LAZY - Earnings call transcript Q2 2018

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Operator

Good morning. My name is Caitlin and I will be your conference operator today. At this time I would like to welcome everyone to the Lazydays Holdings Inc., Second Quarter 2018 Financial Results Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks there will be a question and answer session. you. Thank Instructions] [Operator Controller, begin Corporate conference. you Meehan, your may James

James Meehan

James you morning our us presentations Financial report to Thank release of this I'm the earnings Good exhibit and website, copy release Form relations the of and an SEC. the current Financial thank We page furnished Mr. Results Corporate Bill for the the to issued Lazydays. been with Call. and Murnane, our morning. XXXX on our Mr. you, operator. and events press Officer. our call on Quarter Nick is Officer, and are available has X-K joining section company's Chief the Controller Second as me Chairman for Conference investor of With A Meehan, Executive earnings our Tomashot, Chief today under

that revenue, information factors. results consist discussion reminder, of product regarding those or statements, a a materially you As geographic future could forward-looking from as stock-based expenses, trends mix many our differ of some result note during forward-looking and the hear periods Actual may expense, expansion. compensation will gross statements operating please of taxes, margins, limitation today without for the that including

risk For March with the the information, XX, factors SEC XXXX. refer additional to Form please the on in discussed X-K filed

release measures. the press We comparable GAAP will earnings directly EBITDA including company, and measures to reconciliations we also to to Adjusted non-GAAP useful our financial discuss non-GAAP Please most are measures that of of financial financial believe the EBITDA. refer these performance for

result information of financial XXXX, operating months Lazydays the the ended three For XX, represents the June Holdings Inc. presented

the results Lazydays months Inc. RV of the presented three represents information ended financial For June Center XX, XXXX, the operating

XXXX, months January period Center Holdings XXXX. of for XX, March financial X, ended XX, XXXX, For the Lazydays for XX, period combined the presented information the operating from operating Inc. the to to Lazydays the from June Inc. RV result with XX, result of the March represents XXXX, XXXX, six June

represents the Inc. XX, For months June six Center of the result ended operating financial presented Lazydays information RV XXXX, the

Now Murnane. Bill introduce it is my pleasure to

William Murnane

Thank you James, and morning good everyone.

happy results. strong very are to We quarterly report

EBITDA $XX in million X.X% increased Adjusted Our the by to quarter.

revenue our its demand average $XXX.X our result million, Nick few price, impact mix Tomashot towable a shift remained the margin, a of results. decrease he X.X% higher details this was total strong towards on in Although mix selling marketplace. details the more more provides Recreational will to and shift decreased the lower vehicle moments when products. on financial in give

line and industry. The no see deliver growth. were remained unit to we leverage very and margins to strong and importantly, the underlying industry improve RV strong able delivering trends growth remain margins change of focused revenue our More profitable bottom performance. on strong the we in We

demand from see to We demographic strong continue groups. all

over the Now financial I'm the second Tomashot, Nick of to some take our quarter. going turn highlights the to CFO, through to call you of

Nicholas Tomashot

for XXXX. Thanks the period good Bill, I'm June compared unless otherwise morning between comparisons everyone. quarter providing are XX, stated to the XXXX, ended note that recent Please the second and same

the Total the of year. of X.X% X.X% X,XXX June for X,XXX XXXX, increased same XXXX. last excluding to period we revenue unit growth for quarter to the show X.X% compared where, unit for to excluding to Bill units quarter our X,XXX the were Year wholesale, date, through stated, second in As the the up $XXX.X X,XXX to continued all second across versus to units in quarter sales wholesale decreased RV sales quarter million. dealerships of end of XXXX

selling reflecting approximately which prices towable revenue decreased mix lower and new overall have for towards million $X.X units, pre-owned RV million, $XXX.X sales RV in up were an Although average unit to the shift per sales unit. quarter,

increase XX.X% pre-owned X.X% revenue per sold in $XX,XXX offset increase or a average $XX.X approximately unit, sold to average million XX increased approximately New in vehicle an to in price new revenue, XX.X% driven $XX,XXX. vehicle increase XXX million. towards to sales X,XXX, units selling to while sales the by X.X% by $XX.X unit reflects sales million decreased $X.X new to per pre-owned a wholesale a vehicle to or which excluding in was decreased X.X% million, The both decrease the $X.X increased by X.X% units unit This RV or in towables. revenue mix shift plus

quarter, e-commerce Revenues well faster and associated $XX.X RV versus moderately these business total, units $X.X second revenue second mix now revenue. by million business towable our other motorized to our growing parts, finance insurance discontinued than with quarter and year, prior quarter channels of lines as For campground of revenue, motorized million sales $X.X as at X.X% the services, other In million. accessories, approximately pre-owned of towables. of in year rate XXXX sales. other to a and with unit decreased was consist approximately comparable revenue Prior included or related

business in Excluding quarter, sales department million lines $XX.X approximately from $X.X quarter Finance by our X.X% the e-commerce million. X.X% these but our increase and X.X% increased sales, XXXX shift the to approximately This $X.X increased $XX.X at and of insurance $X.X million of Lazydays the our million. overall drove from business of and to higher or in flat lines units, our profit excluding million profit these pre-owned mix approximately $XX for showed other decrease compared X.X%. to other towards million, service quarter. impact $X.X XXXX X.X% sales revenues $X.X approximately XXXX or year-on-year revenue sales unit parts for Sales In Despite towable RV sales gross gross business. of a increased approximately other a was Gross carry million. RV margins, increased to which second e-commerce the increase gross in the to discontinued mentioned million total, increased our was by $X.X profit previously million. X.X% or driven or

primarily million $XX.X to Andina combined costs stock-based the Lazydays million non-cash business increased million. Center combination and depreciation primarily between This balance II and by was March. related to the for merger, RV increased X.X% Excluding approximately as to Inc., or expenses, from Corp. the $X.X compensation driven expenses to by in operating Acquisition market March $X.X transaction attributable million sheet revaluation $X.X increasing million, awards amortization well with conditions as with driven granted $X.X

transaction gross general costs As administration profit, a selling, percentage XXX points or increased to expenses basis SG&A of excluding XX.X%. and

was includes $X.X of Adjusted $X.X release points to in increase million of table million, Adjusted increase refer before costs, for the from made as in XXXX, second quarter XX.X%, transaction and expense and Net second as basis increased approximately by a depreciation, points for stock-based decreased EBITDA million EBITDA compensation, up EBITDA. to to XXXX. SG&A XXX $XX income amortization quarter of second for the reconciliation tax Excluding income quarter profit This stock-based gross non-cash million. $X.X $X.X million earnings increased percentage basis XX.X% or the previously includes X.X% the which was I XXXX compensation. increases XXXX in that million million to $X.X a $X.X margin SG&A of before non-cash of well amortization, expense depreciation a tax tax to our income XXXX Adjusted prior Please net attributable as down by the a of my versus expense discussion. to of net from X.X%. mentioned in XX before year. This impact

vehicles, inventory, balance approximately our of turning we financial and $XX.X Now used $XX on consisting $XXX.X approximately We to hand of parts net in in June $XX.X sheet cash million capital of and million XX, working had had XXXX and $X.X in position, vehicles, in million. inventory. million new million $XX.X million

quarter As $XX.X now XX, the Differences of our million effective facility, term million rate floor in transaction to turn $X XXXX. XX.X% we over and new and compensation and like facility. I'd XX% XXXX, compared Murnane. of to of the as company's June for Bill the back tax between under credit non-deductible in result you, loans $XX.X a the rate effective stock are our outstanding, notes payable on no million expense rate costs had and XXXX call the plan XXXX, The Thank of our impact was rate. effective borrowings of tax primarily revolving the on to statutory second

William Murnane

like to mix a shift give are more little into I'd the experiencing. insight Nick. we you, Thank

we believe be will two a products. towable Going towards components there forward, shift to continued mix

enter first-time market, prices. are younger more products as that the buyers purchasing towable average they lower First, affordable typically selling carry

we than Lazydays' continue likely higher create historical geographic as towable or XX%. acquire XX% mix current most will to dealerships mix Second, of have our that or towable expansion, a we

very and our very is As has dealership location. many dealership, Tampa motorhome of Tampa successful unique strong business. and know, a its size given you a

to there will believe As a we to expand, be we dealership create similar Tampa. opportunities many don't

only increase. geographically, a have country, that as the across XX% to natural dealerships most XX%. expand mix and is to we Therefore, dealerships, towable our other Our mix would towable of expect it

generate as products mix also typically Given higher our margin would of of revenue, increase towable expect gross grows. revenue percent as margin towable to a our we a gross as percent

closed This to as is our this Shorewood of Minnesota now RV are dealership acquisition have excited very Lazydays. We week. branded in

Minnesota the Our Lazydays talented, into team is family. to excited and are welcome we them

construction next season beginning art to important performance. of facility selling XX to impact on It begin on is a XXXX in on slow immediately XX note QX in days, Minnesota don't to spring Minnesota QX so have and in that investors dealership's service Minnesota, new the state will our the of expect to growth, a this a and our to down the will Minnesota we our expect We begin meaningful XXXX. significant impact facility have the for financial

centers. geographic to remain at looking Regarding we service confident we to our and able grow continue future dealerships expansion will of expansion, and that opportunities, network are actively we multiple be

and strategic three-point in future. foreseeable Our not has focus not the changed change will

and providing We will with questions, lines focused This network remarks. the concludes class prepared one, best delivering on, our in Operator, our two, and every service; to now growing three, outstanding each geographically. for please. be and and experience; service you open can up a dealership continue customer predictable

Operator

for a the moment compile Instructions] roster. to just We'll Q&A [Operator pause

Dyer Your line first of question the comes Steve Craig-Hallum. from with

open. is line Your

Steve Dyer

Bill. Good Thanks. morning morning Good Nick.

William Murnane

Steve. morning, Good

Nicholas Tomashot

Good morning, Steve.

Steve Dyer

that it questions just at shift don't know, mix I even some something change Tampa of if you on going view, something thinking sort mix know facility, groups, more is that acquisitions, sort the of sudden, and of was dealership expect It don't the about we guess outperformance absent is seems, should more think in a function a it that guess I at shift. you or forward? I the that be couple your just I was smaller of

Nicholas Tomashot

our strong the need but towable evaluate to mix. actually had breaking about mix of out outside shift was as this future, the were We Tampa. whether out we some that It's in Tampa we haven't performance talking both. something well about It as previously morning we broken in

William Murnane

grow and that I mix. will we either So, I part didn't a But towable geographically a on a wasn't out-performance very acquire the at mix. as plan outlying had most quarter, have stronger we much think a the surprise they probably the heavier dealerships but as maybe was much strong that have of dealership an towable maybe we create, it Steve, the or think is

So going I forward. to think grow that it's to right expect

Steve Dyer

feel couple fifth you is just revenue then Then growth different something that does I that that, opts buying sale that how different maybe that? entirely small digit also guess this that a maybe and impact wheel to have along number; you the for rate, like sort those we that's your talked of same of a lines does a think or a should sort change questions, of of instead Class kind other an A customer about or mean like mid-single customer, about guys I do

William Murnane

the products Steve, the F&I that of but towable certainly because at tends to and I higher with more tend it, unit need to But stated on we your growth the the as some we've towable well. product a how not look carry do to goes our - line question, We revenue higher as growth to carry the think may. margin rate, it bottom analysis about It relative may our rate, margins part other

Steve Dyer

A mix a to customer? other same you trying of to typically new or customer customer door? shift, a sale the wheel are just the in one walking in was figure a of the a different instead fifth out, seeing I somebody opts Yes, is totally Class the that absence kind small for and words of In

William Murnane

progress and again, both wheels some customers say, have are it's there think the offered made, there's wheels. I definitely may in a No, amenities tremendous who - would but in I been fifth fifth

once have unit customers they can they've little a train to reached definitely are to there who So more the freedom trying are their detach travel from drive itself, so the destination.

think people wheel Class some that to versus of the a larger or and that sure. I maybe for driving the product or faster, that it's little fifth towable there's opting C, going B also market A smaller So are on, entrants a or newer again, a

Steve Dyer

Okay. have given think typically back in Then lastly how and that, I'll just given sort guys sense of parts, me kind the about you forward? going and of number with how you're the thinking the EBITDA of for for about of hop we sort queue, this moving year's should year, some

William Murnane

not what aren't you're what sure we Steve, that's for I'm the - guidance, giving you're asking, year. if

Steve Dyer

Got it.

Okay. Thanks.

Operator

question the with Penney Paul from comes of [Operator Instructions] Northland line Your Capital. next

open. is line Your

Paul Penney

Good morning, Bill and Nick.

William Murnane

Hey Paul.

Nicholas Tomashot

Hey Paul.

Paul Penney

over revenues, can go and longer-term recent kind service about like repair your talk efforts a as the percentage where F&I specifically, of some and of your and two tangible these reinvigorate you Can segments segments, to basis? of a

William Murnane

the I create existing that's We with or aren't at, opportunity that lot think definite on a side F&I that at find the some the so think we biggest tend either on acquire. higher our do of our the looking side opportunity. dealerships dealerships is dealerships is F&I a we of the that performance to newer

units the For that. of F&I their X% the ours dealerships higher X%, range to than they at to is in tends X% to percent looking example, be we're a X% revenue; sell, in as of of

service we good, customers, the big to going so yet. at to us take and for down see efficient at offering, very more a another we and our On We've do. we do process six really of very provide probably increase processes country. the still down our our operations service We're in think process predictable there both aren't side, got more months our to the opportunity. to around becoming work opportunity service quite then and and locations and that creating locking procedures, existing our but pretty internally, lock It's some can we capacity, procedure substantial a new by there's

Paul Penney

deals Okay acquisitions, great. general to of just seeing, what you on speakers)? over (multiple give kind a And can then switching you're range multiples

William Murnane

market's haven't We times think to the said two given the of range, and we we've that's the I at where really that. think past, four right kind We've in in - now.

Paul Penney

Fair enough.

materially your or - to too back this layouts margins? the to plan of the do that or question. change point? shift store in Lastly, What just at go mix this at kind you, Do like is given differential early, inventory mix it shift, to point, you is

Nicholas Tomashot

haven't towable We out margins. broken motorized versus our

the We you year, shift going units making our disclosures, used. far if versus have reflected have been the so to bit there mix the disclosing and turning. right see, part the to be well the as managing are taken new we've towables on down this and the a a you'll is of at our But is as quite for we actually sure look lot toward managing that inventory, that. But that in being inventory

William Murnane

evaluate selling, orders. we're We highest-turning, our inventory we every you fastest-selling, our evaluating know, make selling, meetings what to possible. literally and lot And adjusting week those and very constantly closely. manage In sure inventory profitable the our and most weekly have best, products what's meet so on just isn't we our

So we every very every week, closely, very, every not that year. manage quarter just or

Paul Penney

Great. Thanks guys.

Operator

We at questions This have Instructions] concludes this today's call. no conference [Operator time.

disconnect. now may You

Lazydays (GORV) 12 Aug 182018 Q2 Earnings call transcript