LAZY - Earnings call transcript Q4 2021

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Operator

Thank you for standing by. My name is Cheryl, and I will be your conference operator today. At this time, I would like to welcome everyone to the Lazydays Holdings, Inc. Fourth Quarter and Full-Fiscal Year 2021 Financial Results Conference Call. [Operator Instructions]. Controller. Corporate Harrell, Debbie

your begin conference. may You

Debbie Harrell

Harrell, report Good Thank the earnings and joining on Results press thank the Mr. Lazydays. earnings Debbie for release and this copy Investor is Chief and for X-K call to Relations has website been you, Officer. Nick Conference issued Mr. of our our of exhibit company's the furnished Officer; I'm Financial our section release Executive SEC. Presentations operator. Events our Bob the us XXXX Chief fourth you of current Form with year-end on available Interim at With the Financial an A morning, quarter as the Controller Corporate page and Tomashot, morning. Call. DeVincenzi, We me and our are today under

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

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

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

represents Inc. operating the ended December results financial and of months information XXXX XX, X Holdings, year and the Lazydays XXXX, the presented For

DeVincenzi overview to the opening XXXX and quarter is introduce provide an Tomashot, financials. Nick Xth who it some Now full of who will share pleasure will my for year remarks Bob

Robert DeVincenzi

is Board January the to my joined of do this Having Debbie. XXXX, stakeholders, shareholders this so. on and I'm CEO Lazydays to year, X then address and appointed our pleased in interim of you, first October Thank very and opportunity

me serve that of again yield to existing dealership by footprint and remarkable in in X, $XX.X to of regard we fourth of solid the later $XX.X quarter, Nick additional we million, for release of off financial and results $XX.X issued million a the call. EBITDA of plans line million bit Nebraska highlights. press indicated and Let a preliminary financial more fourth release year year Florida, Tomashot preliminary detail results greater fiscal as strategy, our is our our results full million and $XX.X the capped which location performance results fourth a In fourth-quarter and to will location announced to results on we Lazydays. respectively. in on in expand income in net a net performance and greenfield Bluffs, well industry Council Fort expected area. our million, growth announced our as Florida, quarter dealership greenfield RV market providing demonstrated located Pierce, income we be few year our XXXX our and our provide third With Omaha, Today, with quarter that start The February Iowa in quarter would we the fourth an of for adjusted million. revenue $XXX.X EBITDA improved revenues results with an announced $XXX.X our

we company time service with the I the great that and become As operations team frame dealerships job more locations to and deliver opportunities the XX the and to been industry with XXXX, in continues do the Lazydays business the The partners to and ahead I leadership current challenges large. of the to impressed dealing a the team the the in the have operate. moving has at in have customer and engaged and deeply that business, experience presented

more levels levels of other uncomfortable health, demand, business being public gotten consumer fluctuating all either persistent have comfortable and as We with effects. our conditions inventory and changed, increased have from

refined and of and and period. to first ability about our be the consumer We quarter beyond. control flexible unit supply through of our offer demand move as to these current have price is industry Lazydays critical in and will XXXX RV comments margin. XXXX topic A much skills adaptable and and balance wanted the to I we few be the discussion a of

in work Our return appropriate which demand. to production to industry our to turn are for to normalized levels, the return us customer levels hard -- to partners, allows working OEMs, inventory

of and desired availability QX As improved we of to higher-end given we towables, With you strong XXXX. fifth demand. models And our been will experiencing know, Brands, and our at not categories different will presently Towables for a levels approaching inventory. but levels not are in and has a below margins process be desired period, the and now consistent levels inventories improving with seamless. complicated product experience of vehicles rates. and remain consumer stock are this motorized restore quarter and units, our demand are XXXX is wheel continue historical modestly fourth

Nick fourth now like and industry over declines turn XXXX most participants, expectations will full financial margins the of call who reports results. complete provide in likely quarter on XXXX. later I and the we, industry a year overview Tomashot, more to the will Although of heard have

Nicholas Tomashot

$XXX XX.X%. up or up was QX excluding for sale new the recreational vehicles, or XX, of periods quarter $XXX.X from X,XXX million were XXXX. Total unless XX.X% or X,XXX, quarter year RV or the was of Revenue for stated XXXX. same ended $XXX.X XX.X%. $XXX Thank from RVs, $XX.X XX.X%. revenue comparisons Please the million, the units wholesale from $XXX.X recreational Revenues that sales, results fiscal up sale units, you, were unit million, up million vehicles million and or quarter million, and are fourth versus note otherwise, Bob. December the the X- XX-month

year. average sales $X,XXX revenue QX from other XX.X%. insurance selling miscellaneous fourth as unit or driven and of of periods increase noncash increase million of $XX.X XXXX, business XX.X%. $XXX.X finance The increased for compared lines XX.X% price by XXX accessories other X $X.X the up sold, or of million profit all pre-owned million, adjustments, recreational versus in well XX.X%. LIFO XX.X% of sales a prior net $XX.X in quarter was Revenues the $XX of from $XX,XXX, was RVs units quarter units as swing XXX was service F&I of our gross compared million up versus excluding between was increase last-in-first-out of margin, was vehicles up the of business, in between or XX.X% million, unfavorable the of RV had XX.X% lines Campground Gross or $XX.X growth $XX.X the $XX,XXX selling adjustments, to price service, parts, XX.X%. or sale these and X,XXX, total, revenue new revenue. was X.X%. adjustments were of Gross $XX,XXX, million up $X RV million X,XXX, units million, compared revenue by XX.X% related for The with which and revenue or to wholesale excluding or $XX.X or million, average to $XX.X million. F&I to LIFO including XXXX. In periods up $X.X XXXX. and noncash, $XX an channels to pre-owned parts million $XX.X driven or million revenue million, change to or units, quarter consist RVs excluding the LIFO up profit, XX.X% XXXX. was The were up QX New and Pre-owned up or

XXXX, QX million Adjusted $XXX the versus unit recreational depreciation year $X.X of sale $XX.X XX.X% $X.X or excluding up XXXX, million from our $X.X billion was earnings up gross $X.X increased gross for dealership in million, from million acquired margin profit Nashville, December was profit, and million compared up as increased the ex-LIFO the in adjustments, XXXX XXXX. the is XX.X% to was in of in LIFO Washington greenfield up overhead was increased million, from between in of XXXX. of points all as financial million, to August to million quarter versus to sales, X to X.X% XXXX. release million, XXXX. driven from $XX.X had which to Portland, including by XX,XXX, location, for decreased million adjustments, as now expenses the Tennessee quarter XXX margin, or RV XX.X%. were which the and Revenue income results. year. million profit unfavorable for compared mentioned reconciliation our compared a refer SG&A the stock-based Vancouver, by or costs, or was in the Revenue and $XXX.X Maryville, acquired periods increased billion, $XX provide Year-end up to Oregon, the I'll compensation This in attributable transaction versus increased EBITDA SG&A stock-based XX.X%. year, X,XXX from or compensation amortization million March Amortization swing XX.X% driven of as units gross for Adjusted Wisconsin million $XXX.X includes associated adjusted profit for XX.X% Gross up and $XX.X EBITDA to to and income percentage compared was million year-end in and a and net quarter above. $X.X overhead Excluding Chicagoland, January table, was XXXX the growth The Indiana Milwaukee, wholesale XXXX. sales Gross year reflecting $XXX.X well acquisitions RV Net fourth units, excluding October adjustments, a XX.X% and XXXX amortization, in XXXX XXX%. XXXX. increase acquired, LIFO excluding depreciation the $XXX.X which previously LIFO dealerships the business, overhead to EBITDA. to locations XX.X% year. of year. summary a prior noncash discussed. $XXX.X for This XXXX $X.X lines with relative basis up for the opened and prior improved of in net Elkhart full million prior XX.X% Please in XXXX. quarter vehicles respectively, the Tennessee $XX.X was to

the and million, This amortization $XXX.X and XXXX, performance year, depreciation leverage. the operating was to financial $X.X depreciation and XXX.X% $X.X the XXXX of XXXX. was EBITDA locations up XX.X% result of unit in in XXXX. Excluding XX.X% increased revenue sales previously transaction improved a stock-based year improved EBITDA million year SG&A percentage prior expenses reflecting ended a to Amortization December and 'XX to measure compared in relative from XXXX for gross The XXXX. was as as compensation up to costs, wages X.X% percentage $XX.X of profit profit decreased compensation compared the $XX added sales increased for profit overhead and a associated Adjusted million, stock-based RV year. $XXX.X with for overhead in ex-LIFO gross due and to the margin million year. million gross a compared to increased SG&A and driven the to XX.X% XX, of discussed. amortization, for X year decreased non-GAAP compared increase million, to as by Adjusted or increased prior and was

than well This in of options cash used warrants December offset cash the the for of of higher by proceeds and of proceeds cash We financing for of of The from balance position. includes of leases $X.X had impact $XXX.X million stockholders. pre-owned XX X in in from $XX.X vehicles, repurchases our sheet payment and dividends cash million, million Now $X.X vehicles, XXXX, million, inventory, the inventory capital invest exercise also exercise including in $XX.X stock of XXXX. and in the turning $XX.X new to change the financial $XX.X of million, from December and with had working hand to million $XX.X million in the $X.X preferred $XXX.X as proceeds $XXX.X of growth of increase million. $XX stock cash A At approximately of LIFO net as of XX, on the we to liabilities million consisting cash parts million Series used $XX initiatives, includes million in million. end reserves million acquisitions in

our no of our notes outstanding XX, Floorplan million $XX.X XXXX, in we $XX on revolving borrowings As had credit and million under million facility, term $XXX.X gross loans of facility. payable December

approximately outstanding payable approximately million on We to also $X.X related outstanding and had PPP acquisitions, of $X.X million notes $X.X million. a loans property on mortgage of

We review our change controlled X first be a related identify management areas: financial ITGCs. regarding program support technology changes controls we'll certain general filing have that discuss our weaknesses a in and IT in our company's area We systems was the additional efficiencies our weakness ineffective to XX-K internal controls, or These reporting to systematically material of The were X identified disclosing made identified of item to to over information inability processes. reporting all financial that system. result management

from prevent all made Although systems. we have in identify changes process place, systematically a us to able to system change limitations being our

that In responsibilities. addition, some to was changes for their specific we found have beyond ability users the what job facilitate necessary

access area separation second of user of The and of duties. regarding was the permissions review

at in not categorize no Based for XX, conflicts Our financial and affected. difficult current identified material on there permissions technology provisioning previously released weakness could company's concluded material to result changes and the company's that XXXX, platform not was and assess to This over this to misstatements weakness, maintenance makes internal reporting of our did controls. weaken were user December possible that financial results. the any financial control statements, management

Following designing believe second, be and IT third, material and underlying a our testing the actions IT and monitor with XXXX. reporting controls identification developing on ITGCs maintaining and to annual plan in be in and will transfer believe our we environment; including the financial implementing consolidated permissions knowledge to include: users. testing. sufficient included has to U.S. not measures through changes; procedures, personnel fairly applicable the and an material results our on remediate for management the prior completed promote documentation The concluded of has assessment management changes upon and ITGCs the reporting processes; controls remediated. that are review will around and and to information focus to fourth, and systems, have of The weakness financial function the specific controls supported contributing that operate and and proving role-based assignment procedures accordance a our December are Committee the ensure however, quarterly of related And monitoring that on provides on Form roles assigning and Board included reporting our we XX-K finally, been effectively. implement weakness. risk remediation respects systems fifth, remediated the to supporting Directors. and until deployment XX, XX-K, statements these remediation present for our implementing as Based we report first, designing the Management of substantive controls all flows of statements time, with testing to continues filing been operating of tools Form strengthening expanding permissions Audit Form enhanced procedures, will access enhanced in that for weakness, XX-K and the implementing and the IT and these this of developing that by monitoring financial and prepared considered of changes cash in period We financial actions that material technology other and GAAP condition, in controls improving financial intended to development improved and and in implementing changing allow controlled efficiencies to measures material operations of weaknesses company these that

like I'd that over to And expect will of prior Bob XXXX. weakness be end to fiscal remediation to now Thank you. We call completed the the the this of DeVincenzi. turn

Robert DeVincenzi

address couple before up we to a call for wanted Q&A. I the Nick. open Thanks, final topics of

continue First, strategy grow let our me the business. to address to

the focused we we RV on with to our and Lazydays continue country. the enthusiasts footprint both opportunities across acquisition growing contact the to and increase past, number have As of a in greenfield be grow been

are careful expectations to markets. and we in that we expansion of high continue and the transition, With opportunities but of and are Seller target determine a leaders in With make to these our identify evaluate metrics and been our very evaluating we the methodology, to have our to to for to deal respect regard on continue refining and continue flow. price to pipeline position our we expect announcements additional acquisitions disciplined in filters markets some use to greenfield focus quite promising financial we in opportunities coming dealerships, are and existing operational maintain to our be on interest. be Given act weeks.

capital topic leadership me our Directors. a of let focus allocation. Lastly, team This address the the remains of Board of topic and

As many stock. XXXX. same common $XX million of XXXX, you authorized buyback place of announced buyback up XX, announced the of the common At our to through million we time, know, we additional on February be share December to the XX, $XX of of completion put an in in authorization previously

various will growth to of continue shareholder the investments capital Lazydays We long-term value. to that support allocate

We of like balance future generate Board in and to balancing will with cash core through This be a up continue questions. to open the now flow of investments our focus to team are call invest the growth buybacks. of share for the mindful We'd Directors. to opportunities business leadership of

Operator

Instructions]. [Operator

of question Research. The Fred is first Wightman from Wolfe

Frederick Wightman

up at follow like also but quarter, you call. I similar at margin Bob, sounds margins expected start to later commentary seeing It gross softening you're the first wanted hinted gross in in fourth the the on had, to the you year. quarter that the relative some of the

build maybe through and bit gross think talk normalizes will more? the you inventory on So hopefully that move out about how trend margins you year could as just a and we

Robert DeVincenzi

the It's Nick thus color the to his ask Yes. question what in let I provide perspective. from information difficult period about me a Fred, answer. seeing give thanks more to currently and question. your for complex financial bit a we're little did And far.

Nicholas Tomashot

to QX. will starting point we the some motorized were commented targeted levels products. we Camping haven't. see towable higher-end that sure in I'm And because towards haven't heavier out so the far, those and compression still they I skew really reached But Yes. yet. inventory you're asking But World that margin

we've to able and up So those. point, to margins this to on maintain been hang

as supply I And will time will balance. and I can't be. that I but over into about demand not opinions course, the said, erode lot have Of that. And a of there's predict will share. when gets back that one,

Frederick Wightman

you on relative whether where the you or quarter quarter-to-date or quantitative? today? history, either of Could qualitative guys Maybe just enough. in stands, what fourth it's just presold to Fair that comment sort saw

Nicholas Tomashot

that has record disclosed really [indiscernible]. haven't maintaining been what not internally we has been and consistent delivered. We as that and see units have And that, are on but and of order levels we are

Frederick Wightman

Okay. on of And XQ. detail just look the Could stand the we seasonality, like was where big sequentially XQ the fourth if sort and to more up Great. sheet in of exiting you're that then at discuss looks you that... step you today on inventory versus quarter, much new balance pretty give comfortable it a how versus how of with used, that sort bit if you just

Nicholas Tomashot

we're loading inventory purposefully, I the when up would on the towards our and chain was skewing used supply mix tight. was say, we was and heavier skewing especially -- uses,

starting typically inventory inventory in. at looking come the or do we're new get we we number And absolute higher dollars. appropriate of we we're levels. to to units levels, would at monitor see if turns seeing not than sell-through. or we is product turns of When still look we're Now our levels our our What we

Frederick Wightman

of versus then industry, of a on retail have you discounting, are that's sense. I or a bit from mix seeing Makes signs but guys or any little broader And incremental the that whether discounting. just a unique you OEMs? thoughts know hearing

Nicholas Tomashot

in that we'll because composition, -- markets I others. have and different before see in see think competitive different at expect markets that we'll happen different some but happening to I is things locations we're different No, probably timing see what start

Frederick Wightman

lowered that on production thoughts Okay. just in Any wholesale what And think last based today? just you then RVIA's that's market on forecast. prudent you're seeing the Do the one.

Nicholas Tomashot

to not XXXX, a have too Personally, it's production was in have I detrimental -- as much through as to to stock, prefer margins demand to oversupply. linked Having many there lived it's units possible. where

Operator

turn will time. now There Bob to call are closing further questions no I for at remarks. DeVincenzi this the over

Robert DeVincenzi

next quarterly conference day. quarter, your Great. good in to look and you Thank call. for a you forward participation wish all our We updating you. Thank all you

Operator

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

now disconnect. may You

Lazydays (GORV) 10 Mar 222021 Q4 Earnings call transcript