Release Date: March 31, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Lazydays Holdings Inc (NASDAQ:GORV) completed a comprehensive recapitalization, enhancing their capital structure and reducing debt.
• The company successfully sold five dealerships to Camping World, retaining a $10 million nonrefundable deposit for two locations not closed by the buyer.
• Lazydays Holdings Inc (NASDAQ:GORV) signed a letter of intent with General RV Center to divest three locations, potentially adding meaningful cash to their balance sheet.
• The company saw improved gross profit per unit sold, reflecting the benefits of inventory actions taken throughout 2024.
• Finance penetration remained strong at approximately 73%, with FNI revenue per unit up 3% relative to the third quarter of 2024.

Negative Points

• New unit sales declined by 7% in the fourth quarter, with pre-owned retail unit sales down 23%.
• Net sales for the quarter decreased by $38 million or 19%, reflecting planned lower volumes.
• Total gross margin decreased to 19% in the fourth quarter compared to 21% in the third quarter of 2024.
• SGNA expenses increased to $53 million due to higher transaction and legal expenses related to restructuring.
• The company reported an adjusted EBITDA loss of $24 million, compared to a loss of $11 million in the prior year period.

Q & A Highlights

• Warning! GuruFocus has detected 8 Warning Signs with GORV.

Q: Can you elaborate on the strategic transactions completed in the fourth quarter of 2024? A: Ron Fleming, Interim CEO, explained that Lazydays completed a comprehensive recapitalization, including a $30 million common equity PIPE from two investors and the exchange of all outstanding convertible preferred stock for common stock. They also amended their credit facility with M&T Bank. These actions added cash to the balance sheet, enhanced the capital structure, and reduced debt, providing financial flexibility.

Q: What steps have been taken to right-size the dealership portfolio? A: Ron Fleming noted that Lazydays sold one dealership asset for $8 million and agreed to sell seven additional dealerships to Camping World for $65.5 million. Five dealerships were sold, while the buyer chose not to close on two locations. Lazydays retained a $10 million deposit and exercised remedies for the buyer's refusal to close, avoiding stockholder dilution.

Q: How is Lazydays addressing inventory management and consumer demand? A: Amber Dillard, COO, stated that Lazydays focused on maintaining a healthy inventory position and increased procurement of used units directly from consumers. The new inventory consists of 75% model year 2025 units, with a significant portion being towable products, reflecting consumer demand for affordable options.

Q: What are the financial highlights for the fourth quarter of 2024? A: Jeff Needles, CFO, reported that net sales for the quarter were $160 million, a 19% decrease due to planned lower volumes. Gross margins, excluding LIFO adjustments, remained at 21%. SG&A expenses increased due to higher transaction and legal costs. The adjusted EBITDA loss was $24 million, compared to an $11 million loss in the prior year.

Q: What are the future plans for operational performance improvement? A: Amber Dillard mentioned that Lazydays sees opportunities for improvement across all dealership functions, including inventory, sales, service, FNI, and marketing. They are working with general managers to increase volume, improve FNI, and drive service revenue, aiming to operate efficiently and effectively.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.