Lazydays Holdings, Inc.

Hello, and welcome to the Lazy Days 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 will 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 that 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 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 as 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 for 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 first quarter, despite macroeconomic headwinds. Our first quarter results have shown sequential improvement from the fourth quarter of last year in terms of overall revenue, fewer full sales, 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 Lazy Day stores. To that end, we have three more locations under construction that will be completed in the third quarter of this year, and 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. Finally, 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.