GORV - Earnings call transcript Q2 2024

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Operator

Greetings, and welcome to the Lazydays Holdings Second Quarter 2024 Conference Call.

As a reminder, this conference is being recorded.

It is now my pleasure to introduce your host, Kelly Porter, Chief Financial Officer. Thank you.

You may begin.

Kelly Porter

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

today North, of CEO; the call Amber John me with President On and are Dillard, Operations. Vice

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

filings earnings assumptions of uncertainties, are other the release as and well and periodic our section our risks, Such identified the other factors with Relations as SEC in Investor website.

our should relied be and results to our obligation no Accordingly, not forward-looking or we of all statements prediction forward-looking as inaccurate. actual We statements our undertake any of performance or forward-looking update be statements. about to upon can prove a revise make may and guarantees no

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

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

John North

Kelly. everyone. Thanks for being Thanks, Good us today. with morning,

and couple Kelly opening As talk we'll operations. will make financial will then of a results, in discuss some comments, take questions. about our usual I'll form, Amber

Obviously, for recovery the anticipated had we discretionary quarter has the demand under second elusive. pressure and in didn't hoped. items, vehicles, Consumer develop as remains been including recreational XXXX

registrations year-over-year X% in in retail According April, Surveys, and RV declined June. U.S. to Inc., Statistical XX% May in XX%

experienced year. summer did this believe increases that sequentially, seasonal it the we suggest is months are typically indicative trends this the deteriorating occur While more sales not might that in

XXXX industry pointing second trajectory in Our continued best meaningful inflection July to and likely sales experts most quarter the recovery. a for is industry the view are as that

inventory, the quarter. margin have substantial focus sequentially to from unit F&I maintaining can we control, we the first healthy improvement that achieving total facing on gross things improving backdrop, vehicle per So continued and

unit we should the month. the reduction annually. approximately sales quarter, subsequently, the August Given results substantially decisions anticipate We that end save next financial will be by cost in further in implemented million $XX complete volume these and actions of

into We location in market. also in were X proximity close locations closed under Arizona that our and one consolidated pouring one

portfolio difficult, are store actions, revenue remain opportunities Despite structure While best-in-class these and rest necessary. we'll optimization match about to are our as continue of adjust decisions they the to X locations, we enthusiastic necessary our expense available. the

nonessential emit Since quarter, focus continued deferring and the all the preserving levels second have we spending. to our maintaining on of healthy end liquidity,

announce We another is facility, their Coliseum are pleased which mortgage operational provide fall. against Management flexibility be for the also to to that further Capital committed $X a advancing will boost outstanding to million

are exceptional industry forward always, recovery. operating confident We improvements that our of providing our for experiences look earnings As entire the to results power delivering potential our recovers. to as and full remain in in await unlocking company we customer control I team want and thank its as within the the market the

And to I'll with it hand Amber. that,

Amber Dillard

basis, same-store we gross of we a reflecting unit, per relative new first year. profit used offset volume Thanks, and saw benefits unit partially morning, inventory a improved the earlier significantly good in and quarter, On the by the decline actions this John, everyone. both to took

XX% XX% second lower Of total our blended despite quarter. on by over in XX% first. where F&I, average As spot was selling basis. penetration in a margin approximately A XX.X% first quarter quarter the same-store to bright $X,XXX note, gross unit was improved being finance per our to prices our result up the was X.X%, the compared particular basis, a in to on the XX% result, compared a same-store in in

units increasing averages. as approximately directly while our We lowered in our historical more used trade-ins compared been healthy XX% vehicle maintaining on our to by on from continued to position consumers inventory to focus XXXX procure have sales efforts have

our than XXX of XXXX units year comprised year new XXXX remaining. As XX% less of inventory XX% today, is model XXXX with and units unit model

XX% from time XX% up our Also over the inventory is worth year. towable of last highlighting product, same at

continue mix a classes, stocking We local store-by-store product demand based brands basis, product refining to and competitive evaluate our landscape. levels the market on on and

particularly trailers on more Class segment. and A with a levels placed being have motorized judicious in are and We to appeal greater first-time around to emphasis affordable buyers, travel inventory, stocking payment-driven the

year, we interested We've as to agree marketplace. in resonate with a for price. to up option we program ramp had selling unable purchase incredible RV, this success continues and implemented in consumers Earlier upon are the a their the consignment where it

customers, work of the normalized of versus unit still and our units consignment plan acquired and incur of risk or purchase. but sold. reconditioning floor to source These XX% do outright not July because is that from expense XX% units unit the recover a cannot do an we gross changes not when units completed we June Specifically, expose profit of valuation us generate were inventory

approximately we in expense relative count year-over-year. store cost XX% are last our Regarding to despite X% a adding increase SG&A control, nearly X in up year, locations or

to The all which control costs expense absolute fine by reduction. change in $XXX,XXX, just team's SG&A increased is opportunities a to dollars effort and testament find the under to

should further in taken month since As a quarter the the in $X gains of that incremental John million over the mentioned, drive actions we end have future.

is not performance there opportunities a without in does on network said, market recovery. have the not to that that With improve significant store solely relying our

incremental work general managers to and revenue. with our continue closely ways volumes, increase identify to to drive F&I We improve service

in look added to providing portfolio we incremental laser-focused our grow last stores areas We are to we quarters around forward addition, on success in the updates these year. the to to and continuing integrate come. the In

been are store would a business nor divestitures some the in we discussions We'd regarding also that to the combinations counterparties industry. strategic at transactions significant involving we have time. in contemplating take like We circulating or moment clarify of rumors note not that are to with this

the best that we transactions shareholders, maintain the we operate in potential on of the our gain currently, so remain financing action focus that interest to prudent to are scale open most and is strategic ongoing our believe additional flexibility of partners course attractive While I'd thank we employees portfolio. to asset hard dedication our times. unwavering continued OEM their not and in for our dealerships support as and for their difficult And finally, platform navigate unprecedented like of work but to we these

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

Kelly Porter

stated basis a stated the unless for the will metrics was point Please you, From period $XXX.X XX.X%. versus second note quarter on, are million, revenue Thank all comparisons unless the Amber. this otherwise, decrease XXXX. otherwise. same in Total of a that XXXX same-store be on quarter

sales gross LIFO, per in and quarter, New XX.X% unit, declined the unit excluding profit declined XX.X%.

more unit the however, XXX% the to a unit and to the year. to of Compared gross profit XXXX, Compared per as quarter quarter sales $XX,XXX. aggressive increased inventory decreased we actions to XXXX, $X,XXX XX.X%. unit unit decreased result XX.X% increased first gross of saw XXX% first profit per of gross per than took this new than earlier and profit Used retail more we

unit due XX.X% and Finance backs. and declined primarily insurance charge in higher the to volume a decrease revenue during quarter,

unit average per F&I XX%. mentioned, selling approximately decreasing Amber despite prices X.X% increased As

by decreased and parts gross decreased XX.X% profit revenue body service X.X%. our and Our

points. gross Our and XXX service margin increased basis on body parts

$X.XX diluted $X.XX the million compared quarter a the million of loss earnings loss to share of the $X.X prior was to income for was net net Adjusted compared per last income year. of $XX.X quarter Adjusted fully in for year.

on capital liquidity and Moving to allocation.

as through said, continue boost be additional to welcome million John in mortgage capital a $X facility. we an As will our liquidity of securing we're of additional an outstanding sources. seek capital increase This

$XX of reminder, estate real the a with million. and a As mortgage currently balance basis approximately million of has a facility $XXX includes

generate refinancing similar locations financed a to additional million in other properties loan-to-value rate $XX XX% We mortgage estimate that proceeds we can by XXXX. at an these in we

our the as an a facility. quarter, in second Given to lenders our quarter, negotiated credit we syndicated end our we of amendment from performance while of the the waiver received

As any picture repayment as a accepted of We debt debt. condition. present required lenders long-term on the generally portion convention waiver, We outstanding result made any of accelerated amounts financial have due would this of our current note accounting are balance that not demands not principles, our painting or view our in to our sheet. a complete our accounting we under

thank throughout XXXX. results to to allow current for us partners room the our improving bank partnership on the navigate flexibility to and operating their focus want continued economic I environment and

As we we million cash $XX had of of should be yesterday, next few $X and the million, cash equivalents not incremental the in weeks. receiving including

over and by We have to per month all nonessential have our further $X expenses reduce actions million taken spending. overhead significant deferred

open the to capital seek future. current navigate confident to to to and Operator? to on the questions. our are environment continue have additional you we we look adequate economic that, With can We in forward progress as we liquidity updating raise call the

Operator

CJS of [Operator with come Securities. from Instructions] Daniel the Our question first line Moore

Dan Moore

QX far? starting stage this of new it see and How just see How do near-term up at from to kind perspective You about bit outlook. similar you QX unit a QX with sequentially revenue? and sales Maybe your being little a more used challenging? you are thinking shaping so

John North

hear Dan. Good you, from to

I the And volume terms through end of of slowing. in rate about you with think saw unit start halfway historically see June when July run to I was seasonal is say August. pretty August would consistent the we the at

anyway. enough tell and the So smart probably not soon fall good a looks to prognosticator like, what probably too I'm be to

bump assumption -- along I And what going our with is political think things rates. are interest obviously, to here. odds certainly, some adding for of happens kind lot that's there's are some But uncertainty consumers. bump kind probably a that to baseline depending on of that then

expecting we're not big think I So a improvement.

move September. We things do the a September of Arizona. as best given our through and the and just usually, coming we have view and are kind along months think I Florida as in maybe quite stuff. bump those kind concentration of in at seasonality And August going August normal of are in heat back-to-school markets, a slowest the and bit trajectory some of is to similar that

that's So we of kind things how today. see

Dan Moore

Big helpful. Really picture.

ago. an another or RVs kind most right your lower-end would far mix recovery versus more thinking year your low-cost in from of so about middle, have historic guess on inventory you been made rightsizing much how a of And adjusting anticipated high, thus a of mix said price are what's entry-level lower, perspective? inventory current point progress, at You maybe RV has ton units of way, the inventories. we I than further, the Clearly, obviously, the

John North

Yes.

it's us. think nuanced a question for I

fifth lower-priced whether whether you're think in looking about XXXX picture, to pretty think you're talking towables, reductions relative talking we've XXXX. big is about I units, good everybody wheels. some And I for seen

right? think saw I or is off that towables XX% that were Amber, something. I night stat up a last

Amber Dillard

in XX% decrease price.

John North

to XX% Yes, XX%.

are So OEMs and obviously, change, reach and that the I try to and consumers. working mean that's meaningful affordability more that's make hard, to with payment a

side motorized still Class up Ford chassis talking the or on more from about stuff bigger cetera. is challenge because costs or the if you're the et think whomever I Mercedes that's XX%. the And are even or As, coming

not I underpinned price. those down kind of chassis have come similarly mean in

And motorized is so I find more more ability affordability the think side. elusive on the to

the the and it's see on in the just entry-level control the We're certainly then the generally pretty of So a particular, Certainly, a of whether stuff, that there wheels in some movement total bag. kind you're fifth or piece and moving seeing I talking toward and where destiny. think what's you mixed data their OEMs sales good in marketplace. towables more shift

what across the for inventory as the we to did of Tampa. bears. on of I of towable, some I gotten pandemic, seen we've a the think country we an of more based. what and tried more dealer, be and to other probably replicate us, end motorized we've kind be that these stocking the as of market we entry-level think need specifically, more is grew of And more historically, higher which a pandemic, that to in was focused tended in the the It's markets, of side hallmark lot more we through and the think I the

in been team of the And Florida. that our and here in home so are that's has and farther some locations operations from the that pivoting been appealed Amber something base

year-over-year. too. the And on as XX% year, we're remarks, prepared I but that's inventory versus X,XXX almost in think we on to last So in total XX% units the call, fewer play, mentioned up

a that's change. meaningful So pretty

about inventory. If to relative proportions in and think there's the reduction those you mix absolute then

pivoting market. a And some to that's of the function of

most heavy of Some the particular, a the on toward mix of As, motorized which the cautious unfortunately certainly really the function the Class are and skews us, probably in. in stuff it's more just right now, markets played which being given part the of historically we -- challenged market

Dan Moore

parts, obviously, a a ask few just to today. of where going moving kind sit couple I'm helpful. because Really more we

what $X financing at this there about you're Just you other of beyond from say is can contemplating? stage million the incremental forms Coliseum, potential anything

John North

Obviously, No, we've of stores. across as Certainly, we and brands we look foundation the and we careful be we is portfolio, in allude the in think the believe, good I in the have, are I the prepared remarks, thankfully, the best really when markets word. tried among we the a there. to have that partners But a what to we're believe industry. got that in

difficult our holding something very we're and I when the the that. When with that parse facing looking probably of we of to market, of like have dealing those it there's then market. deconstruct in overall, think of industry tough is compounding where weaker which kind just seems data some than effect SSI a everybody part like which and we're or been the it, a certainly segments challenges the is you're own even we because play like at

so And this eventually, and we're and an can investors to think has evaluate cyclical to downs, side ability take industry and that certain we've to in that of appeal it. going ups view to I got to processes know come a that other and run longer transactions,

and really I optimizing certainly through what you. kept share, to very we would got would a had was done has as we've we year you say we've this have last of had. can stuff and the continue generating to update a very part we is the I conversations out they sequential there's year. good our highlight healthy, been that group of in to obviously, understand and first There's in there. And regard. We've Certainly, phenomenal constructive supportive. things dollars of sure that making shape. be is and so that And inventory quarter it. And that also lender improvement good incredibly see our job have as profitability painful And we'll good really, interest

more need of going You to just it. eventually. that's come And

And here cost take there, so path capital, just and for to how got out the scale those try to to us. opportunities we've to but forward incremental to raise continue that's from figure clearly to revenue for to the look out

Dan Moore

jump important, them? achieve Very do buckets, cost run you back John. follow-ups. savings. helpful, one for hitting the Last cost say rate? of cash restructuring, primary I'll anticipate but any me, maybe full Anything kind to targeted million can and you more what's $XX when The that to about And

John North

X, when every is are a to those pull. people just not really line. I cash our are but vendors. There's an you really or And and the ton the variable, things XX-day term. about get say really you're that talking mean mean time would floor levers a there's you I month I I adjust Those near buckets. that's the the and in in cost. time people, are costs of near mean, over only infinite obviously we looking out line, it's in publicly can corporate, term things in a dealership, that cost marketing controllable can something within three becomes plan. fixed really the

So and up believe things very be we at that corporate the do and can from gut things reductions. And as in trying aggressive of to stuff just efforts been vendors and those that on what there's those of in some what we have an strategic have we point wrenching. marketing field. a very, totally And pick it's of in the then decisions, personnel this to are and transformative are paused investments priorities, any absolutes to there, certainly certainly very, selectless ROI not first that of of might July, or ROI. versus you'll that effectively that those get And an we the incredibly at those some with to had some any the have outside a of see in very painful high really we made to what time as part both was And big make had looking we've are August. and

there. wouldn't So the to get those as kind of about, to say a to to buckets. are it's going of we third cost get really the lot through I quarter be But incremental take going it. there's talked

really at see rate seasonal a not coincidentally slowdown tougher, to which to things happen, doesn't focused is prepare bump certainly we the we're like won't that also the see fourth for get nadir those do of sort the better they would, we're fact run that. I potentially best the along we of the what effect expected quarter, and prepared until full what's hope So and of things doing. for have for you but here that with in volume, the and that from here hope on quarter unit fourth if just way, that's but

Operator

D.A. next the with Bryan come Griffin of line Our from questions Davidson.

Griffin Bryan

Yes.

you optimal to from perspective guess over sports of seen of guys varied I to weather. our affected So than less some kind the start, be companies just by speak of other power can how performance quarter? a kind We regional

kind to out you're there quarter, if that July and within the curious, and Just August what of as in maybe well? seeing then there's call anything that from happened perspective

John North

good normal any industry I store the and data of next distribution summer kind as anything different. month. of to normalized in of move a was broadly that's out tend they'll not around month good that and in up call specific changes then more particular SSI see for think weather the as region they'll that has some stores but mean in we out month, about We Northern the reflected have performance, I have month, other store a didn't a remarks. looking and the better in the predates And North. storage, seasonality. Certainly, would in pick to conversely, recovery mind maybe by And a don't a the the the to you didn't a have wouldn't top just I that months, then, volume triangulate even you think Southern quarter. it of prepared talked X have of of basket come the say have particular into when start time I second necessarily as but at stores a my you're of the at and you'll month recall Lazydays, I don't stores group hoped looking at good see this I had one and hibernation. I in those of than we people anything the can say as slow as then

In terms that of probably the in weekend here came Florida, cost of us at weeks July hurricane our particular, stores. and August, a August a few of in ago, a through couple

Just when a -- some start is is there's policies, anything. disruption any companies coming in hurricane insurance MO you always their originating happens which deliver stop time when insurance that or can't in,

how and anything lose up, is more you happened, But and versus So don't wouldn't there somewhere, call wood, very it's some loss disruptions, always specifically is on storm sales I of that a we deferred else have perspective. much knock that out some a but made geographic time question. any and hopefully, difficult from

Griffin Bryan

what there then And like be level of terms that segments? maybe of Understood. comparable within may in year pricing motorhome versus model year 'XX? And 'XX seeing model and decontenting then units you towable happening guys the are for any

Amber Dillard

impacted the travel say is trailer I most been our pricing this year-over-year. has would Amber. Griffin, that Yes.

and pretty been decrease they've entry-level to So we've kind point. the reduction significant of the with We've travel able because both double-digit decontent in working attack we've a those to OEMs pricing. price trailer seen seen been

Class we've and and more able specifically. motorized, mentioned John been as some models our earlier, to of and decontent successfully offer Cs Bs And options affordable in

reductions seen there chassis 'XX So due between As, we again, not much. prices, as to we've Class single-digit the have movement and 'XX. primarily, seen

Griffin Bryan

we And it. restocking to I here? any expecting fall just maybe on me. are house of the one get thoughts then Got then out guess for head early open into month? Okay. levels what And last guys you as next just

Amber Dillard

to acquisitions look last the and our refine in that I newer of think would house some options in that to for goal late to stores primary affordable we we continue have continue year. at mix open opened and greenfields our be

In market terms through calling what about will of very stock for the we basis. the to be stocking, what run we based is continue on regional judicious winter we on a how and

coming So I see any open efforts house. don't restocking into large

Operator

I'm showing time. at no this further questions

John like back North hand any I'd comments. So to the closing call for to over

John North

we'll very next you and talk quarter. your for interest, to Thanks

Operator

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

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

Lazydays (GORV) 16 Aug 242024 Q2 Earnings call transcript