Lazydays Holdings, Inc. Earnings Call Highlights Debt Reduction and Profitability

Lazydays Holdings, Inc. ((GORV)) has held its Q1 earnings call. Read on for the main highlights of the call.

Lazydays Holdings, Inc. recently held its earnings call, which reflected a positive sentiment despite some challenges. The company has made significant strides in reducing its debt, improving gross margins, and successfully executing strategic divestitures. These efforts have contributed to an overall improvement in operational performance, with a focus on strengthening the balance sheet and enhancing profitability.

Debt Reduction and Financial Deleveraging

Lazydays has made substantial progress in reducing its debt, cutting down a total of $145 million. This includes $95 million in floor plan debt, $47 million in mortgage debt, and $2.5 million on the revolving line of credit. This significant deleveraging effort has been a crucial step in stabilizing the company’s financial position.

Improved Gross Profit Margins

The company reported improved gross profit margins across all product lines. Notably, new vehicle margins increased by 7% to 11%, while used vehicle margins saw an impressive rise of 10% to 21% compared to the previous year. This improvement highlights the company’s effective pricing strategies and operational efficiency.

SG&A Expenses Reduction

Lazydays successfully reduced its SG&A expenses to $39 million for the quarter, down from $49 million in the prior year. This reduction was primarily driven by decreased overhead personnel and marketing expenses, resulting from operating seven fewer stores.

Increase in Gross Profit

Despite a decrease in net sales, Lazydays achieved a gross profit of $44 million for the quarter, marking an increase of $6 million compared to the previous year. This indicates the company’s ability to maintain profitability through strategic cost management.

Successful Store Divestitures

The sale of five dealerships to Camping World and the signing of a letter of intent to divest three additional stores have streamlined Lazydays’ operations and reduced geographical redundancies. These divestitures are part of the company’s strategy to optimize its dealership footprint.

Sequential Improvement in Unit Sales

Lazydays reported a sequential month-over-month improvement in unit sales, with new unit sales up 18% and used unit sales up 19% compared to the fourth quarter of 2024. This improvement reflects the company’s efforts to boost sales performance.

Net Sales Decline

Net sales for the quarter were $166 million, a decrease of $104 million or 39% compared to the prior year period. This decline was due to a deliberate reduction of inventory and a lower store count, aligning with the company’s strategic restructuring efforts.

Adjusted EBITDA Loss

The company reported an adjusted EBITDA loss of $4 million for the quarter. Although this still reflects operational challenges, it is an improvement from the previous year, indicating progress in addressing financial hurdles.

Impact of Non-Cash Impairment Charges

Lazydays experienced a loss from operations of $2.3 million for the quarter, which included non-cash impairment charges of $2.9 million related to indefinite-lived and tangible assets. These charges have impacted the company’s financial results but are part of its ongoing restructuring efforts.

Forward-Looking Guidance

Looking ahead, Lazydays has outlined significant progress in its strategic initiatives. The company has completed the sale of five dealerships, reducing debt by approximately $145 million and cutting SG&A expenses by $10 million compared to the previous year. Despite a 36% decrease in new unit sales due to divestitures, the average selling price for new units improved by 15%. The company achieved a gross profit of $44 million, up $6 million year-over-year, while reducing SG&A expenses to $39 million. These efforts have led to a significant reduction in the adjusted EBITDA loss to $4 million from $18 million in the prior year.

In summary, Lazydays Holdings, Inc.’s earnings call highlighted a positive sentiment driven by effective debt reduction, improved gross margins, and strategic divestitures. While challenges remain, the company’s operational performance has shown improvement, with a focus on strengthening the balance sheet and enhancing profitability. Investors and stakeholders will be keen to see how these strategic initiatives continue to unfold in the coming quarters.