LAZY - Earnings call transcript Q2 2020

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Operator

Ladies and gentlemen, thank you for standing by, and welcome to the Lazydays Holdings, Inc.

Second Quarter 2020 Financial Results Conference Call. At this time, all participants are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today’s conference is being recorded. now today, turn Debbie would to conference I speaker your Harrell. Instructions] like the to over [Operator Please go ahead, madam.

Debbie Harrell

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

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

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

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

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

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

Nick Tomashot

million, everyone. the lines to revenues morning, business that of for QX results the XXXX second and stated $XXX.X $XX.X note the Recreational versus XX.X%. of prior Total across $XXX comparisons Thank you, all was Revenue sale are unless up up otherwise, were from good quarter Please for million $XX.X Debbie, XXXX. or XX.X% million quarter, year. second quarter RVs, of the the or or Vehicles, million

was million, revenue million New $X.X million, million or preowned $XX.X was revenue $XXX.X or up RV up And XX.X%. XX.X%. RV $XX.X

wholesale our RV up unit total unit RV at Looking sales, XXX excluding were units, or X,XXX, sales XX%. units

$X.X or X.X% preowned unit channels mix shift in for vehicle accessories lower-priced the The ASP sales, $XX,XXX, these And and revenue; excluding as New to insurance, small of Non-cash versus in and $XX,XXX, revenue was attributable decrease increase swing shift million of compared were by million quarter sales as offset driven as business campground our services; by mix. to from gross a net XX.X% parts, F&I from finance outpacing well revenue. between LIFO consist up related and with units growth and other adjustments ASPs XXXX. partially Gross year. units, of preowned and to revenue channels margin adjustments a $X.X units. miscellaneous selling were In compared excluding well growth adjustments higher-margin ASP, increase in or or XXXX, profit to was two or vehicles lines was in XX.X% coming year. change units up Total XX.X%. Revenue to vehicle and million, parts average as F&I increases a were had rental $X or XXXX. miscellaneous last-in-first-out, or of LIFO, up These These wholesale million million, XX.X% to in of X,XXX, million or prior $X.X million QX other campground million. towards from revenue. towables periods, the an $XX.X at versus XXX our $XX.X non-cash revenue increase $XX,XXX or in XX.X%. or reflect revenue new other was service $X.X decreased RV sales prior $XX.X and favorable versus up excluding $X.X vehicles of revenue XXX XX.X% The total, reduced million was the RV other of X,XXX, a the price, LIFO $X,XXX or down unit $X.X XX.X%. million down X%

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

XXXX driven Adjusted quarter as additional new amortization, new of by year. service earnings The and per increased up for was release $X.X increased of per overhead depreciation versus quarter Net record driven Houston prior $XX.X record interest. net in prior income with up exceeding previous Adjusted well increase quarter was year. in million compared EBITDA. $XX.X mainly and refer Please Lazydays, XXXX’s share. This our by acquired was table, the increased million compensation $X.X SG&A mid-February, to million, increased plan Earnings $X.XX as income quarter. income floor reduced first near by reconciliation performance product of dealership a X our above, in center the includes our attributable million. Villages income XXXX’s $X.X QX and by stock-based acquired lower compared to the compensation reduction that and stock-based expense million. increase favorable a strong in Phoenix to share May sales associated costs, wages to for EBITDA X%. year. was and dealership million the for million in from $X.X This which a we points basis margin expense decreased EBITDA $XX.X August for quarter, more XXX in expenses profit we the the for net adjusted for amortization a times to the and EBITDA $X.X $X QX share million. prior up million, per quarterly sets driven primarily compensation $XX,XXX amortization was than the SG&A stock-based net of started discussed transaction net of to the Amortization $X.XX gross interest Excluding for the This down to million improvement $X.X the is of performance depreciation XXXX, And

by turning $XX.X balance hand the financial up $XX.X on includes compared Now consummation $X $X.X the built dealership of December mortgage quarter Tennessee; and in and greenfield being the by million of we Houston, quarter, This Program Nashville, sale-leaseback to million provided new quarter in of XXXX. the At the sheet the million and in property first had with the position. of cash for service loans. our first increase end impact net cash to $X.X on cash and June quarter of XX in property million, Protection the working of the cash Texas; center $XX.X near million second provided the capital million XX, Paycheck

inventory, million compared $X.X COVID-XX. is As approximately reserves approximately the million the vehicles we’ve Total year, million in million to $XX.X $XX.X new of of less suspended million of June $X and prior $XX.X manufacturers in approximately reflecting same had to vehicles, inventory respond strong in million. in XX, in consisting $XXX production had LIFO time down XXXX, demand experienced we preowned inventory, parts while recent

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

million for related Murnane. the notes due outstanding now acquisitions the Bill Program approximately you over to like loans. had on also We payable turn and $X.X time. And to Paycheck under call I’d million Protection $X.X Thank your to

Bill Murnane

Thank everyone. morning, Good you us morning. Nick. you, this Thank for joining

in swings of As caused I’m consumer RVs product are for the all sure aware, you large and pandemic manufacturers. both the demand from has availability

to back typically in our rather our investors the stabilized. these occur that we updates have perhaps rapidly not the financial happens, and Given special providing be but in currents When point, good, business. more cadence indifferent, as of would. believe updates We our future, At been business bad quarterly. industry help we typically near updates changing than or should that our normal has will currently it this circumstances, interpreted go some our frequent we navigate

to and continue and limited people believe social for distancing. strong changes allow have robust have activities lifestyle leisure vacation We RVs. enjoy to incredibly for is demand demand to the and the that caused options experience pandemic the primarily related this We by

gaining July. alone than We We in share be against that XXXX. this stated EBITDA press competitors market also adjusted equal of our QX our for or we are July morning greater EBITDA in to strong in believe release continued for month to adjusted believe our will be of we Demand most all markets. that the

EBITDA July million. For month the clarity, $X.X at we for be XXXX least will adjusted believe of

should be and on OEM hold tight. to into our While short-term, demand flow the bottoming continues out in is levels. and product that begun demand inventory believe inventory to We remains has steady and production depending strong stores,

are normalize as throughout that XXXX. wait-and-see are begin to to the we and fluid levels in we and begin inventory nature the all mode, begin hopeful of still Having this, We said given demand current production. will grow will fall

based We most current evaluate conditions. decisions our will procurement on the constantly continue to market

active. We pipeline on closed our growth dealership Phoenix. in recently Our remains very new

that couldn’t our in dealerships to America, one us of Value significant in We RV I generate first-class are Later location. be excited level Total activity growing rapidly dealership thank robust strategic with excited activity, family’s to please Hank of And and RV, for significant the are can fastest add future growth recently we top performing our for brands the he we Nashville, year. position transaction shown his the We very of acquire future in the Indiana. about the Tennessee. generate very is We dealership growth new coming agreed generate current and fall, expect Total well very market. announced the want the Lazydays. we That’s has the very the in all close questions. at new Value These for by for excited early growth continue growing to three to in XXXX. this moment. the with to to year, believe in prepared we plan this cities and Schrock, we the owner open we are market this confidence of it in this to line entrusting in us Lazydays Phoenix will have a anticipate dealerships Moreover, from more will to Nashville we Elkhart, about is open building business. open Ian, network remarks. given

Operator

of [Operator comes from Instructions] question Dyer. the Your first line Steven

Steven Dyer

Bill, nice good quarter. Nick, morning, Hey,

Bill Murnane

Thanks, Steve.

Nick Tomashot

Thanks.

Steven Dyer

I’m to well? expect sort that you about little August, that guessing, the talked you July bit of the kind the of normal July Bill, remarks I’m or What of remaining – a prepared strong. very of very, in the case? by followed consistent sort seasonality something is wrong. is year cadence? is But is Maybe the be strongest, as by September. followed this And

Bill Murnane

to No, tend think the I three months pretty be similar.

have in not that’s months. don’t anything, Nick? have it’s demand steady through predict, three we’d – steady the even the why demand We know predicting past of year, fairly Steve. what we’re But through we typically, the months this and three or been quarter. across two three years, Again, to

Nick Tomashot

in skew other that’s steady. by stronger of the of But it. north. lower QX Yes. tends quarter, driven more our strongest QX, in the the second driven and is our and by are then year also be the half We to and just and dealerships And that second the Tampa size season spring

Steven Dyer

Got you.

up? what That’s trade seeing Any And past madness? this how new in all the maybe maybe demographically, you as guess, COVID I what is buyers? to then, think Okay. of you seeing you you Are the color sustainable Are good seeing you demand? foreshadows see, color. which people are

Bill Murnane

Yes.

boomers. sort areas we all at, So are three look millennials, we all it’s that in seeing those three three are all those Xers the of whether definitely demographics, than millennials growing boomers, the faster growing The Steve. growth and significantly, pretty Xers are of or demographics of

from So And will up that trend a lower share from we the continue. picking they’re to share either that probably priced used skew there towards – if perspective, you market think product. think they market tend boomers. And about or product

Steven Dyer

and been out heck some of have scare hold busy And what’s me, asking to year then prices? another you’ve of weren’t you or both relates you first greenfields acquisition lastly Is boom acquisitions. the that Or this what the an did such on the seeing as to asking – scare doing raising looking for are from What so? the sense sort entry maybe of it Okay. just people the your kind pipeline, or getting part prices, year that before? out people just for people in of

Bill Murnane

changing. think that to prices, I from They the are best really certainly hard our really are It’s understand Yes. same. But Prices people what aren’t thinking. perspective. aren’t intelligence our – well, says changing

that of dodged that forward. uncertain this future take the understand want I going bullet their pay dodging good going chances a had in We’re like may they people not good but to overriding economies. lot they But there to and sensing anything, effect no run system. are like we been owners for – of XX-year to have the is – And think it good feel say do And will because dodged to certainly guarantees bit some on may the price RV another solid it is still think last, March some the a I for I and been people have have we don’t a the feel may a don’t may There’s I’m scare shock going would bullet, dealership. a a – a maybe one. and we overpay a here in a business. little

Steven Dyer

helpful. That’s it. Got

Just a the housekeeping units. you that? new? I Nick, Could I used missed question. repeat What new of X,XXX. as number quick was have

Nick Tomashot

my I’ll here. at look notes

New units were X,XXX, up XXX.

Steven Dyer

it that’s me. Thanks, Okay, for guys.

Bill Murnane

Steve. Thanks,

Operator

[Operator Instructions] from There next the comes question no your further Lynde. line Russell – of are

Russell Lynde

Hey, good morning.

Bill Murnane

light, a can hear It’s we hear can you. Yes, little Russell, you. we but

Russell Lynde

Okay.

about that. Sorry

then about Just maintenance attach And that that the talk you just can guys the typically curious you opportunity rates seeing. you’re talk in about if maintenance general, see?

Bill Murnane

Yes.

grow. strong continues. very end maintenance service great business. the all if it’s comes shared needs that think do reasons lift side We using exists our a think, And kind service think But any think I is a Houston, where growth we activity on right where don’t today. this up our lots a to an more dedicated investors service can to or our the strong of use we of is attachment to of fall, industry we margins happens more of the are We center built frequently. us The this focus the of the service is, think of work, centers. expect use want lot could and amount that, we something going think flexibility dedicated think especially RV fill in see their RVs, we growth Maintenance right not And start fair see to a where And as Service on in have our we’ll more know, the do with primary now. we that’s one maintenance a in in now RV kind provider, Texas. most have are as people forward, maintenance sales on summer gives higher, given going rates. we I that we and

Russell Lynde

What kind does centers? dedicated expect compare that of the cash-on-cash other How returns investments? service do for to you

Bill Murnane

Yes.

a EBITDA on much we that. as investment I expect it disclosed dramatically $XX as would said service than we revenue. to return million the publicly said for generate have be we center need don’t as less the haven’t that full-blown a on higher much larger. We be is are dealership, because What a XX-bay land margins and should have dealership

So $XX the point. network. the Houston could match of facility in our most million at That’s our dealership ultimately, share that’s a probably to we I this earnings expect would –

Russell Lynde

how then do spending on dealerships? in service industry acquiring so dealers the prioritize dedicated or whole centers, And given uplift building and the new you

Bill Murnane

Well, own good I – a good everybody definition and a of dealership dealership. their think has if

for available going not a becomes year may a jump think six market that, available available road. to because on it good down greenfield, I a dealership becomes the a good months, or if we’re be

is, in a take going going market with brands if – like, The to to find the fill good we of that advantage when it’s we’re can’t really gaps dealerships in advantage, We we gaps service good we good we’re So going good take center dealership centers. of can model those prioritize growth acquire. fill to be service and we’re can a with that to especially beauty that. new

Nick Tomashot

and between service. one at, RV dealership, things we business is is sales balanced look do the And we of if our acquire how

in adding a next capability, center For instance, practically dealership an in service immediately stand-alone of right service door Minneapolis, the to we invested expansion their building.

Bill Murnane

dealership in the or likely expand does we’re next an pretty Phoenix acquired will appropriate Phoenix. to the service we not capacity. two, the year Phoenix And that of in level – significantly. In we same do have likely

Russell Lynde

And from last one me.

all service on for utilization Sorry Roughly capacity in was your your what XXXX? speaking, questions. business

Bill Murnane

of a don’t that disclose one, think we that a that’s number but have dramatically. number Well, I have is tough certain number. certain a and me. Nick technicians, looking bays, because at we also fluctuates pretty we of And

we – had – output has how many techs we from we’re moved – service more productive on across standpoint. we disclosed haven’t network. may we’re getting in But if it So our typically a depending future. even a the yet. we it have Capacity much We

Russell Lynde

So guys flex you same-store to needed you say a to? higher it’s fair in could if on to basis, XXXX XXXX

Bill Murnane

we And think Yes. significantly.

lot We’re focus in of that. putting a

to predictable methods place, get But confidence Russell. and give – and service don’t want process we can and consistent, and a have trying we We’re that have that customers. flexing we the great until really start right our to systems processes to in

doing we’re and we have we tackling – grow. blocking get to But service fantastic bolts, nuts and our can once kind So the we’re – there. of and then

to now on But in basis ones by, techs. do to have upside need facilities, hard We amount And to same-store and to to our fair our part they’re bays of a is to add the we a grow our just number but there the operations. attract right we’re come there. good going of

Russell Lynde

Congratulations. a thanks lot. Okay,

Bill Murnane

Thank you. welcome. You’re

Operator

over are the call the to over time. back There this turn phone the no I presenters. questions Instructions] further [Operator at lines

Bill Murnane

soon. you, talk for a you day, Have great us joining Thank today. everyone, again to Great. we’ll and

Operator

call. conference today’s concludes This

disconnect. now may You

Lazydays (GORV) 1 Aug 202020 Q2 Earnings call transcript