Hello, welcome to the Lazydays Holdings First Quarter 2023 Financial Results Conference Call and Webcast. If anyone should require operator assistance, please press star zero on your telephone keypad. A question-and-answer session will follow the formal presentation. As a reminder, this conference is being recorded. It's now my pleasure to turn the call over to your host, Kelly Porter, Chief Financial Officer. Please go ahead, Kelly. Thanks. Good morning, everyone, and thank you for joining us. Before we begin, I would like to remind everyone that we'll be discussing forward-looking information, including potential for 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 North, our Chief Executive Officer. Thanks, Kelly. Good morning, everybody, and thank you for joining us today. As usual, I will make a few opening comments, Kelly can take us through our financial results, and then we're happy to have some questions. I usually find the first quarter earnings call to be a bit anticlimactic. It's been only nine weeks to the day since we spoke to you in February, and typically, not much changes in such a short amount of time. Of course, this year has been different with the collapse of both Silicon Valley and Signature Bank. Having experienced the great financial crisis of 2008 at Lithia and the COVID-19 pandemic at Avis, my observation has been the second derivative effects of these events often take time to work through. We will remain vigilant. However, so far, these broader market dynamics have not affected our business, both in terms of our ability to borrow money to fund our operations, and more importantly, in our ability to find financing options for our customers. Despite higher interest rates impacting some customers' willingness to take out loans when purchasing a vehicle from us, we continue to see credit is available and lenders remain open for business. During our previous call, we mentioned that our store leadership team has been aggressively managing our inventory for the past few quarters, particularly focusing on units from prior model years. As of today, we only have around 400 units left from the 2022 model year. Although gross profit dollars on 2022 units have been deteriorating sequentially each month for the last three quarters, the small number of units remaining relative to overall sales will inflect to make up a smaller contribution, causing overall gross margin on new unit sales to stabilize. Furthermore, we are still generating healthy profits from 2023 and some 2024 units that have recently arrived, so we are pleased that the worst is behind us. I'm also quite happy with the velocity of our unit sales volume, which has been the most resilient part of our performance in the 1st quarter, despite macroeconomic headwinds. Our 1st quarter results have shown sequential improvement from the fourth quarter of last year in terms of overall revenue, fewer wholesales, lower adjusted SG&A to gross, and growth in our service body and parts business. We have also seen month-on-month improvement in operations each month from January through April. While it's impossible to predict exactly where the market will go in the balance of the year, we remain committed to improving our operations and profitability, and we are optimistic about our future performance. We continue to make exciting strides in corporate development. We opened a new location in Council Bluffs, Iowa, this week, which is the second addition to our store network this year after the acquisition in Las Vegas in February. We remain focused on growing the number of locations we operate to expand our footprint in new markets, to create economies of scale in our operations, and to leverage the network effect of clusters of Lazydays stores. To that end, we have three more locations under construction that will be completed in the third quarter of this year. We remain active in pursuing acquisition opportunities. Alongside our physical expansion, we are also prioritizing the development of our digital capabilities to enhance the customer experience and promote growth. We have welcomed a new VP of Marketing, Jake Barron, who brings extensive experience and knowledge to our team. Previously, he led marketing efforts for one of the top 25 largest dealer groups in the U.S. and has a deep understanding of the intersection of digital retail, web design, and vehicle sales and service. I'm enthusiastic about the future of our company as we expand our digital presence and advance our marketing strategies with Jake on board. I want to express my gratitude to our organization for their exceptional work during the past few months. It has been a challenging period as we had to make tough decisions about people and projects, and we need to accomplish more with fewer resources. Nevertheless, I'm impressed with how we have responded. From our store leaders and field personnel to the team here at our headquarters, everyone has risen to the occasion, making a significant impact. Witnessing this level of dedication and commitment is both inspiring and motivating. I am honored to be a part of such an energetic and capable organization, and I sincerely thank each and every one of our fantastic employees. With that, I'll turn the call over to Kelly. Thank you, John. Please note that unless otherwise stated, the 2023 first quarter comparisons are versus the same three-month period in 2022. Total revenue was $295.7 million, a decrease of 21.4%, reflecting a continued softening of sales volumes in the quarter and discounting of our 2022 model year inventory. We ended the quarter with a 207 day supply of new vehicle inventory, a decrease of 43 days over the- year-end, and a 77 day supply on used inventory, a one day decrease over year-end. As a reminder, we calculate day supply on a trailing 90-day average. From this point on, all metrics will be on a same store basis unless otherwise stated. New unit sales declined 18.9% in the quarter and gross profit per unit excluding LIFO declined 38.6% to $12,132 per unit. Used unit sales excluding wholesale units declined 15.6% and gross profit per unit declined 30% to $13,359 per unit. Finance and insurance revenue declined 25.4% during the quarter, primarily as a result of declines in unit volume combined with lower financing penetration. F&I per unit was $5,007 for the quarter, a decrease of 10.4%. We continue to see overall F&I product penetration as a significant opportunity in our stores. Our service body and parts business continues to grow with revenue increasing 6.3% to $15 million. To discuss a few items below the line. Total SG&A as a percentage of gross profit in the quarter was 82%, excluding the impact of LIFO. Adjusted SG&A for the quarter was 79%, a sequential improvement from the fourth quarter of 2022. We have more work to do. I am encouraged by the hard work the team has put into control costs. Adjusted net income was $1.2 million for the quarter, down from $28.2 million last year. Adjusted fully diluted earnings per share was $0 for the quarter compared to $1.27 in 2022. As a reminder, adjusted net income is reduced by the preferred dividend for the quarter to arrive at income applicable to common and participating securities. After accounting for the dividend, adjusted net income was breakeven, resulting in 0 adjusted earnings per share for the quarter. Shifting to liquidity and capital allocation, we had cash and cash equivalents of $41 million as of March 31st, with $62.5 million of immediate availability on our new and used floor plan line based on eligible inventory balances, as well as $20 million available on our revolving line of credit. We also have approximately $61 million of unfinanced real estate that we estimate could provide $51.6 million of additional liquidity. As John mentioned, we've seen minimal impacts from the increase in interest rates and turmoil in the banking sector. As a reminder, in February, we amended our credit facility, increasing our total floor plan capacity to $525 million and our revolver capacity to $50 million. In addition, the amendment extended the agreement four years to 2027 and is a committed facility that cannot be called or revoked. With over $400 million of inventory and related floor plan debt, we will always be a net debtor and excess cash on hand will be used to pay down our floor plan balance. We do not maintain large cash depository exposure as the best use of cash on hand is to retire floor plan financing, either through our floor plan offset account or the outright retirement of debt. We were comfortably in compliance with our debt covenants and our covenant leverage ratio stood at 0.63x at the end of the quarter. During the first quarter, we generated adjusted operational cash flows of approximately breakeven, similar to our financial results. We received just over $30 million in proceeds from warrant exercises. During the quarter, we deployed $19 million on acquisitions and $14 million in capital expenditures primarily related to construction of our greenfield locations. We remain committed to deploying capital prioritized first on internal investment and owning our real estate, followed by acquisitions with an underlying floor for share repurchases when our trading multiple is lower than what we can acquire private dealerships for. We can open the call to questions. Operator? Thank you. We'll now be conducting a question and answer session. If you'd like to be placed in the question queue, please press star one at this time. A confirmation tone will indicate your line is in the question queue. You may press star two if you'd like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing star one. One moment please while we pull for questions. Our first question today is coming from Steve Dyer from Craig-Hallum. Your line is now live. Good morning, John, Kelly, Ryan on for Steve. Hi, Ryan. I want to start with kind of monthly trends in the quarter and then if you can comment on April and then kind of second to that, historically, Q1 is seasonally the strongest quarter for Lazydays given the large dealership in Florida. I guess, do you think that's still the case on what you see this year, assume that similar normal seasonality or different trends? Well, thanks for the question. Great to hear from you, Ryan. I'm looking forward to seeing you in a few weeks here in May in person at your conference. I think in terms of the Q1 cadence and into April, it got better sequentially, and I would say March was significantly better than January and February. You know, we do have obviously a very large dealership in Tampa that, you know, is about a third of the company, and there's a significant trade show down here, the Super Show, that's in January. That. That was strong. I would say the rest of the organization had a pretty anemic January. You know, February is a short month, and often is impacted by weather. I would say weather has been probably colder and wetter in most of the country. I think that slowed things down a bit too. March, we saw some things come to life, and April's pacing ahead of March. That's encouraging. You know, we've obviously diversified the footprint quite a bit in the last couple of years, and are really coming off of a couple of pretty bizarre years at least. I don't like the word unprecedented when it comes to the pandemic, 'cause it's certainly been precedented at this point. The last couple of years have been unusual, and so it's hard for me to really give you a lot of color around what I think the rest of the year is gonna be. On top of that, I mean, this is my seventh month at the company, so, you know, I think we're doing the best we can. I think our expectations are that, you know, hopefully, as things warm up, particularly in the Midwest, you know, we'll see some nice seasonal growth. You know, I think that may end up with us having a slightly different seasonality than we've had in more normalized years past. It's hard for me to size that for you. Sorry I can't be more helpful there. No, that is. Sitting here in the Midwest, we're still waiting for spring to come. Hopefully soon. Curious on inventory mix. You commented on new, feeling pretty good there. Anything on the used side, I guess, inventory costs that you're sitting on relative to kind of the current conditions and selling prices, and then also mix within that? Yeah. It's a, it's a nuanced question. I think what we've, what we've seen is that there's really healthy demand for used, particularly with interest rates being up and just with cost inflation in general on new product, which I don't think is unique to our industry, but we've certainly seen that. I think consumers in some demographics are trading down and are buying used because it's more affordable. You know, there's some ability to move down the depreciation curve on a unit that cost a lot less a few years ago. I would say, generally speaking, you know, the velocity of our used unit sales has been improving, and we've really been leaning into that. You'll see a pretty significant reduction in our wholesale volume in the first quarter, and that's quite intentional by Ron and the operations team. You know, we're purposely trying to retail more, you know, and encouraging our stores to try to be thoughtful with reconditioning because that's always the area where you can get into trouble with used units. If you recondition them too much, you know, you can end up with pricing that becomes difficult for consumers. There's a balance to strike there, and we're still finding our way through. You know, generally speaking, there's really good demand for used. I think, you know, other thought leaders in the industry have talked a lot about leaning into used sales, and I agree 100% with that notion. I think we're, as an organization, trying to do more there, and think that there's opportunity for us to potentially, you know, find additional revenue there if we can source units. I think one difference in the business, for at least for me, coming from automotive, is that you just don't see the same trade ratio. For whatever reason, you know, there's a higher trade ratio in traditional automotive than in the RV space. Finding other channels to procure inventory from is more important. You know, you certainly can go to an auction and raise your hand, but trying to figure out how to buy units directly from consumers is something that, you know, we've been doing and are continuing to try to work on, particularly with the addition of Jake, our marketing leader, and really trying to be thoughtful about channels and ways we can go source more units there. Just to follow up on that, what is the ratio of trade-ins? Then how do you feel Lazydays compares relative to the industry? I don't know that I can size how we compare to the industry. It's a little bit of a moving target. You know, I would say typically in the automotive world, I would expect 70%-ish of the units to have a trade ratio. You know, we see something significantly lower than that. Just one more for me, and then I'll turn it over. Appreciate the comments on Silicon Valley and kind of the financial implications, and not seeing a lot of impact there. Curious on the floor plan side. There's been several high-profile lenders exiting idle floor plan financing. Anything notable there in the RV industry? No. I think generally speaking, you know, credit is harder to get in the RV world than in the auto world. If I'm blunt, you know, there are more banks competing for automotive than RV credit generally. That's been something I think both Kelly and I have been, you know, learning and becoming more knowledgeable around. Far, we haven't seen any big changes in terms of the people that do participate on the RV side. As she mentioned in her prepared remarks, you know, we just redid our credit facility, and so the banks that are in our syndicated facility providing floor plan, you know, are there contractually until the program matures. We've had no indication that anybody's exiting. There are some other big players that do provide RV floor plan financing that aren't in our facilities. I feel like we have, you know, options there. As we get bigger, we're gonna need more, you know, more participants for sure. We have some really good partners. Obviously, we'll be looking to increase that over time. You know, I think generally, you know, when you see the lenders pull back, and I've watched this happen on the retail and the floor plan side for a decade in automotive or a decade plus, you know, usually there's someone else that comes in and senses an opportunity. It just kinda depends on, you know, the tone and within the bank. I think it'll be manageable and nothing to date that would cause me any real concern. Thanks, John, Kelly. Good luck, guys, and look forward to seeing you in three weeks. Thanks. Thanks. Thank you. Next question today is coming from Griffin Bryan from D.A. Davidson. Your line is now live. Hi, good morning, guys. I'm just kinda curious how consumer demand for model year '2023s has been trending, you know, given they aren't giving as much promotional support as the '2022s. Good morning, Griffin. It's nice to hear from you. Thanks to you and the team for picking up coverage. We really appreciate it. Nice to have another analyst on the line here this morning. Thanks again. I think you've got a couple of dynamics when it comes to 2022 versus 2023. You know, I would say 2022's require quite a bit of discounting at this point, you know. If, and if you look at the gross profit that we make on the front end, as we would call it, so before F&I, you know, every month it's gone down. You know, I think it was, you know, in the low triple digits, maybe by the time you get to March. I mean, it's a pretty small number. Then you're still paying commissions and things on top of that to your salespeople because obviously they're, you know, they need a commission to eat, as the expression goes. You know, you end up in a situation where they're dilutive to margin, by the time you get your selling costs in there. I think the 2023s are still bringing pretty good money. You know, obviously that will be inflecting as we move into the summer and you start to see certain OEMs moving to model year 2024. You know, we're being really vigilant on 2023s in terms of what's coming in already. Really working with our manufacturer partners around trying to be really thoughtful about when the model year changeovers are gonna come and to make sure we don't continue to have '2023s arriving alongside '2024s because that just perpetuates, you know, the same issue we've been dealing through with 2022 model year. I think it's probably gonna be more normal. You just didn't have that shock in supply that came in last summer that really, I think, made the dealer body, you know, too heavy in terms of 2022 model year for the sales velocity. It seems like OEMs have been pretty rational in terms of continuing to idle production. I feel like we need to just work through it. You know, I think the wild card for me is just there are some dealers that have significantly unhealthy inventory, in my opinion, just in terms of the percentage of 2022s of the overall. I know what we're having to do to move those. You know, what does that do? Does that cause any unnatural reactions or rational behavior when it pertains to the new model year stuff? You know, just because people need to lighten up. You know, so far so good. We're seeing good grosses on the 23s yet still. You know, you're discounting. Certainly you're advertising significant discounts. You know, we buy even significantly back of that for a lot of our inventory. There's still room to make some nice margin there. We're managing through it. Okay, that's great. Super helpful. I guess kinda on that same note, I guess, you know, can you give kinda your current appetite to order more inventory given what you've been seeing at retail so far, I guess through April here? Our appetite to order inventory, I mean, I think it's still there. You know, I think we're seeing pretty good unit velocity. I mean, we've sold 1,100 units or 1,200 units a month, and more than that in March. You know, our days supply came down quite a bit because the sales velocity is kind of on the new side. I mean, we went from 277 days supply- 205 days supply or something. It was a pretty significant change in terms of days supply. You know, we'll continue to order, and we're trying to be helpful to the OEM as well, and where we can maybe take a little bit more or figure out ways to partner with them and buy in bulk to get some additional help. You know, we're willing to do that, like I think other dealers are. It's manageable. Okay. I guess just a quick follow-up on that. Are you seeing the OEMs make any changes to their pricing strategy as it relates to rebates and discounting on the 2023s themselves? No, I mean, not in a material way. You know, I think there's always programs and ways that the OEMs try to help dealers and, you know, I don't think that's any different than in years past. Okay. All right. I appreciate it. Thanks a lot. Thanks. Thank you. We've reached the end of our question and answer session. I'd like to turn the floor back over for any further closing comments. Thanks for joining us. We'll talk to you soon. Thank you. That does conclude today's teleconference and webcast. You may disconnect your line at this time and have a wonderful day. We thank you for your participation today.