedule of Inventories (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Inventories, gross | $ 157,194 | $ 164,583 |
Less: excess of current cost over LIFO | (3,910) | (3,719) |
Inventories, net | 153,284 | 160,864 |
New Recreational Vehicles [Member] | ||
Inventories, gross | 121,357 | 124,096 |
Pre-owned Recreational Vehicles [Member] | ||
Inventories, gross | 31,828 | 36,639 |
Parts, Accessories and Other [Member] | ||
Inventories, gross | $ 4,009 | $ 3,848 |
Accounts Payable, Accrued Exp_3
Accounts Payable, Accrued Expenses and Other Current Liabilities - Schedule of Accounts Payable, Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Payables and Accruals [Abstract] | ||
Accounts payable | $ 10,024 | $ 11,231 |
Other accrued expenses | 3,838 | 3,392 |
Customer deposits | 3,161 | 2,267 |
Accrued compensation | 3,640 | 2,388 |
Accrued charge-backs | 4,694 | 4,221 |
Accrued interest | 292 | 356 |
Total | $ 25,649 | $ 23,855 |
Leases (Details Narrative)
Leases (Details Narrative) - USD ($) $ in Thousands | Mar. 10, 2020 | Mar. 31, 2020 |
Lease term | 12 months | |
Weighted-average remaining lease term | 5 years 9 months 18 days | |
Weighted-average discount rate of operating leases | 5.00% | |
Operating lease costs | $ 878 | |
Short term leases | ||
LD Murfreesboro TN Landlord, LLC [Member] | ||
Proceeds from sale of land | $ 4,921,000 | |
Maximum [Member] | ||
Lease renewal terms | 20 years |
Leases - Schedule of Maturities
Leases - Schedule of Maturities of Lease Liabilities (Details) $ in Thousands | Mar. 31, 2020USD ($) |
Leases [Abstract] | |
Remaining nine month ending December 31, 2020 | $ 3,081 |
2021 | 3,820 |
2022 | 3,450 |
2023 | 3,312 |
2024 | 2,557 |
Thereafter | 4,116 |
Total lease payments | 20,336 |
Less: Imputed Interest | 2,767 |
Present value of lease liabilities | $ 17,569 |
Leases - Schedule of Supplement
Leases - Schedule of Supplemental Cash Flow Information Related to Leases (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Leases [Abstract] | ||
Cash paid for amounts included in the measurement of lease liability: Operating cash flows for operating leases | $ 878 | |
ROU assets obtained in exchange for lease liabilities: Operating leases | $ 17,781 |
Debt (Details Narrative)
Debt (Details Narrative) - USD ($) $ in Thousands | Mar. 06, 2020 | Mar. 16, 2018 | Mar. 31, 2020 | Mar. 31, 2019 |
Repayments under long term debt with bank of America | $ 725 | $ 725 | ||
Third Amendment [Member] | ||||
Line of credit maximum borrowing capacity | $ 6,136 | |||
Interest rate | 3.312% | |||
M&T Facility [Member] | ||||
Line of credit maximum borrowing capacity | $ 200,000 | |||
Line of credit facility, expiration date | Mar. 15, 2021 | |||
Maximum amount of cash dividends | $ 9,886 | |||
BOA Floor Plan [Member] | ||||
Repayments of lines of credit | $ 96,740 | |||
BOA Term Loan with M&T Facility [Member] | ||||
Repayments under long term debt with bank of America | 8,820 | |||
M&T Floor Plan Line of Credit [Member] | ||||
Line of credit maximum borrowing capacity | $ 175,000 | |||
Line of credit rate description | The Base Rate is defined in the M&T Facility as the highest of M&T's prime rate, the Federal Funds rate plus 0.50% or one-month LIBOR plus 1.00%. | The $175,000 M&T Floor Plan Line of Credit may be used to finance new vehicle inventory, but only $45,000 may be used to finance pre-owned vehicle inventory and $4,500 may be used to finance rental units. Principal becomes due upon the sale of the related vehicle. | ||
Interest rate | 2.989% | |||
Maximum draw down for rental units | $ 4,500 | |||
Line of credit commitments percentage | 0.15% | |||
M&T Floor Plan Line of Credit [Member] | Pre-owned Vehicle Inventory [Member] | ||||
Line of credit maximum borrowing capacity | $ 45,000 | |||
M&T Floor Plan Line of Credit [Member] | LIBOR [Member] | Minimum [Member] | ||||
Percentage of leverage ratio | 2.00% | |||
M&T Floor Plan Line of Credit [Member] | LIBOR [Member] | Maximum [Member] | ||||
Percentage of leverage ratio | 2.30% | |||
M&T Floor Plan Line of Credit [Member] | Base Rate [Member] | Minimum [Member] | ||||
Percentage of leverage ratio | 1.00% | |||
M&T Floor Plan Line of Credit [Member] | Base Rate [Member] | Maximum [Member] | ||||
Percentage of leverage ratio | 1.30% | |||
M&T Floor Plan Line of Credit [Member] | Third Amendment [Member] | ||||
Repayments of loan monthly installments | $ 30 | |||
Line of credit rate description | The mortgage shall bear interest at (a) LIBOR plus an applicable margin of 2.25% or (b) the Base Rate plus a margin of 1.25%. | |||
Debt instrument maturity date | Mar. 15, 2021 | |||
Line of credit mortgage balance | $ 5,006 | |||
M&T Floor Plan Line of Credit [Member] | Third Amendment [Member] | LIBOR [Member] | ||||
Percentage of leverage ratio | 2.25% | |||
M&T Floor Plan Line of Credit [Member] | Third Amendment [Member] | Base Rate [Member] | ||||
Percentage of leverage ratio | 1.25% | |||
M&T Term Loan [Member] | ||||
Repayments of loan monthly installments | $ 242 | |||
Debt instrument maturity date | Mar. 15, 2021 | |||
Interest rate | 3.25% | |||
Term loan | $ 20,000 | |||
Outstanding letters of credit | $ 14,200 | |||
M&T Term Loan [Member] | LIBOR [Member] | Minimum [Member] | ||||
Percentage of leverage ratio | 2.25% | |||
M&T Term Loan [Member] | LIBOR [Member] | Maximum [Member] | ||||
Percentage of leverage ratio | 3.00% | |||
M&T Term Loan [Member] | Base Rate [Member] | Minimum [Member] | ||||
Percentage of leverage ratio | 1.25% | |||
M&T Term Loan [Member] | Base Rate [Member] | Maximum [Member] | ||||
Percentage of leverage ratio | 2.00% | |||
M&T Revolver [Member] | ||||
Line of credit maximum borrowing capacity | $ 5,000 | |||
M&T Revolver [Member] | Minimum [Member] | ||||
Line of credit commitments percentage | 0.25% | |||
M&T Revolver [Member] | Maximum [Member] | ||||
Line of credit commitments percentage | 0.50% | |||
M&T Revolver [Member] | LIBOR [Member] | Minimum [Member] | ||||
Percentage of leverage ratio | 2.25% | |||
M&T Revolver [Member] | LIBOR [Member] | Maximum [Member] | ||||
Percentage of leverage ratio | 3.00% | |||
M&T Revolver [Member] | Base Rate [Member] | Minimum [Member] | ||||
Percentage of leverage ratio | 1.25% | |||
M&T Revolver [Member] | Base Rate [Member] | Maximum [Member] | ||||
Percentage of leverage ratio | 2.00% |
Debt - Schedule of Floor Plan N
Debt - Schedule of Floor Plan Notes Payable (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Floor plan notes payable, net of debt discount | $ 133,425 | $ 143,949 |
Floor Plan Notes Payable [Member] | ||
Floor plan notes payable, gross | 133,577 | 144,133 |
Debt discount | (152) | (184) |
Floor plan notes payable, net of debt discount | $ 133,425 | $ 143,949 |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Income Tax Disclosure [Abstract] | ||
Provision for federal and state income taxes | $ 1,300 | $ 1,185 |
Effective tax rates, percentage | 30.00% | 39.00% |
Federal statutory rate, percentage | 21.00% |
Commitments and Contingencies (
Commitments and Contingencies (Details Narrative) - USD ($) $ in Thousands | Apr. 06, 2020 | May 31, 2018 | Mar. 31, 2020 |
Chief Financial Officer [Member] | Employee Relocation [Member] | |||
Relocation allowance | $ 100 | ||
Chief Financial Officer [Member] | Maximum [Member] | |||
Percentage of target bonus on base salary | 150.00% | ||
Senior Management [Member] | Subsequent Event [Member] | |||
Percentage of target bonus on base salary | 25.00% | ||
Non-Employee Members [Member] | |||
Annual cash compensation | $ 50 | ||
Committee of Board of Directors [Member] | |||
Annual cash compensation | 5 | ||
Chairman of Any Committees [Member] | |||
Annual cash compensation | 10 | ||
Employment Agreement [Member] | Chief Executive Officer [Member] | |||
Initial base salary | $ 540 | ||
Percentage of target bonus on base salary | 100.00% | ||
Employment Agreement [Member] | Chief Financial Officer [Member] | |||
Initial base salary | $ 325 | ||
Percentage of target bonus on base salary | 75.00% |
Preferred Stock (Details Narrat
Preferred Stock (Details Narrative) $ / shares in Units, $ in Thousands | Mar. 15, 2018USD ($)$ / sharesshares | Mar. 31, 2020USD ($)$ / shares |
Preferred stock conversion price per share | $ 9.72 | |
Market price per share on the date of issuance | $ 10.29 | |
Beneficial conversion feature on series a convertible preferred stock | $ | $ 3,392 | |
Reduction in preferred stock | $ | $ 2,035 | |
Measurement Input, Expected Term [Member] | ||
Fair value assumptions, measurement input, term | 5 years | |
Measurement Input, Price Volatility [Member] | ||
Fair value assumptions, measurement input, percentages | 0.39 | |
Measurement Input, Risk Free Interest Rate [Member] | ||
Fair value assumptions, measurement input, percentages | 0.0261 | |
Measurement Input, Expected Dividend Rate [Member] | ||
Fair value assumptions, measurement input, percentages | 0 | |
Common Stock [Member] | ||
Warrant redemption price per share | $ 0.01 | |
Common Stock [Member] | Exceeds Price Point [Member] | ||
Common stock market price per share | $ 24 | |
Placement Agent [Member] | ||
Warrant term | 5 years | |
Warrant to purchase common shares | shares | 178,882 | |
Warrant exercise price | $ 11.50 | |
Aggregate offering costs | $ | $ 2,981 | |
Fair value of warrants | $ | $ 632 | |
Series A Preferred Stock [Member] | ||
Preferred stock dividend rate percentage | 10.00% | |
Weighted average price trading price after second anniversary force conversion | $ 25 | |
Warrant term | 5 years | |
Warrant to purchase common shares | shares | 596,273 | |
Warrant exercise price | $ 11.50 | |
Dividend payment on preferred stock | $ | $ 1,644 | |
Preferred stock dividend price per shares | $ 2.74 | |
Private Placement [Member] | ||
Sale of stock consideration | $ | $ 94,800 | |
Private Placement [Member] | Series A Preferred Stock [Member] | ||
Number of shares issued | shares | 600,000 | |
Number of shares issued, value | $ | $ 60,000 | |
Preferred stock conversion price per share | $ 10.0625 | |
Preferred stock dividend rate percentage | 8.00% | |
Issue price of preferred stock | $ | $ 100 | |
Dividend rate description | Accrued and unpaid dividends, until paid in full in cash, will accrue at the then applicable Dividend Rate plus 2%. The Dividend Rate will be increased to 11% per annum, compounded quarterly, in the event that the Company's senior indebtedness less unrestricted cash during any trailing twelve-month period ending at the end of any fiscal quarter is greater than 2.25 times earnings before interest, taxes, depreciation and amortization ("EBITDA"). The Dividend Rate will be reset to 8% at the end of the first fiscal quarter when the Company's senior indebtedness less unrestricted cash during the trailing twelve-month period ending at the end of such quarter is less than 2.25 times EBITDA. | |
Private Placement [Member] | Series A Preferred Stock [Member] | Maximum [Member] | ||
Preferred stock dividend rate percentage | 11.00% | |
Private Placement [Member] | Series A Preferred Stock [Member] | Board of Directors [Member] | ||
Number of preferred stock owned | shares | 500,000 |
Stockholders' Equity (Details N
Stockholders' Equity (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | May 20, 2019 | Jun. 15, 2018 | May 31, 2018 | May 07, 2018 | Mar. 23, 2018 | Mar. 16, 2018 | Mar. 15, 2018 | Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 |
Common stock, shares authorized | 100,000,000 | 100,000,000 | ||||||||
Common stock, par value | $ 0.0001 | $ 0.0001 | ||||||||
Preferred stock, shares authorized | 5,000,000 | 5,000,000 | ||||||||
Preferred stock, par value | $ 0.0001 | $ 0.0001 | ||||||||
Stock based compensation | $ 680 | $ 1,514 | ||||||||
Number of shares options granted | 225,000 | |||||||||
Expected term | 3 years 9 months | |||||||||
Expected risk-free rate | 0.43% | |||||||||
Expected dividend yield | 0.00% | |||||||||
Expected annual volatility | 55.00% | |||||||||
Stock based compensation related to awards with market conditions | $ 554 | 1,470 | ||||||||
Stock based compensation related to awards with service conditions | $ 88 | $ 44 | ||||||||
Non-Employee Directors [Member] | ||||||||||
Fair value of the options issued | $ 350 | |||||||||
Expected term | 3 years 6 months | |||||||||
Expected risk-free rate | 2.42% | |||||||||
Expected dividend yield | 0.00% | |||||||||
Expected annual volatility | 39.00% | |||||||||
Stock options vesting term | 3 years | |||||||||
Granted stock options term | 5 years | |||||||||
Stock option issued to purchase units | 14,218 | |||||||||
Employees [Member] | ||||||||||
Number of shares options granted | 225,000 | 505,000 | ||||||||
Stock options exercise price per share | $ 8.50 | |||||||||
Fair value of the options issued | $ 145 | $ 957 | ||||||||
Expected term | 3 years 9 months | |||||||||
Expected dividend yield | 0.00% | |||||||||
Stock options vesting term | 4 years | 4 years | ||||||||
Granted stock options term | 5 years | 5 years | ||||||||
Employees [Member] | Minimum [Member] | ||||||||||
Stock options exercise price per share | $ 4.50 | |||||||||
Expected risk-free rate | 1.70% | |||||||||
Expected annual volatility | 52.00% | |||||||||
Employees [Member] | Maximum [Member] | ||||||||||
Stock options exercise price per share | $ 8.50 | |||||||||
Expected risk-free rate | 2.51% | |||||||||
Expected annual volatility | 55.00% | |||||||||
Non-Redeemable Pre-funded Warrants [Member] | ||||||||||
Number of warrant to purchase shares of common stock | 1,339,499 | |||||||||
Warrant exercise price | $ 0.01 | |||||||||
Five Year Incentive Stock Options [Member] | ||||||||||
Number of shares options granted | 3,573,113 | |||||||||
Stock options exercise price per share | $ 11.10 | |||||||||
Fair value of the options issued | $ 2,357 | $ 15,004 | ||||||||
Expected term | 5 years | 5 years | ||||||||
Expected risk-free rate | 2.74% | 2.62% | ||||||||
Expected dividend yield | 0.00% | 0.00% | ||||||||
Expected annual volatility | 54.70% | 42.80% | ||||||||
Five Year Incentive Stock Options [Member] | Share-based Compensation Award, Tranche One [Member] | ||||||||||
Stock option vesting percentage | 30.00% | |||||||||
Stock option vested price per share | $ 13.125 | |||||||||
Stock options vesting term | 11 months 19 days | 8 months 26 days | ||||||||
Five Year Incentive Stock Options [Member] | Share-based Compensation Award, Tranche Two [Member] | ||||||||||
Stock option vesting percentage | 30.00% | |||||||||
Stock option vested price per share | $ 17.50 | |||||||||
Stock options vesting term | 1 year 9 months | 1 year 7 months 21 days | ||||||||
Five Year Incentive Stock Options [Member] | Share-based Compensation Award, Tranche Three [Member] | ||||||||||
Stock option vesting percentage | 30.00% | |||||||||
Stock option vested price per share | $ 21.875 | |||||||||
Stock options vesting term | 2 years 1 month 24 days | 2 years 2 months 27 days | ||||||||
Five Year Incentive Stock Options [Member] | Share-based Compensation Award, Tranche Four [Member] | ||||||||||
Stock option vesting percentage | 10.00% | |||||||||
Stock option vested price per share | $ 35 | |||||||||
Stock options vesting term | 2 years 11 months 15 days | 3 years 1 month 16 days | ||||||||
Five Year Incentive Stock Options [Member] | Non-Employee Directors [Member] | ||||||||||
Stock options exercise price per share | $ 11.10 | |||||||||
Number of options forfeited | 15,123 | |||||||||
Stock options vesting term | 3 years | |||||||||
Granted stock options term | 5 years | |||||||||
Stock option issued to purchase units | 99,526 | |||||||||
CEO Stock Options [Member] | ||||||||||
Number of shares options granted | 1,458,414 | |||||||||
CFO Stock Options [Member] | ||||||||||
Number of shares options granted | 583,366 | 583,366 | ||||||||
Former CFO Stock Options [Member] | ||||||||||
Number of options forfeited | 583,366 | |||||||||
New Five Year Incentive Stock Options [Member] | Non-Employee Directors [Member] | ||||||||||
Stock option issued to purchase units | 15,123 | |||||||||
Stock option issued to purchase units price per share | $ 10.40 | |||||||||
Stock Options [Member] | ||||||||||
Compensation cost unrecognized | $ 1,682 | |||||||||
Weighted average service period | 2 years 1 month 2 days | |||||||||
Weighted average grant date fair value of awards issued | $ 0.65 | |||||||||
2018 Long-Term Incentive Equity Plan [Member] | ||||||||||
Maximum percentage on options may be issued | 13.00% | |||||||||
Options issuable under stock price trigger | $ 8.75 | |||||||||
Number of common shares reserved for future issuance | 600,000 | 625,748 | ||||||||
2019 Employee Stock Purchase Plan [Member] | ||||||||||
Number of common shares reserved for future issuance | 900,000 | |||||||||
Common stock purchase price, description | Participants in the plan may purchase shares of common stock at a purchase price which will not be less than the lesser of 85% of the fair market value per share of the common on the first day of the purchase period or the last day of the purchase period. | |||||||||
Stock based compensation | $ 38 | |||||||||
Increased Plan by Formula [Member] | 2018 Long-Term Incentive Equity Plan [Member] | ||||||||||
Maximum percentage on options may be issued | 18.00% |
Stockholders' Equity - Schedule
Stockholders' Equity - Schedule of Warrants Activity (Details) | 3 Months Ended |
Mar. 31, 2020$ / sharesshares | |
Equity [Abstract] | |
Shares of Common Stock Underlying Warrants outstanding beginning balance | shares | 4,677,458 |
Shares of Common Stock Underlying Warrants Granted | shares | |
Shares of Common Stock Underlying Warrants Cancelled or Expired | shares | |
Shares of Common Stock Underlying Warrants Exercised | shares | |
Shares of Common Stock Underlying Warrants outstanding ending balance | shares | 4,677,458 |
Weighted Average Exercise Price beginning balance | $ / shares | $ 11.50 |
Weighted Average Exercise Price Granted | $ / shares | |
Weighted Average Exercise Price Cancelled or Expired | $ / shares | |
Weighted Average Exercise Price Exercised | $ / shares | |
Weighted Average Exercise Price ending balance | $ / shares | $ 11.50 |
Stockholders' Equity - Schedu_2
Stockholders' Equity - Schedule of Stock Option Activity (Details) | 3 Months Ended |
Mar. 31, 2020USD ($)$ / sharesshares | |
Equity [Abstract] | |
Shares of Common Stock Underlying Options, outstanding, January 1, 2019 | shares | 3,798,818 |
Shares of Common Stock Underlying Options, Granted | shares | 225,000 |
Shares of Common Stock Underlying Options, Cancelled or terminated | shares | |
Shares of Common Stock Underlying Options, Exercised | shares | |
Shares of Common Stock Underlying Options, outstanding, December 31, 2019 | shares | 4,023,818 |
Shares of Common Stock Underlying Options, vested, December 31, 2019 | shares | 97,554 |
Weighted Average Exercise Price outstanding, January 01, 2019 | $ / shares | $ 10.63 |
Weighted Average Exercise Price, Granted | $ / shares | 8.50 |
Weighted Average Exercise Price, Cancelled or terminated | $ / shares | |
Weighted Average Exercise Price, Exercised | $ / shares | |
Weighted Average Exercise Price outstanding, December 31, 2019 | $ / shares | 10.51 |
Weighted Average Exercise Price, vested, December 31, 2019 | $ / shares | $ 8.08 |
Weighted Average Remaining Contractual Life outstanding, December 31, 2019 | 3 years 3 months 19 days |
Weighted Average Remaining Contractual Life, vested, December 31, 2019 | 3 years 7 months 6 days |
Aggregate Intrinsic Value, outstanding, January 1, 2019 | $ | |
Aggregate Intrinsic Value, vested, December 31, 2019 | $ |
Stockholders' Equity - Schedu_3
Stockholders' Equity - Schedule of Fair Value Assumptions of Awards (Details) | 3 Months Ended |
Mar. 31, 2020 | |
Equity [Abstract] | |
Risk free interest rate | 0.43% |
Expected term (years) | 3 years 9 months |
Expected volatility | 55.00% |
Expected dividends | 0.00% |