Lazydays (GORV) 16 May 242024 Q1 Earnings call transcript

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

As a reminder, this conference is being recorded. It's 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, 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 performance, results to our no undertake Accordingly, statements. not forward-looking update and of all statements prediction forward-looking as inaccurate. actual We statements revise we any of future or our to be forward-looking about obligation upon can prove a or make may and guarantees no

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

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

Thanks, for calling Kelly. morning, Good everybody. Thanks in.

I'll financial take usual, and to operations. speak Kelly we'll kick the talk I'll questions. things can Amber As let hopefully of a about couple then results, off.

To industry-wide what of overhang hard industry, current an and working softness we of We, the along with aging the can rest end, adapt inventory units. to been sales XXXX with the that have coupled to have focused been control. retail namely XXXX we environment, on

since all spoke cost. I'm XX made report insurance procurement; to driving days and controlling you higher; second, we significant these performance about and we've use health; fourth, to increasing areas third, inventory progress in ago. First, pleased finance

declines. XX% we control were most new the has Based through better performed been over the the expected from on materialize. than in in in year-over-year March recent velocity still is sales down equation our market nationwide unit SSI variable The sales April XXXX. and not The We demand. but increase did retail March of saw outside that data,

factors: second discount did during We lower pandemic; and and their dealers better equity we to to slower deals demand; healthier-priced respond inventory is units that were our purchased drove is and on that third that attribute aging offerings. X compete consumer the consumer traffic this against negative so, away first is and many from towards

flexibility fantastic with investors. partners have month again We've on OEMs, financing. support this facility raising $XX credit injection we and through liquidity a of financial and Fortunately, an inventory, expansion our received of lenders in our our million units mortgage continued our and further

Our cash third position we today from is almost XX% of higher where XXXX. the where first we the remains and quarter than almost unchanged ended quarter finished

healthy. inventory In is summary, our

are but to unit operational elusive. driving continues gross improvements profit improve, volume to We increasing continues per and unit vehicle be

our year the but Given loss, and the for pretax outlook a we rest adjusted to the anticipate EBITDA cash start flow. of projecting free XXXX, and are positive

of every our hard is the together the market. continues their all to want available work. is identify pursue I in opportunity employees working engaged, to ways that Finally, team to thank retail for hard and

it I'll let over. take with that, And Amber

Thanks, John, and good morning, everyone.

stock. approximately XXXX we model have units As we early units been our journey on, mentioned, recall To year previously the we November, continued over X,XXX on inventory and to focus health. have had in XXXX improving year XXX in model

yesterday, just under of down remaining. XXXX units XXXX units to and X were XXX As we

new also today. from reduced have under X,XXX over in We our inventory to November units X,XXX on-ground

XXXX our the or of today, year. inventory believe is is more than XXXX XX% this We industry. model in among the of As healthiest

units. XX have the slowing units, they model of change introducing stock. slowly on we which to OEM partners than preserve less where year can our XXXX XXXX are Additionally, and in year currently are They thoughtfully pricing model power

of area to is used strength approach our inventory. our Another

We month the every and units year. team effort made acquired sequentially has concerted up have more activity ramp this purchasing to internal our a

new our an the quarter, XX Given May it more April. at we have lead reducing incremental unit significantly acquisition on in but with cadence last than focus higher year-end, increased effort days is volume used compared inventory over slowed in Xx that the delivering fourth our to

unit A units used therefore bought potential with on a X lead with consumers in has been from to profit volume unit, consistent generates stock. funnel our unit into pre-pandemic than typically Current which sales results. fewer new customers more more our gross Xx drives per historical inventory

thereby So to we and and more stores. from leads, are doing purchases consumers we more revenue generate our traffic to more can everything

been Another F&I. focus has

We to our same-store F&I declining have unit despite a examples, a due process per been provide of selling people, our product. basis making meaningful prices results on per enhancing year-over-year $XXX units couple increased XX%. by improvements and unit average in on over To our

in units XX% from in XX% many far as to ratio. having benefit penetration to due Our units loan-to-value are lower on March May that financing aggressively the at without easier increased finance in so January priced a is to of and XX%

managers they our this profit of have revenue stream. critical financial to increase effort in proud services for generation am the gross shown I our

compared absolute over revenue cost by regarding almost within in while total SG&A operations more X basis. X.X%, SG&A on in absolute declined to and the is a of relative we last have as X.X% change XXXX. or an Finally, basis percentage control, are to revenue first XX year, The in $X million expense points locations we of quarter, lower

has to the Overall, stores and performance improvements. additional the operations providing and We to these self-help achievable. substantial optimum generating remain updates look forward drive opportunities for for times team our incremental as

to echo thank our and employees. comments John's like I'd Finally,

industry. that and to focus is a mission, none culture have in second We the

humbled honored aligned pulling and am lead store and together, and all are I both We personnel. to our

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

the XXXX. Please the versus in first Thank stated period you, Amber. that comparisons XXXX quarter note, otherwise, same unless are

same-store was this stated. basis Total a metrics revenue decrease on quarter all otherwise From million, unless be $XXX.X for the on, X.X%. a of point will

X.X% excluding in the declined sales unit gross unit per our and New Used result profit declined per decreased XX.X%. as XX.X% aggressive units. a unit, XXXX gross model of and of profit XXXX sales retail XX.X% discounting and LIFO, quarter, decreased unit year

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

mentioned, and unit F&I increased despite unit Amber prices sales. per selling fewer As average X.X% lower

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

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

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

with mortgage We mortgage current facility On real owned real approximately million with estate we $XX XXXX. balance on million The earlier properties received has generate refinancing $XX Working in an the in Moving million raised and May a proceeds XXXX. we the financial we an on a a syndicated of estate. of of and to XX% can through to lenders, by locations these a $XXX $XX similar we financed capital additional mortgage estimate XX, first modification allocation. loan-to-value generated quarter liquidity of other additional through of our million. at capital rate includes basis covenants financing our

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

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

[Operator Instructions]

Steve is coming from first from Our Craig-Hallum. Dyer question

I of above? of that Is you've don't or kind absorption of cost imagined think old level all a vehicle seen on gross out probably. function Just or I've model kind the margin fixed new question blowing of or just a at that year a

Good to hear from you.

mean, and I well, I in that's recover into seen we've April May. short, probably could vehicle exactly yes, new far what imagine. so happened. think you But gross margins dramatically described in it anybody lower than our pretty

I and writing get think took the a moved we it. was saw and the for the on big wall needing lot really and healthy, in through that pain the of first get inventory change our us and quarter through to

what that's happened. And

today, as I March paying would think and lot would seasonality with now. I quantity we that sell X,XXX light is where were of lot think, about were as last stores less in of are we're for attention a the to The up that. Amber particular, on units. of to pick And April reasons. compared 'XXs We're more we of talked did grosses to time and hoping this in we way happen a couple some the see down a we what year than, more inventory, which units we there even and

sure careful the really want and we're pieces high because with one, slower Number motorized to been have to move. make even the end we those

to over I of XX% it's mix be because under been shared different is segment sold also $XX,XXX, on towables morning historically. this the is, think Travel we're that's what everybody intentionally are focused market low-end me Trailer has seen where has we our than And frank. year at. this with in the is way where that the which Amber

this I $XX,XXX in the X from year, like and mean or a that's SSI trailer been row think I months $XX,XXX Coleman's #X unit. a

the and historically pretty financing plan you're X%, we've unit thoughtful high-end heavy them. it been the with of the floor as at been $XXX,XXX not So or turn faster has we've product doesn't motorized that that if trying product, costly $XXX,XXX and turning because to grosses it generate about well, funding every gets month

things. those all of combination a it's So

where more I is. good because really do into hoping just where market everything use really retail feel We're the can and the to inventory trying think sales at are we and drive the there. short, we is, to in leaning grosses that's

it mix, where like Yes, of the mean have through I needs stuff sounds Colemans model the want the it right world demand to to mix you Do be where relates it you to that's really relative it. now? late you have helpful. as the

of has is couple run I at price done a That's price mean, for has pretty things right out decade us. Yes. to buyer for our that's first-time I country really the get point, product the level, got with call better part price I stuff chain the good relationships competitive and at we've supply OEMs Amber that fortunately, really Catalina mean a and a point. product, points, good able of

where like even in in low-end XX% is, stuff they mean Design, our we think they're units. that's of coming market partner out then because affordable Grand #X And the was sold and I I of Grand 'XX what see with they're more Design. terms the

So can market That's the is. get it. where we yes,

you Camping World. You see the at margin us differences when look versus

with are us. Tiffin an much partner the a motorized stuff in a but margin So been higher-end balance a for, ASP, lower to really the see obviously, Newmar, can a you has we that teens, Entegra on and there and sells phenomenal good because also there's

much to we fun. also end best trying we up very their ourselves to happy be and having it keep And a you you and when keep on as can. that's want really had protect partner. we've be starts so And the careful to We're months that heavy last inventory, buy units because good and get age, everybody moving to factories X not

that's think the I I don't lot it in quarterly dealers out results of think has been. because And a do. do their where private like industry they just put we

to Aren't just And just forth, do, to you working can on areas. service that's of so to When do Lithia happy you've some a and of there want know don't what of how of relative started, to little degree and other you a kind of give able bit these kind background been get was the do you they you focus. expectations? triaging going sort you're parts given that? been color and But I kind of to you've in what

would We've I I organization, say, we and year, sales of and you're leaned of right. really on had in last I the on mean, laser-focused side think to August pretty starting sales. heavy focus the about, we're Sure.

to obviously, mean, there. doing the for can if which the left on F&I, such and incremental I part drive improvement continue business, performance sales per us, in on there. things an table side the unit or of there's we think, is start there's opportunity any like to thousands needed dollars of particular, I you're we always but being

it's That through the operations, the January, right. I this year it, is fixed total. But supposed consistent mean XX X.X% of if service. a about that pivoting sizing that end and help And of was costs. I into and foundational in into revenue justice, mean we're been now you're got cover the at call your to me I is the our think think you one of think plus. business, we rough to more as there's fixed things we've be should reason I exactly we focus serviced it And that of

scenes. area We an tremendous see in really many in level, schools opportunity there so longer at new to any there We're that's partnering the things more so capacity. low-hanging and it And with done we've get brought pay you're trade to people changes any So recruiters. making There's technicians. technical opportunity. much behind that where fruit is takes always But just time off. recruiters,

in probably to it's not turn be a going something we're And on quarter. going to so

as for terms so I is And margin could the is it in be where everybody this than gross But I model, of higher plus. business be, XX their easily about be thinking think gentle. think And long term automotive. the

I XX% really, in operating And well-run of do mean whatever reason, consistent a gross we third. one sells business sells that a say it's should. And in really way a and where emphasized see good, we to department, second service the can service XX% a that's find business. for the jokingly mean XX% I margin. we typical to is And you haven't kind just ourselves, it the we sales what first I think and margin.

wheels. product usable unfortunately, get at and towed things these on take XX their miles you homes customers go and And of if are an and wrong. hour you They make care

overcome If customers can good really recurring things, really value the those revenue. you. prop. create good happy. are love you OEMs There's you And The

So for to we're here just opportunity it. last just, days I can working tell go in can XX And much lot It's just but time. get. your going a us. big triage point, to some things, other you, had there's the to it's on focus take a been we've XX, There's there. as we It's

CJS question Your coming next Dan is Securities. today Moore from from

retail and for there for new demand industry in for units experiencing This demand noticeable is relative what Will to terms on is of been you pickup units? used any Dan. in Has the

I on mean really turns. demand XXXX was really, and bought made if [ XXXX, I -- sold That's ] days. In buying you grosses XXX%. in can at for units. looking night particular, find piece. gold. last And bus it, I not trip a is stuff to the is XXXX there much even the seeing reports so front. profit think used And that's $XX,XXX the we gigantic quick a our like in and that that on X liquid financing sales team gross we're just

pricing. manufacturers So want. where those pandemic that what customers have inflation the the right saw I haven't They the motorized affordability is on buy much their chassis way, particular, don't mean, through when can and dropped That's the better. side, units in I the price that's you you today. And through mean,

piece vehicle costs on crack. coming so to And But lot has tougher yes, side. a are been down not total new the the motorized

is quickly So we buy yes, short, it. gross really, without get long-winded, on in a margin, we're too healthy snapped for all used really the being we focused can and that can why so -- and buy up right that's

how of per then All for used gross your about think very unit That's right. for to the the over And what for and cadence year? QX? are new expectations profit relative then we QX helpful. And balance should both the

question an versus the typically we provide And is I even this Well, out balance tough what that's happens in tougher price environment, I think guidance. to figure the question. that that's here say trying would answer, to volume we're and mean market. in I a don't detailed because

they're started we as significantly And I and any in I on lot not of what discounted pricing and March, on new ground, cases, got to dealer's we the up below it April the put think that's that about a think many better still dealers XXXXs is particular, that to talked side, because cost. XXXXs because every the have there's And in be. month. getting demand and wanted in problem inventory where wasn't back healthy we

that's those have new bargains. I think to for doesn't marginal unit is preference a model take going customer current a incremental go year a the And so that

inventory been in side, going traffic. to we we've that forward, started don't that's because so had lot issue on the to answer of to started grosses how volume as competitors' kind know question that's really the we be difficult the a long going to balance is bring And up because is And to part new what saw the suffer. I

that going to careful I'm be on So one.

in in what said improvement is May. I saw think I saw April. we improvement We

very Our healthy. inventory is

be quarter like in year. we of in to going it's So I anything back what think not it to last where saw it's QX. I'm don't was go going second sure to the

used some to used a that it's through more the in the been We we pieces On side, feels work two. historically. like had lot that quarter or needed aged first

And so well. that suppressed as our used margin a little bit

P&L I that can see through we I quarter And to get shape wholesale in move think our the loss, took line we rid stuff we're losses on good really the we some of. And in you there, too. took needed mean and to on first

that. all we did And

used, more the little the we're you're would modeling, to bit be focused still probably work as that's being got continue say, So worth about and to but because to I is why conservative piece, on just on thinking volume new we've going is normal a so F&I.

as your year? then are And for Great. the the what of cash Okay. operating well CapEx for and expectations balance QX as flow

we've be some to the operating expectation see year. were flow I much the CapEx, it something first, can then release, From that the that our should in we're cash break basis, adjusted working cash in floor that's going in our And tapering an on perspective, we into and expectation that cash that you calculation. is that similar flow earnings the that second is be we're you effect, operating would done. for plan we that's positive see that I flow what our flight, out to off. financing. But pieces through And got think you'll in saw pretty quarter a suspect the take

things with on timing-related when I'm ends fluctuate floor can can that I quarter-by-quarter month some and not it's happens. whatever a plan because a and depending and or AP swing of sure that you just give

from Securities. question Mike from next Swartz today coming is Truist Your

follow to you prior question, a on just level. just a maybe answer an up John, maybe, had that strategic And to

think new the just think the towable, of challenges do terms going in I towable? business heavily that inflation, decade motorized product motorized, values. terms right between in forward? maybe way the But In past over towable balance versus of portfolio, of some I your how has little near affordability, seemed kind you the know more certainly. given and term do balance a of you is stocking leaned cost into How residual it a motorized structural to more gone guess, about this about

Well, a question. nuanced I pretty it think It's depends.

unpack ways. can a So try to couple I of mean, it I

you in if dealership been Tampa decades think places, like customers to long premier a like travel I as a sells units, think for take the come way. something literally and that's out-of-state our buy the for people I destination and product store Tampa, XX% shop is and to one what known places of of this motorized will

think store mix in I XX% XX% so is like that, totally fine. And a a having motorized or

take our of you and I towables lot sense store think and travel in fifth as makes not Oklahoma, leaning motorized units trailers Tulsa, really sure the into conversely, if that wheels. a there stocking much I'm as

a brands the in are it that we we has the think country, I been what So little where store for. bit on depends represent the known and

say still conversation, I pockets how business. that's our important. are kind to about motorized some more the would really there is industry-wide But pertains in as really, it what it like are of think that I So of

being But we're really been a that were And diesel particular, a incredibly with is B typically really very careful which are early has I the vans But this unit product. profitable, the of that to stuff which they super the Class a that's were really, saturated were us last over would into you very there Those big out we've for seen industry. me, slow in then could and there. familiar being OEMs couple of is everybody year. at come A, converted expensive I very than historically larger with XX has time. stuff, Sprinter B-van a the like if B a been like think van have units. And say say really become whole C pushers the kind profitable and camp to look example, Van, in. would unit you the C not months, For I unusual

mean, be motorized. I so too. But pretty And you've committed very think in to short, got in careful that to we're I segment,

in think they I a lifestyle equity. the right is what who've that seeing because are of people been lot have we're out, locked now negative

shift that's But camp the share. and to stuff in And buyers day a for they've don't market. so And whatever low-end why taking just can change that's come think in the been that they it's structural you're seeing a advertisement because the first-time a I or $X want a is.

I thoughtful don't the really it. be I think And just we see But we'll from have it. terms think motorized move always away to you're in how develops. going I we see will of there. market how be pursue to us think

I there's high-end just on. of being now. that mean too. than different some stuff expensive any terms fifth in we really But also careful demand slowdown think are be travel those right that's trailers, of segments in definitely I you because careful need to not wheels or

some of think as retail into maybe Okay. previously just the parse on to made April, you question another gone May. the commentary, environment And we've I

any it think was the to I how quarter. in nothing quarter maybe. first has there there about volume sounds really that changed looks XX% to way about new But second is first unit comparable to relative a number? the that quarter think in think far Is the thus down way like

basis think be of in you, tell. to it's with to too I I something terms frank daily on And soon change. that monitor it's a that percentage not

in I particular, we not see say pickup. would What dealers a I here I a that And I'm feels market would are the sure seeing demand. April, if that's didn't I we're mean just as in So you there into better. a is point some traffic we're little because summer. or tapestry. of seasonally, And it you is for May, May get one other data anecdotally, the definitely know stronger don't relative that if rich see to it's we spring in getting even pretty the But say as do just to deals move commit memory. I and say, terms into would there fewer can like improved I out

I to that numbers those XXX I seem sales optimistic from so whole I know tick than of they trend. remain got read XXX see about demand. to down terms more from call and continue But retail it to that to talk seems obviously OEM want strength time perspective like think all side, do don't better we I they the a like every we'll see at in We'd to least So a And the they're They've what country. because far see we in it. seen that the we've May.

And results we're new our to other hopefully marketing as competition that well. and strategies trying things obviously pushing could the differentiate and pivoting with relative and

So to it. keep grinding we're going on

I the think continue focused on. That's momentum to see for what to there's us an opportunity improve. we're

question Rollé next from coming The D.A. is Davidson. from Brandon

you procurement been seemed run like pulling on new Could just factories. -- you both sides? helping on competitors on more talk side, to rollout? about and the for year. 'XX it on taking to used guys Could rationale of were just the on rationale kind continue First, restocking know ahead one year on inventory leaning the in you actually new larger of the like of seems environment. I of there has I used about OEMs this part your had you back the side, in the their talked your model about it throughout the first used think But talk

mean at we're being And on X,XXX. X,XXX units last I side. on today, were Sure. new. I the we're to the careful new compared pretty at would November of we ground year, say

So that's significant pretty a change.

If have you it, don't sell you can't it.

we incentives, we careful. stretch And be of can our take thoughtful and really keep we're about general, their turn try alive. But certain and partnerships lot that we our that. back. that got at in where thoughtful spirit think and with to they're you doing to And give and where to be partnership be this production OEMs models would best try point so can we And say, to to I of thoughtful a decades can cut commit us and they

we've is hit, about that lot inventory capacity do the when sure on. take to healthy, and a Our really thinking got been we've 'XXs those making

sure I'm I and to competitors, thing our used the dangerous a about. always behind side, not that's understand On curtain speculate the at

is and What we've options the buy lead I on our are you customers can can long you units experienced affordable for things new as that that correctly. as on tell are website Xx volume used versus looking

And we're maybe built the used general, a lot not quality, terms in so us a seeing on avoid really I are mind buy model around I bit a pandemic. it really targeted little that. tending we in of consumer's think stuff. the being to inventory of in say, you're has late It purchasing. We're used during would of was overhang it the

that than earlier But I that's is, quick. I stuff the the that earlier, like gold. mean I stuff used goes said think I expression, liquid

going buy, don't nuanced. It's used I here. Amber certainly adjustments mean the her. I higher-end to used almost used, get would every especially stuff, targeted. it's make little is not So just I we or whipsaw into approves more And buy buy don't and say, you that's, crazy we when mean literally, a this unit

I it. by a executed how That's like thing that's this in of much tactical the piece is we laser-focus literally piece mean, inventory. So have our on

shortly. And current Okay. your And very going model closing from 'XX retail partners? Great. obviously, your consumer. the given based for on on What's or process just year price-conscious a the bidding you've right on model your guess heard 'XX year on best environment, what rollout. pricing is is OEM new where relatively going know the the model now I

Yes.

what at heard of I think least our partners. on maybe from the from couple towable we've early percent side, we of some increase, expect on a

but increase, and capacity, trying it still will just they then their significant think, chassis be restocked a their of than haven't chassis because not build I So to And manufacturers, to on The little channel. side, the definitely are the a yet higher motorized prices. that higher.

And down, that so come the in of those prices unit. haven't the motorized and majority that's cost

expect would I that's be to higher. So going

in used why new you're why that's so towable And on that's some out. focused the models And come we're seeing side. really

Obviously, Okay. exposure on frames. Great. welding you experience the it? And about I guess, seeing been service concerns more to comment Could Design. crack maintenance issues their kind the And frame finally, you any, of in I publicity Grand have just from flex the or flex guess, people just or, the issues? frame your and there's chassis with

I And warranty way tip really the saw for No. exactly hat And there. they day. whatever customers. product. Design not lot an department Grand partner a behind with they their they came see extent out And my an if off up think the should know Don stood us. that have. don't such the this, just in I But X-year things I I took they to the because why to service to concerns that's they're their team but and the I'm a handled and mean think whole all I issue, every important you it of and retroactive table to stepped sitting

that of and it's important list things good And stand but we Design partners, they do of behind for a their the us. top or like Grand have make product, and And near they they lot is because the at stuff.

Grand of remain of supportive And so Design. we vans

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

talk to We'll in. tuning guys you soon. for Thanks

you. and Thank today's teleconference conclude webcast. does That

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