UNITED
STATES
 SECURITIES
AND EXCHANGE COMMISSION
 Washington,
DC 20549
 
 Form
10-Q
 
  
 xQUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
 
 For
the quarterly period ended September 30, 2008
 
  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
      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
November 17, 2008, the registrant had 100 shares of common stock
outstanding.
 
  1
  TABLE
OF CONTENTS
 
 PART
      I. FINANCIAL INFORMATIONITEM 1.
      Financial Statements:Balance
      Sheets
              3Statements
      of Operations
              4Statements
      of Cash Flows
              5Notes
      to Financial Statements
              6ITEM 2.
      Management’s Discussion and Analysis of Financial Condition and Results of
      Operations
              11ITEM 3.
      Quantitative and Qualitative Disclosures About Market Risk
              19ITEM 4.
      Controls and Procedures
              20PART
      II. OTHER INFORMATIONITEM 1.
       Legal Proceedings
              21ITEM
      1A. Risk Factors
              21ITEM 2.
       Unregistered Sales of Equity Securities and Use of
      Proceeds
              21ITEM 3. 
      Defaults Upon Senior Securities
              21ITEM 4. 
      Submission of Matters to a Vote of Security Holders
              21ITEM 5. Other
      Information
              22ITEM 6.
       Exhibits
              22SIGNATURES
              23
   2
  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
              
              September
      30,
                2008
              
              
              December
      31,
                2007Current
      assets
              
              (Unaudited)Cash
              
              $
              4,349,023
              
              
              $
              8,908,837Receivables,
      net of allowance for doubtful accounts of $595,688 in
                2008
      and $788,785 in 2007
              
              
              10,911,054
              
              
              
              16,485,641Refundable
      income taxes
              
              
              1,845,284
              
              
              
              996,086Inventories
              
              
              84,566,371
              
              
              
              94,459,531Prepaid
      expenses and other
              
              
              3,223,258
              
              
              
              3,450,261Total
      current assets
              
              
              104,894,990
              
              
              
              124,300,356Property
      and equipment, net
              
              
              32,725,394
              
              
              
              34,048,842Loan
      and other costs, net
              
              
              3,567,139
              
              
              
              3,913,244Goodwill
              
              
              104,865,672
              
              
              
              104,865,672Intangible
      assets, net
              
              
              71,940,402
              
              
              
              73,324,955Other
      assets
              
              
              98,065
              
              
              
              130,470Total
      assets
              
              $
              318,091,662
              
              
              $
              340,583,539LIABILITIES
      AND STOCKHOLDER’S EQUITYCurrent
      liabilitiesFloor
      plan notes payable
              
              $
              52,839,815
              
              
              $
              59,697,840Current
      maturities of long-term debt
              
              
              1,719,000
              
              
              
              -Accounts
      payable and accrued expenses
              
              
              8,629,561
              
              
              
              20,034,905Accrued
      interest
              
              
              6,420,700
              
              
              
              2,414,717Reserve
      for chargebacks
              
              
              1,056,000
              
              
              
              1,179,000Customer
      deposits
              
              
              1,609,931
              
              
              
              2,506,053Deferred
      income taxes
              
              
              1,801,042
              
              
              
              2,013,228Total
      current liabilities
              
              
              74,076,049
              
              
              
              87,845,743Long-term
      debt
              
              
              137,025,046
              
              
              
              138,585,577Reserve
      for chargebacks
              
              
              869,000
              
              
              
              998,000Deferred
      rent
              
              
              13,957,797
              
              
              
              14,078,420Deferred
      income taxes
              
              
              25,947,432
              
              
              
              27,784,162Other
              
              
              62,706
              
              
              
              80,101Total
      liabilities
              
              
              251,938,030
              
              
              
              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
              
              
              (846,369
              )
              
              
              4,211,535Total
      stockholder’s equity
              
              
              66,153,632
              
              
              
              71,211,536Total
      liabilities and stockholder’s equity
              
              $
              318,091,662
              
              
              $
              340,583,539
  See
accompanying notes to financial statements.
  3
  Lazy
Days’ R.V. Center, Inc., a wholly owned subsidiary of LD Holdings,
Inc.
 Statements of
Operations(Unaudited)
  Three
      Months Ended
              
              
              Nine
      Months EndedSeptember
      30,
                2008
              
              
              September
      30,
                2007
              
              
              September
      30,
                2008
              
              
              September
      30,
                2007RevenuesNew
      vehicle
              
              $
              50,212,107
              
              
              $
              84,270,269
              
              
              $
              258,419,319
              
              
              $
              351,962,489Pre-owned
      vehicle
              
              
              32,635,157
              
              
              
              57,539,024
              
              
              
              162,123,539
              
              
              
              206,644,303Parts,
      service and other
              
              
              3,984,005
              
              
              
              5,061,208
              
              
              
              15,242,913
              
              
              
              16,967,149Finance
      and insurance
              
              
              2,970,579
              
              
              
              5,024,804
              
              
              
              13,235,159
              
              
              
              17,167,902RallyPark
              
              
              179,991
              
              
              
              166,416
              
              
              
              1,261,215
              
              
              
              1,233,176Other
              
              
              145,949
              
              
              
              137,254
              
              
              
              595,931
              
              
              
              632,076Total
      revenues
              
              
              90,127,788
              
              
              
              152,198,975
              
              
              
              450,878,076
              
              
              
              594,607,095Cost
      of revenuesNew
      vehicle
              
              
              47,205,589
              
              
              
              76,324,730
              
              
              
              234,122,152
              
              
              
              319,341,725Pre-owned
      vehicle
              
              
              31,019,925
              
              
              
              51,093,014
              
              
              
              144,667,050
              
              
              
              183,148,684Parts,
      service and other
              
              
              2,413,871
              
              
              
              3,841,370
              
              
              
              9,818,441
              
              
              
              12,641,808Total
      cost of revenues
              
              
              80,639,385
              
              
              
              131,259,114
              
              
              
              388,607,643
              
              
              
              515,132,217Gross
      profit
              
              
              9,488,403
              
              
              
              20,939,861
              
              
              
              62,270,433
              
              
              
              79,474,878Selling,
      general and administrative expenses
              
              
              15,247,822
              
              
              
              19,361,705
              
              
              
              56,225,814
              
              
              
              63,415,302Income
      before interest expense and income taxes
              
              
              (5,759,419
              )
              
              
              1,578,156
              
              
              
              6,044,619
              
              
              
              16,059,576Interest
      expense
              
              
              4,765,800
              
              
              
              4,922,748
              
              
              
              14,526,222
              
              
              
              15,317,813Income
      (loss) before income taxes
              
              
              (10,525,219
              )
              
              
              (3,344,592
              )
              
              
              (8,481,603
              )
              
              
              741,763Income
      tax (benefit) expense
              
              
              (4,258,543
              )
              
              
              (1,272,995
              )
              
              
              (3,423,699
              )
              
              
              316,980Net
      (loss) income
              
              $
              (6,266,676
              )
              
              $
              (2,071,597
              )
              
              $
              (5,057,904
              )
              
              $
              424,783
 
 
 See
accompanying notes to financial statements.
  4
  Lazy
Days’ R.V. Center, Inc., a wholly owned subsidiary of LD Holdings,
Inc.
 Statements of
Cash Flows(Unaudited)
 Nine
      Months EndedSeptember
      30,
                2008
              
              
              September
      30,
                2007Cash
      flows from operating activitiesNet
      income (loss)
              
              $
              (5,057,904
              )
              
              $
              424,783Adjustments
      to reconcile net income (loss) to net cash (used in)
    providedby
      operating activitiesDepreciation
      of property and equipment
              
              
              2,613,396
              
              
              
              2,818,108Depreciation
      of rental vehicle inventory
              
              
              -
              
              
              
              2,653Amortization
      of intangible costs
              
              
              1,384,553
              
              
              
              1,436,339Amortization
      and write-off of loan and other costs
              
              
              691,605
              
              
              
              670,472Amortization
      of discount on long-term debt
              
              
              158,469
              
              
              
              168,408Loss
      on sale of property and equipment
              
              
              -
              
              
              
              (11,086
              )Provision
      for doubtful accounts
              
              
              193,097
              
              
              
              60,211Deferred
      income taxes
              
              
              (2,048,916
              )
              
              
              (813,564
              )Change
      in assets and liabilitiesReceivables
              
              
              5,381,490
              
              
              
              (1,527,230
              )Refundable
      income taxes
              
              
              (849,198
              )
              
              
              377,633Inventories
              
              
              9,893,160
              
              
              
              24,678,496Prepaid
      expenses and other
              
              
              227,003
              
              
              
              (1,596
              )Other
      assets
              
              
              32,405
              
              
              
              3,560Accounts
      payable, accrued interest, other accrued expensesand
      customer deposits
              
              
              (8,312,878
              )
              
              
              4,719,973Income
      taxes payable
              
              
              -
              
              
              
              579,821Reserve
      for chargebacks
              
              
              (252,000
              )
              
              
              139,000Deferred
      rent
              
              
              (120,623
              )
              
              
              (47,502
              )Net
      cash provided by operating activities
              
              
              3,933,659
              
              
              
              33,678,479Cash
      flows from investing activitiesProceeds
      from sale of property and equipment
              
              
              -
              
              
              
              17,954Purchases
      of property and equipment
              
              
              (1,289,948
              )
              
              
              (625,249
              )Net
      cash used in investing activities
              
              
              (1,289,948
              )
              
              
              (607,295
              )Cash
      flows from financing activitiesNet
      payments under floor plan
              
              
              (6,858,025
              )
              
              
              (29,844,358
              )Loan
      and other costs
              
              
              (345,500
              )
              
              
              (187,671
              )Net
      cash used in financing activities
              
              
              (7,203,525
              )
              
              
              (30,032,029
              )Net
      change in cash
              
              
              (4,559,814
              )
              
              
              3,039,155Cash
      at beginning of period
              
              
              8,908,837
              
              
              
              3,253,637Cash
      at end of period
              
              $
              4,349,023
              
              
              $
              6,292,792Supplemental
      disclosure of cash flow informationCash
      paid during the period for interest
              
              $
              10,520,239
              
              
              $
              11,345,968Cash
      (received) paid during the period for income taxes
              
              
              (525,585
              )
              
              
              150,000
 
 See
accompanying notes to financial statements.
  5
  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:
 September
      30,
                2008
              
              
              December
      31,
                2007Contracts
      in transit and vehicle receivables
              
              $
              4,450,742
              
              
              $
              10,977,162Manufacturer
      receivables
              
              
              6,056,203
              
              
              
              5,030,992Finance
      and other receivables
              
              
              999,797
              
              
              
              1,266,27211,506,742
              
              
              
              17,274,426Less:
      Allowance for doubtful accounts
              
              
              595,688
              
              
              
              788,785$
              10,911,054
              
              
              $
              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:
 September
      30,
                2008
              
              
              December
      31,
                2007New
      recreational vehicles
              
              $
              52,624,475
              
              
              $
              64,850,732Pre-owned
      recreational vehicles
              
              
              37,987,576
              
              
              
              33,167,420Parts,
      accessories and other
              
              
              1,715,901
              
              
              
              1,749,72692,327,952
              
              
              
              99,767,878Less:
      LIFO reserve
              
              
              7,761,581
              
              
              
              5,308,347$
              84,566,371
              
              
              $
              94,459,531
  The
Company uses the last-in, first-out (“LIFO”) method to account for its inventory
costs.   Specifically, the Company uses
 a method
whereby the price index is determined using Producer Price Index industry data
at December 31 for motor homes, travel trailers, and camping parts, published by
the U.S. Department of Labor, Bureau of Statistics.  The Company
estimates the December 31 price index and inventory quantities on a
quarterly basis.  Actual results could differ from those
estimates.
   NOTE
4 - GOODWILL AND OTHER INTANGIBLE ASSETS
  Goodwill
totaling $104,865,672 at September 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.  The
Company’s annual impairment analysis is completed during the fourth quarter,
utilizing financial information through September
30.  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:
 September
      30, 2008
              
              
              December 31,
      2007Gross
                Carrying
                Amount
              
              
              Accumulated
                Amortization
              
              
              Gross
                Carrying
                Amount
              
              
              Accumulated
                AmortizationAmortizable
      intangible assets:Manufacturer
      relationships
              
              $
              26,700,000
              
              
              $
              2,920,312
              
              
              $
              26,700,000
              
              
              $
              2,419,688Non-compete
      agreement
              
              
              9,000,000
              
              
              
              6,839,286
              
              
              
              9,000,000
              
              
              
              5,955,357Customer
      database
              
              
              3,600,000
              
              
              
              3,600,000
              
              
              
              3,600,000
              
              
              
              3,600,00039,300,000
              
              
              
              13,359,598
              
              
              
              39,300,000
              
              
              
              11,975,045Unamortizable
      intangible assets:Trade
      names and trademarks
              
              
              46,000,000
              
              
              
              –
              
              
              
              46,000,000
              
              
              
              –$
              85,300,000
              
              
              $
              13,359,598
              
              
              $
              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 nine-month periods ended
September 30, 2008 was $461,517 and $1,384,553 respectively, compared to
$461,517 and $1,436,339 for the three and nine-month periods ended September 30,
2007. Estimated amortization expense for the three-month period ending December
31, 2008 and for each of the subsequent five years ending December 31 is: 2008
(three-months) - $461,517, 2009 - $1,846,072, 2010 - $1,355,000, 2011 -
$667,500, 2012 - $667,500, 2013 - $667,500.
  6
  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 through March 31, 2009 and $80,000,000 through
the termination date, February 22, 2011. 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.  The financial institutions collateralize
all vehicles purchased under these agreements and all receivables generated from
the sale of these vehicles. The interest rate charged (4.74% and 7.27% at
September 30, 2008 and 2007, respectively) is based on the prime rate or
LIBOR. Principal is due upon the sale of the respective vehicle.
  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.
 
 Effective
August 30, 2008, the Company amended the floor plan financing agreement
modifying certain definitions, amending minimum covenant requirements and
incorporating new “Working Capital” requirements.  The working capital
requirements provide that the Company maintain a current ratio not less than
1.25 through June 30, 2010.  During the period beginning July 1, 2010,
the Company must maintain a current ratio not less than 1.20 at the end of any
calendar quarter ending March 31, June 30, or September 30 and not less than
1.17 for any calendar quarter ending December 31.  During the period
beginning September 1, 2008, the Company shall not permit its working capital at
the end of each calendar month to be less than $26,000,000.
 
 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 September 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 (4.5% at September
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 September 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 September 30, 2008.
  Interest
expense on the floor plan notes payable for the three and nine-month periods
ended September 30, 2008 was $738,572 and $2,302,495, respectively, compared to
$734,848 and $2,762,376 for the three and nine-month periods ended September 30,
2007.
   7
  Lazy
Days’ R.V. Center, Inc., a wholly owned subsidiary of LD Holdings,
Inc.
 Notes to
Financial Statements  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.  On
November 17, 2008, in order to preserve cash in light of the severe and
protracted downturn in the market for recreational vehicles that has been
exacerbated by a significant reduction in the extension of credit to consumers
for the purchase of recreational vehicles, and the uncertainties associated
therewith, we elected not to make the interest payment that was due and payable
on that same day to holders of our Senior Notes. Under the governing indenture,
we have a 30-day grace period before the failure to pay interest becomes an
event of default. During this grace period, we intend to engage in discussions
with holders of our Senior Notes to improve our liquidity or modify our
requirements for liquidity.The outstanding balance of  Senior
Notes at September 30, 2008 was $138,744,046 net of unearned discount of
$809,954.  Interest expense on the Senior Notes for the three and
nine-month periods ended September 30, 2008 was $4,099,899 and $12,298,196
compared to $4,171,367 and $12,514,102 for the three and nine-month periods
ended September 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. 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 recorded as a current maturity of long-term
debt.  In October 2008, the free cash flow offer was completed for
$1,849,209, consisting of $1,717,000 in bond redemption, a $51,510 redemption
premium and $80,699 in accrued interest.
  The
Company had outstanding letters of credit amounting to $495,000 at September 30,
2008.   Interest on outstanding advances is payable monthly and
is based on the prime rate (4.5% at September 30, 2008).  Borrowings
are collateralized by substantially all of the Company’s assets.
 
  8
  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:
 September
      30,
                2008
              
              
              December
      31,
                2007ASSETSInvestment
      in and equity in earnings of Lazydays
              
              $
              66,153,632
              
              
              $
              71,211,536STOCKHOLDER’S
      EQUITYCommon
      stock, Class A
              
              $
              1
              
              
              $
              1Paid-in
      capital
              
              
              67,000,000
              
              
              
              67,000,000Retained
      earnings
              
              
              (846,369)
              
              
              
              4,211,535Total
      stockholder’s equity
              
              $
              66,153,632
              
              
              $
              71,211,536
  The
balance sheets of RV Acquisition consisted of the following:
 September
      30,
                2008
              
              
              December
      31,
                2007ASSETSInvestment
      in and equity in earnings of LD Holdings
              
              $
              66,153,632
              
              
              $
              71,211,536LIABILITIESDue
      to Lazy Days' R.V. Center, Inc.
              
              $
              51,372
              
              
              $
              51,372STOCKHOLDERS’
      EQUITYPreferred
      stock, Series A, including accrued dividends of $49,313,613 in
      2008and
      $39,358,660 in 2007.
              
              
              111,313,613
              
              
              
              101,358,660Common
      stock, $.01 par value
              
              
              49,947
              
              
              
              49,947Paid-in
      capital
              
              
              4,941,771
              
              
              
              4,941,771Accumulated
      deficit
              
              
              (50,203,071)
              
              
              
              (35,190,214
              )Total
      stockholders’ equity
              
              
              66,102,260
              
              
              
              71,160,164Total
      liabilities and stockholders’ equity
              
              $
              66,153,632
              
              
              $
              71,211,536
 
  9
  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 for
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.
  10
   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 financial 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 during 2007.
  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.
  11
  Results
of Operations
  Three
Months Ended September 30, 2008 Compared to Three Months Ended September 30,
2007 (Unaudited)
  Revenues. Revenues
decreased from $152.2 million in the three months ended September 30, 2007
to $90.1 million in the comparable period in 2008.   Vehicle
revenue decreased $59.0 million while finance and insurance income decreased
$2.1 million and parts and service decreased $1.1 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 246 units from the comparable period in 2007.  Total
pre-owned units sold decreased 296 units from the comparable period in
2007.
  New Unit Sales. Sales of new
vehicles were $50.2 million in the three months ended September 30, 2008
compared to $84.3 million for the comparable period in 2007.  New
vehicle unit sales decreased from 642 units for the third quarter of 2007
to 396 units in 2008.  This was due to a decrease in
motorized and towable unit sales.  New unit sales by class for
the three months ended September 30, 2008 as compared to the three months ended
September 30, 2007 are summarized as follows:
 
 Three
      Months EndedSeptember
      30,
                2008
              
              
              September
      30,
                2007Class
      A – Diesel
              
              
              146
              
              
              
              261Class
      A – Gas
              
              
              53
              
              
              
              105Class
      C
              
              
              42
              
              
              
              69Total
      Motorized
              
              
              241
              
              
              
              435Fifth
      Wheel
              
              
              80
              
              
              
              117Travel
      Trailer
              
              
              75
              
              
              
              90Total
      Towable
              
              
              155
              
              
              
              207Total
      New Units
              
              
              396
              
              
              
              642
 
  12
  Pre-Owned Unit Sales. Sales
of pre-owned vehicles for the third quarter of 2008 were $32.6 million compared
to $57.5 million for the third quarter of 2007.  Pre-owned vehicle
unit sales decreased from 789 units for the third quarter of 2007 to 493
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
September 30, 2008 compared to the three months ended September 30, 2007
are summarized as follows:
 
 Three
      Months EndedSeptember
      30,
                2008
              
              
              September
      30,
                2007Class
      A – Diesel
              
              
              135
              
              
              
              255Class
      A – Gas
              
              
              95
              
              
              
              163Class
      C
              
              
              63
              
              
              
              100Total
      Motorized
              
              
              293
              
              
              
              5182Fifth
      Wheel
              
              
              73
              
              
              
              68Travel
      Trailer
              
              
              62
              
              
              
              119Other
              
              
              65
              
              
              
              84Total
      Towable
              
              
              200
              
              
              
              271Total
      Pre-Owned Units
              
              
              493
              
              
              
              789
  Parts, Service and Other
Revenues. Parts, service and other revenues for the third quarter of 2008
were $4.0 million compared to $5.1 million for the comparable period in
2007.  This decrease is attributable to a decline in retail and
warranty sales and lower unit volume.
  Finance and Insurance Related Revenues. Finance,
insurance and extended warranty related revenues for the third quarter of 2008
were $3.0 million compared to $5.0 million for the comparable period in
2007.  The decrease is due to lower unit volume and lower penetration
partly offset by higher 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 September 30, 2008 was $9.5 million compared with the
three months ended September 30, 2007 at $20.9 million.  The $11.4
million decrease in gross profit was primarily due to a $4.9 million decrease in
new vehicle gross profit, $4.8 million decrease in pre-owned gross profit, $2.1
million decrease in finance and insurance gross profit offset by a $0.4 million
increase in parts and service gross profit. New vehicle gross profit in the
third quarter 2008 was negatively impacted by a non-cash LIFO inventory
adjustment representing $0.8 million of the variance quarter over quarter and
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 decreased from 13.8% in
the three months ended September 30, 2007 to 10.5% in the comparable period in
2008.  The decrease in gross profit margin resulted from the decreased
average margins in new and pre-owned unit sales.
 
 Selling, General and Administrative
Expenses. Selling, general and administrative expenses, including
depreciation and amortization, decreased from $19.4 million for the three months
ended September 30, 2007 to $15.2 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 (Loss)fromOperations.Income from
operations represents our gross profit, less selling, general and administrative
expenses including depreciation and amortization. Income from operations
decreased from $1.6 million in the three months ended September 30, 2007 to $5.8
million loss 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 remained
consistent at $0.7 million in the three months ended September 30, 2007 and
in the comparable period in 2008.  Interest expense on our Senior
Notes was $4.1 million in the three months ended September 30, 2008 and $4.2
million in the comparable period in 2007.
  Income Tax(Benefit)Expense. Income tax benefit
increased from $1.3 million in the three months ended September 30, 2007 to
$4.3 million for the comparable period in 2008.  This increase
was primarily attributable to an increase in loss before income taxes of
$10.5 million during the three-month period ended September 30, 2008 compared to
a loss before income tax of $3.3 million during the comparable period in
2007.
 
  13
  Results
of Operations
  Nine
Months Ended September 30, 2008 Compared to Nine Months Ended September 30, 2007
(Unaudited)
  Revenues. Revenues
decreased from $594.6 million in the nine months ended September 30, 2007 to
$450.9 million in the comparable period in 2008.   Vehicle
revenue decreased $138.0 million while finance and insurance income decreased
$3.9 million and parts and service decreased $1.7 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 554 units from the comparable period in 2007.  Total
pre-owned units sold decreased 533 units from the comparable period in
2007.
  New Unit Sales. Sales of new
vehicles were $258.4 million in the nine months ended September 30, 2008
compared to $352.0 million for the comparable period in 2007.  New
vehicle unit sales decreased from 2,490 units for the nine months ended
September 30, 2007 to 1,936 units for the comparable period in
2008.  This was due to a decrease in motorized and towable
sales.  New unit sales by class for the nine months ended September
30, 2008 as compared to the nine months ended September 30, 2007 are
summarized as follows:
 
 Nine
      Months EndedSeptember
      30,
                2008
              
              
              September
      30,
                2007Class
      A – Diesel
              
              
              757
              
              
              
              1,100Class
      A – Gas
              
              
              295
              
              
              
              438Class
      C
              
              
              213
              
              
              
              260Total
      Motorized
              
              
              1,265
              
              
              
              1,798Fifth
      Wheel
              
              
              406
              
              
              
              402Travel
      Trailer
              
              
              265
              
              
              
              290Total
      Towable
              
              
              671
              
              
              
              692Total
      New Units
              
              
              1,936
              
              
              
              2,490
 
  14
  Pre-Owned Unit Sales. Sales
of pre-owned vehicles decreased to $162.1 million in the nine months ended
September 30, 2008 from $206.6 million in the comparable period in
2007.  Pre-owned vehicle unit sales decreased from 2,766 units for the
nine months ended September 30, 2007 to 2,233 units in 2008 due to a lower
demand.  Pre-owned unit sales by class in the nine months ended
September 30, 2008 compared to the nine months ended September 30, 2007 are
summarized as follows:
 
 Nine
      Months EndedSeptember
      30,
                2008
              
              
              September
      30,
                2007Class
      A – Diesel
              
              
              708
              
              
              
              915Class
      A – Gas
              
              
              463
              
              
              
              637Class
      C
              
              
              288
              
              
              
              323Total
      Motorized
              
              
              1,459
              
              
              
              1,875Fifth
      Wheel
              
              
              277
              
              
              
              276Travel
      Trailer
              
              
              231
              
              
              
              333Other
              
              
              266
              
              
              
              282Total
      Towable
              
              
              774
              
              
              
              891Total
      Pre-Owned Units
              
              
              2,233
              
              
              
              2,766
  Parts, Service and Other
Revenues. Parts, service and other revenues for the nine months ended
September 30, 2008 were $15.2 million compared to $17.0 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 third quarter of 2008 were $13.2 million compared to $17.2 million for the
comparable period in 2007.  The decrease is due to lower unit volume
and finance penetration partially offset by an increase in per unit
financed.
 
 Gross Profit. Gross profit
consists of gross revenues less our cost of sales and services. Gross profit in
the nine months ended September 30, 2008 was $62.3 million compared with the
nine months ended September 30, 2007 at $79.5 million.   The
$17.2 million decrease in gross profit was primarily due to an $8.3 million
decrease in new vehicle gross profit, $6.0 million decrease in pre-owned gross
profit, $3.9 million decrease in finance and insurance gross profit offset by a
$1.1 million increase in parts and service gross profit. New vehicle gross
profit in 2008 was negatively impacted by a non-cash LIFO inventory adjustment
representing $0.6 million of the variance year over year and 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 13.4% in the nine months
ended September 30, 2007 to 13.8% in the comparable period in 2008. The increase
in gross profit margin resulted from the improved average margins in new 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 and improved productivity.
 
 Selling, General and Administrative
Expenses. Selling, general and administrative expenses, including
depreciation and amortization, decreased from $63.4 million for the nine months
ended September 30, 2007 to $56.2 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 fromOperations.Income from
operations represents our gross profit, less selling, general and administrative
expenses including depreciation and amortization. Income from operations
decreased from $16.1 million in the nine months ended September 30, 2007 to $6.0
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 $2.8
million in the nine months ended September 30, 2007 and $2.3 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 $12.3 million in the
nine months ended September 30, 2008 and $12.5 million in the comparable period
in 2007.
  Income Tax(Benefit)Expense. Income tax
decreased from $0.3 million expense in the nine months ended September 30, 2007
to $3.4 million benefit for the comparable period in 2008.  This
decrease was primarily attributable to increased loss before income tax of
$8.5 million during the nine month period ended September 30, 2008 compared to
income before income tax of $0.7 million during the comparable period in
2007.
 
  15
  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.
 
 At
September 30, 2008, the Company was in compliance with all covenants associated
with its floor plan credit facility.  We intend to continue to closely
monitor our liquidity position throughout the fourth quarter when we generally
experience higher borrowing under our floor plan for the purchase of inventory
to support sales in the first quarter. Our first quarter has historically been
the high point of retail sales during our fiscal year.  On November
17, 2008, in order to preserve cash in light of the severe and protracted
downturn in the market for recreational vehicles that has been exacerbated by a
significant reduction in the extension of credit to consumers for the purchase
of recreational vehicles, and the uncertainties associated therewith, we elected
not to make the interest payment that was due and payable on that same day to
holders of our Senior Notes.  Under the governing indenture, we have a
30-day grace period before the failure to pay interest becomes an event of
default.  During this grace period, we intend to engage in discussions
with holders of our Senior Notes to improve our liquidity or modify our
requirements for liquidity.  We can provide no assurances that any
such action could be successfully accomplished or as to the timing or terms
thereof.  If we are unable to obtain a waiver, forbearance or other
amendment from holders of our Senior Notes during the grace period, we would be
in default under the indenture relating to our Senior Notes.
  An event
of default under the indenture would trigger the cross-default provisions under
our floor plan credit facility.  However, among other items, we are
currently negotiating terms of a waiver of such cross-default with our lenders,
although there can be no assurance that we will be successful in securing a
waiver or that we will not incur significant costs in doing so.  The
failure to obtain a waiver, forbearance or other amendment from our lenders and
holders of our Senior Notes or an uncured event of default under our debt
instruments, could have a material adverse impact on the Company’s business,
results of operations, and financial condition.
  Operating Activities. Net
cash provided by operating activities during the nine months ended September 30,
2008 was equal to $3.9 million, compared to net cash provided by operating
activities of $33.7 million during the comparable period in 2007. This decrease
in net cash provided by operating activities for 2008 was primarily the result
of a net loss reported for the period, an increase in inventories (due to the
purchase of essentially all the Company’s consigned inventory in the first
quarter of 2008) and a decrease in accounts payable, accrued interest and other
accrued expenses. There were minimal consigned inventories at September 30,
2008 compared to $11.0 million in consigned inventory at December 31,
2007.
  Investing Activities. Net
cash used in investing activities during the nine months ended September 30,
2008 was equal to $1.3 million, compared to $0.6 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 cash used in financing activities during the
nine months ended September 30, 2008 was $7.2 million, compared to net cash
used in financing activities totaling $30.0 million during the comparable period
in 2007.  This was due primarily 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 facility due to decreased
volume.
 
 Working
Capital. Working capital, including cash and cash equivalents, totaled
approximately $30.8 million at September 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 (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.  Our
ability to maintain adequate liquidity through the end of 2008 and during 2009
will depend significantly on the level of RV sales, control of operating
expenses and capital spending, generation of additional working capital,
obtaining additional financing or a combination of the foregoing.
 
  16
  Debt Service. As of September
30, 2008, we had $52.8 million of borrowings outstanding under our
floor plan credit facility, which has $100.0 million of borrowing capacity,
subject to certain covenants.  We have $26.2 million of availability
under this facility as of September 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
September 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 for the
six-month period ended June 30, 2008 was recorded as a current maturity of
long-term debt.  In October 2008, the offer was completed for
$1,849,209, consisting of $1,717,000 in bond redemption, a $51,510 redemption
premium and $80,699 in accrued interest.
 
 As of
September 30, 2008, our capital expenditures approximated $1.3 million for the
nine 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.
   17
  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.
 
 §
              Inadequate
      liquidity could materially and adversely affect our business operations in
      the future.
  §
              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
      has adversely affected our current sales volume.   If this
      trend continues we may experience unfavorable operating
      results.
 
 §
              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.
  18
  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 September 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 September 30, 2008, based on the
aggregate amount of $52.8 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 $0.5
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.
  ForeignCurrency 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 2008 and
2007.
  19
  ITEM 4.
Controls and Procedures
  Management’s
Conclusions Regarding Effectiveness of Disclosure Controls and
Procedures
 
 As
of  September 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 September 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 September 30, 2008 that have materially affected,
or are likely to materially affect, our internal controls over financial
reporting.
  20
  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
 
 In
addition to the risk factors applicable to us that are disclosed in “Item 1A.
Risk Factors” of our Annual Report on Form 10-K for the fiscal year ended
December 31, 2007, we have identified the following material changes to the
reported risks:
  Inadequate
liquidity could materially and adversely affect our business operations in the
future.
  As of
September 30, 2008, our outstanding balance of unsecured Senior Notes was
approximately $138.7 million, net of unearned discount of $809,954, and we had
$52.8 million of borrowings outstanding under our floor plan credit facility. At
September 30, 2008, the Company was in compliance with all covenants associated
with its floor plan credit facility and eligible to borrow under the terms of
this facility. We require substantial liquidity to acquire inventory, pay salary
and sales commissions, meet debt service requirements, continue capital spending
and to run our regular business operations.  Historically, we have
satisfied our liquidity needs through cash from operations and various borrowing
arrangements.  The recent unprecedented deterioration in the U.S. and
global credit markets and the RV industry have negatively impacted our
operations in several ways.  One consequence of the global economic
downturn and credit crisis has been an erosion of consumer confidence and demand
for recreational vehicles. We intend to continue to closely monitor our
liquidity position throughout the fourth quarter when we generally experience
higher borrowing under our floor plan for the purchase of inventory to support
sales in the first quarter. Our first quarter has historically been the high
point of retail sales during our fiscal year.  However, we do not
expect that the difficult economic conditions, and their effect on the RV
industry, are likely to improve significantly in the near future, and any
continuation or worsening of the credit crisis, or even the fear of such a
development, could intensify the adverse effects of these difficult market
conditions.  Our ability to maintain adequate liquidity through the
end of 2008 and during 2009 will depend significantly on the level of RV sales,
control of operating expenses and capital spending, generation of additional
working capital, obtaining additional financing or a combination of the
foregoing.
  On
November 17, 2008, in order to preserve cash in light of the severe and
protracted downturn in the market for recreational vehicles that has been
exacerbated by a significant reduction in the extension of credit to consumers
for the purchase of recreational vehicles, and the uncertainties associated
therewith, we elected not to make the interest payment that was due and payable
on that same day to holders of our unsecured Senior Notes.  Under the
governing indenture, we have a 30-day grace period before the failure to pay
interest becomes an event of default.  During this grace period, we
intend to engage in discussions with holders of our unsecured Senior Notes to
improve our liquidity or modify our requirements for liquidity.  We
can provide no assurances that any such action could be successfully
accomplished or as to the timing or terms thereof.  If we are unable
to obtain a waiver, forbearance or other amendment from holders of our unsecured
Senior Notes during the grace period, we would be in default under the indenture
relating to our unsecured Senior Notes.
  An event
of default under the indenture would trigger the cross-default provisions under
our floor plan credit facility.  However, among other items, we are
currently negotiating terms of a waiver of such cross-default with our lenders,
although there can be no assurance that we will be successful in securing a
waiver or that we will not incur significant costs in doing so. The failure to
obtain a waiver, forbearance or other amendment from our lenders and holders of
our Senior Notes or an uncured event of default under our debt instruments,
could have a material adverse impact on the Company’s business, results of
operations, and financial condition.
  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.
   21
  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.
  
 22
 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: 
       November 17, 2008
  
  23
   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
   24