While Lazydays RV reported their gross profit, excluding LIFO adjustments, increased $2.2 million in Fiscal Year 2018 versus Fiscal Year 2017, the company saw its fourth quarter revenues decrease $10.7 million, or 7.8%, versus 2017.
Revenue from sales of recreational vehicles was $110.1 million for the quarter, down $11.9 million, or 9.7%. RV unit sales excluding wholesale units, were 1,334 for the quarter, down 145 units, or 9.8% versus 2017. The decline in the sale of recreational vehicles for the quarter was offset by an increase in parts, accessories, and related services revenues of $0.9 million and an increase in finance and insurance revenues of $0.3 million.
Other fourth-quarter highlights include:
• Subsequent to the end of the fourth quarter, on March 11, 2019, Lazydays announced that it will open a dealership in Nashville, Tenn., and has signed a dealership agreement for the Nashville market with Grand Design RV, one of the most respected and fastest growing RV brands in the RV industry. Lazydays anticipates opening its Nashvilledealership in late 2019 or early 2020, after it builds out its new dealership.
• Gross profit for the quarter including LIFO adjustments was $26.9 million; up $4.0 million, or 17.3%. This gross profit improvement was impacted by a $5.1 million net change related to LIFO adjustments in the two periods.
• Excluding transaction costs, stock-based compensation, and depreciation and amortization, selling, general and administrative expense (SG&A) for the quarter was $21.7 million, down $1.8 million compared to the prior year. This decrease is attributable to reduced performance and incentive compensation and other personnel costs more than offsetting the additional overhead expenses contributed by the recently acquired Minnesota and Tennessee locations.
“Given the difficult industry conditions in the fourth quarter, we are pleased with our performance during the quarter,” stated Chairman and Chief Executive Officer William Murnane. “We are also excited to have continued our geographic expansion by closing on our acquisition in Knoxville, Tenn. Our Minnesota and Tennessee dealerships contributed little to fourth quarter sales and are not expected to contribute much in the first quarter of 2019 given the seasonality of these locations. However, these two new locations should have a much more meaningful impact on Q2 and Q3 in 2019. Moreover, these dealerships along with our planned greenfield dealership in Nashville, expands Lazydays’ footprint into new fast-growing markets and diversifies our revenue base geographically.”
Revenues for the fiscal year 2018 were $608.2 million, down $6.6 million, or 1.1%, versus 2017. Revenue from sales of recreational vehicles was $538.1 million for the year, down $8.3 million, or 1.5%. RV unit sales excluding wholesale units, were 7,296 for the year, down 92 units, or 1.2%.
Other highlights include:
• Gross profit, excluding LIFO adjustments, was $133.1 million, up $2.2 million versus 2017. Gross margin excluding LIFO adjustments improved between the two periods, from 21.3% in 2017 to 21.9% in 2018, primarily driven by improved new vehicle margins and improved F&I revenues per vehicle sold. Gross profit for the year including LIFO adjustments was $131.7 million; up $4.6 million, or 3.6%. This gross profit improvement was impacted by a $2.3 million net change related to LIFO adjustments in the two periods.
• Excluding transaction costs, stock-based compensation, and depreciation and amortization, SG&A for the year was $96.8 million, up $0.5 million compared to the prior year, this is attributable to the additional overhead expenses contributed by the recently acquired Minnesota and Tennessee locations, partially offset by reduced personnel and other overhead expenses across the Company. Stock-based compensation and depreciation and amortization increased $8.3 million and $3.4 million, respectively, compared to the prior year. These non-cash expense increases stemmed from the March 2018 merger between Andina Acquisition Corp. II and Lazy Days’ R.V. Center, Inc., which included options issued to management and increases in tangible and intangible asset valuations.
• Adjusted EBITDA, a non-GAAP financial measure, was $32.4 million for the year, up $1.1 million compared to 2017. This was primarily driven by improved gross margins which were partially offset by the decline in revenue and units sold. Adjusted EBITDA Margin as a percentage of revenue increased slightly for the year to 5.3% compared to 5.1% in 2017.
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