Lazydays Reports Q4, Full Year Results; Adds Ariz. Location – RVBusiness – Breaking RV Industry News
TAMPA, Fla., – Lazydays (NasdaqCM: GORV) today reported financial results for the fourth quarter ended Dec. 31, 2023. The report comes a day after Lazydays announced the opening of Lazydays of Phoenix at Surprise, in Surprise, Ariz.
The new facility is the third location in the greater Phoenix metropolitan area, complimenting Lazydays of Phoenix at Mesa and Lazydays of Phoenix at Arrowhead, and further strengthens our position in the state as the premier RV Sales and Service destination. This opening brings Lazydays’ nationwide location count to 25.
Lazydays of Phoenix at Surprise boasts a state-of-the-art facility and space to display over 300 new and used RVs for sale. The location will feature new inventory from Grand Design, Newmar, Thor, Coachmen, Forest River, Keystone, and Starcraft. The Service Department includes 16 service bays to complete retail and warranty service work, and the 15+ acre facility houses a body shop and collision center. Lazydays expects to generate $50 million in annual revenues at the location.
As far as the company’s performance report, CEO John North said the fourth quarter of 2023 “proved to be a challenging operating environment, in particular due to industry wide economic pressures.
“However, after increasing our marketing budget and aggressively discounting 2022 and 2023 inventory, our unit volumes increased meaningfully both sequentially and year-over-year in December, January and February,” stated North.
“More importantly,” he continued, “we have seen gross profit on vehicle sales improve from December to February and an increasing percentage mix of current model year units sold relative to the total, generating more gross profit dollars. As of today, our new inventory is comprised of more than 80% current model year units, and we believe is among the healthiest in the industry. Additionally, our adjusted cash flow from operations is positive this quarter to date.”
Commenting on 2024, North said the company anticipates a pre-tax loss in the first quarter and a return to profitability thereafter.
“Given the significant corporate development actions taken in 2023, the first six months of this year will be focused on improving volume and store performance,” he said. “For the full year 2024, we anticipate both positive net income and operational cash flow. The quality of our locations, the partnerships we have with our OEMs and the operational improvements we have made to our leadership team give me confidence in our future results and we look forward to demonstrating the earnings power of the company in the future.”
Fourth quarter 2023 revenue decreased to $198.0 million from $243.5 million in the fourth quarter of 2022. As a result of the decline in the price of our common equity in the fourth quarter of 2023, Lazydays officials determined a triggering event had occurred relative to the carrying value of goodwill, and, as a result, the company recorded a non-cash goodwill impairment charge of $118.0 million in the quarter.
Fourth quarter 2023 net loss was $108.0 million compared to net loss of $1.4 million for the same period in 2022. Fourth quarter 2023 adjusted net loss, a non-GAAP measure, was $13.8 million compared to net income of $0.9 million for the same period in 2022. Fourth quarter 2023 net loss per diluted share was $7.59 compared to net loss per diluted share of $0.24 for the same period in 2022. Adjusted fourth quarter 2023 net loss per diluted share was $1.09 compared to net loss per diluted share of $0.02 for the same period in 2022.
The fourth quarter 2023 adjusted results exclude a net non-core charge of $6.50 per diluted share related to the company’s non-cash goodwill impairment charge, LIFO adjustment, and acquisition expenses. The fourth quarter of 2022 adjusted results exclude a net non-core charge of $0.22 per diluted share related to the effects of changes in fair value of warrant liabilities, the company’s LIFO adjustment, acquisition expenses and severance and transition costs.
Net loss for 2023 was $110.3 million compared to net income of $66.4 million for the same period in 2022. Adjusted net loss for 2023 was $11.5 million compared to net income of $64.1 million for the same period in 2022. Net loss per diluted share for 2023 was $8.45 compared to net income per diluted share of $2.42 for the same period in 2022, and adjusted net loss per diluted share was $1.24 compared to adjusted net income per diluted share of $3.05 for the same period in 2022.
The adjusted results for full year 2023 exclude a net non-core charge of $7.21 per diluted share related to the effects of a non-cash goodwill impairment charge, changes in the fair value of warrant liabilities, the company’s LIFO adjustment, acquisition expenses, severance and transition costs and a storm reserve. The adjusted results for the same period in 2022 exclude a net non-core charge of $0.63 per diluted share related to the effects of changes in the fair value of warrant liabilities, our LIFO adjustment, acquisition expenses and severance and transition costs.
Corporate Developments
As previously announced, during the fourth quarter, Lazydays acquired Orangewood RV in Surprise, Ariz., and RVzz in St. George, Utah. Lazydays also opened its Ft. Pierce, Fla., greenfield location. The company estimates these stores will add $110.0 million in annual revenues at steady state.
In addition to the acquisitions and openings, in January 2024, Lazydays launched a comprehensive rebranding effort, including an all-new website, new logos, fonts and colors, and changed our stock symbol to “GORV.” These actions are designed to enhance the company’s digital retailing efforts as well as improve its customer experience on mobile devices, which account for over 80% of its website traffic today.
Balance Sheet Update
In the fourth quarter, Lazydays cancelled its planned rights offering to stockholders. The company subsequently secured a $35.0 million mortgage facility collateralized by seven of its owned locations with a cost basis of approximately $109.9 million. The facility closed on Dec. 29, 2023 and has a three-year term. It is structured to allow Lazydays to obtain alternative financing on a location-by-location basis at an increased loan-to-value advance rate with other lending partners including regional and national banks.
Lazydays ended the fourth quarter 2023 with cash of $58.1 million, the report continued. Company officials estimate it can generate an additional $47.5 million in mortgage loan proceeds as it refinances locations at a 75% loan-to-value, in line with advance rates obtained on other mortgage financing secured earlier in 2023. Lazydays also has other unencumbered real estate that it estimates can generate additional liquidity of approximately $18 million through financing transactions.
As a result of its financial performance in the fourth quarter of 2023 and overall market conditions, Lazydays received a waiver of its financial covenants associated with its syndicated credit facility for the fourth quarter of 2023 and the first two quarters of 2024, with relaxed covenants in the third quarter and a return to the company’s standard covenant package as of the end of 2024.
As of March 7, 2024, Lazydays had cash and cash equivalents of approximately $45 million. The reduction in its cash balance from year end is primarily a function of capital expenditures associated with corporate development efforts that are substantially complete as of today, the release continued.
“With cash on hand of $45 million as of today, we believe we have a strong foundation on which to build,” stated Chief Financial Officer Kelly Porter. “We have generated positive operational cash flow for the first 70 days of 2024 while continuing to make significant operational improvements and we expect to be operationally cash flow positive for the remainder of the year. I’d like to thank our syndicated lenders, led by M&T Bank, for facilitating the modification to our credit facility to relax our financial covenants and provide room to navigate the current macroeconomic environment and prepare us for a strong 2024.”
Conference Call Information
We have scheduled a conference call at 8:30 AM Eastern Time on Friday, March 8, 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.
