Earnings call transcript Q1 2023

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Operator

Hello and welcome to the Lazydays Holdings First Quarter 2023 Financial Results Conference Call and Webcast. [Operator Instructions] As a reminder this conference is being recorded.

It's now my pleasure to turn the call to your host Kelly Porter, Chief Financial Officer. Please go ahead Kelly.

Kelly Porter

Thanks. thank joining and everyone, morning you us. for Good

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

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

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

to like I'd to call the Chief Executive that, With Officer. John North, over our turn

John North

Good you today. Thank joining us morning, Kelly. everybody. for Thanks,

make not February, of typically nine only amount day to and spoke changes through I questions. a then been you bit weeks a comments. usual, to take the find be opening the us usually I in will As It's anticlimactic. a since happy to can we call in earnings our Kelly time. and results to some financial few we're have short first much quarter such

of Bank, of COVID-XX observation events through. at at often time both great work collapse crisis Lithia and Silicon effects the been My take these has year having Of XXXX course this the with Avis. been derivative financial of Valley the Signature to second experienced has the pandemic and different

vigilant. remain will We

fund rates willingness a vehicle lenders from our broader ability impacting when and our as financing for both Despite our in for importantly to business. some interest operations, open business to our available these in take out have and loans remain not see to to so ability However, higher borrow customers market of continue credit terms us, money more far dynamics to find we affected our customers. options purchasing

During our has our prior mentioned previous aggressively we few particularly for leadership focusing our that on team the call, inventory model been store years. quarters, from units managing past

for remaining unit As units of inflect on year, XXX overall have a only today, we make the dollars up gross last number the of small overall units on causing model new smaller month contribution deteriorating stabilize. quarters left around gross have margin from sales XXXX XXXX sales profit units three been each to will the sequentially to to although relative

that Furthermore, some units we healthy and have generating XXXX XXXX in recently still arrived. profits are

worst that performance So macroeconomic sales us. unit been is also our our behind the of despite with of we the pleased quite volume headwinds. has resilient are part I'm velocity most quarter happy the first in the which

overall of sequential have last growth terms adjusted to and Our sales, SG&A improvement first service, growth quarter from our fourth year fewer and revenue, results of shown the in business. body poll parts quarter lower in

month in seen April. January each improvement We from have month-on-month also through operations

we improving performance. go to our in of we our where are While to it's market about the predict impossible year, and future remain optimistic operations will exactly committed the the And balance profitability.

focused To to store to we network year. create in active of markets, footprint effect on of number corporate be after in new end We Council to pursuing that to this strides have the development. the the second third operations February. expand we the will open acquisition week, we network growing our the Las location in construction make locations We that addition Iowa Lazydays in leverage our completed this continue which scale operate locations in year this stores. under exciting is Vegas in opportunities. and to Bluffs, and And more We our a remain quarter remain three of of economies new of in clusters acquisition

physical expansion, and digital Alongside growth. we also prioritizing our of are the enhance development customer the to capabilities experience our promote

our the have advance the on We to our has board. Previously of expand one understanding sales and U.S. the extensive strategies design, who of top of a VP groups a and and welcomed XX as for presence Baron, future intersection led vehicle new I'm Marketing largest retail, knowledge efforts company of experience marketing digital and our deep the he web team. of service. brings marketing digital dealer we Jake about our Jake in enthusiastic and with

to to to their my fewer accomplish want a with for make we work need more the decisions and exceptional has past gratitude had during resources. months. I our Finally, few challenging as projects to about people express organization and we been period It tough

occasion we have from every store commitment of employees. a inspiring and at to of field and team both impact. to has I'm the how motivating. part honored of organization. our everyone and with I such impressed fantastic responded significant a risen thank each this I'm energetic Witnessing be sincerely is Nevertheless, dedication And our one capable and an and making headquarters, to personnel here the leaders our level

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

Kelly Porter

in that versus otherwise Please revenue was a are you, million, same of of stated continued decrease XX of reflecting period XX.X% over month unless $XXX.X the the ended Thank the end. end, year inventory, XXX softening a and the one on first and supply in XXXX of decrease note XXXX. comparisons sales used vehicle Total days model XXXX day volumes a discounting days three the John. our quarter a of inventory of over decrease a We year supply year new XX quarter day quarter with inventory.

store basis calculate this unless same a a XX point otherwise trailing on reminder, on average. stated. be a we will As metrics day on day all supply From

the $XX,XXX excluding the sales per XX% per $XX,XXX unit New gross Used per to XX.X% to unit LIFO and profit combined declined XX.X% in declined Finance was a and quarter, as XX.X% lower XX.X% declines the XX.X%. during declined result sales of revenue unit. unit $X,XXX decrease a unit wholesale of quarter with per units insurance declined for unit per F&I financing unit quarter excluding unit. profit and volume penetration. in declined primarily gross

in We F&I see product opportunity overall significant as continue to penetration a stores. our

X.X% revenue Our grow business service increasing to spotting and $XX million. continues parts with to

LIFO the from of the below Now the Total a quarter quarter of XXXX. sequential items profit percentage XX%, quarter of SG&A was discuss adjusted SG&A fourth in improvement was to few gross for impact of a as and XX% the excluding the line.

more I hard encouraged put control have but has work do by to in to We the team am work costs. the

million from down per Adjusted $X.X million net in diluted share income for the zero $X.XX earnings last the fully Adjusted for to year. was XXXX. quarter was quarter $XX.X compared

quarter net is breakeven income participating for preferred net the per the income dividend adjusted arrive accounting the to adjusted income quarter. to reminder, by eligible the resulting share common in and zero was adjusted dividend earnings reduced a As at securities. After for for

of line on We well our million as Shifting of balances had to liquidity new revolving of with available and based million availability as million XX capital floor credit. and March on cash $XX plan and as $XX cash used eligible immediate our $XX.X on line allocation. inventory equivalents of

$XX.X of estimate to real million of we $XX estate approximately million We un-finance liquidity. additional also provide have that

minimal in the the impacts rates sector. we've mentioned, from John As increase and seen interest banking in turmoil

As in $XX a $XXX to total our we amended credit capacity to our reminder, revolver plan increasing million. million February, our capacity facility, floor and

revoked. four agreement to that extended the years a amendment In addition, the facility committed and called is be or XXXX cannot

account million maintain inventory of depository balance. of debt hand use We floor planned or for $XXX our used a and is for an exposure net over best floor pay be financing down to through not we cash on hand plan plan debtor, will always cash of be do large related the plan With our excess retirement outright on either cash debt. to the retire as offset will

our stood end at comfortably our ratio and at quarter. leverage the we debt covenant Additionally, compliance were with X.XX covenants the of in

to of financial approximately breakeven, similar results. first the our generated operational quarter cash adjusted During we flows

In $XX received warrant in proceeds million we addition, from just over exercises.

the greenfield we for. our construction share expenditures related and capital underlying investment multiple During committed floor deploying internal to million $XX our primarily $XX million with followed by we for our on repurchases real remain to acquisitions estate owning trading and We quarter private on first dealerships what deployed of an than location. prioritize when in lower can capital acquisitions acquire is

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

Operator

Our conducting Craig-Hallum. be from question-and-answer now is Instructions] Dyer Steve you. a Thank first question coming [Operator session. today from We'll

live. now is line Your

Steve Dyer

QX strongest April. trends Good of and morning, in John, Kelly, kind with on that's the in to that on And do different that seasonality I second is want think historically you the still kind similar I the to seasonally trends? assume can Florida. or of start dealership Steve. guess monthly year the quarter then for Lazy, you and given then what Ryan quarter case comment normal you see this large

John North

forward hear person the at in a in and seeing you looking Well, in to thanks for weeks Great question. May conference. you to few from the

would of it was than I in and cadence say terms think January February. the better April significantly March and got QX better sequentially into I and

that's dealership significant We And is of in down here obviously trade third Tampa a large do in show a a that show there's super company. the have, very about January. the

anemic say colder the January. the I been organization February rest say in is month was often has a weather a that would country. And would and And by of and so wetter is most had pretty the strong, short of weather. And impacted I probably

some so March. March life pacing and And down too. bit we things that saw ahead things I think come slowed of a April's to

in because couple unusual. footprint bizarre couple are certainly So point. really this don't last pretty the and when least been years that's off But quite the of diversified pandemic, it's coming been I we've unprecedented at of like obviously of last the the unprecedented word at a years, it to bit the couple comes years have a of encouraging

think it's so at be. for this of is what that, you is mean, year lot top the And rest to a me around color going really seventh I company. the month on I of the hard give my of And to

So up size different having and think But past. seasonal Midwest we're expectations it's in in growth. I are you. And for nice for end seasonality we'll our some I think to slightly as that up had can we've particularly a hard best see years more the normalized may we the doing us with me than that hopefully things warm that

can't be I more sorry, there. So helpful

Steve Dyer

here for come. sitting still is that No, the waiting Midwest, in we're spring to

So Curious on hopefully inventory soon. mix.

good I selling and prices commented feeling then kind guess, anything But inventory you the of that? relative new that conditions mixed on pretty also you're costs on and there. to on sitting U.S. current So side, the within

John North

demand that. healthy interest really to nuanced I is And I on industry, what and cost up in with don't It's Yes. think being question. there's use just we've a is particularly inflation certainly which we've seen for with think but unique product, seen that general our new rates

So unit curve on less it's consumers a ago. some think some down are I more a the ability are down to depreciation few in because buying move is affordable. There used demographics years and trading lot a cost

And been we've really unit I that. generally speaking so, velocity been our sales the used of And would leaning has into say improving.

You'll see the wholesale volume quarter. pretty a in reduction significant our first in

you thoughtful pricing quite you more used you area because intentional to the into team. operations that trying the always them where with that's if up our be and try with reconditioning by stores consumers. can difficult trouble end the encouraging to to can units get that's too and We're much for And becomes Ron or purposely recondition retail with

organization used notion, additional there more think we And with for and do other And used. there's into that revenue still an generally think a a opportunity But And agree I And for through. we're, way industry there's there's lot we're us finding leaning I think to there about have can XXX%, there. and thought strike so speaking if balance sales. really leaders the of in to as good find that I potentially units. demand trying our source talked

RV me that ratio for for from you There in space. same trade think trade in business is least whatever than automotive just coming difference don't traditional ratio the one automotive for reason. I the see a higher in the is at

so to inventory finding is channels more other from procure And important.

work more figure Jake, trying You consumers of to source to out something there. is and can with raise to hand, the our to be leader, and your on auction how been but go doing are directly channels we've units marketing units that to about go certainly we and from particularly continuing try to ways trying really buy can thoughtful an addition

Steve Dyer

the is feel the what up industry? relative of how on follow compares a Just you then ratio do trade that ins? to And Lazy

John North

I moving compare that we bit how I I than of ratio. to that. size little typically, a have can, expect see would lower world, something It's industry. in XX-ish But a we know say, a units don't the of trade the would to the I target. automotive percent And significantly

Steve Dyer

more but over, there. Anything Just scene. side, Silicon the the and for appreciate one impact several Curious me, I'll the on in exiting Valley. And in of that lot of the industry? floorplan on implications idle, a financial it comments high floorplan profile lenders then turn RV there's been kind there financing. notable Seen

John North

No.

world banks I to get speaking the competing credit generally think There credit automotive world RV in I'm in harder RV for than than auto more is are the if generally. blunt.

more both coming knowledgeable I been think, I Kelly being and learning So and that's around. been have something

terms changes we we And So in her side. people mentioned, as far, big she seen facility. participate redid our the the haven't remarks prepared in RV that of do credit any on just

banks in floor the syndicated indication anybody's had facility, so no that providing exiting. that plan are our we've there matures, until program And the but contractually are

players provide floorplan facility. do aren't RV that financing are in some other there our And that big

there. So I have we feel options like

comes get have And to tone or in looking obviously, think and bigger, to pull But the going usually an happen we're be that time. a the need I participants, really when back, for lenders over of partners. opportunity, the this on that we someone kind within on depends bank. for good And in side watched more I've senses there's the else and we retail you As just sure. generally a on and plus decade floorplan automotive the and see we'll it increase decade some

think I would real nothing so and any cause it'll me And be concern. to manageable date that

Steve Dyer

Good weeks. seeing Kelly. look luck, in three John to forward And Thanks, guys. you

John North

Thanks.

Kelly Porter

Thanks.

Operator

Thank you.

coming Davidson. is from Griffin today DA from question Next Bryan

is now live. Your line

Griffin Bryan

but I'm good as as your XXs Hi, has just much giving Yes. trending, morning, for of all support curious how promotional been XXs? kind guys. consumer demand aren't they the

John North

to the team hear morning, Nice appreciate Griffin. We you this and to And analyst have for to another line nice It's thanks morning. coverage. here really Good from you. picking up it. the on

thanks So again.

'XX profit end, front a would look on every of versus would you've I discounting when quite require so we couple I this down. month if it's make got you think it, at bit to gone 'XX. the F&I And a say dynamics of it comes call gross that at we XXs before the point. as

get And small you're maybe commission pretty to I they your a obviously as that top and triple think salespeople, it I on to of expression goes. was a commissions in the still low the need march it's digits, And then by they the because eat need number. paying time to you things mean,

where there. the they're get margin end by you your costs So in up situation in diluted selling a time to you

OEMs will you see be to certain moving I 'XX. think summer the to money. pretty the we move into XXs and Obviously are that year good inflecting start still bringing as model

already. So vigilant XXs on what's of in coming in really we're terms being

with around really we to about trying are make be partners continue thoughtful that perpetuates our XXXX XXs arriving model dealing alongside to same sure going with body manufacturer overs the year. with through XXs when or So have really don't change because and come to just working and the issue to

going probably it's think I be normal. to more And

rational summer, last think terms that the in the pretty of for to that model production. it have have like came body XXXX continuing And made terms too dealer heavy sales OEMs shock idle really, didn't and that in velocity. seems in just year supply You I been of

to just So through I it. need feel work like we

so But any cause model so just, opinion, because of in wildcard good behavior just the XXXXs move to so of so. up. unhealthy what the significantly of some does know that and yet lighten for seeing overall I inventory new far, there that on percentage are We're good. when it XXs my or to dealers me those do? the stuff I and pertains that irrational people we're reactions terms in to have what is to the Does need grosses think the having do your unnatural just

certainly. discounting You're

even discounts. our advertising we significantly lot for that of You're But of significant inventory. back a buy

room And nice there. it. And so still make through to some margin there's managing more

Griffin Bryan

And I note, guess can you to far, I Okay, order seeing here. that's kind that through current more of then, kind helpful. same of super inventory, you've so been guess, given great, on appetite retail your give I guess, what at [indiscernible]

John North

still Our there. appetite I to it's think mean, order I inventory.

XXXX is the our I the we've came side, seeing down in March XXXX change velocity. we're velocity supply. unit sold to sales of from units think month. or a because significant I we and it’s went on a mean, supply XXX kind so terms pretty in And good pretty than bit, days data new quite something, a XXX more or of that

to and some to maybe and continue them dealers ways are. figure We're think or take do the I bit we'll additional to OEM in help. where out helpful So buy we're and bulk can to partner be with order like well, to willing trying get other as a to more we that little

So it's manageable.

Griffin Bryan

guess relates follow their Are any discounting to strategy I a rebates themselves? up on the OEMs quick make and just XXs seeing on changes and Okay, that. the it to as pricing you

John North

in material mean, way. a I No. not

think programs help ways trying different always the in that's dealers. that any is OEM there's past. think I years and I to than don't And

Griffin Bryan

it. Okay, a all right. Thanks lot. I appreciate

John North

Thanks.

Operator

floor end and of for comments. Thank like you. question over the answer closing the session. further back I'd We our reached turn any to

John North

you us. soon. joining We'll to for talk Thanks

Operator

webcast. teleconference you. Thank today's And that conclude does and

have your wonderful time We your you today. for this and at You participation line day. may thank disconnect a

Lazydays (GORV) 27 Apr 232023 Q1 Earnings call transcript