Lazydays Holdings, Inc. ((GORV)) has held its Q4 earnings call. Read on for the main highlights of the call.
The recent earnings call for Lazydays Holdings, Inc. presented a mixed bag of strategic advancements and financial challenges. While the company has made significant strides in strengthening its financial position and streamlining operations, these positive moves were clouded by declining sales, increased expenses, and a notable adjusted EBITDA loss, underscoring persistent market challenges.
Recapitalization and Financial Restructuring
Lazydays Holdings, Inc. has completed a comprehensive recapitalization effort, which included a $30 million common equity pipe and the exchange of convertible preferred stock for common stock. Additionally, the company amended its credit facility, which has enhanced its capital structure and reduced debt, marking a significant step in financial restructuring.
Strategic Divestitures
In a bid to streamline operations, Lazydays sold one dealership asset for $8 million and agreed to sell seven additional dealerships to Camping World for $65.5 million. The company retained a $10 million deposit from Camping World, reflecting a strategic move to focus on core operations.
Operational Improvements
Despite the challenges, Lazydays reported improvements in gross profit per unit sold and a 3% increase in F&I revenue per unit, which now stands at over $6,000. The company also achieved strong finance penetration at approximately 73%, indicating effective operational strategies.
Towable Inventory Demand
Reflecting consumer preferences, towable products now constitute 77% of Lazydays’ new inventory, up from 73% last year. This shift highlights the growing demand for more affordable RV options among consumers.
Decline in Unit Sales
The company faced a 7% decline in new unit sales and a 23% drop in pre-owned retail unit sales, including consigned vehicles. This decline in sales volume is a significant concern for the company moving forward.
Overall Revenue Decline
Lazydays reported net sales of $160 million for the quarter, marking a $38 million or 19% decrease compared to the same period last year. This decline underscores the financial challenges the company is currently facing.
Increased SG&A Expenses
SG&A expenses rose to $53 million from $46 million, driven by higher transaction and legal expenses. This increase in expenses adds to the financial pressures on the company.
Adjusted EBITDA Loss
The company reported an adjusted EBITDA loss of $24 million, compared to a loss of $11 million in the prior year period. This significant loss highlights the ongoing financial challenges that Lazydays is grappling with.
Forward-Looking Guidance
Looking ahead, Lazydays Holdings, Inc. is focused on strategic initiatives to improve its financial performance. The company aims to reduce debt and enhance its balance sheet, having already reduced floor plan debt by $11 million and term loan debt by $6 million. Despite a decline in unit sales, the company remains optimistic about future RV demand and is committed to enhancing operational performance across its dealerships to drive long-term shareholder value.
In conclusion, while Lazydays Holdings, Inc. has made commendable strategic moves to bolster its financial standing, the company continues to face significant challenges, particularly in terms of declining sales and increased expenses. The earnings call reflected a cautious optimism for the future, with a focus on strategic initiatives to navigate the current economic environment.