Lazydays Holdings Inc.
11/14/2025 | Press release | Distributed by Public on 11/14/2025 10:55
Quarterly Report for Quarter Ending September 30, 2025 (Form 10-Q)
Management's Discussion and Analysis of Financial Condition and Results of Operations
The following should be read together with our financial statements and related notes included in Part I, Item 1 of this Form 10-Q, as well as our 2024 Form 10-K.
The Company refers to the condensed consolidated financial statements collectively as "financial statements," and individually as "statements of operations and comprehensive loss," "balance sheets," "statements of stockholders' equity," and "statements of cash flows" herein.
Disclosure Regarding Forward Looking Statements
Certain statements in this Quarterly Report on Form 10-Q (including but not limited to this Item 2 - "Management's Discussion and Analysis of Financial Condition and Results of Operations") constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, reflecting our or our management team's expectations, hopes, beliefs, intentions, strategies, estimates, and assumptions concerning events and financial trends that may affect our future financial condition or results of operations. All statements other than statements of historical facts included in this Quarterly Report on Form 10-Q, are "forward-looking" statements. Forward-looking statements generally can be identified by the use of forward-looking terminology such as "may," "will," "expect," "anticipate," "intend," "plan," "believe," "seek," "estimate" or "continue" or the negative of such words or variations of such words and similar expressions. These statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions, which are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements, and we can give no assurance that such forward-looking statements will prove to be correct. Important factors that could cause actual results to differ materially from those expressed or implied by the forward-looking statements, or "cautionary statements," include, but are not limited to:
•The ability of the parties to consummate the Asset Sales and other transactions contemplated by the Asset Purchase Agreement;
•Satisfaction of closing conditions to the consummation of the Asset Sales and other transactions contemplated by the Asset Purchase Agreement;
•Potential delays in consummating the Asset Sales and other transactions contemplated by the Asset Purchase Agreement;
•Our execution costs in connection with the Asset Sales and other transactions contemplated by the Asset Purchase Agreement;
•The occurrence of any event, change or other circumstance that could give rise to the termination of the Asset Purchase Agreement;
•Risks related to disruption of management's attention from the Company's ongoing business operations due to the Asset Sales;
•The effect of the announcement of the Asset Sales on the Company's relationships with its vendors and employees, and its operating results and business generally;
•The risk that the Company may not have sufficient cash to sustain operations through the completion of the Asset Sales and may need additional financing and/or waivers or amendments to financial obligations and covenants with our lenders to sustain operations through the final Closing of the Asset Sales, all of which are uncertain and which may not be available to us;
•The outcome of any legal proceedings against Lazydays;
•The risk that trading in the common stock will not continue on any over-the-counter market or any market following delisting from Nasdaq;
•Our recent history of losses and our future performance, including changes in operating results, such as store performance, and selling, general and administrative expenses ("SG&A");
•Substantial doubt existing regarding our ability to continue as a going concern;
•Changes, including reductions to unstainable levels, of our liquidity from our cash and availability under our credit facilities;
•Compliance with, or defaults under, financial and other covenants under our credit agreements and related loan documents and actions or inactions of our lenders;
•Consumer demand changes and our ability to procure and manage inventory levels to reflect consumer demand;
•Future market conditions and industry trends, including anticipated national new RV wholesale shipments; and
•Changes in U.S. or global economic and political conditions or outbreaks of war.
Business Overview
Lazydays has been a prominent player in the RV industry since our inception in 1976. We operate recreational vehicle dealerships and offer a comprehensive portfolio of products and services for RV owners and outdoor enthusiasts. We generate revenue by providing RV owners and outdoor enthusiasts a full spectrum of products: RV sales, RV repair and services, financing and insurance products, third-party protection plans, and after-market parts and accessories.
As of September 30, 2025, we operate 12 dealerships in nine states. Based on industry research and management's estimates, we believe we operate the world's largest RV dealership, measured in terms of on-site inventory, located on approximately 126 acres outside Tampa, Florida. See Note 1 - Business Organization and Nature of Operationsto our financial statements for additional information.
Lazydays offers one of the largest selections of leading RV brands in the nation, featuring more than 2,800 new and pre-owned RVs. We have approximately 400 service bays, and each location has an RV parts and accessories store. We employ approximately 800 people at our 12 dealership locations. Our locations are staffed with knowledgeable local team members, providing customers access to extensive RV expertise. We believe our locations are strategically located and, based on information collected by us from reports prepared by Statistical Surveys, account for a significant portion of new RV units sold on an annual basis in the U.S.
New Vehicles Retail
We offer a comprehensive selection of new RVs across a wide range of price points, classes and floor plans, from entry level travel trailers to Class A motorhomes, at our dealership locations and on our website. The core brands that we sell, representing 97.0% of the new vehicles that we sold in the quarter ended September 30, 2025, are manufactured by Thor Industries, Inc., Winnebago Industries, Inc., and Forest River, Inc.
Pre-Owned Vehicles Retail
Our pre-owned vehicle operations provide an opportunity to generate sales to customers unable or unwilling to purchase a new vehicle, to sell models other than the store's new vehicle models, access additional used vehicle inventory through trade-ins and increase sales from finance and insurance products. We sell a comprehensive selection of pre-owned RVs at our dealership locations.
Vehicle Wholesale
Vehicle wholesale sales is a channel that provides us with an opportunity to best manage our RV inventory. We generally acquire used RVs from customers, primarily through trade-ins, as well as through private sales, auctions, the Company's rental inventory and other sources. Some of the acquired RVs are not of the brand, model or class that we typically sell or are not in high demand from our customers. We sell these RVs at wholesale prices through auctions.
Consignment Vehicle
We enter into consignment arrangements to hold pre-owned vehicles which we sell on behalf of the consignor to customers. These arrangements allow us to expand our RV inventory without the upfront funding or inventory risk. We restarted our consignment program in 2024.
Finance and Insurance
We believe that arranging timely financing is an important part of providing access to the RV lifestyle and we attempt to arrange financing for every vehicle we sell. We also offer related products such as extended warranties, insurance contracts and other maintenance products.
Service, Body and Parts and Other
With approximately 400 service bays, we provide onsite general RV maintenance and repair services at all of our dealership locations. We employ over 200 highly skilled technicians, many of them certified by the Recreational Vehicle Industry Association ("RVIA") or the National RV Dealers Association ("RVDA") and we are equipped to offer comprehensive services and perform original equipment manufacturer ("OEM") warranty repairs for most RV components. Earnings from service, body and parts and other have historically been more resilient during economic downturns, when owners have tended to hold and repair their existing RVs rather than buy a new one.
Recent Developments
Campers Inn Sale
As previously disclosed by the Company in its Form 8-K filed with the SEC on October 10, 2025, on October 6, 2025, we entered into the Asset Purchase Agreement for the Asset Sales. The Asset Purchase Agreement represents the parties' definitive agreement with respect to the transactions contemplated by the letter of intent the Company previously disclosed in its Form 8-K filed with the SEC on September 16, 2025, and the Asset Purchase Agreement supersedes such letter of intent.
As consideration for the Asset Sales, the Purchasers have agreed to pay an aggregate purchase price consisting of: (i) $30 million for the Sellers' assets other than RV inventory and owned real property; (ii) a price for the Sellers' RV inventory to be calculated by the parties at each closing based on pricing formulas and methodologies as stated in Exhibit A to the Asset Purchase Agreement; and (iii) $34.9 million for the Sellers' owned real property. Purchasers will also assume certain outstanding obligations of the Sellers and are expected to continue operations at certain of the Sellers' RV dealerships, as further described in Exhibit A to the Asset Purchase Agreement.
Subject to the terms and conditions of the Asset Purchase Agreement, the consummation of the Asset Sales are scheduled to take place in a series of Closings on a site-by-site basis, with current target Closings to occur between November 17, 2025 and November 26, 2025, in the sequence and in accordance with the other closing procedures described in the Asset Purchase Agreement and its exhibits.
The obligations of the parties to consummate the transactions contemplated by the Asset Purchase Agreement at each Closing are subject to the fulfillment of each of the following conditions: (i) all waiting periods applicable to the consummation of the transactions contemplated by the Asset Purchase Agreement under the HSR Act, or any other applicable antitrust laws (to the extent applicable to the Closing at issue) (if any) shall have expired or been terminated; (ii) to the extent approval by the stockholders of the Company is required by law prior to consummating the Asset Sales, written consents from the requisite stockholders of the Company, or other manner of obtaining requisite approval from the stockholders of the Company, to the consummation of the transactions contemplated by the Asset Purchase Agreement shall have been obtained and become effective in compliance with applicable laws, and any waiting period relating thereto (including under Rule 14c-2 under the Securities Exchange Act of 1934, as amended, with respect to the filing of an information statement with the SEC) shall have expired; and (iii) certain third-party consents (to the extent applicable to the Closing at issue) shall have been obtained. On October 14, 2025, stockholders of Lazydays holding at least a majority of the outstanding shares of our common stock as of the Record Dates approved the transactions contemplated by the Asset Purchase Agreement by execution of the Written Consent, as further described in the Company's preliminary and definitive information statements filed pursuant to Section 14(c) of the Securities Exchange Act of 1934 on October 15, 2025 and October 27, 2025, respectively. On November 13, 2025 at 11:59 P.M. (Eastern Time), the waiting period under the HSR Act expired for such transactions.
The obligation of the Purchasers to consummate the transactions contemplated by the Asset Purchase Agreement at each Closing is subject to their receipt of good and marketable title to the applicable purchased assets at such Closing (or, in the case of recent trade-in RV inventory, powers of attorney and payoffs to allow the Purchasers to clear title in the ordinary course after such Closing), free and clear of all Encumbrances other than Permitted Encumbrances (in each case as defined in the Asset Purchase Agreement).
The obligations of the Sellers to consummate the transactions contemplated by the Asset Purchase Agreement at each Closing are subject to the Purchasers having completed the applicable payments required under the Asset Purchase Agreement with respect to such Closing.
The Asset Purchase Agreement may be terminated with respect to any one or more sites at any time prior to the final Closing: (i) by mutual written consent of the Purchasers and the Sellers; (ii) by the Purchasers or a Seller if a final, non-appealable order or law permanently enjoining or otherwise prohibiting the transactions contemplated by the Asset Purchase Agreement has been issued by a governmental authority, but only as to the particular transaction or transactions contemplated by the Asset Purchase Agreement subject to such order or law; (iii) by the Company upon exercise of the Fiduciary Out (as defined in the Asset Purchase Agreement), provided the Company pays a $10 million termination fee; or (iv) by the Purchasers or a Seller if the final Closing has not occurred on or before the Outside Date; provided, that the right to terminate the Asset Purchase Agreement under clause (iv) will not be available to a party if the failure of such party
to fulfill, or breach by such party of, any agreement or covenant under the Asset Purchase Agreement has been the cause of, or resulted in, the failure of the final Closing to occur on or before the Outside Date. See Note 15 - Subsequent Eventsto our financial statements for additional information.
Plan of Dissolution
On October 6, 2025, in connection with the Company's entry into the Asset Purchase Agreement and the transactions contemplated thereby, the Board approved, subject to stockholder approval, a plan of dissolution which provided for the Liquidation and the Dissolution of the Company, which plan of dissolution was previously disclosed by the Company. On October 14, 2025, the Board subsequently approved the Plan of Dissolution, pursuant to which the Company may choose to liquidate its assets and dissolve after the final Closing of the Asset Sales.
On October 14, 2025, the Majority Holders, collectively holding a majority of the issued and outstanding shares of Common Stock, approved the Plan of Dissolution by execution of the Written Consent, as further described in the Company's preliminary and definitive information statements filed pursuant to Section 14(c) of the Securities Exchange Act of 1934 on October 15, 2025 and October 27, 2025, respectively. The Board may, in its discretion, abandon the Liquidation and the Dissolution of the Company without further action by the stockholders of the Company at any time prior to the Dissolution. After payment of outstanding liabilities to the Company's secured and unsecured creditors pursuant to the Plan of Dissolution in order of contractual and legal priority, the Company expects there will be no assets remaining for distribution to its stockholders in the Dissolution. See Note 15 - Subsequent Eventsto our financial statements for additional information.
Dealership Divestitures
During the nine months ended September 30, 2025, we sold the following ten dealerships (collectively defined as the "Divestitures"): Elkhart, Indiana; Surprise, Arizona; Murfreesboro, Tennessee; Sturtevant, Wisconsin; and Woodland, Washington; Fort Pierce, Florida, Longmont, Colorado; Mesa, Arizona; Las Vegas, Nevada; and Claremore, Oklahoma. These dealerships generated revenues of $0.7 million and $64.3 million during the three and nine months ended September 30, 2025, respectively, compared to revenues of $73.4 million and $225.0 million during the three and nine months ended September 30, 2024, respectively.
Amendment to Limited Waiver and Consent with Respect to Credit Agreement
On October 29, 2025, the Company entered into the September Waiver Amendment, which amended the September 2025 Waiver to, among other things, include as additional Specified Defaults (a) the failure of the Company and certain other loan parties to provide prompt notice to the Administrative Agent of certain litigation proceedings and (b) the occurrence of a change in control (as such term is defined in the Credit Agreement) resulting from the approval by the direct or indirect holders of the equity interests in the Company of the Plan of Dissolution.
The September Waiver Amendment also changes, solely during the September 2025 Waiver Period, certain eligibility criteria for certain inventory, which changes allow the Company and the other loan parties to borrow increased loan amounts with respect to such inventory during the September 2025 Waiver Period. In addition, under the September Waiver Amendment, the Lenders agreed to permit Company and the other loan parties to retain a portion of certain proceeds from the Asset Sales that would otherwise be required to be used to repay the obligations outstanding under the Credit Agreement, provided that no default or event of default exists (except the Specified Defaults) and certain other conditions are met, and subject to certain limitations, including a maximum retained proceeds amount of $4.5 million. The Company intends to use the proceeds of the increased loan amounts and retained proceeds from the Asset Sales, to the extent received, for working capital to support operations until the completion of all Asset Sales. As previously disclosed, after the completion of all Asset Sales, the Company would not have any remaining business operations, and the Company expects any remaining assets, liabilities and affairs would become subject to the Plan of Dissolution. See Note 15 - Subsequent Eventsto our financial statements for additional information.
Nasdaq Delisting Determination
As previously disclosed, on November 7, 2025, the Board determined to delist the Company's common stock from Nasdaq and, in connection therewith, the Company notified Nasdaq of the Company's intention to file a Form 25 with the Securities and Exchange Commission on or about November 17, 2025. The Company anticipates that the Form 25 will
become effective ten days following its filing and that the common stock will be delisted from Nasdaq on or about November 28, 2025.
The Company has not arranged for listing and/or registration of the common stock on another national securities exchange or for quotation in a quotation medium, and the Company can provide no assurance that trading in the common stock will continue on any over-the-counter market or any market.
WARN Act Notification
As previously disclosed, on September 16, 2025, in compliance with the Worker Adjustment and Retraining Notification Act of 1988, as amended, and applicable state law, the Company notified affected employees and requisite state and local authorities that the Company expects to terminate employees providing services at the Company's corporate headquarters in Tampa, Florida effective November 16, 2025 or within 14 days thereafter in connection with the closing of the Asset Sales.
Quarter-to-Date Results of Operations
The following table presents our consolidated financial results for the three months ended September 30, 2025 compared to the three months ended September 30, 2024.
| Three Months Ended September 30, | Variance | ||||||||||||||||||||||
| (In thousands, except per unit data) | 2025 | 2024 | |||||||||||||||||||||
| Revenue | |||||||||||||||||||||||
| New vehicle retail | $ | 60,150 | $ | 122,291 | $ | (62,141) | (50.8) | % | |||||||||||||||
| Pre-owned vehicle retail | 23,113 | 51,339 | (28,226) | (55.0) | % | ||||||||||||||||||
| Vehicle wholesale | 478 | 1,801 | (1,323) | (73.5) | % | ||||||||||||||||||
| Consignment vehicle | 861 | 1,334 | (473) | (35.5) | % | ||||||||||||||||||
| Finance and insurance | 8,373 | 16,333 | (7,960) | (48.7) | % | ||||||||||||||||||
| Service, body and parts and other | 8,459 | 12,863 | (4,404) | (34.2) | % | ||||||||||||||||||
| Total revenue | $ | 101,434 | $ | 205,961 | $ | (104,527) | (50.8) | % | |||||||||||||||
| Gross profit | |||||||||||||||||||||||
| New vehicle retail | $ | 5,804 | $ | 11,259 | $ | (5,455) | (48.5) | % | |||||||||||||||
| Pre-owned vehicle retail | 4,897 | 9,623 | (4,726) | (49.1) | % | ||||||||||||||||||
| Vehicle wholesale | (251) | (163) | (88) | 54.0 | % | ||||||||||||||||||
| Consignment vehicle | 861 | 1,334 | (473) | (35.5) | % | ||||||||||||||||||
| Finance and insurance | 8,161 | 15,789 | (7,628) | (48.3) | % | ||||||||||||||||||
| Service, body and parts and other | 4,394 | 7,121 | (2,727) | (38.3) | % | ||||||||||||||||||
| LIFO | (4,290) | 350 | (4,640) | NM | |||||||||||||||||||
| Total gross profit | $ | 19,576 | $ | 45,313 | $ | (25,737) | (56.8) | % | |||||||||||||||
| Gross profit margins | |||||||||||||||||||||||
| New vehicle retail | 9.6 | % | 9.2 | % | 40 | bps | |||||||||||||||||
| Pre-owned vehicle retail | 21.2 | % | 18.7 | % | 250 | bps | |||||||||||||||||
| Vehicle wholesale | (52.5) | % | (9.1) | % | (4,340) | bps | |||||||||||||||||
| Consignment vehicle | 100.0 | % | 100.0 | % | - | ||||||||||||||||||
| Finance and insurance | 97.5 | % | 96.7 | % | 80 | bps | |||||||||||||||||
| Service, body and parts and other | 51.9 | % | 55.4 | % | (350) | bps | |||||||||||||||||
| Total gross profit margin | 19.3 | % | 22.0 | % | (270) | bps | |||||||||||||||||
| Total gross profit margin (excluding LIFO) | 23.5 | % | 21.8 | % | 170 | bps | |||||||||||||||||
| Retail units sold | |||||||||||||||||||||||
| New vehicle retail | 798 | 1,666 | (868) | (52.1) | % | ||||||||||||||||||
| Pre-owned vehicle retail | 420 | 942 | (522) | (55.4) | % | ||||||||||||||||||
| Consignment vehicle | 140 | 142 | (2) | (1.4) | % | ||||||||||||||||||
| Total retail units sold | 1,358 | 2,750 | (1,392) | (50.6) | % | ||||||||||||||||||
| Average selling price per retail unit | |||||||||||||||||||||||
| New vehicle retail | $ | 75,376 | $ | 73,404 | $ | 1,972 | 2.7 | % | |||||||||||||||
| Pre-owned vehicle retail | 55,031 | 54,500 | 531 | 1.0 | % | ||||||||||||||||||
| Average gross profit per retail unit (excluding LIFO) | |||||||||||||||||||||||
| New vehicle retail | $ | 7,273 | $ | 6,758 | $ | 515 | 7.6 | % | |||||||||||||||
| Pre-owned vehicle retail | 11,660 | 10,215 | 1,445 | 14.1 | % | ||||||||||||||||||
| Finance and insurance | 6,010 | 5,741 | 269 | 4.7 | % | ||||||||||||||||||
| Finance & insurance revenue per unit | $ | 6,166 | $ | 5,939 | $ | 227 | 3.8 | % | |||||||||||||||
*NM - not meaningful
New Vehicles Retail
New vehicle revenue decreased $62.1 million, or 50.8%, in the three months ended September 30, 2025 compared to the same period in 2024 primarily due to a 52.1% decrease in new vehicle retail units sold, offset by a 2.7% increase in average selling price per retail unit. The decrease in units sold was primarily due to the Divestitures, which represented a decrease in new vehicle retail revenue of $46.3 million, and dealerships closed during the last twelve months, which represented a decrease in new vehicle retail revenue of $3.1 million.
New vehicle gross profit decreased $5.5 million, or 48.5%, in the three months ended September 30, 2025 compared to the same period in 2024 primarily due to the 52.1% decrease in new vehicle retail units sold, partially offset by the increase in average selling price mentioned above.
Pre-Owned Vehicles Retail
Pre-owned vehicle retail revenue decreased $28.2 million, or 55.0%, in the three months ended September 30, 2025 compared to the same period in 2024 primarily due to a 55.4% decrease in pre-owned retail units sold. The decrease in units sold was primarily due to the Divestitures, which represented a decrease in pre-owned vehicle retail revenue of $16.9 million, and dealerships closed during the last twelve months, which represented a decrease in pre-owned vehicle retail revenue of $2.0 million.
Pre-owned vehicle retail gross profit decreased $4.7 million, or 49.1%, in the three months ended September 30, 2025 compared to the same period in 2024 primarily due to fewer units sold. The increase in gross profit margins was primarily due to the concerted effort to discount sales prices to move units in the prior year period.
Vehicle Wholesale
Vehicle wholesale revenue decreased $1.3 million, or 73.5%, in the three months ended September 30, 2025 compared to the same period in 2024 primarily related to a strategic decision to right size our RV inventory during the prior year period.
Vehicle wholesale gross profit decreased $0.1 million in the three months ended September 30, 2025 compared to the same period in 2024.
Consignment Vehicle
Consignment vehicle revenue decreased $0.5 million, or 35.5%, in the three months ended September 30, 2025 compared to the same period in 2024 primarily due to the Divestitures, which represented a decrease in consignment vehicle revenue of $0.4 million. We recognize consignment vehicle revenue on a net basis as an agent and not the gross amount collected from a customer. Consignment vehicle revenue during the three months ended September 30, 2025 was composed of sales of $12.3 million less cost of consignment units of $11.5 million. Consignment vehicle revenue during the three months ended September 30, 2024 was composed of sales of $8.8 million less cost of consignment units of $7.5 million.
Finance and Insurance
Finance and insurance ("F&I") revenue decreased $8.0 million, or 48.7%, in the three months ended September 30, 2025 compared to the same period in 2024 primarily due to a decrease of 50.6% in total retail units sold.
Service, Body and Parts and Other
Our service, body and parts and other revenue decreased 34.2% and our gross profit decreased 38.3%during the three months ended September 30, 2025compared to the same period in 2024 primarily due to the Divestitures, which represented a decrease in service, body and parts and other revenue of $5.3 million.
Depreciation and Amortization
| Three Months Ended September 30, | Variance | ||||||||||||||||||||||
| ($ in thousands) | 2025 | 2024 | $ | % | |||||||||||||||||||
| Depreciation and amortization | $ | 3,898 | $ | 5,170 | $ | (1,272) | (24.6) | % | |||||||||||||||
The decrease in depreciation and amortization was primarily driven by the Divestitures mentioned above.
Selling, General and Administrative
Selling, general and administrative ("SG&A") expenses consist primarily of wage-related expenses, selling expenses related to commissions and advertising, lease expenses, corporate overhead expenses, stock-based compensation expense and transaction costs, and do not include depreciation and amortization expense or impairment charges.
SG&A expense was as follows:
| Three Months Ended September 30, | Variance | ||||||||||||||||||||||
| ($ in thousands) | 2025 | 2024 | $ | % | |||||||||||||||||||
| SG&A expense | $ | 31,000 | $ | 45,802 | $ | (14,802) | (32.3) | % | |||||||||||||||
| SG&A as percentage of revenue | 30.6 | % | 22.2 | % | 840 | bps | |||||||||||||||||
The decrease in SG&A expense was primarily related to a decrease in employee related costs of $8.5 million, a decrease in marketing expenses of $3.1 million, and decreases in rent, information technology, and other miscellaneous expenses, all of which were impacted by the Divestitures. These decreases were partially offset by an increase in transaction costs. The increase in SG&A as a percentage of revenue was primarily driven by a decrease in revenue discussed above, an increase in transaction costs and the continuation of certain fixed costs.
Impairment Charges
| Three Months Ended September 30, | Variance | ||||||||||||||||||||||
| ($ in thousands) | 2025 | 2024 | $ | % | |||||||||||||||||||
| Impairment charges | $ | 63,915 | $ | - | $ | 63,915 | NM | ||||||||||||||||
During the three months ended September 30, 2025, we recorded a non-cash impairment charge on indefinite-lived intangible assets of $22.9 million. The impairment was driven by the Asset Sales.
As of September 30, 2025, management determined that all of our inventories, certain real estate, property and equipment, and lease assets and liabilities met the held for sale criteria. We evaluated the disposal group to ensure the net assets were recorded at the lower of their carrying value or fair value less costs to sell. The quantitative impairment test of the disposal group included a comparison of the estimated sales proceeds less cost to sell to the carrying value of the disposal group. As a result of this analysis, we recorded a loss on assets held for sale of $11.9 million during the three months ended September 30, 2025. Additionally, operating and finance right-of-use assets that are not contemplated to be assumed under the Asset Sales are expected to be abandoned. As a result, such assets were assessed for impairment, which resulted in non-cash impairment charges of $29.1 million during the three months ended September 30, 2025.
Floor Plan Interest Expense
| Three Months Ended September 30, | Variance | ||||||||||||||||||||||
| ($ in thousands) | 2025 | 2024 | $ | % | |||||||||||||||||||
| Floor plan interest expense | $ | 3,084 | $ | 6,361 | $ | (3,277) | (51.5) | % | |||||||||||||||
The decrease in floor plan interest expense was related to a decrease in floor plan notes payable due to the Divestitures. The floor plan notes payable balances as of September 30, 2025 and 2024 were $184.0 million and $316.6 million, respectively.
Other Interest Expense
| Three Months Ended September 30, | Variance | ||||||||||||||||||||||
| ($ in thousands) | 2025 | 2024 | $ | % | |||||||||||||||||||
| Other interest expense | $ | 2,725 | $ | 5,564 | $ | (2,839) | (51.0) | % | |||||||||||||||
The decrease in other interest expense was primarily due to a decrease in the average term loan and mortgage debt balances.
Change in Fair Value of Warrant Liabilities
| Three Months Ended September 30, | Variance | ||||||||||||||||||||||
| ($ in thousands) | 2025 | 2024 | $ | % | |||||||||||||||||||
| (Gain) loss on change in fair value of warrant | $ | (846) | $ | 462 | $ | (1,308) | (283.1) | % | |||||||||||||||
Change in fair value of warrant liabilities represented the mark-to-market fair value adjustments to the outstanding warrants issued in connection with our debt modification in May 2024. The fair value of the warrants fluctuated with changes in the value of our common stock.
(Gain) Loss on Sale of Businesses, Property and Equipment
| Three Months Ended September 30, | Variance | ||||||||||||||||||||||
| ($ in thousands) | 2025 | 2024 | $ | % | |||||||||||||||||||
| (Gain) loss on sale of businesses, property and equipment | $ | (813) | $ | - | $ | (813) | NM | ||||||||||||||||
During the three months ended September 30, 2025, we sold our Claremore, Oklahoma dealership in the Ron Hoover RV Sale. We received net proceeds of $14.6 million and recorded a net gain of $0.8 million from this sale during the three months ended September 30, 2025.
Refer to Note 5 - Dispositions and Assets Held for Salefor further information.
Income Tax Expense
| Three Months Ended September 30, | Variance | ||||||||||||||||||||||
| ($ in thousands) | 2025 | 2024 | $ | % | |||||||||||||||||||
| Income tax (benefit) expense | $ | (1,006) | $ | (381) | $ | (625) | 164.0% | ||||||||||||||||
| Effective tax rate | 1.2 | % | 2.1 | % | |||||||||||||||||||
Income tax benefit of $1.0 million and the effective tax rate for the three months ended September 30, 2025 primarily resulted from the effects of state income taxes and various permanent differences and changes in the valuation allowance. Currently, we are unable to recognize federal tax benefits from loss before income taxes due to our valuation allowance on our net operating loss, which was initially established in the second quarter of 2024. The change in our effective tax rate for the three months ended September 30, 2025 compared to the same period in 2024 was primarily the result of continued application of our valuation allowance.
Year-to-Date Results of Operations
The following table presents our consolidated financial results for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024.
| Nine Months Ended September 30, | Variance | ||||||||||||||||||||||
| (In thousands, except per unit data) | 2025 | 2024 | |||||||||||||||||||||
| Revenue | |||||||||||||||||||||||
| New vehicle retail | $ | 235,132 | $ | 418,315 | $ | (183,183) | (43.8) | % | |||||||||||||||
| Pre-owned vehicle retail | 93,247 | 187,621 | (94,374) | (50.3) | % | ||||||||||||||||||
| Vehicle wholesale | 3,404 | 11,318 | (7,914) | (69.9) | % | ||||||||||||||||||
| Consignment vehicle | 4,428 | 1,978 | 2,450 | 123.9 | % | ||||||||||||||||||
| Finance and insurance | 30,450 | 50,703 | (20,253) | (39.9) | % | ||||||||||||||||||
| Service, body and parts and other | 31,885 | 41,748 | (9,863) | (23.6) | % | ||||||||||||||||||
| Total revenue | $ | 398,546 | $ | 711,683 | $ | (313,137) | (44.0) | % | |||||||||||||||
| Gross profit | |||||||||||||||||||||||
| New vehicle retail | $ | 25,154 | $ | 30,090 | $ | (4,936) | (16.4) | % | |||||||||||||||
| Pre-owned vehicle retail | 19,555 | 29,818 | (10,263) | (34.4) | % | ||||||||||||||||||
| Vehicle wholesale | (358) | (2,703) | 2,345 | (86.8) | % | ||||||||||||||||||
| Consignment vehicle | 4,428 | 1,978 | 2,450 | 123.9 | % | ||||||||||||||||||
| Finance and insurance | 29,460 | 48,822 | (19,362) | (39.7) | % | ||||||||||||||||||
| Service, body and parts and other | 17,205 | 22,569 | (5,364) | (23.8) | % | ||||||||||||||||||
| LIFO | 2,163 | (91) | 2,254 | NM | |||||||||||||||||||
| Total gross profit | $ | 97,607 | $ | 130,483 | $ | (32,876) | (25.2) | % | |||||||||||||||
| Gross profit margins | |||||||||||||||||||||||
| New vehicle retail | 10.7 | % | 7.2 | % | 350 | bps | |||||||||||||||||
| Pre-owned vehicle retail | 21.0 | % | 15.9 | % | 510 | bps | |||||||||||||||||
| Vehicle wholesale | (10.5) | % | (23.9) | % | NM | ||||||||||||||||||
| Consignment vehicle | 100.0 | % | 100.0 | % | - | ||||||||||||||||||
| Finance and insurance | 96.7 | % | 96.3 | % | 40 | bps | |||||||||||||||||
| Service, body and parts and other | 54.0 | % | 54.1 | % | (10) | bps | |||||||||||||||||
| Total gross profit margin | 24.5 | % | 18.3 | % | 620 | bps | |||||||||||||||||
| Total gross profit margin (excluding LIFO) | 23.9 | % | 18.3 | % | 560 | bps | |||||||||||||||||
| Retail units sold | |||||||||||||||||||||||
| New vehicle retail | 3,009 | 5,742 | (2,733) | (47.6) | % | ||||||||||||||||||
| Pre-owned vehicle retail | 1,823 | 3,495 | (1,672) | (47.8) | % | ||||||||||||||||||
| Consignment vehicle | 525 | 197 | 328 | 166.5 | % | ||||||||||||||||||
| Total retail units sold | 5,357 | 9,434 | (4,077) | (43.2) | % | ||||||||||||||||||
| Average selling price per retail unit | |||||||||||||||||||||||
| New vehicle retail | $ | 78,143 | $ | 72,852 | $ | 5,291 | 7.3 | % | |||||||||||||||
| Pre-owned vehicle retail | 51,150 | 53,683 | (2,533) | (4.7) | % | ||||||||||||||||||
| Average gross profit per retail unit (excluding LIFO) | |||||||||||||||||||||||
| New vehicle retail | $ | 8,360 | $ | 5,240 | $ | 3,120 | 59.5 | % | |||||||||||||||
| Pre-owned vehicle retail | 10,727 | 8,532 | 2,195 | 25.7 | % | ||||||||||||||||||
| Finance and insurance | 5,499 | 5,175 | 324 | 6.3 | % | ||||||||||||||||||
| Finance & insurance revenue per unit | $ | 5,684 | $ | 5,374 | $ | 310 | 5.8 | % | |||||||||||||||
*NM - not meaningful
New Vehicles Retail
New vehicle revenue decreased $183.2 million, or 43.8%, in the nine months ended September 30, 2025 compared to the same period in 2024 primarily due to a 47.6% decrease in new vehicle retail units sold, partially offset by a 7.3% increase in average selling price per retail unit. The decrease in units sold was primarily due to the Divestitures, which represented a decrease in new vehicle retail revenue of $104.9 million, and dealerships closed during the last twelve months, which represented a decrease in new vehicle retail revenue of $15.6 million. The increase in average selling price per unit was due to a sales mix shift towards available higher priced units and the concerted effort to discount sales prices on older new units in the prior year period.
New vehicle gross profit decreased $4.9 million, or 16.4%, in the nine months ended September 30, 2025 compared to the same period in 2024 primarily due to the 47.6% decrease in new vehicle retail units sold. New vehicle gross margin increased 350 basis points primarily due to the higher average selling price of new vehicles.
Pre-Owned Vehicles Retail
Pre-owned vehicle retail revenue decreased $94.4 million, or 50.3%, in the nine months ended September 30, 2025 compared to the same period in 2024 primarily due to a 47.8% decrease in pre-owned retail units sold and a 4.7% decrease in average selling price per retail unit. The decrease in units sold was primarily due to the Divestitures, which represented a decrease in pre-owned vehicle retail revenue of $38.2 million, and dealerships closed during the last twelve months, which represented a decrease in pre-owned vehicle retail revenue of $10.0 million. Additionally, we restarted our consignment program in 2024 which shifted a portion of our gross pre-owned vehicle retail revenue to consignment vehicle revenue.
Pre-owned vehicle retail gross profit decreased $10.3 million, or 34.4%, in the nine months ended September 30, 2025 compared to the same period in 2024 primarily due to a 47.8% decrease in retail units sold and a 4.7% decrease in average selling price per unit, offset by a 25.7% increase in average gross profit per unit. The increase in gross profit margins was primarily due to the concerted effort to discount sales prices to move units in the prior year period.
Vehicle Wholesale
Vehicle wholesale revenue decreased $7.9 million, or 69.9%, in the nine months ended September 30, 2025 compared to the same period in 2024 primarily related to a strategic decision to right size our RV inventory during the prior year period.
Vehicle wholesale gross profit increased $2.3 million in the nine months ended September 30, 2025 compared to the same period in 2024 primarily related to a strategic decision to right size our RV inventory during the prior year period.
Consignment Vehicle
Consignment vehicle revenue increased $2.5 million, or 123.9%, in the nine months ended September 30, 2025 compared to the same period in 2024 primarily due to the consignment vehicle program starting in the prior year. We recognize consignment vehicle revenue on a net basis as an agent and not the gross amount collected from a customer. Consignment vehicle revenue in the nine months ended September 30, 2025 was composed of sales of $41.5 million less cost of consignment units of $37.1 million. Consignment vehicle revenue in the nine months ended September 30, 2024 was composed of sales of $13.0 million less cost of consignment units of $11.1 million.
Finance and Insurance
Finance and insurance ("F&I") revenue decreased $20.3 million, or 39.9%, in the nine months ended September 30, 2025 compared to the same period in 2024 primarily due to a decrease of 43.2% in total retail units sold.
Service, Body and Parts and Other
Our service, body and parts and other revenue decreased 23.6% and our gross profit decreased 23.8%during the nine months ended September 30, 2025compared to the same period in 2024 primarily due to the Divestitures, which represented a decrease of $10.4 million, and dealerships closed during the last twelve months, which represented a decrease in service, body and parts and other revenue of $1.5 million.
Depreciation and Amortization
| Nine Months Ended September 30, | Variance | ||||||||||||||||||||||
| ($ in thousands) | 2025 | 2024 | $ | % | |||||||||||||||||||
| Depreciation and amortization | $ | 11,880 | $ | 15,587 | $ | (3,707) | (23.8) | % | |||||||||||||||
The decrease in depreciation and amortization was primarily driven by the Divestitures mentioned above.
Selling, General and Administrative
| Nine Months Ended September 30, | Variance | ||||||||||||||||||||||
| ($ in thousands) | 2025 | 2024 | $ | % | |||||||||||||||||||
| SG&A expense | $ | 105,455 | $ | 146,698 | $ | (41,243) | (28.1) | % | |||||||||||||||
| SG&A as percentage of revenue | 26.5 | % | 20.6 | % | 590 | bps | |||||||||||||||||
The decrease in SG&A expense was primarily related to a decrease in employee related costs of $22.3 million, a decrease in marketing expenses of $10.2 million, and decreases in rent, information technology, and other miscellaneous expenses, all of which were impacted by the Divestitures. These decreases were partially offset by an increase in transaction costs. The increase in SG&A as a percentage of revenue was primarily driven by a decrease in revenue discussed above, an increase in transaction costs and the continuation of certain fixed costs.
Impairment Charges
| Nine Months Ended September 30, | Variance | ||||||||||||||||||||||
| ($ in thousands) | 2025 | 2024 | $ | % | |||||||||||||||||||
| Impairment charges | $ | 74,491 | $ | - | $ | 74,491 | NM | ||||||||||||||||
During the nine months ended September 30, 2025, we recorded non-cash impairment charges on indefinite-lived intangible assets of $30.1 million. The impairment charges were primarily driven by a decrease in revenue projections primarily resulting from the Asset Sales and Divestitures.
As of September 30, 2025, management determined that all of our inventories, certain real estate, property and equipment, and lease assets and liabilities met the held for sale criteria. We evaluated the disposal group to ensure net assets were recorded at the lower of their carrying value or fair value less costs to sell. The quantitative impairment test of the disposal group included a comparison of the estimated sales proceeds less cost to sell to the carrying value of the disposal group. As a result of this analysis, we recorded a loss on assets held for sale of $11.9 million during the three months ended September 30, 2025. Certain assets within the disposal group were previously presented as held for sale and were evaluated for impairment, which resulted in a loss on assets held for sale of $3.4 million during the three months ended June 30, 2025. Additionally, operating and finance right-of-use assets that are not contemplated to be assumed under the Asset Sales are expected to be abandoned. As a result, such assets were assessed for impairment, which resulted in non-cash impairment charges of $29.1 million during the nine months ended September 30, 2025.
Floor Plan Interest Expense
| Nine Months Ended September 30, | Variance | ||||||||||||||||||||||
| ($ in thousands) | 2025 | 2024 | $ | % | |||||||||||||||||||
| Floor plan interest expense | $ | 10,943 | $ | 19,745 | $ | (8,802) | (44.6) | % | |||||||||||||||
The decrease in floor plan interest expense was related to a decrease in floor plan notes payable due to the Divestitures and, to a lesser extent, a decrease in the average floor plan borrowing rate. The floor plan notes payable balances as of September 30, 2025 and 2024 were $184.0 million and $316.6 million, respectively.
Other Interest Expense
| Nine Months Ended September 30, | Variance | ||||||||||||||||||||||
| ($ in thousands) | 2025 | 2024 | $ | % | |||||||||||||||||||
| Other interest expense | $ | 16,292 | $ | 15,924 | $ | 368 | 2.3 | % | |||||||||||||||
The increase in other interest expense was primarily due to acceleration of unamortized debt discount and debt exit costs incurred during the nine months ended September 30, 2025 as a result of repayments on term loan and mortgage debt. These increases were partially offset by a decrease in the average term loan and mortgage debt balances.
Change in Fair Value of Warrant Liabilities
| Nine Months Ended September 30, | Variance | ||||||||||||||||||||||
| ($ in thousands) | 2025 | 2024 | $ | % | |||||||||||||||||||
| (Gain) loss on change in fair value of warrant | $ | (5,535) | $ | 799 | $ | (6,334) | (792.7) | % | |||||||||||||||
Change in fair value of warrant liabilities represented the mark-to-market fair value adjustments to the outstanding warrants issued in connection with our debt modification in May 2024. The fair value of the warrants fluctuated with changes in the value of our common stock.
Loss (Gain) on Sale of Businesses, Property and Equipment
| Nine Months Ended September 30, | Variance | ||||||||||||||||||||||
| ($ in thousands) | 2025 | 2024 | $ | % | |||||||||||||||||||
| Loss (gain) on sale of businesses, property and equipment | $ | 1,598 | $ | (1,044) | $ | 2,642 | (253.1) | % | |||||||||||||||
During the nine months ended September 30, 2025, we sold the following ten dealerships: Elkhart, Indiana; Surprise, Arizona; Murfreesboro, Tennessee; Sturtevant, Wisconsin; Woodland, Washington; Fort Pierce, Florida; Longmont, Colorado; Mesa, Arizona; Las Vegas, Nevada; and Claremore, Oklahoma. We received net proceeds of $186.6 million and recorded a net loss of $1.6 million from the sale of these dealerships during the nine months ended September 30, 2025.
During the second quarter of 2024, we sold certain real estate near the previously closed Burns Harbor, Indiana dealership for net proceeds of $3.0 million. We recorded a gain on sale of $1.0 million related to this sale during the nine months ended September 30, 2024.
Refer to Note 5 - Dispositions and Assets Held for Salefor further information.
Income Tax Expense
| Nine Months Ended September 30, | Variance | ||||||||||||||||||||||
| ($ in thousands) | 2025 | 2024 | $ | % | |||||||||||||||||||
| Income tax (benefit) expense | $ | (1,014) | $ | 16,640 | $ | (17,654) | (106.1) | % | |||||||||||||||
| Effective tax rate | 0.9 | % | (24.8) | % | |||||||||||||||||||
The effective tax rate for the nine months ended September 30, 2025 was impacted by changes in the valuation allowance and the effects of state income taxes and various permanent differences. Currently, we are unable to recognize federal tax benefits from loss before income taxes due to our valuation allowance on our net operating loss, which was initially established in the second quarter of 2024. The change in our effective tax rate for the nine months ended September 30, 2025 compared to the same period in 2024 was primarily the result of continued application of our valuation allowance.
Non-GAAP Reconciliations
EBITDA and Adjusted EBITDA
EBITDA, which is a non-GAAP financial measure, is defined as net income (loss) excluding interest expense, income tax expense (benefit) and depreciation and amortization expense. Adjusted EBITDA, which is a non-GAAP financial measure, is further adjusted to include floor plan interest expense and excludes stock-based compensation expense; LIFO adjustment; impairment charges; (gain) loss on sale of businesses, property and equipment; and change in fair value of warrant liabilities.
EBITDA and Adjusted EBITDA are not measures of financial performance under GAAP and should not be considered in isolation or as an alternative to net income (loss), cash flows from operating activities or any other measure determined in accordance with GAAP. The items excluded to calculate EBITDA and Adjusted EBITDA are significant components in understanding and assessing the Company's results of operations. The Company's EBITDA and Adjusted EBITDA may not be comparable to a similarly titled measure of another company because other entities may not calculate EBITDA and Adjusted EBITDA in the same manner.
The Company believes Adjusted EBITDA is an important measure of operating performance because it allows management, investors and others to evaluate and compare the Company's core operating results from period to period by removing (i) the impact of the Company's capital structure (interest expense from outstanding debt); (ii) tax consequences; (iii) asset base (depreciation, amortization and LIFO adjustments); (iv) the non-cash charges from asset impairments, stock-based compensation expense and change in fair value of warrant liabilities and (v) gains or losses on the sale of businesses, property and equipment. The Company uses Adjusted EBITDA internally to monitor operating results and to evaluate the performance of its business.
The following table reconciles net loss to EBITDA and Adjusted EBITDA:
|
Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||||||||||||||||||||
| (In thousands) | 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||||
| Net loss | $ | (82,381) | $ | (17,665) | $ | (116,503) | $ | (83,866) | ||||||||||||||||||
| Interest expense, net | 5,809 | 11,925 | 27,235 | 35,669 | ||||||||||||||||||||||
| Depreciation and amortization | 3,898 | 5,170 | 11,880 | 15,587 | ||||||||||||||||||||||
| Income tax (benefit) expense | (1,006) | (381) | (1,014) | 16,640 | ||||||||||||||||||||||
| EBITDA | (73,680) | (951) | (78,402) | (15,970) | ||||||||||||||||||||||
| Floor plan interest expense | (3,084) | (6,361) | (10,943) | (19,745) | ||||||||||||||||||||||
| LIFO adjustment | 4,290 | (350) | (2,163) | 91 | ||||||||||||||||||||||
| (Gain) loss on sale of businesses, property and equipment | (813) | - | 1,598 | (1,044) | ||||||||||||||||||||||
| Impairment charges | 63,915 | - | 74,491 | - | ||||||||||||||||||||||
| (Gain) loss on change in fair value of warrant liabilities | (846) | 462 | (5,535) | 799 | ||||||||||||||||||||||
| Stock-based compensation expense | 130 | 391 | 601 | 1,495 | ||||||||||||||||||||||
| Adjusted EBITDA | $ | (10,088) | $ | (6,809) | $ | (20,353) | $ | (34,374) | ||||||||||||||||||
Adjusted Net Cash (Used In) Provided By Operating Activities
In accordance with U.S. GAAP, we report floor plan notes payable within cash flows from financing activities in the statements of cash flows. However, management believes that presenting activities relating to floor plan notes payable within cash flows from operating activities is useful in evaluating the Company's cash flows from operating activities. The Company finances substantially all of our new vehicle inventory and certain of our used vehicle inventory through revolving floor plan arrangements. As a result, we use the non-GAAP measure adjusted net cash (used in) provided by operating activities to further evaluate our cash flows. We believe that adjusted net cash (used in) provided by operating activities eliminates excess volatility in our operating cash flows prepared in accordance with U.S. GAAP.
Adjusted net cash (used in) provided by operating activities, a non-GAAP measure, is defined as net cash provided by (used in) operating activities plus net (repayments) borrowings on floor plan notes payable less borrowings on floor plan notes payable assumed in acquisitions.
Adjusted net cash (used in) provided by operating activities is not a measure of financial liquidity measure under U.S. GAAP and should not be considered in isolation or as an alternative to cash flows from operating activities or any other measure determined in accordance with U.S. GAAP. The items included to calculate adjusted net cash (used in) provided by operating activities are significant components in understanding and assessing the Company's cash flows from operating and financing activities. The Company's adjusted net cash (used in) provided by operating activities may not be comparable to a similarly titled measure of another company because other entities may not calculate adjusted cash flows from operating activities in the same manner.
See Liquidity and Capital Resources below for a reconciliation of net cash provided by operating activities to adjusted net cash (used in) provided by operating activities.
Liquidity and Capital Resources
Our principal immediate need for liquidity and capital resources is for working capital. For the nine month period ending September 30, 2025, we have satisfied our liquidity needs through cash flows from operations, borrowings under our credit facilities, waivers or other modifications concerning our existing debt obligations and asset sales. As previously disclosed, we have completed an active, lengthy and thorough evaluation and negotiation of strategic alternatives reasonably available to the Company to address our liquidity needs within the constraints imposed on the Company, and the Company is pursuing the Asset Sales as the available option most likely to maximize value for our residual claimants as determined by our Board based on all relevant factors available to them in their business judgment. As previously disclosed, we anticipate that, following the closing of the Asset Sales, we will not have any remaining operations and will wind up our assets, liabilities and affairs under the Plan of Dissolution. We anticipate the proceeds from the Asset Sales will not be available in sufficient amounts to repay our secured and unsecured obligations in full and we accordingly anticipate that we will not be able to provide a return to our stockholders or sustain our operations as a going concern.
Cash Flow Summary
| Nine Months Ended September 30, | |||||||||||
| (In thousands) | 2025 | 2024 | |||||||||
| Net cash (used in) provided by operating activities | $ | (16,030) | $ | 98,567 | |||||||
| Net cash provided by (used in) investing activities | 186,473 | (16,444) | |||||||||
| Net cash used in financing activities | (185,189) | (126,672) | |||||||||
| Net decrease in cash and restricted cash | $ | (14,746) | $ | (44,549) | |||||||
Operating Activities
Inventories are the most significant component of our cash flow from operations. Borrowings and repayments of our vehicle inventory floor plan loans are presented as financing activities.
To better understand the impact of these items, a reconciliation of adjusted net cash provided by operating activities, a non-GAAP financial measure to net cash provided by operating activities, is presented below:
| Nine Months Ended September 30, | Variance | ||||||||||||||||
| (In thousands) | 2025 | 2024 | $ | ||||||||||||||
| Net cash provided by operating activities, as reported | $ | (16,030) | $ | 98,567 | $ | (114,597) | |||||||||||
| Net repayments on floor plan notes payable | (122,272) | (129,169) | 6,897 | ||||||||||||||
| Adjusted net cash used in operating activities | $ | (138,302) | $ | (30,602) | $ | (107,700) | |||||||||||
The increase in adjusted net cash used in operating activities was primarily driven by repayments of 92.4 million of floor plan notes payable and paid-in-kind interest of $6.7 million with net proceeds received from the Divestitures.
Investing Activities
During the ninemonths ended September 30, 2025, we received $186.6 million net proceeds from the Divestitures. Such proceeds from the Divestitures were used for repayments of $92.4 million of floor plan notes payable, repayments of $57.8 million of term loan and mortgage debt, paid-in-kind interest of $6.7 million and working capital and general corporate purposes. Additionally, capital expenditures decreased by $19.3 million during the ninemonthsended September 30, 2025 compared to the same period in 2024.
Financing Activities
During the nine monthsended September 30, 2025, significant financing activities included $122.3 million of net repayments under our Floor Plan Credit Facility (as defined below), repayments under our Revolving Credit Facility (as defined below) of $2.7 million, and repayments on long-term debt and finance liabilities of $60.2 million. Of these repayments of debt, net proceeds from the Divestitures were used to repay $92.4 million of floor plan notes payable and $57.8 million of term loan and mortgage debt.
Credit Facilities
As of September 30, 2025, the Credit Agreement provided us with the $200.0 million Floor Plan Credit Facility and zero remaining availability under the Revolving Credit Facility, which mature February 21, 2027. As of September 30, 2025,
the outstanding principal balance of the Revolving Credit Facility was $27.7 million, which is classified in our balance sheets as a current liability.
On July 31, 2025, we entered into the July 2025 Waiver related to the Credit Agreement. The July 2025 Waiver granted us temporary waivers of potential defaults or events of default resulting from the following: (a) the failure to make certain vehicle curtailment payments due on or about August 1, 2025; (b) the failure to make certain interest payments on July 31 and August 1, 2025; (c) the failure to repay certain loans outstanding under the Credit Agreement with the Specified Claremore Real Estate Net Proceeds; (d) the inaccuracy of the Company's solvency representation; and (e) certain cross-defaults under the Company's mortgage with First Horizon Bank relating to the foregoing. The foregoing waivers apply for the July 2025 Waiver Period. At the end of the July 2025 Waiver Period, the waivers described above would cease to be of any force or effect.
Pursuant to the July 2025 Waiver, we deposited the Specified Claremore Real Estate Net Proceeds into the Cash Collateral Reserve, and the Administrative Agent and the Lenders could agree in their sole discretion to release funds from the Cash Collateral Reserve to the Company upon its written request.
Among other covenants, the July 2025 Waiver required us to (i) by August 15, 2025, negotiate with the Administrative Agent to assist the Administrative Agent in developing and finalizing contingency procedures for our business and assets and deliver a contingency budget for the business and (ii) by August 22, 2025, either (x) deliver one or more indications of interest with respect to a transaction acceptable to Administrative Agent and the Lenders pursuant to which we would raise new capital through one or more asset sales and/or debt or equity capital raises or (y) deliver to the Administrative Agent drafts of any initial filings we intended to make in connection with any potential action under applicable debtor relief laws.
The July 2025 Waiver also permanently decreased the Lenders' aggregate commitments in respect of the Floor Plan Credit Facility from $245.0 million to $225.0 million.
On August 29, 2025, the Company entered into the July Waiver Amendment which amended the July 2025 Waiver. The July Waiver Amendment (i) added as temporarily waived potential defaults or events of default the failure of the Company to make certain additional vehicle curtailment payments and interest payments when due and (ii) extended the date by which the Company could provide one or more indications of interest with respect to a transaction acceptable to the Administrative Agent and the Lenders or deliver any initial filings we intended to make in connection with any potential action under applicable debtor relief laws, from August 22, 2025, to September 5, 2025.
On September 12, 2025, the Company entered into the September 2025 Waiver, which amended and restated the July 2025 Waiver. The September 2025 Waiver grants the Company temporary waivers of the Specified Defaults resulting from the following: (a) the failure to make certain vehicle curtailment payments due and owing during the months ended August 31, 2025, September 30, 2025, October 31, 2025 and November 30, 2025; (b) the failure to make certain interest payments during the months ended August 31, 2025, September 30, 2025, October 31, 2025 and November 30, 2025; (c) the failure to repay certain revolving loans outstanding under the Credit Agreement with the Specified Claremore Real Estate Net Proceeds; (d) the failure to comply with the minimum liquidity financial covenant during the September 2025 Waiver Period (defined below); (e) the failure to repay certain revolving loans outstanding under the Credit Agreement as a result of the Lenders' revolving credit exposure exceeding the line cap during the September 2025 Waiver Period; (f) the failure to comply with the covenant prohibiting the aggregate value of all consigned vehicles to exceed 10% of the aggregate principal balance of the Floor Plan Credit Facility prior to September 26, 2025; (g) the inaccuracy of the Company's solvency representation during the September 2025 Waiver Period; and (e) certain cross-defaults under the First Horizon Mortgage relating to the foregoing. The foregoing waivers apply for the September 2025 Waiver Period. At the end of the September 2025 Waiver Period, the waivers described above will cease to be of any force or effect.
The September 2025 Waiver provides that, during the September 2025 Waiver Period, the Administrative Agent shall release funds from the Cash Collateral Reserve to the Company upon its written request, provided that the following conditions are met: (a) the Company and the other loan parties project liquidity to be less than the Minimum Liquidity Amount at any time during the week following the request; (b) the amount of the release request does not exceed the amount needed to cause liquidity as of the end of the week in which such release occurs to equal the Minimum Liquidity Amount; (c) only one such request may be submitted per week; (d) such release request is submitted no later than the Friday immediately preceding the week in which the release is requested and specifies the requested release date, which shall be no earlier than Tuesday of such week; and (e) no default or event of default (except those temporarily waived under the September 2025 Waiver) is occurring. At the end of the September 2025 Waiver Period, funds in the Cash Collateral Reserve may be applied to obligations outstanding under the Credit Agreement. The Cash Collateral Reserve
balance as of September 30, 2025 was $0.5 million, which is classified in our balance sheets as restricted cash. The Cash Collateral Reserve balance was fully depleted on October 10, 2025.
Among other covenants, the September 2025 Waiver required the Company to (a) between September 15, 2025 and October 5, 2025, and continuing as of the end of each week thereafter (for the cumulative period of time beginning with September 15, 2025), not to permit certain disbursements and payments to be greater than 110% of the Budget, tested pursuant to the variance analysis delivered in connection with the Credit Agreement; (b) comply with the following milestones: (i) on or before October 6, 2025, execute and deliver the definitive Asset Purchase Agreement, and (ii) on or before the end of the September 2025 Waiver Period, complete the Asset Sales and repay the outstanding obligations under the Credit Agreement in full with the proceeds therefrom; and (c) refrain from (i) engaging in transactions, including investments or dispositions, or making any payments other than in the ordinary course of business consistent with past practice or the Asset Sales, and (ii) except for amounts included in the Budget, grant, agree to grant or make any payment on account of any additional or increase in wages, salary, bonus, commissions, benefits, pension, severance or other compensation of any employee, officer or director.
The termination of the letter of intent executed in connection with the Asset Sales or the Asset Purchase Agreement constitutes an immediate event of default under the Credit Agreement.
Under the September 2025 Waiver, we agreed to pay to the Administrative Agent, for the ratable benefit of the Lenders, (a) a fee equal to 0.25% of the Outstanding Amount, payable on the date of the September 2025 Waiver, and (b) a fee equal to 0.75% of the Outstanding Amount, payable on the earlier of (i) the date all outstanding loans become due under the Credit Agreement, (ii) the consummation of the Asset Sales and (iii) the end of the September 2025 Waiver Period.
The September 2025 Waiver also permanently decreased the Lenders' aggregate commitments in respect of the Floor Plan Credit Facility, effective as of September 12, 2025, from $225.0 million to $200.0 million. In addition, with respect to any floor plan unit sold in the Asset Sales, the Lenders' aggregate commitments in respect of the Floor Plan Credit Facility will be automatically and permanently reduced, on a dollar-for-dollar basis, by the principal balance of the Floor Plan Credit Facility (if any) outstanding with respect to such floor plan unit at the time it is sold. See Note 7 - Debt to our financial statements for additional information.
After September 30, 2025, we entered into a First Amendment to the September 2025 Waiver, as further described in Note 15 - Subsequent Eventsto our financial statements.
As of September 30, 2025, the Floor Plan Credit Facility bears interest at: (a) one-month term SOFR or daily SOFR plus an applicable margin of 2.55% or (b) the Base Rate (as defined in the Credit Agreement) plus a margin of 1.55%. The Floor Plan Credit Facility is also subject to an annual unused commitment fee at 0.15% of the average daily unused portion of the Floor Plan Credit Facility.
As of September 30, 2025, the Revolving Credit Facility bears interest at: (a) one-month term SOFR or daily SOFR plus an applicable margin of 3.40% or (b) the Base Rate plus a margin of 2.40%.
As of September 30, 2025, there was $184.0 million outstanding on the Floor Plan Credit Facility at an interest rate of 6.93% and $27.7 million outstanding on the Revolving Credit Facility at an interest rate of 7.83%.
Borrowings under the Credit Agreement are secured by a first priority lien on substantially all of our assets, including substantially all of our real estate.
The Credit Agreement contains certain reporting and compliance-related covenants and negative covenants, among other things, related to borrowing and events of default. It also includes certain non-financial covenants, including covenants limiting our ability to dispose of assets, undergo a change in control, merge with, acquire stock, or make investments in other companies, in each case subject to certain exceptions. Upon the occurrence of an event of default, in addition to the Lenders being able to declare amounts outstanding under the Credit Facilities due and payable or foreclose on the collateral, the Lenders can elect to increase the interest rate by 2.0% per annum during the period of default. The Credit Agreement contains a cross-default provision applicable to the First Horizon Mortgage.
Other Long-Term Debt
Mortgages
In July 2023, we entered into two mortgages for total proceeds of $29.3 million secured by certain real estate assets at our Murfreesboro and Knoxville, Tennessee locations. The loans bear interest at 7.10% and 6.85% per annum, respectively, and mature in July 2033. On February 26, 2025, we sold our Murfreesboro, Tennessee dealership and related real property in one of the Camping World Sales and repaid the remaining outstanding principal balance of the Murfreesboro mortgage, which was approximately $15.5 million. As of September 30, 2025, there was $12.5 million outstanding related to the First Horizon Mortgage, which is classified in our balance sheets as a current liability.
Future Contractual Maturities
Future contractual maturities of total debt are as follows:
| (In thousands) | |||||
| Remainder of 2025 | $ | 28,017 | |||
| 2026 | 491 | ||||
| 2027 | 406 | ||||
| 2028 | 435 | ||||
| 2029 | 465 | ||||
| Thereafter | 10,430 | ||||
| Total | $ | 40,244 | |||
The above schedule reflects contractual maturities, but for financial reporting, the Revolving Credit Facility and mortgage debt have been classified as current liabilities because of certain waivers and cross-default provisions applicable to our mortgage debt.
Going Concern
The Company does not expect to continue as a going concern following the completion of the Asset Sales. The Company incurred a net loss of $116.5 million during the nine months ended September 30, 2025 and had an accumulated deficit of $231.3 million. As of September 30, 2025, the Company had cash and cash equivalents of $9.5 million, debt obligations of $40.2 million related to mortgages, term loans and the Revolving Credit Facility, floor plan notes payable of $184.0 million and operating and finance lease obligations of $34.0 million. Under the Third Amendment, we permanently eliminated our ability to borrow new loans or swingline loans or to request the issuance of letters of credit under the Revolving Credit Facility formerly available to us thereunder. As a result, the only credit facility currently available to us under the Credit Agreement is the Floor Plan Credit Facility, and currently we do not have access to a revolving credit facility that we can use for general working capital purposes.
During the third quarter of 2025, the Company entered into additional waivers and consents that provided temporary waivers of certain potential defaults or events of default that occurred or may have occurred under the Credit Agreement and established new requirements related to disbursements and the deposit of proceeds from certain asset sales into restricted or blocked accounts. These waivers also reduced the Company's overall borrowing capacity under the Floor Plan Credit Facility. Although these arrangements temporarily extend covenant relief, they also impose significant liquidity constraints. See Note 7 - Debt to our financial statements for additional information.
On October 6, 2025, the Company entered into the Asset Purchase Agreement for the Asset Sales. If the Asset Sales close, substantially all of the proceeds are expected to be used to repay the outstanding obligations under the Credit Agreement (including the Floor Plan Credit Facility and the Revolving Credit Facility) and the First Horizon Mortgage in accordance with their senior priority and pay related costs and expenses. Completion of the Asset Sales is currently expected to occur in a series of site-by-site closings between November 17, 2025 and November 26, 2025, although Lazydays cannot assure completion of any closing by any particular date, if at all. The outside date under the Asset Purchase Agreement is December 1, 2025, after which any non-breaching party may terminate the Asset Purchase Agreement. The termination of the Asset Purchase Agreement would constitute an immediate event of default under the Credit Agreement. See Note 15 - Subsequent Eventsto our financial statements for further information.
We have evaluated the significance of the uncertainty regarding our financial condition in relation to our ability to meet our obligations, which has raised substantial doubt about the Company's ability to continue as a going concern. If the Asset
Sales are not completed for any reason, we do not anticipate we would be able to meet future our liquidity needs to operate in the near term and would dissolve and wind up our affairs under the Plan of Dissolution (absent an unforeseen and unlikely ability to generate positive cash inflows from operations and/or secure sources of outside capital). As a result, there is substantial doubt about our ability to continue as a going concern.
Tax Legislation
On July 4, 2025, federal legislation commonly referred to as the One Big Beautiful Bill Act (the "OBBBA") was enacted, resulting in changes to U.S. federal income tax law. The OBBBA includes significant provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, modifications to the international tax framework and the restoration of favorable tax treatment for certain business provisions. The legislation has multiple effective dates, with certain provisions effective in 2025 and others implemented in later years. We are currently assessing its impact on our financial statements.
Industry Trends
We monitor industry conditions in the RV market using a number of resources including its own performance tracking and modeling. We also consider monthly wholesale shipment data as reported by the RV Industry Association ("RVIA"), which is typically issued on a one-month lag and represents manufacturers' North American RV production and delivery to dealers. In April, the RVIA issued an updated forecast for calendar year 2025 wholesale unit shipments. The forecast projects 2025 RV wholesale shipments to range between 320,400 to 353,500 units with a median of 333,700 units. We believe that retail consumers remain interested in the RV lifestyle. While we anticipate that near-term demand will be influenced by many factors, including consumer confidence, interest rates and the level of consumer spending on discretionary products, we believe future retail demand for RVs over the longer term will exceed historical, pre-pandemic levels as consumers continue to value the benefits offered by the RV lifestyle.
Inflation
During the nine months ended September 30, 2025, we experienced the impact of inflation on our operations, particularly with the increased cost of new vehicles. The price risk relating to new vehicles includes the cost from the manufacturer, as well as freight and logistics costs. Each of these costs have been impacted, to differing degrees, by factors such as high demand for product, supply chain disruptions, labor shortages, and increased fuel costs.
Inflationary factors, such as increases to our product and overhead costs, may adversely affect our operating results if the selling prices of our products and services do not increase proportionately with those increased costs or if demand for our products and services declines as a result of price increases to address inflationary costs. We finance substantially all of our new vehicle inventory and certain of our used vehicle inventory through revolving floor plan arrangements. Inflationary increases in the costs of new and/or used vehicles financed through the revolving floor plan arrangement result in an increase in the outstanding principal balance of the revolving floor plan arrangement. Additionally, our leases require us to pay taxes, maintenance, repairs, insurance and utilities, all of which are generally subject to inflationary increases. Finally, our credit agreements include interest rates that vary based on various benchmarks. Such rates have historically increased during periods of increasing inflation.
Cyclicality
Unit sales of RV vehicles historically have been cyclical, fluctuating with general economic cycles. During economic downturns the RV retailing industry tends to experience similar periods of decline and recession as the general economy. We believe that the industry is influenced by general economic conditions and particularly by consumer confidence, the level of personal discretionary spending, fuel prices, interest rates and credit availability.
Seasonality and Effects of Weather
Our operations generally experience modestly higher volumes of vehicle sales in the first half of each year due in part to consumer buying trends and the hospitable warm climate during the winter months at our Florida and Arizona locations. In addition, the northern locations in Colorado, Tennessee, Minnesota, and Oregon generally experience modestly higher vehicle sales during the spring months.
Our largest RV dealership is located near Tampa, Florida, which is in close proximity to the Gulf of America. A severe weather event, such as a hurricane, could cause severe damage to property and inventory and decrease the traffic to our
dealerships. Although we believe that we have adequate insurance coverage, if we were to experience a catastrophic loss, we may exceed our policy limits and/or may have difficulty obtaining similar insurance coverage in the future.
Critical Accounting Policies and Estimates
There have been no material changes in the critical accounting policies and use of estimates described in our 2024 Form 10-K.
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