TAMPA, Fla., Aug. 15, 2024 /PRNewswire/ -- Lazydays (NasdaqCM: GORV) today reports results for the second quarter ended June 30, 2024. John North, Chief Executive Officer, commented, "Our team has focused on maintaining healthy vehicle inventory, improving F&I per unit and achieving substantial total gross margin improvement sequentially. However, the seasonal improvement in sales volume we had anticipated to occur in the second quarter did not materialize. On a same-store basis, we saw a decline in both new and used unit volume relative to the first quarter, partially offset by significantly improved gross profit per unit sold reflecting the benefits of the inventory actions we took earlier this year. Our same store F&I was over $5,300 per unit, up 6.9%, despite average selling prices being lower by approximately 17% on a blended basis. We have continued to focus on maintaining our healthy inventory position while increasing our efforts to procure more used units directly from consumers as trade-ins on vehicle sales have been off approximately 50% compared to our historical averages. As of today, our new inventory is comprised of 26% model year 2025 units and 69% model year 2024 units, with less than 140 2023 units remaining. Also of note, over 75% of our inventory is towable product, up from 70% at the same time last year." Commenting on operational changes since the end of the second quarter, John stated, "Given the current unit sales volume, we have implemented further cost reduction actions in August that should be substantially complete by the end of September. We anticipate these decisions will save approximately $25 million annually. We have also closed our Waller, Texas dealership, and consolidated our retail operations from two locations to one in the Surprise, Arizona market. While these decisions are painful, they are necessary. Despite these two store actions, we remain enthusiastic about operating the rest of our best-in-class locations and will continue to adjust our expense structure as necessary to seek to match the revenue opportunities available. We would note that we are not contemplating, nor are we in discussions with counterparties regarding strategic transactions involving significant store divestitures or business combinations at this time. As usual, I want to thank our entire team for delivering the improvements in operating results that are within our control and providing exceptional customer experiences as we await the market recovery. We remain confident in the earnings power of our company and look forward to unlocking its full potential as the industry recovers." Total revenue for the second quarter was $238.7 million compared to $308.4 million for the same period in 2023. Total revenue for the six months ended June 30, 2024 was $509.3 million compared to $604.0 million for the same period in 2023. Net loss for the second quarter was $44.2 million compared to net income of $3.6 million for the same period in 2023. Adjusted net loss, a non-GAAP measure, was $18.4 million compared to adjusted net income of $3.9 million for the same period in 2023. Net loss per diluted share was $3.22 compared to net income per diluted share of $0.12 for the same period in 2023. Adjusted net loss per diluted share was $1.42 compared to adjusted net income per diluted share of $0.14 for the same period in 2023. Net loss for the six months ended June 30, 2024 as $66.2 million compared to net income of $3.3 million for the same period in 2023. Adjusted net loss, a non-GAAP measure, was $46.5 million compared to adjusted net income of $5.1 million for the same period in 2023. Net loss per diluted share was $4.89 compared to net income per diluted share of $0.00 for the same period in 2023. Adjusted net loss per diluted share was $3.51 compared to adjusted net income per diluted share of $0.13 for the same period in 2023. See Reconciliation of Non-GAAP Measures for additional details regarding our adjusted results of operations. Balance Sheet and Strategic UpdateAfter the end of the second quarter, we executed a temporary waiver related to our required financial covenants as of June 30, 2024. This waiver was approved by 100% of the lenders in our syndicated credit facility and provides additional runway to negotiate an amendment to the facility. Earlier this week, we received a nonbinding commitment from the clients of Coliseum Capital Management to provide an additional $5 million in capital that will be added by increasing the mortgage loan facility we established in December 2023. The terms of the incremental advance are substantially similar to the terms of the existing mortgage loan facility and require no additional collateral to be added to the pool. In connection with the incremental advance, it is contemplated that Lazydays will issue warrants to clients of Coliseum Capital Management to purchase 666,667 shares of common stock at a price of $5.25 per share, subject to certain adjustments. The special committee of independent directors established by our board of directors was advised by Stoel Rives LLP. Upon review, the special committee unanimously approved the nonbinding commitment to increase to the size of the mortgage loan facility and related warrant issuance. Additionally, the special committee continues to seek sources of incremental capital from investors and has engaged Miller Buckfire, a Stifel company, to assist in the process. While we remain open to other potential transactions that are in the best interest of our shareholders, at the present time we have determined the most prudent course of action is to focus on strategic financing so that we maintain scale and gain additional flexibility to operate the attractive platform of dealership assets in our portfolio. As a result of the upcoming expiration of the temporary waiver to our credit facility, we have presented our long-term debt in current portion as of June 30, 2024. We note that to date our lenders have not accelerated any amounts due or made any repayment demands beyond routine amounts required in the normal course of business. Kelly Porter, Chief Financial Officer, stated, "We appreciate the continued flexibility from our syndicated lenders, as well as the increased support we received from Coliseum. We believe we have adequate liquidity to continue to navigate the current macroeconomic environment." Conference Call InformationWe have scheduled a conference call at 8:30 AM Eastern Time on Friday, August 16, 2024  that will also be broadcast live over the internet. The conference call may be accessed by telephone at (877) 407-8029 / +1 (201) 689-8029. To listen live on our website or for replay, visit https://www.lazydays.com/investor-relations. About LazydaysLazydays has been a prominent player in the RV industry since our inception in 1976, earning a stellar reputation for delivering exceptional RV sales, service, and ownership experiences. Our commitment to excellence has led to enduring relationships with RVers and their families who rely on us for all of their RV needs. With a strategic approach to rapid expansion, we are growing our network through both acquisitions and new builds. Our wide selection of RV brands from top manufacturers, state-of-the-art service facilities, and an extensive range of accessories and parts ensure that Lazydays is the go-to destination for RV enthusiasts seeking everything they need for their journeys on the road. Whether you're a seasoned RVer or just starting your adventure, our dedicated team is here to provide outstanding support and guidance, making your RV lifestyle truly extraordinary. Lazydays is a publicly listed company on the Nasdaq stock exchange under the ticker "GORV." Forward-Looking StatementsThis press release includes "forward-looking statements" within the meaning of the "Safe-Harbor" provisions of the Private Securities Litigation Reform Act of 1995. Forward looking statements include statements regarding our goals, plans, projections and guidance regarding our financial position, results of operations, market position, pending and potential future financing transactions and business strategy, and often contain words such as "project," "outlook," "expect," "anticipate," "intend," "plan," "believe," "estimate," "may," "seek," "would," "should," "likely," "goal," "strategy," "future," "maintain," "continue," "remain," "target" or "will" and similar references to future periods. Examples of forward-looking statements in this press release include, among others, statements regarding: Our efforts to procure more used units; Full year 2024 results, including anticipated cost savings; Our recent history of losses and our ability to continue as a going concern; The earnings power of our store base, and our unlocking of its full earnings potential; Our ability to generate additional sources of financing; and Our foundation to navigate the current macroeconomic environment. By their nature, forward-looking statements involve risks and uncertainties because they relate to events that depend on circumstances that may or may not occur in the future. Forward-looking statements are not guarantees of future performance, and our actual results of operations, financial condition and liquidity and development of the industry in which we operate may differ materially from those made in or suggested by the forward-looking statements in this press release. The risks and uncertainties that could cause actual results to differ materially from estimated or projected results include, without limitation, future economic and financial conditions (both nationally and locally), changes in customer demand, our relationship with, and the financial and operational stability of, vehicle manufacturers and other suppliers, risks associated with our indebtedness (including our ability to obtain further waivers or amendments to credit agreements, the actions or inactions of our lenders, available borrowing capacity, our compliance with financial covenants and our ability to refinance or repay indebtedness on terms acceptable to us), acts of God or other incidents which may adversely impact our operations and financial performance, government regulations, legislation and others set forth throughout under the headers "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Risk Factors" and in the notes to our financial statements, in our most recent Quarterly Report on Form 10-Q, Annual Report on Form 10-Kand from time to time in our other filings with the SEC. We urge you to carefully consider this information and not place undue reliance on forward-looking statements. We undertake no duty to update our forward-looking statements, including our earnings outlook, which are made as of the date of this release. Non-GAAP Financial Measures This press release contains non-GAAP financial measures such as EBITDA, adjusted cash flow from operations, adjusted costs applicable to revenue, adjusted net income (loss), adjusted net income (loss) per diluted share, adjusted income (loss) before income taxes, adjusted SG&A, and adjusted income (loss) from operations. Non-GAAP measures do not have definitions under GAAP and may be defined differently by and not comparable to similarly titled measures used by other companies. As a result, we review any non-GAAP financial measures in connection with a review of the most directly comparable measures calculated in accordance with GAAP. We caution you not to place undue reliance on such non-GAAP measures, and also to consider them with the most directly comparable GAAP measures. We present cash flows from operations in the following tables, adjusted to include the change in non-trade floor plan debt to improve the visibility of cash flows related to vehicle financing. As required by SEC rules, we have reconciled these measures to the most directly comparable GAAP measures in the attachments to this release. We believe the non-GAAP financial measures we present improve the transparency of our disclosures; provide a meaningful presentation of our results from core business operations, because they exclude items not related to core business operations and other non-cash items; and improve the period-to-period comparability of our results from core business operations. These presentations should not be considered an alternative to GAAP measures. In addition, we have not reconciled our fiscal year 2024 EBITDA or adjusted operational cash flow expectations.  These are provided on a non-GAAP basis and cannot be reconciled to the closest GAAP measures without unreasonable effort because of the unpredictability of the amounts and timing of events affecting the items we exclude from non-GAAP measures.   Results of Operations Three Months Ended June 30, Variance (In thousands except share and per share amounts) 2024 2023 % Revenues New vehicle retail $            143,333 $            182,752 (21.6) % Pre-owned vehicle retail 60,908 90,991 (33.1) % Vehicle wholesale 3,268 1,716 NM   Finance and insurance 16,041 17,742 (9.6) % Service, body and parts and other 15,144 15,179 (0.2) % Total revenues 238,694 308,380 (22.6) % Cost applicable to revenues New vehicle retail 130,138 158,144 (17.7) % Pre-owned vehicle retail 49,446 72,425 (31.7) % Vehicle wholesale 3,597 1,685 NM   Finance and insurance 644 810 (20.5) % Service, body and parts and other 7,150 7,517 (4.9) % LIFO 315 76 NM   Total cost applicable to revenues 191,290 240,657 (20.5) % Gross profit 47,404 67,723 (30.0) % Depreciation and amortization 4,956 4,459 11.1 % Selling, general, and administrative expenses 50,966 50,480 1.0 % (Loss) income from operations (8,518) 12,784 (166.6) % Other income (expense): Floor plan interest expense (5,708) (5,835) (2.2) % Other interest expense (5,837) (2,083) 180.2 % Change in fair value of warrant liabilities (337) — NM   Total other expense, net (11,882) (7,918) 50.1 % (Loss) income before income taxes (20,400) 4,866 NM   Income tax expense (23,821) (1,306) 1,724.0 % Net (loss) income (44,221) 3,560 NM   Dividends on Series A Convertible Preferred Stock (2,031) (1,196) 69.8 % Net (loss) income and comprehensive (loss) income attributable tocommon stock and participating securities $             (46,252) $                 2,364 NM   (Loss) income per share: Basic $                 (3.22) $                   0.12 NM   Diluted $                 (3.22) $                   0.12 NM   Weighted average shares used for EPS calculations: Basic 14,374,897 14,181,659 Diluted 14,374,897 14,292,064   *NM - not meaningful   Six Months Ended June 30, Variance (In thousands except share and per share amounts) 2024 2023 % Revenues New vehicle retail $            296,024 $            359,499 (17.7) % Pre-owned vehicle retail 140,484 175,766 (20.1) % Vehicle wholesale 9,517 3,424 NM   Finance and insurance 34,370 34,623 (0.7) % Service, body and parts and other 28,885 30,724 (6.0) % Total revenues 509,280 604,036 (15.7) % Cost applicable to revenues New vehicle retail 277,193 311,475 (11.0) % Pre-owned vehicle retail 119,645 139,953 (14.5) % Vehicle wholesale 12,057 3,406 NM   Finance and insurance 1,337 1,503 (11.0) % Service, body and parts and other 13,437 14,698 (8.6) % LIFO 441 1,387 (68.2) % Total cost applicable to revenues 424,110 472,422 (10.2) % Gross profit 85,170 131,614 (35.3) % Depreciation and amortization 10,417 8,862 17.5 % Selling, general, and administrative expenses 99,852 104,012 (4.0) % (Loss) income from operations (25,099) 18,740 (233.9) % Other income (expense): Floor plan interest expense (13,384) (11,366) 17.8 % Other interest expense (10,360) (3,783) 173.9 % Change in fair value of warrant liabilities (337) 856 (139.4) % Total other expense, net (24,081) (14,293) 68.5 % (Loss) income before income taxes (49,180) 4,447 NM   Income tax expense (17,021) (1,163) NM   Net (loss) income (66,201) 3,284 NM   Dividends on Series A Convertible Preferred Stock (4,015) (2,380) 68.7 % Net (loss) income and comprehensive (loss) income attributable to common stock and participating securities $            (70,216) $                    904 NM   (Loss) income per share: Basic $                 (4.89) $                   0.05 NM   Diluted $                 (4.89) $                      — NM   Weighted average shares used for EPS calculations: Basic 14,371,787 13,066,607 Diluted 14,371,787 13,188,135 *NM - not meaningful   Total Results Summary Three Months Ended June 30, Variance 2024 2023 Gross profit margins New vehicle retail 9.2 % 13.5 % (430) bps Pre-owned vehicle retail 18.8 % 20.4 % (160) bps Vehicle wholesale (10.1) % 1.8 % NM  Finance and insurance 96.0 % 95.4 % 60 bps Service, body and parts and other 52.8 % 50.5 % 230 bps Total gross profit margin 19.9 % 22.0 % (210) bps Total gross profit margin (excluding LIFO) 20.0 % 22.0 % (200) bps Retail units sold New vehicle retail 2,036 1,979 2.9 % Pre-owned vehicle retail 1,149 1,388 (17.2) % Total retail units sold 3,185 3,367 (5.4) % Average selling price per retail unit New vehicle retail $           70,458 $           92,346 (23.7) % Pre-owned vehicle retail 53,009 65,555 (19.1) %