Lazydays (GORV) 3 Nov 232023 Q3 Earnings call transcript

Greetings, and welcome to the Lazydays Holdings Third Quarter 2023 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.

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

today North, Supply CEO; the call Amber John me with of On and are Dillard, Chain. VP

that to all or our be will call, forward-looking our future we may prove or can no call our could forward-looking forward-looking no begin, to any refer undertake revise subject filings financial non-GAAP earnings that, assumptions of from website, to uncertainties, which are other we the would measures release is as these and define the press such our John and to well and we discuss statements turn results is periodic everyone update we reconciliations certain release, statements statements will of obligation Officer. our assumptions to guarantees to to we our how should make to the forward-looking uncertainties that materially Before performance, to which information. be section our like actual our including information risks, Such not performance, upon identified about comparable the and other GAAP for I'd closest I actual Chief of financial We available measures. With measures. inaccurate. discussing this risks, be Executive factors prediction over potential cause results, North, future with forward-looking on Relations and remind as SEC like relied earnings in Investor a as and website. Accordingly, Please statements. On differ and

X diligently the a we Since I'll a and open our through and will taking been in one, for reviewing execution working want relentless company our opening remarks. disappointing quarter to you first, me joined questions. Obviously, results third strategic are company Kelly Hello, I it a have our everyone. financial over initiatives: year main financial be make I interest and brief team. first ago, Kelly. on to you Thanks, our our few difficult efficiencies. for we'll results, some the was thank our and and up then call today. take in to just

to partner the with Second, be of our OEMs. to aspire choice

and Third, and mindset allocate infrastructure above to average to long-term responsibly an with a owner leverage and grow like to capital finally, capital. metrics invested return superior our act and deliver on and

lies While X in all continued I'm success our that performance, the initiatives. pleased barometer ultimate we make financial of considerable progress to have against

healthy, our work. and to First, hard to remains our inventory to speak execution thanks and efficiencies, relentless focus team's

units at year this our last October. doubling unit than around XXXX from end model months record remaining year and of our the supply more XXX We inventory of intensified September reduced have is procurement and the overall We've efforts have used XX% model previous to in year of new XXX inventory XXXX. both units our year days our XXX and

been have costs from the organization. removing We

have modifying We renegotiated with decisions in vendors headcount pay difficult overhead, situations providers made plans our lower-cost reducing around the to other key and and switched eliminated and and stores. all unnecessary

XX% over what still means matching in third it laser and vigilant since addition quarter us, remain X With further locations result, of the on new year. overall overhead down we'll same if market said, changes. our despite a last is our that focused quarter even with gives As SG&A the the the

our to strive As our OEMs. choice partner second objective, be we with the of continue to

issued participate. to and to if rights are to million We and equally current The on not oversubscription upside $XXX of right locations a actively the contribute multi-store become platforms growth. greenfields many an quality We both to locations that we'll chooses generated X size COVID the To dealers acquisitions over you can where and each allow opportunities believe announced the profits ownership many reaching percentage. They To These next and million of to near capital and deploy operating and XXXX in raise available have be and other shareholders to or environment the you in horizon. quarters. Coming raise allow being the in is the need of believe both acquisition term. individual our capital participate their -- last event. month, rights end revenue of also of a more your maintain the growth quantity have careers marketed every and offering we $XXX opened year-to-date current acquisition may existing we equity additional an X to available. their more for few completed end, patients over and the shareholder opportunity, monetization could seize independent see generated the windfall XXXX, off capital are

November management provide encourage money if As and return Broadridge, need our to to to make a the scale election customers facilities on up or a we housekeeping maximum capital to you for your on a existing you and with matter, deliver and our experience. we're invested third XX. employees window for of purpose in entire pursuit behalf would effort an and significant want objective, raising. In to team, peerless to On ensure the our compelling we trust information them have endeavor they your thank broker the expires you contact make to more will we as fit

over As a relocations with owner's have value actions to organization through versus We an grow I now endeavored over previously discussed, summer. that for for the and industry dynamics. fourth shareholders long-term them and to XX taken optimize continued this for environment successfully the final and current number operating and mortgage time. And our we initiative, from XX of weeks mindset will believe on we financing our years from now, obtained significant own create our

marketing improving particularly and infrastructure, have our been our in steadily We technology departments.

closing, sales these all I fantastic a with in thank to through team. abilities. In externally, each turn and again wherewithal. the believe of mission we best again, service singular significant to are their in that, our over apparent and our I'll improvements the come will work the industry. by dedication -- to to to changes financials. not you that provide sale our I thank the want are day While scale they to immediately Kelly They experience take you, impressed sincerely Time and I'm call and employees. With result

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

second unit declined to declined the declined XX.X% new year per and per XX.X%. quarter, in XXXX, Compared to sales due second $X,XXX. inventory gross Compared sales decreased declined profit at and the during XX.X% and decreased primarily unit to excluding quarter unit per gross of declined as $X,XXX volume XXXX, $XX, profit used unit excluding F&I model XXXX of unit declined to unit XXX year-over-year flat unit insurance quarter out. gross quarter, roll XX.X% to to the New per unit LIFO, XX.X% sales, wholesale the and was profit per unit sales unit unit. Finance the XX.X% revenue profit and as decreased X.X% began lower Used gross per X.X% units, unit, XX.X%. per

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

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

and earnings performance the in per adjust for loss and the compared to last $X.X profit. Total million structure quarter a to the in with the year. was of per compared cost was Adjusted volume XX.X%. adjusted $X.XX to profit was SG&A evaluate net drive gross was $X.XX percentage share net quarter modify income for and continue gross loss prior a of LIFO in million the $XX.X net XX.X%, fully We fluctuations income and our of quarter excluding the Adjusted of share as of diluted impact for to diluted quarter year. SG&A

liquidity on and Moving to capital allocation.

with and cash immediate had million our of available line floor equivalents of we new cash as our credit. $XX.X well million XX, on as September revolving million of plan used of on and line availability $X.X $XX.X As

of million end, liquidity. provide we had debt We we're covenants. additional estate of all compliance quarter real At in also approximately estimate could $XX with unfinanced that million $XX

John by attention third net for As like we metric a year-to-date. remain In important times challenging. this result, loss mentioned, to we cash operational positive. and the most to as the is to pay results for were the And quarter's extension ensure quarter these, recorded a flow

our improve year, quarter, This third our year-to-date, and was operational the cash the includes only our floor this funding million nearly used For deployed than into and financing. Taking that and $XX base can million. we adjust of growing but the $X cash year-to-date. our result structure for million, or than we $X acquisitions million a flow the is the our $XX our of plan function and improve our we'll slow continuing monitor to savings will capital and expenditures a improvement core. fourth store normalize accelerating additional to respond health This deterioration. We're making in operational lever intra-quarter significant things size quarter. cost closely made have capital nearly inventory million more expenditures continued for we through performance, reduction impact to existing if both we in in it of year-to-date further is to see position operational conditions, $XX account, see as and generated our capital our liquidity in flow this decision more market The allocations as both changes to cash of is that

the that our subscription currently previously offering open XX. to announced reminder period is expire an for Finally, and November on additional rights scheduled

we subscribed, opportunities open additional $XXX conditions will fortify and until sheet Operator? equity offering it as we capital elect allow. With raise our acquisitions to that, call Assuming the is fully for the balance to deploy the that an in we'll can questions. million market

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

the guess, quarter, I period. Obviously, in traffic we're high to got I've through and couple. then about just trends softer retail getting demand seasonal the a maybe into talk fiscal first, level QX.

second So seasonality can just kind change? derivative of rate general and maybe of if delineate you between

was nice hear The to consistent. you. quarter Dan, We unit saw deliveries Sure. similar pretty month. pretty each from

thing Arizona, interesting in our in the Southern presence. I concentration locales, where got we've Florida, think differentiated business about is larger our just maybe or particular,

a we then and winter, QX. October and move tend in we typically things to see as up pick November season into particularly of December bit a then so to and in into And shoulder the start

Sunbelt. whether to our tend But bit a quarter, October into the be and maybe So that November broader pick third skew U.S. move trend remains execution expect we see to to traffic we we we obviously, into down December, it's that's a more in was as what saw bit just broader or to relative seen. up. different little a because the than back

the on I Very destocking. helpful. And appreciate inventory color

higher-end between want to inventory closer from delineate both maybe can at are trailers, this travel stage? fifth motorized you an where lower-end kind of be and in If you wheels to perspective

Amber. From down Obviously, units, continued to ASPs is this destocking certainly believe the of of inventory our -- advantage regulated next them. continue on an motorized inventory to do From get higher-end those, the to come higher in lot but we we'll perspective, that to inventory model year does an we've work levels. a and a on position, demand for point and the healthier take still into the inventory head we're a

In relative well. as focusing think mix, been end on terms we've I of obviously the the lower

good end pushing some and the to that some coming got travel couple be of low We've entry-level got stores. we've our into So lot the trailers going hundred putting a we're units marketplace. a we're of into relationships, at

And with and is across of payment buyers. buyers agree I competitors. the think as about are talked segment of theme affordability a a that's our we think particularly well. generally Ultimately, lot our that with some I

also we think And of I portfolio, that lot our support to find OEM with that's entry-level been bring and so try into product can helpful. We've to some that ways seen the if partners. to

lower been some we've they've been more are axle, at that's trying lean So introducing product ASPs. introducing that models been that to affordable into. be to might $XX,XXX a $XX,XXX single level And and something

the motorized consumers towables, the think very been I think consistent. I demand are pretty high-end those and less And has affected.

has overall, more pleased improved we've which consumers payment if air pressure. around middle. I were buyers that year-end. the that and some pretty will, But significantly our are with the we in obviously is see certainly Those think we're are what at feeling product a seen where that's just supply, where of done really the still bit our pocket, inventory, you from you of in an a we've can and bit are with days

terms you'd definition of helpful, what's be color the other your shipments remind on want give? from sort in $XXX the state million I the that figure assume steady the kind and TAM you Very that of And steady of John. The appreciate is or a you us quoted, and capital I to metric opportunity just raising. state of revenue any

Yes.

we we to dealerships are X-year certainly the that for in are of improve. We dealerships we looking acquisitions And profitable. think the line. bought model general, can time kind year-to-date the our I way buy X all

ramp I'm are really we've portfolio our be. terms the base. And OEM lot So interested think along what with really them initial giving none very consumer to where our can then and to contribution is in of coming And we that added organization. a of they us build time partners our go into we market. to of importantly, performing pleased their as But a in us with obviously to up are

that add mix we're an dealership's February, prior as in we example, it. part acquiring bought of which able to and us So not Las to Vegas Tiffin, was

of is to And strategic and me prior partners. of part initiative, second OEM joining partner And be for think believe I so have has we an to even amazing what that stood to OEMs our goes what relationship choice. was really our back which with the to really Lazydays

And cases, partner there many from because so that to our want come us. will or lines with we can in add to add that OEMs brands believe can to are we we acquisitions they that

many that allows to in so us cases, ramp revenue. And

to that's think the the what EBITDA tell see in to going not terms We out Are raising. obviously, In year, number million contribution not a days income locations, an probably really inventory a more buy enough and XX you normalized of up that our normalized these managing pretax flat about a look like. I knows? that's revenue who market, XXXX could a at going year, we're I if only smart dollars. view. margin, is because we're it XXX that's insignificant to. $XXX attractive are to I'm gear, X mean, the down an in million year be we million, plus relative like assumptions to $XXX think we mean, a million But number pretty we to It's or or $XXX And

versus if Very quarter, pressure long-winded, apologize and was than new new maybe How and Obviously, strategic it's a unit margin mix focusing bit. to clear desire gross but helpful. little Last that in and longer-term to opportunities inventory used more out in much question some for for just the I particularly of on a on less units older sales. gross margins me. maintenance repair. focus on saw decision on more

a at for sort new temporary the the sense this if a trying get margins or of decline terms unit Just to least term was closer of to new on sales. for in norm near

an I It's question. astute appreciate it.

I probably because and And see being competitive those margins. happens dealers to industry private attentive a compression other start typically model some have of year right attentive year, like you XXXX to last on it's now dynamic see very XXXX been sort model XXXX. terms both. think I We in the less certainly the to you as And think July, very it's of which are changeover, April year.

feeling acute And so they're pressure. more

a same with plan floor to it's us the similar off, hard that. at someone's not unit XX% for match And advertising

that's so happening. a I think And dynamic that's

The October, In similar actually good. is terms margins. And margins of you're really XXXX year, as the our in of you deliveries health get gross in still our seeing of real-time model the more attractive color improved. inventory

transitory. That third saw And pressure a we on even we but the mix. in this so year, of and is accelerates, what I smaller saw was continues of what percentage overall the quarter it's some think probably last

days of was front of and right, And to capital. last exactly in the more I in it's something what of. message prioritize that to less to smaller rather talked the big and meant aggressively been hold think that's service I And I the decline the discount end a and margin in needed you really years than try and larger in managers and front-end are big secular relevant. probably sell importantly, observed a in what that's general a that think have rid up a taking trend. But to would about, use, F&I get with XX accelerate that velocity aged gross. to the automotive out XX trades you to trying our And really we've piece about so I for units you're to couple ended gross that for And of is thinking

we're is the in your then to so we And very which were performance return we selling on up, XX% velocity capital focused of gross that on F&I at turns. price. drive the comes side of and investment X%. margin or And that the flip I minus accelerating of think quarter, should average The be plus need from

for opportunity message quarter, and that hit F&I third accelerate on the a the stride from consistent used biggest say the a that's but for of to velocity focus wouldn't been the new. area pretty So we we focus in I really comes internally. us. as is And us opportunity it's trades our the

Instructions] the of Securities. Mike Swartz next [Operator line questions Truist with come Our from

call what a I the terms I a But give how of through that out new hopped asking quarter? in exit the maybe margins, on the Maybe you just the out little late, played the of coming rate if was vehicle time. can so us the color about quarter? any I'm just apologize second question

Sure. Mike. Nice hear you, from to

the XXXX I intra-quarter, as is over. we is what think was it really saw -- toggled

many cases. online you many look, off, our start you industry moment of flip the cost most see close dynamic, is are in product see XX% our So XXs an to lot competitors July a I have been online. really ago, aggressively as XX% and can discounting in mentioned of come you which if a XXXX. towable like tends of and them And to to go From to pretty

what's F&I the money those as you're quarter, say would focusing try bit of them. fee? discounting What's through And you what were of third get on, are, What What's turned? your can opportunity? we opportunity? very to make progress I little those units and as trade turn trying the to so in the terms you do really documentation turn to and a we And so aggressive those

As our is we prepared mentioned inventory XXXXs. of Kelly's in remarks, XX%

towable CS So we're are and between mix good are the those of shape. the we a The particular, motorized some that motorized [ scarce. both and have XXXXs in very ] in really and

term, think, that what were was working That in think improve. focused for down bunch. Relative a of for year, year. supply on and actually of early has was and good gross, pleased of QX so very our have saw, overall, the feel working is And next see I where to been were half party inventory you're a maintaining pretty QX, that last we And seeing XXXXs and healthy the come But I'm QX the of more those. versus year, And better, up. And through of the our terms the And I margin to because that's better of health if focus a XXs now. maintaining set I last in stood of we've what the we discounting gotten you're really XXs. still October, margins in a on with we QX margins big up day to lack health and were is they're mix inventory in you your year. And going on model XXXXs. fashion because we like similar we're on

because I in we up. higher think a slightly see So don't think into you continue you're the of is but shape where industry QX. for next the be we're see is will stronger going it speaking. it's than some next than what nice margin my couple QX, probably I And dramatically to in fall as I think to expectation generally better be ended year, that and quarters going we see margin you'll

is store that greenfield with second impact revenue? on several a I of question things, think acquisitions I'm on you've annualized another the take closures. some do what just impact kind opening together, And just I to you've trying several net out the all got -- the of what know the But -- this Okay. announced year. the location is of as from you

Well, I million. they're terms think we've worth acquisitions the $XXX of done, in probably

that's So X stores.

$XXX probably You've We about got would I Those away and those $X.XX and closed consolidation domain the not stores And sister I then taken that And shift of to $XX that's Indiana store to other is dollar, in say. worth the consolidated by I locations. in our the imminent one probably that's of give percentage it's that into X something hour were this greenfields Tennessee might X were was revenue for million brands. Department the another in was $XX Transportation, should closed opening our Elkhart. dollar store on One They through an smaller million, that. locations. year, and a belief sure think annualized. some market. I'm million dollar. we like

So call decline where and would -- then, or market that of And happening. I to we're. let's it, $X.XX say so to million call in you sorry, minus $XX relative XX%, million of of the And the that low obviously, dabble got rough super and that's -- maybe And the portfolio. where should kind Lazydays into remain [ $XXX or $XX we've ]. it, let's in $XXX the we growth some in million but end justice, isn't still I layer think been gross closure just lost of has don't share But of the market. then overall most million competition. plus XX% of

numbers necessarily to type just us And normalized see what demand were giving awesome. Okay, we'll state not 'XX? were in clarify, industry those you steady numbers,

wish what like. Yes. I tell I smart. I that mean next could to you going I'm year is look not

You tell me.

better we year your of XXX,XXX size it. expectation how is do? should Where of that's is, kind XXXX normalized in we're unit what And stores our think probably do say, go be? March in our What is trying I should what guess a mine. to than we

John now turn We closing like over have reached would North to the comments. I floor end session. to back any question-and-answer of for the our

us year. talk today. We'll joining next guys you for to Thanks

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

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