UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2022

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ___________ to ___________

Commission File Number: 001-38424

Lazydays Holdings, Inc.

(Exact Name of Registrant as Specified in its Charter)

Delaware		82-4183498
(State or Other Jurisdiction of		(I.R.S. Employer
Incorporation or Organization)		Identification No.)

4042 Park Oaks Blvd, Tampa, Florida		33610
(Address of Principal Executive Offices)		(Zip Code)

813-246-4999

(Registrant’s Telephone Number, Including Area Code)

(Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common stock		LAZY		Nasdaq Capital Market

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports); and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐	Accelerated filer ☒
Non-accelerated filer ☐	Smaller reporting company ☒
	Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒

There were 13,874,932 shares of common stock, par value $0.0001, issued and outstanding as of May 4, 2022.

Lazydays Holdings, Inc.

Form 10-Q for the Quarter Ended March 31, 2022

Table of Contents

	Page

PART I – FINANCIAL INFORMATION

Item 1 – Financial Statements	6

Item 2 – Management’s Discussion and Analysis of Financial Condition and Results of Operations	34

Item 3 – Quantitative and Qualitative Disclosures about Market Risk	47

Item 4 – Controls and Procedures	47

PART II – OTHER INFORMATION

Item 1 – Legal Proceedings	48

Item 1A – Risk Factors	48

Item 2 – Unregistered Sales of Equity Securities and Use of Proceeds	48

Item 3 – Defaults Upon Senior Securities	48

Item 4 – Mine Safety Disclosures	48

Item 5 – Other Information	48

Item 6 – Exhibits	49

Disclosure Regarding Forward Looking Statements

Certain statements in this Quarterly Report on Form 10-Q constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical facts included in this Quarterly Report on Form 10-Q, including, without limitation, statements regarding the impact of the COVID-19 pandemic on the Company’s business, results of operations and financial condition and the measures the Company has taken in response to the COVID-19 pandemic, the Company’s future financial position, business strategy, budgets, projected costs and plans and objectives of management for future operations, are “forward-looking” statements. Forward-looking statements generally can be identified by the use of forward-looking terminology such as “may,” “will,” “expect,” “anticipate,” “intend,” “plan,” “believe,” “seek,” “estimate” or “continue” or the negative of such words or variations of such words and similar expressions. These statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions, which are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements and the Company can give no assurance that such forward-looking statements will prove to be correct. Important factors that could cause actual results to differ materially from those expressed or implied by the forward-looking statements, or “cautionary statements,” include, but are not limited to:

●	The fair value of warrant liabilities may fluctuate.

●	The Company must be able to maintain an effective system of internal controls and accurately report our financial results and remediate material weaknesses.

●	The COVID-19 pandemic had a significant adverse impact on the Company’s business, results of operations and financial condition in the first months of the COVID-19 pandemic; while increased sales since then have more than offset the initial adverse impact, there can be no assurance that such sales growth will continue at the same rate or at all, and the Company’s sales may ultimately decline, meaning that, in the long term, COVID-19 could result in a net negative impact on its business.

●	The Company’s business is affected by the availability of financing to it and its customers.

●	The Company’s success will depend to a significant extent on the wellbeing, as well as the continued popularity and reputation for quality, of the Company’s manufacturers, particularly, Thor Industries, Inc., Winnebago Industries, Inc. and Forest River, Inc.

●	Any change, non-renewal, unfavorable renegotiation or termination of the Company’s supply arrangements for any reason could have a material adverse effect on product availability and cost and the Company’s financial performance.

●	The Company’s business is impacted by general economic conditions in its markets, and ongoing economic and financial uncertainties may cause a decline in consumer spending that may adversely affect its business, financial condition and results of operations.

●	The Company depends on its ability to attract and retain customers.

●	Competition in the market for services, protection plans and products targeting the RV lifestyle or RV enthusiast could reduce the Company’s revenues and profitability.

●	The Company’s expansion into new, unfamiliar markets presents increased risks that may prevent it from being profitable in these new markets. Delays in acquiring or opening new retail locations could have a material adverse effect on the Company’s business, financial condition and results of operations.

●	Unforeseen expenses, difficulties and delays encountered in connection with expansion through acquisitions could inhibit the Company’s growth and negatively impact its profitability.

●	Failure to maintain the strength and value of the Company’s brands could have a material adverse effect on the Company’s business, financial condition and results of operations.

●	Failure to successfully procure and manage inventory to reflect consumer demand in a volatile market and anticipate changing consumer preferences and buying trends could have a material adverse effect on the Company’s business, financial condition and results of operations.

●	The Company’s same store sales may fluctuate and may not be a meaningful indicator of future performance.

●	The cyclical nature of the Company’s business has caused its sales and results of operations to fluctuate. These fluctuations may continue in the future, which could result in operating losses during downturns.

●	The Company’s business is seasonal, and this leads to fluctuations in sales and revenues.

●	The Company’s business may be adversely affected by unfavorable conditions in its local markets, even if those conditions are not prominent nationally.

●	The Company may not be able to satisfy its debt obligations upon the occurrence of a change in control under its credit facility.

●	The Company’s ability to operate and expand its business and to respond to changing business and economic conditions will depend on the availability of adequate capital.

●	The restrictive covenants governing the Company’s credit facilities may impair the Company’s ability to access sufficient capital and operate its business.

●	Uncertainty relating to the LIBOR calculation process and potential phasing out of LIBOR may adversely affect the Company.
●	Natural disasters (including hurricanes), whether or not caused by climate change, unusual weather conditions, epidemic outbreaks, terrorist acts and political events could disrupt business and result in lower sales and otherwise adversely affect the Company’s financial performance.

●	The Company depends on its relationships with third party providers of services, protection plans, products and resources and a disruption of these relationships or of these providers’ operations could have an adverse effect on the Company’s business and results of operations.

●	A portion of the Company’s revenue is from financing, insurance and extended service contracts, which depend on third party lenders and insurance companies. The Company cannot ensure these third parties will continue to provide RV financing and other products.

●	If the Company is unable to retain senior executives and attract and retain other qualified employees, the Company’s business might be adversely affected.

●	The Company’s business depends on its ability to maintain sufficient quantity and quality of staff.

●	The Company primarily leases its retail locations. If the Company is unable to maintain those leases or locate alternative sites for retail locations in its target markets and on terms that are acceptable to it, the Company’s revenues and profitability could be adversely affected.

●	The Company’s business is subject to numerous federal, state and local regulations.

●	Regulations applicable to the sale of extended service contracts could materially impact the Company’s business and results of operations.

●	If state dealer laws are repealed or weakened, the Company’s dealerships will be more susceptible to termination, non-renewal or renegotiation of dealer agreements.

●	The Company failing to comply with certain environmental regulations could adversely affect the Company’s business, financial condition and results of operations.

●	Climate change legislation or regulations restricting emission of “greenhouse gases” could result in increased operating costs and reduced demand for the RVs the Company sells.

●	The Company may be unable to enforce its intellectual property rights and/or the Company may be accused of infringing the intellectual property rights of third parties which could have a material adverse effect on the Company’s business, financial condition and results of operations.

●	If the Company is unable to maintain or upgrade its information technology systems or if the Company is unable to convert to alternative systems in an efficient and timely manner, the Company’s operations may be disrupted or become less efficient.

●	Any disruptions to the Company’s information technology systems or breaches of the Company’s network security could interrupt its operations, compromise its reputation, compromise its data, expose it to litigation, government enforcement actions and costly response measures and could have a material adverse effect on the Company’s business, financial condition and results of operations.

●	Increases in the minimum wage or overall wage levels could adversely affect the Company’s financial results.

●	The Company may be subject to liability claims if people or property are harmed by the products the Company sells and services and may be adversely impacted by manufacturer safety recalls.

●	The Company may be named in litigation, which may result in substantial costs and reputational harm and divert management’s attention and resources.

●	The Company’s risk management policies and procedures may not be fully effective in achieving their purposes.

●	The Company could incur asset impairment charges for goodwill, intangible assets or other long-lived assets.

●	Future resales of the shares of common stock of the Company issued to the stockholders and the investors in the PIPE Investment may cause the market price of the Company’s securities to drop significantly, even if the Company’s business is doing well.

●	The Company, as a party to a prior transaction with a special purpose acquisition company (or SPAC), may receive negative scrutiny of, or attention towards, its financial statements (including from the Securities and Exchange Commission), which could have a material adverse effect on the Company’s business, financial condition and results of operations.

●	The Company’s outstanding convertible preferred stock, warrants and options may have an adverse effect on the market price of its common stock.

●	Stockholders may become diluted as a result of the issuance of options under existing or future incentive plans or the issuance of common stock as a result of acquisitions or otherwise.

●	The price of the Company’s common stock may be volatile for a variety of reasons.

●	The conversion of the Series A Preferred Stock into Company common stock may dilute the value for the other holders of Company common stock.

●	The holders of Series A Preferred Stock own a large portion of the voting power of the Company common stock and have the right to nominate two members to the Company’s board of directors (the “Board”). As a result, these holders may influence the composition of the Board and future actions taken by the Board.

●	The holders of the Series A Preferred Stock have certain rights that may not allow the Company to take certain actions.

●	The Company’s stock repurchase program could increase the volatility of the price of the Company’s Common Stock.

●	The Company’s amended and restated certificate of incorporation provides to the fullest extent permitted by law that the Court of Chancery of the State of Delaware will be the exclusive forum for certain legal actions between the Company and its stockholders, which could limit the Company’s stockholders’ ability to obtain a judicial forum viewed by the stockholders as more favorable for disputes with the Company or the Company’s directors, officers or employees.

Part I – FINANCIAL INFORMATION

Item 1. Financial Statements

LAZYDAYS HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Amounts in thousands except for share and per share data)

	As of		As of
	March 31, 2022		December 31, 2021
	(Unaudited)

ASSETS
Current assets
Cash	$	89,558	$	98,120
Receivables, net of allowance for doubtful accounts of $456 at March 31, 2022 and December 31, 2021, respectively		51,649		30,604
Inventories		283,997		242,906
Income tax receivable		-		1,302
Prepaid expenses and other		2,590		2,703
Total current assets		427,794		375,635

Property and equipment, net		126,361		120,748
Operating lease assets		30,718		32,004
Goodwill		80,413		80,318
Intangible assets, net		85,993		87,800
Other assets		1,547		1,623
Total assets	$	752,826	$	698,128

See the accompanying notes to the unaudited condensed consolidated financial statements.

LAZYDAYS HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS, CONTINUED

(Amounts in thousands except for share and per share data)

	As of			As of
	March 31, 2022			December 31, 2021
	(Unaudited)

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable, accrued expenses and other current liabilities	$	63,137		$	58,999
Income taxes payable		7,675			-
Dividends payable		1,184			1,210
Floor plan notes payable, net of debt discount		230,347			192,220
Financing liability, current portion		2,053			1,970
Long-term debt, current portion		4,646			5,510
Operating lease liability, current portion		6,396			6,441
Total current liabilities		315,438			266,350

Long term liabilities
Financing liability, non-current portion, net of debt discount		102,192			102,466
Long term debt, non-current portion, net of debt discount		12,512			13,684
Operating lease liability, non-current portion		24,358			25,563
Deferred income tax liability		13,663			13,663
Warrant liabilities		13,239			15,293
Total liabilities		481,402			437,019

Commitments and Contingencies		-			-

Series A Convertible Preferred Stock; 600,000 shares, designated, issued, and outstanding as of March 31, 2022 and December 31, 2021; liquidation preference of $60,000 as of March 31, 2022 and December 31, 2021, respectively		54,983			54,983

Stockholders’ Equity

Preferred Stock, $0.0001 par value; 5,000,000 shares authorized;		-			-
Common stock, $0.0001 par value; 100,000,000 shares authorized; 13,843,182 and 13,694,417 shares issued and 12,049,073 and 9,656,041 outstanding at March 31, 2022 and December 31, 2021, respectively		-			-
Additional paid-in capital		123,037			121,831
Treasury Stock, at cost, 1,794,109 and 707,312 shares at March 31, 2022 and December 31, 2021, respectively		(31,690	)		(12,515	)
Retained earnings		125,094			96,810
Total stockholders’ equity		216,441			206,126
Total liabilities and stockholders’ equity	$	752,826		$	698,128

See the accompanying notes to the unaudited condensed consolidated financial statements.

LAZYDAYS HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Amounts in thousands except for share and per share data)

(Unaudited)

	For the three			For the three
	months ended			months ended
	March 31, 2022			March 31, 2021
Revenues
New and pre-owned vehicles	$	340,460		$	244,881
Other		35,701			26,112
Total revenues		376,161			270,993

Cost applicable to revenues (excluding depreciation and amortization shown below)
New and pre-owned vehicles (including adjustments to the LIFO reserve of $2,460 and $1,887, respectively)		269,927			201,219
Other		7,046			5,656
Total cost applicable to revenue		276,973			206,875

Transaction costs		34			375
Depreciation and amortization		4,084			3,225
Stock-based compensation		523			372
Selling, general, and administrative expenses		55,918			37,723
Income from operations		38,629			22,423
Other income/expenses
PPP loan forgiveness		-			478
Interest expense		(2,912	)		(1,866	)
Change in fair value of warrant liabilities		1,540			(6,468	)
Inducement Loss on Warrant Conversion		-			(246	)
Total other expense		(1,372	)		(8,102	)
Income before income tax expense		37,257			14,321
Income tax expense		(8,973	)		(5,477	)
Net income	$	28,284		$	8,844
Dividends on Series A Convertible Preferred Stock		(1,184	)		(1,184	)
Net income attributable to common stock and participating securities	$	27,100		$	7,660

EPS:
Basic	$	1.44		$	0.45
Diluted	$	1.17		$	0.35
Weighted average shares outstanding:
Basic		12,798,100			10,897,203
Diluted		20,561,136			20,297,715

See the accompanying notes to the unaudited condensed consolidated financial statements.

LAZYDAYS HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY

JANUARY 1, 2022 THROUGH MARCH 31, 2022

(Amounts in thousands except for share and per share data)

(Unaudited)

	Shares		Amount		Shares		Amount			capital			Earnings		Equity
	Common Stock				Treasury Stock					Additional Paid-In			Retained		Total Stockholders’
	Shares		Amount		Shares		Amount			capital			Earnings		Equity
Balance at December 31, 2021		13,694,417	$	-		707,312	$	(12,515	)	$	121,831		$	96,810	$	206,126
Stock-based compensation		-		-		-		-			523			-		523
Repurchase of treasury stock		-		-		1,086,797		(19,175	)		-			-		(19,175	)
Conversion of warrants and options		148,765		-		-		-			1,867			-		1,867
Shares issued pursuant to the Employee Stock Purchase Plan		-		-		-		-			-			-		-
Dividends on Series A preferred stock		-		-		-		-			(1,184	)		-		(1,184	)
Net income		-		-		-		-			-			28,284		28,284
Balance at March 31, 2022		13,843,182		-		1,794,109	$	(31,690	)	$	123,037		$	125,094	$	216,441

See the accompanying notes to the unaudited condensed consolidated financial statements.

LAZYDAYS HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY

JANUARY 1, 2021 THROUGH MARCH 31, 2021

(Amounts in thousands except for share and per share data)

(Unaudited) (Restated)

	Common Stock				Treasury Stock					Additional Paid-In			Retained		Total Stockholders’
	Shares		Amount		Shares		Amount			capital			Earnings		Equity
Balance at December 31, 2020		9,656,041		-		141,299	$	(499	)	$	71,226		$	14,789	$	85,516
Beginning Balance		9,656,041		-		141,299	$	(499	)	$	71,226		$	14,789	$	85,516
Stock-based compensation		-		-		-		-			372			-		372
Conversion of warrants and options		1,049,915		-		-		-			21,687			-		21,687
Shares issued pursuant to the Employee Stock Purchase Plan		51,437		-		-		-			-			-		-
Dividends on Series A preferred stock		-		-		-		-			(1,184	)				(1,184	)
Net income		-		-		-		-			-			8,844		8,844
Balance at March 31, 2021		10,757,393		-		141,299	$	(499	)	$	92,101		$	23,633	$	115,235
Ending Balance		10,757,393		-		141,299	$	(499	)	$	92,101		$	23,633	$	115,235

See the accompanying notes to the unaudited condensed consolidated financial statements.

LAZYDAYS HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Amounts in thousands)

(Unaudited)

	For the three months ended March 31, 2022			For the three months ended March 31, 2021

Cash Flows From Operating Activities
Net income	$	28,284		$	8,844
Adjustments to reconcile net income to net cash provided by operating activities:
Stock based compensation		523			372
Bad debt expense		11			2
Depreciation and amortization of property and equipment		2,277			1,944
Amortization of intangible assets		1,807			1,281
Amortization of debt discount		108			43
Non-cash lease expense		36			11
Loss (gain) on sale of property and equipment		6			(3	)
PPP loan forgiveness		-			(478	)
Change in fair value of warrant liabilities		(1,540	)		6,468
Inducement loss on warrant conversion		-			246
Tax benefit related to stock-based awards		(74	)		-
Changes in operating assets and liabilities:
Receivables		(20,838	)		(10,343	)
Inventories		(41,412	)		6,946
Prepaid expenses and other		113			(737	)
Income tax receivable/payable		9,051			5,477
Other assets		76			(49	)
Accounts payable, accrued expenses and other current liabilities		4,139			4,799
Total Adjustments		(45,717	)		15,979
Net Cash (Used In) Provided By Operating Activities		(17,433	)		24,823
Cash Flows From Investing Activities
Cash paid for acquisitions		-			(4,302	)
Proceeds from sales of property and equipment		15			3
Purchases of property and equipment		(7,911	)		(1,868	)
Net Cash Used In Investing Activities		(7,896	)		(6,167	)
Cash Flows From Financing Activities
Net borrowings (repayments) under M&T bank floor plan		38,066			(15,028	)
Repayment of long term debt with M&T bank		(1,790	)		(802	)
Proceeds from financing liability		254			3,688
Repayments of financing liability		(472	)		(344	)
Payment of dividends on Series A preferred stock		(1,210	)		(1,210	)
Repurchase of Treasury Stock		(19,175	)		-
Proceeds from exercise of warrants		-			11,582
Proceeds from exercise of stock options		1,353			244
Repayments of acquisition notes payable		(259	)		(801	)
Loan issuance costs		-			(28	)
Net Cash Provided By (Used In) Financing Activities		16,767			(2,699	)
Net (Decrease) Increase In Cash		(8,562	)		15,957
Cash - Beginning		98,120

SEC Form 10-Q filed by Lazydays Holdings Inc.