UNITED
STATES
 SECURITIES
AND EXCHANGE COMMISSION
 Washington,
DC 20549
 
 Form
10-Q
 
 
 x  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 
 For
the quarterly period ended June 30, 2008
 
 OR
 
  ̈  TRANSITIONREPORT 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
      of incorporation)
              (I.R.S.
      Employer Identification No.)6130
      Lazy Days Boulevard
                Seffner,
      Florida 33584-2968
              (813)
      246-4333(Address of principal executive
      offices, including zip code)
              (Registrant's
      telephone number, including area
code)
 
 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 the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.    Yes  o    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 the definitions of “large accelerated filer,” “accelerated
filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
(Check one): Large
accelerated filer o  Accelerated
Filer o    Non-accelerated
filer x    Smaller
Reporting Company o
 
 Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act).    Yes  o    No  x
 
 As of
August 14, 2008, the registrant had 100 shares of common stock
outstanding.
   
 
  
  TABLE
OF CONTENTS
 
 PART
      I. FINANCIAL INFORMATIONITEM 1.     Financial
      Statements:Balance Sheets
              1Statements of Operations
              2Statements of Cash Flows
              3Notes to Financial Statements
              4ITEM 2.     Management’s
      Discussion and Analysis of Financial Condition and Results of
      Operations
              9ITEM 3.     Quantitative
      and Qualitative Disclosures About Market Risk
              16ITEM 4.     Controls
      and Procedures
              17PART
      II. OTHER INFORMATIONITEM 1.     Legal
      Proceedings
              18ITEM
      1A.  Risk Factors
              18ITEM 2.    
      Unregistered Sales of Equity Securities and Use of
Proceeds
              18ITEM 3.     Defaults
      Upon Senior Securities
              18ITEM 4.    
      Submission of Matters to a Vote of Security Holders
              18ITEM 5.     Other
      Information
              18ITEM 6.     
      Exhibits
              18SIGNATURES
              19
   
  PART
I. FINANCIAL INFORMATION
  ITEM 1.
Financial Statements
  Lazy
Days’ R.V. Center, Inc., a wholly owned subsidiary of LD Holdings,
Inc.
 Balance
Sheets
 ASSETS
              
              June
      30,
                2008
              
              December
      31,
                2007Current
      assets
              
              (Unaudited)Cash
              
              $
              1,278,766
              
              $
              8,908,837Receivables,
      net of allowance for doubtful accounts of $709,910 in
                2008
      and $788,785 in 2007
              
              
              14,127,577
              
              
              16,485,641Refundable
      income taxes
              
              
              -
              
              
              996,086Inventories
              
              
              98,225,465
              
              
              94,459,531Prepaid
      expenses and other
              
              
              3,131,835
              
              
              3,450,261Total
      current assets
              
              
              116,763,643
              
              
              124,300,356Property
      and equipment, net
              
              
              32,958,553
              
              
              34,048,842Loan
      and other costs, net
              
              
              3,582,996
              
              
              3,913,244Goodwill
              
              
              104,865,672
              
              
              104,865,672Intangible
      assets, net
              
              
              72,401,919
              
              
              73,324,955Other
      assets
              
              
              122,389
              
              
              130,470Total
      assets
              
              $
              330,695,172
              
              $
              340,583,539LIABILITIES
      AND STOCKHOLDER’S EQUITYCurrent
      liabilitiesFloor
      plan notes payable
              
              $
              56,350,201
              
              $
              59,697,840Current
      maturities of long-term debt
              
              
              1,719,000
              
              
              -Accounts
      payable and accrued expenses
              
              
              12,284,603
              
              
              20,034,905Accrued
      interest
              
              
              2,305,681
              
              
              2,414,717Reserve
      for chargebacks
              
              
              1,191,000
              
              
              1,179,000Customer
      deposits
              
              
              2,434,854
              
              
              2,506,053Income
      taxes payable
              
              
              790,476
              
              
              -Deferred
      income taxes
              
              
              2,013,228
              
              
              2,013,228Total
      current liabilities
              
              
              79,089,043
              
              
              87,845,743Long-term
      debt
              
              
              136,972,223
              
              
              138,585,577Reserve
      for chargebacks
              
              
              911,000
              
              
              998,000Deferred
      rent
              
              
              14,001,434
              
              
              14,078,420Deferred
      income taxes
              
              
              27,232,444
              
              
              27,784,162Other
              
              
              68,720
              
              
              80,101Total
      liabilities
              
              
              258,274,864
              
              
              269,372,003Stockholder’s
      equityCommon
      Stock, $.01 par value 1,000 shares authorized and 100
    sharesissued and outstanding
              
              
              1
              
              
              1Paid-in
      capital
              
              
              67,000,000
              
              
              67,000,000Retained
      earnings
              
              
              5,420,307
              
              
              4,211,535Total
      stockholder’s equity
              
              
              72,420,308
              
              
              71,211,536Total
      liabilities and stockholder’s equity
              
              $
              330,695,172
              
              $
              340,583,539
  See
accompanying notes to financial statements.
  - 1
-
  Lazy
Days’ R.V. Center, Inc., a wholly owned subsidiary of LD Holdings,
Inc.
 Statements of
Operations(Unaudited)
  Three
      Months Ended
              
              
              Six
      Months EndedJune
      30,
                2008
              
              
              June
      30,
                2007
              
              
              June
      30,
                2008
              
              
              June
      30,
                2007RevenuesNew
      vehicle
              
              $
              80,029,971
              
              
              $
              125,205,906
              
              
              $
              208,207,212
              
              
              $
              267,692,220Pre-owned
      vehicle
              
              
              47,452,067
              
              
              
              64,435,255
              
              
              
              129,488,382
              
              
              
              149,105,279Parts,
      service and other
              
              
              5,178,527
              
              
              
              5,904,896
              
              
              
              11,258,908
              
              
              
              11,905,941Finance
      and insurance
              
              
              3,388,377
              
              
              
              5,273,644
              
              
              
              10,264,580
              
              
              
              12,143,098RallyPark
              
              
              277,776
              
              
              
              253,529
              
              
              
              1,081,224
              
              
              
              1,066,760Other
              
              
              281,681
              
              
              
              349,730
              
              
              
              449,982
              
              
              
              494,822Total
      revenues
              
              
              136,608,399
              
              
              
              201,422,960
              
              
              
              360,750,288
              
              
              
              442,408,120Cost
      of revenuesNew
      vehicle
              
              
              71,815,405
              
              
              
              114,300,792
              
              
              
              186,916,563
              
              
              
              243,016,995Pre-owned
      vehicle
              
              
              41,903,717
              
              
              
              57,298,107
              
              
              
              113,647,125
              
              
              
              132,055,670Parts,
      service and other
              
              
              3,323,425
              
              
              
              4,736,675
              
              
              
              7,404,570
              
              
              
              8,800,438Total
      cost of revenues
              
              
              117,042,547
              
              
              
              176,335,574
              
              
              
              307,968,258
              
              
              
              383,873,103Gross
      profit
              
              
              19,565,852
              
              
              
              25,087,386
              
              
              
              52,782,030
              
              
              
              58,535,017Selling,
      general and administrative expenses
              
              
              18,485,014
              
              
              
              20,725,820
              
              
              
              40,977,992
              
              
              
              44,053,597Income
      before interest expense and income taxes
              
              
              1,080,838
              
              
              
              4,361,566
              
              
              
              11,804,038
              
              
              
              14,481,420Interest
      expense
              
              
              4,712,378
              
              
              
              5,009,812
              
              
              
              9,760,422
              
              
              
              10,395,065Income
      (loss) before income taxes
              
              
              (3,631,540
              )
              
              
              (648,246
              )
              
              
              2,043,616
              
              
              
              4,086,355Income
      tax (benefit) expense
              
              
              (1,356,138
              )
              
              
              (245,665
              )
              
              
              834,844
              
              
              
              1,589,975Net
      (loss) income
              
              $
              (2,275,402
              )
              
              $
              (402,581
              )
              
              $
              1,208,772
              
              
              $
              2,496,380
 
 
 See
accompanying notes to financial statements.
  - 2
-
  Lazy
Days’ R.V. Center, Inc., a wholly owned subsidiary of LD Holdings,
Inc.
 Statements of
Cash Flows(Unaudited)
 Six
      Months EndedJune
      30,
                2008
              
              
              June
      30,
                2007Cash
      flows from operating activitiesNet
      income
              
              $
              1,208,772
              
              
              $
              2,496,380Adjustments
      to reconcile net income to net cash (used in) providedby
      operating activitiesDepreciation
      of property and equipment
              
              
              1,747,632
              
              
              
              1,894,290Depreciation
      of rental vehicle inventory
              
              
              -
              
              
              
              2,653Amortization
      of intangible costs
              
              
              923,036
              
              
              
              974,821Amortization
      and write-off of loan and other costs
              
              
              405,248
              
              
              
              470,437Amortization
      of discount on long-term debt
              
              
              105,646
              
              
              
              112,272Loss
      on sale of property and equipment
              
              
              -
              
              
              
              2,141Provision
      for doubtful accounts
              
              
              78,875
              
              
              
              13,377Deferred
      income taxes
              
              
              (551,718
              )
              
              
              (551,718
              )Change
      in assets and liabilitiesReceivables
              
              
              2,279,189
              
              
              
              (2,445,822
              )Refundable
      income taxes
              
              
              996,086
              
              
              
              377,633Inventories
              
              
              (3,765,934
              )
              
              
              22,565,031Prepaid
      expenses and other
              
              
              318,426
              
              
              
              635,083Other
      assets
              
              
              8,081
              
              
              
              (499
              )Accounts
      payable, accrued interest, other accrued expensesand
      customer deposits
              
              
              (7,941,918
              )
              
              
              798,828Income
      taxes payable
              
              
              790,476
              
              
              
              1,590,970Reserve
      for chargebacks
              
              
              (75,000
              )
              
              
              128,000Deferred rent
              
              
              (76,986
              )
              
              
              (40,972
              )Net
      cash (used in) provided by operating activities
              
              
              (3,550,089
              )
              
              
              29,022,905Cash
      flows from investing activitiesProceeds
      from sale of property and equipment
              
              
              -
              
              
              
              1,100Purchases of property and equipment
              
              
              (657,343
              )
              
              
              (243,316
              )Net
      cash used in investing activities
              
              
              (657,343
              )
              
              
              (242,216
              )Cash
      flows from financing activitiesNet
      payments under floor plan
              
              
              (3,347,639
              )
              
              
              (26,417,574
              )Loan
      and other costs
              
              
              (75,000
              )
              
              
              (187,671
              )Net
      cash used in financing activities
              
              
              (3,422,639
              )
              
              
              (26,605,245
              )Net
      change in cash
              
              
              (7,630,071
              )
              
              
              2,175,444Cash
      at beginning of period
              
              
              8,908,837
              
              
              
              3,253,637Cash
      at end of period
              
              $
              1,278,766
              
              
              $
              5,429,081Supplemental
      disclosure of cash flow informationCash
      paid during the period for interest
              
              $
              9,869,458
              
              
              $
              10,557,402Cash
      (received) paid during the period for income taxes
              
              
              (400,000
              )
              
              
              150,000
 
 See
accompanying notes to financial statements.
  - 3
-
  Lazy
Days’ R.V. Center, Inc., a wholly owned subsidiary of LD Holdings,
Inc.
 Notes
to Financial Statements
  NOTE
1 - BASIS OF PRESENTATION AND OPINION OF MANAGEMENT
  The
accompanying unaudited interim financial statements include the accounts of Lazy
Days’ R.V. Center, Inc. (the “Company” or “Lazydays”), a wholly owned subsidiary
of LD Holdings, Inc. (“LD Holdings”), a non-operating holding company, and have
been prepared in accordance with the instructions to Form 10-Q and therefore do
not include all of the information and financial statement disclosures necessary
for a fair presentation of financial position, results of operations and cash
flows in conformity with accounting principles generally accepted in the United
States of America. Certain prior period amounts have been reclassified to
conform to the current period presentation. These reclassifications had no
effect on stockholder’s equity or net income as previously
reported.  In the opinion of management, the information furnished
herein includes all adjustments necessary to reflect a fair statement of the
interim periods reported. All adjustments are of a normal and recurring nature.
Due to the seasonal nature of our business, interim results are not necessarily
indicative of results for the entire fiscal year. The December 31, 2007
condensed balance sheet data was derived from audited financial statements, but
does not include all disclosures required by accounting principles generally
accepted in the United States of America. These interim financial statements and
the related notes should be read in conjunction with the financial statements
and notes included in our Annual Report on Form 10-K for the fiscal year ended
December 31, 2007.
  NOTE
2 - RECEIVABLES
 
 Receivables
consist of the following:
 June
      30,
                2008
              
              
              December
      31,
                2007Contracts
      in transit and vehicle receivables
              
              $
              7,935,088
              
              
              $
              10,977,162Manufacturer
      receivables
              
              
              6,071,873
              
              
              
              5,030,992Finance
      and other receivables
              
              
              830,526
              
              
              
              1,266,27214,837,487
              
              
              
              17,274,426Less:
      Allowance for doubtful accounts
              
              
              709,910
              
              
              
              788,785$
              14,127,577
              
              
              $
              16,485,641
  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, holdbacks and other programs.
 
 NOTE
3 - INVENTORIES
 
 Inventories
consist of the following:
 June
      30,
                2008
              
              
              December
      31,
                2007New
      recreational vehicles
              
              $
              58,432,567
              
              
              $
              64,850,732Pre-owned
      recreational vehicles
              
              
              44,254,026
              
              
              
              33,167,420Parts,
      accessories and other
              
              
              1,789,711
              
              
              
              1,749,726104,476,304
              
              
              
              99,767,878Less:
      LIFO reserve
              
              
              6,250,839
              
              
              
              5,308,347$
              98,225,465
              
              
              $
              94,459,531
   - 4
-
  Lazy
Days’ R.V. Center, Inc., a wholly owned subsidiary of LD Holdings,
Inc.
 Notes
to Financial Statements
  NOTE
4 - GOODWILL AND OTHER INTANGIBLE ASSETS
  Goodwill
totaling $104,865,672 at June 30, 2008 and December 31, 2007, 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,
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, addressed annually and reviewed
for impairment in accordance with SFAS No. 144, Accounting for Impairment or
Disposal of Long-Lived Assets.
 
 Intangible
assets and the related accumulated amortization are summarized as
follows:
 June
      30, 2008
              
              
              December 31,
      2007Gross
                Carrying
                Amount
              
              
              Accumulated
                Amortization
              
              
              Gross
                Carrying
                Amount
              
              
              Accumulated
                AmortizationAmortizable
      intangible assets:Manufacturer
      relationships
              
              $
              26,700,000
              
              
              $
              2,753,438
              
              
              $
              26,700,000
              
              
              $
              2,419,688Non-compete
      agreement
              
              
              9,000,000
              
              
              
              6,544,643
              
              
              
              9,000,000
              
              
              
              5,955,357Customer
      database
              
              
              3,600,000
              
              
              
              3,600,000
              
              
              
              3,600,000
              
              
              
              3,600,00039,300,000
              
              
              
              12,898,081
              
              
              
              39,300,000
              
              
              
              11,975,045Unamortizable
      intangible assets:Trade
      names and trademarks
              
              
              46,000,000
              
              
              
              –
              
              
              
              46,000,000
              
              
              
              –$
              85,300,000
              
              
              $
              12,898,081
              
              
              $
              85,300,000
              
              
              $
              11,975,045
  Amortizable
intangible assets are being amortized using the straight-line method over 40
years for manufacturer relationships, six years for the non-compete 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 intangible assets for the three and six-month periods ended June 30,
2008 was $461,518 and $923,036 respectively, compared to $461,518 and $974,821
for the three and six-month periods ended June 30, 2007. Estimated amortization
expense for the six-month period ending December 31, 2008 and for each of the
subsequent five years ending December 31 is: 2008 (six-months) - $923,036, 2009
- $1,846,072, 2010 - $1,355,000, 2011 - $667,500, 2012 - $667,500, 2013 -
$667,500.
  - 5
-
  Lazy
Days’ R.V. Center, Inc., a wholly owned subsidiary of LD Holdings,
Inc.
 Notes
to Financial Statements
 
 NOTE
5 - 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 $100,000,000. 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”).  The
financial institutions collateralize all vehicles purchased under these
agreements and all receivables generated from the sale of these vehicles. The
interest rate charged (4.21% and 6.97% at June 30, 2008 and 2007,
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 on January 14, 2008.  Effective April 15, 2008, the Company
amended the floor plan financing agreements which modified the change date in
which the Company designates its desire to apply the adjusted LIBOR rate on all
floor plan advances and amended the minimum requirements for the current ratio
and coverage ratio test.
 
 The floor
plan credit facility also includes a revolving credit facility.  The
revolver provides for borrowings up to $15,000,000.  There were no
outstanding advances under the revolver at June 30, 2008.  Borrowings
under the revolver are collateralized by substantially all of the Company’s
assets.  Interest on outstanding advances is payable monthly and is
based on the prime rate (5.0% at June 30, 2008).  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 June 30, 2008, the
Company was not eligible to borrow under this facility.
 
 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 June 30, 2008.  The Company
was out of compliance with its required debt service coverage ratio as of July
31, 2008 and received a waiver for non-compliance and is currently negotiating
Amendment No. 3 to the Third Amended and Restated Credit Agreement.
  Interest
expense on the floor plan notes payable for the three and six-month periods
ended June 30, 2008 was $648,575 and $1,563,923, respectively, compared to
$837,529 and $2,027,529 for the three and six-month periods ended June 30,
2007.
  NOTE
6 - LONG-TERM DEBT
 
 On May
14, 2004, the Company issued $152 million of unsecured, senior notes (the
“Senior Notes”) through a private placement exempt from the registration
requirements of the 1933 Securities Act. 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 outstanding
balance of unsecured Senior Notes at June 30, 2008 was $138,691,223 net of
unearned discount of $862,777.  Interest expense on the Senior Notes
for the three and six-month periods ended June 30, 2008 was $4,098,899 and
$8,198,298 compared to $4,171,283 and $8,342,735 for the three and six-month
periods ended June 30, 2007.
 
 The
Senior Notes rank pari passu with the Company’s existing and future senior debt.
The Senior Notes are effectively subordinated to the floor plan credit facility,
including its revolving credit facility, to the extent of the assets
collateralizing such debt.
  The
Company has the option to redeem the Senior Notes at any time 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.   The
Company’s free cash flow offer for the six-month period ended June 30, 2008 was
approximately $1.7 million and is recorded as a current maturity of long-term
debt.
  The
Company had outstanding letters of credit amounting to $495,000 at June 30,
2008.   Interest on outstanding advances is payable monthly and
is based on the prime rate (5.0% at June 30, 2008).  Borrowings are
collateralized by substantially all of the Company’s assets.
 
 - 6
-
 Lazy
Days’ R.V. Center, Inc., a wholly owned subsidiary of LD Holdings,
Inc.
 Notes
to Financial Statements
  NOTE
7 - LD HOLDINGS AND RV ACQUISITION
  The
balance sheets of LD Holdings, a wholly owned subsidiary of RV Acquisition,
consisted of the following:
 June
      30,
                2008
              
              
              December
      31,
                2007ASSETSInvestment
      in and equity in earnings of Lazydays
              
              $
              72,420,308
              
              
              $
              71,211,536STOCKHOLDER’S
      EQUITYCommon
      stock, Class A
              
              $
              1
              
              
              $
              1Paid-in
      capital
              
              
              67,000,000
              
              
              
              67,000,000Retained
      earnings
              
              
              5,420,307
              
              
              
              4,211,535Total
      stockholder’s equity
              
              $
              72,420,308
              
              
              $
              71,211,536
  The
balance sheets of RV Acquisition consisted of the following:
 June
      30,
                2008
              
              
              December
      31,
                2007ASSETSInvestment
      in and equity in earnings of LD Holdings
              
              $
              72,420,308
              
              
              $
              71,211,536LIABILITIESDue
      to Lazy Days' R.V. Center, Inc.
              
              $
              51,372
              
              
              $
              51,372STOCKHOLDERS’
      EQUITYPreferred
      stock, Series A, including accrued dividends of $45,971,074 in
      2008and
      $39,358,660 in 2007.
              
              
              107,971,074
              
              
              
              101,358,660Common
      stock, $.01 par value
              
              
              49,947
              
              
              
              49,947Paid-in
      capital
              
              
              4,941,771
              
              
              
              4,941,771Accumulated deficit
              
              
              (40,593,856
              )
              
              
              (35,190,214
              )Total
      stockholders’ equity
              
              
              72,368,936
              
              
              
              71,160,164Total
      liabilities and stockholders’ equity
              
              $
              72,420,308
              
              
              $
              71,211,536
 
  - 7
-
  Lazy
Days’ R.V. Center, Inc., a wholly owned subsidiary of LD Holdings,
Inc.
 Notes
to Financial Statements
 
 NOTE
8 - EFFECT OF RECENTLY ISSUED ACCOUNTING STANDARDS ON THE FINANCIAL
STATEMENTS
 
 In
September 2006, the FASB issued Statement No. 157, “Fair Value
Measurements.”  This statement defines fair value, establishes a
framework for measuring fair value, and expands disclosures about fair value
measurements.  The statement establishes a fair value hierarchy about
the assumptions used to measure fair value and clarifies assumptions about risk
and the effect of a restriction on the sale or use of an asset.  The
Company adopted this standard which is effective for fiscal years beginning
after November 15, 2007.  In February 2008, the FASB issued FASB Staff
Position ("FSP") No. FAS 157-2, “Effective Date of FASB Statement No.
157.”  This FSP delays the effective date of FAS 157 for all
nonfinancial assets and nonfinancial liabilities, except those that are
recognized or disclosed at fair value on a recurring basis (at least annually)
to fiscal years beginning after November 15, 2008, and interim periods within
those fiscal years.  There was no impact upon adoption.
 
 In
February 2007, the FASB issued Statement No. 159, “The Fair Value Option for
Financial Assets and Financial Liabilities.”  The standard provides
companies with an option to report selected financial assets and liabilities at
fair value and establishes presentation and disclosure requirements designed to
facilitate comparisons between companies that choose different measurement
attributes for similar types of assets and liabilities.  The Company
adopted the new standard which was effective beginning January 1,
2008.  The Company did not elect the fair value option for any
financial assets or financial liabilities as of January 1,
2008.
  - 8
-
   ITEM 2.
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 included in our Annual
Report on Form 10-K for the year ended December 31, 2007.  Unless stated
otherwise, the information provided in this section relates to Lazy Days' R.V.
Center, Inc. only and not to its parent, LD 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.
 
 Management’s
Discussion and Analysis of Financial Condition and Results of Operations
(MD&A) is designed to discuss our financial condition, changes in financial
condition and results of operations, liquidity, critical accounting policies and
the future impact of accounting standards that have been issued but are not yet
effective.
  Certain
Defined Terms
  In this
report, “Lazydays,” the “Company,” “we,” “us” or “our” refers to Lazy Days’ R.V.
Center, Inc. In this report, “LD Holdings” refers to LD Holdings, Inc., our
parent company, and, unless the context otherwise requires, its
subsidiaries.
 
 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 $15 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.
  - 9
-
  Results
of Operations
  Three
Months Ended June 30, 2008 Compared to Three Months Ended June 30, 2007
(Unaudited)
  Revenues. Revenues
decreased from $201.4 million in the three months ended June 30, 2007 to $136.6
million in the comparable period in 2008.  Vehicle revenue decreased $62.2
million while finance and insurance income decreased $1.9 million and parts and
service decreased $0.7 million.  The Company's sales declined during
the period as a result of a decrease in overall industry demand
for recreational vehicles.  Total new retail units sold decreased 231 units
from the comparable period in 2007.  Total pre-owned units sold
decreased 165 units from the comparable period in 2007.
  New Unit Sales. Sales of new
vehicles were $80.0 million in the three months ended June 30, 2008 compared to
$125.2 million for the comparable period in 2007.  New vehicle unit
sales decreased from 844 units for the second quarter of 2007 to 613 units
in 2008.  This was due to a decrease in motorized sales somewhat
offset by an increase in towable units.  New unit sales by class
for the three months ended June 30, 2008 as compared to the three months ended
June 30, 2007 are summarized as follows:
 
 Three
      Months EndedJune
      30,
                2008
              
              
              June
      30,
                2007Class
      A – Diesel
              
              
              230
              
              
              
              405Class
      A – Gas
              
              
              104
              
              
              
              134Class
      C
              
              
              61
              
              
              
              95Total
      Motorized
              
              
              395
              
              
              
              634Fifth
      Wheel
              
              
              133
              
              
              
              115Travel
      Trailer
              
              
              85
              
              
              
              95Total
      Towable
              
              
              218
              
              
              
              210Total
      New Units
              
              
              613
              
              
              
              844
 
  - 10
-
  Pre-Owned Unit Sales. Sales
of pre-owned vehicles for the second quarter of 2008 were $47.5 million
compared to $64.4 million for the second quarter of 2007.  Pre-owned
vehicle unit sales decreased from 857 units for the second quarter of 2007 to
692 units in 2008 due to a lower demand in all product groups with the exception
of fifth wheels.  Pre-owned unit sales by class in the three months
ended June 30, 2008 compared to the three months ended June 30, 2007 are
summarized as follows:
 
 Three
      Months EndedJune
      30,
                2008
              
              
              June
      30,
                2007Class
      A – Diesel
              
              
              214
              
              
              
              282Class
      A – Gas
              
              
              149
              
              
              
              201Class
      C
              
              
              87
              
              
              
              99Total
      Motorized
              
              
              450
              
              
              
              582Fifth
      Wheel
              
              
              86
              
              
              
              82Travel
      Trailer
              
              
              77
              
              
              
              98Other
              
              
              79
              
              
              
              95Total
      Towable
              
              
              242
              
              
              
              275Total
      Pre-Owned Units
              
              
              692
              
              
              
              857
  Parts, Service and Other
Revenues. Parts, service and other revenues for the second quarter of
2008 were $5.2 million compared to $5.9 million for the comparable period in
2007.  This decrease is attributable to a decline in warranty sales
and lower unit volume partially offset by an increase in retail
sales.
  Finance and Insurance Related
Revenues. Finance, insurance and extended warranty related revenues for
the second quarter of 2008 were $3.4 million compared to $5.3 million for the
comparable period in 2007.  The decrease is due to lower unit volume
and a lower 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 June 30, 2008 was $19.6 million compared with the three
months ended June 30, 2007 at $25.1 million.  The $5.5 million
decrease in gross profit was primarily due to a $2.7 million decrease in new
vehicle gross profit, $1.6 million decrease in pre-owned gross profit, $1.9
million decrease in finance and insurance gross profit offset by a $0.7 million
increase in parts and service gross profit. New vehicle gross profit in the
second quarter 2008 was negatively impacted by lower new motorized sales volume,
which also resulted in lower manufacturer holdbacks and incentive
income.  Pre-owned gross profit decreased due to lower sales
volume.  Gross profit margin increased from 12.5% in the three months
ended June 30, 2007 to 14.3% in the comparable period in 2008.  The
increase in gross profit margin resulted from the improved average margins in
new and pre-owned unit sales as well as a more favorable mix.  Parts
and service drove the gross profit margin as well due to increased labor rates
for both retail and warranty.
 
 Selling, General and Administrative
Expenses. Selling, general and administrative expenses, including
depreciation and amortization, decreased from $20.7 million the three months
ended June 30, 2007 to $18.5 million in the comparable period in
2008.  This decrease was primarily due to cost reductions implemented
as well as a decrease in variable costs such as salary, commissions and benefits
which typically comprise the majority of our total selling, general and
administrative expenses.
 
 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 $4.4 million in the three months ended June 30, 2007
to $1.1 million in the comparable period in 2008.  This decrease was
due to a decline in gross profit partially offset by lower selling, general and
administrative expenses.
  Interest Expense—Floor Plan Credit
Facility and Senior
Notes. Interest expense on our Floor Plan Credit Facility was $0.8
million in the three months ended June 30, 2007 and $0.6 million in the
comparable period in 2008.  Interest on the Floor Plan Credit Facility
decreased primarily due to a decrease in short-term borrowing
rates.  Interest expense on our Senior Notes was $4.1 million in the
three months ended June 30, 2008 and $4.2 million in the comparable period in
2007.
  Income Tax(Benefit)Expense. Income tax benefit
increased from $0.2 million in the three months ended June 30, 2007 to $1.4
million for the comparable period in 2008.  This increase was
primarily attributable to an increase in loss before income taxes of $3.6
million during the three-month period ended June 30, 2008 compared to a loss
before income tax of $0.7 million during the comparable period in
2007.
 
  - 11
-
  Results
of Operations
  Six
Months Ended June 30, 2008 Compared to Six Months Ended June 30, 2007
(Unaudited)
  Revenues. Revenues
decreased from $442.4 million in the six months ended June 30, 2007 to $360.8
million in the comparable period in 2008.   Vehicle revenue
decreased $79.1 million while finance and insurance income decreased $1.8
million and parts and service decreased $0.6 million.  The Company's
sales declined during the period as a result of a decrease in
overall industry demand for recreational vehicles.  Total new retail units
sold decreased 308 units from the comparable period in 2007.  Total
pre-owned units sold decreased 237 units from the comparable period in
2007.
  New Unit Sales. Sales of new
vehicles were $208.2 million in the six months ended June 30, 2008 compared to
$267.7 million for the comparable period in 2007.  New vehicle unit
sales decreased from 1,848 units for the six months ended June 30, 2007 to 1,540
units for the comparable period in 2008.  This was due to a decrease
in sales of Class A and Class C units, which was slightly offset by an increase
in sales of towable units.  New unit sales by class for the six months
ended June 30, 2008 as compared to the six months ended June 30, 2007 are
summarized as follows:
 
 Six
      Months EndedJune
      30,
                2008
              
              
              June
      30,
                2007Class
      A – Diesel
              
              
              611
              
              
              
              839Class
      A – Gas
              
              
              242
              
              
              
              333Class
      C
              
              
              171
              
              
              
              191Total
      Motorized
              
              
              1,024
              
              
              
              1,363Fifth
      Wheel
              
              
              326
              
              
              
              285Travel
      Trailer
              
              
              190
              
              
              
              200Total
      Towable
              
              
              516
              
              
              
              485Total
      New Units
              
              
              1,540
              
              
              
              1,848
 
  - 12
-
  Pre-Owned Unit Sales. Sales
of pre-owned vehicles decreased to $129.5 million in the six months ended
June 30, 2008 from $149.1 million in the comparable period in
2007.  Pre-owned vehicle unit sales decreased from 1,977 units for the
six months ended June 30, 2007 to 1,740 units in 2008 due to a lower
demand.  Pre-owned unit sales by class in the six months ended June
30, 2008 compared to the six months ended June 30, 2007 are summarized as
follows:
 
 Six
      Months EndedJune
      30,
                2008
              
              
              June
      30,
                2007Class
      A – Diesel
              
              
              573
              
              
              
              660Class
      A – Gas
              
              
              368
              
              
              
              474Class
      C
              
              
              225
              
              
              
              223Total
      Motorized
              
              
              1,166
              
              
              
              1,357Fifth
      Wheel
              
              
              204
              
              
              
              208Travel
      Trailer
              
              
              169
              
              
              
              213Other
              
              
              201
              
              
              
              199Total
      Towable
              
              
              574
              
              
              
              620Total
      Pre-Owned Units
              
              
              1,740
              
              
              
              1,977
  Parts, Service and Other
Revenues. Parts, service and other revenues for the six months ended June
30, 2008 were $11.3 million compared to $11.9 million for the comparable period
in 2007.  This decrease is attributable to a decline in warranty sales
and lower unit volume partially offset by an increase in retail
sales.
 
 Finance and Insurance Related
Revenues. Finance, insurance and extended warranty related revenues for
the second quarter of 2008 were $10.3 million compared to $12.1 million for the
comparable period in 2007.  The decrease is due to lower unit volume
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 six months ended June 30, 2008 was $52.8 million compared with the six
months ended June 30, 2007 at $58.5 million.   The $5.8 million
decrease in gross profit was primarily due to a $3.4 million decrease in new
vehicle gross profit, $1.2 million decrease in pre-owned gross profit, $1.9
million decrease in finance and insurance gross profit and a $0.7 million
increase in parts and service gross profit. New vehicle gross profit in 2008 was
negatively impacted by lower new motorized sales volume, which also resulted in
lower manufacturer holdbacks and incentive income.  Pre-owned gross
profit decreased due to lower sales volume.  Gross profit margin
increased from 13.2% in the six months ended June 30, 2007 to 14.6% in the
comparable period in 2008. The increase in gross profit margin resulted from the
improved average margins in new and pre-owned unit sales as well as a more
favorable mix.  Parts and service drove the gross profit margin as
well due to increased labor rates for both retail and warranty.
 
 Selling, General and Administrative
Expenses. Selling, general and administrative expenses, including
depreciation and amortization, decreased from $44.1 million the six months ended
June 30, 2007 to $41.0 million in the comparable period in 2008.  This
decrease was primarily due to cost reductions implemented as well as a decrease
in variable costs such as salary, commissions and benefits which typically
comprise the majority of our total selling, general and administrative
expenses.
 
 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 $14.5 million in the six months ended June 30, 2007 to
$11.8 million in the comparable period in 2008.  This decrease was due
the decline in gross profit partially offset by decreased selling, general and
administrative expenses.
  Interest Expense—Floor Plan Credit Facility and
Senior Notes. Interest expense on our Floor Plan Credit Facility was $2.0
million in the six months ended June 30, 2007 and $1.6 million in the
comparable period in 2008.  Interest on the Floor Plan Credit Facility
decreased primarily due to a decrease in short-term borrowing
rates.  Interest expense on our Senior Notes was $8.2 million in the
six months ended June 30, 2008 and $8.4 million in the comparable period in
2007.
  Income Tax Expense. Income
tax expense decreased from $1.6 million in the six months ended June 30, 2007 to
$0.8 million for the comparable period in 2008.  This decrease
was primarily attributable to decreased income before income tax of $2.0 million
during the six-month period ended June 30, 2008 compared to income before income
tax of $4.1 million during the comparable period in 2007.
  - 13
-
  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 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 under our floor plan credit facility will be adequate to
meet our future liquidity needs.
  Operating Activities. Net
cash used in operating activities during the six months ended June 30, 2008 was
equal to $3.6 million, compared to net cash provided by operating activities of
$29.0 million during the comparable period in 2007. This decrease in net cash
provided by operating activities for 2008 was primarily the result of an
increase in inventories (due to the purchase of essentially all the Company’s
consigned inventory) and a decrease in accounts payable, accrued interest and
other accrued expenses. There were no consigned inventories at June 30,
2008 compared to $11.0 million in consigned inventory at December 31,
2007.
  InvestingActivities. Net cash used in investing activities during the six
months ended June 30, 2008 was equal to $0.7 million, compared to $0.2 million
during the comparable period in 2007.  This increase in net cash used
in investing activities was due to increased purchases of property and
equipment.
  Financing
Activities. Net cashused in financing activities during
the six months ended June 30, 2008 was $3.4 million, compared to net cash used
in financing activities totaling $26.6 million during the comparable period in
2007.  This was due to flooring essentially all of
the Company’s consigned inventory in the first quarter of 2008, increased
inventory levels and paying down less on the floor plan credit facilitydue to
decreased volume.
 
 Working
Capital. Working capital, including cash and cash
equivalents, totaled approximately $37.7 million at June 30, 2008. We maintain
sizable inventories in order to meet the expectations of our customers, and
believe that we will continue to require working capital 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 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 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 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 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.
 
 Debt Service. As of June 30,
2008, we had $56.4 million of borrowings outstanding under our floor
plan credit facility which has $100.0 million of borrowing capacity, subject to
certain covenants.  We have $28.7 million of availability under this
facility as of June 30, 2008.  In addition, our floor plan facility
includes a $15.0 million revolving credit facility.  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 June 30, 2008, 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”).  The Company’s Free Cash Flow Offer amount
for the six months ended June 30, 2008 is approximately $1.7
million.
 
 As of
June 30, 2008, our capital expenditures approximated $0.7 million for the
six-month period. Our floor plan credit facility limits our ability to make
capital expenditures in excess of $5.0 million per annum. Based on current
estimates, management believes that the amount of capital expenditures permitted
to be made under our 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.
  Based on
current facts and circumstances, we believe we have adequate cash flow coupled
with borrowing capacity under our floor plan credit facility to fund our current
operations, Free Cash Flow Offer and capital expenditures.
  - 14
-
  Cautionary
Statement for Forward-Looking Information
  Certain
information set forth in this report contains “forward-looking statements”
within the meaning of the federal securities laws. Forward-looking statements
include statements concerning our plans, objectives, goals, strategies, future
events, future revenues or performance, capital expenditures, financing needs,
plans or intentions relating to acquisitions and other information that is not
historical information. In some cases, forward-looking statements can be
identified by terminology such as “believes,” “expects,” “may,” “will,”
“should,” or “anticipates,” or the negative of such terms or other
comparable terminology, or by discussions of strategy. We may also make
additional forward-looking statements from time to time. All such subsequent
forward-looking statements, whether written or oral, by us or on our behalf, are
also expressly qualified by these cautionary statements.
  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.
  There are
a number of risks and uncertainties that could cause our actual results to
differ materially from the forward-looking statements contained in or
contemplated by this report. The following are among the factors that could
cause actual results to differ materially from the forward-looking statements.
There may be other factors, including those discussed elsewhere in this report,
which may cause our actual results to differ materially from the forward-looking
statements. Any forward-looking statements should be considered in light of the
risk factors specified in our Annual Report on Form 10-K for the fiscal year
ended December 31, 2007, some of which are summarized below.
 
 §
              We
      may experience unanticipated fluctuations in our operating results for a
      variety of reasons.
 
 §
              Reduced
      availability of financing and tightened credit standards for our customers
      could adversely affect our sales
volume.
 
 §
              Our
      geographic concentration heightens our exposure to adverse regional
      developments, including adverse economic conditions, demographic changes,
      severe weather events and natural
  disasters.
 
 §
              Our
      business is cyclical and seasonal and this can lead to fluctuations in our
      sales and operating results.
 
 §
              Changes
      in consumer preferences for our products or our failure to gauge those
      preferences could lead to reduced sales and additional
      costs.
 
 §
              We
      are dependent on continued relationships with major manufacturers who
      supply our products.
 
 §
              If
      the frequency and size of product liability and other claims against us,
      including wrongful death, increase, our business, results of operations
      and financial condition may be
harmed.
 
 §
              Fuel
      shortages, or higher prices for fuel, could have a negative effect on
      sales of recreational
vehicles.
 
 §
              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.
 
 §
              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.
 
 §
              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.
 
 §
              The
      interests of our controlling stockholder may be in conflict with your
      interests as a holder of Notes.
 
 §
              We
      are subject to extensive government regulation.  Changes in these
      regulations could have a negative effect on our financial
      condition.
 
 §
              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.
  - 15
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  ITEM 3.
Quantitative and Qualitative Disclosures about Market Risk
  Interest Rates. We are
exposed to market risk from changes in the interest rates on a portion of our
outstanding indebtedness. There were no borrowings outstanding at June 30, 2008
under our Revolver credit facility. Amounts outstanding under the floor
plan credit facility bear interest at a variable rate based on prime or LIBOR as
adjusted each interest period. As of June 30, 2008, based on the aggregate
amount of $56.4 million outstanding under our 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.
Outstanding balances under our Revolver bear interest at a variable rate on
prime or LIBOR as adjusted each interest period.
  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 Senior 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.
  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
recreational 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. 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. There was minimal impact to our facility as a
result of hurricane activity throughout the state of Florida in 2005 and
2004.
  - 16
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  ITEM 4.
Controls and Procedures
  Management’s
Conclusions Regarding Effectiveness of Disclosure Controls and
Procedures
 
 As
of June 30, 2008, 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 June 30, 2008.
 
 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 June 30, 2008 that have materially affected, or
are likely to materially affect, our internal controls over financial
reporting.
  - 17
-
  PART
II. OTHER INFORMATION
  ITEM 1.
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 cash flows.
 
 ITEM
1A. Risk Factors
 
 There
have been no material changes to the factors disclosed in ITEM 1A. Risk Factors
in our Annual Report on Form 10-K for the fiscal year ended December 31,
2007.
  ITEM 2.
Unregistered Sales of Equity Securities and Use of Proceeds
  Not
applicable.
  ITEM 3.
Defaults upon Senior Securities
  Not
applicable.
  ITEM 4.
Submission of Matters to a Vote of Security Holders
  Not
applicable.
  ITEM 5.
Other Information
  Not
applicable.
  ITEM 6.
Exhibits
  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
              Certification
      of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley
      Act of 2002.
 
 - 18
-
 SIGNATURES
  Pursuant
to the requirements of the Securities Exchange Act of 1934, the Registrant has
duly caused this report to be signed on its behalf by the undersigned thereunto
duly authorized.
  Lazy
      Days’ R.V. Center, Inc./s/John
      HortonBy:
              John
      HortonIts:
              Chief
      Executive Officer/s/Randy
      LayBy:
              Randy
      LayIts:
              Chief
      Financial OfficerDated: 
       August 14, 2008
  
  - 19
-
   EXHIBIT
INDEX
  Number
              Description
      of Exhibits31.1
              Certification
      of Chief Executive Officer Pursuant to Section 302 of the
      Sarbanes-Oxley Act of 200231.2
              Certification
      of Chief Financial Officer Pursuant to Section 302 of the
      Sarbanes-Oxley Act of 200232.1
              Certification
      of Chief Executive Officer Pursuant to Section 906 of the
      Sarbanes-Oxley Act of 200232.2
              Certification
      of Chief Financial Officer Pursuant to Section 906 of the
      Sarbanes-Oxley Act of 2002
   - 20
-