Holiday RV Superstores Inc., the retail chain doing business as Recreation USA, reported a second fiscal quarter operating profit, but a net loss due to one-time-only items.
The company’s income from operations was $782,293 during the three months ended April 30, and its net loss was $1.9 million.
The net loss includes a $1.4 million one-time, non-cash charge to convert the Holiday RV Superstores debt securities held by the former owners of County Line RV and Little Valley RV into Holiday RV Superstores stock. The conversion removed $3.2 million in debt from Holiday RV Superstores’ balance sheet, according to Marcus Lemonis, president.
Central Florida dealership group County Line RV and Little Valley RV, with locations in West Virginia and Virginia, were acquired by Holiday RV Superstores in 1999 and 2000, respectively.
Meanwhile, Holiday RV Superstores has responded to the slower economy and softer RV retail market by increasing the percentage of lower price-point and used units in the inventory at its 16 dealership locations.
Sale of used RVs and boats, which have higher dealer profit margins than new units, now account for 40% of Holiday RV Superstore’s revenue, compared with 33.7% historically, Lemonis said.
Additionally, the dealership chain lowered its inventory by $10.4 million during the February-through-April period, to $43 million. The company’s goal is to have a 100-day supply of new and used units on its lots, Lemonis added.