Earnings call transcript Q4 2022

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Operator

Greetings, and welcome to the Lazydays Holdings, Incorporated Fourth Quarter 2022 Financial Results Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded.

I would now like to turn the call over to Debbie Harrell, Corporate Controller. you. Thank

begin. may You

Debbie Harrell

and for everyone, us. thank morning joining you Good

North, me Executive Chief On with John Financial our our the call Porter, are Chief Kelly Officer; Officer. and

will to we from financial future such differ information. could is uncertainties and everyone Before cause would risks, which forward-looking like forward-looking to assumptions I that including statements begin, performance, we materially and be subject potential actual discussing information, to remind that results

and other risks, Relations no in release Such Accordingly, assumptions, our as not SEC, as undertake forward-looking statements. actual factors and section of should relied update forward-looking be prove inaccurate. prediction website. our Investor filings identified are guarantees periodic statements no well uncertainties, other our a or forward-looking future the the revise statements upon may make with be earnings about and as of performance obligation and of our any to we or all to our can results We

discuss measures non-GAAP measures. measures. for to on On this which we press certain available closest comparable financial the to reconciliations call, these Please define our our how is website release, earnings and will GAAP we refer

like call John. over With turn that, to to I'd the

John North

start to you be over morning. morning, take we’ll you have through with Good few us. as CFO her call observations our then Kelly Thanks, Debbie. some. the a and happy a to very you and for for questions I'll joining comments everybody. to Thank few financials, it I'll this take turn if first earnings

locations, over members experience We And visit say the billion customers at every for year they for we stores. finished to over record states, our our revenue. $X.X XX proud in efforts one operating now our the set a I ensuring the in we're of team way have of incredibly we Lazydays company want time X,XXX XX December. team's of with ended First,

outsized continuation with each sales a first deliveries year, industry. year increased new through experienced of to coupled Thematically, in to days July commensurate similarly record production however, floor the RV interest cyclicality costs resulted of from levers broader normalization rates inventory the both the the margin fueled and supply calendar XXXX Industry-wide, new novel. units pandemic RV volume six concluded months nor month for of the After has we for plan softening levels, in facilities. on pull, carrying December. demand, and gross and of us higher lower quite sequential our for higher elevated to are neither on business The the

improving disposition revenue countercyclical and and inventory health on are new year both the opportunities service, current on year and the used in our parts focused of through model businesses. model body prudent focusing on units, inventory the profit We of maximizing prior opportunities the

expense, are below-the-line is ratably moderate. expenses as personnel our the scale modulate comprised that majority costs used associated business, The gross insurance naturally and profit generation volumes finance down with sales of which variable The marketing and of profit. and of our operations and new, with gross

to remove restructuring overhead, general current and line supplemented sales store with reduction partnering corporate staffing for our in ensure also of to expenses nonessential have natural eliminating We is by volumes. this spending managers

across of one, have estate; tactics prioritized environment, our two, key the of capital economic operator owning leverage scale the areas sufficient for of current controlling required The three, ensuring our locations. and our support day-to-day any of real infrastructure growth. economies and for Outside growth of the in we many organization to improving are: preparing health focus

future. see to of To further to estate our December, increasing more that relocating real in options through the XX%. estate acquire stores real purchased and to percentage purchase own existing the locations We or end, at opportunities we of in Elkhart Nashville our we new the facilities

This acquired a locations. steal and borrowing yesterday, both levels facility as to us to growth capacity as greenfield to of locations closed lengthening and inventory at our increasing at well inventory XXXX. ensure due flow facility, bit allow the thunder, our adequate maturity an we syndicated on Kelly's will credit amendment to To additional existing

as Further, transaction press issued in the earlier a the in than less outlined our warrants with XXXX release associated today, deSPAC we expire month.

Assuming are million. additional of would we warrants capital all the generate exercised, $XX growth over

of Tiffin the added week, our existing locations, first we brands more the also Finally, at scale to in were preparing with Finley last which into acquisition in Concurrently, market, the of we Las RV in lineup awarded the store. completed be will right to Vegas, purchase to significantly sell our terms of organization Nevada. XXXX the product

operations beginning Additionally, by building Iowa, or remain buying year on greenfield locations We opportunities this outside Bluffs, remain in that spring find growth in we later new Council track will XXXX. further we either to just hopeful of the attractive four Behind Omaha. open in corporate and believe the design. our aggressively in the us scale been internal We improve costs our and significant allow to infrastructure will modifications network and scenes, quickly, performance we've in future. making overhead these leverage existing reporting, to stores organizational infrastructure, of changes

month. and but team. part with resume with announce stellar his be and supporting experience I'm pleased comes efforts, one, these important we an to added we decades Chander to Technology to a happier companies, us team XXX just Chief couldn't to the of just of Makhija Chander addition Officer, a Fortune last new As the

ultimate deliver yet we the of externally we prove results, diligently obvious to demonstrable has hard the much in confident the to Although future. will work be are toiled benefits have

that, call turn the With I'll Kelly. over to

Kelly Porter

was comparisons period the XXXX. quarter was three-month a $XXX.X million, XXXX for softening revenue of in the model XXXX discounting total unless year a with a of same Total that from in revenue decrease $XXX.X John. sales XXXX. combined inventory. same-store million, of a reflecting quarter, On XX.X% are the you, Thank decrease note fourth quarter XX% otherwise, Please basis, volumes of our the versus stated

We supply days days a calculate XX-day average. new days vehicle trailing of our XX a a supply and on inventory. year XXX on the We used inventory with ended supply

expectations at fourth to seasonality to inventory and year-end relative prepare Given our higher to supply periods. Tampa quarter build our and SuperShow, the other for reporting looks efforts day

a during quarter -- wholesale declined total sales, declined excluding profit units wholesale used basis, unit. XX.X% unit sales and unit the declined unit gross per profit unit. XX.X% LIFO, gross unit $XX,XXX to the sales new unit declined On same-store same-store and unit in sales, units $XX,XXX $XX.XX declined per profit gross unit. new per $XX,XXX Total to per Total XX.X% per declined and XX% a XX.X% gross and profit per declined excluding unit to declined quarter, unit, to XX.X% On used basis, per XX% excluding per excluding LIFO, unit, unit. XX.X%

Finance unit result versus and as decline the insurance $X,XXX, unit the in revenue in to F&I And per increased quarter, prior during XXXX. a slightly over on declined X% unit same-store $X,XXX a year. volume. was declines basis, $X,XXX a per XX.X% primarily F&I of

finance to While higher see significant F&I note decline stores. a volume overall opportunity to we as did in deals, product penetration our a we in due penetration continue of cash

same-store Our $XX.X Total the service grow. quarter parts to revenue $XX body X.X% on and million. And parts X.X% businesses continue to increased revenue increased basis, a and service, million. to during body

SG&A. on to Moving

growth. infrastructure majority nature, for work continuing the and spend of Total properly we As non-essential future corporate SG&A overhead to reduce John rightsize yet to while are our position third to eliminate structure in variable ourselves mentioned, the as our excluding the is higher cost in was is the saw impact increase from XXX gross over we sequentially XX basis of quarter percentage a XX%, points of profit year and the of an than quarter. approximately This nearly LIFO. points prior further basis

down from income share and Adjusted was year, XXXX. net income adjusted in quarter, fully diluted of $XX.X the and was of million $X.XX for $X.XX to per diluted a compared per earnings $X.X fully million loss last share

Now The Total revenue December results. the review a XX, billion, year X.X% of total retail were for and XXXX from sold the increase high-level retail a XX,XXX. $X.X over units year full for XX,XXX, same-store XXXX. basis, ended on an of total units was year

of diluted was million adjusted percentage was for the net per adjusted gross share $X.XX. XX%, a was profit as fully earnings year income $XX.X and SG&A

allocation. and discuss liquidity to on Moving capital

we ratio and quarter. at at of comfortably the December million. were with the covenants, of our end of $XX.X debt cash cash stood As in compliance X.XX and leverage covenant had XX, equivalents We our

earlier, maturity inventory. for to the on of and million, XX February estimate all $XXX total John amendment subsequently retires The higher amended mentioned used approximately liquidity term facility extends we and estate. XXXX rates our and provides credit on including As loans associated unfinanced real mortgage advanced

leases of For adjusted investments, cash $XX.X million, we have operating and for million Elkhart capital on expenditures, purchase leased deployed on were flows and as of and and and and the our amount, we deployed Nashville internal technology. acquisitions, sheet. share properties our estate million Of approximately we in year million purchases real estate that of balance repurchases including capital $XXX the on acquisitions capital locations. recorded $XX finance full projects, previously real including These XXXX, $XX generated

The remainder dedicated towards repurchases. was share

In of of fact, retiring shares XX.X% of over X.X million million at price shares average invested our $XX.X an common stock $XX.XX, to repurchase we outstanding.

and in repurchases balanced growth, a including capital have internal remain the and share opportunistic We stock future. of we’ll allocation, to acquired investments our organic approach repurchases and

the open we to that, With call Operator? questions. can

Operator

you. Thank

We Our Instructions] your questions proceed Securities. Please Swartz from will first now with Mike line the [Operator Truist of session. question-and-answer be with conducting a come question.

Mike Swartz

just leased control terms locations start, to going out thoughts forward? high-level to in quarter. estate, during guys. guess, or some rationale why your how that you allocation morning, provide you just real see the around of Maybe -- the Maybe capital want Good you us why Hi. I of maybe two playing previously strategic acquired

John North

hear Nice to you, Sure. morning. Good from Mike.

the have real just I'm a companies think, I estate. other seen that success past their at victim I've owned of

hidden You strategy assets Copart one working Lithia, span own was a know, real to I estate think, both of and both background that of at my that decades. those organizations the

over make as real to really the sense rent want And no sure in XX-year I've time and invest our the for really in and really that my that values been to infrastructure we refinance to to as property speak, horizon. time the just, tap escalators, I our think, there's we being in able are participate And accumulating really, in And a quarterly it it's well we not work of appreciation the as call, prudent. estate plus over cost, we endeavoring in. the think seen importantly, time, equity increase. past. talked into in question locking will I so having fixing be mind accreting to about something necessary It's capital last CKI

additionally, think, flexibility. a your you estate just I owning gives real lot more

terms If where trying sort cards the sale that of in to how seen control and to our those of flexibility very, do. vacant get estate we're leaseback, we ability trying to you've very that's just not is there's real critical But about things have challenging. a out in site are maintaining operations to been say portfolio, And us. think dealership something I of we lease think that's think ever the to facility necessarily maximum our

this in experience my are business is -- acquisition that unfettered. And totally opportunities the not typically

to typically so to that's and you're stuff. transact, and not speak. where dealing locations time when know, we're to for there's You some sellers constructing finally on And us every be buy rational period new out opportunity with corner, of just need an street

own I so, can anticipate we plenty the growth still to our real have And flow cash estate that of and we finance operational think, having.

have our cake we too. it and think I can proverbially eat So

Mike Swartz

that inventory that helpful. through aware that XXXX? the we're inventory a inventory of and Okay. of liquidation? working to is sense levels John. within inventory maybe Maybe year on Thanks second I elevated think you go everyone like for your terms -- terms of some model give what how just much of kind And environment, have non-current And in well then is inventory question, percentage more the new of elevated us current levels. in That's

John North

I lot Sure. our to a in credit the organization. Again, operators give of

spoke in, I inventory already team mentioned, the I that this the top we was together us was yesterday. healthy As just when our time. at about talked as we topic for a I of last, looking And our think, pulled mind inventory was getting stats at November it

basis absolute in of an flat February. Our January to the where end inventory on today we sit from were levels

inventory really month or or feel to our pretty good as model inventory of terms year. about about XX% added each and point, So What our it X,XXX is haven't and we plus or levels units. sequential at we improvement where model every shrunk yesterday, current have your they all, are, in of prior minus I call a seen of so was

XXXX still inventory So we and were even October cases. into in September getting some

units then it of we So there's really because that we've to spend the of pertains to of we summer, they the been we've curve about been that. conversation ahead under had And plenty number this that been couldn't have as recall. were inventory recall. a continuing but late since And a sell

we're of we seen unchanged. model shrinking, hanging so We've much it. although it, What So as working call that. that are seeing that through end, pretty of And would we're current aggressively sales, it's more profitable we're through discounting still in all front is right? grosses to inventory in terms really on our get

So right and find get I the stuff. try having to move we'll to pricing to think it's just that stretch terms store that aggressive customers, in of through each

pretty And model be good current then still the healthy to gross stuff, had for profit there. year there's

strategic of I'm few good pleased months. and take working on a really going with and it's it's of so that relative being been having it. are ahead And really But to us another to plan a we we've balance through both. where for something And this months work to

Mike Swartz

if Okay. it fit one in. can That's great. more I And

you've optimizing structure. already and there is? think maybe way I sitting or out broader any maybe overhead savings enacted the the kind cost corporate about what cost to the about think the talked that Just you've plan run Is rate of

John North

That's this morning. appreciate get going we're I quantification the question. that probably not totally into a to

think think two. I week too. be been to blunt months six totally XX still Kelly it, are, I another or mean, here, to about hit in has where get around we're arms our I I'll trying days. things totally

out So still figure be taken that all trying lower. for will We've sure. out. I think to we're costs of It

but do I'm opportunity you that sure think more, I to now. little a can it bit for I not there quantify really right there's

Mike Swartz

Thanks. enough. Fair

Operator

Thank you.

the Craig-Hallum. Please from questions. of come questions with proceed next Dyer line Our Steve with your

Steve Dyer

Kelly. good morning, Thanks Great. John and

had, it for looking than historically be going forward, to new As is pace this kind been it Mike questions, like capital relates some maybe seems of the of to of certainly just the dealerships allocation has adding company. faster

be that. asking early into point, I I to guess, your in Are preference that going yet One, slowdown. around you rational, finding, And an are to this think two, time more or prices take greenfields you going fairly acquired. is questions that still is Two from number or perspective, it's probably this we're cyclical asking year? is guess, something at a we price

John North

Hey, Steve, you. from great to hear

an having is many scratch, a mind month while preference personnel months location. device you're Our so let's versus ground, sinking and buying is service sales new waiting return the if goodwill, complexities, second of two to start-up call come many, and are, for many, set the lead and the entirely you're in XXX% with and in construction their with of avoiding the component of start from Greenfields own where in stuff. ones it, an really speak, you're my existing a an cost to biggest XX-plus time, staff capital Greenfield

got You've base. an customer installed

employees got You've drill. know that the

exist You've in got that brands the market.

flight. that, Greenfield. on And looking And focus I'm won't I more where to a are we about sure excited circumstances in general, more allows do We're see and situations you're of ton definitely in ones we we that for that stuff, and that a I – will acquisitions sustain do But building the there I faster. as makes that's us grow us sense. opportunities. to so to think think, acquisition going think opposed be have

so years change over, opinion on of or don't XX is really know, that, terms In that my it prices, this, informed that don't I selling they been of watching much.

transact I when and a speaking, pricing generally the they to that's think need becomes rational. get realistic sellers and where point, to –

has door life to when and where to and to make ill up it's get retire you usually knock ever or the they're the them whatever that they're then is back comes or point unsolicited, a walk that someone catalyst event, going sense for any sell. somebody's you price If really – doesn't time on where

been boats the of in a terms you and number inflection extended do years, automotive for bit I transaction more And think has certainly our money more this their making little of that a in couple beyond gross into last pricing and and phenomenon that, they been taking have. and there's become rational think, other earning. reasonably verticals. a a profit. was of expectations there's everybody Everybody that's can industry maybe of has I over

think for had. so buyer time, because point they're in that pay no seller over-earning accept And would going why to over one willing you there's earning. at I no and a multiple be profits is sell to is lower a to rationally And windfall when as

which good back a normalized I think think is kind what into I get environment, thing. this so feels will a And really more "normal." of as like, we think be to that I is this

for paying plan think dealers again. I

people. think and sales all again, become aged But I I helpful having he's fire can fair those still means good got with there's and high-quality inventory think and with don't return. that brands a good I generate we it had a we we're and think some us. pay things price gross be of It's economic it, to to can still asset good for profit cut and necessarily think willing to valuable, to deal a tailwinds still

Steve Dyer

maybe look I dealership for helpful. you the to geographic landscape, it? That's looking something guess, about Thanks. existing or to of at Are you certain areas an acquisition how you that's fill-out is for Just sort specific sort when not? of sort that close think or looking of sort brands are you Are trending, you for buy hot of $X forward? really going trying criteria there or or to your are what do $X.XX?

John North

little thing profits probably in definitely our that this a gross interested space, that least that. tend to And product tends bit that. at think brands tightly hold really where the in to of more little desirable think to I been a in I are, come allocated, the better. a appreciate we've be all some within view, one Yes, is I've there I mean, more bit

benefit locations. to there's think clustering I

So great would we one-third little it's And is of -- the our market. where Arizona bit. Las that's like store our a I to store from campus phenomenal the like say but Vegas to example store, company. proximity a a away that to We diversify mean, our it's not

flow. It's cash elsewhere history, return country, want equity, we've years, finding particularly We And looking clusters we already think we and our very the very and return We very, that want helpful. some deliver more in want in in very, after the formula we diversification and primarily, can is at So XX% simple. we're applicable those But where and tax opportunities has we've right? equity. is is on hopeful what tick executed on five that's we're well got stores our a of a that back and there's annuity then in money been here, XXXX. seen of them boxes really

Steve Dyer

a And you. Got been net per but of $XXX,XXX in never guess negative adjusted in accused mathematician, non-GAAP, being then GAAP, help rationalize me of you $X.XX an you outstanding I've of reconciliation show that's your how I for share. Can earnings income possible?

Kelly Porter

when It's things one Sure, here. to of the I got I learn Steve. fun got

capital bit on our is little go going do of our a kind dividend with a of everything, refer through to interesting loss particular, a into with warrants stock you the on we preferred. that's preferred thing So and there the the structure calculation. the with EPS our and start complicated process In to

the that starting turns a moving to our allocated has it fully income, So of the net common shareholders. with loss out into there; dividend we’re been it

simple math the that's there. So

it. walk If it through together you to happy want to you offline, work through

Steve Dyer

greenfields I are sort makes sense. forth, year, that guide about guess, that leave on don't the going Kelly. but lastly so Thanks from I you're the or guess, to are year or alone like and that guys anything growth thinking way for this next me, in you now? of, No, so when right maybe for come a you any, post there on, the perspective, that guide

John North

a few was In visibility it pandemic. got short, I there, I don't know ton right? but we that opened in a we've of the mean, greenfields,

in some be be going mean, I I to associated. what's like open XXXX? period And greenfields so to believe costs think, to the we start-up going it there's

immediately. door going in You're come across have the to going not revenue that's to

days decision. there, good Houston for as frame, in a study is there, probably was we service some did We be goes. sales that. a It added And profitable see still and October-ish profitable traction become had the really not in -- think us. center operation us good XX-plus you I'm see there I'm and took recall, February we'll case a a to we'll which time I hopeful We to prior how in that there. February.

but January, figure November, to So time in granted period, ramp. December, it tier seasonally slow takes

So going of be there's any know going some think like. I look going guidance. to exactly be provide not to But that. manageable. don't going We certainly really what We're it's to that's to financial

the than been I'll there's on industry looks deliveries me smarter think and production wholesale retail prognosticate machinations going plenty And to in I around like. of what are what that people be. let

we tell XXXX, you that, of out start a I better can we've seen coming okay certainly pretty What to felt how December. is than and November

mentioned, I profit. current year inventory our good is gross As holding model

just opportunity talked there's see but sales, I outside for industry, has think, company, about our think us grow here. which certainly of opportunity, an we good as to used I been

And same-store fourth I me parts real in was think, quarter seeing number spot memory. X.X%, for then body from service positive up the seen the and up the

keep revenue all I while I there's But on, that we're in into posted we come we'll better you're think to trends it's the organic from, and your I greenfields opportunity feel put our on there's analyst how up. significant drive perform locations and manageable than you you going be not and overall, a that Steve, like How departure is am. think the that a to on. model, to

doesn't one until April. The come on first

call. probably have we'll little get think I we the bit as you, next a to to share more So quarterly with

Steve Dyer

Good you, Thank enough. Fair both. luck. right. All

Operator

Thank you.

questions Research. Our Wolfe with your Wightman Fred Please come with of proceed the question. line from next

Fred Wightman

there due of stands to today to morning. show, feel sort currently? size XXX made where how up just you know that I you and new that maybe Hi, days Thanks inventory. question. guys. way that was our the I follow about high of to it is comment the Good wanted but a any for on Tampa taking that

John North

look trailing the sales to it. obviously, would that's give that we don't a of -- we a why supply we do and come And of so mean, volume that is. and use some imply I take sales up Yes. kind XX-day forward-looking with supply a could cost and days back so the we guidance, calculate day what

mentioned think, of been I one I inventory. as February. That's units and to consistent, about questions, earlier the X,XXX we're December, January pretty in

So as Super inventory ground, a I would know increasing certainly say we down We effort pretty to been I the for haven't decreasing. conscious or I the into you we December got did make were think had make here show, sure on well. we which and went

allows We to ultimately so the deliver inventory we the in have as had than it it units, for is we delivered. say this really the longer it you a which a couple, lot that that less business, takes kills time the more in is the year and unit, important last is likely -- deliver deals on-ground us because to

feel good in X,XXX We think I so pretty unit And that pretty it. general, about is mark unchanged.

I think the for it we're operating levels stocking represents today. that stores the right

up down. And so big anticipate changes I directionally don't or

I when is next the to comes I function Absent wouldn't that, of Bluff on direction. that anticipate in the for big either big a think store changes prepare couple April. in hundred to the need put on We to spring. in ground step going obviously be units Council

Fred Wightman

it be and towables And healthy is of sense. you far motorized just then want where in. as and unit, within the sort Makes to X,XXX as that mix

John North

Yes.

year, talked towables certainly recovered last faster as about we throughout than think I motorized.

third fourth was plenty And I -- the still And some in environment people pretty I lack stuff But so say sell. I normalized the would have motorized there quarter, that's retail now. availability would of general, of the say quarter. it, to let's call think by the in

don't we I if it. that it inability get desire there's motorized, to the we think So us need for if

job and to other production I And a are on think they we isn't be doing or as the continue what that that pick stuff. through summer lot OEMs I and been down aggressive the stuff a inventory improve, need. that's we be channel see it encouraged like slowing as into think power in to decent and stuff. And out general, I'm But stocked we so you've sell and and allowing get I say. yes, the by up, commentary model marketplace the the dealers agree with have to got that. we spring seems of of to continuing discount seasonally health the of And your so should in would

Fred Wightman

Thanks Awesome. so much, guys.

Operator

are further this Thank over would remarks. I for you. any to John There at like time. now the to no back call closing hand North questions

John North

months. talk couple everybody your for thanks joining with and we'll you us, a Just in appreciate of I interest.

Operator

Thank This you. does your participation. teleconference. conclude appreciate We today's

your You at your lines time. of this Enjoy disconnect may the rest day.

Lazydays (GORV) 23 Feb 232022 Q4 Earnings call transcript