Greetings, and welcome to the Lazydays Holdings, Inc. Fourth Quarter 2022 Financial Results Conference Call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star 0 on your telephone keypad. As a reminder, this conference is being recorded. I would now like to turn the call over to Debbie Harrell, Corporate Controller. Thank you. You may begin. Morning, everyone, and thank you for joining us. On the call with me are John North, our Chief Executive Officer, and Kelly Porter, our Chief Financial Officer. Before we begin, I would like to remind everyone that we will be discussing forward-looking information, including potential future financial performance, which is subject to risks, uncertainties and assumptions that could cause actual results to differ materially from such forward-looking statements and information. Such risks, uncertainties, assumptions and other factors are identified in our earnings release and other periodic filings with the SEC, as well as the investor relations section of our website. Accordingly, forward-looking statements should not be relied upon as a prediction of actual results, and any or all of our forward-looking statements may prove to be inaccurate. We can make no guarantees about our future performance, and we undertake no obligation to update or revise our forward-looking statements. On this call, we will discuss certain non-GAAP financial measures. Please refer to our earnings press release, which is available on our website for how we define these measures and reconciliations to the closest comparable GAAP measures. With that, I'd like to turn the call over to John. Thanks, Debbie. Good morning, everybody. Thank you for joining us. I'll start with a few comments and observations this morning. I'll turn it over to Kelly for her very first earnings call as our CFO to take you through the financials. Then, we'll be happy to take a few questions if you have some. First, I wanna say we're incredibly proud of the team's efforts for the year ended in December. We finished with 18 operating locations. We set a record for our company at over $1.3 billion of revenue. We now have over 1,400 team members in 11 states, ensuring our customers experience the Lazydays way every time they visit one of our stores. Thematically, calendar 2022 concluded for us quite similarly to the broader RV industry. After a pandemic-fueled continuation of outsized deliveries for the first six months of the year, we experienced sequential softening in sales volume each month from July to December. Industry-wide, the normalization of demand, coupled with record RV production for the year, has resulted in elevated inventory levels, lower gross margin on new units, and increased carrying costs through both higher days supply and higher interest rates on floor plan facilities. The cyclicality of our business and the commensurate levers to pull, however, are neither new nor novel. We are focused on improving the health of our inventory through the prudent disposition of prior model year units, maximizing profit opportunities on both current model year new and used inventory, and focusing on the countercyclical revenue opportunities in the service, body and parts businesses. The majority of our below-the-line costs are comprised of personnel and marketing expense, which ratably scale down as sales volumes and gross profit generation moderate. The expenses associated with the variable operations of our business, that is new, used, and finance and insurance, naturally modulate with gross profit. We have supplemented this natural reduction of expenses by also restructuring to remove corporate overhead, eliminating non-essential spending and partnering with our store general managers to ensure staffing is in line for current sales volumes. Outside of the day-to-day tactics required of any operator in the current economic environment, we have prioritized improving the health of our organization for growth. The key areas of focus are, one, owning and controlling our real estate, two, ensuring sufficient capital for growth, and three, preparing our support infrastructure to leverage economies of scale across many locations. To that end, in December, we purchased the real estate at our Elkhart and Nashville stores, increasing the percentage of locations we own to 39%. We see further opportunities to acquire more of our real estate through existing purchase options or relocating to new facilities in the future. To steal a bit of Kelly's thunder, yesterday, we closed on an amendment to our syndicated credit facility, increasing our borrowing capacity and lengthening the facility maturity to 2027. This will allow us to floor additional inventory due to growth at both acquired and greenfield locations, as well as ensure adequate inventory levels at existing locations. Further, as outlined in the press release we issued earlier today, the warrants associated with our 2018 de-SPAC transaction expire in less than a month. Assuming all the warrants are exercised, we would generate additional growth capital of over $33 million. In terms of preparing our organization to scale to significantly more locations, last week we completed our first acquisition of 2023 with the purchase of Findlay RV in Las Vegas, Nevada. We were also awarded the right to sell Tiffin brands in the market, which will be added into the existing product lineup at the store. We remain on track to open four new greenfield locations later this year, beginning in the spring in Council Bluffs, Iowa, just outside of Omaha. We remain hopeful that we will find further attractive growth opportunities either by building or buying in 2023. Behind the scenes, we've been making significant changes to our internal reporting infrastructure, corporate operations and organizational design. We believe these modifications will allow us to scale quickly, improve performance in our existing network of stores, and aggressively leverage overhead and infrastructure costs in the future. As just one, but an important part of these efforts, I'm pleased to announce we added a new Chief Technology Officer, Chander Makhija, to the team just last month. Chander comes to us with a stellar resume and decades of experience supporting Fortune 500 companies. We couldn't be happier with his addition to the team. Although much of the hard work we have diligently toiled to deliver has yet to prove externally demonstrable results, we are confident the ultimate benefits will be obvious in the future. With that, I'll turn the call over to Kelly. Thank you, John. Please note that unless stated otherwise, the 2022 fourth quarter comparisons are versus the same three-month period in 2021. Total revenue for the quarter was $243.5 million, a decrease of 24.5% from 2021. On a same store basis, total revenue was $232.2 million, a decrease of 28%, reflecting a softening of sales volumes in the quarter, combined with discounting of our 2022 model year inventory. We ended the year with a 250 days supply of new vehicle inventory and a 78 days supply on used inventory. We calculate our days supply on a trailing 90-day average. Given fourth quarter seasonality and our efforts to build inventory to prepare for the Florida RV SuperShow, day supply looks higher at year-end relative to our expectations in other reporting periods. Total new unit sales declined 18.2%, gross profit per unit, excluding LIFO, declined 20.3% to $15,040 per unit. On a same store basis, new unit sales declined 23.1% in the quarter, gross profit per unit, excluding LIFO, declined 19.1% to $15,272 per unit. Total used unit sales, excluding wholesale units, declined 27%, gross profit per unit declined 24% during the quarter to $15,756 per unit. On a same store basis, total used unit sales, excluding wholesale units, declined 30.8%, and gross profit per unit declined 23.6% to $15,840 per unit. Finance and insurance revenue declined 23.6% during the quarter, primarily as a result of declines in unit volume. F&I per unit was $5,351, a 2% decline over 2021. On a same store basis, F&I per unit increased slightly to $5,497 versus $5,461 in the prior year. While we did note a decline in finance penetration due to higher volume of cash deals, we continue to see overall F&I product penetration as a significant opportunity in our stores. Our service body and parts businesses continue to grow. Total service body and parts revenue increased 9.1% during the quarter to fourteen and a half million dollars. On a same-store basis, revenue increased 4.8% to $14 million. Moving on to SG&A. As John mentioned, while the majority of our cost structure is variable in nature, we are continuing to work to reduce corporate overhead and eliminate non-essential spend to further right-size our infrastructure, yet properly position ourselves for future growth. Total SG&A as a percentage of gross profit in the quarter was 80%, excluding the impact of LIFO. This is an increase of nearly 200 basis points over the prior year and approximately 70 basis points higher than we saw sequentially from the third quarter. Adjusted net income was $0.9 million for the quarter, down from $20.2 million last year, and adjusted fully diluted earnings per share was a loss of $0.02, compared to $0.93 of income per fully diluted share in 2021. A high-level review of full year results. Total revenue for the year ended December 31, 2022 was $1.3 billion, an increase of 7.4% from 2021. Total retail units sold for the year were 14,012, and on a same store basis, total retail units sold were 12,208. SG&A as a percentage of gross profit for the year was 65%. Adjusted net income was $64.1 million, and adjusted fully diluted earnings per share was $3.05. Moving on to discuss liquidity and capital allocation. As of December 31st, we had cash and cash equivalents of $61.7 million. We were comfortably in compliance with our debt covenants and our covenant leverage ratio stood at 0.57 at the end of the quarter. As John mentioned earlier, we amended our credit facility on February 21st and subsequently estimate total liquidity of approximately $165 million, including unfinanced real estate. The amendment extends the maturity to 2027, retires all associated term and mortgage loans, and provides for higher advance rates on used inventory. For the full year 2022, we have generated adjusted operating cash flows of $76.2 million, and we deployed $104 million in capital for acquisitions, share repurchases, and internal investments, including capital expenditures, real estate purchases, and technology. Of that amount, we deployed approximately $15 million on acquisitions and $40 million on capital projects, including the purchase of real estate of our Elkhart and Nashville locations. These properties were previously leased and recorded as finance leases on our balance sheet. The remainder was dedicated towards share repurchases. In fact, we invested $44 and a half million to repurchase 2.7 million shares of common stock at an average price of $16.51, retiring over 18.6% of our shares outstanding. We remain opportunistic repurchasers of our stock, and we'll have a balanced approach to capital allocation, including acquired and organic growth, share repurchases, and internal investments in the future. With that, we can open the call to questions. Operator? Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press Star 2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. We ask that you please limit yourself to 1 question and 1 follow-up question. 1 moment please while we poll for your question. Our first questions come from the line of Michael Swartz with Truist Securities. Please proceed with your question. Hey, good morning, guys. Maybe just to start, you acquired two of your previously leased locations during the quarter. Maybe provide us just some high-level thoughts or strategic rationale around, you know, why, I guess, why you wanna control the real estate, maybe, you know, how you see that playing out in terms of capital allocation going forward. Sure. Good morning. Nice to hear from you, Mike. I think I'm just a victim of the past success I've seen at other companies that have owned their real estate. You know, my background working at both Copart and Lithia, you know, I think one of the hidden assets at both of those organizations was a strategy to own real estate that spanned decades. As we talked about, you know, in the last quarterly call, you know, we really are endeavoring to invest capital for a 10-year plus time horizon. There's no question in my mind that over time, locking in our infrastructure costs, you know, fixing our rent, so to speak, in the sense of not having CPI escalators, and importantly, being able to refinance the real estate as necessary to tap into the equity appreciation that we'll be accumulating and accreting over time as property values increase, has just, you know, I think been really, really prudent. I've seen it work really well in the past and, you know, I think it's something we wanna make sure we participate in. Additionally, owning your real estate just gives you a lot more flexibility. You know, if you've ever seen, a vacant leased facility where there's been a sale lease back, you know, trying to get out of those are very, very challenging. Not to say that we necessarily think that's in the cards for the things we're trying to do, but I think just maintaining site control and the ability to have maximum flexibility, in terms of how we think about our real estate portfolio, our dealership operations, is something that's critical to us. You know, my experience in this business is that, you know, the acquisition opportunities typically are not totally unfettered. You know, you're typically dealing with, you know, some period of time where, you know, sellers need to finally be rational and transact, and that's when there's an opportunity for us to buy stuff. You know, we're not out just constructing new locations on every street corner, so to speak. You know, I think we can own our real estate and still have plenty of operational cash flow to finance the growth that we anticipate having. I think we can proverbially have our cake and eat it, too. Okay. That's helpful. Thanks for that, John. Then second question, just on in terms of the inventory environment, I think everyone's well aware that we're kind of working through some elevated inventory levels and then within that, elevated non-current inventory levels. Maybe give us a sense of, like, how much more you have to go in terms of the inventory liquidation and maybe what percentage of your current new inventory is model year '22? Sure. You know, again, I give a lot of credit to the operators in our organization. As I mentioned, in I think November when we spoke last, this was already a topic top of mind for us, was getting our inventory healthy as we talked about it at the time. You know, I was looking at the inventory stats that our team pulled together just yesterday. You know, our inventory levels on an absolute basis were flat from the end of January to where we sit today in February. We really haven't added or shrunk our inventory levels at all, and I feel pretty good about where they are, so call it ±3,700 units. What we have seen is a sequential improvement each and every month in terms of prior model year, to your point. As of yesterday, about 72% of our inventory was current model year. You know, so we were still getting 2022 inventory even into September and October in some cases. So we've been ahead of this curve since really the late summer, but we've been continuing to have that. Then we had a number of inventory units that we couldn't sell because they were under a recall. There's been, you know, plenty of conversation about that as it pertains to the Sprinter recall. So we're working through all that. You know, we've seen still profitable front end, as we would call it, in terms of that sales, although it's shrinking, right? We're discounting more aggressively to get through it. What we're seeing on our current model year inventory is that, you know, grosses are really hanging in, pretty much unchanged. You know, I think it's just that each store having to try to find the right customers, you know, will stretch and get aggressive in terms of pricing to move through that stuff. For the current model year stuff, there's, you know, still pretty good, healthy gross profit to be had there. It's a balance of both, and it's gonna take us another few months to work through it, but I'm really pleased with where we are relative to, you know, being ahead of this and really having a good strategic plan and something that we've been working on for months. Okay, that's great. Maybe one more, if I can fit it in. Just I think you've talked about, you know, thinning out the corporate overhead and kind of optimizing the cost structure. Is there any way to think about maybe, you know, the run rate cost savings that you've already enacted or maybe what the broader plan is? I totally appreciate the question. That's probably a quantification that we're not gonna get into this morning. I think to be totally blunt about it, we're still trying to, I think, totally get our arms around where things are, too. I mean, Kelly has been here 90 days. I'll hit 6 months in another week or 2. I think we're still trying to figure all of that out. It will be lower. We've taken costs out for sure. You know, I think there's opportunity there to do a little bit more, but I'm not sure that I can, that I can really quantify it for you right now. Fair enough. Thanks. Thank you. Our next question has come from the line of Steve Dyer with Craig-Hallum. Please proceed with your questions. Great. Thanks. Good morning, John and Kelly. As it relates to some of the capital allocation questions, Mike had, just kinda looking forward certainly seems like the pace of, you know, adding new dealerships is gonna be faster than maybe it has been historically for this company. Two questions around that. One, is your preference greenfield or acquired? Number two, are we at a point, I guess, from an asking price perspective, yet we're probably still fairly early in this, you know, cyclical slowdown? Are you finding, I guess, asking prices to be rational, or is that something that you think is gonna take more time going into this year? Hey, Steve, great to hear from you. Our preference is 100% to buy stuff. you know, greenfields come with their own set of complexities. The two biggest ones in my mind are, let's call it an 18-plus month construction lead time, you know, where you're sinking capital into the ground, so to speak, and waiting many, many, many months for a return. you know, while you're avoiding goodwill, you know, the second component of a greenfield is in the start-up cost and really having to start from scratch with, you know, an entirely new staff of sales and service personnel versus if you're buying an existing location, you've got an installed customer base, you've got employees that know the drill, you've got brands that exist in the market. you know, I think we definitely are focused more on looking for acquisition opportunities. That's not to say we won't do a greenfield. I'm sure that there will be circumstances and situations where that makes a ton of sense. We're excited about the ones that we have in flight. I think in general, you're gonna see us do more more acquisitions as opposed to building stuff, and I think that allows us to grow faster. In terms of selling prices, you know, my opinion on this that's been informed over, I don't know, 15 or so years of watching it, is that they really don't change that much. You know, I think sellers get to a point, generally speaking, where they need to transact, and that's when the pricing becomes realistic and, you know, and rational. You know, if you walk up and knock on somebody's door unsolicited, you know, the price that comes back usually doesn't ever make any sense. Then, you know, when you get to that point where someone really has a life event, they're gonna retire or, you know, they're ill or whatever the catalyst is, where it's time for them to sell, I think that, you know, they become reasonably rational in terms of their expectations for pricing, and there's a transaction that you can have. I do think, there's a little bit of inflection. In the last couple of years, everybody's been overearning. You know, everybody was making more money and maybe taking more gross profit. This has been, you know, a phenomenon that certainly extended beyond our industry into automotive and boats and a number of other verticals. You know, I think no one's willing to sell at that point in time because they're overearning, and, you know, no buyer is rationally gonna pay for overearning. Why would you as a seller accept a lower multiple when there's, you know, windfall profits to be had? I think as we get into a more normalized environment, which is what this really feels like, you know, I think this is kinda back to, back to quote-unquote normal. You know, I think that'll be a good thing. You know, I think dealers paying floor plan again, I think having to cut, you know, gross profit and deal with aged inventory again, I think, you know, all of those things can become helpful tailwinds to us. I don't think it necessarily means that there's some fire sale to be had. You know, if you've got a high-quality asset with good brands and good people, you know, it's still valuable, and we're still willing to pay a fair price for it, and we still think we can generate a good economic return. Thanks. That's helpful. I guess when you look at the acquisition landscape, how do you think about it? Are you looking for, you know, to sort of fill out certain geographic areas or maybe something that's close to an existing dealership or not? Are you looking for, you know, really specific brands that are sort of hot or trending, or are you sort of trying to buy $1 for $0.50? Just sort of what is your criteria there going forward? Yes, all of that. I mean, I think one thing I've probably come to appreciate a bit more, you know, is that there are, in our view at least, some really desirable brands within this space, where the product tends to be a little bit more tightly allocated. You know, the gross profits tend to hold in a little better. You know, and I think that we've been definitely interested in that. I think there's benefit to clustering locations. You know, so the Las Vegas store is a great example where we like the proximity to our Arizona market. You know, we would like to diversify away from our campus store a little bit. That's not to say that I mean, that's a phenomenal store, but it's a third of our company. You know, finding some diversification elsewhere in the country, particularly where we've already got clusters of stores, is helpful. Primarily, you know, what we're looking at is return on equity, right? It's really simple. We want a 20% after-tax return on equity. We want our money back in 5 years, and then we want the annuity cash flow. You know, that's a formula that we've seen and has been executed very, very well, you know, in our history and we think is very, very applicable here. There's opportunities that tick those boxes, and we're hopeful we can deliver more of them in 2023. Gotcha. I guess I've never been accused of being an outstanding mathematician, but in your adjusted reconciliation for GAAP, non-GAAP, you show net income of $936,000 and a negative $0.02 of earnings per share. Can you help me sort of rationalize how that's possible? Sure, Steve. It's one of the fun things I got to learn when I got here. With our interesting capital structure with our preferred stock and our warrants and everything, we do go through a little bit of a complicated process on the EPS calculation. In particular, the thing that's gonna kind of throw you into a loss there to start with is the dividend on the preferred. Starting with our net income, removing the dividend out of there turns it into a loss that is then fully allocated to the common shareholders. That's kind of the simple math there. If you wanna work through it together offline, happy to walk you through it. That makes sense. Thanks, Kelly. I guess lastly for me, you guys don't guide or anything like that for this next year, but are there any sort of, I guess, guideposts in the, in the way that you're thinking about the year, from a growth perspective, maybe when the greenfields come on, so on and so forth? Or are you gonna leave that alone right now? In short, I don't know that we've got a ton of visibility there, right? I mean, we opened a few greenfields, but it was in the pandemic. You know, what's it gonna be like to open the greenfields in 2023? You know, I mean, I think we believe there's gonna be some, you know, some startup period costs associated. You know, you're not gonna have revenue that's gonna come in across the door immediately. You know, Houston's a good case study for us. We had a service center there, as you probably recall, and in the October-ish timeframe, we added a sales operation in there, which I think was a good decision. You know, it still took us 90-plus days to really see some traction there. You know, we'll see how February goes. I'm hopeful that we'll be profitable there in February. We did not become profitable prior to that, so, you know, figure November, December, January, granted seasonally slow tier periods, but, you know, it takes time to ramp. There's gonna be some of that. We don't really know exactly what that's gonna look like, but I think it's gonna be manageable. You know, we're certainly not gonna provide any financial guidance. You know, I think there's been plenty of machinations in the industry around what wholesale production and retail deliveries are gonna be, and I'll let smarter people than me prognosticate on what that looks like. What I can tell you is that we've seen a pretty okay start to 2023, certainly better than how we felt coming out of November and December. As I mentioned, our current model year inventory is holding good gross profit. I think we see good opportunity for us to grow used sales, which has been talked about, you know, outside of just our company. I think as an industry, there's opportunity, but certainly here. The real positive spot for me in the fourth quarter was seeing service body and parts up. You know, seeing the same store number up 4.9%, I think, from memory. I think that there's organic opportunity to perform in our locations and to drive revenue up. You know, how you put all that into your model, Steve, is, well, you're a better analyst than I am. You know, I think overall we feel like it's manageable and, you know, the trends that we're on, there's not gonna be a significant departure from. We'll keep you posted on how the greenfields come on. The first one doesn't come on until April. You know, I think we'll have probably a little bit more to share with you, as we get to the next quarterly call. All right. Fair enough. Thank you both. Good luck. Thank you. Our next question is coming from the line of Fred Wightman with Wolfe Research. Please proceed with your question. Hey, guys. Good morning. Thanks for taking our question. I just wanted to follow up on the 250 days of new inventory. I know that you made a comment that it was high due to the Tampa show. Is there any way to sort of size where that stands today and maybe how you feel about that currently? Yeah. I mean, we give a 90-day look back, so we take, you know, the trailing cost of sales and use that to calculate what the days supply is. Obviously, we could come up with a forward-looking days supply, but then that would imply some kind of a sales volume guidance. That's why we don't do it. I think as I mentioned to one of the earlier questions, you know, we're about 3,700 units in inventory. That's been pretty consistent December, January, and February. You know, I would say we haven't been increasing or decreasing. We did certainly make a conscious effort as we got into December to make sure we had inventory on the ground, and i know you were down here for the Super Show, which i think went pretty well. You know, I would say we haven't been increasing or decreasing. We did certainly make a conscious effort as we got into December to make sure we had inventory on the ground, and i know you were down here for the Super Show, which i think went pretty well. You know, we had a lot more on-ground inventory this year than we have in the last couple, that allows us to deliver the units, which is really important because, as we say in the business, time kills deals. You know, the longer it takes for you to deliver a unit, you know, the less likely it is that it ultimately is delivered. You know, I think in general, that 3,700 unit mark is pretty unchanged. I feel pretty good about it. I think it represents the right stocking levels for the stores that we're operating today. I don't anticipate big changes directionally up or down. You know, I think the next big step function is gonna be when Council Bluffs comes on in April. We'll obviously need to, you know, put a couple hundred units on the ground in that store to prepare for the spring. Absent that, I wouldn't anticipate, you know, big changes in either direction. Makes sense. Then just within that 3,700 unit, the mix as far as towables and motorized is sort of healthy and where you want it to be? Yeah. I think, as we talked about throughout last year, you know, towables certainly recovered faster than motorized. I think there was still some lack of motorized availability, you know, in the, let's call it the third quarter. I would say by the fourth quarter, you know, that's pretty normalized now. You know, I would say the retail environment in general, people have plenty of stuff to sell. I don't think that there's the inability for us to get motorized if we, you know, if we desire it, if we need it. In general, I think we have what we need. I agree with a lot of the other, you know, commentary that's been out in the marketplace that, you know, it seems like OEMs are doing a decent job of slowing down production and allowing dealers to sell through stuff. Yeah, you've got to discount and be aggressive on your prior model year stuff, but, you know, the channel isn't continuing to be stuffed, as they would say. I think as we get into the spring and summer and seasonally pick that stuff up, you know, we should continue to see the health of the inventory improve, and so I'm encouraged by that. Awesome. Thanks so much, guys. Thank you. There are no further questions at this time. I would now like to hand the call back over to John North for any closing remarks. Just thanks everybody for joining us. We'll talk with you in a couple months. Appreciate your interest. Thank you. This does conclude today's teleconference. We appreciate your participation. You may disconnect your lines at this time. Enjoy the rest of your day.