LAZY - Earnings call transcript Q1 2020

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Operator

Ladies and gentlemen thank you for standing by and welcome to the Lazydays Holdings First Quarter 2020 Financial Results Conference Call. At this time, all participants are in a listen-only mode. After the speaker’s presentation, there will be a question-and-answer session. [Operator Instructions]

I would now like to hand the conference over to your speaker today, Debbie Harrell. you. Thank ma'am. ahead go Please

Debbie Harrell

you, April. us conference you joining Lazydays. and I'm Good our first morning at for Controller results Harrell, thank quarter Debbie for Corporate Thank XXXX call. financial

with earnings issued release to been of SEC. furnished and earnings under the the press We Relations available Form current company's release morning. report of of is Presentations A and Events exhibit has page as our this on the Investor an the copy section X-K website, the our

With Executive Nick Mr. and Chief me today Murnane, Bill are Officer. on the Officer; call our Chairman Financial Tomashot Chief Mr. and our

regarding please reminder, sales, operating margins, stock-based discussion a you consist revenue, will compensation of today expenses, product mix expense, note expansion. As statements the geographical may information including that shift, unit that some statements, and of gross our during forward-looking taxes, hear limitation without

as forward-looking or of many results from materially Actual the for differ trends a result could periods statements future factors.

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

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

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

will Tomashot financials. Now, an is it who of provide the pleasure Nick introduce first to overview XXXX quarter my

Nick Tomashot

QX three-month ended to same Please note period results otherwise, that comparisons XXXX. Debbie. unless are the Thanks, stated March the

million the RVs the $XXX.X of were lines first all recreational vehicles XXXX. X.X%. $XX.X Revenue for of from the across sale quarter Total versus $XXX.X million up or $XX.X million, up XX.X% for million or quarter, or was revenues business

million $X.X up million, $XXX.X million, $X.X up RV was And was pre-owned or million XX.X%. revenue RV or sales revenue X.X%. $XX.X New

RV X,XXX, unit XX.X%. or XXX up were sales units units excluding wholesale

pre-owned of for up or QX average vehicle was wholesale to X,XXX, up lower $XX,XXX, XX.X%. or price $X,XXX XXX was were selling unit vehicles X,XXX, units were units And XXX of -- XXXX. excluding units new or compared X.X% The price $XX,XXX, selling sales pre-owned RVs unit vehicles X%. New down sales, Average XX.X%.

channels of or other parts finance XXXX. lines $XX.X of increase campground revenue or revenue, in $X.X revenue service as an and increase campground as increases our accessories other miscellaneous was was related million or $X.X total, a these compared from XX.X% service, were to of to to up million. and consist $XX.X and F&I revenue parts, of million, increase $X million and or XX.X%, million revenue. decrease XX% offset F&I by million million a driven $XX.X Revenues and $X.X revenue. In miscellaneous by insurance from partially business The and well These

excluding or across XX.X% XXXX. growth attributable margin $XX.X noncash the business. QX LIFO adjustments to was XXXX, excluding change $X.X compared lines last-in-first-out two LIFO adjustments Gross of to between core at gross XX.X% million, up periods the our the profit million with in versus increased

net small million prior compared year. of unfavorable a adjustments Non-cash swing had LIFO $X.X to

including LIFO, up for profit was gross XX.X%. So, million, quarter, or million the $X.X $XX.X

acquired depreciation associated year. with was $X.X overheads costs, Villages additional $XX.X in to million, quarter SG&A, compared XXXX. the million the to transactions amortization, compensation and stock-based August attributable prior Excluding increase for and up The is dealership This

depreciation million, increased has $X.X by center compensation Amortization mid-February revenues. started wages million up and compared and and prior performance $X.X unit higher and service of new decreased to decreased amortization Houston near year. in The stock-based driven sales

compensation million net million or per stock-based This expense SG&A and amortization plan interest of a $X.X share $X.XX well expense as driven driven net of improvement the income profit $X.X the floor by reduction $X gross interest. for was income share $X.X mainly increased above, by of was in reduced first quarter to as Net discussed per or in $X.XX million million compared XXXX. reduced the

EBITDA quarter, EBITDA $X.X refer by margin our decreased X.X%. Adjusted $X.X Adjusted income of for to net a adjusted earnings EBITDA. Please which XX to million. a was basis points million to the table, release up for reconciliation includes

Now turning $XX.X million of on XX to the financial cash up million, XX, working balance of sheet had million capital our to and we December hand $XX.X $XX.X net with March cash XXXX. position, compared and

by sale-leaseback impact in near the a $X service dealership the completed mortgage includes the center Tennessee. for million consummation greenfield Nashville provided cash the in being by of provided recently Texas, $X.X of on million a property increase here This of Houston cash plus built

$XXX.X had million million in in million pre-owned reserves parts vehicles, in inventory, of approximately million. $XX.X of inventory $X approximately $XXX.X and new We $X.X vehicles, LIFO million in consisting

near up second The the in million of time addition XXXX. Villages acquired $XX the year, is we inventory approximately Total to location approximately our the that half $XX from in same includes compared which RV and inventory prior of parts million

March XX, of had outstanding, borrowings XXXX, payable $X no in our million $X under plan our the notes credit $XXX.X floor term mortgage of As million loans facility. and $XX.X revolving on facility, we on gross million million Houston M&T

outstanding had notes also We $X.X payable approximately related to million on acquisitions.

to I'd And turn for Bill? to like you Murnane. the over Thank Bill your time. call

Bill Murnane

to all-time significantly our until XXXX take mid-March up Through shelter-at-home to orders began were when pace Nick. effect. were an set of and and weeks record. to and revenue strong XX first both the strong the on earnings you, the XX Lazydays started Thank remained COVID-XX quarter,

The of strong all was at dealerships across our the country. demand

as drop shelter-at-home we states issuing experienced last strong of substantial in the most During two orders. to weeks of three demand a result QX, a

are showing if the would growth revenue confident quarter we much had growth higher managed to and have finish for we earnings, in COVID-XX. Although, not we

lower-priced selling our drop, a to which average In addition year-over-year the is reflected and demand to in units, we experienced shift more lower price. used also

encouraged growth service businesses our We quarter. during the by are in and F&I the

the our to service at businesses country grow this -- and to recovers and we we as business recover COVID-XX. from continue continue improving we will as growing As this you are on the country know, business very Lazydays, focused grow

experience. best-in-class customer not to did of We a sight lose provide goal our

improvements we in During our these exciting hard customer service team quarter, operations. meaningful their it nice and The made scores, for to scores Lazydays improve see to sales and generate work the hard results. both is has worked survey very

We of have demand. to managed shape. future our well inventory closely great matched is and to inventory I'm our happy inventory size that is expected believe in the report We our

We inventory. are very pleased the our age also of with

As turns as anyone you know or faster the Lazydays industry. its fast, inventory in than may

believe and we to team we and Our discounted has hard model season our We fresh. our inventory management positions in QX because the worked have our move off less inventory change well aged prices. moving as will QX, focused keep at enter to us lots inventory

is of took it for negative on expected disclosed in to hard decisions plan filings. have the We and actions prudent to line We impact April continue These made COVID-XX and and decisions our our economy a future. have a previously been demand. foreseeable to to difficult the company's number with industry believe in get for in actions costs the

the on of little COVID-XX, Given color we like a to give would presented April. the month by special circumstances

smaller sales, in delivery delivery came the continued March we back year, which the ended Given much April during significantly March, a same off with into demand drop to started Moreover, diminish backlog. half versus with way our April lower backlog of than normal. prior the

were deliveries April our result, below prior a year. As

and the a we our of revenue when Around deliver continued a more an demand often improved that, a mid-April, Keep or most to when have increased has an we RV in past recognize we of mind strong when during May. week Year-over-year There's we our between, sales dealerships. at deliver weeks dramatically be into unit. sell unit and three RV. delay

a a and can or of between week unit Overall, that were of the delivery monthly year. sales Remember unit. delay than a April last sale higher more there be

a strong As delivery we a entered improved with May result of activity, this much backlog. sales

migrate customers lower. our drove lower-priced towards see to which continue ASPs April, units in We

Although, encouraged business are not by are our strong COVID-XX we and are demand, we losing we the impact managing we accordingly. are of experiencing of economic sight the

first achieve Lazydays RV service of to business. QX, in dedicated Service and We intelligently opened we to breakeven Lazydays nicely center. of continues will our continue it we Service Houston grow ramping RV our QX. expect In Houston

expect excellence we support, to in our service the dedicated more future. service centers open To strategy,

ground dealership new on our Tennessee. broken in have Nashville We

in open Nashville of sales RV Lazydays to year. for this service of expect QX and We

We are very rapidly growing excited to market. Nashville enter the

and believe will as shelter-in-place remains we to grow be our a we robust growth to service pipeline and able close. to continue orders Our network dealership come

for remarks. for That open our questions. is all the Please line prepared

Operator

question from Dyer first Steve Capital. line comes the And Instructions] of your from [Operator Craig-Hallum

Ryan Sigdahl

guys. Steve. Sigdahl for Hey, on Ryan

Bill Murnane

Hey, Ryan.

Ryan Sigdahl

a I up revenue want but both? year-over-year? the April on thought a just it basis you unit was that And to or caught I prepared or was say remarks, I did in clarify.

Bill Murnane

unit April was up on April, basis year-over-year. a

our moving definitely are going customers about more talked we products. drive lower-priced that change down. used to That's ASP the Given towards and ASP

we on -- be -- giving likely down, specific although that. not we're revenue we're will revenue not So being

in April But the mind keep into also by impacted we the backlog revenue April come with. that is

a there's So, delay.

when unit sales to So, not units we that They delivered until are May. those so get sell. say contracted may I

Ryan Sigdahl

then the here? trend kind quarter Has quarter-to-date a used in Got that in of it. from stronger and And is standpoint mix QX. continued was April in

Bill Murnane

used lower-priced a definitely priced. towards towards overall Definitely on shift units Yes. the more just used and It's trend new -- side. the lower even

Ryan Sigdahl

liquidity. decent Then it. have a Got guys cash and balance you

and I going? the interest and a there thought that lenders your what's foregoing weeks the of your And with cash You process announced are how you liquidity then those have? ago earlier given couple you're payments. basically principal guess conversations

Bill Murnane

debt. talk are Nick we're XX cash can add. than I both person this we but been to of -- lot. for have a them quickly. we The to lot do we I'll balance a And great. change lenders our that's Yes but a as And them have over in things a Yes. more industry also let talks company. conversation pretty conservative years a He

the of especially change And wrong things a when economy direction. heads lot can the quickly

business we're -- that's prudent being very managing we conservatively. So, in think our we're just --

Nick Tomashot

we Yes, beginning as a demand saw I'll at add steep and we March that April. of -- end in Bill drop-off pretty mentioned, of the had just

taking preserve cost cash. to sure we so, to And every were ourselves could action positioning make we lower we're and

Bill Murnane

at we of clear more growth the A not comment. encouraged been happening. we're growth And this by anybody lot economy weeks sight of I Like the are three losing We're think very said definitely this encouraged point. impacts -- has unemployed. the but not what's last we're to in by by or that, of We'll are encouraged are and one we're strong the seeing. but people growth broader I longer-term so. The

Ryan Sigdahl

And I'll over. then then last me one for and turn it

who on the weeks Just social that naturally buyer and last the distance? growth is of what is and that few people community? retired Is that that go it by? stabilization Is primarily the primarily outdoors comments demographic is. improvement it driven -- kind to Just of on looking any kind the

Bill Murnane

across Yes. out. growth. think the three been are there's to primary We it's Well, but probably of drivers it's point the demand. at -- haven't getting think the One hard primary for us drivers what and gauge People They home. likely we board Ryan. pent-up some this there's is are there's

So, looking they're to pent-up And for home there's they're while things some demand. do.

We getting go on a may So, for hunting more into they're somewhere. and vacation thinking sounds hotel a getting online. plane think be or people a there's than an about into RV definitely RVs better

We also share. taking think we're market

a We And selling. share. we're marketing are great and gaining we job doing internally market think

Ryan Sigdahl

luck. Good Thanks guys. Great.

Operator

And from question Barry Management. Haimes line Asset of next from your the comes Sage

Barry Haimes

some So, anticipate much so that given dealers first is feel this out? at what's on in that's see I is one consolidation there we question. Or question. taking so my for of may that be you industry had the Thanks going short a in downturn of could there? my terms not moment the weaker dropping Thanks. -- change do industry much

Bill Murnane

know. Yes, is we I the think answer don't

I fully time we think don't impact impact been it's need longer understand and we been the -- We long longer of we're conservative. Quite enough. term this. the being it understand of to this frankly, hasn't term more why that's think

early So, to on if there's and industry it's definitely see the consolidation. too any impact

-- plan and strategically consolidate to goal still be consolidator. our our a is Although,

Barry Haimes

somewhere bit. mentioned, talk about, Great, But on second you I COVID-XX. thanks. especially could response a was little if doing And as airplane sales What your total, that to I and logic in marketing as vacation in an then, have getting wonder versus within you done the had Okay. to there's question then RV given come you everything? back,

who hadn't of So to doing maybe some that So would RV-type point get to vacations message fly a view marketing different side, from reach love in anything to people, about are places? on were used color. you across, the try any new marketing Thanks. anything thought before,

Bill Murnane

we're than up advantage to marketing our going be Barry, is want believe not color, the metal. keeping We're what is any not And let not give area, a them, -- Yeah. with going to doing. able an to we're do on. competitors But And to we're not pedal unfortunately, other for us. we the we we're to marketing competitive share

doing But -- women we're is get we need And our feel to good team they a guys what our job, sales getting -- doing close they like, and deals. them a -- sales. marketing have we what market. what in into need good are get doing they're we The marketing people of hands don't it. sales will how into specifics on, we converting But not job

Barry Haimes

a to But are rephrase, you at you get anything doing specifics about to me who -- to marketing Yeah. something in asking I let in getting hotel-type are No. -- try specific, trying all. without fine. you're without Are reach people the different spend address? That's again flying that, is who staying have to those vacation? before, not about mean RVs and the used may thought

Bill Murnane

Yes.

everybody small lifestyle. people our from think but people to messaging that's not We're really to to changed who It's job in just probably piece. reach goal camping our interest primary I some is has the RV. are RV convert a showing --

into take to who Our are people, spend up -- is That's trying interested of to convince more lifestyle. an buying Those people lot from the Lazydays. It's dollars in industry. job. to somebody RV a job we else's of convert don't

-- the the where customers. interested to and lifestyle is are job Our people in Lazydays

Barry Haimes

it. so color. Perfect. Thanks for I much the appreciate

Bill Murnane

welcome. You're

Operator

we That is have. all that the questions

Bill Murnane

you quarter. Have great to a joining All We'll week. us talk thank today. you and safe everyone next right. for Well,

Nick Tomashot

Thanks.

Operator

concludes Thank conference you call. This your participation. for today's

disconnect. now may You

Lazydays (GORV) 13 May 202020 Q1 Earnings call transcript