Lazydays (GORV) 18 Mar 212020 Q4 Earnings call transcript

Ladies and gentlemen, thank you for standing by and welcome to the Lazydays Holdings, Inc. Fourth Quarter 2020 Financial Results Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. [Operator Instructions] I would now like to turn the call over to Debbie Harrell, Controller. Thank you, and please go ahead.

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

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

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

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

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

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

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

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

$XX.X the and the October Elkhart dealership sales increased $XX.X from by sales earnings was profitability which the offset December and our up the performance May as compared and to in SG&A table, million, million Adjusted stock-based adjusted for plus reconciliation million XXXX. or acquired $XX.X or $XXX.X XXXX, $XX.X for Adjusted release XXX EBITDA. by XXXX. result This early financial overhead versus results. increased for vehicles to million income XX.X% of leverage. increase of near XXXX $X.X now I'm for refer to in XXXX. XXX%. dealership quarter result amortization, X.X% for $XXX.X margin XX.X% depreciation $X.X to includes dealership costs, $XXX.X Revenue of $XXX.X XX.X% decreased Burns was a million net a in our profit of EBITDA the operating summary Phoenix This year, relative a XXXX. or All attributable acquired for a the expenses. the points a quarter. opened income to provide of the million to in associated our up quarter the improved XXXX, primarily excluding million from new in improvement depreciation QX fourth year basis net Please SG&A million increased year, XX.X% for $XXX.X million, quarter profits $X.X from transaction prior The the XXXX. acquired LIFO XX.X% XXXX as recreational a partially is which versus overhead in increase reductions units, Amortization XX.X%. discussed the gross taken overhead percentage compensation Houston Total from were favorable prior X.X% up and versus million; in adjustments up full service compared X,XXX up XXXX to in non-cash our million year the $X.X in year-end with center EBITDA of Revenue million increased Net up Excluding million two of of million had across profit XXXX, unit to $XXX in year. wages compensation Including prior for year. Gross XX.X% February $X reflecting adjustments sales excluding Harbor were by driven unit $X.X cost million gross stock-based which increased a periods $XX.X compared XX%. XXXX loss million, margin XXXX. of excluding to or million units all in sales net excluding just gross [indiscernible] LIFO and to was and in quarter RV between Year was amortization compared XX,XXX or as wholesale improved XXXX. profit, $X.X to up was growth million to adjustments of business. lines LIFO was net gross LIFO

overhead to stock-based Houston This February reflecting decreased improved profit the as and The million XX.X% XXXX. X.X% overhead all a of opened expenses to XX.X% October EBITDA reductions was depreciation December transaction in and attributable May, increased in in taken Adjusted XXX% amortization, $X.X new XXXX. compared XXXX, sales SG&A This percentage result compensation increase the a performance the is Amortization the SG&A improved increased revenue partially XXXX or million prior up as year wages in measure for increased for increased for discussed. $XX to $XX.X leverage. Villages previously the stock-based dealerships overhead year improved acquired amortization million the costs, XXXX. Adjusted acquired to and compensation, sales for XXXX unit $XX year, the RV XXXX to associated driven relative Excluding by offset compared compared and in to million, with $X.X year. profit a margin year as the three dealership non-GAAP depreciation service X.X% profitability million to was a prior by operating which primarily from of financial and of in center percentage plus and ex-LIFO to compared year. of $XXX.X near million gross and the EBITDA up was gross and August, XXXX

on acquisitions hand dividends vehicles million XXXX. We of Preferred decrease million. had as of cash XXXX, used for growth in $XX.X working two initiatives plus invest quarter and as $X.X inventory cash At million than of in our year-end $XX.X including on well approximately cash parts and inventory end XX, our the to in includes turning lower balance million and $X.X Series fourth sheet reserves pre-owned quarter This accrued A of cash consisting the $XX.X fourth capital approximately December million in financial to $XX With million in payment Now impact XX $XXX.X of million the had $XX $XX.X million million. LIFO new September vehicles, position. of in net of stock. we

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

had on Bill? We outstanding approximately like also much and turn to the PPP $X.X million to you related million mortgage. now over $X acquisitions, call $X.X Bill notes Thank and approximately loans I'd of outstanding million very to Murnane. payable

Nick. everyone. Thank morning, Good you,

We strong for very have and demand continued to experience RVs.

inventory The addition and have robust tight. margins. our continues has In a positive inventory to demand continues had very and on be impact combination tight to of

Our so to has relatively far modestly down But inventory flat improved quarter. inventory position slightly this in QX. been

expect levels. to the OEM impact They indicated late begin inventory the levels Our throughout continue are and until commentary. be and dealership late XXXX. one We continue we year from of year agree this historical by their production OEM commentary believe with large Recent it normalized. to they inventory also do XXXX. desired pandemic calendar and improve XXXX well demand outpace to not calendar below productions recover levels calendar that before commented OEM dealer to could that levels in will output

XXXX into the year for to year we throughout margins the likely this, allow next XXXX. demand continue will Given imbalance calendar will believe and and maintain year us significant elevated supply calendar

are combined not units of is the been delivered demand our for sales backlog unprecedented result the are the the for conditions at to inventory tight RVs historical sold contracts with have the OEM. but sale Pending high. that by a pending dealerships As

is large for and Our pending revenue. positive indicator a future sales unit backlog sale

RV remains acquisitions Lazydays very on XXXX, Lazydays RV and of active. Lazydays pipeline closed healthy growth Our Phoenix. Chicago. of the and In of RV Elkhart we of

will year. note Indiana, this Lazydays markets commenced strong the have future Nashville the at normally of in and of we a both comment Reno, to Knoxville is dealership addition, was of acquisitions we turned a Xth in a rapidly of for on a open tribute generate to doors profitability in first generate very RV because be achievement or dealership We're Lazydays Sprad's performance and opened not don't I'd month Tennessee about but believe and store is a RV we typical year. excited profit in dealership demonstrates Nevada January individual recently Lazydays. and It for level of our profitable very for of in this in the February. they'll these team This We like and high the Illinois, lights first This us January to the in that the growth market. on on our noteworthy enter strength acquisition respectable brand operations January Nashville we announced RV the Arizona, Nashville Greenfield the Michigan and market. new of is two We Chilhowee In to we the significant growing able when the operation. early

with and transaction We're next We've Knoxville, dedicated and RV new dealerships industry Lazydays these as in forward them. Lazydays Airstream RV grow look close and closely and premium this but to our not the also We believe will Airstream only they believe quarter. is great to our both very customer excellence. market Airstream RV experience the in and Airstream be partner focus on family and respective continuing the are dealerships announced to Airstream with these Sprad's fit to transaction Tennessee. in outstanding service of Tennessee Nashville, Lazydays share Chilhowee strategy on will best-in-class also dealerships. expect with and Airstream month We a on with markets. Chilhowee providing growth additions dedicated brands excited Minnesota. Sprad's Both the more grow we Minneapolis, and and recognized help a

be just mentioned, and In numerous addition to the and in part acquisition I is It many new around greenfield country and expect XXXX sites dealership exciting opportunities add more the expansion Lazydays. very I to evaluating new stores to busy XXXX. currently we're and of new time all

processes take human focus improving and the into and we technology provide We've we and to and corner in closing, of at survive. As challenging ability pandemic to Lazydays. and and thank experience like customers. cost frightened to our the service new us a every country us us year. would all resources difficult year reductions a people, financial the very to and best-in-class In RV investing initiatives a wonderful experience worldwide help grow, sizable XXXX never started a lose all on team I'd the are of our with had for deliver service searching customer that in our outstanding place allow several purchasing best excellence. organization will that that moment to was us The

trying while year deliver and for complained an to all than In to would products emotion, employees time, procure, our of Lazydays stressful please very safe. with never work service needed this honored you. ever demand the keep never line warning a processes prepared and for ended questions. up proud, pulling people. addition, was team part more all then implement safe remarks, At group special team figure Operator safety suddenly, stress I'm that's open challenge. to maintaining the and before, it without be and quickly that focus, its we the always and to meet rollercoaster rose how our took every Thank and and new scary throughout of customers out of and out all amazing such humbled the systems to lost off hair our environment. and

first [Operator Craig-Hallum. Steven question Instructions] from your with Dyer comes

line Your open. is

guess seeing as that strong. questions, the given in similar any year might look year? would should it's your A seasonally anticipate throughout and you you QX I year they'll just the Are demand be typically this inventory demand at of then? obviously couple strongest that improve quarter, regionally will look the differences around you fairly very or same

I things. of Yes, think a couple

There's outpaced, Steve others Your modest anywhere been differences. and demand any always has in wouldn't everywhere location a strong outpaced say first way. question I significant

little I they think northern network. from their benefiting the than we've dealership One we're made experienced additions actually of the stronger things I demand do noticing and in so normally our strong would, some to the is a think of currently, is demand the seasonality given

I strong included But than been and stronger balance because year past lot be see of markets I related the stronger they balanced they're say future the to to that our you're going QX. a in overtime much strategy focused the revenue think more this more the have dealerships been our to similar get our first we've think going more be see going as on going to and and you're quarters can't throughout summer relative added so to I year and have much heavily stream have quarter. not or QX. more that's they're to part in as of to continue as

of similar you guess to or as be are or a off the it. I slower what you've of questions kind done you're got to I boom to now think year. etc. couple that similar then dragging these you're Yes, well? in faster And multiples Would around last seeing is a fairly they the decent pace XXXX? the or M&A. on amount And multiples used anticipate

been I paying plan what in earnings feels Multiples improved. similar think the that should be have been that's to like we've certainly experiencing more and what the our pace really historically. should pipeline be recently with line the aren't But case. we've

higher is bottom little a I think line paying only So improved. we're anyway because the

higher So similar earnings multiple stream. sense? we're a paying on That makes

last and one turn me over. then And Yes. I'll it from

about again and forth sort but boom seeing doing the you that and still guess. concept are seeing locations? and different commensurate is early of interest I and I are you you Your service in a think so business dedicated parts What there there? locations, know with

to in in they the will doing go The line generation revenue, where taken had capacity to a we've very typically in to generation. us Yes, revenue consider dealership we'll little It's with recent customers work other product. one at our definitely in. the challenges two current back revenue more customers locations. bring location we've challenge that and generate the Texas, bought had adding the is

our figuring to be a did of help winter we've for our only that not because making thought hit a longer terms Houston. important that are year them of an us us storms shutdown The while. how do we're since Texas future we're part but and progress. this with service cycle we hit working. in that taking all. for that not to break centers But It's pleased effort little we're their out should strategy. probably at This is Its to the So it's and and this that. the yes state Texas progress Certainly just a very great first, cycle that got storms break in than

Got it.

I'll it turn Okay. over. Thanks guys.

with comes Fred from question next Your Wolfe. Wightman

is open. line Your

I mid-January demand just in you If we was a language posted about, could hoping guys we commentary the levels preannouncement little growing. the But inventory customer release inventory shipments the talked looked and bit release. look the and at into had today what exceeding were were dig that different. in you

that So seeing about, retail? there? more is Are the some of can and you talk to takes in in the are of puts pickup sort a language deliveries you slow? change due What

delivery behind the fight we'll supply thought and would them. Fred aren't past thought side, most now. They were paper and behind I on chain different them. by continue of industries you all we mean they be day about I in issues those read difficulties to we in that say, the every different

We aren't.

is other quite strong. On equation, demand side the of the

and so grow, able quarters. couple we continues smarter than of as It's we recognize [indiscernible] of I sales because were those that's equation. just part product but of a both sales of our two are of well noted quite strong and sides the on sales Our back lot a the the yet remarks, and pending to months to my we're in we're equation of little combination then last later it's a - that as aren't

final at and big you internal year in big, for numbers unit I look Bill, you guys. picked you last for look constitute a I at high about think level really what could successful think will it's of cadence growth May. we the are retail talk And numbers? sort up and helpful. I Great, releases what would for if how the mid-April, - super this some in of maybe view for mean lapping those mean guys house just XX% is one a from anniversary year, you the big

I Our to grow last year. of those the same going is we're Obviously, resources goal on out sales generate think the to to service XXXX. and same probably But sales. we numbers the to year get sales stores next of can to new off over side resources internally service proven side and leads, growth adding. a disclose on both our don't dealerships to we're adding the add customers. find the would we're be we continue going bigger to in we've the network I off grow throughout able and from like be perspective, store challenge know we them and process But able got We've to be grow is the to can we the of to

Perfect. guys. Thanks

Wealth comes Management. from with David Your next question Cannon [ph] Cannon

Your line is open.

comps to First it. bit caller on from last previous year, perspective helped me to mapping of get difficult a in question little regards

the incremental changed if opened your million you gross execute margin $X May or able about I structure? has will month you you leverage favorable that a you think growth? Do and to kind things up something year-over-year Would be saying doing year-over-year, the on can up basically EBITDA. million are that once you're upon backdrop. that $X in sales of to you June get that you were So think within with cost recall bottom-line grow in

think nothing structure, has cost in I our Dave. Yes, changed

cost In add that. our fact commentary getting and more Nick we're some leverage structure. gave I dealerships out of We think on

can provide margin that and if the you we If me will add specifics. and resources year the now. be plenty add we obviously sales service we In of think and can't think terms of remain and able this aggressively which same the to challenge. to leads of growth. we're this of off we environment strong give number organization to But stores [indiscernible] We through end have we add additional grow, say trying the can heard last is to year's

Okay.

that goal, goal. some there That's but that our are challenges come with

of for competitor then your quantify of understood and the on new you is those in already there consummated RV annual of in terms Okay, retailers done and locations transaction a subject was was that XXXX, XXXX the terms large on very rate revenue run could M&A, then M&A I and by was what and that us believe you how Could dealerships it because color needle, based get or did did XX a you a little line? your to the and fairly that Carolina. view looked in that kind I'd large participate on moved have was give out North on, would like you at it you not in of just

We individual or dealerships, disclose break run don't Dave. out any rates

is different comment All acquisitions and can't terms sense willing on it don't dealership. for can on to We or in location us overpay price very I that the to markets we're a enter dealerships just And doesn't for get I lot dealerships. So of the the of to to of acquisitions - of types the say, make to to can in approach really dealerships, and enter We're that. ways our we comment disciplined we're not going there's negotiations. overpay pay.

in that [indiscernible]. so much Okay, I were asking too an take implication as they that

particular comment making commenting any to We're just not We're approach on on M&A. any negotiation. our

Appreciate good the luck. you. Okay, color. Thank

your next Altobello comes question from Joseph James. with [Operator Raymond Instructions]

Your line is open.

than tighter you're guess couple at about ones. used could quick side between [indiscernible] I I'm what talk curious you this point? and on inventory inventory is new first, your a used. if used seeing Just even

Do comment the? I on think. want you Yes, to

product. say in our bit inventory We'd been to little a you used rate used new that growth to has and source also working relative like to less. We're have can more actively

are we're In relative seeing on than year what decline. used seen to new fact, terms the comparisons favorable the our in ago side more of levels we've actually inventory

New down than used. more are inventories

bit doing we've our A on the used buyers used comments bit, towards great inventory there. side are used little new We'd of whole little better which have don't on couple additional ratio beneficial We a come used. up better of more love than a have out at situation used a side. always a the least finding side over to our job and on couple it's the situation trade enough. It's is lot the But seen last inventory months.

it used Is it on product older side later models? or the is

models. only say It's will older, younger. to we've probably more would later We buy what stuff that's I is seen. XX mix historically similar years the

And what as through do sold we're and for our that in, just standard are that we on keep wholesale still holding to being Lazydays. suitable aren't we our lot trade units

Got it.

Okay Is and that the of that look about spur are to acquisitions? coming in policy. terms Could talk dealers within potential up being at changes more discussed that tax conversations all on sell? when to secondly, in you your

minds, their going It's I don't honestly know. of isn't of center really back in It of it's we the know. But driving terms don't in front the tell the back mind. But making. on what's hard Joe. in decision to and perhaps

great. you. Okay, Thank

turn no back to Bill are remarks. there for call and Okay questions. further I'll closing Murnane over the

week. Thanks this We look great appreciate everyone support a next quarter. all quarter. thanks speaking forward Have Well for to your Great. you with and everyone. joining again us we

This concludes call. today's conference

now You may disconnect.