Lazydays reported third-quarter financial results. The company reported inventories growing and stated most dealerships for sale now do not meet Lazydays’ standards to be acquired.
Bill Murnane, Lazydays CEO, said his company bucked the national trend of declining RV sales and grew its unit sales by almost 40%.
“We expect strong demand and margins to continue into the foreseeable future,” he said. “Our inventories increased in the third quarter, and our towable inventories increased faster than our motorized inventories. Our dealership inventories continued to be well below historical and desired levels, and we do not expect our inventory levels to normalize until sometime in the second half of 2022.”
During the quarter, Lazydays acquired Burlington RV in Milwaukee and B Young RV of the Portland, Oregon, and Vancouver, Washington, markets. The company recently announced new greenfield projects in the Omaha, Nebraska, and Fort Pierce, Florida, markets.
“We are able to acquire great properties and great brands for these dealerships, and we are excited about their growth potential,” Murnane said.
He told investors the dealerships are slated to open in 2022’s last quarter. He also said additional greenfield projects are in the works and have a greater return on investment than dealership acquisitions yield.
“We are finding price expectations to be above what we deem reasonable,” Murnane said. “In addition, we are finding that most of the dealerships that are currently for sale do not meet the high-quality standards that are required to become a Lazydays dealership. This does not mean we will not continue to make acquisitions — when we find high quality dealerships like Burlington and B Young for sale at reasonable prices, we will make our best effort to bring them into the Lazydays family.”
Murnane said newer acquired dealership operations provide less than a 50% return on investment.
“Our only real cash outlay for greenfield is some small startup costs related to working capital, advisor fees and a month or two of negative operating cash flow,” Murnane said. “We conservatively estimate our startup cash investment to be $500,000.”
Murnane said Lazydays’s goal is to add five to 10 dealerships per year to its network.
Nick Tomashot, chief financial officer for Lazydays, told company investors on a 3rd quarter earnings call that revenue rose to $318.7 million, up a $103 million, or 48%, from 2020’s third quarter.
Revenue from the sale of RVs was $285.8 million for the quarter, or 47% of total revenue. Tomashot reported new RVs accounted for $181.4 million, up 39%. He said revenue from the sale of preowned RVs was $104.4 million for the quarter, a 63% increase.
