LAZY - Earnings call transcript Q1 2019

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Operator

Good morning. My name is Jason, and I will be your conference operator today. At this time, I would like to welcome everyone to the Lazydays Holdings, Inc.

First Quarter 2019 Financial Results Conference Call. [Operator Instructions]. you. Thank may you your begin Meehan, conference. James

James Meehan

We Form Jason. us & section has for Mr. you, call. morning. our call James at A Good release the earnings financial Investor available the morning, joining Relations on filed of Nick current Chief for Officer. furnished I'm under to Chief an Lazydays. Controller exhibit Corporate today our Tomashot, release you our SEC. copy and page the thank Meehan, Financial Mr. and the our as this Presentations been website the report conference Officer; company's With press Bill and X-K with results Thank issued on earnings first is and Executive our of XXXX Chairman quarter of Events me Murnane, are the

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

statements, XXXX. factors could regarding on filed XX-K information discussed additional For in Form XX, to impact please the that the forward-looking refer the factors SEC risk with March the

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

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

XXXX period period months results the Center, operating with March Inc. the presented operating March from XXXX the for X, from ending the the XX, March of Holdings, Lazydays financial XX, three R.V. to Lazy XXXX. combined information Inc. to XXXX XX, January XXXX, for the March For results of represents XX, Days'

it Bill to my Murnane. is pleasure Now introduce

William Murnane

us early and Thank what I of read good begin markets, you, quarter will give the than as we improve performance. James, little on relatively weaker - morning, in one year, February. did on in two but from XXXX we It began March of our remained to should We joining and in March, this year. more of two quick this feel and demand in year March Knoxville then of with year demand give it of Minneapolis Thank we addition through weak quarter any the of was a are similar quarter specific seeing dealerships Quarter our our you experienced to of this morning. for will get of to far Nick details slow too this four XXXX. and everyone. quarter last overview a is benefit still begin but

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

Nicholas Tomashot

comparisons $X.X are RV revenues Bill, XXXX. million for XXXX. note $X.X or everybody. $XXX.X quarter wholesale quarter, at was million. units, quarter units were the from first otherwise, well excluding sales XX, vehicle result were as down million sales, down unit X.X% XX Recreational to or million, stated XXXX Please you, X.X% down X.X%. unless Thank the X,XXX, down Total the morning, quarter same the good $XXX.X March ended that and for revenue

$XX.X year new lower for $X.X was million. a towards X.X%. vehicles, sales $XX,XXX, New or from was or X.X% down revenue were than to at and the RV vehicles mix for new down average There towable motorized RV quarter X.X%. shift units Net our product XX unit million selling up $X,XXX X,XXX, prior was sales price

decline XXXX. as million, was consignment business revenue $X.X other by to decreased in parts of service Pre-owned well a In lines quality were the F&I primarily new $X.X increase XX.X% million, due million increased of finance The unit X.X% sales and XX offset to accessories consist commissions, rentals, X cetera. in the was For by was decline or Gross business, driven the XXXX. in increases $X.X These availability and to or et price was million by shift margin parts, vehicle towards by $X.X XX.X% from the pre-owned in selling units growth related wholesale, was from retail offset in $X.X profit or compared gross miscellaneous by to million, or from pre-owned lower vehicles, to commissions Revenues XXXX. decline wholesale including periods million, campgrounds, driven unit motorized decrease $XX,XXX, vehicle pre-owned $X.X million the XXXX, of $XX.X $X down revenue $XX.X is to and these revenue, other but was increase sales. million side down QX vehicles restaurants, driven price recreational This pre-owned driven the other of revenue by motorized down product insurance compared in in combined for million towables. pre-owned sales. The revenue reflecting towards F&I change as sales limits list partially or million decreases a sales. pre-owned total, X.X% a by of and revenue was sold, or declined was $X.X there compared XXX, motorized million. product our sales XX.X%. of were $X,XXX on excluding and the units. primarily other shift X.X%, mix mix to quarter down $XX.X lines XXXX. our XX.X% Pre-owned declines The consignment units revenue our in driven average or service, miscellaneous X.X% business revenue of versus up between

and adjusted Days' $X.X and II decreased million year. XXXX includes Transaction $X.X and to and Adjusted X.X%. Income issued our between $X EBITDA million million, of income net $X.X to expense $XX.X intangible million reflects decreased Inc., compared stemming the $X.X to down and amortization XX, the prior Net fees the compared million for income remained with by was the increased quarter Lazy XXX costs, the which from was transaction refer and respectively, gross the lower on and March amortization, $X.X compared million partially net approximately reconciliation income quarter, EBITDA by sheet. offset depreciation EBITDA and compared basis GAAP the $X.X expense Excluding earnings tax Center, $X.X year, profit margin. for relatively of which valuations between to million Adjusted associated flat million, decline higher and XXXX. These the points transaction-related noncash a Corp. year. XXXX. merger our for plus at compared management included million The million down and net balance million year decline to quarter income to intangible stock-based for in $X $X million EBITDA depreciation in million the approximately Andina amortization, increased compensation depreciation $X to for $X and Andina stock-based margin SG&A. merger increases first due and expenses for to $X.X have to prior noncash to lower and Acquisition XXXX compared quarter compensation million. adjusted margin prior was in by $X.X R.V. costs prior table, options Lazydays. compensation for expenses SG&A asset the Please to release million XXXX to the Stock-based

$XXX.X our financial compared million XXXX, of inventory of offset on had Now working $XX plan. cash parts primarily by turning to hand vehicles in million generated and December XX, $XX.X million $X.X position. sheet in At with the and million We by $X.X balance million, up of and we and $XX.X in end $XXX.X the capital cash vehicles, the to of LIFO $XX.X the in million inventory March of reserves in XX $X.X decrease associated consisting of had approximately new floor pay-down net million. QX, pre-owned million million inventory, approximately our

facility, gross to $XXX As outstanding XX, March borrowings under revolving we payable XXXX, facility. loan no our million floor plan in term and our credit $XX.X million of million notes $X had of

We the call turn on for payable you notes time Thank to like outstanding Bill over million now approximately your also acquisitions. to to related I'd back Murnane. $X.X this had morning, and

William Murnane

you, Thank Nick.

great able with did The value more with general we competition In proposition stated XXXX. for the to and dealerships we at of our pleased flat and customers, same As job in an margins teams period our release, Lazydays are our our to articulating the of managers in a sales the pleased keep relatively we're we generally X customers inventory fewer performance exit and succumbing quarter manage during slowdown industry spite the may well existed inventories our believe were going of press have market. in the and closely positioned forward. about We - inventories closely below and same-store simply XXXX quarter competition inventory to dealership we our inventory not - current with feel dealership levels, our price We good is inventory our quarter, managed to that levels. our we in the XXXX.

remarks. strategy. to generate our geographic we believe stated, quarter, $X.X for growth and will for Jason, That's open support opportunities continue line continued are our cash help our and able will during strong, this please Nick to prepared questions. million We were As all in on expansion. the our expansion we the execute

Operator

[Operator Instructions].

Your line first the from Fred Citi. Wightman question comes of from

Frederick Wightman

like bit sure just a got cadence turned wasn't helpful. perspective then give It comfortable or sounded if throughout And actually more it March. color negative the positive. things you're the sort that for just would Could from that sharing of be sort of anything little improved in sort quarter? you of retail XQ I preliminary a less if maybe on

William Murnane

which still quite Yes, Relative Too rest to year, was about prior it similar improvement was just the was or but to out more the trend March, April big Fred. and QX, tell of certainly to improvement sure. - and down, probably March. early February, it was a started over was favorable, more a In the January big slow.

know, we guidance, we you as and about say can - in we're now. So probably for give all that's so don't

Frederick Wightman

Yes. sort on your past, flat. about thinking of being about I the sort the down then an XX% sort just that? down industry from to just thoughts think That's still really that helpful. updated year? perspective, anywhere you're of industry how you the from had share of Is Can you And in talked

William Murnane

of for strength really guys the quarters majority northern at QX of country. we're others. is part just and we - We the go. half and the strongest presence data the kind part Again, have in we at like into point is That's Yes, the a because of we of from strong to the I'd hear how and to look season the strength northern different country, industry a - than little same country, have bit commentary this the Yes. industry are southern of more QX. look because going the feel year selling a the quite same. you QX out so that in coming the most the We're sizeable do in this the

Frederick Wightman

weather-impacted the different But than the you those that early bit the the of impact about sort here, where some see understand In talked markets a we've trends your have moved think footprint broader I up as market. into a those markets, bit Sure. release. in there? is you I spring did weather in picked little

William Murnane

people seeing seeing northern weather, expected, happening now. it We're are and we're Yes. lot experienced is others definitely has where In which markets we arrived, out. coming - more and activity, we but a the thaw the

Frederick Wightman

inventory that the just specifically Okay. to like, sounded a due talk product mean I on sort how new availability? the just on you in the softer little is And business, in quarter, the shaking that lastly, and just channel used how motorized used here versus Is today? used the side. it out of about then Can bit is

William Murnane

think we Yes. We and would about the like. hard of as I to supply market, for reading - us it's on our supply supply with just it. as supply, It's we're it's like that's used. And all would to the we that much and get really quality is could can hands that's we side get sell in but it if similar what others on the all

Operator

Instructions]. [Operator

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

Ryan Sigdahl

I was Ryan for How organic? said And Dyer. that of much what was that To service I you that quarter. caught XX%, start, and Steve in Sigdahl right, if think drove strength? then the parts up on

William Murnane

take to want Nick, do you that?

Nicholas Tomashot

Yes. We're of retail growth but some organic. that. in focus out, - not large really have been and breaking nice the we was And portion that service it business putting really on saw a our our

William Murnane

that. to add we would And - would Ryan, continue. We expect I'll that to

bays, we in service to which pure the we and large dealership terms going put release, you're Minnesota, I was in market a capacity press our But from perspective. - facility a that of in service As of under-serviced was under open fairly just our think see should going more brand-new, we think so forward. service

on hopeful we're a service the side we of there growth see going more you're business, So to we significant focus have so forward. the move as

Ryan Sigdahl

segue new stand-alone be centers? center that's with then opening you of associated existing that's And some service mentioned then service Or ramps? you that QX fully to How the opening QX of offerings, it Thanks, was my of upfront cost facilities? going question thoughts but think on good expansion do you before service in a expanding kind secondly, do to about that about ever Bill. up think more And in and that's soon. much there expected here next

William Murnane

Yes.

of repeat that, So I'm About could the - first was sorry. you Ryan, part your please? costs? question,

Ryan Sigdahl

Yes.

Just if startup costs was in then some that onetime-type it QX before facility QX any of there the and probably with ramps. expect here in

Nicholas Tomashot

Yes. included able build-out the revenue. the to It on can of And facility minimal. effectively hiring terms and the did the for ramping sale-leaseback the a curve that facility generate now the very focus so we of on and was were finance lease, property we costs. both When techs with just we're we're actually there, those - the up actually

the all So have the minimal besides been run costs the upfront through expense, capital which pretty were lease.

William Murnane

Yes.

both Ryan, expanding second offerings. having dealership service part both, we'll at service question, your the of and of just offerings existing look potential the stand-alone Regarding

Ryan Sigdahl

about one constraints the were you in final used over. there then made you that it that quarter, now. But One and I'll you for some right comment is me, the then some good inventory about commentary - turn Great. also inventory, but feel mentioned that supply where was

and current on balance and So on inventory maybe two just that QX combine supply. thoughts mean QX, those could today what for

Nicholas Tomashot

we has Bill our short the down more is and same-store where feel Actually, how from we inventories, and so that the Yes. during managed used they really year so The units. importantly, supply actually inventory, were a the as - used mentioned, quarter. quality about are on ago, good

actually and quality the I that on find wholesaled think think than notice you'll in we trying I And did to are better million the can. my more $X used margins units ago, year commentary, more. we business, we're a units we all the used

William Murnane

with we customers. our a have Ryan, for quality reputation

we them. not said, take trades are lot quality on lot, So of wholesaled the sometimes of have put we our that Nick to and a as

supply good So to it's lot our and selling of just feel a combination not supply we on putting customers. that but comfortable

Operator

at I back are you. There time. over questions no further it turn this

William Murnane

We Jason. morning. you, Thank Have day. with for us everyone, look quarter. Thanks, to great forward this a Yes. joining you next speaking

Operator

today's concludes call. That conference

You may now disconnect.

Lazydays (GORV) 11 May 192019 Q1 Earnings call transcript