# EDGAR Filing Document

**Accession Number:** 0001721741
**File Stem:** 0001493152-23-005815
**Filing Date:** 2023-2
**Character Count:** 41129
**Document Hash:** 1d9d9d775c5ab789785e5a842c26db27
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001493152-23-005815.hdr.sgml**: 20230223

**ACCESSION NUMBER**: 0001493152-23-005815

**CONFORMED SUBMISSION TYPE**: 8-K

**PUBLIC DOCUMENT COUNT**: 14

**CONFORMED PERIOD OF REPORT**: 20230221

**ITEM INFORMATION**: Entry into a Material Definitive Agreement

**ITEM INFORMATION**: Termination of a Material Definitive Agreement

**ITEM INFORMATION**: Results of Operations and Financial Condition

**ITEM INFORMATION**: Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant

**ITEM INFORMATION**: Financial Statements and Exhibits

**FILED AS OF DATE**: 20230223

**DATE AS OF CHANGE**: 20230223

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** Lazydays Holdings, Inc.
- **CENTRAL INDEX KEY:** 0001721741
- **STANDARD INDUSTRIAL CLASSIFICATION:** RETAIL-AUTO DEALERS & GASOLINE STATIONS [5500]
- **IRS NUMBER:** 000000000
- **STATE OF INCORPORATION:** DE
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 8-K
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-38424
- **FILM NUMBER:** 23655860

**BUSINESS ADDRESS:**
- **STREET 1:** 4042 PARK OAKS BLVD
- **STREET 2:** SUITE 350
- **CITY:** TAMPA
- **STATE:** FL
- **ZIP:** 33610
- **BUSINESS PHONE:** 813-246-4999

**MAIL ADDRESS:**
- **STREET 1:** 4042 PARK OAKS BLVD
- **STREET 2:** SUITE 350
- **CITY:** TAMPA
- **STATE:** FL
- **ZIP:** 33610

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** Andina II Holdco Corp.
- **DATE OF NAME CHANGE:** 20171103

?xml version="1.0" encoding="utf-8"?

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**WASHINGTON, D.C. 20549**

**FORM 8-K**

**CURRENT REPORT**

**Pursuant to Section 13 or 15(d) of**

**The Securities Exchange Act of 1934**

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| | |
|:---|:---|
| Date of Report (Date of earliest event reported): | **February 21, 2023** |

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**LAZYDAYS HOLDINGS, INC.**

(Exact name of registrant as specified in its charter)

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| | | |
|:---|:---|:---|
| **Delaware** | **001-38424** | **82-4183498** |
| (State or other jurisdiction<br> of incorporation) | (Commission<br> File Number) | (IRS Employer<br> Identification No.) |

---

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| | |
|:---|:---|
| **4042 Park Oaks Blvd., Suite 350, Tampa, Florida** | **33610** |
| (Address of principal executive offices) | (Zip Code) |

---

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| | |
|:---|:---|
| Registrant's telephone number, including area code | **(813) 246-4999** |

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**N/A**

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (<u>see</u> General Instruction A.2. below):

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

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| | | |
|:---|:---|:---|
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
| Common stock | LAZY | Nasdaq Capital Market |

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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

**Item 1.01. Entry into a Material Definitive Agreement.**

The disclosures set forth in Item 2.03 below are incorporated by reference into this Item 1.01.

All of the lenders under the New Credit Agreement (as defined below) or their affiliates have various other relationships with the Company (as defined below) and its subsidiaries involving the provision of financial services, and some may serve as a source of retail financing for the Company's customers. In addition, one of the lenders under the New Credit Agreement was a lender under the Company's Prior Credit Agreement (as defined below).

**Item 1.02. Termination of a Material Definitive Agreement.**

To the extent that entering into the New Credit Agreement constituted a termination of the Prior Credit Agreement, the information set forth above under Item 1.01 and below under Item 2.03 is hereby incorporated by reference into this Item 1.02.

**Item 2.02 Results of Operations and Financial Condition.**

On February 23, 2023, Lazydays Holdings, Inc. issued a press release announcing its financial results for the fourth quarter and fiscal year ended December 31, 2022. A copy of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated into this Current Report on Form 8-K by reference.

The information furnished pursuant to this Item 2.02, including Exhibit 99.1, shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liabilities under that section and shall not be deemed to be incorporated by reference into any filing of the Lazydays Holdings, Inc. under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

**Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.**

On February 21, 2023, LDRV Holdings Corp. ("the Company"), Lazydays RV America, LLC, Lazydays RV Discount, LLC and Lazydays Mile HI RV, LLC (collectively with certain other subsidiary entities, the "Borrowers") entered into a Second Amended and Restated Credit Agreement, (the "New Credit Agreement"), with Manufacturers and Traders Trust Company ("M&T"), as Administrative Agent, Swingline Lender, Issuing Bank and a Lender, and other financial institutions as Lender parties. The New Credit Agreement amends and restates in its entirety that certain Amended and Restated Credit Agreement dated July 14, 2021, (as amended prior to the date hereof, the "Prior Credit Agreement"), among the Borrowers, M&T, as Administrative Agent, Swingline Lender, Issuing Bank and a Lender, and other financial institutions as Lender parties thereto.

The New Credit Agreement, among other things, amends the Prior Credit Agreement primarily to: (i) increase the capacity under the Floor Plan Line of Credit to up to $525,000,000 and increase the capacity under the Revolving Credit Facility to up to $50,000,000; (ii) remove the Mortgage Loan Facility and Term Loan; (iii) extend the term of the Floor Plan Line of Credit and the Revolving Credit to February 21, 2027; and (iv) remove certain guarantors.

The New Credit Agreement evidences an approximately $575.0 million aggregate credit facility (the "Credit Facility"), consisting of a $525.0 million floor plan credit facility (the "Floor Plan Facility") with SOFR borrowings bearing interest at SOFR plus a range of 1.90% to 2.05% based on a total net leverage matrix and a base rate margin range of 0.90% to 1.05% based on a total net leverage matrix, and a $50.0 million revolving credit (the "Revolver") with SOFR borrowings bearing interest at SOFR plus a range of 2.15% to 2.90% based on a total net leverage matrix and a base rate margin range of 1.15% to 1.90% based on a total net leverage matrix.

The New Credit Agreement contains certain customary representations and warranties, and certain customary covenants that restrict the Borrowers' ability to, among other things: (i) create, incur, assume or permit indebtedness, (ii) create, incur, assume or permit liens, (iii) make loans and investments, (iv) engage in fundamental changes, including mergers, acquisitions, dissolutions and liquidations, (v) make certain restricted payments, (vi) engage in transactions with affiliates, (vii) allow the total net leverage ratio to exceed a ratio of 3.00 to 1.00, allow the consolidated fixed charge coverage ratio to be less than a ratio of 1.25 to 1.00 or allow the consolidated current ratio to be less than 1.15 to 1.00 and (viii) make or become legally obligated to make any capital expenditures in any fiscal year, except for capital expenditures in the ordinary course of business not exceeding an amount equal to 25% of consolidated EBITDA for such fiscal year.

Events of default under the New Credit Agreement include, but are not limited to: (i) failure to pay principal, interest or fees when due, (ii) breach of any representation or warranty, (iii) failure or refusal to perform, observe or comply with certain covenants, (iv) insolvency, (v) cross default under certain other material indebtedness, (vi) unsatisfied final judgments over a specified threshold in excess of available insurance proceeds, (vii) the attempt to terminate or limit any portion of a guarantor's obligations under a guaranty agreement, and (viii) a change in control.

All of the obligations under the New Credit Agreement are guaranteed by Lazydays Holdings, Inc., Lazy Days' R.V. Center, Inc. LDL of Fort Pierce, LLC, Lazydays RV of Maryville, LLC, Lazydays RV of Reno, LLC, Lazydays Support Services, LLC and certain other subsidiaries of Lazydays Holdings, Inc. and Lazy Days' R.V. Center, Inc. from time to time (collectively, the "Guarantors"). The Credit Facilities are secured by substantially all of the operating assets of the Borrowers and Guarantors as collateral.

This description of the New Credit Agreement is qualified in its entirety by reference to the complete terms and conditions of the New Credit Agreement which is expected to be filed as an exhibit to the Company's Quarterly Report on Form 10-Q for its fiscal year ended March 31, 2023.

**Item 9.01** **Financial Statements and Exhibits.**

(d) *Exhibits* 

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| | |
|:---|:---|
| **Exhibit No.** | **Description** |
| 99.1 | [Press Release, dated February 23, 2023, announcing Lazydays' financial results for the fourth quarter and full year ended December 31, 2022.](ex99-1.htm) |
| 104 | Cover Page Interactive Data File (formatted as inline XBRL). |
| \* | Schedules and similar attachments to this exhibit have been omitted pursuant to Item 601(a)(5) of Regulation S-K. We agree to furnish supplementally a copy of such omitted materials to the SEC upon request. |

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**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 hereunto duly authorized.

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| | | |
|:---|:---|:---|
|  | **LAZYDAYS HOLDINGS, INC.** | **LAZYDAYS HOLDINGS, INC.** |
| February 23, 2023 | By | */s/ Kelly Porter* |
| Date |  | Kelly Porter |
|  |  | Chief Financial Officer |

---

## Exhibit 99.1

**Exhibit 99.1**

**LAZYDAYS REPORTS FOURTH QUARTER AND FISCAL YEAR 2022 FINANCIAL RESULTS**

**Tampa, FL (February 23, 2023)** – Lazydays (NasdaqCM: LAZY) today reported financial results for the fourth quarter and fiscal year ended December 31, 2022.

Fourth quarter 2022 revenue decreased to $243.5 million from $322.5 million in the fourth quarter of 2021.

Fourth quarter 2022 net loss was ($1.4) million, compared to net income of $16.9 million in the fourth quarter of 2021. Fourth quarter 2022 adjusted net income, a non-GAAP measure, was $0.9 million, compared to $20.2 million for the same period in 2021. Fourth quarter 2022 net loss per diluted share was ($0.24) compared to net income of $0.80 in the fourth quarter of 2021. Adjusted fourth quarter 2022 net loss per diluted share was ($0.02) compared to net income of $0.93 for the same period in 2021.

Full year 2022 revenue increased to $1.3 billion from $1.2 billion in 2021.

Full year 2022 net income was $66.4 million compared to $82.0 million in 2021. Full year 2022 adjusted net income was $64.1 million compared to $99.6 million in 2021. Full year 2022 net income per diluted share was $2.42 compared to $3.93 in 2021 and full year 2022 adjusted net income per diluted share was $3.05 compared to $4.82 in 2021.

As shown in the attached non-GAAP reconciliation tables included in this press release, the 2022 fourth quarter adjusted results exclude a net non-core charge of $0.22 related to the effects of changes in fair value of warrant liabilities, our LIFO adjustment, acquisition expenses and certain compliance, legal and executive transition costs. The 2021 fourth quarter adjusted results exclude a net non-core charge of $0.13 related to the effects of changes in fair value of warrant liabilities, our LIFO adjustment, and acquisition expenses. The 2022 full year adjusted results exclude a net non-core charge of $0.63 related to the effects of changes in fair value of warrant liabilities, our LIFO adjustment, acquisition expenses and certain compliance, legal and executive transition costs. The 2021 full year adjusted results exclude a net non-core charge of $0.89 related to the effects of changes in fair value of warrant liabilities, our LIFO adjustment, and acquisition expenses.

**Corporate Development**

On February 15, 2023, we acquired Findlay RV in Las Vegas, Nevada. Concurrent with the acquisition, we were awarded the Tiffin brand for the Las Vegas market. We estimate this store will add approximately $40 million in annualized revenue at steady state. With this addition, we operate 19 stores across the United States.

**Balance Sheet Update and Share Repurchases**

We ended the fourth quarter with $61.7 million in cash on hand. On February 21, 2023, we amended our credit facility and subsequently estimate total liquidity of approximately $165 million, including unfinanced real estate. The new agreement extends our facility to February 2027, increases our floorplan capacity to $525 million, increases our revolver capacity to $50 million and provides for higher advance rates on used inventory. Concurrently we retired all associated term and mortgage loans.

In December 2022, we acquired the real estate for our Elkhart and Nashville stores. These properties were purchased for approximately $24.5 million and were previously leased facilities recorded as finance leases on our balance sheet.

During the fiscal year ended December 31, 2022, we have deployed $44.5 million to repurchase approximately 2.7 million shares of common stock at a weighted average price of $16.51 per share. This represents 18.6% of shares outstanding. In December 2022, the Board of Directors authorized an additional $50.0 million for share repurchases, leaving a total of approximately $63.7 million available.

**Warrant Expiry**

On March 15, 2023, the warrants issued as part of our 2018 de-SPAC transaction will expire. Any warrants that have not been exercised on or prior to that date will automatically lapse. Assuming the exercise of all outstanding warrants, we would generate proceeds of approximately $33 million. Public warrant holders should work with their broker to exercise the warrants. For PIPE warrant holders, please email <u>warrants@lazydays.com</u> for assistance.

**Conference Call Information:**

The Company has scheduled a conference call at 8:30 AM Eastern Time on Thursday, February 23, 2023 that will also be broadcast live over the internet.

The conference call may be accessed by telephone at (877) 407-8029 / +1 (201) 689-8029. To listen live on our website or for replay, visit <u>https://www.lazydays.com/investor-relations</u>.

**About Lazydays RV**

As an iconic brand in the RV industry, Lazydays, The RV Authority, consistently provides outstanding RV sales, service, and ownership experience, which is why RVers and their families become Customers for Life. Lazydays continues to add locations at a rapid pace as it executes its geographic expansion strategy that includes both acquisitions and greenfields.

Since 1976, Lazydays has built a reputation for providing an outstanding customer experience with exceptional service excellence and unparalleled product expertise, along with being a preferred place to rest and recharge with other RVers. By offering the largest selection of RV brands from the nation's leading manufacturers, state-of-the-art service facilities, and thousands of accessories and hard-to-find parts, Lazydays RV provides everything RVers need and want.

Lazydays Holdings, Inc. is a publicly listed company on the Nasdaq stock exchange under the ticker "LAZY."

**Forward-Looking Statements**

This press release includes "forward-looking statements" within the meaning of the "Safe-Harbor" provisions of the Private Securities Litigation Reform Act of 1995. Forward looking statements include statements regarding our goals, plans, projections and guidance regarding our financial position, results of operations, market position, pending and potential future acquisitions and business strategy, and often contain words such as "project," "outlook," "expect," "anticipate," "intend," "plan," "believe," "estimate," "may," "seek," "would," "should," "likely," "goal," "strategy," "future," "maintain," "continue," "remain," "target" or "will" and similar references to future periods. Examples of forward-looking statements in this press release include, among others, statements regarding:

● Anticipated revenues from acquired and open point stores; and

● Anticipated availability of liquidity from our credit facility and unfinanced operating real estate.

By their nature, forward-looking statements involve risks and uncertainties because they relate to events that depend on circumstances that may or may not occur in the future. Forward-looking statements are not guarantees of future performance, and our actual results of operations, financial condition and liquidity and development of the industry in which we operate may differ materially from those made in or suggested by the forward-looking statements in this press release. The risks and uncertainties that could cause actual results to differ materially from estimated or projected results include, without limitation, future economic and financial conditions (both nationally and locally), changes in customer demand, our relationship with, and the financial and operational stability of, vehicle manufacturers and other suppliers, risks associated with our indebtedness (including available borrowing capacity, compliance with financial covenants and ability to refinance or repay indebtedness on favorable terms), acts of God or other incidents which may adversely impact our operations and financial performance, government regulations, legislation and others set forth throughout "Part II, Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations" and in "Part I, Item 1A. Risk Factors" of our most recent Annual Report on Form 10-K, and from time to time in our other filings with the SEC. We urge you to carefully consider this information and not place undue reliance on forward-looking statements. We undertake no duty to update our forward-looking statements, including our earnings outlook, which are made as of the date of this release.

**Non-GAAP Financial Measures**

This presentation contains non-GAAP financial measures such as adjusted net income, adjusted diluted earnings per share, adjusted cost of goods sold, adjusted income before taxes, adjusted income tax benefit, adjusted SG&A, adjusted SG&A as a percentage of revenue, adjusted SG&A as a percentage of gross profit, adjusted operating income as a percentage of revenue, adjusted operating income as a percentage of gross profit, adjusted pre-tax income as a percentage of revenue and adjusted net income as a percentage of revenue. Non-GAAP measures do not have definitions under GAAP and may be defined differently by and not comparable to similarly titled measures used by other companies. As a result, we review any non-GAAP financial measures in connection with a review of the most directly comparable measures calculated in accordance with GAAP. We caution you not to place undue reliance on such non-GAAP measures, but also to consider them with the most directly comparable GAAP measures. We present cash flows from operations in the following tables, adjusted to include the change in non-trade floor plan debt to improve the visibility of cash flows related to vehicle financing. As required by SEC rules, we have reconciled these measures to the most directly comparable GAAP measures in the attachments to this release. We believe the non-GAAP financial measures we present improve the transparency of our disclosures; provide a meaningful presentation of our results from core business operations, because they exclude items not related to core business operations and other non-cash items; and improve the period-to-period comparability of our results from core business operations. These presentations should not be considered an alternative to GAAP measures.

**Contact**:

Angela Johnson

+1 (813) 204-4099

investors@lazydays.com

**Results of Operations** 

(Dollar amounts in thousands except for share and per share data)

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **For the Three Months Ended**<br> **December 31** | **For the Three Months Ended**<br> **December 31** | | **For the year ended**<br> **December 31** | **For the year ended**<br> **December 31** | |
|  | **2022** | **2021** | **%**<br> **Increase**<br>**(Decrease)** | **2022** | **2021** | **%**<br> **Increase**<br>**(Decrease)** |
| Revenues |  |  |  |  |  |  |
| New vehicle retail | $137729 | $174748 | (21.2)% | $777807 | $725114 | 7.3% |
| Pre-owned vehicle retail | 74927 | 111974 | (33.1)% | 394582 | 372566 | 5.9% |
| Vehicle wholesale | 2416 | 4324 | (44.1)% | 21266 | 14241 | 49.3% |
| Finance and insurance | 13891 | 18171 | (23.6)% | 75482 | 72647 | 3.9% |
| Service, body and parts, other | 14527 | 13319 | 9.1% | 57824 | 50480 | 14.5% |
| **Total revenues** | 243490 | 322536 | (24.5)% | 1326961 | 1235048 | 7.4% |
| Cost of sales |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;New vehicle | 115155 | 140129 | (17.8)% | 632316 | 586876 | 7.7% |
| &nbsp;&nbsp;&nbsp;Pre-owned vehicle | 59186 | 83612 | (29.2)% | 301565 | 278036 | 8.5% |
| &nbsp;&nbsp;&nbsp;Vehicle wholesale | 2395 | 4201 | (43.0)% | 21620 | 13591 | 59.1% |
| &nbsp;&nbsp;&nbsp;Finance and insurance | 513 | 679 | (24.4)% | 2729 | 2473 | 10.4% |
| &nbsp;&nbsp;&nbsp;Service, body and parts, other | 7714 | 7618 | 1.3% | 27657 | 25771 | 7.3% |
| &nbsp;&nbsp;&nbsp;LIFO | 4153 | 3402 | 22.1% | 12383 | 4811 | 157.4% |
| **Total cost of sales** | 189116 | 239641 | (21.1)% | 998270 | 911558 | 9.5% |
| &nbsp;&nbsp;&nbsp;Depreciation and amortization | 4420 | 4135 | 6.9% | 16758 | 14411 | 16.3% |
| &nbsp;&nbsp;&nbsp;Selling, general, and administrative expenses | 47649 | 52533 | (9.3)% | 222218 | 184985 | 20.1% |
| **Income from operations** | 2305 | 26227 | (91.2)% | 89715 | 124094 | (27.7)% |
| Other income/expenses |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;PPP loan forgiveness |  |  |  |  | 6626 | (100.0)% |
| &nbsp;&nbsp;&nbsp;Floorplan interest expense | (3534) | (655) | 439.5% | (8596) | (1852) | 364.1% |
| &nbsp;&nbsp;&nbsp;Other interest expense | (2158) | (2112) | 2.2% | (7996) | (6648) | 20.3% |
| &nbsp;&nbsp;&nbsp;Change in fair value of warrant liabilities | 1782 | (621) | (387.0)% | 12453 | (11711) | (206.3)% |
| &nbsp;&nbsp;&nbsp;Inducement Loss on Warrant Conversion | - | - |  | - | (246) | (100.0)% |
| **Total other income (expense)** | (3910) | (3388) | 15.4% | (4139) | (13831) | (70.1)% |
| **Income before income tax expense** | (1605) | 22839 | (107.0)% | 85576 | 110263 | (22.4)% |
| Income tax expense | 205 | (5943) | (103.4)% | (19183) | (28242) | (32.1)% |
| **Net income** | $(1400) | $16896 | (108.3)% | $66393 | $82021 | (19.1)% |
| Dividends on Series A Convertible Preferred Stock | (1210) | (1210) | 0.0% | (4801) | (4801) | 0.0% |
| Net income attributable to common stock and participating securities | $(2610) | $15686 | (116.6)% | $61592 | $77220 | (20.2)% |
| EPS: |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Basic | $(0.24) | $0.86 | (127.9)% | $3.47 | $4.43 | (21.7)% |
| &nbsp;&nbsp;&nbsp;Diluted | $(0.24) | $0.80 | (131.2)% | $2.42 | $3.93 | (38.4)% |
| Weighted average shares outstanding: |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Basic | 10928362 | 12164192 | (10.2)% | 11701302 | 11402655 | 2.6% |
| &nbsp;&nbsp;&nbsp;Diluted | 10928362 | 14719764 | (25.8)% | 12797796 | 12852318 | (0.4)% |

---

NM - Not meaningful

**Total Results Summary**

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Three Months Ended** | **Three Months Ended** | | **Year ended** | **Year ended** | |
|  | **December 31, 2022** | **December 31, 2022** | | **December 31, 2022** | **December 31, 2022** | |
|  | **2022** | **2021** | **%**<br>**Increase**<br>**(Decrease)** | **2022** | **2021** | **%**<br>**Increase**<br>**(Decrease)** |
| **Gross Margin** |  |  |  |  |  |  |
| New Vehicle Retail | 16.4% | 19.8% | (342) bps | 18.7% | 19.1% | (36) bps |
| Pre-Owned Vehicle Retail | 21.0% | 25.3% | (432) | 23.6% | 25.4% | (180) |
| Vehicle Wholesale | 0.9% | 2.9% | (197) | (1.7)% | 4.6% | (623) |
| Finance & Insurance | 96.3% | 96.3% | 4 | 96.4% | 96.6% | (21) |
| Service, Body & Parts, Other | 46.9% | 42.8% | 410 | 52.2% | 48.9% | 322 |
| **Total Gross Margin** | 22.3% | 25.7% | (337) | 24.8% | 26.2% | (142) |
| ***Total Gross Margin (Ex-LIFO)*** | *24.0 %* | *26.8 %* | *(272)* | *25.7 %* | *26.6 %* | *(88)* |
| **<u>Unit Sales</u>** |  |  |  |  |  |  |
| New Vehicle Retail | 1501 | 1835 | (18.2)% | 8603 | 8930 | (3.7)% |
| Used Vehicle Retail | 999 | 1368 | (27.0)% | 5409 | 5283 | 2.4% |
| **Total Retail Units Sold** | 2500 | 3203 | (21.9)% | 14012 | 14213 | (1.4)% |
| **<u>Average Selling Price</u>** |  |  |  |  |  |  |
| New Vehicle Retail | $91758 | $95231 | (3.6)% | $90411 | $81200 | 11.3% |
| Used Vehicle Retail | 75001 | 81853 | (8.4)% | 72949 | 70522 | 3.4% |
| **<u>Average Gross Profit Per Unit (ex-LIFO)</u>** |  |  |  |  |  |  |
| New Vehicle Retail | $15040 | $18866 | (20.3)% | $16912 | $15480 | 9.2% |
| Used Vehicle Retail | 15756 | 20733 | (24.0)% | 17197 | 17893 | (3.9)% |
| Finance and Insurance | 5351 | 5461 | (2.0)% | 5192 | 4937 | 5.2% |
| **Total Vehicle Retail** | 20677 | 25125 | (17.7)% | 22214 | 21314 | 4.2% |
| **Revenue Mix** |  |  |  |  |  |  |
| New Vehicle Retail | 56.6% | 54.2% |  | 58.6% | 58.7% |  |
| Pre-Owned Vehicle Retail | 30.8% | 34.7% |  | 29.7% | 30.2% |  |
| Vehicle Wholesale | 1.0% | 1.3% |  | 1.6% | 1.2% |  |
| Finance & Insurance | 5.7% | 5.6% |  | 5.7% | 5.9% |  |
| Service, Body & Parts, Other | 5.9% | 4.2% |  | 4.4% | 4.0% |  |
|  | 100.0% | 100.0% |  | 100.0% | 100.0% |  |
| **Gross Profit Mix** |  |  |  |  |  |  |
| New Vehicle Retail | 37.6% | 39.7% |  | 42.7% | 42.1% |  |
| Pre-Owned Vehicle Retail | 26.2% | 32.5% |  | 27.3% | 28.8% |  |
| Vehicle Wholesale | 0.0% | 0.1% |  | (0.1)% | 0.2% |  |
| Finance & Insurance | 22.3% | 20.1% |  | 21.3% | 21.4% |  |
| Service, Body & Parts, Other | 13.9% | 7.6% |  | 8.8% | 7.5% |  |
|  | 100.0% | 100.0% |  | 100.0% | 100.0% |  |

---

**Other Metrics**

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Adjusted** | **Adjusted** | **As Reported** | **As Reported** | **Adjusted** | **Adjusted** | **As Reported** | **As Reported** |
|  | **Three months ended**<br> **December 31,** | **Three months ended**<br> **December 31,** | **Three months ended**<br> **December 31,** | **Three months ended**<br> **December 31,** | **Year ended**<br> **December 31,** | **Year ended**<br> **December 31,** | **Year ended**<br> **December 31,** | **Year ended**<br> **December 31,** |
|  | **2022** | **2021** | **2022** | **2021** | **2022** | **2021** | **2022** | **2021** |
| SG&A as a % of revenue | 19% | 16% | 20% | 16% | 17% | 15% | 17% | 15% |
| SG&A as a % of gross profit (Ex-LIFO) | 81% | 61% | 80% | 61% | 65% | 56% | 65% | 56% |
| Operating income as a % of revenue | 3% | 9% | 1% | 8% | 8% | 11% | 7% | 10% |
| Operating income as a % of gross profit | 12% | 35% | 4% | 30% | 30% | 40% | 26% | 38% |
| Pre-tax income as a % of revenue | 1% | 8% | -1% | 7% | 7% | 10% | 6% | 9% |
| Net income as a % of revenue | 0% | 6% | -1% | 5% | 5% | 8% | 5% | 7% |

---

**Other Highlights**

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **As of** | **As of** | **As of** | **As of** |
|  | **December 31, 2022** | **December 31, 2022** | **December 31, 2021** | **December 31, 2021** |
| **Store Count** |  |  |  |  |
| Dealership |  | 18 |  | 15 |
| Service Center\*\* |  | 0 |  | 1 |
| **Days Supply\*** |  |  |  |  |
| New vehicle inventory |  | 250 |  | 84 |
| Used vehicle inventory |  | 78 |  | 58 |

---

\* Days supply calculated based on current inventory levels and a 90 day historical average cost of sales level.

\*\* Dealership added to service center in Q4 2022

**Financial Covenants**

---

| | | |
|:---|:---|:---|
|  | **Requirement** | **As of**<br> **December 31, 2022** |
| Fixed charge coverage ratio | Not less than 1.25 to 1 | 2.17 to 1 |
| Leverage ratio | Not more than 3.0 to 1 | 0.57 to 1 |

---

**Same-Store Results Summary**

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Three months ended** | **Three months ended** | | **Year ended** | **Year ended** | |
|  | **December 31** | **December 31** | | **December 31** | **December 31** | |
|  | **2022** | **2021** | **%**<br>**Increase**<br>**(Decrease)** | **2022** | **2021** | **%**<br>**Increase**<br>**(Decrease)** |
| **Revenue** |  |  |  |  |  |  |
| New Vehicle Retail | $131200 | $174748 | (24.9)% | $682077 | $725114 | (5.9)% |
| Pre-Owned Vehicle Retail | 71209 | 111974 | (36.4)% | 360173 | 372566 | (3.3)% |
| Vehicle Wholesale | 2416 | 4324 | (44.1)% | 19841 | 14241 | 39.3% |
| Finance & Insurance | 13464 | 18171 | (25.9)% | 67680 | 72647 | (6.8)% |
| Service, Body & Parts, Other | 13956 | 13318 | 4.8% | 51979 | 50480 | 3.0% |
| **Total Revenue** | 232245 | 322535 | (28.0)% | 1181750 | 1235048 | (4.3)% |
| **Gross Profit** |  |  |  |  |  |  |
| New Vehicle Retail | $21548 | $34619 | (37.8)% | $125128 | $138237 | (9.5)% |
| Pre-Owned Vehicle Retail | 15001 | 28363 | (47.1)% | 83375 | 94531 | (11.8)% |
| Vehicle Wholesale | 21 | 124 | (82.6)% | (377) | 650 | NM |
| Finance & Insurance | 12963 | 17492 | (25.9)% | 65296 | 70174 | (7.0)% |
| Service, Body & Parts, Other | 8023 | 6610 | 21.4% | 27182 | 24710 | 10.0% |
| LIFO | (4153) | (3402) | 22.1% | (12383) | (4811) | 157.4% |
| **Total Gross Profit** | 53403 | 83806 | (36.3)% | 288221 | 323491 | (10.9)% |
| **Gross Margin** |  |  |  |  |  |  |
| New Vehicle Retail | 16.4% | 19.8% | (339) bps | 18.3% | 19.1% | (72) bps |
| Pre-Owned Vehicle Retail | 21.1% | 25.3% | (426) | 23.1% | 25.4% | (222) |
| Vehicle Wholesale | 0.9% | 2.9% | (197) | (1.9)% | 4.6% | (646) |
| Finance & Insurance | 96.3% | 96.3% | 1 | 96.5% | 96.6% | (12) |
| Service, Body & Parts | 57.5% | 49.6% | 786 | 52.3% | 48.9% | 335 |
| **Total Gross Margin** | 23.0% | 26.0% | (299) | 24.4% | 26.2% | (180) |
| ***Total Gross Margin (Ex-LIFO)*** | *24.8 %* | *27.0 %* | *(226)* | *25.4 %* | *26.6 %* | *(114)* |
| **<u>Unit Sales</u>** |  |  |  |  |  |  |
| New Vehicle Retail | 1411 | 1835 | (23.1)% | 7361 | 8930 | (17.6)% |
| Used Vehicle Retail | 947 | 1368 | (30.8)% | 4847 | 5283 | (8.3)% |
| **Total Retail Units Sold** | 2358 | 3203 | (26.4)% | 12208 | 14213 | (14.1)% |
| **<u>Average Selling Price</u>** |  |  |  |  |  |  |
| New Vehicle Retail | $92984 | $95231 | (2.4)% | $92661 | $81200 | 14.1% |
| Used Vehicle Retail | $75195 | 81853 | (8.1)% | 74308 | 70522 | 5.4% |
| **<u>Average Gross Profit Per Unit (ex-LIFO)</u>** |  |  |  |  |  |  |
| New Vehicle Retail | $15272 | $18866 | (19.1)% | $16999 | $15480 | 9.8% |
| Used Vehicle Retail | 15840 | 20733 | (23.6)% | 17201 | 17893 | (3.9)% |
| Finance and Insurance | 5497 | 5461 | 0.7% | 5349 | 4937 | 8.3% |
| **Total Vehicle Retail** | 20998 | 25125 | (16.4)% | 22428 | 21314 | 5.2% |

---

NM - Not meaningful

**Condensed Consolidated Balance Sheets**

(Dollar amounts in thousands except for share and per share data)

---

| | | |
|:---|:---|:---|
|  | **As of**<br>**December 31, 2022** | **As of**<br>**December 31, 2021** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cash | $61687 | $98120 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Receivables, net | 25053 | 30604 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Inventories | 378881 | 242906 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other current assets | 11228 | 4005 |
| **Total current assets** | 476849 | 375635 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Property and equipment, net | 158991 | 120748 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Goodwill and intangible assets, net | 165125 | 168118 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other assets | 29753 | 33627 |
| **Total assets** | $830718 | $698128 |
| &nbsp;&nbsp;&nbsp;Floor plan notes payable, net | 348735 | 192220 |
| &nbsp;&nbsp;&nbsp;Other current liabilities | 50890 | 74130 |
| **Total current liabilities** | 399625 | 266350 |
| &nbsp;&nbsp;&nbsp;Financing liability, non-current portion, net | 89770 | 102466 |
| &nbsp;&nbsp;&nbsp;Long term debt, non-current portion, net | 10131 | 13684 |
| &nbsp;&nbsp;&nbsp;Other current liabilities | 39197 | 54519 |
| **Total liabilities** | 538723 | 437019 |
| Series A Convertible Preferred Stock | 54983 | 54983 |
| Stockholders' Equity | 237012 | 206126 |
| **Total liabilities and stockholders' equity** | $830718 | $698128 |

---

**Condensed Statements of Cash Flows**

(Dollar amounts in thousands)

---

| | | |
|:---|:---|:---|
|  | **For the year ended** <br> **December 31, 2022**  | **For the year ended** <br> **December 31, 2021**  |
| **Cash Flows From Operating Activities** |  |  |
| &nbsp;&nbsp;&nbsp;Net income | $66393 | $82021 |
| &nbsp;&nbsp;&nbsp;Adjustments to reconcile net income to net cash provided by operating activities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Stock based compensation | 2813 | 750 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Bad debt expense | (526) | 128 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Depreciation and amortization of property and equipment | 9480 | 8386 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Amortization of intangible assets | 7278 | 6025 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Amortization of debt discount | 431 | 261 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Non-cash lease expense | 173 | 80 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Loss (gain) on sale of property and equipment | (20) | (156) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Deferred income taxes | 1872 | (1428) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;PPP loan forgiveness |  | (6626) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Change in fair value of warrant liabilities | (12453) | 11711 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Inducement loss on warrant conversion |  | 246 |
| &nbsp;&nbsp;&nbsp;Changes in operating assets and liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Receivables | 6512 | (8473) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Inventories | (127594) | (105511) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prepaid expenses and other | (613) | 37 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Income tax receivable/payable | (6725) | 595 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other assets | (1146) | (1130) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts payable, accrued expenses and other current liabilities | (17835) | 15855 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total Adjustments** | (138353) | (79250) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Net Cash (Used In) Provided By Operating Activities** | (71960) | 2771 |

---

---

| | | |
|:---|:---|:---|
|  | **For the year ended** <br> **December 31, 2022** | **For the year ended** <br> **December 31, 2021** |
| **Net cash provided by operating activities** |  |  |
| &nbsp;&nbsp;&nbsp;As Reported | $(71960) | $2771 |
| &nbsp;&nbsp;&nbsp;Net borrowings on floor plan notes payable | 148180 | 73097 |
| **Adjusted** | $76220 | $75868 |

---

**Reconciliation of Non-GAAP Measures**

(Dollar amounts in thousands except for share and per share data)

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Three months ended December 31, 2022** | **Three months ended December 31, 2022** | **Three months ended December 31, 2022** | **Three months ended December 31, 2022** | **Three months ended December 31, 2022** | **Three months ended December 31, 2022** |
|  | **As reported** | **(Gain)/Loss on fair value of warrant liabilities** | **LIFO** | **Acquisition expense** | **Severance and**<br> **transition costs** | **Adjusted** |
| Cost of goods sold | $189116 |  | $(4153) |  |  | $184963 |
| Selling, general and administrative | 47649 |  |  | (203) | (299) | 47147 |
| Operating income | 2305 |  | 4153 | 203 | 299 | 6960 |
| Change in fair value of warrant liabilities | 1782 | (1782) |  |  |  |  |
| Income before taxes | (1605) | (1782) | 4153 | 203 | 299 | 1268 |
| Income tax (provision) benefit | 205 |  | (458) | (46) | (33) | (332) |
| Net income | $(1400) | $(1782) | $3695 | $157 | $266 | $936 |
| Diluted earnings per share | $(0.24) |  |  |  |  | $(0.02) |
| Diluted share count | 12.8 |  |  |  |  |  |

---

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Three months ended December 31, 2021** | **Three months ended December 31, 2021** | **Three months ended December 31, 2021** | **Three months ended December 31, 2021** | **Three months ended December 31, 2021** | **Three months ended December 31, 2021** |
|  | **As reported** | **(Gain)/Loss on fair value of warrant liabilities** | **LIFO** | **Acquisition expense** | **Severance and**<br> **transition costs** | **Adjusted** |
| Cost of goods sold | $239641 |  | $(3402) |  |  | $236239 |
| Selling, general and administrative | 52533 |  |  | (216) |  | 52317 |
| Operating income | 26227 |  | 3402 | 216 |  | 29845 |
| Change in fair value of warrant liabilities | (621) | 621 |  |  |  |  |
| Income before taxes | 22839 | 621 | 3402 | 216 |  | 27078 |
| Income tax (provision) benefit | (5943) |  | (862) | (55) | - | (6860) |
| Net income | $16896 | $621 | $2540 | $161 | $- | $20218 |
| Diluted earnings per share | $0.80 |  |  |  |  | $0.93 |
| Diluted share count | 12.9 |  |  |  |  |  |

---

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Year ended December 31, 2022** | **Year ended December 31, 2022** | **Year ended December 31, 2022** | **Year ended December 31, 2022** | **Year ended December 31, 2022** | **Year ended December 31, 2022** |
|  | **As reported** | **(Gain)/Loss on fair value of warrant liabilities** | **LIFO** | **Acquisition expense** | **Severance and**<br> **transition costs** | **Adjusted** |
| Cost of goods sold | $998270 |  | $(12383) |  |  | $985887 |
| Selling, general and administrative | 222218 |  |  | (286) | (900) | 221032 |
| Operating income | 89715 |  | 12383 | 286 | 900 | 103284 |
| Change in fair value of warrant liabilities | 12453 | (12453) |  |  |  |  |
| Income before taxes | 85576 | (12453) | 12383 | 286 | 900 | 86692 |
| Income tax (provision) benefit | (19183) |  | (3143) | (73) | (228) | (22627) |
| Net income | $66393 | $(12453) | $9240 | $213 | $672 | $64065 |
| Diluted earnings per share | $2.42 |  |  |  |  | $3.05 |
| Diluted share count | 12.8 |  |  |  |  |  |

---

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Year ended December 31, 2021** | **Year ended December 31, 2021** | **Year ended December 31, 2021** | **Year ended December 31, 2021** | **Year ended December 31, 2021** | **Year ended December 31, 2021** |
|  | **As reported** | **(Gain)/Loss on fair value of warrant liabilities** | **LIFO** | **Acquisition expense** | **Severance and**<br> **transition costs** | **Adjusted** |
| Cost of goods sold | $911588 |  | $(4811) |  |  | $906777 |
| Selling, general and administrative | 184235 |  |  | (1744) |  | 182491 |
| Operating income | 124094 |  | 4811 | 1744 |  | 130649 |
| Change in fair value of warrant liabilities | (11711) | 11711 |  |  |  |  |
| Income before taxes | 110263 | 11711 | 4811 | 1744 |  | 128529 |
| Income tax (provision) benefit | (28242) |  | (498) | (180) | - | (28920) |
| Net income | $82021 | $11711 | $4313 | $1564 | $- | $99609 |
| Diluted earnings per share | $3.93 |  |  |  |  | $4.82 |
| Diluted share count | 12.9 |  |  |  |  |  |

---

**\*** In periods where the change in fair value of warrants is a gain, the diluted EPS calculation is not affected by this line item.

###