UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


Washington,
DC 20549




FORM
10-K




x
            ANNUAL REPORT PURSUANT TO SECTION
      13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
  1934




for
the fiscal year ended December 31, 2007




OR




 ̈
            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.


(Exact
name of registrant as specified in its charter)








Florida
            59-1764794(State
      or other jurisdiction of
              incorporation
      or organization)
            (I.R.S. Employer
              Identification No.)6130
      Lazy Days BoulevardSeffner,
      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 if the registrant is a well-known seasoned issuer, as defined in
Rule 405 of the Securities Act.
  Yes ̈Nox
  Indicate
by check mark if the registrant is not required to file reports pursuant to
Section 13 or Section 15(d) of the Act.
  YesxNo ̈
 
 Indicate
by check mark whether the registrant (1) has filed all reports required to
be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that it was required
to file such reports), and (2) has been subject to such filing requirements
for the past 90 days.
 Yes   ̈    No  x
 
 (Note:  As
voluntary filers, not subject to the filing requirements, the registrants filed
all reports under Section 13 or 15(d) of the Exchange Act during the preceding
12 months)
 
 Indicate
by check mark if disclosure of delinquent filers pursuant to Item 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 information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form
10-K.
 Yes   ̈    No  x
 
 Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting
company.  See definitions of “large accelerated filer”, “accelerated
filer”, and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
(Check one):
  Large
accelerated filer ̈Accelerated filer ̈Non accelerated filerx    Smaller
Reporting Company ̈
  Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange
 Act.):
 Yes ̈Nox
  As of
March 31, 2008, the registrant had 100 shares of common stock outstanding
all of which is held by LD Holdings, Inc.
 
 DOCUMENTS
INCORPORATED BY REFERENCE
 
 None.





TABLE OF
CONTENTS




PART IItem 1.
            Business
            1Item
      1A.
            Risk
      Factors
            11Item
      1B.
            Unresolved
      Staff Comments
            15Item
      2.
            Properties
            15Item
      3.
            Legal
      Proceedings
            15Item
      4.
            Submission of
      Matters to a Vote of Security Holders
            15PART IIItem
      5.
            Market
      for Registrant’s Common Equity, Related Stockholder Matters and Issuer
      Purchases of Equity Securities
            16Item
      6.
            Selected
      Financial Data
            16Item
      7.
            Management’s Discussion and
      Analysis of Financial Condition and Results of
      Operations
            17Item
      7A.
            Quantitative
      and Qualitative Disclosures About Market Risk
            26Item
      8.
            Financial
      Statements and Supplementary Data
            26Item
      9.
            Changes in
      and Disagreements with Accountants on Accounting and Financial
      Disclosure
            47Item 9A.
            Controls and
      Procedures
            47Item
      9B.
            Other
      Information
            47PART IIIItem
      10.
            Directors,
      Executive Officers and Corporate Governance
            48Item
      11.
            Executive
      Compensation
            50Item
      12.
            Security
      Ownership of Certain Beneficial Owners and Management and Related
      Stockholder Matters
            61Item
      13.
            Certain Relationships and Related Transactions and
      DirectorIndependence
            62Item
      14.
            Principal
      Accountant Fees and Services
            66PART IVItem
      15.
            Exhibits and Financial
      Statement Schedules
            66









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.




SPECIAL
NOTE REGARDING FORWARD-LOOKING STATEMENTS




Certain
information set forth in this report contains “forward-looking statements”
within the meaning of the Private Securities Litigation Reform Act of 1995.
These statements relate to analyses and other information that are based on
forecasts of future results and estimates of amounts not yet determinable. These
statements also relate to our future prospects, developments and business
strategies. The statements contained in this report that are not statements of
historical fact may include forward-looking statements that involve a number of
risks and uncertainties.




We have
used the words “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,”
“may,” “plan,” “predict,” “project,” “will” and similar terms and phrases,
including references to assumptions, in this report to identify forward-looking
statements. These forward-looking statements are made based on our management’s
expectations and beliefs concerning future events affecting us and are subject
to uncertainties and factors relating to our operations and business
environment, all of which are difficult to predict and many of which are beyond
our control, that could cause our actual results to differ materially from those
matters expressed in or implied by these forward-looking statements. Our actual
results could differ materially from those anticipated by such forward-looking
statements.





All
forward-looking statements, including without limitation, management’s
examination of historical operating trends, are based upon our current
expectations and various assumptions. Our expectations, beliefs and projections
are expressed in good faith and we believe there is a reasonable basis for them,
but there can be no assurance that management’s expectations, beliefs and
projections will result or be achieved. All forward-looking statements apply
only as of the date made. Unless required by law, we undertake no obligation to
update or revise forward-looking statements to reflect events or circumstances
after the date made or to reflect the occurrence of unanticipated
events.







PART
I




ITEM 1. BUSINESS




Our
Company




We are
the largest single site recreational vehicle (“RV”) retailer in the world. In
2007, we sold 6,647 new and pre-owned RVs in the retail market, including Class
A motor homes, Class C motor homes, conventional travel trailers and fifth-wheel
travel trailers. Class A motor homes are the highest priced class of vehicles in
the RV industry and represented 86% of our 2007 new RV revenues. We also
generate revenue from commissions earned on vehicle financing and insurance
products we sell on behalf of third-party providers, from the service,
maintenance and repair of RVs, daily fees paid by customers who utilize our
RallyPark campground facilities, and rental revenue from our temporary housing
rental program. We operate on a 126-acre site near Tampa, Florida that attracts
more than 250,000 visitors annually. We generated 2007 revenues of $778
million.




One of
our primary strategies is to create “Customers for Life” by offering a unique
purchasing experience that combines the largest single-site RV inventory in the
world, our one-of-a-kind scenic facility with multiple amenities, and our
focused, process oriented approach to servicing the customer. Building a
welcoming atmosphere that caters to the entry level as well as the seasoned RV
enthusiast is an intangible element critical to our success, and our philosophy
is thoroughly ingrained in and continually reinforced throughout our corporate
culture at every level. Our unique customer-focused business model has resulted
in a loyal, stable and growing customer base and an unrivaled reputation within
the RV community. Our ability to generate a significant portion of our annual
unit sales from repeat business and word-of-mouth referrals is testimony to the
success of this approach.




To
enhance our guests’ experience, we have developed our facilities with their
needs in mind and as a result, our site has become a destination location for RV
owners throughout the United States, Mexico and Canada. Our facilities feature a
number of unique attractions including a 1,200-site outdoor show space of new
and pre-owned RVs, a 230-bay RV servicing facility with a 6,600 square foot
Service Pavilion that includes professional full-time concierge services,
complimentary Starbucks® coffee
concession, luxurious seating areas, flat screen televisions and wireless
internet connections. At our 299-site RallyPark, we hold over 100 rallies each
year and provide our visitors the opportunity to meet and spend time with other
RV enthusiasts. In addition, visitors to our site can enjoy complimentary meals
at our Italian themed Café, or visit our Learning Center for complimentary
seminars. Customers who have purchased a luxury Class A motor home enjoy the
exclusive services and amenities of our CrownClub facility and all other buyers
become members of our exclusive Club Lazydays. Finally, there are additional
attractions located adjacent to our facilities that appeal to RV owners
including a Camping World retailer, a Flying J RV Travel Plaza and a Cracker
Barrel restaurant. These features and our customer focused philosophy cater to
the RV enthusiast community and have allowed us to attract potential RV
purchasers from across the United States. In 2007, 42% of our unit sales were to
customers that reside outside the state of Florida.





▪
              Unique
      Business Model and Customer Focus.Our business model was developed
      to serve our customers and create “Customers for Life.” An RV purchase is
      often one of our customers’ most significant purchase decisions and one
      that we strive to make enjoyable. Our philosophy provides for a unique
      customer experience to ensure satisfaction and generate loyalty.
      Additionally, we offer numerous amenities to visitors and customers at our
      site whether or not they are actively seeking to purchase an RV. We
      believe our unique business model has allowed Lazydays to become a
      destination site for RV enthusiasts and RV purchasers from all over North
      America.




▪
              Process Driven Sales
      Organization. We have a talented and experienced sales organization
      with approximately 150 sales professionals. Our sales professionals
      benefit from at least one hour of training each business day on specific
      product features and selling techniques. Our sales professionals’
      compensation structure is 100% commission based and is driven by profit
      achievement and customer satisfaction ratings. Each salesperson follows a
      carefully scripted process which we have developed over time. Our sales
      process begins with a customer interview to determine which products will
      appeal to the customer. The salesperson then escorts the customer through
      the product selection process by touring our facilities and focusing the
      customer on three to five specific models the sales person determines best
      meets the customer’s needs. Once a selection is made, the salesperson
      coordinates with the desk manager to value the customer’s trade-in, if
      applicable, and determine the sales price. We contact each customer, on
      average, eight times within the first twelve months following their
      purchase to ensure satisfaction and create customer loyalty. In 2007, $714
      million of our revenues were generated from sales of new and pre-owned
      RVs.




▪
              Finance and
      Insurance Product Sales.Upon completion of the sale
      negotiation, the customer is escorted to a business manager who documents
      the purchase and offers third-party financing, insurance and warranty
      products. In 2007, approximately 57% of our customers obtained their
      vehicle financing through Lazydays, the interest on which is often tax
      deductible as a person’s primary or secondary residence. We arrange
      financing from eleven lending institutions and offer insurance products
      from seven insurance underwriters. In 2007, $21.4 million of our revenues
      were generated from commissions on third-party finance and insurance
      products.




-1-


▪
              Value-Added
      Customer Benefits and Customer Dedication.We provide each of our customers
      complimentary benefits with an RV purchase that we estimate have an
      aggregate value of over $8,000. Our delivery team performs a 130-point
      inspection of every motor home and a 100-point inspection for every
      towable vehicle. We also provide our customers with an optional driver
      confidence course, assistance in registering and obtaining title for their
      RV, complimentary memberships in various RV clubs and campgrounds as well
      as discounts at Camping World stores.




▪
              Marketing.The most important component of
      our marketing effort is word-of-mouth marketing among our customers and
      other RV enthusiasts. We actively cultivate referrals from our customers
      with our proprietary “Friends and Family” referral program. Their referral
      efforts are acknowledged on our “Wall of Honor”, which prominently
      displays their names. We target multiple direct marketing efforts at
      prospective buyers utilizing our proprietary database
      of  approximately two million street addresses and 117,000 email
      addresses for current and potential RV customers in order to drive
      in-person visits and telephone contacts. We have a print advertising
      campaign in camping and RV magazines. In 2006, we launched Lazydays RV
      Showcase magazine. The magazine is published every two months and targets
      RV owners and aspirants. Our largest source of sales leads is our website,
      Lazydays.com, which features real-time displays of our inventory updated
      automatically every ten minutes and offers customers an opportunity to
      browse our current product selection. These multi-faceted marketing
      initiatives generate a significant number of sales
      leads.




▪
              The
      Café.The Italian
      themed Café is located in our main dealership building and serves over
      300,000 complimentary meals to customers and visitors each year, including
      customers visiting our facilities for service and repair, sales prospects
      and RallyPark guests. Importantly, the layout of our site requires our
      RallyPark guests to traverse our product selection in order to reach the
      Café. As a result, potential customers often approach sales
      representatives before or after the meal service to inquire about our
      products.




▪
              CrownClub.Our CrownClub
      facility opened in December 2003 as an additional exclusive benefit to our
      customers who purchase a luxury (approximately $300,000 and above) Class A
      motor home. CrownClub qualifying new and pre-owned unit purchasers receive
      membership privileges, of three and two years, respectively, which we
      believe helps to motivate our customers to trade-in on a more frequent
      basis. CrownClub membership offers exclusive access to 43 premier service
      bays and a 17,000 square foot clubhouse, including a lounge, dining room,
      library, business center and swimming pool. CrownClub members enjoy
      complimentary upscale meals and our full-service bar. Members also receive
      other amenities such as invitations to exclusive CrownClub reunions held
      at upscale RV resorts throughout the U.S. and certificates for 20 free
      nights at RallyPark.  As of December 31, 2007, we had more than
      2,340 CrownClub
members.




▪
              Club
      Lazydays.In
      2006, we introduced Club Lazydays, a one of a kind club that provides
      exclusive benefits to anyone who purchases an RV from
      us.  Benefits include a luxurious Service Pavilion; a dedicated
      toll free number for member assistance; complimentary breakfast and lunch;
      a personal service advisor; invitations to Club Lazydays reunions;
      discounts on stays at RallyPark, and affiliated membership to other RV
      clubs such as Thousand Trails, Family Motor Coach Association, Camping
      World President’s club and other product specific clubs.




▪
              RallyPark.RallyPark is a
      299-site RV campground located at the Lazydays facility. Each site offers
      wireless internet access, utilities, cable TV and a morning newspaper.
      More than 100 rallies are held at RallyPark each year and we believe
      RallyPark is the preferred rally site for many national, regional and
      state RV clubs. Our 12,000 square foot, climate-controlled RallyCenter can
      accommodate up to 500 people and is utilized for dinners, meetings, award
      ceremonies and live entertainment. We also offer a screened and heated
      swimming pool and Jacuzzi, tennis courts, horseshoe pits and shuffleboard
      lanes for our guests. In 2007, $1.6 million of our revenues were generated
      from fees charged to RallyPark
guests.




▪
              Quality
      Service and Repair Programs.We have a 230-bay servicing area
      including 43 premier CrownClub bays and what we believe is the largest RV
      collision repair center in the U.S. We also offer other special services
      that are performed in our cabinet shop, chassis shop, windshield repair
      shop and upholstery shop. Our staff is highly qualified and has over 100
      of an estimated 400 RVIA/RVDA Certified and Master Certified technicians
      in the state of Florida. We have an extensive parts inventory which, as of
      December 31, 2007, was approximately $1.7 million and we have
      access to many hard-to-find parts. In 2007, $39.9 million of our revenues
      were generated from service and repair.




▪
              Premier Customer
      Profile. Our business model allows us to seek and maintain
      “Customers for Life.” Our target customers are both entry level and
      seasoned RV enthusiasts who enjoy a wide range of RV lifestyles. These
      include everything from weekend trips to full-time RVing.  A
      substantial segment of our customer base seeks a part and full-time
      lifestyle centered on the RV. These RV enthusiasts are typically
      financially secure couples in the 55-74 year-old age group who are seeking
      an RV lifestyle that involves frequent travel, substantial time living in
      their RV and the opportunity for interaction with other RV enthusiasts.
      Approximately 70% of our customers seek to trade-in an RV and many of our
      RV enthusiast customers are purchasing their third or fourth RV and may
      use their RV as their primary residence. We are intently focused on
      improving the likelihood that when an RV enthusiast does purchase an RV
      they purchase it from Lazydays. Our continuing success in this endeavor
      was demonstrated by the 19% of our unit sales which were generated from
      repeat customers in 2007. Our customers generally purchase RVs at higher
      price points, as evidenced by our average purchase price for retail sales
      of $107,430 in 2007 compared to an industry average of approximately
      $41,041 in 2007. We also believe our name and reputation are being
      disseminated to other RV enthusiasts within this
  community.




-2-


▪
              Economies of
      Scale.We believe
      that we generate approximately three times the revenue of the next largest
      single-site dealership. We offer over 150 distinct new RV models,
      including Class A motor homes, Class C motor homes, conventional
      trailers and fifth-wheel trailers, which we believe is the broadest
      product offering at any single-site retailer. Our 1,200-site outdoor show
      space includes new products from leading manufacturers, including Monaco
      Coach Corporation, Fleetwood Enterprises, Inc., Winnebago
      Industries, Inc., Carriage, Inc., Thor Industries, Inc.,
      Glendale RV, Forest River RV, Inc. and Tiffin Motor homes, Inc. We
      attract potential RV purchasers from across the United States, as
      evidenced by the 52% of our Class A unit sales in 2007 made to
      customers that reside outside the state of Florida. Our scale also allows
      us to provide one-stop shopping for our customers by offering competitive
      third-party financing, insurance and warranty products. Approximately 70%
      of our customers seek to trade-in an RV which provides 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 developed since
      1994 provides us with a reliable system for managing our pre-owned
      inventory and allows us to accept and accurately value customer
      trade-ins.




▪
              Favorable
      Relationships with Manufacturers.We believe our supplier
      relationships are excellent. In 2007, we were the largest retailer for
      five of the nine manufacturers represented by our new RV product offering.
      Our product offering of Class A motor homes represents manufacturers
      that command a 67% share of the U.S. Class A market. The
      manufacturers we represent have 16 full-time sales and service
      representatives stationed at our site to educate our sales force, assist
      customers in their purchase decision and assist in servicing vehicles. We
      have favorable multi-year contracts which provide exclusive geographical
      distribution rights for many manufacturers’ products, ranging from the
      Tampa, Florida area to the southeastern United States. We have maintained
      long-term relationships with these manufacturers across various levels
      within each organization, ranging from frequent management contacts to
      manufacturer production personnel visiting our facilities to assist in
      delivering RVs and addressing quality issues.




▪
              Experienced Management
      Team. We are led by an experienced management team with our
      top eight managers having over 75 years experience in the RV industry and
      average tenure at the Company of seven years. Our team has extensive
      retail sales, marketing, operations and financial experience and is
      skilled at driving growth and creating a unique customer experience. Our
      senior management group is responsible for developing and implementing our
      business strategy and focusing on increasing profitability and our
      incentive systems ties their compensation to our financial
      performance.





Business
Strategy




Our
principal business strategies include the following:






▪
                  Maintain
      High Levels of Customer Service. Our business is differentiated
      from other retailers due to our customer focus. We believe customer
      satisfaction is critical to our continued growth and profitability. Over
      the past ten years, we have transformed our business from a large RV
      retailer into an RV enthusiast destination site through the development of
      our sales and service processes and our one-of-a-kind facilities
      including, most recently, the addition of our Service Pavilion, Café and
      Learning Center and remodeling of our sales offices. We intend to continue
      to upgrade and enhance our facilities as well as add additional site
      amenities to increase customer satisfaction. We believe that our
      customer-centric business strategy will continue to attract visitors and
      allow 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 next 5-10
      years.  Overall, RV ownership rates have historically been
      highest in the 55-64 year old age group with penetration rates of
      approximately 14%.  This age group is expected to grow 45% from
      2002 to 2010.  Our management team believes our existing
      126-acre site can accommodate a 55% increase in annual RV deliveries and
      we plan to continue to expand our product offering to include additional
      manufacturers’ product lines as dictated by customer
      preferences.




▪
              Generate and Convert Sales
      Opportunities. We continually seek to increase the number of sales
      prospects through creative marketing initiatives including effectively
      utilizing and enhancing our destination location appeal, our proprietary
      database and our website. We employ systems that continually monitor and
      improve nearly all of our customer interactions and all facets of our
      sales processes in order to increase the rate at which we convert these
      sales leads into RV purchases. In 2007, approximately 19% of the 35,000
      prospective customers who actively pursued an RV purchase from us actually
      purchased an RV. We will continue to work to improve our customer focused
      model by having daily training sessions with our sales force to improve
      sales techniques and product knowledge, ensuring that a consistent message
      is delivered to our customers. We will also continue to focus on
      high-margin sales opportunities, including Class A motor home sales
      and sales of finance, insurance and warranty
  products.







-3-


Products




Overview




RVs are
categorized into two vehicle segments: motor homes and towables. Motor homes are
self-contained and are built on a motor vehicle chassis. They are designed to
provide a mobile living environment for recreational, travel, or camping use.
Towables are also self-contained, wheeled units designed to be towed by a
motorized vehicle and are generally less expensive and smaller than motor
homes.




New
Vehicles




Motor
homes




Class A. Class A
motor homes are the largest and most luxurious motor homes. These motor homes
are built on specially designed chassis and often are outfitted with amenities
such as washers/dryers, security systems, 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 to dramatically enlarge the interior space.
These motor homes range in length from 21 to 45 feet and sell for between
$50,000 and over $1 million and represented 86% of our 2007 new vehicle
revenues.




Diesel-powered
Class A motor homes, 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 advantages
over gas engines, including greater horsepower, increased fuel mileage and
longer life. High line diesel vehicles are premium Class A motor homes with
diesel engines and premier living facilities and amenities. The high line
vehicles are typically priced above $250,000. Standard diesel vehicles have
similar engines to high line motor homes, but generally contain fewer amenities
and are priced at a lower point.




Gas-powered
Class A motor homes are considered entry-level Class A motor homes and
are priced from $75,000 to $175,000. Class A gas products appeal primarily
to the part time RVer who is looking to enjoy the RV experience at an affordable
price. Built on a less robust chassis than diesel products, gas motor homes tend
to offer less carrying capacity and a slightly rougher ride than diesels.
Interior comfort is not sacrificed; however, as Class A gas products are
available with all the high end amenities including multiple slide-outs,
luxurious furnishings, flat screen TVs and satellite antennas.





Class C. Class C
motor homes, also known as “mini-motor homes,” are constructed on an automotive
manufactured van frame with an attached cab segment. Similar to Class A
motor homes, these RVs, which range in length from 20 to 32 feet, offer full
kitchen, sleeping and dining facilities and are increasingly featuring
“slide-outs.” Class C motor homes sell for between $40,000 and $125,000 and
represented 7% of our 2007 new vehicle revenues.




Towables




Conventional. Conventional
travel trailers range in length from 12 to 39 feet and generally include all of
the facilities found in a motor home. As with all towables, an advantage of a
conventional travel trailer is 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,
lightweight travel trailer models. New travel trailers, most of which can sleep
up to eight people, are priced between $9,000 and $76,000 and represented 2% of
our 2007 new vehicle revenues.




Fifth
Wheel.Fifth-wheel travel
trailers, which range in length from 21 to 42 feet, are similar to conventional
travel trailers in terms of size and amenities, but the two differ in their
methods of attachment to the towing vehicle. While a conventional travel trailer
is designed to be mounted on a standard car, truck, or van hitch, a fifth-wheel
travel trailer is attached to a pickup truck by a special hitch connected to the
truck bed. This design provides greater maneuverability and reduces the overall
length of the combined vehicles. Fifth-wheel travel trailers sell for between
$12,000 and $100,000 and represented 5% of our 2007 new vehicle
revenues.





Pre-Owned
Vehicles




Sales of
pre-owned RVs contributed 34% of our revenues during 2007. 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 wholesale basis, a network of RV and automotive
dealers. Retail customer’s purchase pre-owned vehicles because they can get a
high quality vehicle at a lower price. We enhance the value of pre-owned
vehicles by fully servicing them before offering them for resale.




-4-


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




The sales
of all categories of pre-owned inventory through our wholesale network
represented 9% of total pre-owned vehicle revenues in 2007. Of our total
pre-owned vehicle revenues in 2007, retail sales of pre-owned Class A motor
homes represented approximately 75%, retail sales of Class C pre-owned
motor homes represented 6% and retail sales of pre-owned fifth wheel and
conventional towables and other miscellaneous vehicles represented the remaining
9%.




Trailer
Rental Program for Temporary Housing




As a
result of the active Florida hurricane season in 2004, we developed a rental
program which targeted displaced hurricane victims in need of temporary housing.
In 2004, 682 conventional travel trailers were rented. Rental terms ranged from
three to six months with extended terms available. We continued the program in
2005 and 2006 and expanded rental units to include Class C motor
homes.  This program concluded in 2007.




Service
and Repair




We
operate 230 service bays, providing on-site general RV maintenance and repair
work to customers. The service and repair department is divided into two areas:
the “make ready” process for deliveries of recently purchased new and pre-owned
retail units and post-delivery service. We also maintain a body shop, cabinet
shop, chassis shop and windshield repair shop with highly skilled,
RVIA/RVDA-certified technicians and specialized equipment and facilities. In
addition to preparing several thousand RVs for delivery to customers each year,
our service and repair operations provide general RV maintenance and repair
services and manufacturer paid work performed under warranty to approximately
10,000 customers annually. Furthermore, with over $1.7 million of parts and
accessories inventory, in addition to a fully stocked on-site Camping World
store, Lazydays provides new and pre-owned RV buyers the option of dealer
installed accessories, such as tow hitches, satellite dishes and specialized
suspension systems that can be included in each buyer’s financing. Lazydays’
average service and repair customer spends approximately $1,100 per
visit.




We
frequently welcome customers who travel from across the country to have their
vehicles serviced by our team of service and repair professionals. As a result,
the service and repair department serves as a means of attracting potential
customers to the Lazydays facilities and offers greater additional sales
opportunities for us. Our service and repair department generated
$39.9 million of revenue in 2007.




Financing
and Related Services




We
provide assistance to customers in arranging financing for their RV purchases
through a variety of lenders. Revenues from financing, warranty and extended
warranty products and related services have increased from $14.8 million in
1999 to $21.4 million in 2007.




Financing




Lazydays
generates commission based revenue from its financing services by placing the
loans with one of eleven independent lending institutions. The interest on these
loans is often deductible to our customers as a mortgage for tax purposes for a
primary or secondary residence. During 2007, approximately 57% of our customers
obtained their vehicle financing through Lazydays. By leveraging the volume of
our financing customers, we are able to negotiate favorable rates for our
customers with third-party lenders. Financing fee based revenues represented
approximately 66% of 2007 financing and related services revenue.




Insurance
and Extended Warranties




We offer
extended warranties and various insurance products for new and pre-owned RVs. As
with our financing related products, we are paid a fee for placing the warranty
or insurance product with one of seven different insurance underwriters.
Approximately 45% of our customers purchased extended warranties during 2007,
and we offer other insurance products, including tire, life and physical damage
insurance. Together, revenue from insurance and warranties represented
approximately 34% of our 2007 financing and related services
revenue.





RallyPark
and Related Services




RallyPark
is our full service RV campground that includes a 12,000 square foot recreation
hall, screened-in heated pool and Jacuzzi, commercial kitchen facilities and
internet and exists primarily to attract visitors to Lazydays as well as to
enhance their overall destination experience.  RallyPark attracts over
48,000 visitors each year and has 299 full hook-up sites which provide
utilities, wireless internet access, cable TV and a morning
newspaper.




-5-


More than
100 rallies were held at RallyPark in 2007, with many sponsored by us as a
marketing tool to create additional sales leads. We also prominently display
marketing and promotional materials throughout the park. All park guests are
invited to the Café in the main building for complimentary breakfast and lunch
with a shuttle service running frequently between the park and the dealership.
Our 12,000 square foot, climate-controlled RallyCenter can accommodate up to 500
people and is utilized for dinners, meetings, award ceremonies and live
entertainment. RallyPark represents an important and successful marketing tool
for us. In 2007, revenues of $1.6 million in fees were generated from RallyPark
visitors.




Served
Markets




We
generated approximately 58% of our retail deliveries from Florida residents in
2007, the third largest RV buying state in the United States, and we are a
dominant player in the Florida market with a 43% share of Class A motor
home unit sales in 2007. While we estimate that Florida is Lazydays’ primary
market, we have experienced great success penetrating other markets, with unit
sales to residents outside the state of Florida reaching 42% of our retail
deliveries in 2007. We believe our U.S. market share in Class A motor home
unit sales in 2007 was over 6%, and represents a substantial opportunity for
further market penetration and expansion for us.




Target
Customer




We
estimate that approximately 70% of our customers have previously owned an RV.
These customers have adopted the RV lifestyle and do not generally view RVs as
luxury or recreational items, as the broader market may view them. Accordingly,
for many of our customers, the RV represents a necessary purchase that will
occur periodically as the time comes to trade in and upgrade the vehicle.
Consistent with their RV enthusiast lifestyle, Lazydays customers are frequently
repeat purchasers. Management estimates that Lazydays’ average customer owns his
or her RV three to four years before trading it in, compared to an estimated
industry average of approximately seven years. In addition, the RV lifestyle
includes frequent social interaction between RVers that creates an environment
in which word-of-mouth marketing becomes a powerful tool.




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





Sales
Overview




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




Our
direct sales organization is comprised of eight sales managers who oversee
approximately 150 salespeople, as well as managers that oversee other aspects of
the sales process, such as Internet, telephone and wholesale sales, pricing and
the appraisal of trade-in units. Each sales manager is responsible for a team of
salespeople and is compensated based on team and Company performance goals.
Additionally, each sales manager administers a relationship with a manufacturer
by understanding new products and monitoring inventory levels.




Our
salespeople are divided into three levels based on customer satisfaction and
sales performance. Our sale professionals’ compensation structure is 100%
commission based and is driven by profit achievement and customer satisfaction
ratings. In 2007, our compensation per year per salesperson averaged
approximately $90,000 and the top salesperson earned over $200,000, which we
believe is significantly higher than at other dealerships in the country, thus
allowing us to attract and retain a high quality sales force. Because of the
opportunities offered to our salespeople, we have historically maintained low
turnover within our sales staff.




-6-





Sales
Organization




Our sales
team has consistently improved its success in converting sales opportunities
into RV deliveries over the years, as management continuously refines the sales
process. From 2000 to 2007, we improved our delivery ratio (the number of sales
divided by the number of sales opportunities or “ups”) from 16.9% to 19.0%.
Through the ongoing development of the sales process and training of personnel,
management believes its sales force’s productivity will continue to
improve.




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




We strive
to ensure that our sales personnel are consistent in their approach to the
customer and in their application of these tenets through extensive training.
Each salesperson must complete an initial two-week customer service and sales
process training program. Thereafter, all salespeople are required to attend
daily one-hour product and selling skills training sessions. The emphasis on
continuous training ensures that sales personnel are knowledgeable in their
representation of the products and skilled in their approach to the
customer.





Marketing
Overview




Lazydays
attracted over 250,000 visitors to its complex and generated over 34,000 sales
opportunities in 2007. This traffic is generated through a comprehensive
advertising plan that includes a referral program, direct mail promotions, print
advertising, attendance at off-site rallies and trade shows, the Lazydays
website and partnering with  other companies. All of our marketing
work, including the development of strategies and concepts, the maintenance of
the customer database and the design and layout of advertisements, is performed
in-house, with the exception of high volume printing and television production.
By performing the majority of our marketing functions internally, we are able to
manage our marketing cost effectively. We spent $4.4 million on our marketing
efforts in 2007, or 0.6% of total revenues, a level that is consistent with
historical expenditures as a percentage of revenues.




Referrals




Customer
referrals are our most productive and inexpensive advertising source. The
introduction of the Lazydays Friends & Family Program in July 1997
served as a catalyst for referral based business. The program promotes referral
activity by rewarding customer loyalty and referral business with awards and
recognition for each referral that leads to a sale. As customers make new,
qualified referrals, they receive rewards, such as complimentary stays at
RallyPark for Friends & Family rallies, award
certificates  and cash prizes. In addition, based on their number of
referrals, Friends & Family members have their names prominently
displayed on plaques along the Wall of Honor in the lobby of the main dealership
building.




Direct
Mail, Print and Television




We manage
a proprietary database of approximately two million RV owners and potential
owners to maintain regular mail-based contact with existing and potential
customers. We have used direct mail marketing for the past ten years and email
marketing for the past three years.  We advertise in numerous industry
publications and, on a limited basis, through local television.




We design
our own direct mail marketing materials in-house and have millions of
postcards, posters, brochures and mailers printed each year to generate interest
in our RVs. Our largest publication is our bi-monthly Lazydays RV Showcase which
was launched in December 2006. Lazydays RV Showcase lists
RVs for sale at Lazydays and targets the fastest growing segment of RV owners
and aspirants - the baby boomer generation. The magazine has an annual
circulation of over 1.5 million. We also send our customers personalized notes
each year for a variety of occasions, including the anniversary of an RV
purchase, to maintain strong customer goodwill.




-7-


Internet
Website




The
Lazydays website is a user-friendly marketing and informational tool. Our
website allows our visitors to view new and pre-owned RV photos and
specifications within minutes after the vehicle becomes available for sale.
Users can search for available RVs by keyword, brand, class, make and model, as
well as learn more about the numerous value added benefits offered by us. Users
have the ability to purchase our RVs without visiting our facility by learning
about products online and by calling or emailing Lazydays to further their
inquiry. Additionally, users can obtain an estimate of the value of their
trade-ins prior to arriving at Lazydays.




Rallies
and Trade Shows




Rallies
and trade shows serve as an ideal opportunity to market Lazydays to concentrated
groups of RV enthusiasts. Hundreds of rallies and trade shows take place
throughout the U.S. each year. Lazydays attends nearly 30 off-site rallies each
year. We send sales representatives and at times, a selection of RVs, to the
rallies and trade shows to promote products, answer questions and build
excitement around the dealership. In addition, approximately 100 RV rallies are
held each year at RallyPark in which we can exclusively display and promote our
products and value-added benefits.




Marketing
Partners




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




The
following chart lists our 2007 marketing partners:




Marketing
Partners




Partner
            
            DescriptionCamping
      World, Inc.
            
            Retailer
      of RV accessoriesThousand
      Trails, Inc.
            
            Manager
      of membership campgroundsFamily
      Motor Coach Association
            
            RV
      owners clubFantasy
      RV Tours
            
            Conducts
      guided RV toursWorkhorse
      Custom Chassis LLC
            
            Manufacturer
      of heavy duty custom chassisSpartan
      Chassis, Inc.
            
            Manufacturer
      of heavy duty custom chassis





Suppliers




Over the
course of our operating history, we have developed strong relationships with the
industry’s leading RV manufacturers. We are supplied primarily by eight major RV
manufacturers that rely on us as a primary point of distribution.




For most
product lines and manufacturers, we are the leading dealership in terms of sales
volume. Manufacturers are highly dependent on us for their Florida sales, an
important territory for the RV industry. In 2007, we were responsible for 43% of
our suppliers’ total Florida Class A RV sales. We have won numerous
supplier awards for our excellence in sales and service, including Fleetwood’s
Circle of Excellence Award ten times and Winnebago’s Circle of Excellence Award
every year (20 times) since the award’s inception.




We have
negotiated favorable long term dealer agreements and reasonable sales goals.
Dealer agreements provide exclusive sales rights for manufacturers’ products
over extended geographic regions ranging from the local Tampa area to the
southeastern United States. In addition, we believe our size and market presence
ensure that we have top priority with our suppliers and a consistent supply of
RVs, even during times of production shortages.




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




-8-





We also
have the benefit of over 26 onsite manufacturer representatives from the major
RV manufacturers, depending on the season. Manufacturer sales representatives
will answer customer inquiries specific to their products, lend credibility to
Lazydays’ operations and assist in the sale of products and training of
salespeople, keeping us informed of new product innovations and fostering strong
relationships with the manufacturers.




Wholesale
Vehicle Network




Approximately
70% of our RV purchases (new and pre-owned) are accompanied by a trade-in. The
large number of pre-owned trade-ins that we receive assures us of a steady
supply of high quality pre-owned vehicles. We believe that we are able to pay
more for pre-owned RVs than 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 us to optimize our
inventory carrying levels by disposing of old or unwanted trade-ins through this
channel.




Management
Information Systems




Our key
customer and business information systems (customer relationship, sales,
finance, insurance, service, accounting, purchasing and inventory management
information and processes) are fully integrated.  These systems
provide real-time information and are integrated with our industry leading
web site, offering our customers the ability to browse our continuously updated
inventory, trigger our team to search for RVs matching buying criteria, shop for
parts and even “Build Their Own RV” using the industry’s first such
application.  This new foundation for growth allows for enhanced
customer relationships, marketing and sales effectiveness, operational
efficiency and management information.  We are now working to
integrate our business systems with those of our manufacturing, finance and
other business partners for improved service delivery and
efficiency.




Employees




We
benefit from a loyal and dedicated non-union workforce of 675 full-time and 5
part-time employees as of December 31, 2007 and have never experienced a
work stoppage. Each of these individuals is critical to sustaining a culture
that is unique in the industry. We work to ensure that every employee shares our
vision and commitment to customer service and welcomes each visitor with the
phrase, “Welcome to Lazydays.”




We offer
competitive compensation and benefit plans to employees working more than
30 hours per week. Our benefits include a defined contribution 401(k)
plan with discretionary company matching, medical and dental, pharmacy and
vision insurance, short-term and long-term disability and life insurance, a
pre-tax premium payment plan with flexible spending accounts, post-tax voluntary
benefit and vacation up to three weeks after seven years of
employment.




We have
never experienced any significant labor shortages nor had any difficulty in
obtaining adequate replacements for departing employees. We consider our
relations with our employees to be good.




-9-


Intellectual
Property




We have
registered, and are in the process of registering, various trademarks and
service marks with the U.S. Patent and Trademark Office, including “Lazy Days RV
Super Center,” “Tire Re-Nu,” “CrownClub” and “RallyPark”.




Government
Regulation




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




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




As with
vehicle dealerships generally, and parts and service operations in particular,
our business involves the use, handling, storage and contracting for recycling
or disposal of hazardous or toxic substances or wastes, including
environmentally sensitive materials, such as motor oil, waste motor oil and
filters, transmission fluid, antifreeze, Freon, waste paint and lacquer thinner,
batteries, solvents, lubricants, degreasing agents, gasoline, diesel fuels,
asbestos containing materials and other chemicals.




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 quality standards. We are also
subject to laws, ordinances and regulations governing investigation and
remediation of contamination at facilities we operate to which we send hazardous
or toxic substances or wastes for treatment, recycling or disposal.
Noncompliance with or changes to these requirements could limit our ability to
operate our business.




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





Available
Information




The
Company files Annual Reports, Quarterly Reports, Current Reports and other
information with the Securities and Exchange Commission. Copies of such
materials can be read, copied and obtained from the Public Reference Room of the
Securities and Exchange Commission at 100 F Street, N.E., Room 1024, Washington,
D.C. 20549. You may obtain information on the operation of the Public Reference
Room by calling the Securities and Exchange Commission at 1-800-SEC-0330. You
can access the Company’s filings electronically by visiting the Securities and
Exchange Commission’s website at http://www.sec.gov. In addition, the Company
will provide copies of such filings free of charge upon request. While any notes
remain outstanding, we will make available, upon request, to any beneficial
owner and any prospective purchaser of notes the information required pursuant
to Rule 144A(d)(4) under the Securities Act of 1933 during any period in which
we are not subject to Section 13 or 15 (d) of the Securities Exchange
Act of 1934. Such requests may be made by calling our main number 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, Florida 33584-2968, Attn:
Director of Corporate Reporting and Investor Relations.


-10-


ITEM 1A.
RISK FACTORS





You
should carefully consider the risk factors described below, as well as the other
information included or incorporated by reference in this Annual Report prior to
making a decision to invest in our securities. The risks and uncertainties
described below are not the only ones facing our company. Additional risks and
uncertainties not presently known or that we currently believe to be less
significant may also adversely affect us.





We may
experience unanticipated fluctuations in our operating results for a variety of
reasons.




Our net
sales, gross margin and operating results may fluctuate significantly from
period to period due to a number of factors, many of which are not readily
predictable. These factors include the following:









▪
                the
      ability of our suppliers to introduce new models that achieve consumer
      acceptance;






▪
                the
      addition or loss of competing
dealers;






▪
                the
      timing of trade shows and rallies, which we use to market and sell our
      products; and






▪
                factors
      affecting the recreational vehicle industry as a whole, including economic
      and seasonal factors.






Our overall gross margin may decline in
future periods to the extent that we increase the percentage of sales of lower
gross margin towable products or if the mix of motor homes we sell shifts to
lower gross margin units. In addition, a relatively small variation in the
number of recreational vehicles we sell in any quarter can have a significant
impact on total sales and operating results for that
quarter.




We
attempt to forecast demand for our products and adjust our inventory accurately
prior to receipt of such orders. However, it is highly unlikely that we will
consistently accurately forecast the timing, rate and mix of orders. This aspect
of our business makes our planning inexact and, in turn, affects our
inventories, operating results and cash flow for any given quarter.




Reduced
availability of financing for our customers could adversely affect our sales
volume.




Our
customers generally secure financing from third-party lenders. Reduced
availability of such financing and higher interest rates may have an adverse
effect on the recreational vehicle business and our sales. If third-party
financing were to become unavailable or were to be restricted, this could have a
material adverse effect on our results of operations. Availability of financing
is dependent on the lending practices of lending institutions, financial
markets, governmental policies and economic conditions, all of which are largely
beyond our control. Many states classify recreational vehicles as personal
property rather than real property for purposes of taxation and lien perfection
and as a result, interest rates for recreational vehicles are generally higher
and the terms of the loans shorter than for site-built homes. There can be no
assurance that affordable wholesale or retail financing for recreational
vehicles will continue to be available on a widespread basis.





Our geographic
concentration heightens our exposure to adverse regional developments, including
adverse economic conditions, demographic changes, severe weather events and
natural disasters.




For the
year ended December 31, 2007, 58% of our unit sales were to customers in
the state of Florida. Our geographic concentration in the southeast and Florida
in particular, heightens our exposure to adverse developments related to
competition, as well as economic and demographic changes in this region. We
cannot assure you that our geographic concentration will not result in a
material adverse effect on our business, financial condition or results of
operations in the future. In addition, as a single-site operator, a severe
weather event or natural catastrophe such as a hurricane may adversely affect
our business. We have a single location near Tampa, Florida which is in close
proximity to the Gulf of Mexico. A severe weather event such as a hurricane
could cause severe damage to our property and inventory and could cause
disruptions to our operations. Although we believe we have adequate insurance
coverage, if we were to experience a catastrophic loss, we may exceed our policy
limits and/or we may have difficulty obtaining similar insurance coverage in the
future. We cannot assure you that an adverse weather event would not have an
adverse impact on our business.


-11-


Our
business is cyclical and seasonal and this can lead to fluctuations in our sales
and operating results.




The
industry in which we operate is highly cyclical and there can be substantial
fluctuations in our retail sales and operating results, and the results for any
prior period may not be indicative of results for any future period. Companies
within the recreational vehicle industry are subject to volatility in operating
results due to external factors such as economic, demographic and political
changes.




Factors
affecting the recreational vehicle industry include:






▪
              overall
      consumer confidence and the level of discretionary consumer spending,
      which has had an adverse effect on our business from time to time and may
      do so again depending on consumer reaction to economic uncertainty and
      potential volatility in the stock
market;






▪
              general
      economic conditions;






▪
              increases
      in interest rates (which increase our borrowing costs and borrowing costs
      for our customers who finance their RV
  purchases);






▪
              international
      tensions and hostilities;






▪
              employment
      trends; and






▪
              fuel
      availability and prices.







Changes
in consumer confidence and the level of discretionary spending may
disproportionately impact sales of our highest priced luxury motor homes and a
significant decrease in demand for these motor homes may have an adverse effect
on our business.




We cannot
provide assurance that the factors that have had an adverse affect on our
business in prior years will not have an adverse effect in the
future.




We have
experienced, and expect to continue to experience, significant variability in
sales and net income as a result of seasonality in our business. Demand
generally increases during the winter season, while sales and profits are
generally lower during the spring and summer months.





Changes
in consumer preferences for our products or our failure to gauge those
preferences could lead to reduced sales and additional costs.




We
believe that consumer preferences for recreational vehicles are likely to change
over time. We further believe that the introduction of new features, designs and
models will be critical to the future success of our operations. Delays in the
introduction of new models or product features, or a lack of market acceptance
of new features, designs or models, could have a material adverse effect on our
business. Products may not be accepted for a number of reasons, including
changes in consumer preferences or the failure of our suppliers to properly
gauge consumer preferences. Our suppliers may also experience production
difficulties, such as inefficiencies in purchasing and increased labor costs, as
they introduce new models. We cannot be certain that new product introductions
will not reduce revenues from existing models and adversely affect our results
of operations. There can be no assurance that any of these new models or
products will be introduced to the market on time or that they will be
successful when introduced.





We
are dependent on continued relationships with major manufacturers who supply our
products.




Our
success depends, to a significant extent, on continued relationships with eight
major manufacturers from whom we purchase the majority of our new RV products.
In the majority of cases we have entered into long term dealer agreements that
provide exclusive sales rights for a certain product line over an extended
geographic area. Some of these agreements require us to meet specified sales
goals. Cancellation or modification of the dealer agreements, including the loss
of our rights to geographic exclusivity, or a failure to renew a dealer
agreement with one or more of these manufacturers could have a material adverse
effect on our revenues by limiting our access to desirable products. We
currently purchase over 150 models of new RVs from these eight manufacturers. We
depend on our relationships with these manufacturers to provide the most
desirable possible mix of new models to our customers. The loss of one of a
significant number of models could reduce our competitiveness by decreasing our
potential sales.


-12-





If
the frequency and size of product liability and other claims against us
increases, including wrongful death, our business, results of operations and
financial condition may be harmed.




The
products that we sell and service have the potential to inflict significant
injury or property damage. Even if the manufacturer caused a defect which led to
injury or property damage, we could be liable on the theory of third-party
product liability. We carry insurance for this in addition to the general
liability insurance generally maintained by the manufacturers, but it is
possible that a claim would not be covered or would exceed our policy
limits.




Fuel
shortages, or higher prices for fuel, could have a negative effect on sales of
recreational vehicles.




Gasoline
or diesel fuel is required for the operation of motor homes and most vehicles
used to tow travel trailers. Particularly in view of increased international
tensions, there can be no assurance that the supply of these petroleum products
will continue uninterrupted, that rationing will not be imposed or that the
price of or tax on these petroleum products will not significantly increase in
the future. Increases in gasoline prices and speculation about potential fuel
shortages have had an unfavorable effect on consumer demand for recreational
vehicles from time to time in the past, which had a material adverse effect on
our sales volume, and may do so again in the future.





We
require floor plan financing to purchase our inventory. The absence of available
floor plan financing could have a material adverse effect on our operations and
hinder our ability to achieve our growth strategy.




We
depend, to a significant extent, on our ability to finance the purchase of
inventory, which in the automotive and RV retail industries involves borrowing
money in the form of floor plan financing. Floor plan financing is the method in
which dealerships finance the purchase of new vehicles from a manufacturer. Our
floor plan financing is secured by substantially all of our vehicle inventory
and related accounts receivable. Any inability to obtain floor plan financing on
customary terms, or the termination of our floor plan financing arrangements by
our floor plan lenders, could have a material adverse effect on our
operations.





A
substantial portion of our income is from financing, insurance and extended
service contracts, which depend on third-party lenders and insurance companies.
We cannot assure you third-party lending institutions will continue to provide
financing for RV purchases.




A
substantial part of our earnings come from the fees we receive from lending
institutions and insurance companies for arranging financing and insurance
coverage for our customers. The lending institution pays us a fee for each loan
that we arrange. If the lenders we arrange financing through were to lend to our
customers directly rather than through us, we would not receive a fee. In
addition, if customers prepay financing we arranged within a specified period
(generally within six months of making the loan), we are required to rebate (or
"chargeback") all or a portion of the commissions paid to us by the lending
institution. Our revenues from financing fees and vehicle service contract fees
are recorded net of a reserve for estimated future chargebacks based on
historical operating results and the termination provisions of the applicable
contracts. Lending institutions may change the criteria or terms they use to
make loan decisions, which could reduce the number of customers for whom we can
arrange financing, or may elect to not continue to provide these products with
respect to RVs. Our customers may also use the internet or other electronic
methods to find financing alternatives. If any of these events occur, we could
lose a significant portion of our income and profit.




In
addition, we generally offer our customers a service contract that provides
additional warranty coverage on their RV or some of its parts after the
manufacturer's original warranty expires and various types of insurance
policies that will provide money to pay a customer's RV loan if the customer
dies or is physically disabled. We sell these products as a broker for unrelated
companies that specialize in these types of coverage and we receive a fee for
each product that we sell. If our customers obtain these policies directly from
the insurers, our income and profits could decline.





The
loss of key personnel and/or failure to attract and retain highly qualified
personnel could make it more difficult for us to generate cash flow from
operations and service our debt.




We are
dependent on the continued services of our senior management team. If any of
these persons were to leave our company it could be difficult to replace him or
her. We believe the loss of such key personnel could have a material adverse
effect on us and our financial performance. We cannot assure you that we can
attract and retain sufficient qualified personnel to meet our business
needs.  -13-





The
interests of our controlling stockholder may be in conflict with your interests
as a holder of Notes.




RV
Acquisition owns 100% of Holdings common stock, which in turn owns 100% of our
common stock. BRS LP owns approximately 84% of RV Acquisition's common stock and
has the ability to elect a majority of the Board of Directors and generally to
control the affairs and policies of our company. Circumstances may occur in
which the interests of BRS LP, as our ultimate stockholder, in pursuing
acquisitions or otherwise, could be in conflict with the interests of the
holders of the Notes. See "Security Ownership of Certain Beneficial Owners and
Management and Related Stockholder Matters".





We
are subject to extensive government regulation. Changes in these regulations
could have a negative effect on our financial condition.




The
adoption of more stringent statutes and regulations, changes in the
interpretation of existing statutes and regulations or our entrance into
jurisdictions with more stringent regulatory requirements could curtail some of
our operations. Such events could also deny us the opportunity to operate in
certain locations or restrict products or services offered by us, including
restrictions on the terms of financial and insurance products that we
offer.




Various
federal, state and local regulatory agencies, including the Occupational Safety
and Health Administration, the United States Environmental Protection Agency and
similar federal and local agencies, have jurisdiction over the operation of our
dealerships, repair facilities and other operations with respect to matters such
as consumer protection, workers' safety and laws regarding protection of the
environment, including air, water and soil. The failure to maintain all
requisite licenses and permits and comply with all applicable federal, state and
local regulations, requisite licenses and permits could limit our ability to
operate our business.




As with
vehicle dealerships generally, and parts and service operations in particular,
our business involves the use, handling, storage and contracting for recycling
or disposal of hazardous or toxic substances or wastes, including
environmentally sensitive materials such as motor oil, waste motor oil and
filters, transmission fluid, antifreeze, Freon, waste paint and lacquer thinner,
batteries, solvents, lubricants, degreasing agents, gasoline, diesel fuels,
asbestos containing materials and other chemicals.





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 quality standards. We are also
subject to laws, ordinances and regulations governing investigation and
remediation of contamination at facilities we operate to which we send hazardous
or toxic substances or wastes for treatment, recycling or disposal.
Noncompliance with or changes to these requirements could limit our ability to
operate our business.





Our
customers and potential customers are subject to federal, state and local
statutes, ordinances and regulations, including motor vehicle licensing
requirements, regarding the ownership of recreational vehicles. The adoption of
more stringent statutes, ordinances and regulations affecting the consumer
ownership of recreational vehicles could limit our ability to sell our
products.




The
occurrence of extraordinary events, such as a major terrorist attack in the
United States, may adversely affect our business, resulting in a decrease in our
revenues.




Future
terrorist attacks cannot be predicted, and their occurrence can be expected to
further negatively affect the United States economy generally, and specifically
the regional markets in which we operate.




-14-


ITEM 1B.
UNRESOLVED STAFF COMMENTS





None.





ITEM 2.
PROPERTIES






We lease
our 126-acre facility, located at 6130 Lazy Days Boulevard, Seffner, Florida,
from I-4 Land Holding Limited Company (“I-4”), an entity controlled by Don
Wallace, our founder and former Chairman of the Board, under a lease arrangement
the initial term of which will expire in 2022. The amended lease entered into on
May 14, 2004 included four (4) five-year renewal options, which if
exercised would extend the expiration date to 2042.





On
October 12, 2006, we amended this lease agreement with I-4.  The lease was
amended to modify the purchase option from $42 million (subject to CPI
increases) through May 14, 2011 to a fair market value purchase option, as
defined, through January 15, 2023.  The amendment also permitted I-4
to purchase certain of our buildings located on land leased from I-4 as
part of an asset purchase agreement, as well as reduce rents owed to I-4 by
an aggregate amount of $2.7 million during 2006, 2007 and 2008. The amended
lease agreement also gives us a right to purchase certain adjacent land
currently rented by a third party.  Finally, the amended lease agreement
and asset purchase agreement provided us with $11.6 million of cash, preserved
our business use of all the leased real property and significantly reduced our
future lease obligation without increasing the existing lease term.  The
$11.6 million of cash proceeds and the $2.7 million of rent abatements were
treated similar to lease incentives under Statement of Financial Accounting
Standards (SFAS) No. 13, “Accounting for Leases” and are being amortized over
the remaining life of the lease, and are presented as deferred rent on the
balance sheet.





The
annual rent before abatements is $4,793,880 in 2007 and will further increase
thereafter based on periodic CPI adjustments. The lease provides for equal
monthly rental payments and provides that we pay all property taxes and
insurance. Rent expense is calculated on a straight-line basis over the life of
the lease resulting in deferred rent during the earlier years of the lease. We
are also responsible for maintenance costs as well as betterments to the
facilities.




We also
have one short-term lease on a property that we use for off-site RV parking lots
during our peak-season.




ITEM 3.
LEGAL PROCEEDINGS




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




ITEM 4.
SUBMISSION OF MATTERS TO A VOTE OF SECURITY
HOLDERS




None.





-15-


PART
      II




ITEM 5.
MARKET FOR REGISTRANT’S COMMON EQUITY,
RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY
SECURITIES




There is
no market for our common stock. As of December 31, 2007, Holdings owns 100%
of our common stock. RV Acquisition owns 100% of Holdings Class A common stock.
At December 31, 2007, Bruckmann, Rosser, Sherrill & Co. II, L.P. held
84.4% of RV Acquisition common stock, the balance was held by Don Wallace
(10.6%), management and others. See “Security Ownership and Certain Beneficial
Owners” in Item 12 of this report.




ITEM 6.
SELECTED FINANCIAL DATA




The
following table presents selected historical statement of operations data and
balance sheet data as of and for the periods presented. The statement of
operations data set forth below with respect to fiscal years 2007, 2006, and
2005 and the balance sheet data at December 31, 2007 and December 31, 2006
are derived from, and should be read in conjunction with, the audited financial
statements and related notes thereto, which are included elsewhere in this Form
10-K. The statement of operations data set forth below with respect to fiscal
years 2003 and 2004 and the balance sheet data at December 31, 2005,
December 31, 2004,  and December 31, 2003 are derived from
audited financial statements of the Company, which are not included in this Form
10-K.





Years Ended December
31($ in
thousands)





2007
            
            
            2006
            
            
            2005
            
            
            2004
            
            
            2003Statement
      of Operations Data:Revenues:New
      vehicles
            
            $
            449,501
            
            
            $
            445,576
            
            
            $
            475,712
            
            
            $
            477,166
            
            
            $
            416,165Pre-owned
      vehicles
            
            
            264,589
            
            
            
            248,615
            
            
            
            263,742
            
            
            
            260,018
            
            
            
            278,592Other
            
            
            63,860
            
            
            
            63,077
            
            
            
            64,744
            
            
            
            62,526
            
            
            
            60,882Total
      revenues
            
            
            777,950
            
            
            
            757,268
            
            
            
            804,198
            
            
            
            799,710
            
            
            
            755,639Cost
      of revenues
            
            
            674,100
            
            
            
            643,371
            
            
            
            684,307
            
            
            
            683,415
            
            
            
            646,685Gross
      profit
            
            
            103,850
            
            
            
            113,897
            
            
            
            119,891
            
            
            
            116,295
            
            
            
            108,954Selling,
      general and administrative expenses
            
            
            80,586
            
            
            
            81,710
            
            
            
            83,314
            
            
            
            80,393
            
            
            
            70,027Depreciation
      and amortization
            
            
            6,806
            
            
            
            7,847
            
            
            
            8,302
            
            
            
            9,988
            
            
            
            3,238Loss
      on extinguishment of debt
            
            
            74
            
            
            
            102
            
            
            
            348
            
            
            
            -
            
            
            
            -Operating
      income
            
            
            16,384
            
            
            
            24,238
            
            
            
            27,927
            
            
            
            25,914
            
            
            
            35,689Floor
      plan interest expense
            
            
            3,543
            
            
            
            4,170
            
            
            
            3,565
            
            
            
            2,441
            
            
            
            2,556Other
      interest expense
            
            
            16,671
            
            
            
            17,157
            
            
            
            17,813
            
            
            
            12,290
            
            
            
            3,211Income
      tax (benefit) expense
            
            
            (1,376
            )
            
            
            1,110
            
            
            
            2,487
            
            
            
            3,354
            
            
            
            4,542Net
      income (loss)
            
            $
            (2,454
            )
            
            $
            1,801
            
            
            $
            4,062
            
            
            $
            7,829
            
            
            $
            25,370Balance
      Sheet Data (at period end):Inventories
            
            $
            94,460
            
            
            $
            100,688
            
            
            $
            87,392
            
            
            $
            85,961
            
            
            $
            69,873Working
      capital
            
            
            36,395
            
            
            
            36,421
            
            
            
            23,353
            
            
            
            24,060
            
            
            
            9,011Total
      assets
            
            
            340,584
            
            
            
            344,772
            
            
            
            344,022
            
            
            
            346,484
            
            
            
            131,512Floor
      plan notes payable
            
            
            59,698
            
            
            
            66,802
            
            
            
            74,609
            
            
            
            69,576
            
            
            
            52,046Total
      debt (excluding floor plan and including current
    maturities)
            
            
            138,586
            
            
            
            140,797
            
            
            
            143,938
            
            
            
            150,227
            
            
            
            59,046Total
      stockholder’s equity (deficiency)
            
            
            71,212
            
            
            
            73,665
            
            
            
            71,497
            
            
            
            67,435
            
            
            
            (103,565
            )

















-16-











ITEM 7.
MANAGEMENT’S DISCUSSION 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 be read in conjunction with our
financial statements and the notes to those statements and other financial
information appearing elsewhere in this report. Unless stated otherwise, the
information provided in this section relates to Lazy Days’ R.V.
Center, Inc. only and not to its parent, Holdings. This report contains
forward-looking statements that involve risks and uncertainties. Our actual
results may differ materially from those indicated in forward-looking
statements.




Overview




We are
the world’s largest single-site dealer of recreational vehicles (“RVs”) with the
industry’s broadest selection of new and previously-owned RVs. We are a primary
point of distribution for eight of the leading manufacturers in the recreational
vehicle retail industry, an industry with sales of approximately
$12 billion in new, and $14 billion in pre-owned RV vehicles annually.
Located on a 126-acre site outside of Tampa, Florida, we are widely recognized
in the RV community as the premier destination for RV enthusiasts, attracting
over 250,000 visitors each year to our RV dealership, and approximately
1.3 million visitors per year to our facility (including visitors to
additional attractions that appeal to RV owners located adjacent to our site,
namely Camping World, Cracker Barrel and Flying J Travel Plaza).




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




We derive
our revenues principally from sales and rental of new units, sales of pre-owned
units, service and rental repair, commissions earned on sales of third-party
financing and insurance products, and visitors fees at RallyPark. In 2007, we
derived our revenues from these categories in the following percentages, 57.8%,
34.0%, 5.1%, 2.7% and 0.2%, respectively. New and pre-owned unit sales accounted
for more than 91% of total revenues.




The vast
majority of our costs of revenues are related to inventory purchases. New and
pre-owned vehicles have accounted for 97% or more of cost of revenues in each of
the previous three years. Increased unit costs are immediately passed through to
end customers.




Our gross
profit margins on pre-owned vehicles are typically higher on a percentage basis
while our gross profit margins on an absolute dollar basis are typically higher
on new vehicles. In 2007, gross profit margins on new vehicles averaged 7.4%
compared to 9.7% for pre-owned vehicles, and our gross profit from sales of new
vehicles was $33.4 million and $25.5 million for pre-owned
vehicles.




Salaries,
commissions and benefits represent the largest component of our total selling,
general and administrative expense and comprised more than 50% of total selling,
general and administrative expense. In 2007, approximately 14.3% of our selling,
general and administrative expense consisted of commissions for our sales force
which are directly correlated to RV vehicle sales levels. Selling, general and
administrative expense is typically consistent with revenue on a percentage
basis.








-17-


Results
of Operations




The
following table sets forth the percentages of revenues that certain items of
operating data constitute for the periods indicated:


Fiscal
      Year Ended December 312007
            
            
            2006
            
            
            2005Statement
      of operations data:Revenues
            
            
            100.0
            
            
            
            100.0
            
            
            
            100.0Cost
      of revenues
            
            
            86.7
            
            
            
            85.0
            
            
            
            85.1Gross
      profit
            
            
            13.3
            
            
            
            15.0
            
            
            
            14.9Selling,
      general and administrative expenses
            
            
            11.2
            
            
            
            11.8
            
            
            
            11.4Income
      from operations
            
            
            2.1
            
            
            
            3.2
            
            
            
            3.5Interest
      expense
            
            
            2.6
            
            
            
            2.8
            
            
            
            2.7Income
      (loss) before income taxes
            
            
            (0.5
            )
            
            
            0.4
            
            
            
            0.8Income
      tax (benefit) expense
            
            
            (0.2
            )
            
            
            0.2
            
            
            
            0.3Net
      income (loss)
            
            
            (0.3
            )
            
            
            0.2
            
            
            
            0.5





SUMMARIZED
QUARTERLY FINANCIAL DATA (Unaudited)





The
following is a summary of unaudited quarterly financial information for the
years ended December 31, 2007 and 2006.





First
            
            
            Second
            
            
            Third
            
            
            Fourth2007Revenues
            
            $
            246,285,531
            
            
            $
            206,301,835
            
            
            $
            156,154,237
            
            
            $
            169,209,189Cost
      of revenues
            
            
            211,976,507
            
            
            
            180,167,245
            
            
            
            134,470,934
            
            
            
            147,485,679Gross
      profit
            
            
            34,309,024
            
            
            
            26,134,590
            
            
            
            21,683,303
            
            
            
            21,723,510Selling,
      general and administrative expense
            
            
            24,189,170
            
            
            
            21,773,024
            
            
            
            20,105,147
            
            
            
            21,399,012Income
      from operations
            
            
            10,119,854
            
            
            
            4,361,566
            
            
            
            1,578,156
            
            
            
            324,498Interest
      expense
            
            
            5,385,253
            
            
            
            5,009,812
            
            
            
            4,922,748
            
            
            
            4,896,512Income
      (loss) before income taxes
            
            
            4,734,601
            
            
            
            (648,246
            )
            
            
            (3,344,592
            )
            
            
            (4,572,014
            )Income
      tax (benefit) expense
            
            
            1,835,640
            
            
            
            (245,665
            )
            
            
            (1,272,995
            )
            
            
            (1,693,275
            )Net
      income (loss)
            
            
            2,898,961
            
            
            
            (402,581
            )
            
            
            (2,071,597
            )
            
            
            (2,878,739
            )2006Revenues
            
            $
            237,763,619
            
            
            $
            192,835,132
            
            
            $
            156,157,934
            
            
            $
            170,511,795Cost
      of revenues
            
            
            200,975,517
            
            
            
            163,719,069
            
            
            
            134,088,238
            
            
            
            144,588,576Gross
      profit
            
            
            36,788,102
            
            
            
            29,116,063
            
            
            
            22,069,696
            
            
            
            25,923,219Selling,
      general and administrative expense
            
            
            24,824,406
            
            
            
            21,572,625
            
            
            
            21,251,305
            
            
            
            22,011,031Income
      from operations
            
            
            11,963,696
            
            
            
            7,543,438
            
            
            
            818,391
            
            
            
            3,912,188Interest
      expense
            
            
            5,444,534
            
            
            
            5,217,026
            
            
            
            5,315,467
            
            
            
            5,349,912Income
      (loss) before income taxes
            
            
            6,519,162
            
            
            
            2,326,412
            
            
            
            (4,497,076
            )
            
            
            (1,437,724
            )Income
      tax (benefit) expense
            
            
            2,520,297
            
            
            
            904,429
            
            
            
            (1,741,857
            )
            
            
            (572,803
            )Net
      income (loss)
            
            
            3,998,865
            
            
            
            1,421,983
            
            
            
            (2,755,219
            )
            
            
            (864,921
            )











-18-


Results
for the three months ended December 31, 2007 compared to the results for
the three months ended December 31, 2006




Revenues. Revenues decreased
from $170.5 million in the three months ended December 31, 2006 to $169.2
million in the comparable period in 2007. Vehicle revenue increased $0.3 million
while finance and insurance income decreased $0.9 million and parts and service
declined $1.0 million.  Total retail vehicle sales decreased by 54
units.  Despite the decrease in overall units, vehicle revenues
increased due to a better product mix and higher average per unit
price.  The vehicle sales increase, as well as an increase in
RallyPark revenues, was offset by decreases in finance and insurance and parts
and service due to the decline in volume as well as a slight decrease in
advertising revenue.





New Unit Sales. Sales of new
vehicles were $97.5 million in the three months ended December 31, 2007
compared to $97.9 million for the comparable period in 2006. New vehicle unit
sales decreased from 732 for the fourth quarter of 2006 to 682 in 2007. This was
due to a decrease in sales of Class A units, while Class C and towables
increased slightly.  New unit sales by class for three months ended
December 31, 2007 compared to three months ended December 31, 2006 are
summarized as follows:





Three
      Months EndedDecember
      31, 2007
            
            
            December
      31, 2006Class
      A – Diesel
            
            
            287
            
            
            
            302Class
      A – Gas
            
            
            101
            
            
            
            139Class
      C
            
            
            89
            
            
            
            89Total
      Motorized
            
            
            477
            
            
            
            530Fifth
      Wheel
            
            
            124
            
            
            
            123Travel
      Trailer
            
            
            81
            
            
            
            79Total
      Towable
            
            
            205
            
            
            
            202Total
      New Units
            
            
            682
            
            
            
            732





Pre-Owned Unit Sales. Sales
of pre-owned vehicles for the fourth quarter of 2007 were $57.9 million compared
to $57.3 million for the fourth quarter of 2006. Pre-Owned vehicle unit sales
decreased from 713 for the fourth quarter of 2006 to 709 in 2007, due to lower
demand of motorized product offset slightly by a 2.8% improvement in towable
units.  Pre-owned unit sales by class for three months ended December
31, 2007 compared to three months ended December 31, 2006 are summarized as
follows:




Three
      Months EndedDecember
      31, 2007
            
            
            December
      31, 2006Class
      A – Diesel
            
            
            261
            
            
            
            245Class
      A – Gas
            
            
            152
            
            
            
            168Class
      C
            
            
            74
            
            
            
            84Total
      Motorized
            
            
            487
            
            
            
            497Fifth
      Wheel
            
            
            75
            
            
            
            79Travel
      Trailer
            
            
            79
            
            
            
            71Other
            
            
            68
            
            
            
            66Total
      Towable
            
            
            222
            
            
            
            216Total
      Pre-Owned Units
            
            
            709
            
            
            
            713





Parts, Service and Other
Revenues. Parts, service and other revenues for the fourth quarter of
2007 were $8.8 million, $1.0 million less than the fourth quarter of 2006. The
decrease is attributable to lower volume as well as an overall decrease in
maintenance and service fees.





Finance and Insurance Related
Revenues. Finance, insurance and extended warranty related revenues
decreased $0.8 million from $5.0 million in the three months ended December 31,
2006 to $4.2 in the fourth quarter of 2007. The decrease is attributable to
lower volume partially offset by improved average income per unit
financed.




Gross Profit. Gross profit
consists of gross revenues less our cost of sales and services. Gross profit in
the three months ended December 31, 2007 was $21.7 million compared with
the three months ended December 31, 2006 at $25.9 million.  Gross
profit margin decreased from 15.2% in the three months ended December 31,
2006 to 12.8% in the comparable period in 2007.   The decrease in
gross profit was primarily due to a $2.6 million decrease in new vehicle margin,
$0.9 million decrease in parts and service margin and a $0.8 million decrease in
finance and insurance margin.  New vehicle margin in 2007 was
negatively impacted by a non-cash LIFO inventory adjustment representing $2.2
million of the variance quarter over quarter and lower new motorized sales
volume, which also resulted in lower manufacturer holdbacks and incentive income
of approximately $0.4 million slightly offset by a higher average margin on new
units.  Finance and insurance margin decrease was driven by the
overall unit volume decrease, offset by a higher average margin per unit
financed and a timing difference of approximately $0.6 million of additional
warranty income received in the third quarter of 2007 as compared to the fourth
quarter of 2006.




-19-


Selling, General and Administrative
Expenses. Selling, general and administrative expenses, including
depreciation and amortization was slightly lower at $21.4 million, or 12.6% of
revenues, in the three months ended December 31, 2007 compared to $22.0
million, or 12.9% of revenues, in the comparable period in 2006. Historically,
salary, commissions and benefits have comprised the majority of our total
selling, general and administrative expenses and exceeded 50% of selling,
general and administrative expenses in the three months ended December 31,
2007.




Income from Operations.
Income from operations represents our gross profit less selling, general and
administrative expenses, including depreciation and amortization. Income from
operations decreased from $3.9 million in the three months ended
December 31, 2006 to $0.3 million in the comparable period in
2007.  This decrease was due to the overall decline in gross profit,
offset by a decrease in selling, general, and administrative
expense.





Interest Expense—Floor Plan Credit
Facility and Senior Notes. Interest expense decreased from $5.3 million
in the three months ended December 31, 2006 to $4.9 million in the
comparable period in 2007.  This was primarily due to the change in
interest on the Floor Plan Credit Facility.  Interest on the Floor Plan
Credit Facility decreased due to lower average borrowing levels as well as a
decrease in short-term borrowing rates.




Income Tax Benefit. Income
tax benefit increased from $0.6 million in the three months ended
December 31, 2006 to an income tax benefit of $1.7 million in the
comparable period in 2007. This increase was primarily attributable to an
increased loss before income tax of $4.6 million during the three-month period
ended December 31, 2007 compared to a loss before income tax of $1.4
million during the fourth quarter of 2006.





Results for 2007
Compared to the Results for 2006





Revenues. Revenues increased
from $757.3 million in 2006 to $778.0 million in 2007.  Total retail
vehicle sales decreased 228 units.  Despite the decrease in overall
units, vehicle revenues increased due to a better product mix and higher average
per unit sales price.  In addition to the vehicle sales increase,
parts and service, finance and insurance, and RallyPark also increased partially
offset by a decline in other income which was primarily due to a decrease in
advertising revenue from the discontinuation of RVLiving.





New Unit Sales. New vehicle
sales increased $3.9 million to $449.5 million in 2007 from $445.6 million in
2006.  Overall 2007 new vehicle unit sales decreased 131 units,
however motorized units, which typically maintain a higher average per unit
sales price increased slightly somewhat offsetting the decrease in the towable
unit sales.  New unit sales by class for fiscal year ended December
31, 2007 compared to fiscal year ended December 31, 2006 are summarized as
follows:





Fiscal
      Year EndedDecember
      31, 2007
            
            
            December
      31, 2006Class
      A – Diesel
            
            
            1,387
            
            
            
            1,334Class
      A – Gas
            
            
            539
            
            
            
            563Class
      C
            
            
            349
            
            
            
            365Total
      Motorized
            
            
            2,275
            
            
            
            2,262Fifth
      Wheel
            
            
            526
            
            
            
            586Travel
      Trailer
            
            
            371
            
            
            
            455Total
      Towable
            
            
            897
            
            
            
            1,041Total
      New Units
            
            
            3,172
            
            
            
            3,303





-20-





Pre-Owned Unit Sales.
Pre-owned vehicle sales in 2007 were $264.6 million compared to $248.6 million
in 2006. Pre-owned unit sales, excluding wholesale, decreased from 3,572 in 2006
to 3,475 in 2007.  The sales increase, despite a 97 unit decline was
attributable to a more favorable mix of motorized units with Class A diesels up
3.5% and Class C units up 15.1%.  Pre-owned unit sales by class for
fiscal year ended December 31, 2007 compared to fiscal year ended December 31,
2006 are summarized as follows:





Fiscal
      Year EndedDecember
      31, 2007
            
            
            December
      31, 2006Class
      A – Diesel
            
            
            1,176
            
            
            
            1,136Class
      A – Gas
            
            
            789
            
            
            
            870Class
      C
            
            
            397
            
            
            
            345Total
      Motorized
            
            
            2,362
            
            
            
            2,351Fifth
      Wheel
            
            
            351
            
            
            
            387Travel
      Trailer
            
            
            412
            
            
            
            377Other
            
            
            350
            
            
            
            457Total
      Towable
            
            
            1,113
            
            
            
            1,221Total  Pre-Owned
      Units
            
            
            3,475
            
            
            
            3,572





Parts, Service and Other
Revenues. Parts, service and other revenues were $39.9 million in 2007,
an increase of $1.1 million from 2006.  Retail sales increased
overall, partially offset by a decline in warranty sales.





Finance and Insurance Related
Revenues. Finance, insurance and extended warranty related revenues
increased approximately 0.9% ($0.2 million) from $21.2 million in 2006 to $21.4
million in 2007.  The increase in finance, insurance and extended
warranty related revenues were primarily attributable to favorable warranty
income and improved finance penetration ratios, partially offset by lower
finance margins, lower vehicle volume and a slight increase in
chargebacks.




Gross Profit. Gross profit
consists of gross revenues less our cost of sales and services. Gross profit
decreased from $113.9 million in 2006 to $103.9 million in 2007. Gross profit
margin decreased to 13.3% in 2007 down from 15.0% in the prior year. The
decrease in gross profit was primarily due to a $7.1 million decrease in new
vehicle margin, $1.0 million decrease in pre-owned vehicle margin and a $1.7
million decrease in parts and service margin offset by a slight increase in
finance and insurance margin.  New vehicle margin in 2007 was negatively
impacted by a non-cash LIFO inventory adjustment representing $4.9 million of
the variance year over year, a $0.5 million loss of margin due to the
discontinuation of our rental program and overall lower new vehicle sales
volume, which also resulted in lower manufacturer holdbacks and incentive
income. Pre-owned vehicle margin decrease year over year was due to lower
pre-owned towable sales volume somewhat offset by increased pre-owned
motorized unit sales which carry a higher average margin per unit sold. Finance
and insurance increased $0.1 million as increased warranty income and improved
finance penetration ratios more than offset the lower volume
experienced.




Selling, General and Administrative
Expenses. Selling, general and administrative expenses, including
depreciation and amortization, decreased from $89.7 million, or 11.8% of
revenues, in 2006 to $87.5 million, or 11.2% of revenues, in 2007. This decrease
is primarily due to lower commissions expense (driven by lower vehicle volume),
lower rent expense, lower non-compete costs, decreased amortization expense and
advertising partially offset by increased insurance costs, professional service
fees and contract labor (driven by Sarbanes-Oxley implementation).




Income from Operations.
Income from operations represents our gross profit, less selling, general and
administrative expenses and depreciation and amortization. Income from
operations decreased from $24.2 million in 2006 to $16.4 million in
2007.  This decrease was due to the overall decline in gross profit
offset by a decrease in selling, general and administrative
expenses.




Interest Expense—Floor Plan Credit
Facility and Senior Notes. Interest expense on our Floor Plan Credit
Facility  and Senior Notes decreased from $21.3 million in 2006 to
$20.2 million in 2007.  This represents a  $0.6 million
and $0.5 million reduction  in interest expense on the Floor Plan Credit
Facility and Senior Notes, respectively.  Interest on the Floor
Plan Credit Facility decreased due to lower average borrowing levels as well as
a decrease in short-term borrowing rates.




Income Tax (Benefit) Expense.
Income tax expense decreased from $1.1 million in 2006 to an income tax benefit
of $1.4 million in the comparable period in 2007.  This decrease was
primarily attributable to an increased loss before income taxes.  The
Company’s effective income tax rate was 35.9% and 38.1% for fiscal years ended
2007 and 2006, respectively.




-21-





Results
for 2006 Compared to the Results for 2005





Revenues. Revenues decreased
from $804.2 million in 2005 to $757.3 million in 2006. This decrease resulted
primarily from decreases in new and pre-owned unit sales.





New Unit Sales. Sales and
rental of new vehicles for the year ended December 31, 2006 were $445.6
million compared to $475.7 million for the year ended December 31, 2005.
New vehicle unit sales, excluding wholesale, decreased 1,036 units to 3,303 in
2006. This decrease in new unit sales primarily reflected a decrease in towable
products (864 units), specifically travel trailers, and a decrease of motorized
products (172 units). The decrease in travel trailers was due to the bulk travel
trailer sales in 2005. Bulk travel trailer sales represent the sale of travel
trailers to FEMA as a part of the U.S. Government’s hurricane relief
efforts.




Pre-Owned Unit Sales.
Pre-owned unit sales in 2006 were $248.6 million compared to $263.7 million in
2005. Pre-owned unit sales, excluding wholesale, decreased from 4,211 in 2005 to
3,572 in 2006. Overall, pre-owned unit sales experienced a decrease due to lower
demand for motorized products and decreased travel trailer sales driven by the
resale of travel trailers from our rental program in 2005.




Finance and Insurance Related
Revenues. Finance, insurance and extended warranty related revenues
decreased approximately 0.9% ($0.2 million) from $21.4 million in 2005 to $21.2
million in 2006. Overall, insurance product revenues and finance commissions
remained relatively flat. The decrease is attributable to lower unit sales,
mostly offset by improvements (1.7%) in the percentage of units financed as well
as higher revenue per unit financed. Additionally, the bulk travel trailer sales
were not eligible for financing.




Parts, Service and Other
Revenues. Parts and service revenues were $38.8 million in 2006, a
decrease of $2.1 million from 2005. This decline resulted from a decrease in
retail and warranty sales and the decreased unit sales experienced in
2006.





Gross Profit. Gross profit
consists of gross revenues less our cost of sales and services. Gross profit
decreased from $119.9 million in 2005 to $113.9 million in 2006, or 5.0%. This
decrease was largely attributable to decreased new and pre-owned unit volumes.
Gross profit margin increased slightly to 15.0% in 2006 up from 14.9% in the
prior year.




Selling, General and Administrative
Expenses. Selling, general and administrative expenses, including
depreciation and amortization, decreased from $92.0 million, or 11.4% of
revenues, in 2005 to $89.7 million, or 11.8% of revenues, in 2006. This decrease
corresponded to a reduction in salary, commissions and benefits expenses, which
declined primarily due to decreased gross profit.




Income from Operations.
Income from operations represents our gross profit, less selling, general and
administrative expenses and depreciation and amortization. Income from
operations decreased from $27.9 million in 2005 to $24.2 million in 2006. This
decrease was largely due to lower sales and gross profit as discussed
above.




Interest  Expense -
Floor Plan Credit Facility and
Senior Notes.Interest expense remained relatively flat in 2006 as
compared to 2005.





Income Tax Expense. Income
tax expense decreased from $2.5 million in 2005 to $1.1 million in 2006. This
decrease was primarily attributable to a decline in pre-tax income from $6.5
million in 2005 to $2.9 million in 2006.





Liquidity
and Capital Resources




Liquidity.Historically,
we have satisfied our liquidity needs through cash from operations and various
borrowing arrangements. Principal liquidity needs have included the acquisition
of inventory, salary and sales commissions, debt service requirements and other
capital expenditures necessary to maintain our facility. Our cash requirements
consist principally of scheduled payments of principal and interest on
outstanding indebtedness (including indebtedness under our amended floor plan
credit facility), capital expenditures, salary and sales commissions and lease
expenses. Based upon our current level of operations, we believe that our cash
flow from operations, available cash and available borrowing will be adequate to
meet our future liquidity needs for the next several years.





Operating Activities.Net
cash provided by operating activities for 2007 was equal to $16.3 million,
compared with net cash provided by operating activities of $1.5 million in 2006.
This increase in net cash provided by operating activities for 2007 was
primarily the result of a decrease in inventories and an increase in accounts
payable primarily driven by an increase in trade-payoffs partially offset by an
increase in receivables.





-22-
 Investing
Activities. Net cash used in investing activities for 2007 was
$0.8 million, compared with net cash used in investing activities of
$3.0 million in 2006.  The decrease in net cash used in investing
activities was attributable to a decrease in purchases of property and
equipment.  In 2006 we upgraded our information
systems.





Financing Activities.Net cash used in financing activities during 2007 increased $9.8 million,
compared to net cash used in financing activities during 2006. Payments on the
amended floor plan facility and the Senior Notes totaled $7.1 million and $2.5
million, respectively, during 2007.  In 2006, we received $11.6
million in proceeds from a lease negotiation which offset net
cash  used in financing activities.




Working
Capital. Working capital, including cash and cash equivalents, totaled
approximately $36.4 million at December 31, 2007. We maintain inventory in
order to meet the expectations of our customers, and believe that we will
continue to require working capital largely consistent with past experience.
Historically, we have funded our operations with internally generated cash flow
and borrowings. Changes in our working capital are driven primarily by our
profit levels and management of our inventories. Borrowings under our amended
floor plan credit facility to finance our new vehicle inventory may not exceed
(i) 100% of the factory invoices for the related vehicles, (ii) 85% of
the wholesale value of all pre-owned inventory (as determined in accordance with
National Automobile Dealers Association RV Industry Appraisal Guide, or
appraised NADA value) for vehicles in the current through 7th prior model years
and (iii) 65% of the appraised NADA value with respect to pre-owned
vehicles in the 8th, 9th and 10th prior model years. At times, we have made
repayments on our amended floor plan credit facility using excess cash flow from
operations.




Our principal
sources of funds are cash flows from operating activities and available
borrowings under our amended floor plan credit facility. We believe that these
funds will provide us with sufficient liquidity and capital resources for us to
meet our current and future financial obligations, including our scheduled
principal and interest payments, as well as to provide funds for working
capital, capital expenditures and other needs for at least the next twelve
months. No assurance can be given, however, that this will be the
case.




Capital
Expenditures. Our capital expenditures include expenditures to extend the
useful life of our current facilities and expand operations. Historically, our
annual maintenance capital expenditures have been lower than our annual
depreciation charge. In 2007, we invested approximately $0.8 million in
capital expenditures primarily to improve our facility and other maintenance
capital expenditures. Our amended floor plan credit facility limits our ability
to make capital expenditures to $5.0 million per annum. Based on current
estimates, management believes that the amount of capital expenditures permitted
to be made under our amended floor plan credit facility will be adequate to grow
our business according to our business strategy and to maintain the properties
and business of our continuing operations.




Debt Service. As of
December 31, 2007, we had $59.7 million of borrowings outstanding
under our $85.0 million amended floor plan credit facility which was
increased to $100.0 million on January 14, 2008, subject to certain covenants,
including a minimum interest coverage ratio, as defined, of 1.35.  We
have $32.7 million of availability under this facility as of December 31,
2007.  In addition, the amended and restated floor plan facility
includes a $15.0 million revolving credit facility which effectively replaced
the $15.0 million senior secured revolving line of credit facility during
2007.  The Company is eligible to borrow under this revolving credit
facility when its interest coverage ratio, as defined, exceeds 1.40 and the
Company’s trailing twelve month net income, as defined, exceeds
$500,000.  As of December 31, 2007, the Company was not eligible to
borrow under this facility.




The Company
shall offer to repurchase Senior Notes from all holders, on a pro rata basis, to
the extent of 50% of the Company’s free cash flow, as defined, for any six month
period ending on either June 30 or December 31, of any fiscal year (“Free Cash
Flow Offer”).  In October 2007, a Free Cash Flow Offer was completed
for the six month period ended June 30, 2007 totaling $2,633,052, consisting of
$2,450,000 in bond redemption, a $73,500 redemption premium and $109,552 in
accrued interest.  The Company was not required to make a Free Cash
Flow Offer for the six months ended December 31, 2007.




Off-Balance Sheet
Arrangements




The Company
purchases and sells new vehicles under various consignment arrangements,
including one with a related party.  During the term of this
agreement, which commenced on December 29, 2001, the Company has purchased
virtually all inventories that have been held under consignment.  The
total consigned inventory, which is not included in the Company’s balance
sheets, approximated $11.0 million and $14.5 million at December 31, 2007 and
2006, respectively.  Total inventory purchased by the Company under
this consignment arrangement totaled approximately $119 million and $107 million
for the years ended December 31, 2007 and 2006,
respectively.  Subsequent to year end, the Company purchased all units
on hand in conjunction with the exercise of the option to increase the aggregate
commitment to $100 million on the amended floor plan credit
facility.




Except as set
forth above, at December 31, 2007, we had no off-balance sheet arrangements
that have or are likely to have a material current or future effect on our
financial condition, changes in financial condition, revenues or expenses,
results of operations, liquidity, capital expenditures or capital
resources.








-23-
 Contractual and Commercial
Commitments Summary




The
following table sets forth our contractual and commercial commitments as of
December 31, 2007:





Payments
      Due by PeriodLess
      than 1 Year
            
            
            1
      - 3 Years
            
            
            4
      - 5 Years
            
            
            After
      5 YearsContractual
      Obligations
            
            TotalRevolving
      line of credit
            
            $
            -
            
            
            $
            -
            
            
            $
            -
            
            
            $
            -
            
            
            $
            -Senior
      Notes (1)
            
            
            138,585,577
            
            
            
            -
            
            
            
            -
            
            
            
            138,585,577
            
            
            
            -Floor
      plan notes payable
            
            
            59,697,840
            
            
            
            59,697,840
            
            
            
            -
            
            
            
            -
            
            
            
            -Operating
      lease obligations
            
            
            82,090,525
            
            
            
            5,062,046
            
            
            
            11,314,833
            
            
            
            11,025,446
            
            
            
            54,688,200FIN
      48 unrecognized tax benefits
            
            
            591,197
            
            
            
            329,449
            
            
            
            178,665
            
            
            
            83,083
            
            
            
            -Total
      contractual cash obligations
            
            $
            280,965,139
            
            
            $
            65,089,335
            
            
            $
            11,493,498
            
            
            $
            149,694,106
            
            
            $
            54,688,200








(1)
Amount is net of $968,423 of unamortized discount and does not reflect any
potential redemptions by note holders associated with any free cash flow offer
made by the Company as described in Note 9 to the financial
statements.




Critical
Accounting Policies




General. This discussion and
analysis of our financial condition and results of operations is based upon our
financial statements included in this Form 10-K, which have been prepared in
accordance with accounting principles generally accepted in the United States.
The preparation of these financial statements requires us to make estimates and
judgments that affect the reported amounts of assets, liabilities, revenues,
expenses and related disclosure of contingent liabilities. We base our estimates
on historical experience and on various other assumptions that are believed to
be reasonable under the circumstances, the results of which form the basis for
making judgments about the carrying value of assets and liabilities that are not
readily apparent from other sources. Actual results may differ from these
estimates under different assumptions or conditions.




We
believe the following critical accounting policies affect our more significant
judgments and estimates used in the preparation of the financial statements. A
critical accounting policy is one which is both important 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 matters that are inherently
uncertain.





Revenue Recognition. Revenue
from the sale of vehicles is recognized on delivery, transfer of title and
completion of financing arrangements. Revenue from parts sales and service is
recognized on delivery of service or product. We receive a commission from the
sale of insurance and vehicle service contracts to customers. In addition, we
arrange financing for customers through various financial institutions and
receive commissions. We may be charged back (“chargebacks”) a portion of the
financing fees or vehicle service contract fees in the event of early
termination of the contracts by customers. The revenues from financing fees and
vehicle service contract fees are recorded at the time of the sale of the
vehicles, net of a reserve for estimated future chargebacks based on historical
operating results and the termination provisions of the applicable
contracts.




Major Supplier and Dealer
Agreements. We purchase substantially all of our new recreational
vehicles and replacement parts from various manufacturers at the prevailing
prices charged to all authorized dealers. We are subject to dealer agreements
with each manufacturer. The manufacturer is entitled to terminate the dealer
agreement if we are in material breach of their agreement terms.





Goodwill and Other Intangible
Assets.Goodwill represents the excess of costs over fair value of net
assets of an acquired business. Pursuant to Statement of Financial Accounting
Standards ("SFAS") No. 142," Goodwill and Other Intangible Assets," goodwill and
intangible assets acquired in a purchase business combination and determined to
have an indefinite life are not amortized, but instead tested for impairment at
least annually. At December 31, 2007 and 2006, management determined there was
no impairment of goodwill. SFAS No. 142 also requires that intangible assets
with estimable useful lives be amortized over their respective estimated useful
lives, assessed annually, and reviewed for impairment in accordance with
SFAS No. 144, "Accounting for Impairment or Disposal of Long-Lived
Assets."





-24-


Intangible
assets include manufacturing relationships, non-compete agreement, customer
database, trade names and trademarks. Amortizable intangible assets are being
amortized using the straight-line method over 40 years for manufacturer
relationships, five years for the non-compete agreement and one year for the
customer database. Trade names and trademarks are considered to have indefinite
useful lives and are not being amortized.





LIFO Inventory Accounting.
Vehicle and parts inventories are recorded at the 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, the net loss would
have been reduced by approximately $1.9 million for the year ended December 31,
2007.  Net income would have decreased approximately $1.2 million for the
year ended December 31, 2006 and increased approximately $1.4 million for the
year ended December 31, 2005.





Recent
Accounting Pronouncements




See
Recent Accounting Pronouncements in Note 1 of Notes to Financial
Statements.





Inflation




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




Cyclicality




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




Seasonality
and Effects of Weather




Our
operations generally experience higher volumes of vehicle sales in the first and
fourth quarters of each year due in part to consumer buying trends and our
hospitable warm climate during the winter months. The service and parts business
experiences relatively modest seasonal fluctuations.




We have a
single location near Tampa, Florida, which is in close proximity to the Gulf of
Mexico. As a single-site operator, a severe weather event such as a hurricane
could cause severe damage to our property and inventory. In addition, such
weather events can cause extended disruptions of our operations. In 2005 and
2006, the coastal areas of Florida were evacuated on occasions due to
hurricanes. While this did not materially impact our business or results of
operations, we can provide no assurance that a future hurricane or other local
disaster could not do so in the future. Although we believe we have adequate
insurance coverage (including business interruption coverage), if we were to
experience a catastrophic loss, we may exceed our policy limits and /or we may
have difficulty obtaining similar insurance coverage in the future.




-25-








ITEM 7A.
QUANTITATIVE AND QUALITATIVE DISCLOSURES
ABOUT MARKET RISK




Interest Rates. We are
exposed to market risk from changes in the interest rates on a significant
portion of our outstanding indebtedness. Outstanding balances under our senior
secured revolving line of credit bears interest at a variable rate based on
prime or LIBOR as adjusted each interest period. There were no borrowings
outstanding at December 31, 2007. Amounts outstanding under floor plan
financing arrangements bear interest at a variable rate based on prime or LIBOR
as adjusted each interest period. As of December 31, 2007, based on the
aggregate amount of $59.7 million outstanding under our amended floor plan
financing facility as of such date, a 100 basis point change in interest rates
would have changed our annual floor plan interest expense by approximately
$0.6 million.





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




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




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







ITEM 8.
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA




Index
to Financial Statements





Report
      of Independent Registered Public Accounting Firm
            27Financial
      Statements:Balance
      Sheets as of December 31, 2007 and 2006
            28Statements
      of Income (Loss) for the years ended December 31, 2007, 2006 and
      2005
            30Statements
      of Stockholder’s Equity for the years ended December 31, 2007, 2006
      and 2005
            31Statements
      of Cash Flows for the years ended December 31, 2007, 2006 and
      2005
            32Notes
      to Financial Statements
            34Financial
      Statement Schedule:Schedule
      II: Valuation and Qualifying Accounts for the years ended December 31,
      2007, 2006 and 2005
            46




-26-





REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM







Board of
Directors


Lazy
Days’ R.V. Center, Inc.


Seffner,
Florida





We have
audited the accompanying balance sheets of Lazy Days’ R.V. Center, Inc., a
wholly owned subsidiary of LD Holdings, Inc., as of December 31, 2007 and 2006,
and the related statements of income (loss), stockholder’s equity and cash flows
for each of the three years in the period ended December 31,
2007.  Our audits also included the financial statement schedule
listed in Item 15(a) (2).  These financial statements and financial
statement schedule are the responsibility of the Company’s
management.  Our responsibility is to express an opinion on these
financial statements and financial statement schedule based on our
audits.





We
conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States).  Those standards require
that we plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement.  The
Company is not required to have, nor were we engaged to perform, an audit of its
internal control over financial reporting.  Our audit included
consideration of internal control over financial reporting as a basis for
designing audit procedures that are appropriate in the circumstances, but not
for the purpose of expressing an opinion on the effectiveness of the Company’s
internal control over financial reporting.  Accordingly, we express no
such opinion.  An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial
statements.  An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation.  We believe
that our audits provide a reasonable basis for our opinion.





In our
opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Lazy Days’ R.V. Center, Inc. as of
December 31, 2007 and 2006, and the results of its operations and its cash flows
for each of the three years in the period ended December 31, 2007 in conformity
with U.S. generally accepted accounting principles.  In addition, in
our opinion, the financial statement schedule referred to above, when considered
in relation to the basic financial statements taken as a whole, presents fairly,
in all material respects, the information set forth therein.












-27-


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


subsidiary
of LD Holdings, Inc.


BALANCE
SHEETS


December 31,
2007 and 2006











ASSETS
            
            2007
            
            
            2006Current
      assetsCash
            
            $
            8,908,837
            
            
            $
            3,253,637Receivables,
      net of allowance for doubtful accounts of $788,785 in
              2007
      and $549,307 in 2006
            
            
            16,485,641
            
            
            
            15,514,990Refundable
      income taxes
            
            
            996,086
            
            
            
            377,633Inventories
            
            
            94,459,531
            
            
            
            100,688,336Prepaid
      expenses and other
            
            
            3,450,261
            
            
            
            3,001,928Total
      current assets
            
            
            124,300,356
            
            
            
            122,836,524Property
      and equipment, net
            
            
            34,048,842
            
            
            
            36,970,987Loan
      and other costs, net
            
            
            3,913,244
            
            
            
            4,647,963Goodwill
            
            
            104,865,672
            
            
            
            104,865,672Intangible
      assets, net
            
            
            73,324,955
            
            
            
            75,222,812Other
      assets
            
            
            130,470
            
            
            
            228,445Total
      assets
            
            $
            340,583,539
            
            
            $
            344,772,403








See
accompanying notes to financial statements.




-28-





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


subsidiary
of LD Holdings, Inc.


BALANCE
SHEETS (Continued)


December 31,
2007 and 2006





LIABILITIES
      AND STOCK HOLDER’S EQUITY
            
            2007
            
            
            2006Current
      liabilitiesFloor
      plan notes payable
            
            $
            59,697,840
            
            
            $
            66,801,629Accounts
      payable and accrued expenses
            
            
            20,094,820
            
            
            
            12,376,900Accrued
      interest
            
            
            2,414,717
            
            
            
            2,548,495Reserve
      for charge-backs
            
            
            1,179,000
            
            
            
            1,110,000Customer
      deposits
            
            
            2,506,053
            
            
            
            1,421,168Deferred
      income taxes
            
            
            2,013,228
            
            
            
            2,157,135Total
      current liabilities
            
            
            87,905,658
            
            
            
            86,415,327Long-term
      debt
            
            
            138,585,577
            
            
            
            140,796,654Reserve
      for charge-backs
            
            
            998,000
            
            
            
            1,042,000Deferred
      rent
            
            
            14,078,420
            
            
            
            14,134,249Deferred
      income taxes
            
            
            27,784,162
            
            
            
            28,707,187Other
            
            
            20,186
            
            
            
            11,494Total
      liabilities
            
            
            269,372,003
            
            
            
            271,106,911Commitments
      and contingencies (Notes 7 and 12)Stockholder’s
      equityCommon
      stock, $.01 par value: 1,000 shares authorized and 100 shares
              issued and outstanding
            
            
            1
            
            
            
            1Paid-in
      capital
            
            
            67,000,000
            
            
            
            67,000,000Retained
      earnings
            
            
            4,211,535
            
            
            
            6,665,491Total
      stockholder’s equity
            
            
            71,211,536
            
            
            
            73,665,492Total
      liabilities and stockholder’s equity
            
            $
            340,583,539
            
            
            $
            344,772,403





See
accompanying notes to financial statements.




-29-





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


subsidiary
of LD Holdings, Inc.


STATEMENTS
OF INCOME (LOSS)


Years
ended December 31, 2007, 2006 and 2005





2007
            
            
            2006
            
            
            2005RevenuesNew
      vehicle
            
            $
            449,500,809
            
            
            $
            445,576,274
            
            
            $
            475,711,502Pre-owned
      vehicle
            
            
            264,589,382
            
            
            
            248,615,409
            
            
            
            263,742,360Parts,
      service and other
            
            
            39,885,671
            
            
            
            38,838,477
            
            
            
            40,851,104Finance
      and insurance
            
            
            21,390,860
            
            
            
            21,194,556
            
            
            
            21,392,249RallyPark
            
            
            1,603,197
            
            
            
            1,516,255
            
            
            
            1,507,987Other
            
            
            980,873
            
            
            
            1,527,509
            
            
            
            993,029Total
      revenues
            
            
            777,950,792
            
            
            
            757,268,480
            
            
            
            804,198,231Cost
      of revenuesNew
      vehicle
            
            
            416,120,361
            
            
            
            405,092,871
            
            
            
            432,969,891Pre-owned
      vehicle
            
            
            239,039,733
            
            
            
            222,057,139
            
            
            
            233,279,554Parts,
      service and other
            
            
            18,940,271
            
            
            
            16,221,390
            
            
            
            18,057,467Total
      cost of revenues
            
            
            674,100,365
            
            
            
            643,371,400
            
            
            
            684,306,912Gross
      profit
            
            
            103,850,427
            
            
            
            113,897,080
            
            
            
            119,891,319Selling,
      general and administrative expenses
            
            
            87,466,353
            
            
            
            89,659,367
            
            
            
            91,963,731Interest
      expense
            
            
            20,214,325
            
            
            
            21,326,939
            
            
            
            21,378,239Income
      (loss) before income taxes
            
            
            (3,830,251
            )
            
            
            2,910,774
            
            
            
            6,549,349Income
      tax (benefit) expense
            
            
            (1,376,295
            )
            
            
            1,110,066
            
            
            
            2,487,110Net
      income (loss)
            
            $
            (2,453,956
            )
            
            $
            1,800,708
            
            
            $
            4,062,239





See
accompanying notes to financial statements.




-30-


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


subsidiary
of LD Holdings, Inc.


STATEMENTS
OF STOCKHOLDER’S EQUITY


Years
ended December 31, 2007, 2006 and 2005





Common StockShares
            
            
            Amount
            
            
            Paid-in
      Capital
            
            
            Retained
      Earnings
            
            
            Total
      Stockholder’s EquityBalances, January
      1, 2005
            
            
            100
            
            
            $
            1
            
            
            $
            67,000,000
            
            
            $
            434,780
            
            
            $
            67,434,781Net
      income
            
            
            —
            
            
            
            —
            
            
            
            —
            
            
            
            4,062,239
            
            
            
            4,062,239Balances, December
      31, 2005
            
            
            100
            
            
            
            1
            
            
            
            67,000,000
            
            
            
            4,497,019
            
            
            
            71,497,020Cumulative
      effect adjustment, adoption of SAB 108, net of tax
            
            
            —
            
            
            
            —
            
            
            
            —
            
            
            
            367,764
            
            
            
            367,764Net
      income
            
            
            —
            
            
            
            —
            
            
            
            —
            
            
            
            1,800,708
            
            
            
            1,800,708Balances, December
      31, 2006
            
            
            100
            
            
            
            1
            
            
            
            67,000,000
            
            
            
            6,665,491
            
            
            
            73,665,492Net
      loss
            
            
            —
            
            
            
            —
            
            
            
            —
            
            
            
            (2,453,956
            )
            
            
            (2,453,956
            )Balances, December
      31, 2007
            
            
            100
            
            
            $
            1
            
            
            $
            67,000,000
            
            
            $
            4,211,535
            
            
            $
            71,211,536





See
accompanying notes to financial statements.




-31-


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


subsidiary
of LD Holdings, Inc.


STATEMENTS
OF CASH FLOWS


Years
ended December 31, 2007, 2006 and 2005





2007
            
            
            2006
            
            
            2005Cash
      flows from operating activitiesNet
      income (loss)
            
            $
            (2,453,956
            )
            
            $
            1,800,708
            
            
            $
            4,062,239Adjustments
      to reconcile net income (loss) to net cash
              from
      operating activitiesDepreciation
      of property and equipment
            
            
            3,744,333
            
            
            
            3,197,389
            
            
            
            2,867,072Depreciation
      of rental vehicle inventory
            
            
            2,653
            
            
            
            435,222
            
            
            
            3,230,241Amortization
      of intangible assets
            
            
            1,897,857
            
            
            
            2,467,501
            
            
            
            3,817,499Amortization
      and write-off of loan and othercosts
            
            
            922,390
            
            
            
            1,489,452
            
            
            
            1,309,655Amortization
      of discount on long-term debt
            
            
            238,923
            
            
            
            257,878
            
            
            
            307,357(Gain)
      loss on sale of property and equipment
            
            
            (11,588
            )
            
            
            (3,156
            )
            
            
            31,815Loss
      on extinguishment of debt
            
            
            73,500
            
            
            
            101,970
            
            
            
            348,885Provision
      for doubtful accounts
            
            
            301,669
            
            
            
            297,484
            
            
            
            56,298Deferred
      income taxes
            
            
            (1,066,932
            )
            
            
            (346,565
            )
            
            
            (95,721
            )Change
      in operating assets and liabilitiesReceivables
            
            
            (1,272,320
            )
            
            
            6,042,393
            
            
            
            (7,715,526
            )Refundable
      income taxes
            
            
            (618,453
            )
            
            
            113,633
            
            
            
            7,012,603Inventories
            
            
            6,226,152
            
            
            
            (13,731,866
            )
            
            
            (4,661,086
            )Prepaid
      expenses and other
            
            
            (448,333
            )
            
            
            (940,200
            )
            
            
            (241,508
            )Other
      assets
            
            
            97,975
            
            
            
            14,347
            
            
            
            (84,069
            )Accounts
      payable, accrued interest,other
      accrued expenses
              and customerdeposits
            
            
            8,677,719
            
            
            
            (447,197
            )
            
            
            (4,033,189
            )Reserve
      for charge-backs
            
            
            25,000
            
            
            
            67,000
            
            
            
            51,000Deferred
      rent
            
            
            (55,829
            )
            
            
            731,789
            
            
            
            (81,930
            )Net
      cash from operating activities
            
            
            16,280,760
            
            
            
            1,547,782
            
            
            
            6,181,635Cash
      flows from investing activitiesProceeds
      from sale of property and equipment
            
            
            18,454
            
            
            
            17,030
            
            
            
            12,099Purchases
      of property and equipment
            
            
            (829,054
            )
            
            
            (3,014,029
            )
            
            
            (4,658,254
            )Net
      cash used in investing activities
            
            
            (810,600
            )
            
            
            (2,996,999
            )
            
            
            (4,646,155
            )





See
accompanying notes to financial statements.


-32-





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


subsidiary
of LD Holdings, Inc.


STATEMENTS
OF CASH FLOWS (Continued)


Years
ended December 31, 2007, 2006 and 2005





2007
            
            
            2006
            
            
            2005Cash
      flows from financing activitiesNet
      borrowings (payments) under floor plan
            
            $
            (7,103,789
            )
            
            $
            (7,333,338
            )
            
            $
            5,032,639Proceeds
      from lease renegotiation
            
            
            —
            
            
            
            11,600,000
            
            
            
            —Repayments
      of long-term debt
            
            
            (2,523,500
            )
            
            
            (3,501,344
            )
            
            
            (6,945,511
            )Loan
      and other costs
            
            
            (187,671
            )
            
            
            (788,628
            )
            
            
            —Net
      cash used in financing activities
            
            
            (9,814,960
            )
            
            
            (23,310
            )
            
            
            (1,912,872
            )Net
      change in cash
            
            
            5,655,200
            
            
            
            (1,472,527
            )
            
            
            (377,392
            )Cash
      at beginning of year
            
            
            3,253,637
            
            
            
            4,726,164
            
            
            
            5,103,556Cash
      at end of year
            
            $
            8,908,837
            
            
            $
            3,253,637
            
            
            $
            4,726,164Supplemental
      disclosure of cash flow informationCash
      paid during the year for interest
            
            $
            20,348,103
            
            
            $
            21,386,858
            
            
            $
            21,366,097Cash
      paid (received) during the year for
              income
      taxes
            
            
            286,000
            
            
            
            1,345,000
            
            
            
            (4,429,772
            )





See
accompanying notes to financial statements.




-33-


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


subsidiary
of LD Holdings, Inc.


NOTES
TO FINANCIAL STATEMENTS


December 31,
2007, 2006 and 2005




NOTE
1 - NATURE OF OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES




Basis of
Presentation: The financial statements include the accounts of Lazy Days’
R.V. Center, Inc. (“Lazydays” or the “Company”), a wholly owned subsidiary of LD
Holdings, Inc. (“LD Holdings”), a non-operating holding company. LD Holdings was
acquired on May 14, 2004 by R.V. Acquisition, Inc. (“RV Acquisition”), a
newly formed holding company owned by an affiliate of Bruckman, Rosser,
Sherrill & Co., Inc. (“BRS”) and certain original shareholders of LD
Holdings. These financial statements include the accounts of Lazydays and any
obligations of LD Holdings that are pushed down to the subsidiary level. These
obligations include the redeemable preferred stock - Class A (see Note
13).




Business Operations:
The Company sells and services new and pre-owned recreational vehicles and
related parts and accessories. It also offers to its customers such ancillary
services as extended service contracts and overnight campground facilities. The
Company also arranges financing for vehicle sales through third-party financing
sources. The majority of the vehicle receivables are due from financial
institutions.




Major Suppliers and Dealer
Agreements: The Company purchases substantially all of its new
recreational vehicles and replacement parts from various manufacturers. The
Company purchases new vehicles from four major suppliers which, including new
vehicles purchased under consignment arrangements (see Note 12), represented
approximately 84%, 78% and 81% of the total cost of new vehicle revenues for the
years ended December 31, 2007, 2006 and 2005, respectively.




The
Company is subject to dealer agreements with each manufacturer. The manufacturer
is entitled to terminate the dealer agreement if the Company is in material
breach of their agreement terms.




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




Revenue Recognition:
Revenue from the sale of vehicles is recognized on delivery, transfer of title
and completion of financing arrangements. Revenue from parts sales and service
is recognized on delivery of service or product. Rental revenue is recorded as
unearned revenue at lease inception and recognized ratably over the term of the
lease.  Revenue excludes any applicale sales tax which is remitted to
governmental authorities.




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




The
Company may be charged back (“charge-backs”) for financing fees, insurance or
vehicle service contract commissions in the event of early termination of the
contracts by the customers. The revenues from financing fees and commissions are
recorded at the time of the sale of the vehicles and a reserve for future
charge-backs is established based on historical operating results and the
termination provisions of the applicable contracts.




Receivables and
Concentration of Credit Risk: The Company sells to customers and arranges
third-party financing as is customary in its industry. Interest is not normally
charged on receivables. Management establishes an allowance for doubtful
accounts based on historic loss experience and current economic conditions.
Losses are charged to the allowance when management deems further collection
efforts will not produce additional recoveries.




During
the years ended December 31, 2007 and 2006, approximately 58% and 64%
respectively, of unit sales were to customers in the state of Florida. This
geographic concentration increases the Company’s exposure to adverse
developments related to competition, as well as economic, demographic and other
changes in this region.





Inventories: Vehicle
and parts inventories are recorded at the 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, the net
loss would have been reduced by $1.9 million for the year ended December 31,
2007, net income would have decreased approximately $1.2 million for the year
ended December 31, 2006 and increased approximately $1.4 million for the year
ended December 31, 2005.




-34-


Property and
Equipment: Property and equipment are stated at cost less accumulated
depreciation. Expenditures for maintenance and repairs are charged to expense in
the period incurred. Betterments and additions are capitalized. Depreciation is
generally provided under accelerated and straight-line methods over estimated
useful lives for both financial reporting and income tax purposes. For financial
reporting purposes, leasehold improvements are amortized using the straight-line
method over the lesser of the useful life of the asset or term of the lease.
Useful lives range from 15 to 25 years for buildings and improvements and from 3
to 7 years for vehicles and equipment. Upon sale or retirement of items of
property and equipment, the cost and related accumulated depreciation are
eliminated from the accounts and the resulting gain or loss, if any, is
reflected in earnings of the period of disposition.





Evaluation of Impairment of
Long-Lived Assets: In accordance with Statement of Financial Accounting
Standards (“SFAS”) No. 144, “Impairment or Disposal of Long-Lived Assets”,
the Company evaluates the carrying value of long-lived assets whenever
significant events or changes in circumstances indicate the carrying value of
these assets may be impaired. The Company evaluates potential impairment of
long-lived assets by comparing the carrying value of the assets to the expected
net future cash flows resulting from the use of the assets. Management believes
no material impairment of long-lived assets exists at December 31, 2007 and
2006.




Loan and Other Costs:
Loan and other costs are amortized on a straight-line basis over the life of the
related loans ranging from 2.5 to 15 years. Unamortized loan costs of $339,000
were written off in connection with the refinancing of the Company’s line of
credit during 2006, and new loan costs of approximately $789,000 were
capitalized as part of its property lease renegotiation. New loan costs of
approximately $188,000 were capitalized as part of amending the floor plan
financing agreement in February 2007.  Loan costs are presented net of
accumulated amortization of approximately $3,617,000 and $2,843,000 at
December 31, 2007 and 2006, respectively.




Goodwill and Other
Intangible Assets:Goodwill, totaling
$104,865,672 at December 31, 2007 and 2006, represents the excess of costs over
fair value of net assets of an acquired business. Pursuant to SFAS No.
142," Goodwill and Other Intangible Assets," goodwill and intangible assets
acquired in a purchase business combination and determined to have an indefinite
life are not amortized, but instead tested for impairment at least annually. At
December 31, 2007 and 2006, management determined there was no impairment of
goodwill. SFAS No. 142 also requires that intangible assets with estimable
useful lives be amortized over their respective estimated useful lives, assessed
annually, and reviewed for impairment in accordance with SFAS No. 144,
"Accounting for Impairment or Disposal of Long-Lived Assets."





Intangible
assets include manufacturing relationships, non-compete agreement, customer
database, trade names and trademarks. Amortizable intangible assets are being
amortized using the straight-line method over 40 years for manufacturer
relationships, five years for the non-compete agreement and one year for the
customer database. Trade names and trademarks are considered to have indefinite
useful lives and are not being amortized.





Fair Value of Financial
Instruments: The Company’s financial instruments consist of cash,
receivables, accounts payable and debt. Fair values of cash, receivables
and accounts payable approximate carrying values for these financial instruments
since they are relatively short-term in nature. The carrying amount of debt,
except for the Company’s Senior Notes (see Note 9), approximates fair value due
either to length of maturity or existence of variable interest rates that
approximate prevailing market rates.




Management
Fees:  The Company entered into a management services agreement
with BRS and a shareholder of LD Holdings, whereby the parties agreed to provide
general management services to the Company, as defined. In exchange for these
services, the Company agreed to pay the parties an annual management fee equal
to the greater of: 1.75% of the Company’s annual EBITDA, adjusted for non-cash
expenses, management fees, and non-compete payments, or $500,000.
Management fee expense for the years ended December 31, 2007, 2006 and 2005
was $517,643, $553,030, and $726,081, respectively.




Advertising Costs:
Advertising and promotion costs are charged to operations in the year incurred
and totaled approximately $4,994,000, $6,630,000 and $6,006,000 for the years
ended December 31, 2007, 2006 and 2005, respectively.




Segment Information:
The Company follows the provisions of SFAS No. 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 no international operations. The Company’s operating
business delivers the same products and services to a common group. The
Company’s customers are generally individuals. The Company’s business generally
follows the same management and marketing strategies, and operates in a similar
regulatory environment.




Income
Taxes:  Income tax expense is the total of the current year
income tax due or refundable and the change in deferred tax assets and
liabilities.  Deferred tax assets and liabilities are the expected
future tax amounts for the temporary differences between carrying amounts and
tax bases of assets and liabilities, computed using enacted tax
rates.  A valuation allowance, if needed, reduces deferred tax assets
to the amount expected to be realized.








-35-


The
Company adopted Financial Accounting Standards Board ("FASB") Interpretation 48,
“Accounting for Uncertainty in Income Taxes” (“FIN 48”), as of January 1,
2007.  A tax position is recognized as a benefit only if it is "more
likely than not" that the tax position would be sustained in a tax examination,
with a tax examination being presumed to occur.  The amount recognized
is the largest amount of tax benefit that is greater than 50% likely of being
realized on examination.  For tax positions not meeting the "more
likely than not" test, no tax benefit is recorded.  The adoption did
not have a material impact on the Company’s financial position or results of
operation.





The Company recognizes interest and/or
penalties related to income tax matters in income tax
expense.





Use of Estimates in the
Preparation of Financial Statements: The preparation of financial
statements in conformity with accounting principles generally accepted in the
United States of America requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates. Significant estimates include
the fair values used in intangible impairment analysis, reserve for
charge-backs and the allowance for doubtful accounts.





Reclassifications:
Certain prior years’ amounts have been reclassified to conform to the current
year presentation. These reclassifications had no effect on stockholder’s equity
or net income as previously reported.




Recent Accounting
Pronouncements: In September 2006, the FASB issued SFAS No. 157, “Fair
Value Measurements”, which defines fair value, establishes a framework for
measuring fair value in generally accepted accounting principles, and expands
disclosures about fair value measurements.  SFAS No. 157 does not
require any new fair value measurements, but provides guidance on how to measure
fair value by providing a fair value hierarchy used to classify the source of
the information.  SFAS No. 157 is effective for fiscal years beginning
after November 15, 2007; however, on February 12, 2008, the FASB issued
Financial Statement Position (FSP) FAS 157-2 which delayed the effective date of
SFAS No. 157 for all nonfinancial assets and nonfinancial liabilities, except
those that are recognized or disclosed at fair value in the financial statements
on a recurring basis (at least annually).  This FSP partially deferred
the effective date of SFAS No. 157 to fiscal years beginning after November 15,
2008, the Company interim periods within those fiscal years for items within the
scope of this FSP.  Effective for 2008, the Company will adopt SFAS
No. 157 except as it applies to those nonfinancial assets and nonfinancial
liabilities as noted in FSP FAS 157-2. The Company is currently assessing the
impact of the adoption of this statement.





In
February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for
Financial Assets and Financial Liabilities- including an Amendment of FASB
Statement No. 115”, which allows an entity to choose to measure certain
financial instruments and liabilities at fair value.  Subsequent
measurements for the financial instruments and liabilities an entity elects to
fair value will be recognized in earnings.  SFAS No. 159 also
establishes additional disclosure requirements.  SFAS No. 159 is
effective for the Company beginning in fiscal 2008.  The Company is
currently assessing the impact of the adoption of this statement.





NOTE
2 – STOCKHOLDER’S EQUITY





In
September 2006, the Securities and Exchange Commission ("SEC") staff issued
Staff Accounting Bulletin ("SAB") No. 108, "Considering the Effects of Prior
Year Misstatements when Quantifying Misstatements in Current Year Financial
Statements." SAB 108 was issued in order to eliminate the diversity of practice
surrounding how public companies quantify financial statement misstatements. In
SAB 108, the SEC staff established an approach that requires quantification of
financial statement misstatements based on the effects of the misstatements on
each of the company's financial statements and the related financial statement
disclosures. This model is commonly referred to as a "dual approach" because it
requires quantification of errors under both the iron curtain and the roll-over
methods. SAB 108 permitted existing public companies to initially apply its
provisions either by (i) restating prior financial statements as if the "dual
approach" had always been used or (ii) recording the cumulative effect of
initially applying the "dual approach" as adjustments to the carrying values of
assets and liabilities as of January 1, 2006 with an offsetting adjustment
recorded to the opening balance of retained earnings.





The
Company elected to apply the provisions of SAB 108 using the cumulative effect
transition method in connection with the preparation of the financial statements
for the year ended December 31, 2006. As a result, the Company recorded a
decrease in accrued liabilities and an increase in retained earnings in the
amount of approximately $368,000, net of tax, as of January 1, 2006. This
adjustment resulted from the Company overstating liabilities for sales
promotional items, which was deemed immaterial to the financial statements in
each respective period. This misstatement, increased (decreased) net income in
the year reported, originated as follows: 2005 - $128,000; and prior to 2005 -
($496,000).





-36-





NOTE
3 - RECEIVABLES




Receivables
consist of the following:





2007
            
            
            2006Contracts
      in transit and vehicle receivables
            
            $
            10,977,162
            
            
            $
            9,262,233Manufacturer
      receivables
            
            
            5,030,992
            
            
            
            5,371,397Finance
      and other receivables
            
            
            1,266,272
            
            
            
            1,430,66717,274,426
            
            
            
            16,064,297Less:  Allowance
      for doubtful accounts
            
            
            788,785
            
            
            
            549,307$
            16,485,641
            
            
            $
            15,514,990





Contracts
in transit represent receivables from financial institutions for the portion of
the vehicle sales price financed by the Company’s customers through financing
sources arranged by the Company. Manufacturer receivables are due from the
manufacturers for incentives, rebates and other programs.


-37-


NOTE
4 - INVENTORIES




Inventories
consist of the following:




2007
            
            
            2006New
      recreational vehicles
            
            $
            64,850,732
            
            
            $
            68,440,121Pre-owned
      recreational vehicles
            
            
            33,167,420
            
            
            
            32,869,060Parts,
      accessories and other
            
            
            1,749,726
            
            
            
            1,707,84899,767,878
            
            
            
            103,017,029Less:
      LIFO reserve
            
            
            5,308,347
            
            
            
            2,335,35594,459,531
            
            
            
            100,681,674Rental
      recreational vehicles, less accumulated depreciation of $11,660 in 2007
      and $38,775 in 2006
            
            
            —
            
            
            
            6,662$
            94,459,531
            
            
            $
            100,688,336








NOTE
5 - PROPERTY AND EQUIPMENT




Property
and equipment consist of the following:





2007
            
            
            2006Buildings
      and improvements
            
            $
            35,792,926
            
            
            $
            35,643,968Furniture
      and equipment
            
            
            14,255,382
            
            
            
            13,857,169Company
      vehicles
            
            
            405,248
            
            
            
            390,521Construction
      in progress
            
            
            165,123
            
            
            
            —50,618,679
            
            
            
            49,891,658Less:
      Accumulated depreciation and amortization
            
            
            16,569,837
            
            
            
            12,920,671$
            34,048,842
            
            
            $
            36,970,987








Depreciation
expense of property and equipment aggregated $3,744,333, $3,197,389, and
$2,867,072 for the years ended December 31, 2007, 2006 and 2005,
respectively.





As
discussed further in Note 7, effective October 12, 2006, the Company amended its
existing lease agreement with a certain related party, which permitted the
lessor to purchase certain of the Company's buildings located on land leased by
the Company.  The transaction was treated as capital financing transaction
and the assets have remained on the Company's accounting books and records;
however, the cost basis of the assets for financial reporting purposes was reset
to the net carrying value at the time of the transaction.




-38-


NOTE
6 - INTANGIBLE ASSETS




Intangible
assets and the related accumulated amortization as of December 31, 2007 and
2006 are summarized as follows:





2007
            
            
            2006Gross
      Carrying Amount
            
            
            Accumulated
      Amortization
            
            
            Gross
      Carrying Amount
            
            
            Accumulated
      AmortizationAmortizable
      intangible assets:Manufacturer
      relationships
            
            $
            26,700,000
            
            
            $
            2,419,688
            
            
            $
            26,700,000
            
            
            $
            1,752,188Non-compete
      agreement
            
            
            9,000,000
            
            
            
            5,955,357
            
            
            
            9,000,000
            
            
            
            4,725,000Customer
      database
            
            
            3,600,000
            
            
            
            3,600,000
            
            
            
            3,600,000
            
            
            
            3,600,00039,300,000
            
            
            
            11,975,045
            
            
            
            39,300,000
            
            
            
            10,077,188Unamortizable
      intangible assets:Trade
      names and trademarks
            
            
            46,000,000
            
            
            
            —
            
            
            
            46,000,000
            
            
            
            —$
            85,300,000
            
            
            $
            11,975,045
            
            
            $
            85,300,000
            
            
            $
            10,077,188




Amortizable
intangible assets are being amortized using the straight-line method over 40
years for manufacturer relationships, six years for the non- compete agreement
(which was extended an additional year in March 2007 as part of the former
Chairman’s retirement agreement) and one year for the customer database. The
weighted-average amortization period for all amortizable intangible assets
acquired in 2004 is 28.7 years. Trade names and trademarks are considered to
have indefinite useful lives and are not being amortized.




Amortization expense for the years
ended December 31, 2007, 2006 and 2005 was $1,897,857, $2,467,501, and
$3,817,499, respectively. Estimated amortization expense for each of the
subsequent five years ending December 31 is: 2008 - $1,846,072, 2009 -
$1,846,072, 2010 - $1,355,000, 2011 - $667,500, and 2012 -
$667,500.





NOTE
7 - LEASES




The
Company leases land and certain of its facilities from I-4 Land Holding Limited
Company (“I-4”), a related entity owned by a shareholder of the Company, under
an operating lease arrangement which expires in December 2022. The lease
contains four (4) five-year renewal options upon expiration of the original
lease term. The lease requires minimum monthly rental payments of approximately
$399,490 in 2007 before abatements (subject to adjustments in 2008, 2013 and
2018 for increases in the CPI) and provides that the lessee pays all property
taxes and insurance. Rent is recognized straight-line over the life of the lease
resulting in deferred rent during the earlier years of the lease. The Company is
responsible for maintenance costs and betterments on the
facilities.




On
October 12, 2006, the Company amended this lease agreement with I-4.  The
lease was amended to modify the purchase option from $42 million (subject to CPI
increases) through May 14, 2011 to a fair market value purchase option, as
defined, through January 15, 2023; to permit I-4 to purchase certain of the
Company's buildings located on land leased by the Company from I-4 as part of an
asset purchase agreement, as well as reduce rents owed by the Company to I-4 by
an aggregate of $2.7 million during 2006, 2007 and 2008. The amended lease
agreement also gives the Company a right to purchase certain adjacent land
currently rented by a third party.  Finally, the amended lease agreement
and asset purchase agreement provided the Company with $11.6 million of cash,
preserved its business use of all the leased real property and significantly
reduced the Company's future lease obligation without increasing the existing
lease term.  The $11.6 million of cash proceeds and the $2.7 million of
rent abatements, which were treated similar to lease incentives under SFAS No.
13, “Accounting for Leases," are being amortized over the remaining term of
the lease, and are presented as deferred rent on the balance sheet.




The
Company also leases various office and dealership equipment under operating
leases. These leases have terms ranging from 39 months to 66 months and expire
through 2011.


-39-





As of
December 31, 2007, future minimum lease commitments are as
follows:





Related
            
            
            ThirdParty
            
            
            Parties2008
            
            $
            4,668,820
            
            
            $
            393,2262009
            
            
            5,468,820
            
            
            
            246,0712010
            
            
            5,468,820
            
            
            
            131,1222011
            
            
            5,468,820
            
            
            
            87,8062012
            
            
            5,468,820
            
            
            
            —2013
      and thereafter
            
            
            54,688,200
            
            
            
            —$
            81,232,300
            
            
            $
            858,225





Rent expense was approximately
$4,639,000, $5,257,000, and $5,403,000 for the years ended December 31,
2007, 2006 and 2005, respectively, including related party rental expense of $
4,118,156 in 2007, $4,791,240 in 2006, and $4,793,880 in
2005.





NOTE
8 - FLOOR PLAN NOTES PAYABLE




The
Company maintains floor plan financing agreements with two financial
institutions, collateralized by new and pre-owned recreational vehicles
aggregating up to $85,000,000. The entire facility may be used to finance new
vehicle inventory but only up to $26,000,000 may be used to finance pre-owned
vehicle inventory. On October 28, 2004, the agreements were amended further
to permit the Company to use floor plan credit to finance new vehicle inventory
to be leased by the Company (“rental vehicle inventory”). Borrowings are not to
exceed $5,000,000 in the aggregate for rental vehicle inventory or $35,000 per
unit. The financial institutions collateralize all vehicles purchased under
these agreements and all receivables generated from the sale of these vehicles.
The interest rate charged (6.80% and 8.10% at December 31, 2007 and 2006,
respectively) is based on the prime rate or LIBOR. Principal is due upon the
sale of the respective vehicle.




Effective
February 22, 2007, the Company amended the floor plan financing agreements
extending the terms through February 22, 2011 and obtained an option to increase
the aggregate floor plan commitments to $100,000,000 from $85,000,000, which was
exercised subsequent to year-end on January 14, 2008. The amended and restated
floor plan credit facility also includes a $15,000,000 revolving credit facility
(see Note 9).





The Company’s floor plan notes payable
are subject to certain financial and restrictive covenants including debt
service coverage ratio; current ratio; and limitations on lease rentals, certain
executive compensation, capital expenditures, accounts payable, additional debt,
liens, dividends, distributions, certain restricted investments, and certain
other corporate activities, all as defined in the credit agreement. The Company
was in compliance with all covenants at December 31,
2007.




Interest
expense on the floor plan notes payable was approximately $3,543,000,
$4,170,000, and $3,565,500 for the years ended December 31, 2007, 2006 and
2005, respectively.




-40-





NOTE
9 - LONG-TERM DEBT




Long-term
debt consists of the following:





2007
            
            
            200611.75%
      Senior Notes, due 2012
            
            $
            139,554,000
            
            
            $
            142,004,000Less:  Unamortized
      discount
            
            
            968,423
            
            
            
            1,207,346Total
      long-term debt
            
            $
            138,585,577
            
            
            $
            140,796,654





The Company issued $152 million of
unsecured, senior notes (the “Senior Notes”) through a private placement exempt
from the registration requirements of the Securities Act of 1933.
Subsequently, on December 6, 2004, the Company successfully completed the
exchange of $137 million of its Senior Notes. The remaining Senior Notes
totaling $15 million were not eligible for exchange. The Senior Notes mature
May 15, 2012 and bear interest at an annual rate of 11.75% payable each
November 15 and May 15, to the registered holders at the close of
business on November 1 and May 1 immediately preceding the interest
payment date.




The
Senior Notes rank pari passu with the Company’s existing and future senior debt.
The Senior Notes are effectively subordinated to the Revolver and amended floor
plan credit facility to the extent of the assets collateralizing such
debt.




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




The
Company shall offer to repurchase Senior Notes from all holders, on a pro rata
basis, to the extent of 50% of the Company’s free cash flow, as defined,
for any six-month period ending on either June 30 or December 31 of
any fiscal year, commencing with the six-month period ending December 31,
2004. To the extent the Company’s free cash flow for any six-month period is
less than $1.0 million, the Company may elect 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 succeeding six-month period. For the six months
ended December 31, 2007 no free cash flow existed for offer.




The
Senior Notes’ indenture includes covenants that limit the ability of the Company
to: incur additional debt, including sale and leaseback transactions; pay
dividends or distributions on its capital stock or repurchase capital stock;
issue stock of subsidiaries; make certain investments; create liens on its
assets to secure debt; enter into transactions with affiliates; merge or
consolidate with another company; and transfer and sell assets. As noted, the
indenture contains a covenant to limit the incurrence of additional indebtedness
as measured by its fixed charge coverage ratio, as defined. The Company may
incur indebtedness on or before December 31, 2007 if this ratio is greater
than 2.0 to 1.0 or greater than 2.25 to 1.0 if such indebtedness is incurred
thereafter. The Company will not incur pari passu indebtedness if the ratio is
less than or equal to 2.5 to 1.0. The Company obtained a waiver relative to the
2006 lease transaction with an affiliate, which is described in Note
7.




The
Company estimates the fair value of the Senior Notes at December 31, 2007
to be approximately $120.0 million, based on their publicly traded value at that
date compared to a recorded amount of $138.6 million.




The
Company maintained a five-year senior secured revolving line of credit facility
(the “Revolver”). The Revolver provided for borrowings up to $15 million, as
defined, which includes a $10 million sub-facility for the issuance of letters
of credit. There were no outstanding advances under the Revolver at
December 31, 2006. Borrowings under the Revolver were collateralized by
substantially all of the Company’s assets. The Revolver was terminated February
22, 2007 and replaced with a $15 million revolving line of credit under the same
credit facility as the floor plan arrangement (see Note 8).  The terms and
collateral of the new revolving line of credit have not significantly changed
from the prior agreement.  Interest on outstanding advances is payable
monthly and is based on the prime rate or LIBOR (9.25% at December 31,
2007).





The
Company had outstanding letters of credit amounting to $225,000 and $2,800,000
at December 31, 2007 and 2006, respectively.





Interest expense on long term debt was
approximately $16,671,000, $17,157,000 and $17,813,000 for the years ended
December 31, 2007, 2006, and 2005, respectively.





-41-


NOTE 10 - INCOME
TAXES




The
components of the Company’s income tax (benefit) expense are as
follows:





2007
            
            
            2006
            
            
            2005CurrentFederal
            
            $
            (
      309,363
            )
            
            $
            1,243,803
            
            
            $
            3,636,468State
            
            
            —
            
            
            
            212,828
            
            
            
            523,894(309,363
            )
            
            
            1,456,631
            
            
            
            4,160,362DeferredFederal
            
            
            (858,924
            )
            
            
            (295,736
            )
            
            
            (1,510,936
            )State
            
            
            (208,008
            )
            
            
            (50,829
            )
            
            
            (162,316
            )(1,066,932
            )
            
            
            (346,565
            )
            
            
            (1,673,252
            )$
            (1,376,295
            )
            
            $
            1,110,066
            
            
            $
            2,487,110





A
reconciliation of income taxes calculated using the statutory federal income tax
rate (34% in 2007, 2006, and 2005) to the Company’s income tax
(benefit) expense for the years ended December 31 is as
follows:





2007
            
            
            2006
            
            
            2005Amount
            
            
            %
            
            
            Amount
            
            
            %
            
            
            Amount
            
            
            %Income
      taxes at statutory rate
            
            $
            (1,302,285
            )
            
            
            (34.0%
            )
            
            $
            989,663
            
            
            
            34.0
            %
            
            $
            2,226,779
            
            
            
            34.0
            %Non-deductible
      expense
            
            
            16,418
            
            
            
            0.4%
            
            
            
            13,484
            
            
            
            0.5
            %
            
            
            10,128
            
            
            
            0.2
            %State
      income taxes, net of federal
              tax
      benefit
            
            
            (137,285
            )
            
            
            (3.6%
            )
            
            
            106,919
            
            
            
            3.6
            %
            
            
            238,641
            
            
            
            3.6
            %Uncertain
      tax positions
            
            
            49,720
            
            
            
            1.3%
            
            
            
            —
            
            
            
            —
            
            
            
            —
            
            
            
            —Other,
      net
            
            
            —
            
            
            
            —
            
            
            
            —
            
            
            
            —
            
            
            
            11,562
            
            
            
            0.2
            %Income
      tax (benefit) expense
            
            $
            (1,376,295
            )
            
            
            (35.9%
            )
            
            $
            1,110,066
            
            
            
            38.1
            %
            
            $
            2,487,110
            
            
            
            38.0
            %





-42-


Deferred
tax assets and liabilities were as follows:


2007
            
            
            2006Deferred
      tax assets:Inventory
      and receivable allowances
            
            $
            438,519
            
            
            $
            333,131Reserve
      for charge-backs
            
            
            816,375
            
            
            
            807,000Other
      accrued liabilities
            
            
            255,548
            
            
            
            1,056Deferred
      rent
            
            
            5,361,780
            
            
            
            5,645,754Unearned
      rental income
            
            
            —
            
            
            
            1,421Other,
      net
            
            
            158,290
            
            
            
            235,9817,030,512
            
            
            
            7,024,343Deferred
      tax liabilities:Prepaid
      expenses
            
            $
            (706,076
            )
            
            $
            (510,606
            )Inventories
            
            
            (2,479,493
            )
            
            
            (2,465,480
            )Depreciation
      and amortization
            
            
            (122,637
            )
            
            
            (541,500
            )Property
      and equipment
            
            
            (8,179,954
            )
            
            
            (8,179,954
            )Intangible
      assets
            
            
            (25,339,742
            )
            
            
            (26,191,125
            )(36,827,902
            )
            
            
            (37,888,665
            )Net
      deferred tax liabilities
            
            $
            (29,797,390
            )
            
            $
            (30,864,322
            )Presented
      in the balance sheets as:Current
      deferred tax liabilities
            
            $
            (2,013,228
            )
            
            $
            (2,157,135
            )Long-term
      deferred tax liabilities
            
            
            (27,784,162
            )
            
            
            (28,707,187
            )$
            (29,797,390
            )
            
            $
            (30,864,322
            )





The
Company adopted FIN 48 on January 1, 2007.  The amount of unrecognized
tax benefits as of December 31, 2007 and January 1, 2007 are $534,901 and
$451,818, respectively.





A
reconciliation of the beginning and ending unrecognized tax benefit is as
follows:





Year
      EndedDecember
      31, 2007Balance
      at January 1, 2007
            
            $
            451,818Additions
      based on tax positions related to prior years
            
            
            —Additions
      based on tax positions related to current year
            
            
            83,083Balance
      at December 31, 2007
            
            $
            534,901





$509,524
of this amount would increase income from continuing operations, and thus impact
the Company’s effective tax rate, if ultimately recognized into
income.





It is the Company’s policy to recognize
interest and penalties accrued relative to unrecognized tax benefits in their
respective federal or state income taxes accounts.  The total amount
of interest and penalties recorded in the  statement of operations for
the year ended December 31, 2007 was $26,887 and the amount accrued for interest
and penalties at December 31, 2007 was $56,296.





No
significant increases or decreases in the amounts of unrecognized tax benefits
are expected in the next 12 months.The Company files a U.S. federal income tax
return and a Florida state income tax return.  The Company is no
longer subject to examination by taxing authorities for years before 2004.


-43-





NOTE
11 - EMPLOYEE BENEFIT PLANS





Effective
January 1, 2003, the Company established a profit sharing plan with 401(k)
provisions (the “Plan”). The Plan covers substantially all employees. The Plan
allows employee contributions to be made on a salary reduction basis under
Section 401(k) of the Internal Revenue Code. Under the 401(k) provision,
the Company makes discretionary matching contributions equal to 50% of the
employees’ contribution not to exceed 4% of employee pre-tax deferrals. Expense
under the Plan for the years ended December 31, 2007, 2006 and 2005 was
approximately $ 551,000, $537,000, and $523,000 respectively.




NOTE
12 - COMMITMENTS AND CONTINGENCIES




The
Company purchases and sells new vehicles under various consignment arrangements,
including one with a related party. During the term of this arrangement, which
commenced on December 29, 2001, the Company has purchased virtually all
inventory that has been held under consignment. The total consigned inventory,
which is not included in the Company’s balance sheets, approximated $11.0
million and $14.3 million at December 31, 2007 and 2006, respectively.
Total inventory purchased by the Company under this consignment arrangement
totaled approximately $119 million, $107 million and $143 million for the years
ended December 31, 2007, 2006 and 2005, respectively. This consignment
arrangement, as amended October 12, 2006, required the Company to begin paying
consideration for the consignment of such units.  Required payments began
in October 2007 and were based on U.S. Treasury rates times the average value of
units on hand, as defined.  These payments aggregated $72,724 in
2007.  Subsequent to year end, the Company purchased all units under
the consignment arrangement in conjunction with the exercise of the option to
increase the aggregate commitment on the amended floor plan credit facility (see
Note 8).




An
employment agreement exists between the Company and the Chief Executive Officer
which expires five years from the date of the agreement, or May 14, 2009. The
agreement may continue on terms mutually agreeable to the parties. The agreement
details various matters including but not limited to base compensation and bonus
compensation.




In
addition, the Company entered into a non-competition agreement with its past
Chairman of the Board and a shareholder of LD Holdings, whereby the past
Chairman agreed not to engage in any business competing with the businesses of
the Company for a period of five years following the acquisition on May 14,
2004, or if later, three years following termination of employment with the
Company. In consideration thereof, the past Chairman will be paid $2 million per
year so long as he continues to remain employed by the Company or serves as a
member of the Board of Directors of the Company, LD Holdings or RV Acquisition,
as defined.  The past Chairman retired effective August
2007.




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




-44-


NOTE
13 - LD HOLDINGS AND RV ACQUISITION




The
balance sheets of LD Holdings, a wholly owned subsidiary of RV Acquisition,
consisted of the following at December 31, 2007 and 2006:





2007
            
            
            2006ASSETSInvestment
      in and equity in earnings of Lazydays
            
            $
            71,211,536
            
            
            $
            73,665,492STOCKHOLDER'S
      EQUITYCommon
      stock, Class A
            
            $
            1
            
            
            $
            1Paid-in
      capital
            
            
            67,000,000
            
            
            
            67,000,000Retained
      earnings
            
            
            4,211,535
            
            
            
            6,665,491Total
      stockholder's equity
            
            $
            71,211,536
            
            
            $
            73,665,492




The
balance sheets of RV Acquisition consisted of the following at December 31,
2007 and 2006:





2007
            
            
            2006ASSETSInvestment
      in and equity in earnings of LD Holdings
            
            $
            71,211,536
            
            
            $
            73,665,492LIABILITIESDue
      to Lazydays
            
            $
            51,372
            
            
            $
            51,372STOCKHOLDERS’
      EQUITYPreferred
      stock, Series A, including accrued dividends of $39,358,660
              in
      2007 and $26,547,610 in 2006
            
            $
            101,358,660
            
            
            $
            88,547,610Common
      stock, $.01 par value
            
            
            49,947
            
            
            
            49,947Paid-in
      capital
            
            
            4,941,771
            
            
            
            4,941,771Accumulated
      deficit
            
            
            (35,190,214
            )
            
            
            (19,925,208
            )Total
      stockholders' equity
            
            
            71,160,164
            
            
            
            73,614,120Total
      liabilities and stockholders' equity
            
            $
            71,211,536
            
            
            $
            73,665,492





The Series 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 in cash 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 A Preferred Stock aggregated $
39,358,660, at December 31, 2007 and $26,547,610 at December 31, 2006. Upon
a sale of RV Acquisition, the holders of Series A Preferred Stock have the right
to request RV Acquisition to redeem their shares at a price equal to the initial
purchase price plus any accrued and 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 treated as a
liquidation event, as a result of which all shares of Series A Preferred Stock
will be redeemed at a price equal to the initial purchase price plus any accrued
and unpaid dividends thereon.




Effective
August 20, 2004, RV Acquisition established a nonqualified stock option
plan (the “Option Plan”) for certain of its Directors, officers, consultants and
employees. The Option Plan is administered by the Board of Directors or a
committee designated by the Board. The Board of Directors may grant options and
establish the option term, vesting period and exercise price. The maximum number
of shares to which options may be granted shall not exceed 768,301 and expire no
later than ten years from the date of grant. In August 2004, the Board of
Directors granted an aggregate of 363,636 stock options to three key employees
at an exercise price of $1 per share, and an additional 20,000 stock options
were granted to a key employee at an exercise price of $1 per share in November
2004. In December 2006, the Board of Directors granted an additional 243,360
stock options to a key employee at an exercise price of $1 per share. As of
December 31, 2007 only 384,572 stock options remain outstanding and 383,729 are
available for future grants.  One-third of the option grant is subject to
time vesting and becomes exercisable in five equal installments on the
anniversary of the grant. One-third of the option grant vests upon BRS reaching
an internal rate of return (“IRR”), as defined, of 25% and one-third vests upon
BRS reaching an IRR of 30%.




-45-


Effective
January 1, 2006, RV Acquisition adopted SFAS No. 123(R) (revised 2004),
"Share-Based Payment" as interpreted by SEC Staff Accounting Bulletin No.
107.  SFAS No. 123(R) supersedes Accounting Principles Board ("APB")
Opinion No. 25, "Accounting for Stock Issued to Employees," and amends SFAS No.
95, "Statement of Cash Flows." Generally, the approach in SFAS No. 123(R) is
similar to the approach described in SFAS No. 123, "Accounting for Stock-Based
Compensation."  However, SFAS No. 123(R) requires all stock-based payments
to employees, including grants of employee stock options, to be recognized in
the income statement based on their fair values at the date of grant. 
Compensation expense for the year ended December 31, 2007 and December 31, 2006
was insignificant.





Prior to
January 1, 2006, the Company accounted for its stock options under the
recognition and measurement principles of APB Opinion No. 25, and related
interpretations.  Accordingly, no stock-based employee compensation cost
was reflected in net earnings prior to January 1, 2006 as all options to
purchase common stock of the Company had an exercise price equal to, or greater
than, the market value of the underlying common stock on the date of
grant.  Pro forma net income for the years ended December 31, 2005 and
2004, computed under the minimum value method of SFAS No. 123, would not have
differed significantly from its reported net income.


















Financial
Statement Schedule




LAZY
DAYS’ R.V. CENTER, INC.


Schedule
II: Valuation and Qualifying Accounts





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 PeriodYear
      ended December 31, 2007:Reserves
      and allowances deducted from asset accounts:Allowance
      for doubtful accounts
            
            $
            549,307
            
            
            $
            301,669
            
            
            $
            62,191
            
            
            $
            788,785Reserves
      which support the balance sheet caption, reserves:Reserve
      for charge-backs
            
            $
            2,152,000
            
            
            $
            2,526,000
            
            
            $
            2,501,000
            
            
            $
            2,177,000Year
      ended December 31, 2006:Reserves
      and allowances deducted from asset accounts:Allowance
      for doubtful accounts
            
            $
            279,557
            
            
            $
            297,484
            
            
            $
            27,734
            
            
            $
            549,307Reserves
      which support the balance sheet caption, reserves:Reserve
      for charge-backs
            
            $
            2,085,000
            
            
            $
            2,353,000
            
            
            $
            2,286,000
            
            
            $
            2,152,000Year
      ended December 31, 2005:Reserves
      and allowances deducted from asset accounts:Allowance
      for doubtful accounts
            
            $
            437,846
            
            
            $
            56,298
            
            
            $
            214,587
            
            
            $
            279,557Reserves
      which support the balance sheet caption, reserves:Reserve
      for charge-backs
            
            $
            2,034,000
            
            
            $
            2,539,000
            
            
            $
            2,488,000
            
            
            $
            2,085,000





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








-46-




ITEM 9.
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
ON ACCOUNTING AND FINANCIAL DISCLOSURE




None.




ITEM 9A.CONTROLS AND PROCEDURES




Management’s
Conclusions Regarding Effectiveness of Disclosure Controls and
Procedures





As
of December 31, 2007, the Company conducted an evaluation, under the supervision
and participation of management including the Chief Executive Officer and Chief
Financial Officer, of the effectiveness of the Company’s disclosure controls and
procedures (as defined in Rule 13a-15(e) of the Securities Exchange Act of
1934). Based upon that evaluation, the Chief Executive Officer and Chief
Financial Officer concluded that the Company’s disclosure controls and
procedures are effective as of December 31, 2007.





Changes
in Internal Control Over Financial Reporting




There
have been no changes in our internal control over financial reporting that
occurred during the year ended December 31, 2007 that have materially affected,
or are likely to materially affect, our internal controls over financial
reporting.





Management’s
Report on Internal Control over Financial Reporting





Management
of the Company is responsible for establishing and maintaining adequate internal
control over financial reporting (as defined in Rule 13a-15(f) of the Securities
Exchange Act of 1934). Internal control over financial reporting provides
reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with
generally accepted accounting principles.





The
Company’s internal control over financial reporting includes policies and
procedures that: pertain to the maintenance of records that, in reasonable
detail, accurately and fairly reflect the transactions and dispositions of the
Company’s assets; provide reasonable assurance that transactions are recorded as
necessary to permit preparation of financial statements in accordance with
generally accepted accounting principles, and that the Company’s receipts and
expenditures are being made only in accordance with authorizations of management
and provide reasonable assurance regarding prevention or timely detection of
unauthorized acquisition, use or disposition of the Company’s assets that could
have a material effect on the financial statements.





Because
of its inherent limitations, internal control over financial reporting may not
prevent or detect misstatements. Also, projections of any evaluation of
effectiveness to future periods are subject to the risk that controls may become
inadequate because of changes in conditions, or that the degree of compliance
with the policies or procedures may deteriorate.





Management
of the Company has assessed the effectiveness of the Company’s internal control
over financial reporting based on criteria established in Internal
Control-Integrated Framework issued by the Committee of Sponsoring Organizations
of the Treadway Commission.





Management’s
assessment included an evaluation of the design of the Company’s internal
control over financial reporting, and testing of the operational effectiveness
of the Company’s internal control over financing reporting. Based on this
assessment, management has concluded that the Company’s internal control over
financial reporting was effective as of December 31, 2007.





This annual report does not include an
attestation report of the Company’s independent registered public accounting
firm regarding internal control over financial reporting.  Management’s
report was not subject to attestation by the Company’s independent registered
public accounting firm pursuant to temporary rules of the Securities and
Exchange Commission that permit the Company to provide only management’s report
in the annual report.




ITEM 9B.
OTHER INFORMATION




None.





-47-


PART
III




ITEM 10.
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE
GOVERNANCE




The
following table sets forth the names, ages and a brief account of the business
experience of each person who is a Director or executive officer of Lazydays as
of the date hereof.




Name
            
            Age
            
            PositionJohn
      Horton
            
            49
            
            Chief
      Executive Officer, DirectorRandy
      Lay
            
            53
            
            Chief
      Financial OfficerStewart
      Shaffer
            
            56
            
            Chief
      of Marketing and CommunicationsPatrick
      Overby
            
            46
            
            General
      Manager of SalesSteve
      Ratcliff
            
            54
            
            Finance
      and Insurance ManagerBob
      Grady
            
            53
            
            Director
      of Service and PartsJoe
      Wiley
            
            45
            
            Chief
      Information OfficerDominic
      Calabro
            
            48
            
            CrownClub
      PresidentLinda
      Stephens
            
            32
            
            Director
      of Corporate Reporting and Investor RelationsThomas
      Donnelly
            
            51
            
            ChairmanCharles
      Macaluso
            
            64
            
            DirectorThomas
      Baldwin
            
            49
            
            Director
      and Compensation Committee ChairmanStephen
      Sherrill
            
            55
            
            DirectorMichael
      Salvati
            
            55
            
            Director
      and Audit Committee ChairmanThomas
      Millner
            
            54
            
            DirectorNicholas
      Sheppard
            
            32
            
            Director





John Horton began working
with us in 2001 as Chief Operating Officer. In August 2005, he was appointed
Chief Executive Officer. In his current capacity Mr. Horton oversees the
ongoing operations and develops future plans for the Company. From 2000 to 2001,
Mr. Horton served as Executive Vice President of Aavid Thermalloy, a
manufacturer of thermal management products. From 1996 to 2000, Mr. Horton
held positions as CEO and CFO of IPM Service Corporation, a manufacturer of
automotive aftermarket products. From 1980 to 1996, he held various financial
and operations managerial positions at Zenith Electronics Corporation and Zenith
Data Systems. Mr. Horton earned a BBA from the University of Michigan and
an MBA from the University of Texas.





Randy Layjoined us in 2007
and serves as our Chief Financial Officer.  Mr. Lay is responsible for all
of the financial activities of the Company.  Prior to joining Lazydays, Mr.
Lay led the New York office of Buccino & Associates, a consulting firm. Mr.
Lay has also served as President and CEO of Universal Access Global Holdings, a
Chicago based telecommunications firm, SVP and CFO of Metromedia Fiber Network,
a New York City based telecommunications firm, and as EVP and CFO of
International Specialty Products, a global specialty chemical firm. Prior to his
tenure at International Specialty Products, Mr. Lay held senior financial
positions at United Technologies Corporation and Xerox Corporation.  Mr.
Lay holds a BA (Summa Cum Laude) and MBA
from Boston University in Boston, Massachusetts, where he was elected to Phi
Beta Kappa.





Stewart Schaffer joined us in
2000 and serves as our Chief Marketing and Communications Officer.
Mr. Schaffer leads the Company’s efforts to maximize sales opportunities
through promotions, membership programs, events, publications, the Lazydays
website, rallies and other marketing activities. From 1987 to 2000,
Mr. Schaffer served in executive marketing capacities for ClubCorp
International, becoming Corporate Vice President of Marketing in 1994. Prior to
that Mr. Schaffer held various senior marketing positions at American
Express Company and International Paper Company. Mr. Schaffer earned a BS
and an MBA from the Wharton School of the University of
Pennsylvania.




Patrick Overby joined
Lazydays in 1991and serves as our General Manager of Sales. Mr. Overby is
responsible for all Sales operations including Sales production, inventory,
training and recruitment and supplier relations. Prior to becoming General
Manager of Sales, Mr. Overby held positions at Lazydays including:
Sales Associate, Training and Recruiting Manager, Sales Desk Manager, Director
of Financial Services, and Assistant General Manager of Sales. From 1979 to
1991, Mr. Overby served in various sales/management positions with three
other companies in the RV industry. Mr. Overby earned a MBA from
Florida Technological University in Orlando, Florida.




Steve Ratcliff joined the
Company in 1991 as the Finance and Insurance Manager. Prior to joining us,
Mr. Ratcliff held the position of Regional Vice President with Canada and
Associates, a company that sells financial products to dealerships.
Mr. Ratcliff has previously managed the finance and insurance departments
of several automotive dealerships. Mr. Ratcliff is responsible for
maintaining our relationships with our lending partners and securing the best
financing terms and insurance products for our customers. Mr. Ratcliff earned a
BS in Finance from West Virginia University.


-48-





Bob Grady has been with
Lazydays since 2002 in Service and Parts management roles. In 2004
Mr. Grady was promoted to Director of Service and Parts where he is
responsible for all of the Company’s service operations. Prior to Lazydays,
Mr. Grady spent six years in the automotive parts aftermarket in
operational and general management capacities, most recently with a supplier to
Ford and General Motors. Before that, he held operational and financial
management positions in the computer manufacturing industry. Mr. Grady
holds a BS in Administration from the University of New Hampshire and an MBA
from Bentley College. His areas of specialization include process
improvement and materials management.





Joseph Wiley joined the
company in 2005 as our Chief Information Officer. He continues in that role and
also has responsibility for Property Management, Purchasing and Contracts and
RallyPark. Mr. Wiley brings a breadth of operating leadership and functional
experience to our Company, including Information Technology; Electrical
Engineering, Contracting and Construction; Real Estate; Long Range Planning;
Fleet Engineering and Operations; Purchasing and Contracts; Inventory
Management; Facilities Management and Project Management. Mr. Wiley earned a BS
degree in Electrical Engineering from the University of South Florida, an MBA
from the University of Tampa, and is registered as a Professional Engineer in
the State of Florida.




Dominic Calabro joined the Company in 1997 and serves
as our CrownClub President and Sales Manager.  Mr. Calabro is responsible
for all CrownClub sales, service, and administration.  Prior to becomming
our CrownClub President, Mr. Calabro has held the following positions at
Lazydays:  Sales Associate, Training & Recruiting Manager, Product
Manager and Sales Manager.  Mr. Calabro earned a BS from Marist College in
Poughkeepsie, New York.




Linda
Stephens joined the Company in 2004 as the Director of Corporate
Reporting and Investor Relations. Mrs. Stephens is a Certified Public
Accountant (CPA), as designated by the State of Florida and before joining us,
served as a manager with a regional CPA firm. Mrs. Stephens is responsible
for investor relations, corporate reporting, financial analysis and all
accounting functions of the company. Mrs. Stephens holds a BS degree in
Accounting from the University of South Florida.





Thomas Donnellyis currently
a partner with Landmark Financial Advisors, specializing in financial services,
Kentucky Outdoor Advertising, outdoor billboard company and Hard Ten Group, a
development company. In 1971 Mr. Donnelly joined Camping World, Inc. where
he served as Chief Executive Officer from 1986 until 2002. Camping World is the
world’s largest retailer of RV accessories, supplies and services.
Mr. Donnelly is also a Director of Branch Bank & Trust (BB&T)
of Bowling Green, Kentucky and Airxcel Holdings, Inc., of Wichita,
Kansas.




Charles Macaluso is a
founding principal of Dorchester Capital Advisors (formerly East Ridge
Consulting, Inc.), a management consulting and corporate advisory firm founded
in 1996. From March 1996 to June 1998, Mr. Macaluso was a partner at Miller
Associates, Inc., a company principally involved in corporate workouts. From
1989 to 1996, Mr. Macaluso was a partner at The Airlie Group, LLP, a fund
specializing in leveraged buyout, mezzanine and equity investments. He is the
Chairman of the Board for GEO Special Chemicals and serves as a member of the
audit committee. He is also a Director of Global Crossing, Inc., where he serves
on the audit committee. He is lead Director and member of the compensation
committee and nominating committee for Darling International and Chairman of the
Board for Global Power Equipment Group.





Thomas Baldwin joined BRS as
a Managing Director in 2000. From 1988 to 1995, he served as Vice President and
then Managing Director of The INVUS Group, Ltd., a private equity investment
firm. Prior to that he was a consultant with the Boston Consulting Group, a
strategy consulting firm. Mr. Baldwin received a BBA from
Siena College and his MBA from Harvard Business School.
Mr. Baldwin is a Director of Totes Isotoner Corporation, Eurofresh, Inc.
and The Sheridan Group, Inc.




Stephen Sherrill is a founder
and Managing Director of BRS. Previously, he was an officer of Citicorp 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
Columbia Law School. Mr. Sherrill is a Director of Airxcel
Holdings, Inc., B&G Foods, Inc. and Remington Arms Company,
Inc.




Michael
Salvati has over 25 years of financial and business experience. He
has been a principal at Oakridge Consulting since 2000, where he provides
financial consulting and interim management services for various companies.
During this time, Mr. Salvati has served as the Chief Financial Officer of
several companies. These assignments have included public registrants such as
AMIS Holdings, Inc., a designer and manufacturer of semiconductor products
through its subsidiary, Global Exchange Services, and marchFirst. Prior to
founding Oakridge Consulting, Mr. Salvati served as Chief Operating Officer
at National Financial Partners from 1998 to 2000 and Chief Financial Officer of
Culligan Water Technologies, Inc. from 1996 to 1998. Mr. Salvati was
previously a partner at KPMG LLP. Mr. Salvati holds both a B.S. in
Microbiology and M.S. in Accounting from the University of Illinois in
Champaign-Urbana.   Mr. Salvati is a Director of Things
Remembered, Inc.  Mr. Salvati served as interim Chief Financial
Officer for the Company from April 2007 to September 2007.





Thomas
Millneris currently the
Chief Executive Officer of Remington Arms Company, Inc.   He also
served as the company’s President, Chief Executive Officer, and Director from
1999 - 2007. In 1987, Mr. Millner joined Pilliod Cabinet Company, a leading
producer of opening price point bedroom wall systems, and living room tables. In
1990, he was named Chief Executive Officer where he served until Pilliod was
sold to LADD Furniture in 1994. From 1976 until 1987 Mr. Millner held
various sales and management positions with Broyhill and Thomasville Furniture
Industries. Mr. Millner holds a BA with Honors from RandolphMaconCollegewhere he was admitted into Phi Beta
Kappa. Mr. Millner is a Director of Stanley Furniture (NASDAQ:STLY) and
serves as Chairman of the Audit Committee.He is a Director of Lazydays and serves
on both their audit and compensation committees.  He is also a Director of
Bushnell Outdoor Products and a Director of the US Sportsmen’sAlliance.Lastly, Mr. Millner is also a
Director of Remington Arms Company, Inc





-49-


Nicholas Sheppard is a
Principal of BRS. He joined BRS in 2000. From 1997 to 2000, he worked as a
Consultant in the London and New York offices of Marakon Associates, a strategy
consulting firm. Mr. Sheppard received his BSc from the London School of
Economics and Political Science and his MBA from the Wharton School of
Business.  Mr. Sheppard is a Director of Airxcel Holdings,
Inc.




Code of Conduct







Board of Directors Committees














ITEM
11: EXECUTIVE COMPENSATION




The
following discussion and analysis contains statements regarding future company
performance targets and goals. These targets and goals are disclosed in the
limited context of our compensation programs and should not be understood to be
statements of management’s expectations or estimates of results or other
guidance. We specifically caution readers of these statements not to apply these
statements to other contexts.





Compensation
Discussion and Analysis




In this
section, we provide certain aspects of our compensation program as it pertains
to John Horton (Chief Executive Officer), Randy Lay (Chief Financial
Officer), Don Wallace (past Chairman), and our three other most highly
compensated executive officers in 2007. We refer to these six people as the
“Named Executive Officers” or “NEO”. Our discussion focuses on compensation and
practices related to our most recently completed fiscal year.





We
believe that the performance of each of the Named Executive Officers has the
potential to impact both our short-term and long-term profitability.
Therefore, we place considerable importance on the design and administration
of our executive compensation program.




Compensation
Committee (“Committee”) Structure





The
Compensation Committee is comprised of non-management Directors. No member of
the Compensation Committee was an officer or employee of LD Holdings or any of
its subsidiaries during the fiscal year ended December 31, 2007. No member
was formerly an officer of LD Holdings or of its subsidiaries. In addition, no
executive officer of the Company serves on the Board of Directors or the
Compensation Committee of another entity where a Committee member is employed.
Mr. Baldwin, Director and Chairman of the Compensation Committee, is a
Managing Director of BRS, which owns approximately 84% of the common stock of RV
Acquisition.





The
Committee has responsibility for oversight and review of our total compensation
strategy taking into consideration existing company-wide benefit plans. The
Board of Directors has responsibility for the approval of any stock option
grants.





The
compensation for the Chief Executive Officer and past Chairman was established
through employment agreements that were negotiated as part of the acquisition by
RV Acquisition.   The compensation for the Chief Financial
Officer was established through a compensation agreement negotiated at date of
hire.  As needed, the Compensation Committee reviews and approves any
modifications to these agreements.





Pat
Overby (General Manager of Sales), Dominic Calabro (CrownClub President), and
Steve Ratcliff (Finance and Insurance Manager) do not have employment
agreements. The majority of their compensation is cash compensation, 100% of
which is commission based on achieving sales targets, profit targets and other
performance related targets. These targets are established by the Chief
Executive Officer during the annual budgeting process and approved through the
budget review by the Board of Directors. This approach has been taken because
the majority of the effort of these individuals is short-term in nature (i.e.
sales focus) rather than long-term (strategic focus). This approach allows us to
be competitive with the compensation structure of the marketplace.





The
Committee did not engage an outside compensation and benefits consultant during
fiscal year end 2007.




-50-


Report of the Compensation Committee
on the Compensation Discussion and Analysis
  The Compensation
Committee reviewed and discussed the Compensation Discussion and Analysis
included in this Annual Report on Form 10-K with management. Based on such
review and discussion, the Compensation Committee recommended to the Board of
Directors that the Compensation Discussion and Analysis be included in this
Annual Report on Form 10-K for filing with the Securities and Exchange
Commission.
  Submitted
by the Compensation Committee of Lazy Days’ R.V. Center Inc.’s Board of
Directors.
  Thomas
Baldwin, Director and Chairman of the Compensation Committee
 Thomas
Millner, Director
 Thomas
Donnelly, Director


Executive
Compensation Philosophy





The
objectives of our executive compensation program are to provide our executives
with a compensation package that supports our goals, is competitive and provides
executives with rewards equal to their contribution to the Company’s success. In
some cases, compensation was established as part of the negotiated acquisition
of the Company by RV Acquisition. In all other situations, executive
compensation decisions are driven by a pay for performance philosophy. The goal
is to provide a compensation package that is comparable to the marketplace and
provide compensation that is commensurate with the executive’s contribution to
the Company’s financial performance. Compensation structure is designed to
provide a significant portion of total compensation through variable
compensation.


-51-





Objectives of Executive
Compensation-The
objectives of our executive compensation program are to:





1.
            Attract
      and retain quality executive leadership,2.
            Increase
      shareholder value,3.
            Improve
      our overall performance,4.
            Enhance
      the individual executive's performance, and5.
            Align
      incentives with the business unit and company areas most directly impacted
      by the executive's leadership and
performance.




The Committee
strives to meet these objectives while maintaining market competitive
compensation. The Committee attempts to make compensation decisions consistent
with the foregoing objectives and considerations including, in particular,
market levels of compensation it believes are necessary to attract, retain, and
motivate our executive officers. Therefore, the Committee does not take into
account an individual’s net worth or the aggregate wealth accumulated or
realizable by the individual from past compensation grants.




Determining
Executive Compensation





The Committee oversees
the administration of executive compensation plans, including the design,
performance measures, and award opportunities for the executive incentive
programs, and certain employee benefits. The Committee has the authority to
determine, and recommend for Board of Directors approval, all compensation and
awards to the Chief Executive Officer and Chief Financial Officer.





Elements of
Compensation





We
provide a competitive mix of pay elements that align executive incentives with
shareholder value. The primary components of the executive compensation program
are:





▪
            Base
      salary,▪
            Annual
      cash incentives,▪
            Long-term
      incentives,▪
            Benefits,
      and▪
            Severance
      benefits.




A brief
description of these components and related programs follows.





Base
Salary - Base salary is designed to provide competitive levels of
compensation to executives based upon their experience, duties and scope of
responsibility. We pay base salaries to provide a basic level of compensation in
order to recruit and retain executives.





The base
annual salary for John Horton and Randy Lay is $600,000 and $300,000,
respectively. John Horton's base salary is increased each May by a percentage
increase in the consumer price index.  For a discussion of the Named
Executive Officers’ employment arrangements, please see the narrative
accompanying the Summary Compensation Table.




Annual
Cash Incentives (“Bonus”)- We use our annual cash incentives as
a short-term incentive to drive achievement of our annual performance goals. The
goal is to focus on the achievement of annual financial goals and provide cash
awards relative to performance. Annual Cash Incentives are designed
to:




▪
            Support
      our strategic business objectives,▪
            Promote
      the attainment of specific financial goals,▪
            Reward
      achievement of specific performance
objectives.




The
annual cash incentive is paid based on the actual EBITDA performance relative to
the budgeted EBITDA. EBITDA is net income from operations increased by the sum
of interest expense, income taxes, depreciation, amortization and other non-cash
items, as defined.





The Board
of Directors sets the targeted EBITDA level through its review and approval of
the annual budget. In determining final awards and in evaluating personal
performance, the Board considers adjusting EBITDA and other corporate
performance measures for unplanned, unusual or non-recurring income or expense.
In 2007, the Board exercised its discretion by adding to reported EBITDA the
amount of non-compete payments made to Mr. Wallace and management fees paid to
BRS and Mr. Wallace.





-52-


As
discussed above, 100% of the cash compensation for the General Manager of Sales,
CrownClub President, and Finance and Insurance Manager is commission based.
Annual cash incentives for the Chief Executive Officer and Chief Financial
Officer are based on their employment agreements. Based on his employment
agreement, the past Chairman is not eligible for an annual cash
incentive.





The Chief
Executive Officer is eligible to receive a bonus of $200,000 upon achieving 85%
of the targeted EBITDA each year. The bonus increases to up to $400,000 upon
achieving 115% of the targeted EBITDA. If the EBITDA falls between 85% and 115%
of the targeted EBITDA, a pro-rata payment is made. If performance falls below
85% of the targeted EBITDA level, no bonus is paid. The EBITDA as measured for
the annual cash incentive was less than 85% of budget for the 12 months ended
December 31, 2007. Since performance was below 85%, no annual cash incentive was
paid to Mr. Horton.





The Chief
Financial Officer is eligible to receive a bonus of $150,000.  The
bonus amount is split 75% upon achieving 100% of the targeted EBITDA and 25%
upon meeting personal objectives as defined by the Chief Executive
Officer.  If the EBITDA falls between 85% and 115% of the targeted
EBITDA, a pro-rata payment is made.  If performance falls below 85% of
the targeted EBITDA levels, no bonus is paid for the EBITDA portion of the
bonus.  The Chief Financial Officer earned a one-time bonus in 2007 in
the amount of $75,000 as defined in his compensation agreement.





Long-term
Incentive Plans-
Our compensation structure also includes a long-term variable compensation at
the senior executive levels because of our desire to reward effective long-term
management decision making. Long-term incentives are designed to focus attention
on long-range objectives and future returns to shareholders. Long-term Incentive
Plans utilized by the Company include:





Stock Option Awards: In
connection with the purchase of LD Holdings by RV Acquisition, RV Acquisition
stock option grants were issued by RV Acquisition to our Chief Executive Officer
and past Chairman. Stock option grants are made at the discretion of the
Compensation Committee and Board of Directors pursuant to the 2004 Stock Plan as
amended, which is administered by the Compensation Committee and approved by the
Board of Directors.





We grant
only nonqualified stock options. These awards are used to: (1) create a
fundamental, long-term linkage between the interests of executives and
shareholders, and (2) recruit and retain executive talent.




Stock
options represent 100% of long-term incentive compensation for our Chief
Executive Officer and past Chairman. On August 20, 2004 initial grants of
121,212 shares were made to Mr. Horton and Mr. Wallace. The options are subject
to time vesting in five equal installments on the anniversary date of the grant.
The options expire after 10 years. The options have an exercise price of
$1.00.





On
December 28, 2006, an additional grant of 243,360 shares was made to Mr. Horton
as a result of his additional responsibilities as Chief Executive Officer. This
grant expires after 10 years. One-third of the option grant is subject to time
vesting and becomes exercisable in five equal installments on the anniversary of
the grant. One-third of the option grant vests upon BRS reaching an IRR of 25%
and one-third vests upon BRS reaching an IRR of 30%. All options have an
exercise price equal to $1.00. Accordingly, the actual value an executive will
realize is tied to future stock price appreciation and is therefore aligned with
corporate performance and shareholder stock price returns.





Long-term Incentive
Plan:Our General Manager of Sales, CrownClub President, and
Finance and Insurance Manager participate in the Long-term Incentive Plan
of RV Acquisition. Under the terms of the plan, participants would share
pro-rata (based on salary) in a pool equal to approximately 7.5% of the total
common equity value of RV Acquisition upon occurrence of a Trigger Event as
defined in the plan. A Trigger Event means the sale of RV Acquisition (whether
by sale of a majority of its stock or a sale of all or substantially all of its
assets, including the sale of Lazy Days RV Center, Inc.) or a public offering of
RV Acquisition’s common stock resulting in gross proceeds to RV Acquisition and
selling stockholders of $60 million (unless the Board determines that no “change
of control” has occurred within the meaning of the tax law). If the payment date
occurs due to a public offering described above, the payments due under the plan
may be made in shares of RV Acquisition’s common stock.





-53-


Benefits- The Company provides the
following benefits:





▪
            401(k) Plan -We offer
      a qualified 401(k) Plan. We make matching contributions to the 401(k) Plan
      to encourage employees to save money for their retirement. The 401(k)
      Plan, and our contributions to it, enhance the range of benefits we offer
      to executives and enhance our ability to attract and retain employees.
      Under the terms of the qualified 401(k) Plan, employees may defer from 1%
      to a maximum of $15,500 or $20,500 of their eligible pay, if over 50. The
      Company makes discretionary matching contributions equal to 50% of the
      employee contribution not to exceed 4% of employee pre-tax deferrals. In
      2007, Company matching contributions were approximately $16,000 for the
      NEOs.▪
            Perquisites and Other Benefits
      - Perquisites and other benefits represent a small part of our
      overall compensation package. Perquisites for Mr. Horton, Mr. Lay and Mr.
      Wallace were established by their employment contracts. The primary
      perquisites for Mr. Horton and Mr. Wallace are payment of health
      insurance, company paid life and disability insurance payments, and cash
      payments to cover the tax liability to the executives for the imputed
      value of such benefits. Certain tax, accounting, and other regulations
      often subject our executives to taxation on the receipt of certain
      benefits irrespective of the value such benefit conferred to the
      executive. In these situations, we typically provide a tax gross-up
      payment to the executive to reimburse the executive for approximate
      amounts of additional tax liability the executive will need to pay as a
      result of receiving such benefits. In addition to these perquisites, Mr.
      Horton may be reimbursed for tuition to attend up to one short-term
      management program per year. He may also be reimbursed up to $150,000 for
      relocation expenses.  Mr. Lay was paid approximately $23,000 for
      relocation expenses in 2007.




Severence Benefits - Mr.
Horton is entitled to receive severance benefits upon certain qualifying
terminations of employment based on a provision in his employment agreement.
This severance arrangement is intended to provide continuity of management in
connection with a threatened or actual change in control
transaction.  Mr. Horton is entitled to base salary for 24 months and
bonus payments based on the bonus that would have been payable to the executive
for the fiscal year in which the employment is terminated. He is also entitled
to all benefits provided for in their employment agreements for 24
months.


-54-


Other Guidelines and Procedures
Affecting Executive Compensation




Stock-Based
Compensation-Policies related to Stock-Based Compensation include the
following:




▪
            Procedures Regarding Committee
      Approval and Delegation of Authority - The Committee and Board
      of Directors approve all grants of stock-based
    compensation.▪
            Procedures Regarding Timing and
      Pricing of Awards- Our policy is to not grant “in-the-money” options or options with
      exercise prices below market value on the date of
  grant.





Compensation
for Mr. Overby, Mr. Calabro and Mr. Ratcliff is established by Mr. Horton and
approved by the Board of Directors through approval of the annual
budget.





Summary




In summary, we
believe this mix of salary, potentially significant variable cash incentives and
the potential for equity ownership in RV Acquisition motivates our management
team to produce strong returns for shareholders. We further believe this program
strikes an appropriate balance between the interests and needs of Lazydays in
operating our business and appropriate employee rewards based on shareholder
value creation.




Summary of Cash and Certain Other
Compensation and Other Payments to the Named Executive
Officers




Overview
-The
following sections provide a summary of cash and certain other amounts we paid
for the year ended December 31, 2007 to the named executive officers. 
The compensation we disclose below is presented in accordance with SEC
regulations. According to those regulations we are required in some cases to
include:




▪
            Amounts
      paid in previous years,▪
            Amounts
      that may be paid in future years, including amounts that will be paid only
      upon the occurrence of certain events, such as an involuntary
      termination,▪
            Amounts
      we paid to the named executive officers which might not be considered
      “compensation” (for example, non-compete payments), and▪
            An
      assumed value for share-based compensation equal to the fair value of the
      grant as presumed under accounting regulations, even though such value
      presumes the option will not be forfeited or exercised before the end of
      its 10-year life, and even though the actual realization of cash from the
      award depends on whether our stock price appreciates above its price on
      the date of grant, whether the executive will continue his employment with
      us, and when the executive chooses to exercise the
  option.




Therefore, we encourage you to read the
following tables closely. The narratives preceding the tables and the footnotes
accompanying each table are important parts of each table. Also, we encourage
you to read this section in conjunction with the Compensation Discussion and
Analysis, above.




-55-





Summary Compensation
Table




The
following table provides information concerning the compensation of the Named
Executive Officers for our most recently completed fiscal year.




In the
column “Salary”, we disclose the amount of base salary paid to the Named
Executive Officer during the fiscal year. In the column “Bonus”, we disclose the
annual cash incentive that is paid to Named Executive Officers. The column
“Option Awards” reflects the dollar amount of stock-based compensation
recognized by RV Acquisition for 2007 financial statement reporting
purposes in accordance with SFAS No. 123(R) (revised 2004), "Share-Based
Payment". The amounts relate to stock option awards granted to the named
executive under the Amended RV Acquisition, Inc. 2004 Stock Option Plan as
amended. For stock options, the SFAS 123(R) fair value per share is based
on certain assumptions which we explain in Note 13 to our financial
statements which is included in our annual report on Form 10-K. The amounts
shown in the 2007 Summary Compensation Table also include a ratable portion of
each grant we made in prior years to the extent the vesting period fell in 2007.




In the
column “All Other Compensation,” we disclose the sum of the dollar value
of:





▪
            perquisites
      and other personal benefits, unless the aggregate amount of such
      compensation is less than $10,000;▪
            all
      “gross-ups” or other amounts reimbursed during the fiscal year for the
      payment of taxes;▪
            any
      commission payments;▪
            amounts
      we paid or which became due related to non-compete payments, termination,
      or severance, if any;▪
            any
      health, life or disability insurance premiums we paid during the year for
      the benefit of a Named Executive
Officer.




Summary Compensation
Table





Name
            Year
            
            Salary
      ($)
            
            
            Bonus
      ($)
            
            
            Option
      Awards ($)
              (4)
      (5)
            
            
            All
      Other Compensation ($) (7)
            
            
            Total
      ($)Don
      Wallace (1)
            2007
            
            
            655,344
            
            
            
            —
            
            
            
            —
            
            
            
            1,324,572
            
            
            
            1,979,9162006
            
            
            1,060,008
            
            
            
            —
            
            
            
            —
            
            
            
            2,089,009
            
            
            
            3,140,017John
      Horton (2)
            2007
            
            
            631,942
            
            
            
            —
            
            
            
            —
            
            
            
            36,262
            
            
            
            668,2042006
            
            
            613,588
            
            
            
            —
            
            
            
            —
            
            
            
            36,806
            
            
            
            650,394Randy
      Lay (3)
            2007
            
            
            118,192
            
            
            
            75,000
            
            
            
            —
            
            
            
            32,439
            
            
            
            225,6312006
            
            
            —
            
            
            
            —
            
            
            
            —
            
            
            
            —
            
            
            
            —Patrick
      Overby
            2007
            
            
            —
            
            
            
            —
            
            
            
            —
            
            
            
            376,719
            
            
            
            376,7192006
            
            
            —
            
            
            
            —
            
            
            
            —
            
            
            
            392,980
            
            
            
            392,980Steve
      Ratcliff
            2007
            
            
            —
            
            
            
            —
            
            
            
            —
            
            
            
            298,241
            
            
            
            298,2412006
            
            
            —
            
            
            
            —
            
            
            
            —
            
            
            
            295,390
            
            
            
            295,390Dominic
      Calabro
            2007
            
            
            —
            
            
            
            —
            
            
            
            —
            
            
            
            267,105
            
            
            
            267,1052006
            
            
            —
            
            
            
            —
            
            
            
            —
            
            
            
            247,462
            
            
            
            247,462Chuck
      Thibault (6)
            2007
            
            
            —
            
            
            
            —
            
            
            
            —
            
            
            
            —
            
            
            
            —2006
            
            
            474,030
            
            
            
            193,308
            
            
            
            —
            
            
            
            35,855
            
            
            
            703,193







1)
            During
      fiscal 2007, Mr. Wallace served as Chairman of the Board and Chairman
      of the Company until February 7, 2007 and retired effective August 2,
      20072)
            For
      all of fiscal 2007, the Company did not achieve 85% of its targeted
      EBITDA. As a result, Mr. Horton was not paid an Annual Cash Incentive
      bonus for 2007.3)
            Mr.
      Lay earned a one-time bonus in 2007 as defined in his employment
      agreement.4)
            As
      a part of their employment agreements, Mr. Wallace and Mr. Horton received
      stock option grants. These options have a 10 year term and vest in five
      equal installments on the anniversary date of the grant. The shares have
      an exercise price of $1.00 per share. Both were awarded 121,212shares. Subsequent to his retirement
      on August 2, 2007, Mr. Wallace surrendered all option shares he received
      in conjunction with his grant of 121,212 on August 20,
    2004.5)
            Mr.
      Horton was awarded a second grant of 243,360 shares on December 28, 2006.
      One-third of these shares vest ratably over five years on the anniversary
      date of the grant. One-third will vest upon achieving an internal rate of
      return ("IRR"), as defined, for BRS of 25%. One-third will vest upon
      achieving an IRR for BRS of 30%. These options have a 10 year term
      and an exercise price of $1.006)
            Mr.
      Thibault retired effective October 2, 2006.7)
            All
      other Compensation is comprised of the following
    components:


-56-




Name
            
            
            Year
            
            
            Medical
      Insurance ($)
            
            Life
      & Disability Insurance ($) (1)
            
            
            401(k)
      Match ($) (2)
            
            
            
            Tax
      Gross-ups ($) (3)
            
            Other
      ($) (4)
            
            
            Total
      ($)Don
      Wallace
            
            
            2007
            
            
            10,967
            
            
            8,301
            
            
            
            2,475
            
            
            
            2,490
            
            
            1,302,829
            
            
            
            1,324,5722006
            
            
            9,772
            
            
            12,072
            
            
            
            4,200
            
            
            
            3,578
            
            
            2,062,965
            
            
            
            2,089,009John
      Horton
            
            
            2007
            
            
            16,195
            
            
            15,567
            
            
            
            4,500
            
            
            
            5,604
            
            
            —
            
            
            
            36,2622006
            
            
            15,941
            
            
            16,665
            
            
            
            4,200
            
            
            
            6,074
            
            
            —
            
            
            
            36,806Randy
      Lay
            
            
            2007
            
            
            1,389
            
            
            —
            
            
            
            402
            
            
            
            7,072
            
            
            30,648
            
            
            
            32,4392006
            
            
            —
            
            
            —
            
            
            
            —
            
            
            
            —
            
            
            —
            
            
            
            —Patrick
      Overby
            
            
            2007
            
            
            4,034
            
            
            —
            
            
            
            4,500
            
            
            
            —
            
            
            368,185
            
            
            
            376,7192006
            
            
            3,853
            
            
            —
            
            
            
            4,200
            
            
            
            —
            
            
            384,927
            
            
            
            392,980Steve
      Ratcliff
            
            
            2007
            
            
            3,956
            
            
            —
            
            
            
            4,500
            
            
            
            —
            
            
            289,785
            
            
            
            298,2412006
            
            
            3,853
            
            
            —
            
            
            
            4,200
            
            
            
            —
            
            
            287,337
            
            
            
            295,390Dominic
      Calabro
            
            
            2007
            
            
            4,314
            
            
            —
            
            
            
            4,500
            
            
            
            —
            
            
            258,291
            
            
            
            267,1052006
            
            
            3,853
            
            
            —
            
            
            
            4,200
            
            
            
            —
            
            
            239,409
            
            
            
            247,462Chuck
      Thibault (5)
            
            
            2007
            
            
            —
            
            
            —
            
            
            
            —
            
            
            
            —
            
            
            —
            
            
            
            —2006
            
            
            15,679
            
            
            15,976
            
            
            
            4,200
            
            
            
            6,493
            
            
            —
            
            
            
            35,855





(1)
            The
      Company reimbursed Mr. Wallace and Mr. Horton for the cost of life
      insurance and disability insurance. These payments are grossed up for tax
      payments.(2)
            The
      amount shown includes our matching contributions to the 401(k)
      Plan.(3)
            Mr. Wallace's
      gross-ups include $2,490 for life and disability payments.  Mr.
      Horton's gross-ups include $5,604 for life and disability payments. 
      Mr. Lay's gross-ups inclue $7,072 for relocation expenses.(4)
            The
      amount shown for Mr. Wallace’s Other includes $1,250,000 for
      non-compete payments and $52,829 for annual management fee.  The
      amount for Mr. Lay includes $23,000 of relocation expenses.The amount for Mr.
      Overby, Mr. Calabro, and Mr. Ratcliff are for commissions
  earned.(5)
            Mr.
      Thibault retired effective October 2, 2006.




Employment
Agreements and Other Compensation Plans





Two of
our Named Executive Officers have employment agreements, John Horton and Don
Wallace. Randy Lay, Pat Overby, Dominic Calabro, and Steve Ratcliff have
compensation plans that define the financial targets for the year as well as
their compensation for achieving each target.





Other
Compensation Plans




One
hundred percent (100%) of the cash compensation for Messrs. Overby, Calabro, and
Ratcliff is based on commissions. As is customary for these positions, the vast
majority of compensation is based on cash incentives rather than long-term
equity incentives. This approach has been taken because of the majority of the
effort of these individuals is short-term in nature (i.e. sales focus) rather
than long-term (strategic focus). This approach allows us to be competitive with
the compensation structure of the marketplace.





The plan for Mr. Overby and Mr. Calabro provides compensation based on the level
of sales and profitability that is attained by the sales group. A portion of his
compensation is also based on achieving defined delivery goals and inventory
turnover goals.  The plan for Mr. Ratcliff is based on the
profitability of the Finance and Insurance Group.





Employment
Agreements





On May
14, 2004, our parent, LD Holdings was acquired by RV Acquisition. 
Concurrent with the acquisition, the Company and RV Acquisition entered into
employment agreements with Don Wallace (President and Chief Executive Officer at
the time of the acquisition) and John Horton (Chief Operating Officer at the
time of the acquisition). On August 5, 2005, John Horton was named Chief
Executive Officer and Don Wallace was named Chairman. On December 28, 2006, the
Company amended Mr. Horton’s employment contract to increase his salary and
stock options to reflect his new responsibilities as Chief Executive Officer. On
August 2, 2007, Don Wallace retired as Chairman of the Company.




-57-





2007 Grants of Plan-Based
Awards




In 2007 no stock option awards were
made to any of the Named Executive Officers.





Outstanding
Equity Awards at Fiscal Year-End 2007





The following table provides
information concerning unexercised options and stock that has not vested for
each Named Executive Officer outstanding as of the end of our most recently
completed fiscal year.  Each outstanding award is represented by a
separate row which indicates the number of securities underlying the
award.





For option awards, the following table
discloses the option shares granted, the number exercisable at year end, the
number of option shares that are not yet exercisable, exercise price, and the
expiration date.





Name
            
            Number
      of Option Shares Granted
            
            
            Number
      of Option Shares Exercisable
            
            
            Number
      of Option Shares Un-exercisable
            
            
            Option
      Expiration Date
            
            
            Option
      Exercise PriceJohn
      Horton
            
            
            121,212
            (1)
            
            
            72,728
            
            
            
            48,484
            
            
            8/20/2014
            
            
            
            1.00243,360
            (2)
            
            
            16,224
            
            
            
            227,136
            
            
            12/28/2016
            
            
            
            1.00Don
      Wallace (3)
            
            
            —
            
            
            
            —
            
            
            
            —
            
            
            
            —
            
            
            
            —Randy
      Lay
            
            
            —
            
            
            
            —
            
            
            
            —
            
            
            
            —
            
            
            
            —Patrick
      Overby
            
            
            —
            
            
            
            —
            
            
            
            —
            
            
            
            —
            
            
            
            —Steve
      Ratcliff
            
            
            —
            
            
            
            —
            
            
            
            —
            
            
            
            —
            
            
            
            —Dominic
      Calabro
            
            
            —
            
            
            
            —
            
            
            
            —
            
            
            
            —
            
            
            
            —





(1)
            Options
      were granted on August 20, 2004. Options have a ten year term and vest
      ratably over a five year period on the anniversary of the
      grant.(2)
            One-third
      of this grant becomes exercisable on a ratable basis over a five year
      period on the anniversary of the grant. One-third becomes exercisable upon
      BRS achieving a financial return of 25%. One-third becomes exercisable
      upon BRS achieving a financial return of 30%. Shares have a 10 year term
      and an exercise price of $1.00.(3)
            Options
      were granted on August 20, 2004.  Mr. Wallace was granted
      options to purchase 121,212 shares.  No options were
      exercised and all options were cancelled upon Mr. Wallace’s retirement on
      August 2, 2007.




Option Exercises and Surrenders and
Stock Vested In 2007




During
fiscal 2007, there were no option exercises. During 2007, Mr. Wallace
surrendered all options that he received in conjunction with his grant of
121,212 options on August 20, 2004. The surrender of options resulted from his
retirement on August 2, 2007.





-58-


Severance
Plans




Mr. Horton is
entitled to receive severance benefits upon certain qualifying terminations of
employment based on a provision in his employment agreement. This severance
arrangement is intended to provide continuity of management in connection with a
threatened or actual change in control transaction.  Mr. Horton is
entitled to base salary for 24 months and bonus payments based on the bonus that
would have been payable to the executive for the fiscal year in which the
employment is terminated. He is also entitled to all benefits provided for in
their employment agreements for 24 months.





Potential
Payments Upon Termination





The following
table shows potential payments to our Chief Executive Officer for various
scenarios involving termination which is covered by an Employment
Agreement. We have assumed a termination date of December 31, 2007. These
amounts are estimates only. The actual amounts to be paid out can only be
determined at the time of such Named Executive Officer’s separation from
us.





Under the
employment agreements, the Company may repurchase option shares held by the
Named Executive Officer at the time of his termination. We have assumed
that the repurchase cost at December 31, 2007 is $0 and all options would be
cancelled.




Name
            Executive
      Benefit Payments Upon Termination
            
            Retirement
      ($)
            
            
            Involuntary
      Not for Cause Termination ($)
            
            
            For
      Cause Termination ($)
            
            
            Involuntary
      or Good Reason Termination ($)
            
            
            Death
      or Disability  ($)John
      Horton
            Base
      Salary
            
            
            —
            
            
            
            1,275,240
            
            
            
            —
            
            
            
            1,275,240
            
            
            
            —Bonus
            
            
            —
            
            
            
            —
            
            
            
            —
            
            
            
            —
            
            
            
            —Benefits
            
            
            —
            
            
            
            31,134
            
            
            
            —
            
            
            
            31,134
            
            
            
            —








-59-


Director
Compensation




We
reimburse members of the Board of Directors for any out-of-pocket expenses
incurred by them in connection with services provided in such capacity. In
addition, we compensate members of the Board of Directors who are not employees
of Lazydays or BRS $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 or compensation committee. Board members are also paid $2,000 for
meetings attended in person and $500 for meetings attended telephonically, and
committee members are paid $1,000 per in person and $500 per telephonic meeting
if a meeting occurs on a different day than a meeting of the full
Board.





On
October 7, 2005, the Company entered into a management fee agreement with
Charles Macaluso. Services provided include management advisory, ongoing
strategic planning, general corporate matters, organizing, implementing Board Of
Directors' activities and related activities. Mr. Macaluso is compensated
$10,000 per month.





In
October 2006, the Company entered into a management fee agreement with Michael
Salvati. Services provided include financial staff evaluation, assessing and
interviewing candidates for the position of Chief Financial Officer, monthly
review of financial statements and implementation assistance for the new
enterprise resources management system. Mr. Salvati is compensated $2,000 per
day as services are rendered.  In April 2007, Mr. Salvati was
appointed as Interim Chief Financial Officer serving until September
2007.





In July
2007, the Company entered into a consulting agreement with Thomas Donnelly for
certain consulting and advisory services.  Pursuant to the agreement,
Mr. Donnelly receives an annual fee of $300,000.




The
following table summarizes our Director compensation during the 2007 fiscal
year:





Name
            
            Board
      Fees
              Earned
      or
              Paid
      in Cash
              ($)
            
            
            Management/
              Consulting
              Fees
              ($)Thomas
      Donnelly
            
            
            46,000
            
            
            
            125,000Charles
      Macaluso
            
            
            37,750
            
            
            
            120,000Thomas
      Millner
            
            
            39,500
            
            
            
            -Michael
      Salvati
            
            
            40,250
            
            
            
            366,125





-60-


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




RV
Acquisition's wholly owned subsidiary, LD Holdings, owns 100% of our common
stock. The following table sets forth certain information with respect to the
beneficial ownership of RV Acquisition’s common stock and Series A preferred
stock as of December 31, 2007, by: (i) each person or entity who owns
of record or beneficially 5% or more of any class of RV Acquisition’s voting
securities; (ii) each of our named executive officers and Directors; and
(iii) all of our Directors and named executive officers as a group. Except
as otherwise indicated in the footnotes below, each of the beneficial owners
has, to our knowledge, sole voting and investment power with respect to the
indicated shares.  Except as noted below, the address for each of the
Directors and named executive officers is 6130 Lazy Days Boulevard, Seffner,
Florida 33584-2968.




Security
Ownership Table





Number
      and % of Shares of RV Acquisition, Inc. (1)Series
      A Preferred Stock
            
            
            Common
      StockShares
            
            
            %
      Total
            
            
            Shares
            
            
            %TotalGreater
      than 5% StockholdersBruckmann,
      Rosser, Sherrill & Co. II, L.P.
            
            
            35,534
            
            
            
            57.4
            %
            
            
            4,216,077
            
            
            
            84.4
            %126
      East 56th
      StreetNew
      York, NY 10022 (2)Don
      Wallace
            
            
            22,906
            
            
            
            37.0
            %
            
            
            531,915
            
            
            
            10.6
            %Named
      Executive Officers and DirectorsJohn
      Horton
            
            
            *
            
            
            
            *
            
            
            
            *
            
            
            
            *Randy
      Lay
            
            
            —
            
            
            
            —
            
            
            
            —
            
            
            
            —Patrick
      Overby
            
            
            *
            
            
            
            *
            
            
            
            *
            
            
            
            *Dominic
      Calabro
            
            
            —
            
            
            
            —
            
            
            
            —
            
            
            
            —Steve
      Ratcliff
            
            
            *
            
            
            
            *
            
            
            
            *
            
            
            
            *Charles
      Macaluso
            
            
            *
            
            
            
            *
            
            
            
            *
            
            
            
            *Thomas
      Baldwin (2), (3)
            
            
            —
            
            
            
            —
            
            
            
            —
            
            
            
            —Stephen
      Sherrill (2), (3)
            
            
            —
            
            
            
            —
            
            
            
            —
            
            
            
            —Michael
      Salvati
            
            
            *
            
            
            
            *
            
            
            
            *
            
            
            
            *Thomas
      Millner
            
            
            *
            
            
            
            *
            
            
            
            *
            
            
            
            *Thomas
      Donnelly
            
            
            *
            
            
            
            *
            
            
            
            *
            
            
            
            *Nicholas
      Sheppard
            
            
            —
            
            
            
            —
            
            
            
            —
            
            
            
            —Executive
      Officers and Directors as a group
            
            
            901
            
            
            
            1.5
            %
            
            
            114,332
            
            
            
            2.3
            %





*
Represents less than 1%.




1.
            Beneficial
      ownership is determined in accordance with Rule 13d-3 under the
      Securities Exchange Act of 1934. In computing the number of shares
      beneficially owned by a person and the percentage ownership of that
      person, shares of common stock subject to options held by that person that
      are currently exercisable or exercisable within 60 days of closing of
      the offering are deemed outstanding. Such shares, however, are not deemed
      outstanding for the purposes of computing the percentage ownership of any
      other person. LD Holdings is a wholly-owned subsidiary of RV Acquisition
      and the Company is a wholly-owned subsidiary of LD
    Holdings.2.
            Bruckmann,
      Rosser, Sherrill & Co. II, LP. (“BRS LP”) is a private equity
      investment fund managed by Bruckmann, Rosser, Sherrill & Co.,
      LLC. BRSE, LLC. (“BRSE”) is the general partner of BRS LP and by virtue of
      such status 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 shares held by BRS LP. No single person controls the voting
      and dispositive power of BRSE 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 the managers of BRSE, and none of them
      individually has the power to direct or veto the voting or disposition of
      shares owned by BRS LP. BRSE expressly disclaims beneficial ownership of
      the shares owned by BRS LP. Each of Messrs. Bruckmann, Rosser,
      Sherrill, Kaminski and Baldwin expressly disclaims beneficial ownership of
      the shares owned by BRS LP.3.
            The
      address of each of Mr. Baldwin and Mr. Sherrill is c/o
      Bruckmann, Rosser, Sherrill & Co., Inc., 126 East 56th
      Street, New York, New York 10022.





-61-








ITEM 13.
CERTAIN RELATIONSHIPS AND RELATED
TRANSACTIONS AND DIRECTOR INDEPENDENCE




Stock
Purchase Agreement




Pursuant
to the stock purchase agreement, RV Acquisition agreed to acquire all of LD
Holdings’ outstanding common and preferred stock for a purchase price of
$206.0 million (including repayments of certain indebtedness and subject to
pre-closing working capital, tax benefit and cash adjustments). In connection
with the acquisition, we repaid all of our existing indebtedness, which was
equal to $59.0 million as of May 14, 2004, and paid approximately
$11.1 million for certain transaction related fees and expenses. In
connection with the acquisition, each holder of shares of our capital stock was
entitled to receive a portion of the stock purchase consideration. The ESOP was
terminated in connection with the acquisition. Immediately following the
acquisition, RV Acquisition’s outstanding Common Stock was equal to
approximately 89% owned by BRS LP, its affiliates and co-investors and the
remainder was owned by existing members of management and existing stockholders.
The stock purchase agreement contained customary provisions for such agreements,
including representations and warranties with respect to the condition and
operations of the business, covenants with respect to conduct of the business
prior to and following the closing date of the stock purchase, and various
closing conditions, including the execution of a non-compete agreement with Don
Wallace, execution of an escrow agreement, the amendment to our existing floor
plan credit facility, the closing of our new senior secured revolving credit
facility, an amendment to our facility lease with I-4 (described below), the
obtaining of financing and the continued accuracy of the representations and
warranties. A portion of the consideration was deposited into escrow accounts,
including $20.0 million of cash and $20.0 million of new Series A
Preferred Stock of RV Acquisition (to be issued to certain existing stockholders
of LD Holdings) to support indemnity obligations of the selling
stockholders.




Stock
Purchase Consideration




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




Stockholders
Agreement




In
connection with the transactions, the stockholders of RV Acquisition, including
BRS LP, entered into a stockholders agreement, which establishes the composition
of the Board of Directors and provides for certain restrictions and rights with
respect to sales and issuances of RV Acquisition’s securities. In particular,
the stockholders agreement provides that no employee holder may transfer his or
her capital stock of RV Acquisition, except to immediate family members, family
trusts and charitable organizations. Employees have the right to sell a pro rata
portion of their stock in RV Acquisition if BRS LP elects to sell all or portion
of its Holdings stock. BRS LP also has the right to cause a sale of RV
Acquisition to occur and to require the other holders of RV Acquisition stock to
participate in such a sale. Finally, if RV Acquisition proposes to issue new
equity securities to BRS LP, each holder of RV Acquisition stock has the right
to purchase its pro rata share of such new securities.




Registration
Rights Agreement




In
connection with the transactions, RV Acquisition entered into a registration
rights agreement with BRS LP and certain other equity holders of RV Acquisition.
Under the registration rights agreement, BRS LP and such other equity holders
have the ability to cause RV Acquisition to register securities of RV
Acquisition held by the parties to the registration rights agreement and to
participate in registrations by RV Acquisition of its equity
securities.




Employment
Agreements; Stock Option Plan




Upon
closing of the transactions, we entered into new employment agreements with
certain key employees. On August 20, 2004, we put in place a new stock
option plan which will provide for issuances of common stock of RV Acquisition
to certain key management employees, including the named executive officers. See
“Item 11—Executive Compensation—Long-term incentive plans".





-62-





Management
Services Agreement




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




▪
            general
      management services;





▪
            assistance
      with the negotiation and analysis of financial alternatives;
      and





▪
            other
      services agreed upon by BRS LLC.




In
exchange for these services, BRS LLC and Don Wallace 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





(2)
            $500,000.




10.6% of such fee will
be payable to Don Wallace and 89.4% will be payable to BRS LLC. In addition to
certain restrictions on the payment of the management fee contained in the
senior secured revolving credit facility and the amended floor plan credit
facility, the Management Services Agreement contains certain restrictions on the
payment of that fee. The Management Services Agreement also provides that the
payment of all fees and other obligations under the Management Services
Agreement will be subordinated to the prior payment in full in cash of all
interest, principal and other obligations on our notes and the new senior
secured revolving credit facility in the event of a bankruptcy, liquidation or
winding-up of Lazydays.




BRS LLC
provided various advisory services to us related to the transactions. These
services included arranging and negotiating the refinancing of the senior
secured revolving credit facility and amended floor plan credit facility,
arranging and structuring the acquisition, including forming RV Acquisition and
planning its capital structure, planning Lazydays’ structure and related
services. Pursuant to the Management Services Agreement, for these services, BRS
LLC and Don Wallace received a transaction fee of $3.5 million plus
reasonable expenses upon completion of the transactions. 10.6% of such fee was
payable to Mr. Wallace and 89.4% was payable to BRS LLC. In addition, BRS
LLC will be entitled to receive a transaction fee equal to 1.5% of the
transaction value upon any future material acquisition, divestiture, financing
or refinancing by RV Acquisition, Holdings or us.




Issuance
of Series A Preferred Stock to BRS LP and Certain Existing Stockholders of
Holdings




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




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




The
Series A Preferred Stock will have a liquidation preference equal to the
purchase price plus accrued and unpaid dividends. If an “organic change” (i.e.,
a merger or sale of substantially all of the Company’s assets) occurs, the
holders of the Series A Preferred Stock may require redemption of all or
any portion of their shares at the amount of the liquidation preference plus
accrued and unpaid dividends. The Series A Preferred Stock will, with
respect to dividends, rights upon liquidation, winding up and dissolution, rank
senior to RV Acquisition’s Common Stock. RV Acquisition will be unable to
authorize any dividend or distribution, or pay any dividend or make any
distribution with respect to any junior securities, unless all accrued and
unpaid preferred dividends have been paid in cash. In addition, RV Acquisition
will be unable to effect any redemption or repurchase of any junior securities
(other than upon the exercise by RV Acquisition’s repurchase rights with respect
to any Common Stock issued to employees or others providing services upon a
termination of their employment or other service relationship) unless the
Series A Preferred Stock has been redeemed. Except as otherwise required by
law or provided in the Company’s certificate of incorporation, the holders of
Series A Preferred Stock will not be entitled to vote.




-63-


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





The
holders of the Series A Preferred Stock will also be offered the right to
purchase a pro rata share of any other preferred equity securities (or rights to
acquire preferred equity securities, such as warrants, convertibles, etc.) to be
offered by RV Acquisition to BRS LP or its affiliates on the same terms they are
offered to such parties. BRS LP will also grant to the other holders of
Series A Preferred Stock the right to participate (on a pro rata basis and
on the same terms and conditions) in any sale of Series A Preferred Stock held
by BRS LP to a third-party. The $20.0 million of new Series A
Preferred Stock of RV Acquisition issued to the existing stockholders of
Holdings will be held in escrow to support indemnity obligations of the selling
stockholders. During the period that starts on the closing of the stock purchase
agreement and ends two years following the filing of certain governmental
filings relating to the ESOP with the Department of Labor, the sellers may not
transfer certain of their shares of Series A Preferred Stock held by them
other than pursuant to a one-year call arrangement between Don Wallace and one
other seller or certain permitted transferees.




Issuance
of Common Stock to BRS LP and Certain Existing Stockholders of
Holdings




In
connection with the Acquisition, RV Acquisition issued 5,000,000 shares of new
Common Stock, par value $0.01 per share at a purchase 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 million of Common Stock was purchased by BRS LP for
cash. The balance of $0.5 million was issued to Don Wallace in exchange for
certain equity in Holdings contributed by him to RV Acquisition.




Private
Placement of RV Acquisition Stock




On
September 28, 2004, RV Acquisition and BRS LP consummated an offering
of RV Acquisition Stock previously held by BRS LP and its affiliates to
certain employees of Lazydays. As a result, 186,787 shares of RV
Acquisition Common Stock and 1,489,228 shares of RV Acquisition
Series A Preferred Stock were sold to such employees that participated in
the private placement.




The
ESOP




In
July 1999 the ESOP borrowed funds from Lazydays to purchase, through a
holding company, shares of Lazydays Class A common stock representing
beneficial ownership of 75% of the common stock of Lazydays from Don Wallace
which, together with the existing 9% interest the ESOP already owned, made the
ESOP an 84% beneficial owner of Lazydays. As part of the 2002 restructuring
described below, these shares were converted via merger into the Class A
common stock and Class C common stock of Holdings and have been held by the
ESOP in the ESOP trust’s suspense account and allocated to individual
participants in the ESOP as the loan has been repaid. Subsequently, also as a
result of the 2002 restructuring described below, 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 was considered unearned employee ESOP
shares and, as such, was recorded as a reduction to Holdings’ stockholders’
equity. Holdings’ contributions to the ESOP, plus any dividends paid on
unallocated shares held by the ESOP, have been used to repay the loan principal
and interest. Both the loan obligation and the unearned ESOP shares have been
reduced by the amount of the loan principal repayments made by the ESOP. The
ESOP compensation expense totaled $534,000 for the year ended December 31,
2004. The compensation expense was computed based upon the fair value of the
ESOP shares committed to be released to participants for the relevant
year.




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




Certain
allocated ESOP shares had premium floor price put rights. Holdings’ aggregate
obligation to repurchase the ESOP’s shares under these put obligations at
December 31, 2003 was approximately $18.6 million. In connection with
the acquisition, all of the allocated shares with premium floor price put rights
were paid an amount at closing equal to the applicable put price with respect to
such shares. We used the proceeds from the transactions to satisfy any
outstanding ESOP obligations discussed above, including Holdings’ outstanding
distribution notes and put obligations.




In
connection with the transactions, the ESOP was terminated and three categories
of Holdings’ stock were purchased from the ESOP. Those categories were
(1) Class A common stock allocated to ESOP participants and subject to
a premium floor price, (2) Class C common stock allocated to ESOP
participants and subject to a premium floor price and (3) Class A
common stock, whether allocated or unallocated, not subject to a premium floor
price. Proceeds received by the ESOP from the sale of the unallocated suspense
account shares 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.




-64-


The ESOP was subject to applicable
provisions of the Internal Revenue Code of 1986, as amended (the "Code") and the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"), and
regulations thereunder, designed to protect the ESOP's participants and
beneficiaries. The ESOP was a party to certain corporate and restructuring
transactions entered into by Holdings and its affiliates in 1999, 2002 and
2004. In 2005 the Internal Revenue Service issued a favorable determination
letter regarding the termination of the ESOP and in 2006 the Department of Labor
finalized their review and determined no outstanding issues
exist.




Facility
Lease Agreement




The
Company leases land and certain of its facilities from I-4 Land Holding Limited
Company (“I-4”), a related entity controlled by Don Wallace under an operating
lease arrangement which expires in December, 2022. The lease contains four (4)
five-year renewal options upon expiration of the original lease term. The lease
requires minimum monthly rental payments of $399,490 before abatements (subject
to adjustments in 2008, 2013 and 2018 for increases in the CPI) and provides
that the lessee pays all property taxes and insurance. Rent is recognized
straight-line over the life of the lease resulting in deferred rent during the
earlier years of the lease. The Company is responsible for maintenance costs and
betterments on the facilities.




On
October 12, 2006, the Company amended this lease agreement with I-4.  The
lease was amended to modify the purchase option from $42 million (subject to CPI
increases) through May 14, 2011 to a fair market value purchase option, as
defined, through January 15, 2023 and to permit I-4 to purchase certain of the
Company's buildings located on land leased by the Company from I-4 as part of an
asset purchase agreement, as well as reduce rents owed by the Company to I-4 by
an aggregate of $2.7 million during 2006, 2007 and 2008. The amended lease
agreement also gives the Company a right to purchase certain adjacent land
currently rented by a third party.  Finally, the amended lease agreement
and asset purchase agreement provided the Company with $11.6 million of cash,
preserved its business use of all the leased real property and significantly
reduced the Company's future lease obligation without increasing the existing
lease term.




Consignment
Sales Agreement




We hold
new vehicles under a consignment arrangement with I-4 for up to 180 days.
During the term of the agreement, we have purchased all inventories that have
been held under consignment. The total consigned inventory, which is not
included in our balance sheets, approximated $11.0 million and
$14.3 million at December 31, 2007 and December 31, 2006,
respectively. Total consigned inventory purchased by us has totaled
approximately $119 million and $107 million for the years ended
December 31, 2007 and December 31, 2006, respectively. This
consignment arrangement, as amended October 12, 2006, requires the Company to
pay consideration for the consignment of such units.  Required payments
began October 2007 and are based on U.S. Treasury rates times the average value
of units on hand, as defined.  These payments aggregated $72,724 in
2007.  Subsequent to year end, the Company purchased all units under the
consignment arrangement in conjunction with the exercise of the option to
increase the aggregate commitment on the amended floor plan credit
facility.




Purchase
of Restricted Notes; Exchange Offer




Don
Wallace purchased $15.0 million in aggregate principal amount of restricted
notes in connection with the offering of our senior notes due 2012, of which
$7.0 million in consideration was comprised of equity in Holdings and the
remainder was purchased for cash. Because Mr. Wallace is an affiliate, the
restricted notes held by him were not eligible to be exchanged in connection
with our exchange offer. In connection with our exchange offer consummated in
December 2004, $137 million in aggregate principal amount of outstanding
privately placed senior notes were exchanged for public notes.




Review, Approval or Ratification of
Related Person Transactions.  Our Audit Committee is responsible for the
review, approal or ratification of "related-person transactions: between us and
related persons.  "Related person" refers to a person or entity who is, or
at any point since the beginning of the last fiscal year was, a director,
officer, nominee for director, or 5% stockholder of us and their immediate
family members.  Our Audit Committee does not have a written policy
regarding the approval of related-person transactions.  The Audit Committee
applies its review procedures as a part of its standard operating
procedures.  In the course of its review and approval or ratification of a
related-person transaction, the Audit Committee considers:




▪


▪


▪


▪


▪







-65-





ITEM 14. PRINCIPAL ACCOUNTANT
FEES AND SERVICES




The
following table presents fees for services provided to the Company by Crowe
Chizek and Company LLC for 2007 and 2006 (dollars in thousands).





2007
            
            
            2006Audit
      Fees (a)
            
            $
            296
            
            
            $
            280Audit-Related
      Fees (b)
            
            
            —
            
            
            
            69Tax
      Fees (c)
            
            
            34
            
            
            
            37All
      Other Fees
            
            
            —
            
            
            
            —Total
            
            $
            330
            
            
            $
            386





(a)
            Fees
      for professional services provided for the audit of the Company’s annual
      financial statements as well as preissuance reviews of Lazydays’ quarterly
      reports on Form 10-Q, accounting consultations on matters addressed during
      the audit or interim reviews, and SEC filings.(b)
            Fees
      for professional services which principally include consultations relative
      to SEC filings and the Company’s real estate lease
      transaction.(c)
            Fees
      for professional services for tax related advice and
      compliance.



















PART
IV




ITEM
            15.
      EXHIBITS AND FINANCIAL STATEMENT SCHEDULES




(1)
Financial Statements:




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




(2) The
following financial statement schedule is included in Item 8, “Financial
Statements and Supplementary Data”




Schedule
II - Valuation and Qualifying Accounts.




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




See
attached Exhibit Index.






-66-


SIGNATURES




Pursuant
to the requirements of Section 13 or 15(d) of the Securities Exchange Act
of 1934, Lazy Days’ R.V. Center, Inc. has duly caused this report to be signed
on its behalf by the undersigned.




Lazy Days' R.V. Center,
      Inc.Date:
      March 31, 2008
              By:
              /s/ John
      HortonJohn
      HortonChief
      Executive Officer


Pursuant
to the requirements of the Securities Exchange Act of 1934, this report has been
signed by the following persons on behalf of Lazy Days’ R.V. Center, Inc. and in
the capacities and on the dates indicated.




Signature
              
              Title
              
              Date/s/
      John Horton
              
              Chief
      Executive Officer
              
              March
      31, 2008John
      Horton/s/
      Randy Lay
              
              Chief
      Financial Officer
              
              March
      31, 2008Randy
      Lay/s/
      Thomas Donnelly
              
              Chairman
              
              March
      31, 2008Thomas
      Donnelly/s/
      Charles Macaluso
              
              Director
              
              March
      31, 2008Charles
      Macaluso/s/
      Stephen Sherrill
              
              Director
              
              March
      31, 2008Stephen
      Sherrill/s/
      Thomas Baldwin
              
              Director
              
              March
      31, 2008Thomas
      Baldwin/s/
      Michael Salvati
              
              Director
              
              March
      31, 2008Michael
      Salvati/s/
      Thomas Millner
              
              Director
              
              March
      31, 2008Thomas
      Millner/s/
      Nicholas Sheppard
              
              Director
              
              March
      31, 2008Nicholas
      Sheppard















-67-


EXHIBIT
INDEX





No.
            Exhibit
      Index2.1
            Stock
      Purchase Agreement by and between Lazydays, LD Holdings, Inc., the
      Employee Stock Ownership Plan and Trust for the Employees of Lazydays,
      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 Lazydays, LD
      Holdings, Inc., the Employee Stock Ownership Plan and Trust for the
      Employees of Lazydays, 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 Lazydays, dated as of
      August 6, 2002.*3.2
            Amended
      and Restated By-laws of Lazydays, dated as of August 6,
      2002.*4.1
            Indenture
      by and between Lazydays, 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 Lazydays, 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 Lazydays, 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., Lazydays, the Employee
      Stock Ownership Plan and Trust for the Employees of Lazydays, 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 Lazydays, 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 Lazydays, 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 Lazydays, 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 Lazydays, 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 Lazydays 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 Sellers), 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 Lazydays, 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 Lazydays, dated as
      of May 14, 2004.*10.10
            Non-compete
      and Covenant Agreement by and among Lazydays, 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 Lazydays who executes a joinder to the Agreement on or after
      the date thereof, dated as of May 14, 2004.*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 Lazydays who executes a joinder to the Agreement on or after
      the date thereof, and Alliance Holdings, Inc., dated as of
      May 14, 2004.*




-68-


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 Lazydays, dated as of
      May 14, 2004.*10.15
            Second
      Amended and Restated Floor Plan Credit Agreement by and among Lazydays,
      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 Lazydays
      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 Lazydays, dated
      as of July 1999.*10.18
            First
      Amendment to Lease by and between I-4 Land Holding Limited Company and
      Lazydays, dated as of May 14, 2004.*10.19
            Loan
      and Security Agreement by and between Lazydays 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 Lazydays, 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 Lazydays, 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
            First
      Amended and Restated Amendment No. 1 to Second Amended and Restated Floor
      Plan Credit Agreement dated January 17, 2006, by Lazy Days’ R.V. Center,
      Inc., a Florida corporation (the “Company”), 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 filed as Exhibit 10.29 to Form
      8-K dated January 17, 2006.10.27
            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.*10.28
            Amendment
      No. 3 to Second Amended and Restated Floor Plan Credit Agreement dated as
      of January 17, 2006, by Lazy Days’ R.V. Center, Inc., a Florida
      corporation, Bank of America, N.A. (successor by merger to Banc of America
      Specialty Finance, Inc.), as Administrative Agent and as Collateral Agent
      and Keybank National Association, as Lenders, filed as Exhibit 10.28 to
      Form 8-K dated January 17, 2005 and hereby incorporated by reference
      herein.10.29
            Amendment
      No. 2 to Second Amended and Restated Floor Plan Agreement dated as of May
      23, 2005, by Lazy Days’ R.V. Center, Inc., an Florida corporation, 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, filed as Exhibit 99.1
      to Form 8-K dated May 27, 2005 and hereby incorporated by reference
      herein.10.30
            Management
      Fee Agreement with Charles Macaluso, dated October 7, 2005, filed as
      Exhibit 99.1 to Form 8-K dated October 13, 2005 and hereby incorporated by
      reference herein.(1)10.31
            First
      Amendment,dated
      as of September 29, 2006, to the Loan and Security Agreement,dated as of May 14,
      2004*, by and between Wells Fargo Foothill, Inc., a California
      corporation (the "Lender"), and Lazy
      Days' R.V. Center, Inc., a Florida corporation (the "Borrower",) filed as Exhibit 10.3 to Form
      8-K dated October 04, 2006.10.32
            Second
      Amendment, dated as of October 12, 2006, to Ground Lease dated July 15,
      1999*, between I-4 Land Holding Limited Company, a Florida limited
      liability company (“Landlord”), and Lazy Days’ R.V. Center, Inc., a
      Florida corporation (“Tenant”,) filed as Exhibit 10.31 to Form 8-K dated
      October 18, 2006.




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10.33
            First
      Amendment, dated as of October 12, 2006, to Exclusive Consignment Contract
      for Sale of Recreational Vehicles, dated December 29, 2001*, is between
      I-4 Land Holding Limited Company, a Florida limited liability company, and
      Lazy Days’ R.V. Center, Inc., a Florida corporation, filed as Exhibit
      10.32 to Form 8-K dated October 18, 2006.10.34
            Asset
      Purchase Agreement dated as of 26th
      day of September, 2006, betweenI-4Land Holding
      Limited Company,a
      Florida limited liability company (the “Buyer”), and Lazy Days’
      R.V. Center, Inc.,a Florida corporation (the
      “Seller”,) filed as Exhibit 10.33 to Form 8-K dated October 18,
      2006.10.35
            Amendment,
      dated as of December 28, 2006 amends the Employment Agreement dated as of
      May 14, 2004*(1) by Lazy Days R.V. Center, Inc., a Florida corporation
      (the “Company”), RV Acquisition Inc.,
      a Delaware corporation, John Horton (the “Executive”), and Bruckmann, Rosser,
      Sherrill & Co. II, L.P., a Delaware limited partnership, filed as
      Exhibit 10.1 to Form 8-K dated January 3, 2007.10.36
            Amendment,
      dated as of December 28, 2006, pursuant to Article 6.6 of the RV
      Acquisition Inc. 2004 Stock Option Plan* (the "Plan"), the Board of Directors of RV
      Acquisition Inc. (the “Corporation”)
      adopted a resolution to amend the Plan and increase the number of shares
      of common stock of the Corporation subject to the Plan, filed as Exhibit
      10.2 to Form 8-K dated January 3, 2007.10.37
            Non-qualified
      stock option agreement, dated as of December 28, 2006,between RV
      Acquisition Inc., a Delaware corporation (the “Company”), and John Horton(the “Optionee”), filed as Exhibit 10.3 to Form
      8-K dated January 3, 2007.10.38
            Third
      Amended and Restated Credit Agreement, originally dated as of July 15,
      1999, and as amended and restated as of July 31, 2002, May 14, 2004*, and
      February 22, 2007,by Lazy Days’
      R.V. Center, Inc., a Florida corporation (the “Company”), 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 Key Bank National Association (a national banking association),
      as Lenders, filed as Exhibit 10.30 to Form 8-K dated February 27,
      2007.10.39
            Retirement
      Agreement with Donald W. Wallace, dated February 7,
  2007.10.40
            Mutual
      Release and Non-disparagement Agreement by Lazy Days R.V. Center, Inc., a
      Florida corporation, LD Holdings Inc., RV Acquisition Inc. and Donald W.
      Wallace, effective February 7, 2007.10.41
            Consulting
      Agreement with Michael Salvati, dated October 5, 2006.10.42
            Consulting
      Agreement with Thomas A Donnelly, dated July 26, 2007.10.43
            Compensation
      Agreement with Randy Lay, Chief Financial Officer, dated September 1,
      2007.10.44
            Amendment
      No. 1 to Third Amended and Restated Credit Agreement, originally dated as
      of July 15, 1999, and as amended and restated as of July 31, 2002, May 14,
      2004*, and February 22, 2007,by Lazy Days’
      R.V. Center, Inc., a Florida corporation, 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 Key Bank National
      Association, as Lenders, dated January 14, 2008.21.1
            Subsidiaries
      of Lazy Days’ R.V. Center, Inc. ***31.1
            Certification
      of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley
      Act of 2002.31.2
            Certification
      of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley
      Act of 2002.32.1
            Certification
      of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley
      Act of 2002.32.2
            Cerfitication
      of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley
      Act of 2002.




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


**Previously
      filed with Form S-4/A on October 29, 2004 and hereby incorporated by
      reference herein.


***Previously
      filed with Form 10-K dated March 31, 2005 and hereby incorporated by
      reference herein.


(1)Compensatory
      plan or arrangement or management contract as defined in Rule 601 of
      Regulation S-K.


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