**UNITED STATES SECURITIES AND EXCHANGE COMMISSION**

**Washington,DC  20549**

** **

**FORM10-K**

** **
| **ý****    ****ANNUAL REPORT PURSUANT TO  SECTION 13 OR 15(d)  OF THE SECURITIES EXCHANGE ACT OF 1934**        |
|-----------------------------------------------------------------------------------------------------------------------------------------|
| **for the fiscal year ended December 31, 2004**                                                                                         |
| ** **                                                                                                                              |
| **OR**                                                                                                                                  |
|                                                                                                                                    |
| **o****    TRANSITION REPORT  PURSUANT TO SECTION 13 OR 15(d)  OF THE SECURITIES EXCHANGE ACT OF 1934**             |
| **for the transition period from          to        .** |
|                                                                                                                                    |
| **COMMISSION FILE NUMBER: 333-118185**                                                                                                  |

** **

**LAZY DAYS’ R.V. CENTER, INC.**

**(Exactname of registrant as specified in its charter)**

** **
| **Florida**                                                      | ** ** | **59-1764794**                                   |
|------------------------------------------------------------------|------------|--------------------------------------------------|
| (State  or other jurisdiction  of incorporation or organization) | ** ** | (I.R.S. Employer  Identification Nos.) |
|                                                             |       |                                             |
| **6130 Lazy Days Boulevard**                                     | ** ** |                                             |
| **Seffner, Florida**                                             | ** ** | **33584-2968**                                   |
| (Address  of principal executive offices)                        | ** ** | (Zip  Code)                                      |
| ** **                                                       | ** ** | ** **                                       |
| **(800) 626-7800**                                               |
| (Registrant’s telephone number, including area  code)       |
|                                                             |
| Securities  Registered Pursuant to Section 12(b) of the Act:     |
| **None.**                                                        |
|                                                             |
| Securities  Registered Pursuant to Section 12(g) of the Act:     |
| **None.**                                                        |

 

Indicate by check mark whether the registrant (1) has filed all reportsrequired to be filed by Section 13 or 15(d) of the Securities Exchange Act of1934 during the preceding 12 months (or for such shorter period that it wasrequired to file such reports), and (2) has been subject to such filingrequirements for the past 90 days.  Yes ý  No o

 

Indicate by check mark if disclosure of delinquent filers pursuant toItem 405 of Regulation S-K is not contained herein, and will not be contained,to the best of the registrant’s knowledge, in definitive proxy or informationstatements incorporated by reference in Part III of this Form 10-K or anyamendment to this Form 10-K.  ý

 

Indicate by check mark whether the registrant is an accelerated filer(as defined in Rule 12b-2 of the Act).  Yes o  No ý

** **

As of March 31, 2005, the registrant had 100shares of common stock outstanding.

** **

** **

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**TABLE OF CONTENTS**

 
| **PART I**   | ** ** |
|--------------|------------|
| ** **   | ** ** |
|         | Item  1.   | Business | 4 |
|         | Item  2.   | Properties | 15 |
|         | Item  3.   | Legal Proceedings | 15 |
|         | Item  4.   | Submission of Matters to a Vote of  Security Holders | 15 |
|         |       |
| **PART II**  | ** ** |
| ** **   | ** ** |
|         | Item  5.   | Market for Registrant’s Common  Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities | 15 |
|         | Item  6.   | Selected Financial Data | 16 |
|         | Item  7.   | Management’s Discussion and  Analysis of Financial Condition and Results of Operations | 17 |
|         | Item 7A.   | Quantitative and Qualitative  Disclosure About Market Risk | 26 |
|         | Item  8.   | Financial Statements and  Supplementary Data | 27 |
|         | Item  9.   | Changes in and Disagreements with  Accountants on Accounting and Financial Disclosure | 53 |
|         | Item 9A.   | Controls and Procedures | 53 |
|         | Item 9B.   | Other Information | 53 |
|         |       |
| **PART III** | ** ** |
| ** **   | ** ** |
|         | Item  10.  | Directors and Executive Officers of  the Registrant | 54 |
|         | Item  11.  | Executive Compensation | 57 |
|         | Item  12.  | Security Ownership of Certain  Beneficial Owners and Management and Related Stockholder Matters | 59 |
|         | Item  13.  | Certain Relationships and Related  Transactions | 60 |
|         | Item  14.  | Principal Accountant Fees and  Services | 65 |
|         |       |
| **PART IV**  | ** ** |
| ** **   | ** ** |
|         | Item  15.  | Exhibits and Financial Statement  Schedules | 65 |

 

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You should carefully consider the risk factors describedbelow, as well as the other information included or incorporated by referencein this Annual Report on Form 10-K prior to making a decision to invest in oursecurities. The risks and uncertainties described below are not the only onesfacing our company. Additional risks and uncertainties not presently known orthat we currently believe to be less significant may also adverselyaffect us. Unless the context requires otherwise, references to the “Company,”“we,” “us,” “our” and “Lazydays” refer specifically to Lazy Days’ R.V. Center,Inc. and references to “Holdings” refer to LD Holdings, Inc., our parent.

 

**SPECIALNOTE REGARDING FORWARD-LOOKING STATEMENTS**

 

Certain information setforth in this report contains “forward-looking statements” within the meaningof the Private Securities Litigation Reform Act of 1995. These statementsrelate to analyses and other information that are based on forecasts of futureresults and estimates of amounts not yet determinable. These statements alsorelate to our future prospects, developments and business strategies. Thestatements contained in this report that are not statements of historical factmay include forward-looking statements that involve a number of risks anduncertainties.

 

We have used the words “anticipate,” “believe,” “could,”“estimate,” “expect,” “intend,” “may,” “plan,” “predict,” “project,” “will” andsimilar terms and phrases, including references to assumptions, in this reportto identify forward-looking statements. These forward-looking statements aremade based on our management’s expectations and beliefs concerning futureevents affecting us and are subject to uncertainties and factors relating toour operations and business environment, all of which are difficult to predictand many of which are beyond our control, that could cause our actual resultsto differ materially from those matters expressed in or implied by theseforward-looking statements. Our actual results could differ materially fromthose anticipated by such forward-looking statements as a result of factorssummarized below and at greater length in the “Risk Factors” described in ourRegistraton Statement filed on Form S-4 dated August 12, 2004, as amended:

 

•                  changesfrom anticipated levels of sales, whether due to future national or regionaleconomic and competitive conditions, customer acceptance of existing and newproducts, consumer confidence or otherwise;

 

•                  significantindebtedness that may limit our financial and operational flexibility;

 

•                  increasedinterest rates which increase the cost of financing new vehicle purchases;

 

•                  higherfuel costs which may deter purchases of recreational vehicles;

 

•                  actionsof current or new competitors that increase competition with respect to pricesand services;

 

•                  increasedadvertising costs associated with promotional efforts;

 

•                  pendingor new litigation or governmental regulations;

 

•                  severeweather events and other natural disasters which could impact our single-sitelocation near Tampa, Florida;

 

•                  otheruncertainties which are difficult to predict or beyond our control; and

 

•                  therisk that we incorrectly analyze these risks and forces, or that the strategieswe develop to address them could be unsuccessful.

 

All forward-looking statements, including withoutlimitation, management’s examination of historical operating trends, are basedupon our current expectations and various assumptions. Our expectations,beliefs and projections are expressed in good faith and we believe there is areasonable basis for them, but there can be no assurance that management’sexpectations, beliefs and projections will result or be achieved. Allforward-looking statements apply only as of the date made. Unless required bylaw, we undertake no obligation to update or revise forward-looking statementsto reflect events or circumstances after the date made or to reflect theoccurrence of unanticipated events.

 

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# **PART I**

#  

## **ITEM 1.**                       BUSINESS

## ** **

**OurCompany**

 

We are the largest single site recreational vehicle (“RV”)retailer in the world. In 2004, we sold 7,908 new and pre-owned RVs in theretail market, including Class A motorhomes, Class C motorhomes,conventional trailers and fifth-wheel trailers. Class A motorhomes are thehighest priced and fastest growing product segment of the RV industry andrepresented 85% of our 2004 new RV revenues, which was far in excess of theindustry average of approximately 50% in 2003. We also generate revenue fromcommissions earned on vehicle financing and insurance products we sell onbehalf of third-party providers, from the service, maintenance and repair ofRVs, from daily fees paid by customers who utilize our RallyPark campgroundfacilities and rental revenue from our 2004 rental program. We operate on a126-acre site near Tampa, Florida that attracts more than 250,000 visitorsannually. We generated 2004 revenues of $799.7 million.

 

One of our primary strategies is to create “Customersfor Life” by offering a unique purchasing experience that combines the largestsingle site RV inventory in the world, our one of a kind scenic facility withmultiple amenities and our focused, process oriented approach to servicing thecustomer. Building a welcoming atmosphere that caters to the RV enthusiastcommunity is an intangible element critical to our success, and our philosophyis thoroughly ingrained in and continually reinforced throughout our corporateculture at every level. Our unique customer focused business model has resultedin a loyal, stable and growing customer base and an unrivaled reputation withinthe RV community. Our ability to generate a majority of our annual unit salesfrom repeat business and word-of-mouth referrals is testimony to the success ofthis approach. We generated 25% and 28% of our 2004 unit sales from repeat andreferral customers, respectively.

 

To enhance our customers’ RV experience, we havedeveloped our facilities with their needs in mind and as a result our site hasbecome a destination location for RV owners throughout the United States,Mexico and Canada. Our facilities feature a number of unique attractionsincluding a 1,200-site outdoor showspace of new and pre-owned RVs, a 230-bay RVservicing facility with a 6,600 sq. ft. Customer Service Pavilion that includesa professional full-time concierge station, complimentary Starbucks coffeeconcession, luxurious seating areas, flat screen televisions and wirelessinternet connections.  At our 299-siteRallyPark, we hold over 100 rallies each year and provide our visitors theopportunity to meet and spend time with other RV enthusiasts. In addition,visitors to our site can enjoy complimentary meals at our new Italian styleCafé (formerly Festival Hall) or visit our recently completed Learning Centerfor complimentary seminars.  Customerswho have purchased a high-end Class A motorhome enjoy the exclusiveservices and amenities of our CrownClub facility.  Finally, there are additional attractionslocated adjacent to our facilities that appeal to RV owners including a CampingWorld retailer, a Flying J Travel Plaza and a Cracker Barrel restaurant.These features and our customer focused philosophy cater to the RV enthusiastcommunity and have allowed us to attract potential RV purchasers from acrossthe United States.  In 2004, 42% of ourunit sales were to customers that reside outside the state of Florida.

 

**IndustryOverview**

 

The RV industry has been growing for many years and ispositioned to benefit from continued growth as a result of favorable productmix and U.S. demographic trends. New RV sales in the U.S. were approximately$12 billion in 2003 and have grown at a 10.6% compound annual rate from1980 to 2003. We estimate that annual sales in the U.S. of pre-owned RVsthrough dealers are approximately $14 billion, resulting in aggregate U.S.annual sales for new and pre-owned RVs of approximately $26 billion. Thegrowth in the sale of new Class A motorhomes has outpaced overall RVrevenue growth, accounting for 50% of 2003 new RV revenues compared to 41% in1992, with the average retail price of Class A motorhomes increasing from$64,026 in 1992 to $143,834 in 2003. The growth in industry sales, themigration toward Class A motorhomes with added amenities and the retailprice increases of those products has been driven by the increasing popularityof RVs among consumers and consumer preferences for luxury products.

 

Favorable demographic trends, in particular the agingof the “baby boomers,” indicate that RV ownership should increase during thenext 10 years. Overall RV ownership rates in the U.S. have historicallybeen highest in 

 

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the 55-64 year-old age group, which is expectedto grow 39.0% from 2002 to 2010, compared to total population growth of 11.4%for the same period.

 

**CompetitiveStrengths**

 

•                                          *Unique Business Model and Customer Focus.*  Our business model was developed to serve ourcustomers and create “Customers for Life.” An RV purchase is often one of ourcustomers’ most significant purchase decisions and one that we strive to makeenjoyable. Our philosophy provides for a unique customer experience to ensuresatisfaction and generate loyalty. Additionally, we offer numerous amenities tovisitors and customers at our site whether or not they are actively seeking anRV purchase. We believe our unique business model has allowed Lazydays tobecome a destination site for RV enthusiasts and RV purchasers.

 

•                                          *Process Driven Sales Organization.*  We have a talented and experienced salesorganization with approximately 160 sales professionals. Our sales professionalsbenefit from at least one hour of training each business day on specificproduct features and selling techniques. Our sales professionals’ compensationstructure is 100% commission based and is driven by profit achievement andcustomer satisfaction ratings. Each salesperson follows a carefully scriptedprocess which we have developed over time. Our sales process begins with acustomer interview to determine which products will appeal to the customer. Thesalesperson then escorts the customer through the product selection process bytouring our facilities and focusing the customer on three to five specificmodels the sales person determined best meets the customer’s needs. Once aselection is made, the salesperson coordinates with the desk manager to valuethe customer’s trade-in, if applicable, and determine the sales price. Wecontact each customer, on average, eight times within the first twelve monthsfollowing their purchase to ensure satisfaction and create customer loyalty. In2004, $737.5 million of our revenues were generated from sales of new andpre-owned RVs.

 

•                                          *Finance and Insurance Product Sales.*  Upon completion of the sale negotiation, thecustomer is escorted to a business manager who documents the purchase andoffers third-party financing, insurance and warranty products. In 2004,approximately 57% of our customers obtained their vehicle financing throughLazydays, the interest on which is often tax deductible as a person’s primaryor secondary residence. We arrange financing from eleven lending institutionsand offer insurance products from seven insurance underwriters.  In 2004, $22.3 million of our revenueswere generated from commissions on third-party finance and insurance products.

 

•                                          *Value-Added Customer Benefits and Customer Dedication.*  We provide each of our customerscomplimentary benefits with an RV purchase that we estimate have an aggregatevalue of over $8,000. Our delivery team performs a 130-point inspection ofevery motorhome and a 100-point inspection for every towable vehicle. We alsoprovide our customers with an optional driver confidence course, assistance inregistering and obtaining title for their RV, a complimentary one yearmembership in various RV clubs and campgrounds and discounts at retailersfrequented by RV enthusiasts.

 

•                                          *Marketing.* The most important component of our marketing effort is word-of-mouthmarketing among our customers and other RV enthusiasts. We actively fosterreferrals among our customers and acknowledge their efforts on our “Wall ofHonor,” which prominently displays the names of our customers who generate fouror more referral deliveries. We target multiple direct marketing efforts atprospective buyers utilizing our proprietary database of 450,000 current andpotential RVers in order to drive in-person visits and telephone contacts.These include our bi-monthly “Venture” RV catalog, which provides photographsand descriptions of our inventory and our quarterly “Rally Times” newsletter,which describes upcoming rallies sponsored by us at our RallyPark. In addition,we have a print advertising campaign in camping and RV magazines.  In 2005 we will discontinue “Venture” and “RallyTimes” and launch Lazydays *RVLiving*magazine. The magazine will be published every two months and will target the fastestgrowing segment of RV owners and aspirants – the baby boomer generation.  Our largest source of customer traffic is ourwebsite, www.lazydays.com, which features real-time displays of our inventoryupdated automatically every 10 minutes and offers customers an opportunity tobrowse our current product selection. These multi-faceted marketing initiativesgenerate significant customer traffic.

 

•                                          *The Café* (Formerly FestivalHall)*.* The Italian styleCafé is located in our main dealership building and serves over 300,000complimentary meals to customers and visitors each year, including customersvisiting our 

 

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facilities for service and repair, sales prospects and RallyParkguests. Importantly, the layout of our site requires our RallyPark guests totraverse our product selection in order to reach the Café . As a result,potential customers often approach sales representatives before or after themeal service to inquire about our products.

 

•                                          *CrownClub.* Our CrownClub facility opened in December 2003 as an additionalexclusive benefit to our customers who purchase a high-end (approximately$250,000 and above) Class A motorhome. CrownClub qualifying new andpre-owned unit purchasers receive membership privileges which we believe helpmotivate our customers to trade-in on a more frequent basis.  CrownClub membership offers access to 40premier service bays and a 17,000 square foot clubhouse, including a lounge,grill room, library, business center and swimming pool. CrownClub members enjoycomplimentary upscale meals and our full service bar. Members also receiveother amenities such as an exterior wash upon service completion, invitationsto CrownClub rallies held at exclusive RV resorts throughout the U.S., RallyParkcertificates and free nights at selected premium Outdoor Resorts campgrounds.As of December 31, 2004, we had more than 3,314 CrownClub members, includingcustomers who purchased qualifying RVs in the three years preceding the openingof the CrownClub facility.

 

•                                          *RallyPark.* RallyPark is a 299-site RV campground located at the Lazydays facility.Each site offers wireless internet access, utilities, cable TV and a morningnewspaper. More than 100 rallies are held at RallyPark each year and we believeRallyPark is the preferred rally site for many national, regional and state RVclubs. Our 12,000 square foot climate-controlled RallyCenter can accommodate upto 600 people and is utilized for dinners, meetings, award ceremonies and liveentertainment. We also offer a screened and heated swimming pool and jacuzzi,tennis courts, horseshoe pits and shuffleboard lanes for our guests. In 2004,$1.3 million of our revenues were generated from fees charged to RallyParkguests.

 

•                                          *Quality Service and Repair Programs.*  We have a 230-bay servicing area including 40premier CrownClub bays and what we believe is the largest RV collision repaircenter in the U.S. We also offer other special services that are performed inour cabinet shop, chassis shop, windshield repair shop and upholstery shop. Ourstaff is highly qualified and has over 80 of an estimated 250 RVIA/RVDACertified and Master Certified technicians in the state of Florida. We have anextensive parts inventory which, as of December 31, 2004, was approximately$ 1.5 million and we have access to many hard-to-find parts. In 2004,$38.6 million of our revenues were generated from service and repair.

 

•                                          *Premier Customer Profile.*  Our business model allows us to seek andmaintain “Customers for Life.” Our target customers are RV enthusiasts who webelieve represent the substantial majority of our customer base and differ fromrecreational RV consumers in that they are seeking a lifestyle centered aroundthe RV. RV enthusiasts are typically financially secure couples in the55-74 year-old age group who are seeking an RV lifestyle that involvesfrequent travel, substantial time living in their RV and the opportunity forinteraction with other RV enthusiasts. Approximately 70% of our customers seekto trade-in an RV, and many of our RV enthusiast customers are purchasing theirthird or fourth RV and may use their RV as their primary residence.  We are intently focused on improving thelikelihood that when an RV enthusiast does purchase an RV they purchase it fromLazydays. Our continuing success in this endeavor was demonstrated by the 25%of our unit sales which were generated from repeat customers in 2004. Ourcustomers generally purchase RVs at higher price points, as evidenced by ouraverage purchase price for retail sales of $88,089 in 2004 compared to anindustry average of approximately $37,500 in 2004. We also believe our name andreputation are being disseminated to other RV enthusiasts within this communityand in 2004, 28% of our unit sales were to referral customers.

 

•                                          *Economies of Scale.*  We are approximately one hundred times largerthan the average RV retailer and we believe that we generate approximatelythree times the revenue of the next largest single-site dealership. We offerover 165 distinct new RV models, including Class A motorhomes,Class C motorhomes, conventional trailers and fifth-wheel trailers, whichwe believe is the broadest product offering at any single site retailer. Our1,200-site outdoor showspace includes new products from leading manufacturers,including Monaco Coach Corporation, Fleetwood Enterprises, Inc., WinnebagoIndustries, Inc., Carriage, Inc., Thor Industries, Inc.,National RV Holdings, Inc., Coachmen Industries, Inc., Glendale RVandTiffin Motorhomes, Inc. We attract potential RV purchasers from across theUnited States, as evidenced by the 54% of our Class A unit sales in 2004made to customers that reside outside the 

 

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stateof Florida. Our scale also allows us to provide one-stop shopping for ourcustomers by offering competitive third-party financing, insurance and warrantyproducts. Approximately 70% of our customers seek to trade-in an RV whichprovides us with a consistent supply of pre-owned vehicles to offer our customers.Finally, the wholesale network of over 1,500 dealers that we have developedsince 1994 provides us with a reliable system for managing our pre-ownedinventory and allows us to accept and accurately value customer trade-ins.

 

•                                          *Favorable Relationships with Manufacturers.*  We believe our supplier relationships areexcellent. In 2004, we were the largest retailer for five of the ninemanufacturers represented by our new RV product offering. Our product offeringof Class A motorhomes represents manufacturers that command a 69% share ofthe U.S. Class A market. The manufacturers we represent have over 26full-time sales and service representatives stationed at our site to educateour sales force, assist customers in their purchase decision and assist inservicing vehicles. We have favorable multi-year contracts which provideexclusive geographical distribution rights for many manufacturers’ products,ranging from the Tampa, Florida area to the southeastern United States.  We have maintained long-term relationshipswith these manufacturers across various levels within each organization,ranging from frequent management contacts to manufacturer production personnelvisiting our facilities to assist in delivering RVs and addressing qualityissues.

 

•                                          *Experienced Management Team.*  We are led by an experienced management teamwith our top seven managers having an aggregate 110 years of experience inthe RV industry and an average tenure of 14 years at Lazydays. DonWallace, our Chief Executive Officer, founded Lazydays in 1976 with his fatherand brother. Mr. Wallace was recognized as the 1993 RV Industry Executiveof the Year by RV News. Chuck Thibault, our Chief Financial Officer, joined ourCompany in 1980. John Horton, our Chief Operating Officer, joined us in 2001after holding numerous managerial positions in several industries.

 

**BusinessStrategy**

 

Ourprincipal business strategies include the following:

 

•                                          *Maintain High Levels of Customer Service.*  Our business is differentiated from otherretailers due to our customer focus. We believe customer satisfaction iscritical to our continued growth and profitability. Over the past eight years,we have transformed our business from a large RV retailer into an RV enthusiastdestination site through the development of our sales and service processes andour one of a kind facilities including, most recently, the addition of ourCustomer Service Pavilion, Café and Learning Center and remodeling of our salesoffices. We intend to continue to upgrade and enhance our facilities and to addadditional site amenities to increase customer satisfaction. We believe thatour customer-centric business strategy will continue to attract visitors andallow us to grow our RV enthusiast customer base.

 

•                                          *Favorable Demographics.*  We believe the aging of the “baby boomer”generation will result in substantial increases in RV sales over the next5-10 years. Overall RV ownership rates have historically been highest inthe 55-64 year-old age group with penetration rates of approximately 14%.This age group is expected to grow 39% from 2002 to 2010. Our management teambelieves our existing 126-acre site can accommodate a 45% increase in annual RVdeliveries and we plan to continue to expand our product offering to includeadditional manufacturers’ product lines as dictated by customer preferences.

 

•                                          *Generate and Convert Sales Opportunities.*  We continually seek to increase the number ofsales prospects through creative marketing initiatives including effectivelyutilizing and enhancing our destination location appeal, our proprietarydatabase and website. We employ systems that continually monitor and improvenearly all of our customer interactions and all facets of our sales processesin order to increase the rate at which we convert these sales leads into RVpurchases. In 2004, approximately 21% of the over 36,000 prospective customerswho actively pursued an RV purchase from us actually purchased an RV. Thisrepresents a 24% increase over our conversion rate in 2000, which evidences ourcontinued focus on improving our conversion rate. To that end, we will continueto work to improve our customer focused model by having daily training sessionswith our sales force to improve sales techniques and product knowledge,ensuring that a consistent message is delivered to our customers. We will alsocontinue to focus on high-margin sales opportunities, including Class Amotorhome sales and sales of finance, insurance and warranty products.

 

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**Products**

 

*Overview*

 

RVs can be categorized into two vehicle segments:motorhomes and towables. Motorhomes are self-contained and are built on a motorvehicle chassis. They are designed to provide a mobile living environment forrecreational, travel, or camping use. Towables are also self-contained, wheeledunits designed to be towed by a motorized vehicle and are generally lessexpensive and smaller than motorhomes.

 

*NewVehicles*

 

*Motorhomes*

 

*Class A.*  Class A motor homes are the largest andmost luxurious motorhomes. These motor homes are built on specially designedchassis and often are outfitted with amenities such as washers/dryers, securitysystems, TVs, DVD players, satellite dishes and hydraulic leveling systems.Newer Class A motor homes are generally equipped with multiple “slide-outs,”which allow the owner to extend the exterior walls of the RV when parked todramatically enlarge the interior space. These motor homes range in length from21 to 45 feet and sell for between $50,000 and over $1 million and represented85% of our 2004 new vehicle revenues.

 

Diesel-poweredClass A motorhomes, including high line and standard diesel-motor homes,are large and luxurious vehicles with a price range of $100,000 to more than$1 million. The diesel engines of these RVs provide numerous advantagesover gas engines, including greater horsepower, increased fuel mileage andlonger life.  High line diesel vehiclesare premium Class A motorhomes with diesel engines and premier livingfacilities and amenities. The high line vehicles are typically priced above$250,000. Standard diesel vehicles have similar engines to high linemotorhomes, but generally contain fewer amenities and are priced at a lowerpoint.

 

Gas-poweredClass A motorhomes are considered entry-level Class A motorhomes andare priced from $50,000 to $110,000. Class A gas products appeal primarilyto the part time RVer who is looking to enjoy the RV experience at anaffordable price. Built on a less robust chassis than diesel products, gasmotor homes tend to offer less carrying capacity and a slightly rougher ridethan diesels. Interior comfort is not sacrificed, however, as Class A gasproducts are available with all the high end amenities including multipleslide-outs, luxurious furnishings, flat screen TVs and satellite antennas.

 

*Class C.*  Class C motorhomes, also known as “mini-motorhomes,” are constructed on an automotive manufactured van frame with anattached cab segment.  Similar toClass A motor homes, these RVs, which range in length from 20 to 32 feet,offer full kitchen, sleeping and dining facilities and are increasinglyfeaturing “slide-outs.” Class C motorhomes sell for between $40,000 and$125,000 and represented 4% of our 2004 new vehicle revenues.

 

*Towables*

 

*Conventional.*  Conventional travel trailers range in lengthfrom 12 to 35 feet and generally include all of the facilities found in amotorhome. As with all towables, an advantage of a conventional travel traileris that it can be detached from a car, pickup truck, or van at the destination,thus making the towing vehicle available for other uses. In addition,six-cylinder engine cars are now capable of towing the newer, lightweighttravel trailer models. New travel trailers, most of which can sleep up to eightpeople, are priced between $9,000 and $76,000 and represented 3% of our 2004new vehicle revenues.

 

*Fifth Wheel.*  Fifth-wheel travel trailers, which range inlength from 21 to 40 feet, are similar to conventional travel trailers in termsof size and amenities, but the two differ in their methods of attachment to thetowing vehicle. While a conventional travel trailer is designed to be mountedon a standard car, truck, or van hitch, a fifth-wheel travel trailer isattached to a pickup truck by a special hitch connected to the truck bed. Thisdesign 

 

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provides greater maneuverability and reduces theoverall length of the combined vehicles. Fifth-wheel travel trailers sell forbetween $12,000 and $100,000 and represented 6% of our 2004 new vehiclerevenues.

 

***Trailer Rental Program forTemporary Housing***

 

As a result of the activeFlorida hurricane season in 2004, we developed a rental program which targeteddisplaced hurricane victims in need of temporary housing.  In 2004, 682 conventional travel trailerswere rented. Rental terms ranged from three to six months with extended termsavailable. Rental revenue totaled $3.4 million in 2004.  We expect to wind down this program in2006.

 

*Pre-OwnedVehicles*

 

Sales of pre-owned RVs contributed 33% of our revenuesduring 2004. With approximately 70% of our customers providing a trade-in RV,we benefit from a steady, high quality flow of available pre-owned inventory.We sell our pre-owned vehicles to both retail customers and, on a wholesalebasis, a network of RV and automotive dealers. Retail customers purchasepre-owned vehicles because they can get a high quality vehicle at a lowerprice. We enhance the value of pre-owned vehicles by fully servicing thembefore offering them for resale.

 

Our practice of wholesaling RVs to other dealersallows us to manage our pre-owned vehicle inventory optimally and limit ourrisk of carrying pre-owned vehicles for extended time periods. With access toover 1,500 dealers, we can offer higher values for trade-ins and mitigate ourtrade-in risk by selling slow-moving pre-owned RVs through this large dealernetwork.

 

The sales of all categories of pre-owned inventorythrough our wholesale network represented 12% of total pre-owned vehiclerevenues in 2004. Of our total pre-owned vehicle revenues in 2004, retail salesof pre-owned Class A motorhomes represented approximately 76%, retailsales of Class C pre-owned motorhomes represented 6% and retail sales ofpre-owned fifth wheel and conventional towables and other miscellaneousvehicles represented the remaining 7%.

 

**Serviceand Repair**

 

We operate 230 service bays, providing on site generalRV maintenance and repair work to customers. The service and repair departmentis divided into two areas: the “make ready” process for deliveries of recentlypurchased new and pre-owned retail units and post-delivery service. We alsomaintain a body shop, cabinet shop, chassis shop and windshield repair shopwith highly skilled, RVIA/ RVDA-certified technicians and specialized equipmentand facilities. In addition to preparing several thousand RVs for delivery tocustomers each year, our service and repair operations provide general RVmaintenance and repair services and manufacturer paid work performed underwarranty to approximately 12,000 customers annually. Furthermore, with$1.5 million of parts and accessories inventory, in addition to a fullystocked onsite Camping World store, Lazydays provides new and pre-owned RVbuyers the option of dealer installed accessories, such as tow hitches,satellite dishes and specialized suspension systems that can be included ineach buyer’s financing. Lazydays’ average service and repair customer spendsapproximately $1,300 per visit.

 

Our service and repair department, which generated$38.6 million of revenue in 2004. We frequently welcome customers whotravel from across the country to have their vehicles serviced by our team ofservice and repair professionals. As a result, the service and repairdepartment serves as a means of attracting potential customers to the Lazydaysfacilities and offers greater additional sales opportunities for us.

 

**Financingand Related Services**

 

We provide assistance to customers in arrangingfinancing for their RV purchases through a variety of lenders. Revenues fromfinancing, warranty and extended warranty products and related services haveincreased from $14.8 million in 1999 to $22.3 million in 2004.

 

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*Financing*

 

Lazydays generates commission based revenue from itsfinancing services by placing the loans with one of eleven independent lendinginstitutions. The interest on these loans is often deductible to our customersas a mortgage for tax purposes for a primary or secondary residence. During2004, approximately 57% of our customers obtained their vehicle financingthrough Lazydays. By leveraging the volume of our financing customers, we areable to negotiate favorable rates for our customers with third-party lenders.Financing fee based revenues represented approximately 67% of 2004 financingand related services revenue.

 

*Insurance and Extended Warranties*

 

We offer extended warranties and various insuranceproducts for new and pre-owned RVs. As with our financing related products, weare paid a fee for placing the warranty or insurance product with one of sevendifferent insurance underwriters. Approximately 44% of our customers purchasedextended warranties during 2004, and we offer other insurance products,including tire, life and physical damage insurance. Together, revenue frominsurance and warranties represented approximately 33% of our 2004 financingand related services revenue.

 

**RallyParkand Related Services**

 

RallyPark is our full service RV campground thatincludes a 12,000 sq. it recreation hall, screened-in heated pool and Jacuzzi,computer room and commercial kitchen facilities and exists primarily to attractvisitors to Lazydays and enhance their overall experience.  Our RallyPark attracts over 60,000 visitorseach year and has 299 full hook-up sites which provide utilities, wirelessinternet access, cable TV and a morning newspaper.

 

More than 100 rallies were held at RallyPark in 2004,with many sponsored by us as a marketing promotion tool to create additionalcustomer traffic. We also prominently display marketing and promotionalmaterials throughout the park. All park guests are invited to the Café in themain building for complimentary breakfast and lunch with a shuttle servicerunning frequently between the park and the dealership. Our 12,000 square footclimate-controlled RallyCenter can accommodate up to 600 people and is utilizedfor dinners, meetings, award ceremonies and live entertainment. RallyParkrepresents an important and successful marketing tool for us and our RallyParkguests contributed $11.2 million to our 2004 vehicle revenues, in additionto $1.3 million in fees generated from RallyPark visitors.

 

**ServedMarkets**

 

We generated approximately 58% of our retaildeliveries from Florida residents in 2004, the third largest RV buying state inthe United States, and we are by far the dominant player in the Florida marketwith a 37% share of Class A motorhome unit sales in 2004. While Florida isLazydays’ primary market, we have experienced great success penetrating othermarkets, with unit sales to residents outside the state of Florida reaching 42%of our retail deliveries in 2004.  OurU.S. market share in Class A motorhome unit sales in 2004 wasapproximately 6%, and represents a substantial opportunity for further marketpenetration and expansion for us.

 

**TargetCustomer**

 

We estimate that approximately 80-90% of our customershave previously owned an RV. These customers have adopted the RV lifestyle anddo not generally view RVs as luxury or recreational items, as the broadermarket may view them. Accordingly, for many of our customers, the RV representsa necessary purchase that will occur periodically as the time comes to trade inand upgrade the vehicle.

 

Consistent with their RV enthusiast lifestyle,Lazydays customers are frequently repeat purchasers. Management estimates thatLazydays’ average customer owns his or her RV three to four years beforetrading it in, compared to an estimated industry average of approximately sevenyears. In 2004, 25% of the vehicles we sold were to repeat customers,representing $203 million in revenues. In addition, the RV lifestyle includes frequent social interactionbetween RVers that creates an environment in which word-of-mouth marketingbecomes a powerful tool. The loyalty of the Lazydays customer is perhapsdemonstrated by the fact that referral customers represented 28% of our totalcustomers and generated approximately $191 million in revenue in 2004.

 

10

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While our typical customers are in their mid-sixties,we have an increasing number of customers in their mid-40s with youngchildren.  RV ownership provides thisyounger customer group access to relatively safe and economical vacation andtravel alternatives. While this younger demographic is currently a smallportion of the RV buying group, management believes its growing interest in RVsdemonstrates the broadening appeal of RVs in general and represents anopportunity for us to penetrate a greater portion of the population.

 

**SalesOverview**

 

The entire Lazydays culture is built on the salesphilosophy of making “Customers for Life.” All Lazydays employees are committedto providing premier customer service and developing a relationship with thecustomer that ensures that he or she will return to Lazydays for all future RVpurchases and service needs. This culture is evident in the way each customeris greeted by every employee with the phrase, “Welcome to Lazydays.” Thoughingrained deeply in all facets of the business, the Lazydays culture is mostreadily apparent to customers in their interaction with our sales force.

 

Our direct sales organization is comprised of eightsales managers who oversee approximately 160 salespeople, as well as managersthat oversee other aspects of the sales process, such as Internet, telephoneand wholesale sales, pricing and the appraisal of trade-in units. Each salesmanager is responsible for a team of 20 to 24 salespeople and is compensatedbased on team and Company performance goals. Additionally, each sales manageradministers a relationship with a manufacturer by understanding new productsand monitoring inventory levels.

 

Our salespeople are divided into three levels based oncustomer satisfaction and sales performance. Our sales professionals’compensation structure is 100% commission based and is driven by profitachievement and customer satisfaction ratings. In 2004, our compensation peryear per salesperson averaged approximately $90,000 and annual compensation wasas high as $220,000, which we believe is significantly higher than at otherdealerships in the country , thus allowing us to attract and retain a highquality sales force. Because of the opportunities offered to our salespeople,we have historically maintained low turnover within our sales staff.

 

**SalesOrganization**

 

Our sales team has consistently improved its successin converting sales opportunities into RV deliveries over the years, asmanagement continuously refines the sales process. From 2000 to 2004, weimproved our delivery ratio (the number of sales divided by the number of salesopportunities or “ups”) from 16.9% to20.8%. Through the ongoing development ofthe sales process and training of personnel, management believes its salesforce’s productivity will continue to improve.

 

Our success in developing and maintaining a productivesales force is a function of our ability to execute our “Customers for Life”sales philosophy. We have identified and outlined a number of important tenetsthat embody this philosophy and provide a blueprint for the operation of thesales organization. At a high level, these include our keys to building a greatcompany, such as “find and keep great people” and “be easy to do business with.”The importance of premier customer service is emphasized through our GoldenRule of Customer Service, the Ten Rules of Customer Service and the ThirteenKeys to Being the Best at Customer Service. These rules are reinforced everyweek through sales training sessions and ensure that salespeople execute oursales philosophy. This philosophy defines our culture, which is built around afocus on the needs and wants of the customer, a constant pursuit of premiercustomer service and the consistent execution of a proven sales system. Theembodiment of this philosophy is the greeting of “Welcome to Lazydays,” thateach employee delivers to each and every customer.

 

We strive to ensure that our sales personnel areconsistent in their approach to the customer and in their application of thesetenets through extensive training. Each salesperson must complete an initialone-week customer service and sales process training program. Thereafter, allsalespeople are required to attend daily one-hour product and selling skillstraining sessions. The emphasis on continuous training ensures that sales personnelare knowledgeable in their representation of the products and skilled in theirapproach to the customer.

 

**MarketingOverview**

 

Lazydays attracted over 250,000 visitors to itscomplex and generated over 36,000 sales opportunities in 2004. This traffic isgenerated through a comprehensive program that includes referrals, direct mail,television and 

 

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print advertising, rallies and trade shows, marketingpartners and the Lazydays website. All of our marketing work, including thedevelopment of strategies and concepts, the maintenance of the customerdatabase and the design and layout of advertisements, is performed in-house,with the exception of high volume printing and television production. Byperforming the majority of our marketing functions internally, we are able tomanage our marketing cost effectively. We spent $4.8 million on ourmarketing efforts in 2004, or 0.6% of total revenues, a level that isconsistent with historical expenditures as a percentage of revenues.

 

*Referrals*

 

In 2004, 28% of total deliveries were made on acustomer referral basis, generating $191 million in revenues. Customerreferrals are our most productive and inexpensive advertising source. Theintroduction of the Lazydays Friends & Family Program inJuly 1997 served as a catalyst for referral based business.Friends & Family based referrals accounted for 44% of the referral-basedrevenue in 2004, or approximately $84 million. The program promotesreferral activity by rewarding customer loyalty and referral business withawards and recognition for each referral that leads to a sale. As customersmake new, qualified referrals, they receive rewards, such as complimentarystays at RallyPark for Friends & Family rallies, award certificatesand entries in drawings for cash prizes. In addition, based on their number ofreferrals, Friends & Family members have their names prominentlydisplayed on plaques along the Wall of Honor in the lobby of the maindealership building.

 

*Direct Mail, Print and Television*

 

We manage a proprietary database of approximately450,000 RV owners and potential owners to maintain regular mail-based contactwith existing and potential customers. We have used direct mail marketing forthe past nine years, we advertise in numerous industry publications and, on alimited basis, through local television. In 2004, direct mail, print andtelevision generated 7% of total deliveries and represented approximately$46 million of revenues.

 

We design our own direct mail marketing materialsin-house and have millions of postcards, posters, brochures and mailersprinted each year to generate interest in our RVs. Our largest publication isour bi-monthly Venture catalog, which showcases RVs for sale at Lazydays andhas an annual circulation of approximately 2.1 million. In addition, weseasonally publish Rally Times, in which we outline upcoming events atRallyPark with an annual circulation of approximately 0.5 million.  In 2005 we will discontinue “Venture” and “RallyTimes” and launch Lazydays *RVLiving*magazine. The magazine will be published every two months and will target thefastest growing segment of RV owners and aspirants – the baby boomergeneration.  We also send over1 million large format postcards and personalized notes each year for avariety of occasions, including the anniversary of an RV purchase, to maintainstrong customer goodwill.

 

*Internet Website*

 

The Lazydays website is a user-friendly marketing andinformational tool. We believe our web site offers the only real-time inventorysite in the industry, allowing customers to view new and pre-owned RV photosand specifications within minutes after the vehicle becomes available for sale.Users can search for available RVs by make and model, as well as learn moreabout the numerous value added benefits offered by us. Users have the abilityto purchase our RVs without visiting our facility by learning about productsonline and by calling or emailing Lazydays to further their inquiry.Additionally, users can obtain an estimate of the value of their trade-insprior to arriving at Lazydays. In 2004, the Internet and Lazydays’ web sitegenerated 19% of total deliveries and represented approximately$139 million in revenues.

 

*Rallies and Trade Shows*

 

Rallies and trade shows serve as an ideal opportunityto market Lazydays to concentrated groups of RV enthusiasts. Hundreds ofrallies and trade shows take place throughout the U.S. each year. Lazydaysattends approximately 50 off-site rallies each year. We send sales representativesand a selection of RVs to the rallies and trade shows to promote products,answer questions and build excitement around the dealership. In 2004,attendance at RV rallies and trade shows generated 2% of our total deliveriesand represented $29 million of revenues.

 

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In addition, approximately 100 RV rallies are heldeach year at RallyPark in which we can exclusively display and promote ourproducts and value-added benefits. These onsite rallies and RallyPark guestsgenerated vehicle revenues of approximately $11.2 million in 2004.

 

**MarketingPartners**

 

We have developed joint-marketing relationships withvarious companies that are involved directly or indirectly in the RV industry.For instance, we have a relationship with RV accessory and camping supplyretailer Camping World, which has a store next to Lazydays and benefits from asteady flow of prospective customers as a result of the location. Similarly,Lazydays and other business partners benefit one another by offeringcomplimentary products and services.

 

Thefollowing chart lists our primary marketing partners:

 

**Marketing Partners**

 
| **Partner**                            | ** ** | **Description**                                                    |
|----------------------------------------|------------|--------------------------------------------------------------------|
|                                   |       |                                                               |
| Camping  World, Inc.              |       | Retailer of RV accessories                                         |
| Thousand  Trails, Inc.            |       | Manager of membership campgrounds                                  |
| Family Motor  Coach Association        |       | RV owners club                                                     |
| Outdoor Resorts  of America, Inc. |       | Luxury RV parks                                                    |
| Workhouse Custom  Chassis LLC          |       | Manufacturer of heavy duty custom chassis |
| Spartan  Chassis, Inc.            |       | Manufacturer of heavy duty custom chassis                          |

 

**Suppliers**

 

Over the course of our operating history, we havedeveloped strong relationships with the industry’s leading RV manufacturers. Weare supplied primarily by nine major RV manufacturers that rely on us as aprimary point of distribution.

 

For most product lines and manufacturers, we are theleading dealership in terms of sales volume. Manufacturers are highly dependenton us for their Florida sales, an important territory for the RV industry. In2004, we were responsible for 56% of our suppliers’ total Florida Class ARV sales. We have won numerous supplier awards for our excellence in sales andservice, including Fleetwood’s Circle of Excellence Award eight times andWinnebago’s Circle of Excellence Award every year (18 times) since theaward’s inception.

 

We have negotiated favorable long term dealeragreements and reasonable sales goals. Dealer agreements provide exclusivesales rights for manufacturers’ products over extended geographic regionsranging from the local Tampa area to the southeastern United States. Inaddition, we believe our size and market presence ensure that we have toppriority with our suppliers and a consistent supply of RVs, even during timesof production shortages.

 

Importantly, our RV suppliers also support our abilityto carry an extensive inventory of vehicles by providing a backstop to ourfloor plan financing. The manufacturers have an agreement with our floor planlenders to repurchase unsold inventory at a value of up to 100% of the originalcost of the vehicles under certain circumstances.

 

We also have the benefit of over 26 onsitemanufacturer representatives from the major RV manufacturers, depending on theseason. Manufacturer sales representatives will answer customer inquiriesspecific to their products, lend credibility to Lazydays’ operations and assistin the sale of products and training of salespeople, keeping us informed of newproduct innovations and fostering strong relationships with the manufacturers.

 

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**WholesaleVehicle Network**

 

Approximately 70% of our RV purchases (new andpre-owned) are accompanied by a trade-in. The large number of pre-ownedtrade-ins that we receive assures us of a steady supply of high qualitypre-owned vehicles. We believe that we are able to pay more for pre-owned RVsthan our competition because of our scale. Our steady supply of customers,coupled with our access to a proprietary network of more than 1,500 dealers,helped make us the top single-site pre-owned RV dealership in the U.S.  Additionally, the wholesale network allows usto optimize our inventory carrying levels by disposing of old or unwantedtrade-ins through this channel.

 

**ManagementInformation Systems**

 

We employ management information systems that providefor the efficient management of our business operations, thereby reducingoperating costs. The systems integrate our inventory management, salestracking, order processing, financial recording and customer relationshipmanagement tools.

 

The primary enterprise software applications are ADPDealer Management System (“DMS”) and ADP Document Storage and Document Archive(“DSDA”) system.  These programs are theindustry standard and are used by over 16,000 automotive and truck dealershipsin North America and Europe.  The ADPsystems allow us to manage inventory on a real-time basis, measure and analyzesales productivity data such as closing and delivery rates and administer thepayables and receivables process.  Thesecapabilities generate cost savings for us by maximizing the efficiency of ouroperations.

 

**Employees**

 

We benefit from a loyal and dedicated non-unionworkforce of 691 full-time and 34 part-time employees as of December 31,2004  and have never experienced a workstoppage. Each of these individuals is critical to sustaining a culture that isunique in the industry. We work to ensure that every employee shares our visionand commitment to customer service and welcomes each visitor with the phrase, “Welcometo Lazydays.”

 

We offer competitive compensation and benefit plans toemployees working more than 30 hours per week. Our benefits include adefined contribution “401(k)” plan with discretionary company matching,medical, dental, pharmacy and vision insurance, short-term and long-termdisability and life insurance, a pre-tax premium payment plan with flexiblespending accounts and vacation up to three weeks after seven years ofemployment.

 

We have never experienced any significant laborshortages nor had any difficulty in obtaining adequate replacements fordeparting employees. We consider our relations with our employees to be good.

 

**IntellectualProperty**

 

We have registered, and are in the process ofregistering, various trademarks and service marks with the U.S. Patent andTrademark Office, including “Lazy Days RV Supercenter,” “Tire Re-Nu,” “CrownClub” and “RallyPark.”

 

**GovernmentRegulation**

 

Our operations and business practices are subject toregulation at the federal, state and, in some cases, local levels. State andlocal consumer protection laws and regulations govern our sales, advertising,financing, insurance sales and other trade practices.

 

The adoption of more stringent statutes andregulations, changes in the interpretation of existing statutes and regulationsor our entrance into jurisdictions with more stringent regulatory requirementscould curtail some of our operations. It could also deny us the opportunity tooperate in certain locations or restrict products or services, including termsof finance and insurance products offered by us. Various federal, state andlocal regulatory agencies, including the Occupational Safety and HealthAdministration, the United States Environmental Protection Agency and similarfederal and local agencies, have jurisdiction over the operation of our dealerships,repair facilities and other operations with respect to matters such as consumerprotection, workers’ safety and laws regarding protection of the environment,including air, water and soil. The failure to maintain all requisite licensesand permits and comply with all applicable federal, state and localregulations,  could limit our ability tooperate our business.

 

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As with vehicle dealerships generally, and parts andservice operations in particular, our business involves the use, handling,storage and contracting for recycling or disposal of hazardous or toxicsubstances or wastes, including environmentally sensitive materials, such asmotor oil, waste motor oil and filters, transmission fluid, antifreeze, freon,waste paint and lacquer thinner, batteries, solvents, lubricants, degreasingagents, gasoline, diesel fuels, asbestos containing materials and otherchemicals.

 

Accordingly, we are subject to regulation by federal,state and local authorities establishing requirements for the use, management,handling and disposal of these materials and health and environmental qualitystandards. We are also subject to laws, ordinances and regulations governinginvestigation and remediation of contamination at facilities we operate towhich we send hazardous or toxic substances or wastes for treatment, recyclingor disposal. Noncompliance with or changes to these requirements could limitour ability to operate our business.

 

Our customers and potential customers are subject tofederal, state and local statutes, ordinances and regulations regarding theownership of recreational vehicles. The adoption of more stringent statutes,ordinances and regulations effecting the consumer ownership of recreationalvehicles, could limit our ability to sell our products.

 

**AvailableInformation**

 

The Company files annual reports, quarterly reports,current reports and other information with the Securities and ExchangeCommission. Copies of such materials can be read, copied and obtained from thePublic Reference Room of the Securities and Exchange Commission at 450 FifthStreet, N.W., Washington, D.C. 20549. You may obtain information on theoperation of the Public Reference Room by calling the Securities and ExchangeCommission at 1-800-SEC-0330. You can access the Company’s filingselectronically by visiting the Securities and Exchange Commission’s website athttp://www.sec.gov. In addition, the Company will provide copies of suchfilings free of charge upon request. While any notes remain outstanding, we will make available, uponrequest, to any beneficial owner and any prospective purchaser of notes theinformation required pursuant to Rule 144A(d)(4) under the Securities Actduring any period in which we are not subject to Section 13 or 15 (d) of theExchange Act. Such requests may be made by calling our main number on the coverpage of this report or by writing to the following address: Lazy Days’ R.V.Center, Inc. 6130 Lazy Days Boulevard, Seffner, Florida 33584-2968, Attn: Directorof Corporate Reporting and Investor Relations.

 

## **ITEM 2.**                           PROPERTIES

## ** **

*Leased Properties*

 

We lease our 126-acre facility, located at 6130 LazyDays Boulevard, Seffner, Florida, from I-4 Land Holding Limited Company (“I-4”),an entity controlled by Don Wallace, our Chief Executive Officer, under a leasearrangement, the initial term of which will expire in 2022. The amended leaseentered into on May 14, 2004 included four five-year renewal options,which if exercised would extend the expiration date to 2042.  The annual rent is currently $4,793,880, andwill further increase thereafter based on periodic CPI adjustments. The leaseprovides for equal monthly rental payments and provides that the lessee paysall property taxes and insurance. Rent expense was calculated on astraight-line basis over the life of the lease resulting in deferred rentduring the earlier years of the lease. We are also responsible for maintenancecosts as well as betterments to the facilities.

 

Pursuant to the lease, we currently have a right offirst offer and first refusal on any sale by I-4, as well as an optionexercisable through May 14, 2011 to purchase the land for $42,000,000 (subjectto CPI increases) .

 

We also have two short-term leases on properties thatwe use for off-site RV parking lots during our peak-season.

 

## **ITEM 3.**                           LEGAL PROCEEDINGS

## ** **

We are party to numerous legal proceedings that arisein the ordinary course of our business. We do not believe that the ultimateresolution of these matters will have a material adverse effect on ourbusiness, results of operations, financial condition or cash flows. However,the results of these matters cannot be predicted with certainty and anunfavorable resolution of one or more of these matters could have a materialadverse effect on our business, results of operations, financial conditionand/or cash flows.

 

## **ITEM 4.**                           SUBMISSION OF MATTERSTO A VOTE OF SECURITY HOLDERS

## ** **

None.

 

# **PART II**

#  

## **ITEM 5.**                           MARKET FOR REGISTRANT’SCOMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITYSECURITIES

## ** **

There is no market for our common stock.  As of December 31, 2004, Holdings owns 100%of our capital stock. RV Acquisition owns 100% of Holdings capital stock.Bruckmann, Rosser, Sherrill & Co. II, L.P. held 84.5% 

 

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of RV Acqusition common stock, the balance was held byDon Wallace (10.6%),  management andothers.  See “Security Ownership andCertain Beneficial Owners” in Item 12 of this report.

 

## **ITEM 6.**                       SELECTED FINANCIALDATA

## ** **

Thefollowing table presents selected historical statement of operations data andbalance sheet data as of and for the periods presented. The statement of operationsdata set forth below with respect to fiscal years 2002, 2003 and 2004, and the balancesheet data at December 31, 2003 and December 31, 2004, are derived from, andshould be read in conjuction with, the audited financial statements and relatednotes thereto, which are included elsewhere in this Form 10-K.  The statement of operations data set forthbelow with respect to fiscal years 2000 and 2001, and the balance sheet data atDecember 31, 2000, December 31, 2001 and December 31, 2002, are derived fromaudited financial statements of the Company which are not included in this Form10-K.

 
| ** **                                                          | ** ** | **Year Ended December 31,**                      | ** ** |
|---------------------------------------------------------------------|------------|--------------------------------------------------|------------|
| ** **                                                          | ** ** | **2000**                                         | ** ** | **2001** | ** ** | **2002** | ** ** | **2003** | ** ** | **2004** | ** ** |
| ** **                                                          | ** ** | **($ in thousands, except per share data)** | ** ** |
|                                                                |       |                                             |       |   |   |   |   |   |   |   |   |
| **Statement  of Operations Data:**                                  |       |                                             |       |   |   |   |   |   |   |   |   |
| Revenues:                                                           |       |                                             |       |   |   |   |   |   |   |   |   |
| New vehicles                                                        |       | $                                                | 315,049    |   | $ | 307,871 |   | $ | 384,041 |   | $ | 416,165 |   | $ | 477,442 |   |
| Pre-owned  vehicles                                                 |       | 198,925                                          |       | 207,883 |   | 245,485 |   | 278,592 |   | 260,018 |   |
| Other                                                               |       | 41,668                                           |       | 46,240 |   | 51,601 |   | 60,882 |   | 62,250 |   |
| Total revenues                                                      |       | 555,642                                          |       | 561,994 |   | 681,127 |   | 755,639 |   | 799,710 |   |
| Cost of revenues                                                    |       | 483,419                                          |       | 482,650 |   | 582,159 |   | 646,685 |   | 683,415 |   |
| Gross profit                                                        |       | 72,223                                           |       | 79,344 |   | 98,968 |   | 108,954 |   | 116,295 |   |
| Selling, general  and administrative expenses                       |       | 47,120                                           |       | 49,964 |   | 67,591 |   | 70,027 |   | 80,393 |   |
| Depreciation and  amortization                                      |       | 4,109                                            |       | 4,137 |   | 3,942 |   | 3,238 |   | 9,988 |   |
| Operating profit                                                    |       | 20,994                                           |       | 25,243 |   | 27,435 |   | 35,689 |   | 25,914 |   |
| Floor plan  interest expense                                        |       | 5,269                                            |       | 3,620 |   | 2,970 |   | 2,566 |   | 2,441 |   |
| Other interest  expense                                             |       | 21,452                                           |       | 24,062 |   | 16,267 |   | 3,211 |   | 12,290 |   |
| Income taxes                                                        |       | 400                                              |       | 2,441 |   | 4,493 |   | 4,542 |   | 3,354 |   |
| Net income  (loss)                                                  |       | $                                                | (6,127     | ) | $ | (4,880 | ) | $ | 3,705 |   | $ | 25,370 |   | $ | 7,829 |   |
|                                                                |       |                                             |       |   |   |   |   |   |   |   |   |
| Earnings (loss)  per common share:                                  |       |                                             |       |   |   |   |   |   |   |   |   |
| Basic                                                               |       | $                                                | (30.17     | ) | $ | (21.74 | ) | $ | 9.60 |   | $ | 60.75 |   | $ | 42.76 |   |
| Diluted                                                             |       |                                             | *          |   | * | 1.77 |   | 13.62 |   | 10.93 |   |
| **Balance  Sheet Data (at period end):**                            |       |                                             |       |   |   |   |   |   |   |   |   |
| Inventories                                                         |       | $                                                | 58,371     |   | $ | 64,254 |   | $ | 74,087 |   | $ | 69,873 |   | $ | 85,961 |   |
| Working capital  (deficiency)                                       |       | (4,973                                           | )          | (7,894 | ) | 2,907 |   | 9,011 |   | 24,060 |   |
| Total assets                                                        |       | 106,986                                          |       | 116,815 |   | 123,527 |   | 131,512 |   | 346,484 |   |
| Floor plan notes  payable                                           |       | 55,337                                           |       | 53,986 |   | 56,185 |   | 52,046 |   | 69,576 |   |
| Total debt  (excluding floor plan and including current maturities) |       | 134,999                                          |       | 134,166 |   | 75,161 |   | 59,046 |   | 150,227 |   |
| Total shareholder’s  equity (deficiency)                       |       | (101,719                                         | )          | (137,698 | ) | (124,400 | ) | (103,565 | ) | 67,435 |   |

 

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*  Not presentedherein since effect is antidilutive.

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## **ITEM 7.**                           MANAGEMENT’SDISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

## ** **

The following discussion regarding Lazy Days’ R.V.Center, Inc.’s financial condition and results of operations should beread in conjunction with our financial statements and the notes to thosestatements and other financial information appearing elsewhere in this report.Unless stated otherwise, the information provided in this section relates toLazy Days’ R.V. Center, Inc. only and not to its parent, Holdings. Thisreport contains forward-looking statements that involve risks anduncertainties. Our actual results may differ materially from those indicated inforward-looking statements.

 

**Overview**

 

We are the world’s largest single-site dealer ofrecreational vehicles (“RVs”) with the industry’s broadest selection of new andpreviously-owned RVs. We are a primary point of distribution for nine of theleading manufacturers in the recreational vehicle retail industry, an industrywith sales of approximately $12 billion in new, and $14 billion inpre-owned RV vehicles annually. Located on a 126-acre site outside of Tampa,Florida, we are widely recognized in the RV community as the premierdestination for RV enthusiasts, attracting over 250,000 visitors each year toour RV dealership, and approximately 1.3 million visitors per year to ourfacility (including visitors to additional attractions that appeal to RV ownerslocated adjacent to our site, namely Camping World, Cracker Barrel and Flying JTravel Plaza).

 

We offer our customers an extensive selection of RVsand a variety of services, such as financing, insurance and a 230-bay, fully-staffedservice and repair department. Our inventory is displayed in a park-likesetting and our facility also includes a full-service RV park, two swimmingpools, tennis courts and meeting and dining facilities.

 

We derive our revenues principally from sales andrental of new units, sales of pre-owned units, commissions earned on sales ofthird-party financing and insurance products, service and rental repairs, andvisitors fees at RallyPark. In 2004, we derived our revenues from thesecategories in the following percentages, 59.7%, 32.5%, 2.8% and 4.8%,respectively. New and pre-owned unit sales accounted for more than 90% of totalrevenues.

 

The vast majority of our cost of revenues are relatedto inventory purchases. New and pre-owned vehicles have accounted for 97% ormore of cost of revenues in each of the previous three years. We believe we arethe nation’s largest single point of distribution for RVs and a primary retailoutlet for nine of the leading manufacturers in the industry. Additionally,increased unit costs are immediately passed through to end customers. As aresult, our gross profit margin has been 14.5%, 14.4% and 14.5% for the yearsended December 31, 2004, 2003 and 2002, respectively.

 

Our gross profit margins on pre-owned vehicles aretypically higher on a percentage basis while our gross profit margins on anabsolute dollar basis are typically higher on new vehicles. In 2004, grossprofit margins on new vehicles averaged 8.7% compared to 10.7% for pre-ownedvehicles, and our gross profit from sales of new vehicles was $41.4 millionand $27.9 million for pre-owned vehicles.

 

Salaries, commissions and benefits represent thelargest component of our total selling, general and administrative expense andcomprised more than 50% of total selling, general and administrative expense.In 2004, approximately 13% of our selling, general and administrative expenseconsisted of commissions for our sales force which are directly correlated toRV vehicle sales levels. Selling, general and administrative expense istypically consistent with revenue on a percentage basis.  However, in 2004 the increase in selling,general and administrative expenses was not consistent primarily due to $6.6million in costs and $3.8 million of intangibles amortization in connectionwith the transaction referenced below.

 

On April 27, 2004, we and our parent, LDHoldings, Inc. (“Holdings”), the Employee Stock Ownership Plan and Trustfor the Employees of Lazy Days (the “ESOP”) and certain other stockholders ofHoldings, entered into a stock purchase agreement with RVAcquisition, Inc. (“RV Acquisition”), a newly formed holding company 

 

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owned by Bruckmann, Rosser, Sherrill & Co.II, L.P. (“BRS LP”), an affiliate of Bruckmann, Rosser, Sherrill &Co., Inc. (“BRS”), pursuant to which RV Acquisition acquired all ofHoldings’ outstanding common and preferred stock for a purchase price of$217.1 million (after giving effect to working capital, tax benefit andcash adjustments) on May 14, 2004 (the “Acquisition”). After giving effectto the Acquisition, BRS LP controlled 89.4% of the issued and outstandingcommon stock of RV Acquisition. The balance of the equity of RV Acquisition wasacquired by Don Wallace, and certain former shareholders of Holdings. Inconnection with the Acquisition, we repaid all of our existing indebtednesswhich was equal to $44.8 million as of May 14, 2004 and paidapproximately $12.3 million for certain transaction related fees and expenses.We also entered into an amendment and restatement of our existing floor plancredit facility (referred to herein as our amended floor plan credit facility),a new senior secured revolving credit facility and terminated our then existingemployee stock ownership plan, or ESOP.

 

To finance the Acquisition, we issued 11 3¤4%senior unsecured notes due 2012, or senior notes, and received an equitycontribution from Holdings.  Thetransactions referred to above are collectively referred to in this report asthe “Transactions.”  The closing of theseTransactions occurred on May 14, 2004. As a result of the Transactions, we have a substantial amount ofdebt.  As of December 31, 2004, we hadtotal indebtedness of $219.8 million ($150.2 million of borrowingsunder the senior notes and $69.6 million in borrowings under our amendedfloor plan credit facility).

 

**Resultsof Operations**

 

The following table sets forth the percentages ofrevenues that certain items of operating data constitute for the periodsindicated:

 
| ** **                                    | ** ** | **Fiscal Year Ended  December 31** | ** ** |
|-----------------------------------------------|------------|-----------------------------------------|------------|
| ** **                                    | ** ** | **2002**                                | ** ** | **2003** | ** ** | **2004** | ** ** |
|                                          |       |                                    |       |   |   |   |   |
| **Statement  of operations data:**            |       |                                    |       |   |   |   |   |
| Revenues                                      |       | 100.0                                   | %          | 100.0 | % | 100.0 | % |
| Cost of revenues                              |       | 85.5                                    |       | 85.6 |   | 85.5 |   |
| Gross profit                                  |       | 14.5                                    |       | 14.4 |   | 14.5 |   |
| Selling, general  and administrative expenses |       | 10.5                                    |       | 9.7 |   | 11.3 |   |
| Income from  operations                       |       | 4.0                                     |       | 4.7 |   | 3.2 |   |
| Interest expense                              |       | 2.8                                     |       | 0.8 |   | 1.8 |   |
| Income before  income taxes                   |       | 1.2                                     |       | 3.9 |   | 1.4 |   |
| Income tax  expense                           |       | 0.7                                     |       | 0.6 |   | 0.4 |   |
| Net income                                    |       | 0.5                                     |       | 3.3 |   | 1.0 |   |

 

***Results for thethree months ended December 31, 2004 compared to the results for the three monthsended December 31, 2003***

 

*Revenues*.  Revenues increased from $172.8  million in the three months ended December31, 2003 to $183.2 million in the comparable period in 2004. This was due to anincrease of approximately $13.3 million of new vehicle sales.

 

*New Unit Sales*.   Sales and rental of new vehicles were $111.6million in the three months ended December 31, 2004 compared to $98.3 millionfor the comparable period in 2003.  Newvehicle unit sales increased from 817 for the fourth quarter of 2003 to 1,088in 2004. A significant increase in towable product sales represented 269 of the271 unit increase. The towable product increase was primarily due to 245 unitsales to the Federal Emergency Management Administration, or FEMA, in connectionwith temporary housing programs after the 2004 hurricane season.

 

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*Pre-Owned Unit Sales*.   Sales of pre-owned vehicles for the fourthquarter of 2004 were $57.1 million compared to $60.5 million for the comparableperiod in 2003.  Used vehicle unit salesdecreased from 861 for the fourth quarter of 2003 to 749 in 2004, due toslightly lower demand in the fourth quarter of 2004 versus 2003.

 

*Finance and Insurance RelatedRevenues*. Despite increases in overall unit sales, finance,insurance and extended warranty related revenues remained consistent at $5.1million in the three months ended December 31, 2004 and 2003.  As a result of the relative increase intowable units as a proportion of new unit sales, we experienced a correspondingdecrease in opportunities for earning financing revenues.  Towable product customers finance lessfrequently than motorized customers and average less revenue when they dofinance. Additionally, the FEMA units sold were not eligible for financing.

 

*Parts, Service and Other Revenues*.  Parts, service and other revenues for thefourth quarter of 2004 were $9.5 million, $.6 million more than the fourthquarter of 2003.  The increase isattributable to overall increased maintenance and repair services, specificallywarranty services, and higher labor rates charged to customers than in 2003.

 

*Gross Profit*.  Gross profit consists of gross revenues lessour cost of sales and services. Gross profit in the three months ended December31, 2004 was consistent with the three months ended December 31, 2003 at $25.2million.  However, gross profit margindecreased from 14.6% in the three months ended December 31, 2003 to 13.8% inthe comparable period in 2004.  Thisdecrease was primarily the result of a $1.0 million increase in our LIFO inventoryadjustment.

 

*Selling, General and AdministrativeExpenses*.  Selling,general and administrative expenses, including depreciation and amortization,increased from $18.9 million, or 10.9% of revenues, in the three months endedDecember 31, 2003  to $22.1 million, or12.1% of revenues, in the comparable period in 2004. This increase wasprimarily due to increases in amortization and depreciation related to theacquisition. Historically, salary, commissions and benefits have comprised themajority of our total selling, general and administrative expenses and exceeded50% of selling, general and administrative expenses in the three months endedDecember 31, 2004.

 

*Operating Profit*.  Operating profit represents our gross profit,less selling, general and administrative expenses, including depreciation andamortization.  Operating profit decreasedfrom $6.3 million in the three months ended December 31, 2003 to $3.1 millionin the comparable period in 2004, or 50.9%. This decrease was due to increasedselling, general and administrative expenses, particularly the acquisitionrelated amortization and depreciation expenses.

 

*Interest Expense—Floor Plan CreditFacility and Senior Notes*. Interest expense increased from $1.2 million in the three months endedDecember 31, 2003 to $5.3****millionin the comparable period in 2004.  Thiswas attributable to an increase in average outstanding borrowings under ourfloor plan credit facility and interest on our senior notes.

 

*Income Tax Expense (Benefit)*.  Income tax expense decreased from $0.8million in the three months ended December 31, 2003 to an income tax benefit of$1.6 million in the comparable period in 2004. This decrease was primarily attributable to the pre-tax loss of $2.2million we experienced during the three-month period ended December 31, 2004compared to pre-tax income of $5.2****millionduring the fourth quarter of 2003. Income tax benefit in 2004 was also favorably impacted by the reversalof a $1.0 million tax reserve during the fourth quarter of 2004.

 

***Results for 2004Compared to the Results for 2003***

 

*Revenues*.  Revenues increased from $755.6 million in2003 to $799.7 million in 2004.  Thisincrease resulted primarily from increases in new unit sales, offset by adecline in pre-owned unit sales.

 

*NewUnit Sales*.  Sales andrental of new vehicles for the year ended December 31, 2004 were $477.4 millioncompared to $416.2 million for the year ended December 31, 2003.  New vehicle unit sales, excluding wholesale,increased 694 units to 4,163 in 2004. This increase in new unit sales primarily reflected an unprecendentedincrease in towable products (615 units), specifically travel trailers.  Of the 615 new towable products, 301 unitswere sold to FEMA for temporary housing for hurricane victims.  We believe the balance of the increase waslargely attributable to new first time buyers at lower price points andpurchases of units unrelated to the 

 

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FEMA programs in connection with customers who required temporaryhousing after the hurricanes.

 

*Pre-OwnedUnit Sales*. Pre-owned unit sales in 2004 were $260.0 millioncompared to $278.6 million in 2003. Pre-owned unit sales, excluding wholesale, decreased to 3,745 in 2004from 3,961 in 2003. Overall pre-owned unit sales, with the exception of traveltrailers, experienced a decrease.  Thisdecrease was largely attributable to newly introduced lower price points on newunits which allowed consumers to purchase new units at comparable prices topre-owned units in 2004.  Wholesale unitsalso experienced a decrease from 1,374 units in 2003 to 1,189 units in 2004, or13.5%. ** **This represents a return to morenormal levels of wholesale activity after working down higher wholesaleinventories in 2003.

 

*Finance and Insurance RelatedRevenues*.  Finance,insurance and extended warranty related revenues decreased approximately 1.0%($0.2 million) from 2003 to $22.3 million in 2004. Overall, insurance productrevenues and finance commissions remained relatively flat.   As a result of the relative increase intowable units as a proportion of new unit sales, we experienced a correspondingdecrease in opportunities for earning financing revenues.  Towable product customers finance less frequentlythan motorized customers and average less revenue when they do finance.Additionally, the FEMA units sold were not eligible for financing.

 

*Parts,Service and Other Revenues*. Parts and service revenues were $39.9 million, an increase of $1.6million from 2003.  This represents anincrease in retail and warranty sales and sales related to the increased unitsales experienced in 2004 and reflects higher labor rates charged to servicecustomers in 2004 as compared to 2003.

 

*Gross Profit*.  Gross profit consists of gross revenues lessour cost of sales and services. Gross profit increased from $109.0 million in2003 to $116.3 million in 2004, or 6.7%. This increase was largely attributableto increased new unit volumes and increased margins in parts and service. Grossprofit margin increased from 14.4% in 2003 to 14.5% in 2004.

 

*Selling, General and AdministrativeExpenses*.  Selling,general and administrative expenses, including depreciation and amortization,increased from $73.3 million, or 9.7% of revenues, in 2003 to $90.4 million, or11.3% of revenues, in 2004.  Thisincrease corresponded to increases in salary, commissions and benefitsexpenses, which increased primarily due to increased gross profit as well as acquisitionrelated expenses of approximately $6.6 million and amortization of acquiredintangible assets of $3.8 million.

 

*Operating Profit*.  Operating profit represents our gross profit,less selling, general and administrative expenses and depreciation andamortization. Operating profit decreased from $35.7 million in 2003 to $25.9million in 2004.  This decrease waslargely due to higher sales and gross profit offset by increased selling,general and administrative expenses as discussed above.

 

*Interest Expense—Floor Plan CreditFacility and Senior Notes*. Interest expense increased $9.0 million to $14.7 million in 2004.  This increase was attributable to issuance ofour 11 3/4% senior notes.

 

*Income Tax Expense*.  Income tax expense decreased from $4.5million in 2003 to $3.4 million in 2004.  This decrease was primarily attributable topre-tax income of $11.2 million in 2004 compared to pre-tax income of $29.9****million in 2003 along with the reversal ofa deferred tax valuation allowance of $7.2 million in 2003.  Income tax expense in 2004 was also favorablyimpacted by the  reversal of a $1.0million tax reserve

 

***Results for 2003Compared to the Results for 2002***

 

*Revenues.*  Revenues increased from $681.1 millionin 2002 to $755.6 million in 2003, or approximately 10.9%. This increaseresulted from increased market share penetration, more favorable macroeconomicconditions and an increase in the average selling price per pre-owned unit.

 

*New Unit Sales.*  Sales of new vehicles increased from$384.0 million in 2002 to $416.2 million in 2003, or 8.4%. Unit salesof new vehicles, excluding wholesale, increased from 3,201 in 2002 to 3,469 in2003, or 8.4%. Although unit volumes increased, the average selling price fornew units remained constant. This was primarily 

 

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attributable to a change in sales mix. Although salesincreased across most price points, our sales of lower priced RVs, such astowables, increased at a greater rate than sales of Class A andClass C motorhomes.

 

*Pre-Owned Unit Sales.*  Sales of pre-owned vehicles increased from$245.5 million in 2002 to $278.6 million in 2002, or 13.5%. Theaverage selling price for pre-owned units, excluding wholesale units, increasedfrom approximately $58,400 in 2002 to approximately $60,700 in 2003, or 3.9%.Unit sales of pre-owned vehicles, excluding wholesale units, increased from3,799 in 2002 to 3,961 in 2003, or 4.3%. The increase in the average salesprice per pre-owned vehicle was attributable to an increase in the value of ourpre-owned vehicle inventory. We acquire most of our pre-owned vehicle inventorythrough trade-ins and, over time, these trade-ins increasingly include featuresand amenities introduced into the RV market over the past few years, such as “slide-outs,”which effectively increase the value of the vehicles.

 

*Finance and Insurance RelatedRevenues.*  Finance,insurance and extended warranty related revenues increased from$18.7 million in 2002 to $22.5 million in 2003, or 20.3%. Theincrease in finance, insurance and extended warranty related revenues wasprimarily attributable to increases in our unit sales volumes. Finance,insurance and extended warranty revenue per unit increased from $2,669 in 2002to $3,030 in 2003, or 13.5%. This increase was attributable to an increase in thepercentage of units for which we arranged financing.

 

*Parts, Service and Other Revenues.*  Parts and service revenues increased from$32.9 million in 2002 to $38.4 million in 2003, or 16.7%. Thisincrease was attributable to increases in sales volume and the increasedprovision of “make-ready” services related to preparing new and pre-ownedvehicles for delivery to our customers.

 

*Gross Profit.*  Gross profit consists of gross revenues lessour cost of sales and services. Gross profit increased from $99.0 millionin 2002 to $109.0 million in 2003, or 10.1%. This increase was largelyattributable to increased unit volumes. Gross profit margin decreased from14.5% in 2002 to 14.4% in 2003.

 

*Selling, General and AdministrativeExpenses.*  Selling,general and administrative expenses, including depreciation and amortization,increased from $71.5 million, or 10.5% of revenues, in 2002 to$73.3 million, or 9.7% of revenues, in 2003. This increase corresponded toincreases in salary, commissions and benefits expenses, which increasedprimarily due to increased unit volumes. Historically, salary, commissions andbenefits have comprised the majority of our total selling, general andadministrative expenses, and were equal to 60% of selling, general andadministrative expenses in 2003, as compared to 58% in 2002.

 

*Operating Profit.*  Operating profit represents our gross profit,less selling, general and administrative expenses and depreciation andamortization. Operating profit increased from $27.4 million in 2002 to $35.7 millionin 2003, or 30.3%. This increase was largely due to higher unit sales andselling prices partially offset by increased selling, general andadministrative expenses.

 

*Interest Expense—Floor Plan CreditFacility.*  Interestexpense on our existing floor plan credit facility decreased from$3.0 million in 2002 to $2.6 million in 2003, or 13.3%. This wasattributable to a decrease in average outstanding borrowings under our existingfloor plan credit facility.

 

*Other Interest Expense.*  Other interest expense was primarily relatedto interest payments under our existing senior credit facility. Other interestexpense decreased from $16.3 million in 2002 to $3.2 million in 2003,or 80.4%. This decline was attributable to the restructuring of our indebtednesscompleted in 2002.

 

*Income Tax Expense.*  Income tax expense was constant at$4.5 million in 2002 and 2003. However, income tax expense in 2003 wasfavorably impacted by the reversal of a $7.2 million deferred income taxvaluation allowance established in prior years.

 

***Results for 2002Compared to the Results for 2001***

 

*Revenues.*  Revenues increased from $562.0 millionin 2001 to $681.1 million in 2002, or 21.2%. This increase resulted fromincreased market share penetration and overall growth in industry-wide demandin 2002.

 

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*New Unit Sales.*  Sales of new vehicles increased from$307.9 million in 2001 to $384.0 million in 2002, or 24.7%. Theaverage per unit retail selling price for new vehicles increased to $118,900 in2002, an increase of 3.8% from 2001. Unit sales of new vehicles, excludingwholesale, increased from 2,678 in 2001 to 3,201 in 2002, or 19.5%. Theincrease in average selling price was due to a slight shift in sales mix. Theincrease in unit sales resulted from an increase in our delivery ratio. Thedelivery ratio is equal to the number of unit sales divided by the number ofsales opportunities (or “ups”). An “up” is counted when we receive anindication of interest (defined under pre-determined criteria) from a customerthrough personal visit, phone, or other contacts with us (excluding emailcontacts) that a particular customer is interested in purchasing an RV.

 

*Pre-Owned Unit Sales.*  Sales of pre-owned vehicles increased from$207.9 million in 2001 to $245.5 million in 2002, or 18.1%. Theaverage selling price, excluding wholesale units, for pre-owned units increasedto approximately $58,400 in 2002, an increase of 6.6% from 2001. Unit sales ofpre-owned vehicles, excluding wholesale units, increased from 3,442 in 2001 to3,799 in 2002, or 10.4%. The increase in the average sales price per pre-ownedvehicle was attributable to an increase in the average sales price of ourpre-owned vehicle inventory.

 

*Finance and Insurance RelatedRevenues.*  Finance,insurance and extended warranty related revenues increased from$16.8 million in 2001 to $18.7 million in 2002, or 11.3%. Thisincrease was attributable to an increase in sales and a corresponding increasein financing activities.

 

 *Parts, Service and Other Revenues.*  Parts, service and other revenues increasedfrom $29.4 million in 2001 to $32.9 million in 2002, or 11.9%. Thisincrease was attributable to an increase in provision of make-ready servicesfor purchased vehicles.

 

*Gross Profit.*  Gross profit increased from$79.3 million in 2001 to $99.0 million in 2002, or 24.8%. Thisincrease was largely attributable to increased unit volumes. The gross profitmargin increased from 14.1% in 2001 to 14.5% in 2002.

 

*Selling, General and AdministrativeExpenses.*  Selling,general and administrative expenses, including depreciation and amortization,increased from $54.1 million or 9.6% of revenues in 2001 to$71.5 million or 10.5% of revenues in 2002. This increase was attributableto the amendment and termination of our phantom stock plan and supplementalphantom stock plan, respectively, and the restructuring of our indebtedness in2002. In connection with the restructuring, we incurred administrative fees of$1.8 million, restructuring fees of $4.3 million and$3.4 million of expenses related to the amendment and termination of ourphantom stock plan and supplemental phantom stock plan, respectively. See “CertainRelationships and Related Party Transactions—The 2002 Restructuring.”

 

*Operating Profit.*  Operating profit increased from$25.2 million in 2001 to $27.4 million in 2002, or 8.7%. The increasewas driven by higher unit sales and average selling prices. On a margin basis,costs remained essentially unchanged in 2002 versus 2001. This increase wasdriven by higher unit sales and increased selling price margins on unit sales,partially offset by higher selling, general and administrative expenses.

 

*Interest Expense—Floor Plan CreditFacility.*  Interestexpense on our existing floor plan credit facility decreased from$3.6 million in 2001 to $3.0 million in 2002, or 16.7%. This wasattributable to a decrease in average borrowings outstanding under the existingfloor plan credit facility.

 

*Other Interest Expense.*  Other interest expense was primarily relatedto interest payments under our existing senior credit facility. Other interestexpense decreased from $24.1 million in 2001 to $16.3 million in2002, or 32.4%. This decrease was attributable to the restructuring of ourindebtedness in 2002.

 

*Income Tax Expense.*  Income tax expense increased from$2.4 million in 2001 to $4.5 million in 2002. This increase wasprimarily attributable to an increase in our profits and a $1.9 millionprovision for possible tax assessments relating to certain prior years.

 

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**Liquidityand Capital Resources**

 

 *Liquidity.* Historically, we have satisfied our liquidity needs through cash fromoperations and various borrowing arrangements. Principal liquidity needs have included the acquisition of inventory,salary and sales commissions, debt service requirements and other capitalexpenditures necessary to maintain our facility. Our cash requirements consistprincipally of scheduled payments of principal and interest on outstandingindebtedness (including indebtedness under our amended floor plan creditfacility), capital expenditures, salary and sales commissions and leaseexpenses. Based upon our current level of operations, we believe that our cashflow from operations, available cash and available borrowings under our seniorsecured revolving credit facility will be adequate to meet our future liquidityneeds for the next several years.

 

 *Operating Activities.*  Net cash provided by operating activities for2004 was equal to $2.8 million, compared with net cash provided byoperating activities of $26.6 million in 2003.  This reduction in net cash provided byoperating activities for 2004 was primarily the result of a decrease in netincome and increases in inventory levels.

 

*Investing Activities.*  Net cash used in investing activities for2004 was $107.7 million, compared with net cash used in investingactivities of $2.3 million in 2003. The increase in net cash used in investing activities during 2004 versus2003 was primarily the result of the Transactions.

 

*Financing Activities.*  Net cash generated from financing activitiesduring 2004  was $101.4 million,compared to net cash used of $20.3 million during 2003.  The increase primarily resulted from theissuance of our 11 3⁄4% senior notes, net of repayment of our then existinglong-term debt.

 

*Working Capital.*  Working capital, including cash and cashequivalents, totaled approximately $24.1 million at December 31, 2004. Wemaintain sizable inventory in order to meet the expectations of our customers,and believe that we will continue to require working capital consistent withpast experience. Historically, we have funded our operations with internallygenerated cash flow and borrowings. Changes in our working capital are driven primarilyby our profit levels. Borrowings under our amended floor plan credit facilityto finance our new vehicle inventory may not exceed (i) 100% of thefactory invoices for the related vehicles, (ii) 85% of the wholesale valueof all pre-owned inventory (as determined in accordance with NationalAutomobile Dealers Association RV Industry Appraisal Guide, or appraised NADAvalue) for vehicles in the current through 7th prior model years and(iii) 65% of the appraised NADA value with respect to pre-owned vehiclesin the 8th, 9th and 10th prior model years. At times, we have made repaymentson our existing floor plan credit facility using excess cash flow fromoperations.

 

Based on current facts and circumstances, we believewe have adequate cash flow coupled with borrowing capacity under our seniorsecured revolving credit facility and amended floor plan credit facility tofund our current operations and capital expenditures budgeted for 2005.

 

*Capital Expenditures.*  Our capital expenditures include expendituresto extend the useful life of our current facilities and expand operations.Historically, our annual maintenance capital expenditures have been lower thanour annual depreciation charge. In 2004, we invested approximately$3.5 million in capital expenditures primarily to improve our facility.

 

*Debt Service.*  As of December 31, 2004 , we had(i) $12.5  million of availability after giving effect to a $2.5million letter of credit outstanding under a letter of credit subfacility underour $15.0 million senior secured revolving credit facility and(ii) $69.6 million of borrowings outstanding under our$85.0 million amended floor plan credit facility, subject to customaryconditions.

 

Borrowings under our senior secured revolving creditfacility will generally bear interest based on a margin over, at our option,the base rate or the reserve-adjusted LIBOR. Our senior secured revolvingcredit facility is secured by first priority interests in, and mortgages on,substantially all of our tangible and intangible assets and first prioritypledges of all the equity interests owned by us in any future domesticsubsidiaries, other than a second priority lien on those assets which arepledged under our amended floor plan credit facility. The notes will mature in2012. Interest on the notes is payable semi-annually in cash.

 

 *Capital Expenditures.*  We anticipate that we will spendapproximately $4.7 million on capital expenditures in 2005, of whichapproximately $3.2 million will be used to upgrade our existing software 

 

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applications and approximately $1.5 million willbe used to maintain our facilities, and we expect to spend similar amounts onmaintenance expenditures in subsequent periods. Our senior secured revolvingcredit facility and amended floor plan credit facility limit our ability tomake capital expenditures in excess of $5.0 million per annum. Based oncurrent estimates, management believes that the amount of capital expenditurespermitted to be made under our senior secured revolving credit facility andamended floor plan credit facility will be adequate to grow our businessaccording to our business strategy and to maintain the properties and businessof our continuing operations.

 

 *Working Capital.*  Our principal sources of funds are cash flowsfrom operating activities and available borrowings under our senior securedrevolving credit facility and amended floor plan credit facility. We believethat these funds will provide us with sufficient liquidity and capitalresources for us to meet our current and future financial obligations,including our scheduled principal and interest payments, as well as to providefunds for working capital, capital expenditures and other needs for at leastthe next twelve months. No assurance can be given, however, that this will bethe case.

 

**Off-BalanceSheet Arrangements**

 

The Company purchases andsells new vehicles under various consignment arrangements, including one with arelated party.  Under the related partyarrangement, the consigned inventory, if not previously purchased, is eitherpurchased by the Company after 180 days or returned to the related party.  During the term of this agreement, whichcommenced on December 29, 2001, the Company has purchased virtually all inventorythat has been held under consignment. The total consigned inventory, which is not included in the Company’sbalance sheets, approximated $19.9 million and $14.3 million at December 31,2004 and 2003, respectively.  Totalinventory purchased by the Company under this consignment arrangement totaledapproximately $141 million and $111 million for the years ended December 31,2004 and 2003, respectively.

 

Except as set forth above, at December 31, 2004, wehad no off-balance sheet arrangements that have or are likely to have amaterial current or future effect on our financial condition, changes infinancial condition, revenues or expenses, results of operations, liquidity,capital expenditures or capital resources.

 

**Contractualand Commercial Commitments Summary**

 

Thefollowing table sets forth our contractual and commercial commitments as ofDecember 31, 2004:

 
| ** **                          | ** ** | **Payments Due by Period** | ** **  |
|-------------------------------------|------------|----------------------------|-------------|
| **Contractual Obligations**         | ** ** | **Total**                  | ** **  | **Less than 1 year** | ** ** | **1-3 years** | ** ** | **4-5 years** | ** ** | **After 5 years** | ** ** |
|                                |       |                       |        |   |   |   |   |   |   |   |   |
| Revolving line  of credit           |       | $                          | —      |   | $ | — |   | $ | — |   | $ | — |   | $ | — |   |
| Notes (1)                           |       | 152,000,000                |        | — |   | — |   | — |   | 152,000,000 |   |
| Operating lease  obligations        |       | 87,606,565                 |        | 5,284,161 |   | 15,197,284 |   | 9,598,560 |   | 57,526,560 |   |
| Floor plan notes  payable           |       | 69,576,130                 |        | 69,576,130 |   | — |   | — |   | — |   |
| Total  contractual cash obligations |       | $                          | 309,182,695 |   | $ | 74,860,291 |   | $ | 15,197,284 |   | $ | 9,598,560 |   | $ | 209,526,560 |   |

 

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(1)                                  Doesnot reflect any potential redemptions by noteholders associated with any free cashflow offer made by the Company as described in Note 10 to the financialstatements.

 

**CriticalAccounting Policies**

 

 *General.* This discussion and analysis of our financial condition and results ofoperations is based upon our financial statements included in this offeringmemorandum, which have been prepared in accordance with accounting principlesgenerally accepted in the United States. The preparation of these financialstatements requires us to make estimates and judgments that affect the reportedamounts of assets, liabilities, revenues, expenses and related disclosure ofcontingent liabilities. We base our estimates on historical experience and onvarious other assumptions that are believed to be reasonable under thecircumstances, the results of which form the basis for making judgments about thecarrying value of assets and liabilities that are not readily apparent fromother sources. Actual results may differ from these estimates under differentassumptions or conditions.

 

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We believe the following critical accounting policiesaffect our more significant judgments and estimates used in the preparation ofthe financial statements. A critical accounting policy is one which is bothimportant to the portrayal of the company’s financial condition and results,and requires management’s most difficult, subjective or complex judgments,often as a result of the need to make estimates about the effect of mattersthat are inherently uncertain.

 

*LIFO Inventory Accounting.*  Vehicle and parts inventories are recorded atthe lower of cost or market, with cost determined by the last-in, first-out (“LIFO”)method. If the first-in, first-out (“FIFO”) method of inventory costing hadbeen used, net income would have increased by approximately $1,351,000,$1,456,000 and $660,000 for the years ended December 31, 2004 , 2003 and2002, respectively.

 

*Purchase Accounting Effects.*  The acquisition of Holdings by RV Acquisitionwas accounted for using the purchase method of accounting. As a result, theAcquisition will prospectively affect our results of operations in certainsignificant respects. The aggregate stock purchase consideration, less theassumption of liabilities plus estimated transaction expenses of approximately$12.3 million, was****allocated to the tangible and intangibleassets acquired and liabilities assumed by us based upon their respective fairvalues as of the date of acquisition. The allocation of the purchase price ofthe assets acquired in the Acquisition will result in an increase in our annualdepreciation and amortization expense.

 

*Revenue Recognition.*  Revenue from the sale of vehicles isrecognized on delivery, transfer of title and completion of financingarrangements. Revenue from parts, sales and service is recognized on deliveryof service or product. We receive a commission from the sale of insurance andvehicle service contracts to customers. In addition, we arrange financing forcustomers through various financial institutions and receive commissions. Wemay be charged back (“chargebacks”) a portion of the financing fees or vehicleservice contract fees in the event of early termination of the contracts bycustomers. The revenues from financing fees and vehicle service contract feesare recorded at the time of the sale of the vehicles, net of a reserve forestimated future chargebacks based on historical operating results and thetermination provisions of the applicable contracts.

 

*Major Supplier and DealerAgreements.*  Wepurchase substantially all of our new recreational vehicles and replacementparts from various manufacturers at the prevailing prices charged to allauthorized dealers. We are subject to dealer agreements with eachmanufacturer.  The manufacturer isentitled to terminate the dealer agreement if we are in material breach oftheir agreement terms.

 

**RecentAccounting Pronouncements**

 

 *New Accounting Pronouncements.* InMay 2003, the Financial Accounting Standards Board (“FASB”) issued SFASNo. 150, “Accounting for Certain Financial Instruments withCharacteristics of Both Liabilities and Equity.” SFAS No. 150 establishesstandards for how an issuer classifies and measures certain financialinstruments with characteristics of both liabilities and equity. SFASNo. 150 requires that certain financial instruments be classified asliabilities that were previously considered equity. SFAS No. 150 becameeffective for Lazydays in the first quarter of 2004. The adoption of thisstatement had no effect on our financial statements.

 

In July 2003, the Emerging Issues Task Force ofthe FASB reached a consensus on Issue 03-10, “Application of IssueNo. 02-16 by Resellers to Sales Incentives Offered to Consumers byManufacturers.” Issue 03-10 requires certain consideration offered directlyfrom manufacturers to consumers to be recorded as a reduction of cost of sales.Issue 03-10 became effective for Lazydays in the first quarter of 2004. Theprovisions of Issue 03-10 has had no impact on our results of operations,financial position and cash flows.

 

 In 2004, theCompany adopted FASB Interpretation (“FIN”) No. 46 (revised December 2003), “Consolidationof Variable Interest Entities,” which addresses the consolidation and relateddisclosures of these entities by business enterprises.  These are entities in which either the equityinvestment at risk is not sufficient to absorb the probable losses withoutadditional subordinated financial support from other parties, or the investorswith equity at risk lack certain essential characteristics of a controllinginterest.  Under the interpretation, theCompany must consolidate any variable interest entities (“VIEs”) in which theCompany holds variable interests and the Company is deemed the primarybeneficiary.  The adoption of thisstandard did not have any impact on the Company’s financial position, resultsof operations or cash flows.

 

25

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On December 16, 2004, the FASB issued SFAS No. 123(revised 2004), “Share-Based Payment.” This standard eliminated the alternative of accounting for share-basedcompensation using APB Opinion No. 25. The revised standard generally requires the recognition of the cost ofemployee services based on the grant date fair value of equity or liabilityinstruments issued.  The effective datefor the Company is the beginning of the first quarter of 2006.  The adoption of this standard is not expectedto have any significant impact on the Company’s financial position, results ofoperations or cash flows.

 

**Inflation**

 

Although we cannot accurately anticipate the effect ofinflation on our operations, we believe that inflation has not had, and is notlikely in the foreseeable future to have, a material impact on our results ofoperations.

 

**Cyclicality**

 

Unit sales of RV vehicles historically have beencyclical, fluctuating with general economic cycles. During economic downturns,the RV retailing industry tends to experience similar periods of decline andrecession as the general economy. We believe that the industry is influenced bygeneral economic conditions and particularly by consumer confidence, the levelof personal discretionary spending, fuel prices, interest rates and creditavailability.

 

**Seasonalityand Effects of Weather**

 

Our operations generally experience higher volumes ofvehicle sales in the first and fourth quarters of each year due in part toconsumer buying trends and our hospitable warm climate during the wintermonths. The service and parts business experiences relatively modest seasonalfluctuations.

 

We have a single location near Tampa, Florida, whichis in close proximity to the Gulf of Mexico. As a single-site operator, asevere weather event such as a hurricane could cause severe damage to ourproperty and inventory.  In addition,such weather events can cause extended disruptions of our operations.  In 2004, the coastal areas of Florida wereevacuated on at least four occasions due to hurricanes and our operations andcustomer traffic suffered disruptions for a period of several days.  While this did not materially impact ourbusiness or results of operations, we can provide no assurance that a futurehurricane or other local disaster could not do so in the future.  Although we believe we have adequateinsurance coverage (including business interruption coverage), if we were toexperience a catastrophic loss, we may exceed our policy limits and /or we mayhave difficulty obtaining similar insurance coverage in the future.

 

## **ITEM7A.**                  QUANTITATIVEAND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

### ** **

*Interest Rates.*  We are exposed to market risk from changes inthe interest rates on a significant portion of our outstanding indebtedness.Outstanding balances under our senior secured revolving credit facility bearinterest at a variable rate based on prime or LIBOR as adjusted each interestperiod. There were no borrowings outstanding at December 31, 2004.  Amounts outstanding under floor planfinancing arrangements bear interest at a variable rate based on prime or LIBORas adjusted each interest period. As of December 31, 2004 , based on theaggregate amount of $69.6 million outstanding under our amended floor planfinancing facility as of such date, a 100 basis point change in interest rateswould have changed our annual floor plan interest expense by approximately$0.7 million.

 

We continually evaluate our exposure to interest ratefluctuations and follow established policies and procedures to implementstrategies designed to manage the amount of variable rate indebtednessoutstanding at any point in time in an effort to mitigate the effect ofinterest rate fluctuations on our earnings and cash flows.

 

Interest rate fluctuations affect the fair marketvalue of our fixed rate debt, including the notes, but with respect to suchfixed rate instruments, do not impact our earnings or cash flows.

 

*Foreign Currency Exchange Rates.*  We currently have very limited exposure toexchange rate risk as we have very limited foreign operations. Nearly all ofour new and pre-owned vehicle inventories are sourced domestically.

 

26

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## **ITEM 8.**                           FINANCIAL STATEMENTSAND SUPPLEMENTARY DATA

## ** **

**Indexto Financial Statements**

 
| Report of Independent  Registered Public Accounting Firm |                                                                                                                   |
|----------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------|
|                                                     |                                                                                                                   |
| Financial Statements:                                    |                                                                                                                   |
|                                                     |                                                                                                                   |
|                                                     | Balance sheets as of  December 31, 2004 and 2003                                                                       |   |
|                                                     |                                                                                                                   |   |
|                                                     | Statements of income  for the years ended December 31, 2004, 2003 and 2002                                             |   |
|                                                     |                                                                                                                   |   |
|                                                     | Statements of changes  in stockholder’s equity (deficiency) for the years ended December 31, 2004,  2003 and 2002 |   |
|                                                     |                                                                                                                   |   |
|                                                     | Statements of cash  flows for the years ended December 31, 2004, 2003 and 2002                                         |   |
|                                                     |                                                                                                                   |   |
|                                                     | Notes to Financial  Statements                                                                                         |   |
|                                                     |                                                                                                                   |   |
| Financial Statement  Schedule:                           |                                                                                                                   |
|                                                     |                                                                                                                   |   |
|                                                     | Schedule II: Valuation  and Qualifying Accounts                                                                        |   |

 

27

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**REPORT OF INDEPENDENT REGISTEREDPUBLIC ACCOUNTING FIRM**

 

Board of Directors

Lazy Days’ R.V. Center,Inc.

Seffner, Florida

 

Wehave audited the accompanying balance sheets of Lazy Days’ R.V. Center, Inc., awholly owned subsidiary of LD Holdings, Inc., as of December 31, 2004 and 2003,and the related statements of income, changes in stockholder’s equity(deficiency) and cash flows for each of the three years in the period endedDecember 31, 2004.  Our audits alsoincluded the financial statement schedule listed in Item 15 (a)(2).  These financial statements and financialstatement schedule are the responsibility of the Company’s management.  Our responsibility is to express an opinionon these financial statements and financial statement schedule based on ouraudits.

 

Weconducted our audits in accordance with the standards of the Public CompanyAccounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtainreasonable assurance about whether the financial statements are free ofmaterial misstatement.  An audit includesexamining, on a test basis, evidence supporting the amounts and disclosures inthe financial statements.  An audit alsoincludes assessing the accounting principles used and significant estimatesmade by management, as well as evaluating the overall financial statementpresentation.  We believe that our auditsprovide a reasonable basis for our opinion.

 

In ouropinion, the financial statements referred to above present fairly, in allmaterial respects, the financial position of Lazy Days’ R.V. Center, Inc. as ofDecember 31, 2004 and 2003, and the results of its operations and its cashflows for each of the three years in the period ended December 31, 2004 inconformity with U.S. generally accepted accounting principles.  Also, in our opinion, the related financialstatement schedule, when considered in relation to the basic financialstatements taken as a whole, presents fairly, in all material respects, theinformation set forth therein.

 

 
|                     | Crowe Chizek and  Company LLC |
|--------------------------|-------------------------------|
|                     |                          |
| Ft. Lauderdale,  Florida |                          |
| January 28, 2005         |                          |

 

28

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**LAZY DAYS’ R.V. CENTER, INC., a wholly owned**

**subsidiary of LD Holdings, Inc.**

**BALANCE SHEETS**

**December 31, 2004 and 2003**

 
| ** **                                                                                     | ** ** | **2004**    | ** **  | **2003**   | ** ** |
|------------------------------------------------------------------------------------------------|------------|-------------|-------------|------------|------------|
|                                                                                           |       |        |        |       |       |
| **ASSETS**                                                                                     |       |        |        |       |       |
| Current assets                                                                                 |       |        |        |       |       |
| Cash                                                                                           |       | $           | 5,103,556   |       | $          | 8,575,911 |   |
| Receivables, net  of allowance for doubtful accounts of $437,846 in 2004  and $321,834 in 2003 |       | 14,195,639  |        | 13,710,658 |       |
| Refundable  income taxes                                                                       |       | 7,503,869   |        | 1,368,945  |       |
| Inventories                                                                                    |       | 85,960,847  |        | 69,872,724 |       |
| Prepaid expenses  and other                                                                    |       | 1,820,220   |        | 1,771,222  |       |
| Deferred income  taxes                                                                         |       | 1,105,220   |        | 2,351,747  |       |
|                                                                                           |       |        |        |       |       |
| Total current  assets                                                                          |       | 115,689,351 |        | 97,651,207 |       |
|                                                                                           |       |        |        |       |       |
| Property and  equipment, net                                                                   |       | 35,420,953  |        | 23,938,987 |       |
| Loan and other  costs, net                                                                     |       | 6,658,442   |        | 3,121,872  |       |
| Goodwill                                                                                       |       | 106,357,614 |        | —     |       |
| Intangible  assets, net                                                                        |       | 81,507,812  |        | —     |       |
| Deferred income  taxes                                                                         |       | 605,093     |        | 5,985,928  |       |
| Restricted cash                                                                                |       | —      |        | 624,349    |       |
| Deposits and  other non-current assets                                                         |       | 244,312     |        | 189,754    |       |
|                                                                                           |       |        |        |       |       |
| Total assets                                                                                   |       | $           | 346,483,577 |       | $          | 131,512,097 |   |

 

See accompanyingnotes to financial statements.

 

29

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**LAZY DAYS’ R.V. CENTER, INC., a wholly owned**

**subsidiary of LD Holdings, Inc.**

**BALANCE SHEETS (Continued)**

**December31, 2004 and 2003**

 
| ** **                                                                                                                                                              | ** ** | **2004**    | ** **  | **2003**     | ** ** |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|-------------|-------------|--------------|------------|
|                                                                                                                                                                    |       |        |        |         |       |
| **LIABILITIES AND STOCKHOLDER’S EQUITY**                                                                                                                           |       |        |        |         |       |
|                                                                                                                                                                    |       |        |        |         |       |
| Current  liabilities                                                                                                                                                    |       |        |        |         |       |
| Floor plan notes  payable                                                                                                                                               |       | $           | 69,576,130  |         | $          | 52,045,981 |   |
| Current  maturities of long-term debt                                                                                                                                   |       | —      |        | 18,018,916   |       |
| Current  maturities of ESOP distribution notes                                                                                                                          |       | —      |        | 342,066      |       |
| Accounts payable  and accrued expenses                                                                                                                                  |       | 17,398,775  |        | 14,286,719   |       |
| Accrued interest                                                                                                                                                        |       | 2,596,272   |        | 518,785      |       |
| Reserve for  chargebacks                                                                                                                                                |       | 1,125,000   |        | 993,000      |       |
| Customer  deposits                                                                                                                                                      |       | 932,988     |        | 801,954      |       |
| Income taxes  payable                                                                                                                                                   |       | —      |        | 1,632,557    |       |
|                                                                                                                                                                    |       |        |        |         |       |
| Total current  liabilities                                                                                                                                              |       | 91,629,165  |        | 88,639,978   |       |
|                                                                                                                                                                    |       |        |        |         |       |
| Long-term debt,  less current maturities                                                                                                                                |       | 150,227,419 |        | 39,796,635   |       |
| ESOP  distribution notes, less  current maturities                                                                                                                 |       | —      |        | 888,702      |       |
| Reserve for  chargebacks                                                                                                                                                |       | 909,000     |        | 776,000      |       |
| Deferred rent                                                                                                                                                           |       | 1,884,390   |        | 1,699,850    |       |
| Deferred income  taxes                                                                                                                                                  |       | 34,373,793  |        | —       |       |
| Deferred  compensation                                                                                                                                                  |       | —      |        | 3,622,929    |       |
| Other                                                                                                                                                                   |       | 25,029      |        | 33,644       |       |
|                                                                                                                                                                    |       |        |        |         |       |
| Total  liabilities                                                                                                                                                      |       | 279,048,796 |        | 135,457,738  |       |
|                                                                                                                                                                    |       |        |        |         |       |
| Commitments and  contingencies (Notes 8 and 13)                                                                                                                         |       |        |        |         |       |
|                                                                                                                                                                    |       |        |        |         |       |
| ESOP guarantee  purchase obligation of parent                                                                                                                           |       | —      |        | 18,606,448   |       |
|                                                                                                                                                                    |       |        |        |         |       |
| Redeemable  preferred stock of parent-Class A, $.01 par value, redemption value $1 per  share: 155,000,000 shares authorized; 81,013,368 shares issued and  outstanding |       | —      |        | 81,013,368   |       |
|                                                                                                                                                                    |       |        |        |         |       |
| Stockholder’s  equity (deficiency)                                                                                                                                 |       |        |        |         |       |
| Common stock,  $.01 par value: 100 shares issued and outstanding                                                                                                        |       | 1           |        | 1            |       |
| Unearned ESOP  shares of parent                                                                                                                                         |       | —      |        | (114,129,813 | )          |
| Paid-in capital                                                                                                                                                         |       | 67,000,000  |        | (16,823,287  | )          |
| Retained  earnings                                                                                                                                                      |       | 434,780     |        | 27,387,642   |       |
|                                                                                                                                                                    |       |        |        |         |       |
| Total  stockholder’s equity (deficiency)                                                                                                                           |       | 67,434,781  |        | (103,565,457 | )          |
|                                                                                                                                                                    |       |        |        |         |       |
| Total liabilities  and stockholder’s equity                                                                                                                        |       | $           | 346,483,577 |         | $          | 131,512,097 |   |

 

See accompanying notes to financial statements.

 

30

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**LAZY DAYS’ R.V. CENTER, INC., a wholly owned**

**subsidiary of LD Holdings, Inc.**

**STATEMENTS OF INCOME**

**Years ended December 31, 2004,  2003 and 2002**

 
| ** **                                                                          | ** ** | **2004**    | ** **  | **2003**    | ** ** | **2002**    | ** ** |
|-------------------------------------------------------------------------------------|------------|-------------|-------------|-------------|------------|-------------|------------|
|                                                                                |       |        |        |        |       |        |       |
| Revenues                                                                            |       |        |        |        |       |        |       |
| New vehicle                                                                         |       | $           | 477,441,989 |        | $          | 416,164,861 |       | $ | 384,041,313 |   |
| Pre-owned  vehicle                                                                  |       | 260,018,300 |        | 278,592,113 |       | 245,485,495 |       |
| Parts, service  and other                                                           |       | 39,926,626  |        | 38,371,515  |       | 32,916,776  |       |
| Finance and  insurance                                                              |       | 22,322,793  |        | 22,510,708  |       | 18,683,571  |       |
|                                                                                |       |        |        |        |       |        |       |
| Total revenues                                                                      |       | 799,709,708 |        | 755,639,197 |       | 681,127,155 |       |
|                                                                                |       |        |        |        |       |        |       |
| Cost of revenues                                                                    |       |        |        |        |       |        |       |
| New vehicle                                                                         |       | 435,993,484 |        | 377,695,470 |       | 349,094,829 |       |
| Pre-owned  vehicle                                                                  |       | 232,076,567 |        | 253,147,071 |       | 220,181,815 |       |
| Parts, service  and other                                                           |       | 15,344,873  |        | 15,842,339  |       | 12,882,554  |       |
|                                                                                |       |        |        |        |       |        |       |
| Total cost of  revenues                                                             |       | 683,414,924 |        | 646,684,880 |       | 582,159,198 |       |
|                                                                                |       |        |        |        |       |        |       |
| Gross profit                                                                        |       | 116,294,784 |        | 108,954,317 |       | 98,967,957  |       |
|                                                                                |       |        |        |        |       |        |       |
| Selling, general  and administrative expenses                                       |       | 90,380,339  |        | 73,265,114  |       | 71,532,833  |       |
|                                                                                |       |        |        |        |       |        |       |
| Interest expense                                                                    |       | 14,731,302  |        | 5,777,119   |       | 19,237,357  |       |
|                                                                                |       |        |        |        |       |        |       |
| Income before  income taxes                                                         |       | 11,183,143  |        | 29,912,084  |       | 8,197,767   |       |
|                                                                                |       |        |        |        |       |        |       |
| Income tax  expense                                                                 |       | 3,354,432   |        | 4,542,111   |       | 4,492,655   |       |
|                                                                                |       |        |        |        |       |        |       |
| Net income                                                                          |       | $           | 7,828,711   |        | $          | 25,369,973  |       | $ | 3,705,112 |   |
|                                                                                |       |        |        |        |       |        |       |
| Earnings per  common share:                                                         |       |        |        |        |       |        |       |
| Basic                                                                               |       | $           | 42.76       |        | $          | 60.75       |       | $ | 9.60 |   |
| Diluted                                                                             |       | 10.93       |        | 13.62       |       | 1.77        |       |
|                                                                                |       |        |        |        |       |        |       |
| Weighted-average  number of shares used in cumputation of earnings per common share |       |        |        |        |       |        |       |
| Basic                                                                               |       | 183,094     |        | 417,620     |       | 340,326     |       |
| Diluted                                                                             |       | 716,283     |        | 1,863,156   |       | 2,093,947   |       |

 

See accompanying notes to financial statements.

 

31

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**LAZY DAYS’ R.V. CENTER, INC., a wholly owned**

**subsidiary of LD Holdings, Inc.**

**STATEMENTS OF CHANGES IN STOCKHOLDER'S EQUITY(DEFICIENCY)**

**Years ended December 31, 2004,  2003 and 2002**

 
| ** **                                                 | ** ** | ** **       | ** ** | ** **          | ** ** | ** **                | ** ** | ** **             | ** ** | ** **  | ** **   | **Total  Stockholder’s  Equity (Deficiency)** | ** ** |
|------------------------------------------------------------|------------|------------------|------------|---------------------|------------|---------------------------|------------|------------------------|------------|-------------|--------------|----------------------------------------------------|------------|
| ** **                                                 | ** ** | **Common Stock** | ** ** | **Paid-in Capital** | ** ** | **Unearned  ESOP Shares** | ** ** | **Retained  Earnings** | ** ** |
| ** **                                                 | ** ** | **Shares**       | ** ** | **Amount**          | ** ** | ** **                |
| ** **                                                 | ** ** | ** **       | ** ** | ** **          | ** ** | ** **                | ** ** | ** **             | ** ** | ** **  | ** **   | ** **                                         | ** ** |
| Balances,  January 1, 2002                                 |       | 100              |       | $                   | 1          |                      | $          | (10,566,956            | )          | $           | (127,982,300 | )                                                  | $          | 851,387 |   | $ | (137,697,868 | ) |
|                                                       |       |             |       |                |       |                      |       |                   |       |        |         |                                               |       |
| Net income                                                 |       | —           |       | —              |       | —                    |       | —                 |       | 3,705,112   |         | 3,705,112                                          |       |
| Release of ESOP  shares                                    |       | —           |       | —              |       | (7,047,225                | )          | 7,762,933              |       | —      |         | 715,708                                            |       |
| Increase in ESOP  guarantee purchase obligation of parent  |       | —           |       | —              |       | —                    |       | (3,000,104             | )          | —      |         | (3,000,104                                         | )          |
| Tax benefit of  ESOP                                       |       | —           |       | —              |       | 2,651,871                 |       | —                 |       | —      |         | 2,651,871                                          |       |
| Corporate  restructuring (Note 3)                          |       | —           |       | —              |       | 15,096,365                |       | —                 |       | (2,100,964  | )            | 12,995,401                                         |       |
| Accumulated  dividends on preferred stock                  |       | —           |       | —              |       | (3,332,135                | )          | —                 |       | (437,866    | )            | (3,770,001                                         | )          |
|                                                       |       |             |       |                |       |                      |       |                   |       |        |         |                                               |       |
| Balances,  December 31, 2002                               |       | 100              |       | 1                   |       | (3,198,080                | )          | (123,219,471           | )          | 2,017,669   |         | (124,399,881                                       | )          |
|                                                       |       |             |       |                |       |                      |       |                   |       |        |         |                                               |       |
| Net income                                                 |       | —           |       | —              |       | —                    |       | —                 |       | 25,369,973  |         | 25,369,973                                         |       |
| Release of ESOP  shares                                    |       | —           |       | —              |       | (7,318,644                | )          | 8,240,161              |       | —      |         | 921,517                                            |       |
| Reduction in  ESOP guarantee purchase obligation of parent |       | —           |       | —              |       | —                    |       | 849,497                |       | —      |         | 849,497                                            |       |
| Tax benefit of  ESOP                                       |       | —           |       | —              |       | 2,823,167                 |       | —                 |       | —      |         | 2,823,167                                          |       |
| Acquisition of  10,197 shares of parent treasury stock     |       | —           |       | —              |       | (95,689                   | )          | —                 |       | —      |         | (95,689                                            | )          |
| Accumulated dividends  on preferred stock                  |       | —           |       | —              |       | (9,034,041                | )          | —                 |       | —      |         | (9,034,041                                         | )          |
|                                                       |       |             |       |                |       |                      |       |                   |       |        |         |                                               |       |
| Balances,  December 31, 2003                               |       | 100              |       | 1                   |       | (16,823,287               | )          | (114,129,813           | )          | 27,387,642  |         | (103,565,457                                       | )          |
|                                                       |       |             |       |                |       |                      |       |                   |       |        |         |                                               |       |
| Net income                                                 |       | —           |       | —              |       | —                    |       | —                 |       | 7,828,711   |         | 7,828,711                                          |       |
| Release of ESOP  shares                                    |       | —           |       | —              |       | (4,241,000                | )          | 4,775,000              |       | —      |         | 534,000                                            |       |
| Tax benefit of  ESOP                                       |       | —           |       | —              |       | 1,696,400                 |       | —                 |       | —      |         | 1,696,400                                          |       |
| Sale of LD  Holdings’ stock (Note 2)                  |       | —           |       | —              |       | 19,367,887                |       | 109,354,813            |       | (34,781,573 | )            | 93,941,127                                         |       |
| Capital contributions  of parent                           |       | —           |       | —              |       | 67,000,000                |       | —                 |       | —      |         | 67,000,000                                         |       |
|                                                       |       |             |       |                |       |                      |       |                   |       |        |         |                                               |       |
| Balances,  December 31, 2004                               |       | 100              |       | $                   | 1          |                      | $          | 67,000,000             |       | $           | —       |                                               | $          | 434,780 |   | $ | 67,434,781 |   |

 

See accompanying notes to financial statements.

 

32

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**LAZY DAYS’ R.V. CENTER, INC., a wholly owned**

**subsidiary of LD Holdings, Inc.**

**STATEMENTS OF CASH FLOWS**

**Years ended December 31, 2004,  2003 and 2002**

 
| ** **                                                                        | ** ** | **2004**     | ** ** | **2003**   | ** ** | **2002**   | ** ** |
|-----------------------------------------------------------------------------------|------------|--------------|------------|------------|------------|------------|------------|
| Cash flows from  operating activities                                             |       |         |       |       |       |       |       |
| Net income                                                                        |       | $            | 7,828,711  |       | $          | 25,369,973 |       | $ | 3,705,112 |   |
| Adjustments to  reconcile net income to net cash from operating activities        |       |         |       |       |       |       |       |
| Depreciation of  property and equipment                                           |       | 2,398,890    |       | 2,171,254  |       | 2,293,734  |       |
| Depreciation of  rental vehicle inventory                                         |       | 2,158,294    |       | —     |       | —     |       |
| Amortization of  intangible assets                                                |       | 3,792,188    |       | —     |       | —     |       |
| Amortization and  write-off of loan and other costs                               |       | 3,646,801    |       | 1,067,076  |       | 1,648,103  |       |
| Amortization of  discount on long-term debt                                       |       | 150,219      |       | —     |       | 1,045,392  |       |
| (Gain) loss on  sale of property and equipment                                    |       | 79,950       |       | (7,285     | )          | —     |       |
| Interest  capitalized on senior subordinated debt                                 |       | —       |       | —     |       | 9,494,996  |       |
| Provision  (credit) for doubtful accounts                                         |       | 205,865      |       | 118,439    |       | (32,474    | )          |
| Reserve for  chargebacks                                                          |       | 265,000      |       | 201,000    |       | 298,000    |       |
| ESOP  compensation expense                                                        |       | 534,000      |       | 921,517    |       | 715,708    |       |
| Tax benefit of  ESOP                                                              |       | 1,696,400    |       | 2,823,167  |       | 2,651,871  |       |
| Deferred income  taxes                                                            |       | (705,204     | )          | (8,337,675 | )          | —     |       |
| Change in assets  and liabilities                                                 |       |         |       |       |       |       |       |
| Receivables                                                                       |       | (690,846     | )          | 964,617    |       | 746,588    |       |
| Inventories                                                                       |       | (13,178,729  | )          | 4,213,883  |       | (9,832,234 | )          |
| Prepaid expenses  and other                                                       |       | (48,998      | )          | (64,841    | )          | (460,139   | )          |
| Refundable  income taxes                                                          |       | (6,134,924   | )          | (1,368,945 | )          | 137,737    |       |
| Deposits and  other non-current assets                                            |       | (54,558      | )          | (35,156    | )          | (29,591    | )          |
| Restricted cash                                                                   |       | 624,349      |       | (500,146   | )          | (124,203   | )          |
| Accounts  payable, accrued interest, other accrued expenses and customer deposits |       | 5,311,962    |       | (228,174   | )          | 418,585    |       |
| Income taxes  payable                                                             |       | (1,632,557   | )          | (667,443   | )          | 1,900,000  |       |
| Deferred rent                                                                     |       | 184,540      |       | 380,600    |       | 380,600    |       |
| Deferred compensation                                                             |       | (3,622,929   | )          | (467,299   | )          | 3,117,778  |       |
|                                                                              |       |         |       |       |       |       |       |
| Net cash from  operating activities                                               |       | 2,808,424    |       | 26,554,562 |       | 18,075,563 |       |
|                                                                              |       |         |       |       |       |       |       |
| Cash flows from  investing activities                                             |       |         |       |       |       |       |       |
| Proceeds from  sale of property and equipment                                     |       | 4,696        |       | 14,097     |       | 59,515     |       |
| Purchases of  property and equipment                                              |       | (3,515,503   | )          | (2,265,484 | )          | (1,610,242 | )          |
| Net advance to  parent                                                            |       | (104,147,631 | )          | —     |       | —     |       |
| Payment to  affiliate                                                             |       | —       |       | —     |       | (125,726   | )          |
|                                                                              |       |         |       |       |       |       |       |
| Net cash used in  investing activities                                            |       | (107,658,438 | )          | (2,251,387 | )          | (1,676,453 | )          |
|                                                                                   |            |              |            |            |            |            |            |  |  |  |

 

See accompanyingnotes to financial statements.

 

33

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**LAZY DAYS’ R.V. CENTER, INC., a wholly owned**

**subsidiary of LD Holdings, Inc.**

**STATEMENTS OF CASH FLOWS (Continued)**

**Years ended December 31, 2004,  2003 and 2002**

 
| ** **                                                                                                                                                                                                          | ** ** | **2004**    | ** ** | **2003**    | ** ** | **2002**    | ** ** |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|-------------|------------|-------------|------------|-------------|------------|
| Cash flows from  financing activities                                                                                                                                                                               |       |        |       |        |       |        |       |
| Net borrowings  (payments) under floor plan                                                                                                                                                                         |       | $           | 17,530,149 |        | $          | (4,138,764  | )          | $ | 2,198,456 |   |
| Issuance of  long-term debt                                                                                                                                                                                         |       | 150,077,200 |       | —      |       | —      |       |
| Repayments of  long-term debt                                                                                                                                                                                       |       | (57,815,551 | )          | (16,795,036 | )          | (19,656,736 | )          |
| Issuance of ESOP  distribution notes                                                                                                                                                                                |       | —      |       | 1,022,849   |       | 687,481     |       |
| Repayments of  ESOP distribution notes                                                                                                                                                                              |       | (1,230,768  | )          | (342,066    | )          | (137,496    | )          |
| Loan and other  costs                                                                                                                                                                                               |       | (7,183,371  | )          | —      |       | (1,540,722  | )          |
| Purchase of  treasury stock of parent                                                                                                                                                                               |       | —      |       | (95,689     | )          | 17,780      |       |
|                                                                                                                                                                                                                |       |        |       |        |       |        |       |
| Net cash from  (used in) financing activities                                                                                                                                                                       |       | 101,377,659 |       | (20,348,706 | )          | (18,431,237 | )          |
|                                                                                                                                                                                                                |       |        |       |        |       |        |       |
| Net change in  cash                                                                                                                                                                                                 |       | (3,472,355  | )          | 3,954,469   |       | (2,032,127  | )          |
|                                                                                                                                                                                                                |       |        |       |        |       |        |       |
| Cash at  beginning of year                                                                                                                                                                                          |       | 8,575,911   |       | 4,621,442   |       | 6,653,569   |       |
|                                                                                                                                                                                                                |       |        |       |        |       |        |       |
| Cash at end of  year                                                                                                                                                                                                |       | $           | 5,103,556  |        | $          | 8,575,911   |       | $ | 4,621,442 |   |
|                                                                                                                                                                                                                |       |        |       |        |       |        |       |
| Supplemental  disclosure of cash flow information                                                                                                                                                                   |       |        |       |        |       |        |       |
| Cash paid during  the year for interest                                                                                                                                                                             |       | $           | 12,653,815 |        | $          | 5,872,727   |       | $ | 30,325,906 |   |
| Cash paid during  the year for income taxes                                                                                                                                                                         |       | 10,130,717  |       | 10,361,570  |       | 130,000     |       |
| Supplemental  disclosure of non-cash investing and financing activities                                                                                                                                             |       |        |       |        |       |        |       |
| Shares issued  for accumulated dividends on preferred stock of parent                                                                                                                                               |       | —      |       | 9,034,041   |       | 3,332,135   |       |
| Shares issued  for accumulated dividends on preferred stock, Series A                                                                                                                                               |       | —      |       | —      |       | 437,866     |       |
| In 2002, the  Company exchanged $48,009,464 of its senior subordinated debt and $20,637,728  of deferred payments, interest, and fees for $68,647,192 of preferred Class A  shares of its parent (Note 3).          |       |        |       |        |       |        |       |
| In 2002, the  Company exchanged $7,500,000 of its preferred stock, Series A, and $2,054,430  of related accumulated preferred dividends payable for $9,554,430 of  preferred Class B shares of its parent (Note 3). |       |        |       |        |       |        |       |
| In connection  with the acquisition of business                                                                                                                                                                     |       |        |       |        |       |        |       |
| Fair value of  assets acquired                                                                                                                                                                                      |       | 325,115,634 |       | —      |       | —      |       |
| Liabilities  assumed                                                                                                                                                                                                |       | 108,038,434 |       | —      |       | —      |       |

 

See accompanying notes to financial statements.

 

34

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**LAZY DAYS’ R.V. CENTER, INC., a wholly owned**

**subsidiary of LD Holdings, Inc.**

**NOTES TO FINANCIAL STATEMENTS**

**December 31, 2004, 2003 and 2002**

 

**NOTE 1 –NATURE OF OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES**

 

Basis of Presentation:  The financial statements include the accountsof Lazy Days’ R.V. Center, Inc. (“Lazy Days” or the “Company”), a wholly ownedsubsidiary of LD Holdings, Inc. (“LD Holdings”), a non-operating holdingcompany.  LD Holdings was acquired on May14, 2004 by R.V. Acquisition, Inc. (“RV Acquisition”), a newly formed holdingcompany owned by an affiliate of Bruckman, Rosser, Sherrill & Co., Inc. (“BRS”)and certain original shareholders of LD Holdings (See Note 2).  Also, Lazy Days completed a financial restructuringeffective August 6, 2002 whereby its common equity was converted via mergerinto common equity of LD Holdings, representing the balance of the commonequity of the Company (See Note 3). These financial statements include the accounts of Lazy Days and anyobligations of LD Holdings that are pushed down to the subsidiary level.  These obligations include the ESOPdistribution notes, ESOP guarantee purchase obligation, unearned ESOP sharesand the redeemable preferred stock - Class A (See Note 15).

 

Business Operations:  The Company sells and services new andpre-owned recreational vehicles and related parts and accessories.  It also offers to its customers suchancillary services as extended service contracts and overnight campgroundfacilities.  The Company also arrangesfinancing for vehicle sales through third-party financing sources.  The majority of the vehicle receivables aredue from financial institutions.

 

Major Suppliers and Dealer Agreements:  The Company purchases substantially all ofits new recreational vehicles and replacement parts from variousmanufacturers.  The Company purchases newvehicles from four major suppliers which, including new vehicles purchasedunder consignment arrangements (See Note 13), represented approximately 86%,92% and 94% of the total cost of new vehicle revenues for the years endedDecember 31, 2004, 2003 and 2002, respectively.

 

The Company is subject to dealer agreements with eachmanufacturer.  The manufacturer isentitled to terminate the dealer agreement if the Company is in material breachof their agreement terms.

 

Cash:  Cash consists of a normal business checkingaccount with its bank, the first $100,000 of which is insured by an agency ofthe federal government.

 

Restricted Cash:  Restricted cash consisted of a money marketaccount with its bank which was restricted for the payment of benefits underthe Company’s Supplemental Phantom Stock Plan (See Note 14).  The Company’s Supplemental Phantom Stock Planwas terminated May 14, 2004 due to the acquisition of the Company (See Note 2).

 

Revenue Recognition: Revenue from the sale of vehicles is recognizedon delivery, transfer of title and completion of financing arrangements.  Revenue from parts sales and service isrecognized on delivery of service or product. Rental revenue is recorded as unearned revenue at lease inception andrecognized ratably over the term of the lease.

 

The Company receives commissionsfrom the sale of insurance and vehicle service contracts to customers.  In addition, the Company arranges financingfor customers through various financial institutions and receives commissions.

 

The Company may be charged back(“chargebacks”) for financing fees, insurance or vehicle service contractcommissions in the event of early termination of the contracts by thecustomers.  The revenues from financingfees and commissions are recorded at the time of the sale of the vehicles and areserve for future chargebacks is established based on historical operatingresults and the termination provisions of the applicable contracts.

 

35

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Receivables:  The Company sells to customers and arrangesthird-party financing as is customary in its industry.  Interest is not normally charged onreceivables.  Management establishes anallowance for losses on its accounts based on historic loss experience andcurrent economic conditions.  Losses arecharged to the allowance when management deems further collection efforts willnot produce additional recoveries.

 

Inventories:  Vehicle and parts inventories are recorded atthe lower of cost or market, with cost determined by the last-in, first-out (“LIFO”)method.  If the first-in, first-out (“FIFO”)method of inventory costing had been used, net income would have increased byapproximately $1,351,000, $1,456,000 and $660,000 for the years endedDecember 31, 2004, 2003 and 2002, respectively.

 

Property and Equipment:  Property and equipment are stated at costless accumulated depreciation. Expenditures for maintenance and repairs are charged to expense in theperiod incurred.  Betterments andadditions are capitalized.  Depreciationis provided under accelerated and straight-line methods over estimated usefullives for both financial reporting and income tax purposes.  Useful lives range from 15 to 25 years forbuildings and improvements and from 3 to 7 years for vehicles andequipment.  Upon sale or retirement ofitems of property and equipment, the cost and related accumulated depreciationare eliminated from the accounts and the resulting gain or loss, if any, isreflected in earnings of the period of disposition.

 

Evaluation of Impairment of Long-Lived Assets:  In accordance with Statement of FinancialAccounting Standard (“SFAS”) No. 144, “Impairment or Disposal of Long-Lived Assets”,the Company evaluates the carrying value of long-lived assets wheneversignificant events or changes in circumstances indicate the carrying value ofthese assets may be impaired.  TheCompany evaluates potential impairment of long-lived assets by comparing thecarrying value of the assets to the expected net future cash flows resultingfrom the use of the assets.  Managementbelieves no material impairment of long-lived assets exists at December 31,2004 and 2003.

 

Loan and Other Costs:  Loan and other costs are amortized on astraight-line basis over the life of the related loans ranging from 2 1⁄2 to 8years.  With the Company’s restructuringon August 6, 2002 (See Note 3), unamortized loan costs totaling $2,933,873 werecarried forward, in accordance with EITF 98-14, and $1,540,722 of additionalloan costs were capitalized to amortize over the terms of the restated debtagreements.  Unamortized loan costs of$2,645,685 were written off in connection with the refinancing of the Company’slong-term debt on May 14, 2004 and new loan costs of $7,183,371 werecapitalized.  Loan costs are presentednet of accumulated amortization of approximately $525,000 and $1,353,000 atDecember 31, 2004 and 2003, respectively.

 

Fair Value of FinancialInstruments:  The Company’s financial instruments consistof cash, receivables and debt.  Fairvalues of cash and receivables approximate carrying values for these financialinstruments since they are relatively short-term in nature.  The carrying amount of debt, except for theCompany’s Senior Notes (See Note 10), approximates fair value due either tolength of maturity or existence of variable interest rates that approximateprevailing market rates.

 

Advertising Costs: Advertising and promotion costs are generally charged to operations inthe year incurred and totaled approximately $4,820,000, $4,373,000 and$4,179,000 for the years ended December 31, 2004, 2003 and 2002, respectively.

 

36

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Earnings Per Share:  Earningsper share for the years ended December 31, 2004, 2003 and 2002 are computed asfollows:

 
| ** **                                                                                          | ** ** | **2004**  | ** ** | **2003**   | ** ** | **2002**   | ** ** |
|-----------------------------------------------------------------------------------------------------|------------|-----------|------------|------------|------------|------------|------------|
| Numerator:                                                                                          |       |      |       |       |       |       |       |
|                                                                                                |       |      |       |       |       |       |       |
| Net income                                                                                          |       | $         | 7,828,711  |       | $          | 25,369,973 |       | $ | 3,705,112 |   |
|                                                                                                |       |      |       |       |       |       |       |
| Deduct: Preferred stock dividends                                                                   |       | —    |       | —     |       | 437,866    |       |
|                                                                                                |       |      |       |       |       |       |       |
| Net income available to common stockholders, for basic earnings per  share                          |       | 7,828,711 |       | 25,369,973 |       | 3,267,246  |       |
|                                                                                                |       |      |       |       |       |       |       |
| Effect of dilutive securities:                                                                      |       |      |       |       |       |       |       |
|                                                                                                |       |      |       |       |       |       |       |
| Add: Preferred stock dividends                                                                      |       | —    |       | —     |       | 437,866    |       |
|                                                                                                |       |      |       |       |       |       |       |
| Net income available to common stockholders after assumed dilution, for  diluted earnings per share |       | $         | 7,828,711  |       | $          | 25,369,973 |       | $ | 3,705,112 |   |

 
| ** **                                                        | ** ** | **2004** | ** ** | **2003**  | ** ** | **2002**  | ** ** |
|-------------------------------------------------------------------|------------|----------|------------|-----------|------------|-----------|------------|
| Denominator:                                                      |       |     |       |      |       |      |       |
|                                                              |       |     |       |      |       |      |       |
| Weighted-average shares outstanding, for basic earnings per share |       | 183,094  |       | 417,620   |       | 340,326   |       |
|                                                              |       |     |       |      |       |      |       |
| Effect of dilutive securities:                                    |       |     |       |      |       |      |       |
|                                                              |       |     |       |      |       |      |       |
| Common stock put options of parent                                |       | 533,189  |       | 1,445,536 |       | 1,700,153 |       |
| Convertible preferred securities                                  |       | —   |       | —    |       | 53,468    |       |
|                                                              |       |     |       |      |       |      |       |
| Weighted-average shares, for diluted earnings per share           |       | 716,283  |       | 1,863,156 |       | 2,093,947 |       |
|                                                              |       |     |       |      |       |      |       |
| Earnings per share – basic                                   |       | $        | 42.76      |      | $          | 60.75     |       | $ | 9.60 |   |
|                                                              |       |     |       |      |       |      |       |
| Earnings per share – diluted                                 |       | 10.93    |       | 13.62     |       | 1.77      |       |
|                                                                   |            |          |            |           |            |           |            |  |  |  |

 

Segment Information:  The Company follows the provisions of SFASNo. 131, “Disclosures about Segments of an Enterprise and Related Information”.  Based upon definitions contained in SFAS No.131, the Company has determined that it operates in one segment and has nointernational operations.  The Company’soperating business delivers the same products and services to a commongroup.  The Company’s customers aregenerally individuals.  The Company’sbusiness generally follows the same management and marketing strategies, andoperates in a similar regulatory environment.

 

Income Taxes:  Deferred income taxes are determined usingthe liability method.  A valuationallowance, if necessary, is established to reduce net deferred tax assets to anamount that is more likely than not to be realized.

 

37

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Use of Estimates in the Preparation of FinancialStatements:  Thepreparation of financial statements in conformity with accounting principlesgenerally accepted in the United States of America requires management to makeestimates and assumptions that affect the reported amounts of assets andliabilities and disclosure of contingent assets and liabilities at the date ofthe financial statements and the reported amounts of revenues and expensesduring the reporting period.  Actualresults could differ from those estimates. Significant estimates include the deferred tax valuation allowance,reserve for chargebacks and the allowance for doubtful accounts.

 

New AccountingStandards to be Adopted: On December 16, 2004, the Financial Accounting Standards Board (“FASB”)issued SFAS No. 123 (revised 2004), “Share-Based Payment.”  This standard eliminated the alternative ofaccounting for share-based compensation using APB Opinion No. 25.  The revised standard generally requires therecognition of the cost of employee services based on the grant date fair valueof equity or liability instruments issued. The effective date for the Company is the beginning of the first quarterof 2006.  The adoption of this standardis not expected to have any significant impact on the Company’s financialposition, results of operations or cash flows.

 

New AccountingStandards Adopted:  In2004, the Company adopted FASB Interpretation (“FIN”) No. 46 (revised December2003), “Consolidation of Variable Interest Entities,” which addresses theconsolidation and related disclosures of these entities by businessenterprises.  These are entities in whicheither the equity investment at risk is not sufficient to absorb the probablelosses without additional subordinated financial support from other parties, orthe investors with equity at risk lack certain essential characteristics of acontrolling interest.  Under theinterpretation, the Company must consolidate any variable interest entities (“VIEs”)in which the Company holds variable interests and the Company is deemed theprimary beneficiary.  The adoption ofthis standard did not have any impact on the Company’s financial position,results of operations or cash flows.

 

Reclassifications:  Certainamounts in the prior years’ financial statements have been reclassified toconform with the 2004 presentation. These reclassifications had no effect on total assets, stockholder’sequity (deficiency) or net income as previously reported.

 

**NOTE2 - ACQUISITION**

 

On May 14, 2004, RV Acquisition purchased all of theissued and outstanding shares of capital stock of LD Holdings for a totalpurchase price of $217.1 million (the “Acquisition”).  The Acquisition has been accounted for as apurchase and, accordingly, the acquired assets and liabilities assumed havebeen recorded at their estimated fair values at the date of acquisition andapproximate the following:

 
| Cash                           |   | $           | 6,438,002   |   |
|--------------------------------|--------|-------------|-------------|--------|
| Other current  assets          |   | 85,649,891  |        |
| Property, plant  and equipment |   | 33,547,745  |        |
| Other assets                   |   | 639,011     |        |
| Loan and other  costs          |   | 7,183,371   |        |
| Intangible  assets             |   | 85,300,000  |        |
| Goodwill                       |   | 106,357,614 |        |
| Current  liabilities           |   | (66,688,430 | )           |
| Other  liabilities             |   | (5,443,754  | )           |
| Deferred income  taxes         |   | (35,906,250 | )           |
|                           |   |        |        |
|                           |   | $           | 217,077,200 |   |

 

38

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In connection with the Acquisition, the Companyentered into a management services agreement with BRS and a shareholder of LDHoldings, whereby the parties agreed to provide general management services tothe Company, as defined.  In exchange forthese services, the Company agreed to pay the parties an annual management feeequal to the greater of:  1.75% of theCompany’s annual EBITDA, as defined, or $500,000.  Management fee expense for the year endedDecember 31, 2004 was $321,108.

 

**NOTE 3 - RESTRUCTURING**

 

Effective August 6, 2002, Lazy Days and its parent, LDHoldings, completed a restructuring of its principal debt obligations andequity interests.  The principal elementsof the restructuring transactions were as follows:

 

•                  Thecommon equity of Lazy Days was converted via merger into the Class A CommonStock and Class C Common Stock of LD Holdings, representing the balance of thecommon equity of LD Holdings.  The ClassA and Class C Common Stock is held by the Lazy Days’ ESOP, an individualstockholder and Alliance Holdings.

 

•                  Inconnection with this merger, The Alliance Holdings, Inc. ESOP, which previouslyheld common equity of Lazy Days along with investments in several othercompanies, was divided into two separate ESOPs, with 1,387,168 shares of LDHoldings Class A Common Stock and 47,036 shares of Class C Common Stocktransferred to a newly formed ESOP for the employees of Lazy Days consistingsolely of employees of Lazy Days.

 

•                  Allof Lazy Days’ outstanding subordinated indebtedness, including accrued interestand related warrants, totaling $68.6 million was cancelled and exchanged fornewly issued Class A Preferred Stock of LD Holdings.

 

•                  TheSeries A preferred stock of Lazy Days held by Alliance Holdings, Inc. wasexchanged for Class B Preferred Stock of LD Holdings, having similar rights andpreferences as the original preferred stock.

 

•                  LazyDays entered into an Amended and Restated Senior Credit Agreement with itsexisting senior lenders, providing for a $78.4 million restated term creditfacility and a $3.7 million restated revolving credit facility maturing January15, 2007 (See Note 10).

 

•                  LazyDays entered into an Amended and Restated Floor Plan Credit Agreement providingfor up to $75 million in floor plan financing, maturing January 15, 2005, whichrestated and superseded its then existing floor plan facility (See Note 9).

 

•                  LDHoldings issued three series of warrants for the benefit of an individualstockholder and Alliance Holdings.  Eachseries of warrants enables the holder to receive 10% of the common stock of LDHoldings.  Each series of warrants isexercisable only upon the consummation of certain events or upon the commonequity value of LD Holdings achieving specified values.  The warrants had no value on the date ofissuance and thus had no impact on the recording of the debt restructuring.

 

•                  TheLazy Days’ Phantom Stock Plan and Supplemental Phantom Stock Plan wereterminated, with accrued benefits thereunder to be paid to participants over aspecified time period and subject to certain conditions.

 

•                  LDHoldings, an individual stockholder and Alliance Holdings, Inc. have pledgedall of their capital stock and warrants in the Company as collateral related tothe borrowings under the Amended and Restated Senior Credit Agreement.

 

39

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As a result of these transactions, Lazy Days became awholly owned subsidiary of LD Holdings. LD Holdings was in turn owned by the former holders of the Lazy Days’subordinated debt and by the other former owners of the Lazy Days’ commonequity—the Lazy Days’ ESOP, an individual stockholder and AllianceHoldings.  Furthermore, the Lazy Days’ESOP, an individual stockholder and Alliance Holdings entered into an EscrowAgreement which stipulated future liquidation priorities among the parties, asdefined.

 

The recorded effect of the restructuring was theallocation of $13,024,630 of Lazy Days’ paid-in capital deficit to LD Holdings’retained earnings.  This was the resultof the effective distribution of Lazy Days’ December 31, 2001 equity deficit,the 2002 Lazy Days preferred dividends prior to the restructuring, the value ofthe paid-in capital warrants net of related discounts related to the seniorsubordinated debt exchanged for Class A Preferred Stock, and a prior accruedbank fee all to LD Holdings upon consummation of the restructuring.  No gain or loss has been recognized upon thisrestructuring for financial reporting or income tax purposes.

 

**NOTE4 - RECEIVABLES**

 

Receivables consist of the following:

 
| ** **                                    | ** ** | **2004**   | ** ** | **2003**   | ** ** |
|-----------------------------------------------|------------|------------|------------|------------|------------|
|                                          |       |       |       |       |       |
| Contracts in  transit and vehicle receivables |       | $          | 8,716,717  |       | $          | 9,112,832 |   |
| Manufacturer  receivables                     |       | 4,525,832  |       | 3,774,843  |       |
| Finance and  other receivables                |       | 1,390,936  |       | 1,144,817  |       |
|                                          |       | 14,633,485 |       | 14,032,492 |       |
| Less: Allowance  for doubtful accounts        |       | 437,846    |       | 321,834    |       |
|                                          |       |       |       |       |       |
|                                          |       | $          | 14,195,639 |       | $          | 13,710,658 |   |

 

Contracts in transit represent receivables fromfinancial institutions for the portion of the vehicle sales price financed bythe Company’s customers through financing sources arranged by the Company.

 

**NOTE 5 -INVENTORIES**

 

Inventories consist of the following:

 
| ** **                                                                 | ** ** | **2004**   | ** ** | **2003**   | ** ** |
|----------------------------------------------------------------------------|------------|------------|------------|------------|------------|
|                                                                       |       |       |       |       |       |
| New recreational  vehicles                                                 |       | $          | 57,996,423 |       | $          | 52,968,630 |   |
| Pre-owned  recreational vehicles                                           |       | 20,041,678 |       | 20,820,388 |       |
| Parts,  accessories and other                                              |       | 1,322,872  |       | 1,060,188  |       |
|                                                                       |       | 79,360,973 |       | 74,849,206 |       |
| Less: LIFO  reserve                                                        |       | 1,252,533  |       | 4,976,482  |       |
|                                                                       |       | 78,108,440 |       | 69,872,724 |       |
|                                                                       |       |       |       |       |       |
| Rental  recreational vehicles, less accumulated depreciation of $2,060,039 |       | 7,852,407  |       | —     |       |
|                                                                       |       |       |       |       |       |
|                                                                       |       | $          | 85,960,847 |       | $          | 69,872,724 |   |

 

40

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**NOTE6 - PROPERTY AND EQUIPMENT**

 

Property and equipment consist of the following:

 
| ** **                                       | ** ** | **2004**   | ** ** | **2003**   | ** ** |
|--------------------------------------------------|------------|------------|------------|------------|------------|
|                                             |       |       |       |       |       |
| Land                                             |       | $          | —     |       | $          | 3,000 |   |
| Buildings and  improvements                      |       | 41,775,208 |       | 29,219,554 |       |
| Furniture and  equipment                         |       | 7,480,850  |       | 6,696,457  |       |
| Company vehicles                                 |       | 358,015    |       | 322,849    |       |
| Construction in  progress                        |       | 122,617    |       | 35,551     |       |
|                                             |       | 49,736,690 |       | 36,277,411 |       |
| Less:  Accumulated depreciation and amortization |       | 14,315,737 |       | 12,338,424 |       |
|                                             |       |       |       |       |       |
|                                             |       | $          | 35,420,953 |       | $          | 23,938,987 |   |

 

Depreciation expense of property and equipmentaggregated $2,398,890, $2,171,254 and $2,293,734 for the years ended December31, 2004, 2003 and 2002, respectively.

 

**NOTE7 – GOODWILL AND OTHER INTANGIBLE ASSETS**

 

Goodwill, totaling $106,357,614 at December 31, 2004, representsthe excess of costs over fair value of net assets of businesses acquired (SeeNote 2).  Pursuant to Statement ofFinancial Accounting Standards (“SFAS”) No. 142, *Goodwill andOther Intangible Assets*, goodwill and intangible assets acquired ina purchase business combination and determined to have an indefinite life arenot amortized, but instead tested for impairment at least annually.  SFAS No. 142 also requires that intangibleassets with estimable useful lives be amortized over their respective estimateduseful lives and reviewed for impairment in accordance with SFAS No. 144, *Accounting for Impairment or Disposal of Long-Lived Assets*.

 

Intangible assets (all acquired in connection with theacquisition described in Note 2) and the related accumulated amortization as ofDecember 31, 2004 are summarized as follows:

 
| ** **                        | ** ** | **Gross  Carrying  Amount** | ** ** | **Accumulated  Amortization** | ** ** |
|-----------------------------------|------------|-----------------------------|------------|-------------------------------|------------|
| Amortizable  intangible assets:   |       |                        |       |                          |       |
| Manufacturer  relationships       |       | $                           | 26,700,000 |                          | $          | 417,188 |   |
| Non-compete  agreement            |       | 9,000,000                   |       | 1,125,000                     |       |
| Customer  database                |       | 3,600,000                   |       | 2,250,000                     |       |
|                              |       | 39,300,000                  |       | 3,792,188                     |       |
|                              |       |                        |       |                          |       |
| Unamortizable  intangible assets: |       |                        |       |                          |       |
| Trade names and  trademarks       |       | 46,000,000                  |       | —                        |       |
|                              |       | $                           | 85,300,000 |                          | $          | 3,792,188 |   |

 

Amortizableintangible assets are being amortized using the straight-line method over 40years for manufacturer relationships, five years for the non- compete agreementand one year for the customer database. The weighted-average amortization period for all amortizable intangibleassets acquired during 2004 is 28.4 years. Trade names and trademarks are considered to have indefinite usefullives and are not being amortized.

 

41

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Amortization expense for the year ended December 31,2004 was $3,792,188.  Estimatedamortization expense for each of the subsequent five years ending December 31is:  2005 - $3,817,500, 2006 -$2,467,500, 2007 - $2,467,500, 2008 - $2,467,500 and 2009 - $1,342,500.

 

**NOTE8 - LEASES**

 

The Company leases the land for its facilities from arelated company under an operating lease arrangement which expires in2022.  The lease contains four five-yearrenewal options upon expiration of the original lease term and an option topurchase the land through May 14, 2011 for a purchase price of $42,000,000,adjusted for Consumer Price Index (“CPI”) increases.  The lease required minimum monthly rentalpayments of approximately $309,000 through June 30, 2004 and $399,490thereafter (subject to adjustments in 2008, 2013 and 2018 for increases in theCPI) and provides that the lessee pays all property taxes and insurance.  Rent is recognized straight-line over thelife of the lease resulting in deferred rent during the earlier years of thelease.  The Company is responsible formaintenance costs and betterments on the facilities.

 

The Company also leases various office and dealershipequipment under operating leases.  Theseleases have terms ranging from 39 months to 66 months and expire through April2008.

 

As of December 31, 2004, future minimum leasecommitments are as follows:

 
| ** **           | ** ** | **Related Party** | ** ** | **Third Parties** | ** ** |
|----------------------|------------|-------------------|------------|-------------------|------------|
|                 |       |              |       |              |       |
| 2005                 |       | $                 | 4,793,880  |              | $          | 490,281 |   |
| 2006                 |       | 4,793,880         |       | 421,559           |       |
| 2007                 |       | 4,793,880         |       | 292,084           |       |
| 2008                 |       | 4,793,880         |       | 102,001           |       |
| 2009                 |       | 4,793,880         |       | 10,800            |       |
| 2010 and  thereafter |       | 62,320,440        |       | —            |       |
|                 |       |              |       |              |       |
|                 |       | $                 | 86,289,840 |              | $          | 1,316,725 |   |

 

Rent expense was approximately $4,933,000, $4,552,000and $4,480,000 for the years ended December 31, 2004, 2003 and 2002, respectively,including $4,500,208 of related party rental expense in 2004 and $4,348,370 in2003 and 2002.

 

**NOTE9 – FLOOR PLAN NOTES PAYABLE**

 

Effective with the Acquisition, the Company amendedits existing floor plan financing agreement with two financial institutions,collateralized by new and pre-owned recreational vehicles aggregating up to$85,000,000.  The entire facility may beused to finance new vehicle inventory but only up to $26,000,000 may be used tofinance pre-owned vehicle inventory.  OnOctober 28, 2004, the agreement was amended further to permit the Company touse floor plan credit to finance new vehicle inventory to be leased by theCompany (“rental vehicle inventory”). Borrowings are not to exceed $5,000,000 in the aggregate for rentalvehicle inventory or $35,000 per unit. The financial institutions collateralize all vehicles purchased underthese agreements and all receivables generated from the sale of these vehicles.  The interest rate charged (5.28% at December31, 2004) is based on the prime rate or LIBOR. Principal is due upon the sale of the respective vehicle.

 

42

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The Company’s floor plan notes payable are subject tocertain financial and restrictive covenants including debt service coverageratio; current ratio; and limitations on lease rentals, certain executivecompensation, capital expenditures, accounts payable, additional debt, liens,dividends, distributions, certain restricted investments, and certain othercorporate activities, all as defined in the credit agreement.  The Company was in compliance with allcovenants at December 31, 2004.

 

Interest expense on the floor plan notes payable wasapproximately $2,441,000, $2,566,000 and $2,970,000 for the years endedDecember 31, 2004, 2003 and 2002, respectively.

 

**NOTE10 - LONG-TERM DEBT**

 

Effective with theAcquisition, the Company entered into a five-year senior secured revolving lineof credit facility (the “Revolver”).  Thefacility provides for borrowings up to $15 million, as defined, which includesa $10 million sub-facility for the issuance of letters of credit.  There were no outstanding advances under theRevolver at December 31, 2004.  The Companyhad outstanding letters of credit amounting to $2,500,000 at December 31,2004.  Interest on outstanding advancesis payable monthly and is based on the prime rate or LIBOR (6.25% at December31, 2004).    Borrowings under theRevolver are collateralized by substantially all of the Company’s assets.  At December 31, 2003, the Company had anavailable revolving credit facility in the amount of $3,662,676 under which noadvances were outstanding.  This creditfacility was terminated effective with the Acquisition.

 

Long-term debt consistsof the following:

 
| ** **                                                              | ** ** | **2004**    | ** **  | **2003**    | ** ** |
|-------------------------------------------------------------------------|------------|-------------|-------------|-------------|------------|
|                                                                    |       |        |        |        |       |
| 11.75% Senior  Notes, due 2012, less unamortized discount of $1,772,581 |       | $           | 150,227,419 |        | $          | — |   |
|                                                                    |       |        |        |        |       |
| Term Notes                                                              |       | —      |        | 57,815,551  |       |
|                                                                    |       | 150,227,419 |        | 57,815,551  |       |
| Current  maturities                                                     |       | —      |        | (18,018,916 | )          |
|                                                                    |       |        |        |        |       |
|                                                                    |       | $           | 150,227,419 |        | $          | 39,796,635 |   |

 

Concurrent with theAcquisition, the Company issued $152 million of unsecured, senior notes (the “SeniorNotes”) through a private placement exempt from the registration requirementsof the Securities Act.  Subsequently, onDecember 6, 2004, the Company successfully completed the exchange of $137million of its Senior Notes.  Theremaining Senior Notes totaling $15 million were ineligible for exchange.  The Senior Notes mature May 15, 2012 and bearinterest at an annual rate of 11.75% payable each November 15 and May 15, tothe registered holders at the close of business on November 1 and May 1immediately preceding the interest payment date.

 

The Senior Notes rankpari passu with the Company’s existing and future senior debt.  The Senior Notes are effectively subordinatedto the Revolver and amended floor plan credit facility to the extent of theassets securing such debt.

 

The Company has theoption to redeem the Senior Notes at any time before May 15, 2008, at a definedpremium plus accrued and unpaid interest to the date of redemption.

 

43

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The Company shall offerto repurchase Senior Notes from all holders, on a pro rata basis, to the extentof 50% (or 58% in the case of the six-month period ended December 31, 2004) ofthe Company’s free cash flow, as defined, for any six-month period ending oneither June 30  or December 31 of anyfiscal year, commencing with the six-month period ending December 31,2004.  To the extent the Company’s freecash flow for any six-month period is less than $1.0 million, the Company mayelect not to make a free cash flow offer for such period and, in lieu thereof,add such free cash flow to the amount of free cash flow for the next succeedingsix-month period.  The Company’s freecash flow offer approximated $1,458,000 for the six months ended December 31,2004.

 

The Senior Notes’indenture includes covenants that limit the ability of the Company to:  incur additional debt, including sale andleaseback transactions; pay dividends or distributions on its capital stock orrepurchase capital stock; issue stock of subsidiaries; make certaininvestments; create liens on its assets to secure debt; enter into transactionswith affiliates; merge or consolidate with another company; and transfer andsell assets.  As noted, the indenturecontains a covenant to limit the incurrence of additional indebtedness asmeasured by its fixed charge coverage ratio, as defined.  The Company may incur indebtedness on orbefore December 31, 2005 if this ratio is greater than 2.0 to 1.0 or greaterthan 2.25 to 1.0 if such indebtedness is incurred thereafter.  Nevertheless, the Company will not incur paripassu indebtedness if the ratio is less than or equal to 2.5 to 1.0.

 

The Company estimates thefair value of the Senior Notes at December 31, 2004 to be approximately $165.3million, based on their publicly traded value at that date compared to arecorded amount of $150.2 million as of December 31, 2004.

 

The Term Notes werepayable to various financial institutions in quarterly principal installmentsof $2,500,000 plus the amount of “excess cash flow,” as defined in the creditagreement (computed annually and payable each January), plus interest based onthe prime rate or LIBOR adjusted each interest period, as defined in theagreement.  The notes were repaid in fullin 2004.

 

Interest expense andrelated costs on long-term debt were approximately $12,290,000, $3,261,000 and$16,267,000 for the years ended December 31, 2004, 2003 and 2002, respectively.

 

**NOTE 11- INCOME TAXES**

 

The components of the Company’s income tax expense areas follows:

 
| ** **                                                  | ** ** | **2004**  | ** ** | **2003**   | ** ** | **2002**  | ** ** |
|-------------------------------------------------------------|------------|-----------|------------|------------|------------|-----------|------------|
| Current                                                     |       |      |       |       |       |      |       |
| Federal                                                     |       | $         | 2,017,826  |       | $          | 8,745,528 |       | $ | 1,657,499 |   |
| State                                                       |       | 345,410   |       | 1,311,091  |       | 183,285   |       |
|                                                        |       | 2,363,236 |       | 10,056,619 |       | 1,840,784 |       |
|                                                        |       |      |       |       |       |      |       |
| Deferred                                                    |       |      |       |       |       |      |       |
| Federal                                                     |       | (658,167  | )          | (1,056,175 | )          | (437,041  | )          |
| State                                                       |       | (47,037   | )          | (77,798    | )          | (46,661   | )          |
| Increase  (decrease) in valuation allowance                 |       | —    |       | (7,203,702 | )          | 483,702   |       |
|                                                        |       | (705,204  | )          | (8,337,675 | )          | —    |       |
|                                                        |       |      |       |       |       |      |       |
| Tax benefit of  ESOP deductions credited to paid-in capital |       | 1,696,400 |       | 2,823,167  |       | 2,651,871 |       |
|                                                        |       | $         | 3,354,432  |       | $          | 4,542,111 |       | $ | 4,492,655 |   |

 

44

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A reconciliation of the provision for income taxescalculated using the statutory federal income tax rate (35% in 2004 and 2003and 34% in 2002) to the Company’s income tax expense for the years endedDecember 31 is as follows:

 
| ** **                                     | ** ** | **2004**   | ** ** | **2003** | ** ** | **2002**   | ** ** |
|------------------------------------------------|------------|------------|------------|----------|------------|------------|------------|
| ** **                                     | ** ** | **Amount** | ** ** | **%**    | ** ** | **Amount** | ** ** | **%** | ** ** | **Amount** | ** ** | **%** | ** ** |
| Provision for  income taxes at statutory rate  |       | $          | 3,914,100  |     | 35.0       | %          | $          | 10,469,229 |   | 35.0 | % | $ | 2,787,241 |   | 34.0 | % |
|                                           |       |       |       |     |       |       |       |   |   |   |   |   |   |
| Non-deductible  expenses                       |       | 231,380    |       | 2.1      |       | 456,745    |       | 1.5 |   | 671,503 |   | 8.2 |   |
|                                           |       |       |       |     |       |       |       |   |   |   |   |   |   |
| State income  taxes, net of federal tax effect |       | 193,942    |       | 1.7      |       | 801,640    |       | 2.7 |   | 90,172 |   | 1.1 |   |
|                                           |       |       |       |     |       |       |       |   |   |   |   |   |   |
| Reversal of  prior year tax reserves           |       | (1,000,000 | )          | (8.9     | )          | —     |       | — |   | — |   | — |   |
|                                           |       |       |       |     |       |       |       |   |   |   |   |   |   |
| Other, net                                     |       | 15,010     |       | .1       |       | 18,199     |       | .1 |   | 460,037 |   | 5.6 |   |
|                                           |       |       |       |     |       |       |       |   |   |   |   |   |   |
|                                           |       | 3,354,432  |       | 30.0     |       | 11,745,813 |       | 39.3 |   | 4,008,953 |   | 48.9 |   |
|                                           |       |       |       |     |       |       |       |   |   |   |   |   |   |
| Change in  deferred tax valuation allowance    |       | —     |       | —   |       | (7,203,702 | )          | (24.1 | ) | 483,702 |   | 5.9 |   |
|                                           |       |       |       |     |       |       |       |   |   |   |   |   |   |
| Income tax  expense                            |       | $          | 3,354,432  |     | 30.0       | %          | $          | 4,542,111 |   | 15.2 | % | $ | 4,492,655 |   | 54.8 | % |

 

45

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| ** **                             | ** ** | **2004**    | ** **  | **2003**  | ** ** |
|----------------------------------------|------------|-------------|-------------|-----------|------------|
| Deferred tax  assets:                  |       |        |        |      |       |
| Inventory and  receivable allowances   |       | $           | 262,630     |      | $          | 185,419 |   |
| Reserve for  chargebacks               |       | 762,750     |        | 682,392   |       |
| Other accrued  liabilities             |       | 963,470     |        | 1,046,373 |       |
| Deferred rent                          |       | 706,646     |        | 655,717   |       |
| Unearned rental  income                |       | 963,392     |        | —    |       |
| Loan and lease  costs                  |       | —      |        | 361,621   |       |
| Depreciation and  amortization         |       | 72,245      |        | 245,968   |       |
| Deferred  compensation                 |       | —      |        | 1,397,545 |       |
| ESOP cost in  excess of debt paid      |       | —      |        | 3,971,137 |       |
| Other, net                             |       | 532,849     |        | 71,936    |       |
|                                   |       | 4,263,982   |        | 8,618,108 |       |
|                                   |       |        |        |      |       |
| Deferred tax  liabilities:             |       |        |        |      |       |
| Prepaid expenses                       |       | (170,161    | )           | (280,433  | )          |
| Inventories                            |       | (2,383,508  | )           | —    |       |
| Property and  equipment                |       | (3,808,363  | )           | —    |       |
| Intangible  assets                     |       | (30,565,430 | )           | —    |       |
|                                   |       | (36,927,462 | )           | (280,433  | )          |
|                                   |       |        |        |      |       |
| Net deferred tax  assets (liabilities) |       | $           | (32,663,480 | )         | $          | 8,337,675 |   |

 

In assessing the realizability of deferred tax assets,management considers whether it is more likely than not that some portion orall of the deferred tax assets will not be realized.  The Company provides a valuation allowance tooffset portions of deferred tax assets due to uncertainty surrounding thefuture realization of such deferred tax assets. This valuation allowance is adjusted in the year management determinesit is more likely than not that deferred tax assets will or will not berealized.  The valuation allowance of$7,203,702 established at December 31, 2002 was fully reversed in 2003 based onmanagement’s assessment of the Company’s current and future profitability.

 

As a matter of course, the Company is regularlyaudited by various taxing authorities and, from time to time, these auditsresult in proposed assessments where the ultimate resolution may result in theCompany owing additional taxes.  TheCompany believes that its tax positions comply with applicable tax law and thatit has adequately provided for the likely outcome related to thesematters.  Included in income taxespayable at December 31, 2004 and 2003 is approximately $.5 million and$2.3 million, respectively, associated with these matters.  During the year ended December 31, 2004, theCompany reversed $1.0 million of tax reserves established in certain prioryears following the filing of amended income tax returns for those years andpayment of the additional tax liabilities due thereon.

 

46

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**NOTE 12- EMPLOYEE BENEFIT PLANS**

 

Effectivewith the Acquisition, LD Holdings’ employee stock ownership plan (“ESOP”) wasterminated and all corresponding obligations were paid.

 

The Board of Directors determined its contributionannually.  All transactions relative tothe ESOP were funded by Lazy Days and, as a result, the ESOP obligations wererecorded on the financial statements of Lazy Days.  The ESOP borrowed funds from Lazy Days topurchase shares of Class A common stock from the former majority stockholder ofLazy Days on July 19, 1999.  These shareswere held by the ESOP in the ESOP trust’s suspense account and were allocatedto individual ESOP participants as the loan was repaid.  The loan obligation of the ESOP of$95,523,365 at December 31, 2003 was considered unearned employee ESOP sharesand, as such, was recorded as a reduction of the Company’s stockholder’sequity.  The Company’s contributions tothe ESOP, plus any dividends paid on unallocated shares held by the ESOP, wereused to repay the loan principal and interest. Both the loan obligation and the unearned ESOP shares were reduced bythe amount of the loan principal repayments made by the ESOP.  The ESOP compensation expense totaled$534,000, $921,517 and $715,708 for the years ended December 31, 2004,2003 and 2002, respectively.  Thecompensation expense was computed based upon the fair value of the ESOP sharescommitted to be released to participants for the relevant year.  The number of ESOP shares committed to bereleased to participants totaled 46,883, 80,906 and 76,220 shares for the yearsended December 31, 2004, 2003 and 2002, respectively.

 

The fair value of 937,894 unallocated shares withinthe ESOP was approximately $10.7 million at December 31, 2003.

 

As ESOP participants become entitled to receive astock distribution from the ESOP (i.e., in the event of retirement, death,total disability or termination of employment), certain participants put theirshares to the Company.  If the Company’srequired payment for those shares exceeded a certain amount, the Company issuednotes to such participants.

 

The ESOP distribution notes consisted of thefollowing:

 
| ** **                                                                                                                     | ** ** | **2004** | ** ** | **2003** | ** ** |
|--------------------------------------------------------------------------------------------------------------------------------|------------|----------|------------|----------|------------|
|                                                                                                                           |       |     |       |     |       |
| Notes payable to  various individuals in annual installments over five years, bearing interest  at 8%, maturing December 2007. |       | $        | —     |     | $          | 1,230,768 |   |
|                                                                                                                           |       |     |       |     |       |
| Current  maturities                                                                                                            |       | —   |       | (342,066 | )          |
|                                                                                                                           |       |     |       |     |       |
|                                                                                                                           |       | $        | —     |     | $          | 888,702 |   |

 

Certain allocated ESOP shares had put rights.  The Company’s aggregate obligation torepurchase ESOP shares under these put obligations at December 31, 2003 wasapproximately $18.6 million.

 

Effective January 1, 2003, the Company established aprofit sharing plan with 401(k) provisions (the “Plan”).  The Plan covers substantially allemployees.  The Plan allows employeecontributions to be made on a salary reduction basis under Section 401(k) ofthe Internal Revenue Code.  Under the401(k) provision, the Company makes discretionary matching contributions equalto 50% of the employees’ contribution not to exceed 4% of employee pre-taxdeferrals.  Company contributions to thePlan for the years ended December 31, 2004 and  2003 were approximately $473,000 and$197,000, respectively.

 

47

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**NOTE13 - COMMITMENTS AND CONTINGENCIES**

 

The Company purchases and sells new vehicles undervarious consignment arrangements, including one with a related party.  Under the related party arrangement, theconsigned inventory, if not previously purchased, is either purchased by theCompany after 180 days or returned to the related party.  During the term of this agreement, whichcommenced on December 29, 2001, the Company has purchased virtually all inventorythat has been held under consignment. The total consigned inventory, which is not included in the Company’sbalance sheets, approximated $19.9 million and $14.3 million at December 31,2004 and 2003, respectively.  Totalinventory purchased by the Company under this consignment arrangement totaledapproximately $141 million and $111 million for the years ended December 31,2004 and 2003, respectively.

 

Employment agreements exist between the Company andits three senior officers which expire five years from the date of theAcquisition.  The agreements may continueon terms mutually agreeable to the parties. The agreements detail various matters including but not limited to basecompensation and bonus compensation.

 

In addition, concurrent with the Acquisition, theCompany entered into a non-competition agreement with its current ChiefExecutive Officer (“CEO”) and a shareholder of LD Holdings, whereby the CEOagreed not to engage in any business competing with the businesses of theCompany for a period of five years following the Acquisition, or if later,three years following the CEO’s termination of employment with theCompany.  In consideration thereof, theCEO will be paid $2 million per year so long as he continues to remain employedas President and CEO by the Company or serves as a member of the board ofdirectors of the Company, LD Holdings or RV Acquisition, as defined.

 

The Company is a party to numerous legal proceedingsthat arise in the ordinary course of business. The Company has certain insurance coverage and rights of indemnification.  The Company does not believe that theultimate resolution of these matters will have a material adverse effect on theCompany’s business, results of operations, financial condition, or cashflows.  However, the results of thesematters cannot be predicted with certainty and an unfavorable resolution of oneor more of these matters could have a material adverse effect on the Company’sbusiness, results of operations, financial condition, and/or cash flows.

 

**NOTE 14- DEFERRED COMPENSATION**

 

Effective with the Acquisition, the Company’sobligations under its Phantom Stock Plan and Supplemental Phantom Stock Planwere paid in full.

 

The Company’s Phantom Stock Plan benefits vested toparticipants over a 60-month period from the termination date or in the eventof the death or disability, provided that the participant was actively employedby the Company on the day prior to that event, or upon the 65thbirthday of a participant, provided that such was employed by the Company atleast ten years.  The plan was terminatedon August 6, 2002 and the value of all accrued and future benefits thereunder,as calculated based on a formula described in the plan as of December 31, 2001,were to be paid to participants over a specified time and subject to certain conditions.  Payments made relative to the liquidation ofthe plan totaled approximately $705,000 in 2004 and $646,000 in 2003.

 

The Company’s Supplemental Phantom Stock Plan was tobe paid after the Class A Preferred shares are redeemed.  The Company was required to deposit fivepercent of this total liability in a separate restricted cash account everyquarter for 20 quarters, and all interest earned in this separate account is tobe remitted to the beneficiaries of the plan upon payout of the plan benefit.  The plan was also terminated on August 6,2002.  Cash restricted for funding theSupplemental Phantom Stock Plan payout, which was subject to the seniority ofthe long-term debt, totaled $624,349 as of December 31, 2003.  Payments made relative to the liquidation ofthe plan totaled approximately $2.2 million in 2004.

 

48

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These liabilities were recorded at the present valueof the expected fully vested benefits.

 

Total deferred compensation under these plans was asfollows:

 

| ** **                       | ** ** | **2004** | ** ** | **2003**  | ** ** |
|----------------------------------|------------|----------|------------|-----------|------------|
|                             |       |     |       |      |       |
| Phantom stock  plan              |       | $        | —     |      | $          | 1,461,216 |   |
| Supplemental  phantom stock plan |       | —   |       | 2,161,713 |       |
|                             |       |     |       |      |       |
| Total deferred  compensation     |       | $        | —     |      | $          | 3,622,929 |   |

 

In 2004, 2003 and 2002, the Company recorded expenseof approximately $1,088,000, $178,000 and $3,388,000 respectively, related tothese phantom stock plans.

 

**NOTE15 – LD HOLDINGS AND RV ACQUISITION**

 

The balance sheets of LDHoldings, a wholly owned subsidiary of RV Acquisition, consisted of thefollowing at December 31, 2004 and 2003:

 
| ** **                                                    | ** ** | **2004**   | ** ** | **2003**     | ** ** |
|---------------------------------------------------------------|------------|------------|------------|--------------|------------|
|                                                          |       |       |       |         |       |
| ASSETS                                                        |       |       |       |         |       |
|                                                          |       |       |       |         |       |
| Investment in  Lazy Days                                      |       | $          | 67,434,781 |         | $          | — |   |
|                                                          |       |       |       |         |       |
| LIABILITIES                                                   |       |       |       |         |       |
| Investment in  Lazy Days                                      |       | —     |       | 3,945,641    |       |
|                                                          |       |       |       |         |       |
| ESOP GUARANTEE  PURCHASE OBLIGATION                           |       | —     |       | 18,606,448   |       |
|                                                          |       |       |       |         |       |
| REDEEMABLE  PREFERRED STOCK, CLASS A                          |       | —     |       | 81,013,368   |       |
|                                                          |       |       |       |         |       |
| STOCKHOLDERS’  EQUITY (DEFICIENCY)                       |       |       |       |         |       |
| Convertible  preferred stock, Class B                         |       | —     |       | 10,675,448   |       |
| Common stock,  Class A                                        |       | 100        |       | 16,802       |       |
| Common stock,  Class C                                        |       | —     |       | 472          |       |
| Unearned ESOP  shares                                         |       | —     |       | (114,129,813 | )          |
| Paid-in capital                                               |       | 49,274,195 |       | (10,347,233  | )          |
| Retained  earnings                                            |       | 18,160,486 |       | 10,331,775   |       |
| Treasury stock                                                |       | —     |       | (112,908     | )          |
| Total  stockholders’ equity (deficiency)                 |       | 67,434,781 |       | (103,565,457 | )          |
|                                                          |       |       |       |         |       |
| Total  liabilities and stockholders’ equity (deficiency) |       | $          | 67,434,781 |         | $          | — |   |

 

49

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The Class A Preferred stock of LD Holdings, which wasredeemed on May 14, 2004, paid a 12% cumulative dividend, compounded quarterly,and was senior to all other equity.  Itwas convertible into the common equity of LD Holdings, at any time, equal tothe number of shares being converted divided by 7.0267751 and votes on an “asconverted” basis.  The dividends werepaid in additional Class A Preferred stock, in arrears, prior to the date onwhich all debt of the Company has been repaid and in cash, in arrears,thereafter.  LD Holdings was required toredeem, at a price of $1 per share, all Class A Preferred stock on the earlierof the following specified dates:  (1)August 2, 2007 or (2) the 90th day following the full payment of alldebt.

 

The Class B Preferred stock of LD Holdings, which wasredeemed on May 14, 2004, paid an 8% cumulative dividend, compounded quarterly,in additional Class B Preferred stock, in arrears, and was senior to the commonequity of LD Holdings. It was convertible into the common equity of LD Holdingsequal to the number of shares being converted divided by the current per sharefair value of LD Holdings’ common stock, at any time or automatically upon theconsummation of the sale of LD Holdings or the conversion of 50% of theoriginally issued Class A Preferred shares, into the common equity of LDHoldings.  The Class B Preferred stockvoted on the basis of 200% of its “as converted” basis.  The dividends are to be paid at theredemption price only after all Company debt has been paid.

 

The balance sheet of RVAcquisition consisted of the following at December 31, 2004:

 
| ASSETS                                                                | ** ** | ** ** | ** ** |
|-----------------------------------------------------------------------|------------|------------|------------|
| Investment in LD  Holdings                                            |       | $          | 67,434,781 |   |
|                                                                  |       |       |       |
| STOCKHOLDERS’  EQUITY                                            |       |       |       |
| Preferred stock,  Series A, including accrued dividends of $5,552,548 |       | $          | 67,552,548 |   |
| Common stock,  $.01 par value                                         |       | 50,000     |       |
| Paid-in capital                                                       |       | 4,950,000  |       |
| Accumulated  deficit                                                  |       | (5,117,767 | )          |
| Total  stockholders’ equity                                      |       | $          | 67,434,781 |   |

 

TheSeries A Preferred stock of RV Acquisition accrues dividends at a rate of 14%per annum, compounded semi-annually. Dividends on the Series A Preferred Stock are not required to be paid incash and accrue whether or not declared and whether or not there are profits,surplus or other funds legally available for payment of the dividend.  Accrued and unpaid dividends on the Series APreferred Stock aggregated $5,552,548 at December 31, 2004.  Upon a sale of the Company, the holders ofSeries A Preferred Stock have the right to request RV Acquisition to redeemtheir shares at a price equal to the initial purchase price plus any accruedand unpaid dividends thereon.  Similarly,BRS (as holder of the majority of the Series A Preferred Stock) has the right,upon certain change of control transactions, to have such transactions treatedas a liquidation event, as a result of which all shares of Series A PreferredStock will be redeemed at a price equal to the initial purchase price plus anyaccrued and unpaid dividends thereon.

 

EffectiveAugust 20, 2004, RV Acquisition established a nonqualified stock option plan(the “Plan”) for certain of its directors, officers, consultants andemployees.  The Plan is administered by acommittee of the Board of Directors (the “Committee”).  The Committee may grant options and establishthe option term, vesting period and exercise price.  The maximum number of shares to which optionsmay be granted shall not exceed 606,061 and expire no later than ten years fromthe date of grant.  In August 2004, theCommittee granted an aggregate of 363,636 stock options to three key employeesat an exercise price of $1 per share, and an additional 20,000 stock optionswere granted to a key employee at an exercise price of $1 per share in November 2004. The options vest 20% per year commencing one year following the grantdate.

 

RV Acquisition accounts for its stock options usingthe intrinsic value method of Accounting Principles Board Opinion No. 25, “Accountingfor Stock Issued to Employees”.  Had RVAcquisition accounted for its stock options under the provisions of

 

50

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SFAS No. 123, “Accounting for Stock-Based Compensation”,as amended by SFAS No. 148, “Accounting for Stock-Based Compensation –Transition and Disclosure”, pro forma net income for the year ended December31, 2004, computed under the minimum value method of SFAS No. 123, would nothave differed significantly from its reported net income for 2004.

 

51

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**Financial Statement Schedule**

 

**LAZY DAYS’ R.V. CENTER, INC.**

**Schedule II: Valuation and QualifyingAccounts**

 
| **Column A  Description**                                    | ** ** | **Column B  Balance at  Beginning of  Period** | ** ** | **Column C  Additions  Charged to  Costs  and Expenses** | ** ** | **Column D  Deductions** | ** ** | **Column E  Balance at  End of  Period** | ** ** |
|--------------------------------------------------------------|------------|------------------------------------------------|------------|----------------------------------------------------------|------------|--------------------------|------------|------------------------------------------|------------|
|                                                         |       |                                           |       |                                                     |       |                     |       |                                     |       |
| **Year  ended December 31, 2004:**                           |       |                                           |       |                                                     |       |                     |       |                                     |       |
|                                                         |       |                                           |       |                                                     |       |                     |       |                                     |       |
| Reserves and allowances  deducted from asset accounts:       |       |                                           |       |                                                     |       |                     |       |                                     |       |
| Allowance for  doubtful receivables                          |       | $                                              | 322,000    |                                                     | $          | 206,000                  |       | $                                        | 90,000     |   | $ | 438,000 |   |
|                                                         |       |                                           |       |                                                     |       |                     |       |                                     |       |
| Reserves which  support the balance sheet caption, reserves: |       |                                           |       |                                                     |       |                     |       |                                     |       |
| Reserve for  chargebacks                                     |       | $                                              | 1,769,000  |                                                     | $          | 2,927,000                |       | $                                        | 2,662,000  |   | $ | 2,034,000 |   |
|                                                         |       |                                           |       |                                                     |       |                     |       |                                     |       |
| **Year  ended December 31, 2003:**                           |       |                                           |       |                                                     |       |                     |       |                                     |       |
|                                                         |       |                                           |       |                                                     |       |                     |       |                                     |       |
| Reserves and  allowances deducted from asset accounts:       |       |                                           |       |                                                     |       |                     |       |                                     |       |
| Allowance for  doubtful receivables                          |       | $                                              | 234,000    |                                                     | $          | 118,000                  |       | $                                        | 30,000     |   | $ | 322,000 |   |
|                                                         |       |                                           |       |                                                     |       |                     |       |                                     |       |
| Reserves which  support the balance sheet caption, reserves: |       |                                           |       |                                                     |       |                     |       |                                     |       |
| Reserve for  chargebacks                                     |       | $                                              | 1,568,000  |                                                     | $          | 2,826,000                |       | $                                        | 2,625,000  |   | $ | 1,769,000 |   |
|                                                         |       |                                           |       |                                                     |       |                     |       |                                     |       |
| **Year  ended December 31, 2002:**                           |       |                                           |       |                                                     |       |                     |       |                                     |       |
|                                                         |       |                                           |       |                                                     |       |                     |       |                                     |       |
| Reserves and  allowances deducted from asset accounts:       |       |                                           |       |                                                     |       |                     |       |                                     |       |
| Allowance for  doubtful receivables                          |       | $                                              | 267,000    |                                                     | $          | (32,000                  | )          | $                                        | 1,000      |   | $ | 234,000 |   |
|                                                         |       |                                           |       |                                                     |       |                     |       |                                     |       |
| Reserves which  support the balance sheet caption, reserves: |       |                                           |       |                                                     |       |                     |       |                                     |       |
| Reserve for  chargebacks                                     |       | $                                              | 1,270,000  |                                                     | $          | 2,669,000                |       | $                                        | 2,371,000  |   | $ | 1,568,000 |   |

 

All other schedules for which provision is made in theapplicable accounting regulations of the Commission are not required under therelated instructions or are inapplicable and, therefore, have been omitted.

 

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## **ITEM 9.**                       CHANGES IN ANDDISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

## ** **

None.

 

**ITEM 9A.****                    CONTROLS ANDPROCEDURES**

 

As of the end of theperiod covered by this report, we performed an evaluation under the supervisionand with the participation of our management including the chief executiveofficer and the chief financial officer, of the effectiveness of our disclosurecontrols and procedures.  Based on thatevaluation, our management, including the chief executive officer and chieffinancial officer, concluded that our disclosure controls and procedures wereeffective. There have been no changes in internal control over financialreporting during our fourth fiscal quarter that have materially affected, orare reasonably likely to materially affect, our internal control over financialreporting.

 

## **ITEM 9B.**                    OTHERINFORMATION

### ** **

None.

 

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# **PART III**

#  

## **ITEM10.**                      DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

## ** **

The following table sets forth the names, ages and abrief account of the business experience of each person who is a director orexecutive officer of Lazydays as of the date hereof.

 
| **Name**         | ** ** | **Age** | ** ** | **Position**                                            |
|------------------|------------|---------|------------|---------------------------------------------------------|
|             |       |    |       |                                                    |
| Don Wallace      |       | 56      |       | Chief Executive Officer and Director                    |
| Chuck Thibault   |       | 49      |       | Chief Financial Officer                                 |
| John Horton      |       | 46      |       | Chief Operating Officer                                 |
| Stewart Schaffer |       | 53      |       | Chief of Marketing and Communications                   |
| Ken Scolaro      |       | 43      |       | General Manager, Sales                                  |
| Steve Ratcliff   |       | 51      |       | Finance and Insurance Manager                           |
| Bob Grady        |       | 50      |       | Director of Service and Parts                           |
| Linda Stephens   |       | 29      |       | Director of Corporate Reporting and Investor  Relations |
| Charles Macaluso |       | 61      |       | Director and Chairman                                   |
| Thomas Baldwin   |       | 46      |       | Director and Compensation Committee Chairman            |
| Stephen Sherrill |       | 52      |       | Director                                                |
| Michael Salvati  |       | 52      |       | Director and Audit Committee Chairman                   |
| Thomas Donnelly  |       | 48      |       | Director                                                |
| Thomas Millner   |       | 51      |       | Director                                                |

 

*Don Wallace*, alongwith his brother and father, founded the Company in 1976. Mr. Wallace iswidely recognized throughout the RV industry as an innovator in RV retailing,having pioneered the supercenter concept. He currently oversees the sales,finance, marketing and operations and spends a large portion of his timeworking with the various training programs and developing future plans for theCompany. Mr. Wallace had the distinct honor of being recognized as the RVExecutive of the Year in 1993 by RV News magazine and in 2004 as the“Entrepreneur of the Year” by Ernst & Young LLP.

 

*Chuck Thibault*joined us in 1980 and has been our top financial manager since that time. Priorto joining the Company, Mr. Thibault earned a BA in accounting from theUniversity of South Florida and accumulated three years of dealershipexperience. His current responsibilities include leading all of the accounting,financial analysis and legal functions of the Company.

 

*John Horton* beganworking with us in April 2001 on a consulting basis and joined us on afull-time basis as Chief Operating Officer in July 2001. In his currentcapacity Mr. Horton oversees the service operation, human resources, dataprocessing and property management functions of the Company. From 2000 to 2001,Mr. Horton served as Executive Vice President of Aavid Thermalloy, amanufacturer of thermal management products. From 1996 to 2000, Mr. Hortonheld positions as CEO and CFO of IPM Service Corporation, a manufacturer ofautomotive aftermarket products. Mr. Horton earned a BBA from theUniversity of Michigan and an MBA from the University of Texas.

 

*Stewart Schaffer*joined us in 2000 and serves as our Chief of Marketing and Communications.Mr. Schaffer leads the Company’s efforts to maximize sales opportunitiesthrough events, publications, the Lazydays website, rallies and other marketingactivities. From 1987 to 2000, Mr. Schaffer served in executive marketingcapacities for ClubCorp International, becoming Corporate Vice President ofMarketing in 1994. Prior to that Mr. Schaffer held various seniormarketing positions at American Express Company and International PaperCompany. Mr. Schaffer earned a BS and an MBA from the Wharton School ofthe University of Pennsylvania.

 

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*Ken Scolaro*,General Manager of Sales, joined the Company in 1978 and quickly assumedadditional responsibilities and moved into service management. In 1988Mr. Scolaro moved into the sales department and in 1992 was promoted tosales management. Excelling in his position, he was promoted to General Managerof Sales in 1999. Mr. Scolaro is responsible for all of the Company’ssales operations, including supervising the sales managers, the sales desk andthe sales training process. He also plays an important role in developing andmaintaining manufacturer relationships.

 

*Steve Ratcliff*joined the Company in 1991 as the Finance and Insurance Manager. Prior tojoining us, Mr. Ratcliff held the position of Regional Vice President withCanada and Associates, a company that sells financial products to dealerships.Mr. Ratcliff has previously managed the finance and insurance departmentsof several automotive dealerships. Mr. Ratcliff is responsible formaintaining our relationships with our lending partners and securing the bestfinancing terms and insurance products for our customers.

 

*Bob Grady* has been with Lazydaysfor three years in Service and Parts management roles. In 2004 Mr. Grady waspromoted to Director of Service and Parts where he is responsible for all ofthe Company’s service operations.  Priorto Lazydays, Mr. Grady spent six years in the automotive parts aftermarket inoperational and general management capacities, most recently with a supplier toFord and General Motors.  Before that, heheld operational and financial management positions in the computermanufacturing industry.  Mr. Grady holdsa BS in Administration and an MBA.  Hisareas of specialization include process improvement and materials management.

 

*Linda Stephens* joined the Companyin 2004 as the Director of Corporate Reporting and Investor Relations.  Mrs. Stephens is a Certified PublicAccountant (CPA), as designated by the State of Florida and before joining usserved as a manager with a regional CPA firm. Mrs. Stephens is responsible forinvestor relations and all corporate reporting. Mrs.Stephens holds a BS degreefrom the University of South Florida.

 

*Charles Macaluso*is a founding principal and the Chief Executive Officer of Dorchester CapitalAdvisors (formerly East Ridge Consulting, Inc.), a management consultingand corporate advisory firm founded in 1996. From March 1996 toJune 1998, Mr. Macaluso was a partner at MillerAssociates, Inc., a company principally involved in corporate workouts.From 1989 to 1996, Mr. Macaluso was a partner at The Airlie Group, LLP, afund specializing in leveraged buyout, mezzanine and equity investments.Mr. Macaluso currently serves as a director of O’Sullivan Industries, Inc.where he also serves as Chairman of the nominating committee and as a member ofthe audit committee. He is the Lead Director for GEO Specialty Chemical andserves as a member of the compensation committee.  He is also a director of GlobalCrossing, Inc.

 

*Thomas Baldwin*joined BRS as a Managing Director in 2000. From 1988 to 1995, he served as VicePresident and then Managing Director of The INVUS Group, Ltd., a private equityinvestment firm. Prior to that he was a consultant with the Boston ConsultingGroup, a strategy consulting firm. Mr. Baldwin received a BBA from SienaCollege and his MBA from Harvard Business School. Mr. Baldwin is a director ofTotes Isotoner Corporation, Eurofresh, Inc. and The Sheridan Group, Inc.

 

*Stephen Sherrill*is a founder and Managing Director of BRS. Previously, he was an officer ofCiticorp Venture Capital, or CVC, from 1983 through 1994. Prior to joining CVC,he was an associate at the New York law firm of Paul, Weiss, Rifkind, Wharton& Garrison LLP He earned his BA at Yale University and his JD at ColumbiaLaw School. Mr. Sherrill is a director of Doane Pet Care Enterprises, B&GFoods, Inc., HealthPlus Corporation, MWI Veterinary Supply, Inc.,HealthEssentials, Inc., Seroyal, Inc., Eurofresh, Inc. and Remington ArmsCompany, Inc.

 

*Michael Salvati*has been a principal at Oakridge Consulting since 2000, where he providesfinancial consulting and interim management services for various companies.During this time, Mr. Salvati has served as the Chief Financial Officer ofAMIS Holdings, Inc., a designer and manufactuer of semiconductor productsthrough its subsidiary, AMI Semiconductor, Inc. since February 2004after working as a consultant for them since November 2003. He also servedas Chief Financial Officer of Global Exchange Services from November 2002to August 2003. Prior to founding Oakridge Consulting, Mr. Salvatiserved as Chief Operating Officer at National Financial Partners from 1998 to2000. Mr. Salvati has over 25 years of financial and businessexperience, including as a partner at KPMG LLP and Chief Financial Officer ofCulligan Water Technologies, Inc. Mr. Salvati has also had extensiveexperience in managing and advising companies in financial distresssituations.  In connection with his priordistressed company work, Mr. Salvati served as Chief Financial Officer ofMarchFirst, Inc. for approximately seven weeks prior to its Chapter 7bankruptcy filing in 2001, and had served as a director of Coho Energy, Inc.and Prime Succession, Inc. which filed for Chapter 11 protection in 2002 and2003, respectively, and which were subsequently sold. Mr. Salvati holdsboth a B.S. in Microbiology and M.S. in Accounting from the University ofIllinois in Champaign-Urbana.

 

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*Thomas Donnelly*is currently apartner with Landmark Partners, specializing in financial services, KentuckyOutdoor Advertising and Hard Ten Group. In 1971 Mr. Donnelly joined CampingWorld, Inc. where he served as Chief Executive Officer from 1986 until 2002.Camping World is the world’s largest retailer of RV accessories, supplies andservices. Mr. Donnelly is also a Director of Branch Bank & Trust (BB&T),The Downtown Redevelopment Authority, Girls, Inc. and Southern Kentucky SoccerAssociation, all of Bowling Green, Kentucky.

 

*Thomas Millner* is currently theChief Executive Officer of Remington Arms Company, Inc. He also served as thecompany’s President, Chief Operating Officer, and Director from 1994 until1999. In 1987 Mr. Millner joined Pilliod Cabinet Company, a leading producer ofopening price point bedroom wall systems, and living room tables. In 1990 hewas named Chief Executive Officer where he served until Pilliod was sold toLADD Furniture in 1994. From 1976 until 1987 Mr. Millner held various sales andmanagement positions with Broyhill and Thomasville Furniture Industries. Mr.Millner holds a BA with Honors from Randolph Macon College where he wasadmitted into Phi Beta Kappa. Mr. Millner is a Director of Stanley Furniture(NASDAQ:STLY) and serves as Chairman of the Audit Committee. Mr. Millner isalso a director of Atlanta Belting Company, Atlanta, Ga.

 

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## **ITEM11.**                      EXECUTIVE COMPENSATION

## ** **

**ExecutiveCompensation**

 

The following summarizes, for the year indicated, theprincipal components of compensation for our Chief Executive Officer and theother four highest compensated employees (collectively, the “named executiveofficers”). The compensation set forth below fully reflects compensation forwork performed on our behalf.

 

**Summary Compensation Table**

 
| **Name and Principal Position**         | ** ** | **Period** | ** ** | **Salary ($)** | ** ** | **Bonus ($)(6)** | ** ** | **Other Annual  Compensation ($)** | ** ** |
|-----------------------------------------|------------|------------|------------|---------------------|------------|-----------------------|------------|-----------------------------------------|------------|
|                                    |       |       |       |                |       |                  |       |                                    |       |
| Don Wallace  Chief Executive Officer    |       | 2004       |       | $                   | 865,384.61 |                  | $          | 915,489.65                              |       | $ | 1,323,201.66 | (1) |
| Chuck Thibault  Chief Financial Officer |       | 2004       |       | $                   | 476,209.44 |                  | $          | 1,222,988.96                            |       | $ | 160,785.04 | (2) |
| John Horton  Chief Operating Officer    |       | 2004       |       | $                   | 528,847.54 |                  | $          | 500,000.00                              |       | $ | 15,118.77 | (3) |
| Ken Scolaro  General Manager of Sales   |       | 2004       |       | $                   | 185,500.00 |                  | $          | 279,105.24                              |       | $ | 145,921.36 | (4) |
| Patrick Overby Sales Manager            |       | 2004       |       | $                   | 105,076.96 |                  | $          | 293,543.16                              |       | $ | 95,863.77 | (5) |
|                                         |            |            |            |                     |            |                       |            |                                         |            |  |  |  |  |

 

----

(1) Consists of a paymentupon liquidation of outstanding obligations under the Company’s former PhantomStock and Supplemental Phantom Stock plans upon closing of the Transactions of$146,041.33, premium reimbursement with respect to disability and lifeinsurance of $10,493.64, and a noncompete payment of $1,166,666.69.  See “Employment Agreements” set forth belowin this Item 11 for a summary of the noncompete and covenant agreement pursuantto which such noncompete payment was made. Effective with the Transactions, the Company’s then existing obligationsunder its Phantom Stock Plan and Supplemental Phantom Stock Plan were paid infull.   The plans were terminated onAugust 6, 2002 and the value of all accrued and future benefits under the planswere to be paid out over an extended period of time or upon the occurrence ofcertain specified events.  In connectionwith the Transactions, all outstanding obligations in connection with theterminated plans were paid in full, and all remaining liabilities were paid outto former plan participants.  See “Note14–Deferred Compensation” to our audited financial statements set forth in Item8 hereof.

 

(2) Consists of a paymentupon liquidation of outstanding obligations under the Company’s former PhantomStock and Supplemental Phantom Stock plans upon closing of the Transactions of$145,981.56 and premium reimbursements with respect to disability and lifeinsurance of $14,803.48.  

 

(3) Consists of premiumreimbursements with respect to disability and life insurance of $15,118.77.

 

(4) Consists of a paymentupon liquidation of outstanding obligations under the Company’s former PhantomStock and Supplemental Phantom Stock plans upon closing of the Transactionsof  $145,921.36.

 

(5) Consists of a paymentupon liquidation of outstanding obligations under the Company’s former PhantomStock and Supplemental Phantom Stock plans upon closing of the Transactions of$95,863.77.

 

(6) Includes a one-timebonus payment of $500,000 paid to Mr. Horton and $1,000,000 paid to Mr.Thibault, respectively, in connection with their assistance with and theclosing of the Transactions.

 

**Option/SARGrants During the Year Ended December 31, 2004**

 

Don Wallace, Chuck Thibault and John Horton were eachgranted options to purchase 121,212 shares of RV Acquisition Common Stock at anexercise price of $1 per share as of August 20, 2004 in accordance withthe RV Acquisition Inc. 2004 Stock Option Plan. Bob Grady was also grantedoptions to purchase 20,000 shares of RV Acquistion Common Stock at an exerciseprice of $1 per share as of November5, 2004.  The options vest 20% per yearcommencing one year following the grant date.

 

**AggregateOption/SAR Exercises During the Year Ended December 31, 2004 and 2004Year-End Option/SAR Values**

 

There were no exercises of stock options by the named executiveofficers during the year ended December 31, 2004 and there were nounexercised options held by the named executive officers as ofDecember 31, 2004.

 

**CompensationCommittee Interlocks and Insider Participation**

 

The members of RV Acquisition’s Compensation Committeeare Thomas Baldwin, Chairman, Thomas Donnelly and Thomas Millner.  No members of the Compensation Committee wasan officer or employee of Holdings or any of its subsidiaries during the fiscalyear ended December 31, 2004. No member was formerly an officer ofHoldings or of its subsidiaries. In addition, no executive officer of Lazydaysserves on the board of directors or the compensation committee of anotherentity where a committee member is employed. Messrs. Baldwin and Sherrillare Managing Directors of BRS, which will own approximately 87% of the CommonStock. Bruckmann, Rosser, Sherrill & Co., LLC, an affiliate of BRS,and Lazydays have entered into a Management Services Agreement. See Item 13—”CertainRelationships and Related Transactions—Management Services Agreement.”

 

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**ManagementEmployment Agreements**

 

*EmploymentAgreements*

 

The Company has entered into employment agreementswith Don Wallace, Chuck Thibault and John Horton. Under the employmentagreements, Mr. Wallace is paid a base salary of $1 million per year,Mr. Thibault is paid a base salary of $575,000 per year andMr. Horton is paid a base salary of $500,000 per year, all of which willbe adjusted annually based on changes in the consumer price index.  Thibault and Horton’s employment agreementsprovide for the payment of bonuses equal to a specified percentage of theexecutive’s base salary if we achieve specified performance goals. Eachemployment agreement has a term of 5 years, subject to early terminationby resolution of the board of directors, upon the death or permanent disabilityof the executive or upon the executive’s voluntary resignation. If any of theexecutives listed above are terminated without “cause” by the Company or ifthey terminate their employment within 90 days of a “good reason event,”as each term is defined in their employment agreement, we are obligated to makeseverance payments consisting of their then current salary and bonus for a twoyear period for Thibault and Horton and, depending on the time of termination,twelve or six months for Mr. Wallace. In addition, pursuant to the termsof a non-competition and covenant agreement, Mr. Wallace has agreed torestrictions on his ability to be involved in any business which is incompetition with us for a period of the longer of five years from the closingdate of the Acquisition if he remains employed with us or three years after histermination for any reason. In connection with his agreement not to competewith us, Mr. Wallace will receive payments equal to $2 million perannum so long as (i) he continues to remain employed by us or,(ii) serves as a member of the board of RV Acquisition, Lazydays orHoldings, and thereafter for 12 months after the date on which hisemployment is terminated by us without cause or is terminated byMr. Wallace with good reason, in each case if such termination occursprior to the 18 month anniversary of the closing, or for 6 months ifany such termination occurs thereafter. These contracts also containnon-competition provisions in the case of Thibault and Horton, which restrictthe executives from being involved in any business which is in competition withus during the period of their employment and for a period of two yearsthereafter. In addition, the employment agreements for Thibault and Horton andthe non-competition and covenant agreement for Mr. Wallace contain anexpress obligation of confidentiality in respect of our proprietary informationand an agreement to assign intellectual property rights to us.

 

**Our Benefit Plans**

 

*401(k)Defined Contribution Plan*

 

We maintain a defined contribution “401(k)” plan thatis subject to the provisions of ERISA and the Code. The plan provides fordiscretionary matching contributions equal to 50% of the first 4% of employeepre-tax deferrals made under the plan. For the 2004 plan year, the amount ofsuch matching contributions was $473,000.

 

**ExecutiveStock Option Plan**

 

On August 20, 2004, RV Acquisition Inc. adoptedthe RV Acquisition Inc. 2004 Stock Option Plan under which certain keyemployees, including the named executive officers of Lazydays, may be grantedoptions to purchase up to 606,061shares of RV Acquisition Common Stock. Theplan is administered by the board of directors of RV Acquisition, or to theextent permitted by law, a committee designated by RV Acquisition’s board.

 

**PrivatePlacement of RV Acquisition Stock**

 

OnSeptember 28, 2004, RV Acquisition and BRS LP consummated an offeringof RV Acquisition Stock previously held by BRS LP and its affiliatesto certain employees of Lazydays and others. As a result, 186,787 sharesof RV Acquisition Common Stock and 1,489,228 shares of RV AcquisitionSeries A Preferred Stock were sold to such employees and others that participatedin the private placement.

 

58

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**OtherEmployee Benefits**

 

Wealso offer highly competitive compensation and benefits to our employees.Benefits include medical, dental, pharmacy and vision insurance, short andlong-term disability and life insurance, flexible spending accounts andvacation up to three weeks after seven years of employment with us.

 

**Committeesof the Board of Directors**

 

TheCompany’s board of directors established an audit committee and a compensationcommittee.  The members of the auditcommittee are Stephen Sherrill, Charles Macaluso and Michael Salvati, chairman.The Company’s Board of Directors has determined that Mr. Salvati is the Company’sdesignated audit committee financial expert.  Mr. Salvati isconsidered “independent” as the term is used in Item 7(d)(3)(iv) ofSchedule 14A under the Exchange Act. The audit committee recommends theannual appointment of auditors with whom the audit committee will review thescope of audit and non-audit assignments and related fees, accountingprinciples we will use in financial reporting, internal auditing procedures andthe adequacy of our internal control procedures. The members of thecompensation committee are Tom Baldwin, Thomas Donnelly and Thomas Millner. TomBaldwin will serve as Chairman. The compensation committee reviews and approvesthe compensation and benefits for our employees, directors and consultants,administers our employee benefit plans, authorizes and ratifies stock option grantsand other incentive arrangements, and authorizes employment and relatedagreements. The board of directors of the Company may contemplate establishingother committees in the future.

 

**Code of Ethics**

** **

We have adopted a code of ethics applicable to our principalexecutive officer, principal financial officer, principal accounting officerand persons performing similar functions. The text of this code is available, free of charge, upon request.  Such requests may be made by calling our mainnumber on the cover page of this report or by writing to the following address:Lazy Days’ R.V. Center, Inc. 6130 Lazy Days Boulevard, Seffner, Florida33584-2968, Attn: Director of Corporate Reporting and Investor Relations.

 

**Compensation of Directors**

 

We reimburse members of the board of directors for anyout-of-pocket expenses incurred by them in connection with services provided insuch capacity. In addition, we compensate members of the board of directors$25,000 per year for services provided in that capacity and an additional$7,500 if such board member serves as the chairman of our audit committee.  Board members are also paid $2,000 formeetings attended in person and $500 for meetings attended telephonically, andcommittee members are paid $1,000 per in person and $500 per telephonic meetingif a meeting occurs on a different day than a meeting of the full board.

 
| **ITEM 12.** | ** ** | **SECURITY  OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER  MATTERS** |
|--------------|------------|------------------------------------------------------------------------------------------------------|

 

Holdings owns 100% of our capital stock. The followingtable sets forth certain information with respect to the beneficial ownershipof RV Acquisition’s Common Stock as of December 31, 2004, by: (i) eachperson or entity who owns of record or beneficially 5% or more of any class ofRV Acquisition’s voting securities; (ii) each of our named executiveofficers and directors; and (iii) all of our directors and named executiveofficers as a group. Except as noted below, the address for each of thedirectors and named executive officers is 6130 Lazy Days Boulevard, Seffner,Florida 33584-2968.

 

**Security Ownership Table**

 

 
| ** **                                                                                          | ** ** | **Number and % of Shares of RV Acquisitions, Inc.(1)** | ** ** |
|-----------------------------------------------------------------------------------------------------|------------|--------------------------------------------------------|------------|
| ** **                                                                                          | ** ** | **Series A Preferred  Stock**                          | ** ** | **Common Stock** | ** ** |
| ** **                                                                                          | ** ** | **Shares**                                             | ** ** | **% Total** | ** ** | **Shares** | ** ** | **% Total** | ** ** |
|                                                                                                |       |                                                   |       |   |   |   |   |   |   |
| **Greater  than 5% Stockholders**                                                                   |       |                                                   |       |   |   |   |   |   |   |
| Bruckmann,  Rosser, Sherrill & Co. II, L.P.

126 East 56th Street   New York, New York 10022(2) |       | 35,584                                                 |       | 57.4 | % | 4,225,366 |   | 84.5 | % |
| Don Wallace                                                                                         |       | 22,906                                                 |       | 36.9 | % | 531,915 |   | 10.6 | % |
| **Named  Executive Officers and Directors**                                                         |       |                                                   |       |   |   |   |   |   |   |
| Chuck Thibault                                                                                      |       |                                                   | *          |   | * |   | * |   | * |
| John Horton                                                                                         |       |                                                   | *          |   | * |   | * |   | * |
| Ken Scolaro                                                                                         |       |                                                   | *          |   | * |   | * |   | * |
| Steve Ratcliff                                                                                      |       |                                                   | *          |   | * |   | * |   | * |
| Bob Grady                                                                                           |       |                                                   | *          |   | * |   | * |   | * |
| Charles Macaluso                                                                                    |       |                                                   | *          |   | * |   | * |   | * |
| Thomas  Baldwin(2),(3)                                                                              |       | —                                                 |       | — |   | — |   | — |   |
| Stephen  Sherrill(2),(3)                                                                            |       | —                                                 |       | — |   | — |   | — |   |
| Michael Salvati                                                                                     |       |                                                   | *     |   | * |   | *  |   | * |
| All executive  officers and directors as a group(4)                                                 |       | 23,747                                                 |       | 38.3 | % | 636,141 |   | 12.5 | % |

----

* Represents less than1%.

 

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Thedirectors and named executive officers as a group beneficially own(i) 636,141 shares of Common Stock (which represents approximately 12.4%of the outstanding Common Stock) and (ii) 23,747 shares of Series APreferred Stock.

 

1.                                       Beneficialownership is determined in accordance with Rule 13d-3 under the ExchangeAct. In computing the number of shares beneficially owned by a person and thepercentage ownership of that person, shares of Common Stock subject to optionsheld by that person that are currently exercisable or exercisable within60 days of closing of the offering are deemed outstanding. Such shares,however, are not deemed outstanding for the purposes of computing thepercentage ownership of any other person. Holdings is a wholly-owned subsidiaryof RV Acquisition and the Company is a wholly-owned subsidiary of Holdings.

 

2.                                       Bruckmann,Rosser, Sherrill & Co. II, LP. (“BRS LP”) is a private equityinvestment fund managed by Bruckmann, Rosser, Sherrill & Co., LLc.BRSE, LLC. (“BRSE”) is the general partner of BRS LP and by virtue of suchstatus may be deemed to be the beneficial owner of the shares owned by BRS LP.BRSE has the power to direct BRS LP as to the voting and disposition of sharesheld by BRS LP. No single person controls the voting and dispositive power ofBRSE with respect to the shares owned by BRS LP. Bruce C. Bruckmann, Harold O.Rosser, Stephen C. Sherrill, Paul D. Kaminski and Thomas J. Baldwin are themanagers of BRSE, and none of them individually has the power to direct or vetothe voting or disposition of shares owned by BRS LP. BRSE expressly disclaimsbeneficial ownership of the shares owned by BRS LP. Each ofMessrs. Bruckmann, Rosser, Sherrill, Kaminski and Baldwin expresslydisclaims beneficial ownership of the shares owned by BRS LP.

 

3.                                       Theaddress of each of Mr. Baldwin and Mr. Sherrill is c/o Bruckmann, Rosser,Sherrill & Co., Inc., 126 East 56th Street, New York, New York10022.

 

4.                                      Totalincludes shares owned by Don Wallace listed above who is both a 5% shareholderand a named executive officer and director.

 

## **ITEM13.**                      CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

## ** **

**Agreementsto be Entered into in Connection with the Transactions**

 

**StockPurchase Agreement**

 

Pursuant to the stock purchase agreement, RVAcquisition agreed to acquire all of Holdings’ outstanding common and preferredstock for a purchase price of $206.0 million (including repayments ofcertain indebtedness and subject to pre-closing working capital, tax benefitand cash adjustments). In connection with the Acquisition, we repaid all of ourexisting indebtedness, which was equal to $59.0 million as of May 14,2004, and paid approximately $11.1 million for certain transaction relatedfees and expenses. In connection with the Acquisition, each holder of shares ofour capital stock was entitled to receive a portion of the stock purchase consideration.The ESOP was terminated in connection with the Acquisition. Immediatelyfollowing the Acquisition, RV Acquisition’s outstanding Common Stock was equalto approximately 89% owned by BRS LP, its affiliates and co-investors and theremainder was owned by existing members of management and existingstockholders. The stock purchase agreement contained customary provisions forsuch agreements, including representations and warranties with respect to thecondition and operations of the business, covenants with respect to conduct ofthe business prior to and following the closing date of the stock purchase, andvarious closing conditions, including the execution of a 

 

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non-compete agreement with Don Wallace, execution ofan escrow agreement, the amendment to our existing floor plan credit facility,the closing of our new senior secured revolving credit facility, an amendmentto our facility lease with 1-4 (described below), the obtaining of financingand the continued accuracy of the representations and warranties. A portion ofthe consideration was deposited into escrow accounts, including$20.0 million of cash and $20.0 million of new Series APreferred Stock of RV Acquisition (to be issued to certain existing stockholdersof Holdings) to support indemnity obligations of the selling stockholders.

 

**StockPurchase Consideration**

 

In connection with the Transactions, Don Wallacereceived $22.9 million in Series A Preferred Stock, $0.5 millionin Common Stock, $7.0 million of Restricted Old Notes and$3.4 million in cash with respect to the equity in Holdings owned by him.ESOP holders received a total of $24.6 million. Other existingshareholders of Holdings received $102.9 million.

 

**StockholdersAgreement**

 

In connection with the Transactions, the stockholdersof RV Acquisition, including BRS LP, entered into a stockholders agreement,which establishes the composition of the board of directors and provides forcertain restrictions and rights with respect to sales and issuances of RVAcquisition’s securities. In particular, the stockholders agreement providesthat no employee holder may transfer his or her capital stock of RVAcquisition, except to immediate family members, family trusts and charitableorganizations. Employees have the right to sell a pro rata portion of theirstock in RV Acquisition if BRS LP elects to sell all or portion of its Holdingsstock. BRS LP also has the right to cause a sale of RV Acquisition to occur andto require the other holders of RV Acquisition stock to participate in such asale. Finally, if RV Acquisition proposes to issue new equity securities to BRSLP, each holder of RV Acquisition stock has the right to purchase its pro ratashare of such new securities.

 

**RegistrationRights Agreement**

 

In connection with the Transactions, RV Acquisitionentered into a registration rights agreement with BRS LP and certain otherequity holders of RV Acquisition. Under the registration rights agreement, BRSLP and such other equity holders have the ability to cause RV Acquisition toregister securities of RV Acquisition held by the parties to the registrationrights agreement and to participate in registrations by RV Acquisition of itsequity securities.

 

**EmploymentAgreements; Stock Option Plan**

 

Upon closing of the Transactions, we entered into newemployment agreements with certain key employees. On August 20, 2004, weput in place a new stock option plan which will provide for issuances of commonstock of RV Acquisition to certain key management employees, including thenamed executive officers. See “Item 11—Executive Compensation—EmploymentAgreements” and “Item 11—Executive Compensation—Benefit Plans—Stock OptionPlan.”

 

**ManagementServices Agreement**

 

In connection with the Transactions, we entered into amanagement services agreement (the “Management Services Agreement”) withBruckmann, Rosser, Sherrill & Co., LLC (“BRS LLC”), an affiliate ofBRS. Under the terms of this agreement, BRS LLC provides:

 

•                  generalmanagement services;

 

•                  assistancewith the negotiation and analysis of financial alternatives; and

 

•                  otherservices agreed upon by BRS LLC

 

In exchange for these services, BRS LLC and DonWallace will earn an annual fee equal to the greater of:

 

(1)                                  1.75%of our annual EBITDA (as defined in the indenture related to the notes); or

 

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(2)                                  $500,000.

 

10.6% of such fee will be payable to Don Wallace and89.4% will be payable to BRS LLC. In addition to certain restrictions on thepayment of the management fee contained in the senior secured revolving creditfacility and the amended floor plan credit facility, the management servicesagreement contains certain restrictions on the payment of that fee. Themanagement services agreement also provides that the payment of all fees andother obligations under the management services agreement will be subordinatedto the prior payment in full in cash of all interest, principal and otherobligations on our notes and the new senior secured revolving credit facilityin the event of a bankruptcy, liquidation or winding-up of Lazydays.

 

BRS LLC provided various advisory services to usrelated to the Transactions. These services included arranging and negotiatingthe refinancing of the senior secured revolving credit facility and amendedfloor plan credit facility, arranging and structuring the Acquisition,including forming RV Acquisition and planning its capital structure, planningLazydays’ structure and related services. Pursuant to the Management ServicesAgreement, for these services, BRS LLC and Don Wallace received a transactionfee of $3.5 million plus reasonable expenses upon completion of theTransactions. 10.6% of such fee was payable to Mr. Wallace and 89.4% waspayable to BRS LLC. In addition, BRS LLC will be entitled to receive atransaction fee equal to 1.5% of the transaction value upon any future materialacquisition, divestiture, financing or refinancing by RV Acquisition, Holdingsor us.

 

**Issuanceof Series A Preferred Stock to BRS LP and Certain Existing Stockholders ofHoldings**

 

In connection with the Transactions, RV Acquisitionissued 62,000 shares of new Series A Preferred Stock at a purchase priceof $1,000 per share, for an aggregate purchase price of $62.0 million. TheSeries A Preferred Stock was purchased through a contribution of$20.0 million of existing Holdings equity to RV Acquisition in exchangefor Series A Preferred Stock and an additional $42.0 million, ofwhich $37.5 million was purchased with cash contributed by BRS LP, and$4.5 million was issued to Don Wallace in exchange for Holdings equitycontributed to RV Acquisition by him in exchange for Series A PreferredStock.

 

Dividends on the Series A Preferred Stock willaccrue at a rate of 14% per annum, compounded semi-annually. Dividends on theSeries A Preferred Stock are not required to be paid in cash and willaccrue whether or not declared and whether or not there are profits, surplus orother funds legally available for payment of the dividend.

 

The Series A Preferred Stock will have aliquidation preference equal to the purchase price plus accrued and unpaiddividends. If an “organic change” (i.e., a merger or sale of substantially allof the Company’s assets) occurs, the holders of the Series A PreferredStock may require redemption of all or any portion of their shares at theamount of the liquidation preference plus accrued and unpaid dividends. TheSeries A Preferred Stock will, with respect to dividends, rights uponliquidation, winding up and dissolution, rank senior to RV Acquisition’s CommonStock. RV Acquisition will be unable to authorize any dividend or distribution,or pay any dividend or make any distribution with respect to any juniorsecurities, unless all accrued and unpaid preferred dividends have been paid incash. In addition, RV Acquisition will be unable to effect any redemption orrepurchase of any junior securities (other than upon the exercise by RVAcquisition’s repurchase rights with respect to any Common Stock issued toemployees or others providing services upon a termination of their employmentor other service relationship) unless the Series A Preferred Stock hasbeen redeemed. Except as otherwise required by law or provided in the Company’scertificate of incorporation, the holders of Series A Preferred Stock willnot be entitled to vote.

 

The holders of a majority of the Series A PreferredStock have the right, upon certain change of control transactions, to have suchtransaction treated as a liquidation event, as a result of which all shares ofSeries A Preferred Stock will be redeemed at a price equal to theliquidation preference plus accrued and unpaid dividends.

 

The holders of the Series A Preferred Stock willalso be offered the right to purchase a pro rata share of any other preferredequity securities (or rights to acquire preferred equity securities, such aswarrants, convertibles, etc.) to be offered by RV Acquisition to BRS LP or itsaffiliates on the same terms they are offered to such parties. BRS LP will alsogrant to the other holders of Series A Preferred Stock the right toparticipate (on a pro rata basis and on the same terms and conditions) in anysale of Preferred Stock held by BRS LP to a third-party. The $20.0 millionof new Series A Preferred Stock of RV Acquisition issued to the existingstockholders of Holdings will be held in escrow to support indemnityobligations of the selling stockholders. During the period that starts on theclosing of 

 

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the stock purchase agreement and ends two yearsfollowing the filing of certain governmental filings relating to the ESOP withthe Department of Labor, the sellers may not transfer certain of their sharesof Series A Preferred Stock held by them other than pursuant to a one-yearcall arrangement between Don Wallace and one other seller or certain permittedtransferees.

 

**Issuanceof Common Stock to BRS LP and Certain Existing Stockholders of Holdings**

 

In connection with the Acquisition, RV Acquisitionissued 5,000,000 shares of new Common Stock, par value $0.01 per share at apurchase price of $1.00 per share, for an aggregate purchase price of$5.0 million. Of the $5.0 million of Common Stock, $4.5 millionof Common Stock was purchased by BRS LP for cash. The balance of $0.5 millionwas issued to Don Wallace in exchange for certain equity in Holdingscontributed by him to RV Acquisition.

 

**PrivatePlacement of RV Acquisition Stock**

 

On September 28, 2004, RV Acquisition andBRS LP consummated an offering of RV Acquisition Stock previously held byBRS LP and its affiliates to certain employees of Lazy Days. As a result,186,787 shares of RV Acquisition Common Stock and 1,489,228 shares ofRV Acquisition Series A Preferred Stock were sold to such employees thatparticipated in the private placement.

 

**TheESOP**

 

In July 1999 the ESOP borrowed funds fromLazydays to purchase, through a holding company, shares of LazydaysClass A common stock representing beneficial ownership of 75% of thecommon stock of Lazydays from Don Wallace which, together with the existing 9%interest the ESOP already owned, made the ESOP an 84% beneficial owner ofLazydays. As part of the 2002 restructuring described below, these shares wereconverted via merger into the Class A common stock and Class C commonstock of Holdings and have been held by the ESOP in the ESOP trust’s suspenseaccount and allocated to individual participants in the ESOP as the loan hasbeen repaid. Subsequently, also as a result of the 2002 restructuring describedbelow, additional equity securities were issued to the Company’s debt holders,which effectively diluted the ESOP’s equity ownership interest in the Company.The loan obligation of the ESOP of $95,523,365 at December 31, 2003 wasconsidered unearned employee ESOP shares and, as such, was recorded as areduction to Holdings’ stockholders’ equity. Holdings’ contributions to theESOP, plus any dividends paid on unallocated shares held by the ESOP, have beenused to repay the loan principal and interest. Both the loan obligation and theunearned ESOP shares have been reduced by the amount of the loan principalrepayments made by the ESOP. The ESOP compensation expense totaled $534,000 forthe year ended December 31, 2004. The compensation expense was computedbased upon the fair value of the ESOP shares committed to be released toparticipants for the relevant year. At December 31, 2004,  approximately 47,000 shares were committed tobe released.

 

As ESOP participants became entitled to receive astock distribution from the ESOP (i.e., in the event of retirement, death,total disability or termination of employment), certain participants put theirshares to Holdings. If Holdings’ required payment for those shares exceeded acertain amount, Holdings issued notes to such participants. These notes werepayable to various participants in annual installments over a period of fiveyears, bearing interest at 8%. Approximately $1.2 million in principal ofthese distribution notes was outstanding at December 31,2003, all of whichwere repaid in full and cancelled at closing in connection with theTransactions.

 

Certain allocated ESOP shares had premium floor priceput rights. Holdings’ aggregate obligation to repurchase the ESOP’s sharesunder these put obligations at December 31, 2003 was approximately$18.6 million. In connection with the Acquisition, all of the allocatedshares with premium floor price put rights were paid an amount at closing equalto the applicable put price with respect to such shares. We used the proceedsfrom the Transactions to satisfy any outstanding ESOP obligations discussedabove, including Holdings’ outstanding distribution notes and put obligations.

 

In connection with the Transactions, the ESOP wasterminated and three categories of Holdings’ stock were purchased from theESOP. Those categories were (1) Class A common stock allocated toESOP participants and subject to a premium floor price, (2) Class Ccommon stock allocated to ESOP participants and subject to a

 

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premium floor price and (3) Class A commonstock, whether allocated or unallocated, not subject to a premium floor price.Proceeds received by the ESOP from the sale of the unallocated suspense accountshares were used to pay principal and interest on the loan. After such payment,Lazydays forgave any remaining loan balance owed to it by the ESOP.

 

**The2002 Restructuring**

 

As a result of a decline in financial performanceresulting from an industry-wide downturn commencing in 2000, we incurredpayment defaults on certain of our outstanding indebtedness and as a result weunderwent a restructuring of our principal debt obligations and equityinterests, effective August 6, 2002. As a result of the 2002restructuring, our common equity was converted via merger into the Class Acommon stock and Class C common stock of Holdings, representing thebalance of the common equity of Holdings. The Class A and Class Ccommon stock was held by the ESOP and Don Wallace. All of Lazydays’ outstandingsubordinated indebtedness totaling $68.6 million, including accruedinterest and related warrants, was cancelled and exchanged for newly issuedClass A preferred stock of Holdings. The Series A preferred stock ofLazydays held by Alliance Holdings, Inc. was exchanged for Class Bpreferred stock of Holdings, having similar rights and preferences as theoriginal preferred stock. In connection with the restructuring, we also enteredinto our existing senior credit facility and our existing floor plan creditagreement which superseded our then existing floor plan and senior facilities.Finally, Lazydays’ then existing Phantom Stock Plan was amended and theSupplemental Phantom Stock Plan was terminated, with accrued benefitsthereunder to be paid to participants over a specified time period and subjectto certain conditions. Any remaining obligations related to the amendment ofthe Phantom Stock Plan and the termination of the Supplemental Phantom StockPlan, valued at approximately $3.6 million as of December 31, 2003,were satisfied by the sellers with the proceeds of the stock purchase upon theclosing of the Acquisition.

 

As a result of these transactions, Lazydays was asubstantially wholly owned subsidiary of Holdings. Holdings, which prior to theclosing of the Transactions, was in turn owned by the former holders of oursubordinated debt and by the other former owners of our common equity—the ESOP,Don Wallace and Alliance Holdings, Inc.

 

**FacilityLease Agreement**

 

We lease our 126-acre facility, located at 6130 LazyDays Boulevard, Seffner, Florida, from 1-4 Land Holding Limited Company (“1-4”),an entity controlled by Don Wallace, our Chief Executive Officer, under a leasearrangement, the initial term of which will expire in 2022. The lease wasamended on May 14, 2004 and currently contains four five-year renewaloptions upon expiration of the original lease term (the outside expiration datewill be 2042). The annual rent is currently $4,793,880, and will increasethereafter based on periodic CPI adjustments. The lease provides for equalmonthly rental payments and provides that the lessee pays all property taxesand insurance. Rent was calculated on a straight-line basis over the life ofthe lease resulting in deferred rent during the earlier years of the lease. Weare responsible for maintenance costs as well as betterments to the facilities.

 

Pursuant to the lease, we currently have a right offirst offer and first refusal on any sale by 1-4, as well as an optionexercisable through May 14, 2011 to purchase the land for $42,000,000 (subjectto CPI increases).

 

**ConsignmentSales Agreement**

 

We hold new vehicles under a consignment arrangementwith 1-4 for up to 180 days. After 180 days, the consigned inventoryis either purchased by us as inventory or returned to 1-4. During the term ofthe agreement, we have purchased all inventory that has been held underconsignment. The total consigned inventory, which is not included in ourbalance sheets, approximated $19.9 million and $14.3 million atDecember 31, 2004  and December 31,2003, respectively. Total consigned inventory purchased by us has totaledapproximately $141 million and $111 million for the years endedDecember 31, 2004  and December 31,2003, respectively.

 

**Purchaseof Restricted Notes; Exchange Offer**

 

Don Wallace, our Chief Executive Officer, purchased$15.0 million in aggregate principal amount of restricted notes inconnection with the offering of our senior notes due 2012, of which$7.0 million in consideration 

 

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was comprised of equity in Holdings and the remainderwas purchased for cash. Because Mr. Wallace is an affiliate, therestricted notes held by him were not eligible to be exchanged in connectionwith our exchange offer.  In connectionwith our exchange offer, $137 million in aggregate principal amount ofoutstanding privately placed senior notes for public notes which wasconsummated in December of 2004.

 

**2004Air Charter Services**

 

Don Wallace owns a 100% interest in Air LogicSolutions, an air charter services company. In 2004 the Company paid Air LogicSolutions, on arms-length terms, $248,303 for air charter services which wereused primarily in connection with the sale of the Company in connection withthe Transactions and for use during the “road show” in connection with the issuanceof our senior notes.

 

**Managementand Other Fees Paid in Connection with the Transactions**

 

Charles Macaluso, Charles Thibault and John Hortonwere each paid of $1,000,000, $1,000,000 and $500,000, respectively, inconnection with their assistance with and the successful closing of theTransactions.  Mr. Horton’s and Mr.Thibault’s payments are included in the amounts reported under “bonus” forfiscal 2004 reported in “Item 11–Executive Compensation” above (see note 6 tothe Summary Compensation Table).

 

## **ITEM 14.**                      PRINCIPAL ACCOUNTANTFEES AND SERVICES

## ** **

The following table presents fees for servicesprovided to the Company by Crowe Chizek and Company LLC for 2004.

 

| **(In thousands)**      | ** ** | **2004** | ** ** |
|-------------------------|------------|----------|------------|
| Audit Fees (a)          |       | $        | 171        |   |
| Audit-Related  Fees (b) |       | 669      |       |
| Tax Fees (c)            |       | 15       |       |
| All Other Fees  (d)     |       | 5        |       |
| Total                   |       | $        | 860        |   |

 

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(a)                                  Feesfor professional services provided for the audit of the Company’s annualfinancial statements as well as reviews of Lazydays’ quarterly reports on Form10-Q, accounting consultations on matters addressed during the audit or interimreviews, and SEC filings.

(b)                                 Feesfor professional services which principally include due diligence and audits inconnection with the Transactions, including review of offering memorandums, registrationstatements and issuance of comfort letters and consents.

(c)                                  Feesfor professional services for tax related advice and compliance. 

(d)                                 Feesfor professional services for internal control related advice and compliance.

 

# **PART IV**

#  

## **ITEM15.**                      EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

## ** **

##### (a)(1) FinancialStatements:

#####  

See Part II, Item 8. Financial Statements andSupplementary Data for an index of the Company’s financial statements.

 

##### (a)(2) The followingfinancial statement schedule is included in Item 8, “Financial Statements andSupplementary Data”

#####  

##### Schedule II –Valuation and Qualifying Accounts

#####  

(a)(3)Exhibits required by Item 601 of Regulation S-K.

 

Seeattached Exhibit Index.

 

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**SIGNATURES**

** **

Pursuant to the requirements of Section 13 or 15(d) ofthe Securities Exchange Act of 1934, Lazy Days’ R.V. Center, Inc. has dulycaused this report to be signed on its behalf by the undersigned, thereto dulyauthorized, in the city of Seffner, Florida, on the 31st day of March, 2005.

 

Pursuant to the requirements of the SecuritiesExchange Act of 1934, this report has been signed by the following persons onbehalf of Lazy Days’ R.V. Center, Inc. and in the capacities and on the datesindicated.

 
| **Signature**           | ** ** | **Title**                                                             | ** ** | **Date**       |
|-------------------------|------------|-----------------------------------------------------------------------|------------|----------------|
| ** **              | ** ** | ** **                                                            | ** ** | ** **     |
| /s/ Donald W. Wallace   |       | Chief Executive Officer  and Director  (Principal Executive Officer)  |       | March 31, 2005 |
| Donald W. Wallace       |
|                    |       |                                                                  |       |           |
| /s/ Charles L. Thibault |       | Chief Financial Officer  and Treasurer  (Principal Financial Officer) |       | March 31, 2005 |
| Charles L. Thibault     |
|                    |       |                                                                  |       |           |
| /s/ Kathleen Bachtel    |       | Corporate Controller  (Principal Accounting  Officer)                 |       | March 31, 2005 |
| Kathleen Bachtel        |
|                    |       |                                                                  |       |           |
| /s/ Charles Macaluso    |       | Director                                                              |       | March 31, 2005 |
| Charles Macaluso        |
|                    |       |                                                                  |       |           |
| /s/ Stephen Sherrill    |       | Director                                                              |       | March 31, 2005 |
| Stephen Sherrill        |
|                    |       |                                                                  |       |           |
| /s/ Thomas Baldwin      |       | Director                                                              |       | March 31, 2005 |
| Thomas Baldwin          |
|                    |       |                                                                  |       |           |
| /s/ Michael Salvati     |       | Director                                                              |       | March 31, 2005 |
| Michael Salvati         |
|                    |       |                                                                  |       |           |
| /s/ Thomas Donnelly     |       | Director                                                              |       | March 31, 2005 |
| Thomas Donnelly         |
|                    |       |                                                                  |       |           |
| /s/ Thomas Millner      |       | Director                                                              |       | March 31, 2005 |
| Thomas Millner          |

** **

**SUPPLEMENTAL INFORMATION TO BEFURNISHED PURSUANT TO SECTION 15 (d) OF THE ACT BY REGISTRANTS WHICH HAVE NOTREGISTERED SECURITIES PURSUANT TO SECTION 12 OF THE ACT.**

 

No annual report to security holders covering theregistrant’s last fiscal year has been sent to security holders. No proxystatement, form of proxy or other proxy soliciting material has been sent tomore than 10 of the registrant’s security holders with respect to any annual orother meeting of security holders.

** **

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** **

**EXHIBIT INDEX**

** **
| **No.** | ** ** | **Exhibit Index** |
|---------|------------|-------------------|
|    |       |              |
| 2.1     |       |              | Stock Purchase  Agreement by and between Lazy Days, LD Holdings, Inc., the Employee  Stock Ownership Plan and Trust for the Employees of Lazy Days, certain other  stockholders of LD Holdings, Inc. and RV Acquisition Inc., dated as  of April 27, 2004.* |
| 2.2     |       |              | Disclosure  Schedules to the Stock Purchase Agreement by and between Lazy Days, LD  Holdings, Inc., the Employee Stock Ownership Plan and Trust for the  Employees of Lazy Days, certain other stockholders of LD Holdings, Inc.  and RV Acquisition Inc., dated as of May 14, 2004.* |
| 3.1     |       |              | Amended and  Restated Articles of Incorporation of Lazy Days, dated as of August 6,  2002.* |
| 3.2     |       |              | Amended and Restated  By-laws of Lazy Days, dated as of August 6, 2002.* |
| 4.1     |       |              | Indenture by and  between Lazy Days, a Florida corporation, and The Bank of New York, a New  York banking corporation, dated as of May 14, 2004.* |
| 4.2     |       |              | Registration  Rights Agreement by and among Lazy Days, Deutsche Bank Securities Inc.,  Jefferies & Company, Inc. and Wells Fargo Securities, LLC,  dated as of May 14, 2004.* |
| 4.3     |       |              | Purchase  Agreement by and among Lazy Days, Deutsche Bank Securities Inc.,  Jefferies & Company, Inc. and Wells Fargo Securities, LLC,  dated as of May 12, 2004.* |
| 10.1    |       |              | Agreement Among  Sellers by and among LD Holdings Inc., Lazy Days, the Employee Stock  Ownership Plan and Trust for the Employees of Lazy Days, the Sellers  signatories thereto, and Oakridge Consulting, dated as of April 27,  2004.* |
| 10.2    |       |              | Contribution  Agreement by and among Donald W. Wallace, Alliance Holdings, Inc., PPM  America Special Investments Fund, L.P., Lion Connecticut Holdings, Inc.,  (as successor by merger to Reliastar Financial Corp.), PPM America Special  Investments CBO II, L.P., PB Capital Corporation, The Provident Bank, RV  Acquisition Inc., and Bruckmann, Rosser, Sherrill & Co. II,  L.P., dated as of May 14, 2004.* |
| 10.3    |       |              | Employment  Agreement by and among Lazy Days, RV Acquisition Inc., John Horton, and  Bruckmann, Rosser, Sherrill & Co. II, L.P., dated as of May 14,  2004.*(1) |
| 10.4    |       |              | Employment  Agreement by and among Lazy Days, RV Acquisition Inc., Charles L.  Thibault, and Bruckmann, Rosser, Sherrill & Co. II, L.P., dated as  of May 14, 2004.*(1) |
| 10.5    |       |              | Employment  Agreement by and among Lazy Days, RV Acquisition Inc., Donald W.  Wallace, and Bruckmann, Rosser, Sherrill & Co. II, L.P., dated as of  May 14, 2004.*(1) |
| 10.6    |       |              | Termination  Agreement by and among Lazy Days, LD Holdings, Inc., LDRV Holdings  Corp., Alliance Holdings, Inc., Donald W. Wallace, PPM America Special  Investments Fund, L.P., PPM America Special Investments CBO II, L.P., Lion  Connecticut Holdings, Inc., (as successor by merger to Reliastar  Financial Corp.), PB Capital Corporation, The Provident Bank, and James L.  Farnsworth (not in his individual capacity, but solely as trustee of the  Employee Stock Ownership Plan and Trust for the employees of Lazy Days as  directed by Consulting Fiduciaries, Inc.), dated as of May 14, 2004.* |
| 10.7    |       |              | Escrow Agreement  by and among Alliance Holdings, Inc., PPM America Special Investments  Fund, L.P., Lion Connecticut Holdings, Inc., (as successor by merger to  Reliastar Financial Corp.), PPM America Special Investments CBO II, L.P., PB  Capital Corporation, The Provident Bank, RV Acquisition Inc., Donald W.  Wallace, Oakridge Consulting, Inc. (acting hereunder through Michael  Salvati, not individually, but solely as agent for the Sell ers), RV  Acquisition Inc. and Wells Fargo Bank, National Association (as escrow  agent), dated as of May 14, 2004.* |
| 10.8    |       |              | Redemption  Agreement by and among LD Holdings, Inc. and Lazy Days, dated as of  May 14, 2004.* |
| 10.9    |       |              | Management  Agreement by and among Bruckmann, Rosser, Sherrill & Co., L.L.C., RV  Acquisition Inc., LD Holdings, Inc., and Lazy Days, dated as of  May 14, 2004.* |
| 10.10   |       |              | Non-compete and  Covenant Agreement by and among Lazy Days, RV Acquisition Inc.,  Donald W. Wallace, and Bruckmann, Rosser, Sherrill &  Co. II, L.P., dated as of May 14, 2004.*(1) |
| 10.11   |       |              | Registration  Rights Agreement by and among RV Acquisition Inc., Bruckmann, Rosser,  Sherrill & Co. II, L.P., Donald W. Wallace, and each of the  executives of Lazy Days who executes a joinder to the Agreement on or after  the date thereof, dated as of May 14, 2004.* |

 

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| 10.12 |   |   | Stockholders  Agreement by and among RV Acquisition Inc., Bruckmann, Rosser,  Sherrill & Co. II, L.P., Donald W. Wallace,each of the  executives of Lazy Days who executes a joinder to the Agreement on or after  the date thereof, and Alliance Holdings, Inc., dated as of May 14,  2004.*                                                                                                                                                                                                                                                                                                                                                       |
|-------|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 10.13 |   |   | Wallace  Contribution Agreement by and among Donald W. Wallace, RV  Acquisition Inc., and Bruckmann, Rosser, Sherrill & Co. II,  L.P., dated as of May 14, 2004.*                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 10.14 |   |   | Wallace Note  Agreement by and among Donald W. Wallace and Lazy Days, dated as of  May 14, 2004.*                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| 10.15 |   |   | Second Amended  and Restated Floor Plan Credit Agreement by and among Lazy Days, Bank of  America, N.A. (successor by merger to Banc of America Specialty  Finance, Inc.), and KeyBank National Association (a national banking  association), amended and restated as of May 14, 2004.*                                                                                                                                                                                                                                                                                                                                                                                    |
| 10.16 |   |   | Second Amended  and Restated Floor Plan Security Agreement by and among Lazy Days and Bank of  America, N.A. (successor by merger to Banc of America Specialty  Finance, Inc.), amended and restated as of May 14, 2004.*                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.17 |   |   | Ground Lease by  and between I-4 Land Holding Limited Company and Lazy Days, dated as of  July 1999.*                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| 10.18 |   |   | First Amendment  to Lease by and between I-4 Land Holding Limited Company and Lazy Days, dated  as of May 14, 2004.*                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| 10.19 |   |   | Loan and  Security Agreement by and between Lazy Days and Wells Fargo  Foothill, Inc., dated as of May 14, 2004.*                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| 10.20 |   |   | Collateral  Assignment of Stock Purchase Agreement by and between RV  Acquisition Inc. and Wells Fargo Foothill, Inc., dated as of  May 14, 2004.*                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| 10.21 |   |   | Pledge and  Security Agreement by and among Lazy Days, LD Holdings, Inc. and Wells  Fargo Foothill, Inc., dated as of May 14, 2004.*                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.22 |   |   | Exclusive  Consignment Contract for Sale of Recreational Vehicles by and between I-4  Land Holding Limited Company and Lazy Days, dated as of December 29,  2001.*                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| 10.23 |   |   | RV Acquisition  Inc. 2004 Stock Option Plan, as adopted on August 20, 2004. **(1)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| 10.24 |   |   | Form of  Non-Qualified Stock Option Agreement.**(1)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| 10.25 |   |   | Form of  Subscription Agreement.**(1)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| 10.26 |   |   | Amendment  No. 1 to Second Amended and Restated Floor Plan Credit Agreement dated  as of October 28, 2004, by Lazy Days’ R.V. Center, Inc., Bank of  America, N.A. (successor by merger to Banc of America Specialty  Finance, Inc.), as Administrative Agent and as Collateral Agent, and  Bank of America, N.A. (successor by merger to Banc of America Specialty  Finance, Inc.) and Keybank National Association, as Lenders, to amend  the Second Amended and Restated Floor Plan Credit Agreement, originally dated  as of July 15, 1999, amended and restated as of July 31, 2002, and  amended and restated as of May 14, 2004.* |
| 10.27 |   |   | Collateral  Assignment of Leases, dated as of October 28, 2004, by and between Lazy  Days’ R.V. Center, Inc., a Florida corporation, and Bank of America,  N.A. (as successor by merger to Banc of America Specialty  Finance, Inc.), as collateral agent (together with its successors in  trust under the Second Amended and Restated Floor Plan Collateral Agency  Agreement originally dated as of July 15, 1999, as amended and restated  as of July 31, 2002, and as amended and restated as of May 14,  2004.*                                                                                                                              |
| 21.1  |   |   | Subsidiaries of  Lazy Days’ R.V. Center, Inc.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| 31.1  |   |   | Certification of  Principal Executive Officer dated March 31, 2005 pursuant to Section 302 of  the Sarbanes-Oxley Act of 2002                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 31.2  |   |   | Certification of  Principal Financial Officer dated March 31, 2005 pursuant to Section 302 of  the Sarbanes-Oxley Act of 2002                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 32.1  |   |   | Certification of  Principal Executive Officer dated March 31, 2005 pursuant to 18 U.S.C.  Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of  2002                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| 32.2  |   |   | Certification of  Principal Financial Officer dated March 31, 2005 pursuant to 18 U.S.C.  Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of  2002                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |

 

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*                                         Previouslyfiled with Form S-4 on August 12, 2004.

 

**                                  Previouslyfiled with Form S-4/A on October 29, 2004.

 

(1)                                  Compensatoryplan or arrangement or management contract as defined in Rule 601 of RegulationS-K.

 

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