DEBT

12 Months Ended

Dec. 31, 2023

Debt Disclosure [Abstract]

DEBT

DEBT

M&T Financing Agreement

On February 21, 2023, we amended our $369 million Senior Secured Credit Facility with M&T Bank.

The material provisions of the amendment were to (i) increase the capacity under the Floor Plan Line of Credit to up to $525 million from $327 million and increase the capacity under the Revolving Credit Facility to up to $50 million from $25 million; (ii) remove the mortgage loan facility (“Mortgage Loan Facility”) and M&T term loan facility (the “M&T Term Loan Facility”); (iii) extend the term of the M&T floor plan line of credit (the “Floor Plan Line of Credit”) and the revolving credit facility (the “Revolving Credit Facility”) to February 21, 2027; (iv) lower interest rates on the Floor Plan Line of Credit and the Revolving Credit Facility; and (v) remove certain guarantors.

In the first quarter of 2023, at the time of the amendment, we paid off the $5.4 million outstanding on the Mortgage Loan Facility and the $6.7 million outstanding on the Term Loan Facility.

At December 31, 2023, there was $446.8 million outstanding on the Floor Plan Line of Credit at an interest rate of 7.5% and $49.5 million outstanding on the Revolving Credit Facility at an interest rate of 8.35%. We were not in compliance with our financial and restrictive covenants at December 31, 2023 as we exceed our maximum total leverage ratio of 3.00, but received a waiver from M&T bank through the second quarter of 2024, and received modified covenants through the fourth quarter of 2024.

The Floor Plan Line of Credit bears interest at: (a) 30-day SOFR plus an applicable margin of 1.90% to 2.05% based on the total net leverage ratio (as defined in the new M&T Facility) or (b) the Base Rate plus a margin of 0.90% to 1.05% based on the total net leverage ratio (as defined in the new M&T Facility). Base Rate means, for any day, the fluctuating rate per annum equal to the highest of: (a) the Prime Rate for such day, (b) the Federal Funds Rate in effect on such day plus 50 Basis Points, and (c) the one-month Adjusted Term SOFR Rate, determined on a daily basis, plus 100 Basis Points. The Floor Plan Line of Credit is also subject to an annual unused commitment fee at 0.15% of the average daily unused portion of the Floor Plan.

The M&T Revolving Credit facility bears interest at: (a) 30-day SOFR plus an applicable margin of 2.15% to 2.90% based on the total net leverage ratio (as defined in the new M&T Facility) or (b) the Base Rate plus a margin of 1.15% to 1.90% based on the total net leverage ratio (as defined in the new M&T Facility). Base Rate means, for any day, the fluctuating rate per annum equal to the highest of: (a) the Prime Rate for such day, (b) the Federal Funds Rate in effect on such day plus 50 Basis Points, and (c) the one-month Adjusted Term SOFR Rate, determined on a daily basis, plus 100 Basis Points.

The Revolving Credit facility is also subject to a quarterly unused commitment fee at 0.15% of the average daily unused portion of the Credit facility.

The M&T Floor Plan Line of Credit consisted of the following:

	As of December 31,
(In thousands)	2023		2022
Floor plan notes payable, gross	$	447,647	$	349,117
Debt discount	(864)		(382)
Floor plan notes payable, net of debt discount	$	446,783	$	348,735

Borrowings under M&T Financing Agreement are secured by a first priority lien on substantially all of our assets.

On March 8, 2024, we entered into the First Amendment to the Second Amended and Restated Credit Agreement and Consent with M&T to waive and modify certain covenants. This included waiving the net leverage ratio from the fourth quarter of 2023 through the second quarter of 2024, the current ratio for the fourth quarter of 2023, and the fixed charge coverage ratio for the first and second quarters of 2024. Additionally, an additional tier was added to the definition of applicable margin of the M&T credit facilities, setting forth the applicable interest rates corresponding to a total net leverage ratio of 3.00 ≤ X. This new tier is applicable as of March 8, 2024.

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 locations. The loans bear interest between 6.85% and 7.10% per annum and mature in July 2033.

Coliseum Term Loan

On December 29, 2023, we entered into a $35 million term loan (the "Loan") with the Lender, with a maturity date of December 29, 2026. Certain funds and accounts managed by Coliseum currently hold 57% of LazyDays common stock (calculated as if the preferred stock has been converted into common stock) as of December 31, 2023 and is therefore considered a related party. The Loan bears interest at a rate of 12% per annum, payable monthly in cash on the outstanding loan balance. For any quarterly period during the Loan term, we have the option at the beginning of each quarter to make pay-in-kind elections, whereby the entire outstanding balance would be charged interest at 14% per annum and interest amounts will be added to the outstanding principal. The Loan is secured by certain of our assets. Issuance costs of $2.0 million were recorded as debt discount and are being amortized over the term of the Loan to interest expense using the effective interest method. The Loan is carried at the outstanding principal balance, less debt issuance costs.

Under the terms of the Loan, for any repayments and prepayments that occur prior to January 1, 2025, we will owe a prepayment penalty of 1% on the outstanding principal balance being repaid and a make whole premium equal to the remaining interest owed on such balance repaid from date of repayment through January 1, 2025. For repayments and prepayments that occur after January 1, 2025 through maturity, we will owe a prepayment penalty of 2% on the outstanding principal balance being repaid.

The Loan contains certain reporting and compliance-related covenants. The Loan contains negative covenants, among other things, related to borrowing and events of default. It also includes certain non-financial covenants and 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 lender being able to declare amounts outstanding under the Loan due and payable or foreclose on the collateral, the lender can elect to increase the interest rate by 7% per annum during the period of default. In addition, the Loan contains a cross default with M&T Bank. As of December 31, 2023, we were not in compliance with all of the covenants with M&T Bank as we exceed our max leverage covenant, however the cross default was waived for the period ended December 31, 2023.

Summary

Long-term debt was as follows:

	As of December 31, 2023						As of December 31, 2022
(In thousands)	Gross Principal Amount		Debt Discount		Total Debt, Net of Debt Discount		Gross Principal Amount		Debt Discount		Total Debt, Net of Debt Discount
Total long-term debt	$	64,870	$	(2,300)	$	62,570	$	13,787	$	(49)	$	13,738
Less: current portion	1,141		—		1,141		3,607		—		3,607
Long-term debt, non-current	$	63,729	$	(2,300)	$	61,429	$	10,180	$	(49)	$	10,131

Future maturities of long-term debt are as follows:

(In thousands)
2024	$	1,141
2025	1,205
2026	35,826
2027	886
2028	950
Thereafter	24,862
Total	$	64,870