UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-K

ý ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

for the fiscal year ended December 31, 2004

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

for the transition period from to .

COMMISSION FILE NUMBER: 333-118185

LAZY DAYS’ R.V. CENTER, INC.

(Exact name of registrant as specified in its charter)

Florida		59-1764794
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification Nos.)

6130 Lazy Days Boulevard
Seffner, Florida		33584-2968
(Address of principal executive offices)		(Zip Code)

(800) 626-7800
(Registrant’s telephone number, including area code)

Securities Registered Pursuant to Section 12(b) of the Act:
None.

Securities Registered Pursuant to Section 12(g) of the Act:
None.

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that it was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý No o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of the registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ý

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Act). Yes o No ý

As of March 31, 2005, the registrant had 100 shares of common stock outstanding.

TABLE OF CONTENTS

PART I

	Item 1.	Business	4
	Item 2.	Properties	15
	Item 3.	Legal Proceedings	15
	Item 4.	Submission of Matters to a Vote of Security Holders	15

PART II

	Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	15
	Item 6.	Selected Financial Data	16
	Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	17
	Item 7A.	Quantitative and Qualitative Disclosure About Market Risk	26
	Item 8.	Financial Statements and Supplementary Data	27
	Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	53
	Item 9A.	Controls and Procedures	53
	Item 9B.	Other Information	53

PART III

	Item 10.	Directors and Executive Officers of the Registrant	54
	Item 11.	Executive Compensation	57
	Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	59
	Item 13.	Certain Relationships and Related Transactions	60
	Item 14.	Principal Accountant Fees and Services	65

PART IV

	Item 15.	Exhibits and Financial Statement Schedules	65

You should carefully consider the risk factors described below, as well as the other information included or incorporated by reference in this Annual Report on Form 10-K prior to making a decision to invest in our securities. The risks and uncertainties described below are not the only ones facing our company. Additional risks and uncertainties not presently known or that we currently believe to be less significant may also adversely affect us. Unless the context requires otherwise, references to the “Company,” “we,” “us,” “our” and “Lazydays” refer specifically to Lazy Days’ R.V. Center, Inc. and references to “Holdings” refer to LD Holdings, Inc., our parent.

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

Certain information set forth in this report contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These statements relate to analyses and other information that are based on forecasts of future results and estimates of amounts not yet determinable. These statements also relate to our future prospects, developments and business strategies. The statements contained in this report that are not statements of historical fact may include forward-looking statements that involve a number of risks and uncertainties.

We have used the words “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “predict,” “project,” “will” and similar terms and phrases, including references to assumptions, in this report to identify forward-looking statements. These forward-looking statements are made based on our management’s expectations and beliefs concerning future events affecting us and are subject to uncertainties and factors relating to our operations and business environment, all of which are difficult to predict and many of which are beyond our control, that could cause our actual results to differ materially from those matters expressed in or implied by these forward-looking statements. Our actual results could differ materially from those anticipated by such forward-looking statements as a result of factors summarized below and at greater length in the “Risk Factors” described in our Registraton Statement filed on Form S-4 dated August 12, 2004, as amended:

• changes from anticipated levels of sales, whether due to future national or regional economic and competitive conditions, customer acceptance of existing and new products, consumer confidence or otherwise;

• significant indebtedness that may limit our financial and operational flexibility;

• increased interest rates which increase the cost of financing new vehicle purchases;

• higher fuel costs which may deter purchases of recreational vehicles;

• actions of current or new competitors that increase competition with respect to prices and services;

• increased advertising costs associated with promotional efforts;

• pending or new litigation or governmental regulations;

• severe weather events and other natural disasters which could impact our single-site location near Tampa, Florida;

• other uncertainties which are difficult to predict or beyond our control; and

• the risk that we incorrectly analyze these risks and forces, or that the strategies we develop to address them could be unsuccessful.

All forward-looking statements, including without limitation, management’s examination of historical operating trends, are based upon our current expectations and various assumptions. Our expectations, beliefs and projections are expressed in good faith and we believe there is a reasonable basis for them, but there can be no assurance that management’s expectations, beliefs and projections will result or be achieved. All forward-looking statements apply only as of the date made. Unless required by law, we undertake no obligation to update or revise forward-looking statements to reflect events or circumstances after the date made or to reflect the occurrence of unanticipated events.

PART I

ITEM 1. BUSINESS

Our Company

We are the largest single site recreational vehicle (“RV”) retailer in the world. In 2004, we sold 7,908 new and pre-owned RVs in the retail market, including Class A motorhomes, Class C motorhomes, conventional trailers and fifth-wheel trailers. Class A motorhomes are the highest priced and fastest growing product segment of the RV industry and represented 85% of our 2004 new RV revenues, which was far in excess of the industry average of approximately 50% in 2003. We also generate revenue from commissions earned on vehicle financing and insurance products we sell on behalf of third-party providers, from the service, maintenance and repair of RVs, from daily fees paid by customers who utilize our RallyPark campground facilities and rental revenue from our 2004 rental program. We operate on a 126-acre site near Tampa, Florida that attracts more than 250,000 visitors annually. We generated 2004 revenues of $799.7 million.

One of our primary strategies is to create “Customers for Life” by offering a unique purchasing experience that combines the largest single site RV inventory in the world, our one of a kind scenic facility with multiple amenities and our focused, process oriented approach to servicing the customer. Building a welcoming atmosphere that caters to the RV enthusiast community is an intangible element critical to our success, and our philosophy is thoroughly ingrained in and continually reinforced throughout our corporate culture at every level. Our unique customer focused business model has resulted in a loyal, stable and growing customer base and an unrivaled reputation within the RV community. Our ability to generate a majority of our annual unit sales from repeat business and word-of-mouth referrals is testimony to the success of this approach. We generated 25% and 28% of our 2004 unit sales from repeat and referral customers, respectively.

To enhance our customers’ RV experience, we have developed our facilities with their needs in mind and as a result our site has become a destination location for RV owners throughout the United States, Mexico and Canada. Our facilities feature a number of unique attractions including a 1,200-site outdoor showspace of new and pre-owned RVs, a 230-bay RV servicing facility with a 6,600 sq. ft. Customer Service Pavilion that includes a professional full-time concierge station, complimentary Starbucks coffee concession, luxurious seating areas, flat screen televisions and wireless internet connections. At our 299-site RallyPark, we hold over 100 rallies each year and provide our visitors the opportunity to meet and spend time with other RV enthusiasts. In addition, visitors to our site can enjoy complimentary meals at our new Italian style Café (formerly Festival Hall) or visit our recently completed Learning Center for complimentary seminars. Customers who have purchased a high-end Class A motorhome enjoy the exclusive services and amenities of our CrownClub facility. Finally, there are additional attractions located adjacent to our facilities that appeal to RV owners including a Camping World retailer, a Flying J Travel Plaza and a Cracker Barrel restaurant. These features and our customer focused philosophy cater to the RV enthusiast community and have allowed us to attract potential RV purchasers from across the United States. In 2004, 42% of our unit sales were to customers that reside outside the state of Florida.

Industry Overview

The RV industry has been growing for many years and is positioned to benefit from continued growth as a result of favorable product mix and U.S. demographic trends. New RV sales in the U.S. were approximately $12 billion in 2003 and have grown at a 10.6% compound annual rate from 1980 to 2003. We estimate that annual sales in the U.S. of pre-owned RVs through dealers are approximately $14 billion, resulting in aggregate U.S. annual sales for new and pre-owned RVs of approximately $26 billion. The growth in the sale of new Class A motorhomes has outpaced overall RV revenue growth, accounting for 50% of 2003 new RV revenues compared to 41% in 1992, with the average retail price of Class A motorhomes increasing from $64,026 in 1992 to $143,834 in 2003. The growth in industry sales, the migration toward Class A motorhomes with added amenities and the retail price increases of those products has been driven by the increasing popularity of RVs among consumers and consumer preferences for luxury products.

Favorable demographic trends, in particular the aging of the “baby boomers,” indicate that RV ownership should increase during the next 10 years. Overall RV ownership rates in the U.S. have historically been highest in

the 55-64 year-old age group, which is expected to grow 39.0% from 2002 to 2010, compared to total population growth of 11.4% for the same period.

Competitive Strengths

• Unique Business Model and Customer Focus. Our business model was developed to serve our customers and create “Customers for Life.” An RV purchase is often one of our customers’ most significant purchase decisions and one that we strive to make enjoyable. Our philosophy provides for a unique customer experience to ensure satisfaction and generate loyalty. Additionally, we offer numerous amenities to visitors and customers at our site whether or not they are actively seeking an RV purchase. We believe our unique business model has allowed Lazydays to become a destination site for RV enthusiasts and RV purchasers.

• Process Driven Sales Organization. We have a talented and experienced sales organization with approximately 160 sales professionals. Our sales professionals benefit from at least one hour of training each business day on specific product features and selling techniques. Our sales professionals’ compensation structure is 100% commission based and is driven by profit achievement and customer satisfaction ratings. Each salesperson follows a carefully scripted process which we have developed over time. Our sales process begins with a customer interview to determine which products will appeal to the customer. The salesperson then escorts the customer through the product selection process by touring our facilities and focusing the customer on three to five specific models the sales person determined best meets the customer’s needs. Once a selection is made, the salesperson coordinates with the desk manager to value the customer’s trade-in, if applicable, and determine the sales price. We contact each customer, on average, eight times within the first twelve months following their purchase to ensure satisfaction and create customer loyalty. In 2004, $737.5 million of our revenues were generated from sales of new and pre-owned RVs.

• Finance and Insurance Product Sales. Upon completion of the sale negotiation, the customer is escorted to a business manager who documents the purchase and offers third-party financing, insurance and warranty products. In 2004, approximately 57% of our customers obtained their vehicle financing through Lazydays, the interest on which is often tax deductible as a person’s primary or secondary residence. We arrange financing from eleven lending institutions and offer insurance products from seven insurance underwriters. In 2004, $22.3 million of our revenues were generated from commissions on third-party finance and insurance products.

• Value-Added Customer Benefits and Customer Dedication. We provide each of our customers complimentary benefits with an RV purchase that we estimate have an aggregate value of over $8,000. Our delivery team performs a 130-point inspection of every motorhome and a 100-point inspection for every towable vehicle. We also provide our customers with an optional driver confidence course, assistance in registering and obtaining title for their RV, a complimentary one year membership in various RV clubs and campgrounds and discounts at retailers frequented by RV enthusiasts.

• Marketing. The most important component of our marketing effort is word-of-mouth marketing among our customers and other RV enthusiasts. We actively foster referrals among our customers and acknowledge their efforts on our “Wall of Honor,” which prominently displays the names of our customers who generate four or more referral deliveries. We target multiple direct marketing efforts at prospective buyers utilizing our proprietary database of 450,000 current and potential RVers in order to drive in-person visits and telephone contacts. These include our bi-monthly “Venture” RV catalog, which provides photographs and descriptions of our inventory and our quarterly “Rally Times” newsletter, which describes upcoming rallies sponsored by us at our RallyPark. In addition, we have a print advertising campaign in camping and RV magazines. In 2005 we will discontinue “Venture” and “Rally Times” and launch Lazydays RVLiving magazine. The magazine will be published every two months and will target the fastest growing segment of RV owners and aspirants – the baby boomer generation. Our largest source of customer traffic is our website, www.lazydays.com, which features real-time displays of our inventory updated automatically every 10 minutes and offers customers an opportunity to browse our current product selection. These multi-faceted marketing initiatives generate significant customer traffic.

• The Café (Formerly Festival Hall). The Italian style Café is located in our main dealership building and serves over 300,000 complimentary meals to customers and visitors each year, including customers visiting our

facilities for service and repair, sales prospects and RallyPark guests. Importantly, the layout of our site requires our RallyPark guests to traverse our product selection in order to reach the Café . As a result, potential customers often approach sales representatives before or after the meal service to inquire about our products.

• CrownClub. Our CrownClub facility opened in December 2003 as an additional exclusive benefit to our customers who purchase a high-end (approximately $250,000 and above) Class A motorhome. CrownClub qualifying new and pre-owned unit purchasers receive membership privileges which we believe help motivate our customers to trade-in on a more frequent basis. CrownClub membership offers access to 40 premier service bays and a 17,000 square foot clubhouse, including a lounge, grill room, library, business center and swimming pool. CrownClub members enjoy complimentary upscale meals and our full service bar. Members also receive other amenities such as an exterior wash upon service completion, invitations to CrownClub rallies held at exclusive RV resorts throughout the U.S., RallyPark certificates and free nights at selected premium Outdoor Resorts campgrounds. As of December 31, 2004, we had more than 3,314 CrownClub members, including customers who purchased qualifying RVs in the three years preceding the opening of the CrownClub facility.

• RallyPark. RallyPark is a 299-site RV campground located at the Lazydays facility. Each site offers wireless internet access, utilities, cable TV and a morning newspaper. More than 100 rallies are held at RallyPark each year and we believe RallyPark is the preferred rally site for many national, regional and state RV clubs. Our 12,000 square foot climate-controlled RallyCenter can accommodate up to 600 people and is utilized for dinners, meetings, award ceremonies and live entertainment. We also offer a screened and heated swimming pool and jacuzzi, tennis courts, horseshoe pits and shuffleboard lanes for our guests. In 2004, $1.3 million of our revenues were generated from fees charged to RallyPark guests.

• Quality Service and Repair Programs. We have a 230-bay servicing area including 40 premier CrownClub bays and what we believe is the largest RV collision repair center in the U.S. We also offer other special services that are performed in our cabinet shop, chassis shop, windshield repair shop and upholstery shop. Our staff is highly qualified and has over 80 of an estimated 250 RVIA/RVDA Certified and Master Certified technicians in the state of Florida. We have an extensive parts inventory which, as of December 31, 2004, was approximately $ 1.5 million and we have access to many hard-to-find parts. In 2004, $38.6 million of our revenues were generated from service and repair.

• Premier Customer Profile. Our business model allows us to seek and maintain “Customers for Life.” Our target customers are RV enthusiasts who we believe represent the substantial majority of our customer base and differ from recreational RV consumers in that they are seeking a lifestyle centered around the RV. RV enthusiasts are typically financially secure couples in the 55-74 year-old age group who are seeking an RV lifestyle that involves frequent travel, substantial time living in their RV and the opportunity for interaction with other RV enthusiasts. Approximately 70% of our customers seek to trade-in an RV, and many of our RV enthusiast customers are purchasing their third or fourth RV and may use their RV as their primary residence. We are intently focused on improving the likelihood that when an RV enthusiast does purchase an RV they purchase it from Lazydays. Our continuing success in this endeavor was demonstrated by the 25% of our unit sales which were generated from repeat customers in 2004. Our customers generally purchase RVs at higher price points, as evidenced by our average purchase price for retail sales of $88,089 in 2004 compared to an industry average of approximately $37,500 in 2004. We also believe our name and reputation are being disseminated to other RV enthusiasts within this community and in 2004, 28% of our unit sales were to referral customers.

• Economies of Scale. We are approximately one hundred times larger than the average RV retailer and we believe that we generate approximately three times the revenue of the next largest single-site dealership. We offer over 165 distinct new RV models, including Class A motorhomes, Class C motorhomes, conventional trailers and fifth-wheel trailers, which we believe is the broadest product offering at any single site retailer. Our 1,200-site outdoor showspace includes new products from leading manufacturers, including Monaco Coach Corporation, Fleetwood Enterprises, Inc., Winnebago Industries, Inc., Carriage, Inc., Thor Industries, Inc., National RV Holdings, Inc., Coachmen Industries, Inc., Glendale RVand Tiffin Motorhomes, Inc. We attract potential RV purchasers from across the United States, as evidenced by the 54% of our Class A unit sales in 2004 made to customers that reside outside the

state of Florida. Our scale also allows us to provide one-stop shopping for our customers by offering competitive third-party financing, insurance and warranty products. Approximately 70% of our customers seek to trade-in an RV which provides us with a consistent supply of pre-owned vehicles to offer our customers. Finally, the wholesale network of over 1,500 dealers that we have developed since 1994 provides us with a reliable system for managing our pre-owned inventory and allows us to accept and accurately value customer trade-ins.

• Favorable Relationships with Manufacturers. We believe our supplier relationships are excellent. In 2004, we were the largest retailer for five of the nine manufacturers represented by our new RV product offering. Our product offering of Class A motorhomes represents manufacturers that command a 69% share of the U.S. Class A market. The manufacturers we represent have over 26 full-time sales and service representatives stationed at our site to educate our sales force, assist customers in their purchase decision and assist in servicing vehicles. We have favorable multi-year contracts which provide exclusive geographical distribution rights for many manufacturers’ products, ranging from the Tampa, Florida area to the southeastern United States. We have maintained long-term relationships with these manufacturers across various levels within each organization, ranging from frequent management contacts to manufacturer production personnel visiting our facilities to assist in delivering RVs and addressing quality issues.

• Experienced Management Team. We are led by an experienced management team with our top seven managers having an aggregate 110 years of experience in the RV industry and an average tenure of 14 years at Lazydays. Don Wallace, our Chief Executive Officer, founded Lazydays in 1976 with his father and brother. Mr. Wallace was recognized as the 1993 RV Industry Executive of the Year by RV News. Chuck Thibault, our Chief Financial Officer, joined our Company in 1980. John Horton, our Chief Operating Officer, joined us in 2001 after holding numerous managerial positions in several industries.

Business Strategy

Our principal business strategies include the following:

• Maintain High Levels of Customer Service. Our business is differentiated from other retailers due to our customer focus. We believe customer satisfaction is critical to our continued growth and profitability. Over the past eight years, we have transformed our business from a large RV retailer into an RV enthusiast destination site through the development of our sales and service processes and our one of a kind facilities including, most recently, the addition of our Customer Service Pavilion, Café and Learning Center and remodeling of our sales offices. We intend to continue to upgrade and enhance our facilities and to add additional site amenities to increase customer satisfaction. We believe that our customer-centric business strategy will continue to attract visitors and allow us to grow our RV enthusiast customer base.

• Favorable Demographics. We believe the aging of the “baby boomer” generation will result in substantial increases in RV sales over the next 5-10 years. Overall RV ownership rates have historically been highest in the 55-64 year-old age group with penetration rates of approximately 14%. This age group is expected to grow 39% from 2002 to 2010. Our management team believes our existing 126-acre site can accommodate a 45% increase in annual RV deliveries and we plan to continue to expand our product offering to include additional manufacturers’ product lines as dictated by customer preferences.

• Generate and Convert Sales Opportunities. We continually seek to increase the number of sales prospects through creative marketing initiatives including effectively utilizing and enhancing our destination location appeal, our proprietary database and website. We employ systems that continually monitor and improve nearly all of our customer interactions and all facets of our sales processes in order to increase the rate at which we convert these sales leads into RV purchases. In 2004, approximately 21% of the over 36,000 prospective customers who actively pursued an RV purchase from us actually purchased an RV. This represents a 24% increase over our conversion rate in 2000, which evidences our continued focus on improving our conversion rate. To that end, we will continue to work to improve our customer focused model by having daily training sessions with our sales force to improve sales techniques and product knowledge, ensuring that a consistent message is delivered to our customers. We will also continue to focus on high-margin sales opportunities, including Class A motorhome sales and sales of finance, insurance and warranty products.

Products

Overview

RVs can be categorized into two vehicle segments: motorhomes and towables. Motorhomes are self-contained and are built on a motor vehicle chassis. They are designed to provide a mobile living environment for recreational, travel, or camping use. Towables are also self-contained, wheeled units designed to be towed by a motorized vehicle and are generally less expensive and smaller than motorhomes.

New Vehicles

Motorhomes

Class A. Class A motor homes are the largest and most luxurious motorhomes. These motor homes are built on specially designed chassis and often are outfitted with amenities such as washers/dryers, security systems, TVs, DVD players, satellite dishes and hydraulic leveling systems. Newer Class A motor homes are generally equipped with multiple “slide-outs,” which allow the owner to extend the exterior walls of the RV when parked to dramatically enlarge the interior space. These motor homes range in length from 21 to 45 feet and sell for between $50,000 and over $1 million and represented 85% of our 2004 new vehicle revenues.

Diesel-powered Class A motorhomes, including high line and standard diesel-motor homes, are large and luxurious vehicles with a price range of $100,000 to more than $1 million. The diesel engines of these RVs provide numerous advantages over gas engines, including greater horsepower, increased fuel mileage and longer life. High line diesel vehicles are premium Class A motorhomes with diesel engines and premier living facilities and amenities. The high line vehicles are typically priced above $250,000. Standard diesel vehicles have similar engines to high line motorhomes, but generally contain fewer amenities and are priced at a lower point.

Gas-powered Class A motorhomes are considered entry-level Class A motorhomes and are priced from $50,000 to $110,000. Class A gas products appeal primarily to the part time RVer who is looking to enjoy the RV experience at an affordable price. Built on a less robust chassis than diesel products, gas motor homes tend to offer less carrying capacity and a slightly rougher ride than diesels. Interior comfort is not sacrificed, however, as Class A gas products are available with all the high end amenities including multiple slide-outs, luxurious furnishings, flat screen TVs and satellite antennas.

Class C. Class C motorhomes, also known as “mini-motor homes,” are constructed on an automotive manufactured van frame with an attached cab segment. Similar to Class A motor homes, these RVs, which range in length from 20 to 32 feet, offer full kitchen, sleeping and dining facilities and are increasingly featuring “slide-outs.” Class C motorhomes sell for between $40,000 and $125,000 and represented 4% of our 2004 new vehicle revenues.

Towables

Conventional. Conventional travel trailers range in length from 12 to 35 feet and generally include all of the facilities found in a motorhome. As with all towables, an advantage of a conventional travel trailer is that it can be detached from a car, pickup truck, or van at the destination, thus making the towing vehicle available for other uses. In addition, six-cylinder engine cars are now capable of towing the newer, lightweight travel trailer models. New travel trailers, most of which can sleep up to eight people, are priced between $9,000 and $76,000 and represented 3% of our 2004 new vehicle revenues.

Fifth Wheel. Fifth-wheel travel trailers, which range in length from 21 to 40 feet, are similar to conventional travel trailers in terms of size and amenities, but the two differ in their methods of attachment to the towing vehicle. While a conventional travel trailer is designed to be mounted on a standard car, truck, or van hitch, a fifth-wheel travel trailer is attached to a pickup truck by a special hitch connected to the truck bed. This design

provides greater maneuverability and reduces the overall length of the combined vehicles. Fifth-wheel travel trailers sell for between $12,000 and $100,000 and represented 6% of our 2004 new vehicle revenues.

Trailer Rental Program for Temporary Housing

As a result of the active Florida hurricane season in 2004, we developed a rental program which targeted displaced hurricane victims in need of temporary housing. In 2004, 682 conventional travel trailers were rented. Rental terms ranged from three to six months with extended terms available. Rental revenue totaled $3.4 million in 2004. We expect to wind down this program in 2006.

Pre-Owned Vehicles

Sales of pre-owned RVs contributed 33% of our revenues during 2004. With approximately 70% of our customers providing a trade-in RV, we benefit from a steady, high quality flow of available pre-owned inventory. We sell our pre-owned vehicles to both retail customers and, on a wholesale basis, a network of RV and automotive dealers. Retail customers purchase pre-owned vehicles because they can get a high quality vehicle at a lower price. We enhance the value of pre-owned vehicles by fully servicing them before offering them for resale.

Our practice of wholesaling RVs to other dealers allows us to manage our pre-owned vehicle inventory optimally and limit our risk of carrying pre-owned vehicles for extended time periods. With access to over 1,500 dealers, we can offer higher values for trade-ins and mitigate our trade-in risk by selling slow-moving pre-owned RVs through this large dealer network.

The sales of all categories of pre-owned inventory through our wholesale network represented 12% of total pre-owned vehicle revenues in 2004. Of our total pre-owned vehicle revenues in 2004, retail sales of pre-owned Class A motorhomes represented approximately 76%, retail sales of Class C pre-owned motorhomes represented 6% and retail sales of pre-owned fifth wheel and conventional towables and other miscellaneous vehicles represented the remaining 7%.

Service and Repair

We operate 230 service bays, providing on site general RV maintenance and repair work to customers. The service and repair department is divided into two areas: the “make ready” process for deliveries of recently purchased new and pre-owned retail units and post-delivery service. We also maintain a body shop, cabinet shop, chassis shop and windshield repair shop with highly skilled, RVIA/ RVDA-certified technicians and specialized equipment and facilities. In addition to preparing several thousand RVs for delivery to customers each year, our service and repair operations provide general RV maintenance and repair services and manufacturer paid work performed under warranty to approximately 12,000 customers annually. Furthermore, with $1.5 million of parts and accessories inventory, in addition to a fully stocked onsite Camping World store, Lazydays provides new and pre-owned RV buyers the option of dealer installed accessories, such as tow hitches, satellite dishes and specialized suspension systems that can be included in each buyer’s financing. Lazydays’ average service and repair customer spends approximately $1,300 per visit.

Our service and repair department, which generated $38.6 million of revenue in 2004. We frequently welcome customers who travel from across the country to have their vehicles serviced by our team of service and repair professionals. As a result, the service and repair department serves as a means of attracting potential customers to the Lazydays facilities and offers greater additional sales opportunities for us.

Financing and Related Services

We provide assistance to customers in arranging financing for their RV purchases through a variety of lenders. Revenues from financing, warranty and extended warranty products and related services have increased from $14.8 million in 1999 to $22.3 million in 2004.

Financing

Lazydays generates commission based revenue from its financing services by placing the loans with one of eleven independent lending institutions. The interest on these loans is often deductible to our customers as a mortgage for tax purposes for a primary or secondary residence. During 2004, approximately 57% of our customers obtained their vehicle financing through Lazydays. By leveraging the volume of our financing customers, we are able to negotiate favorable rates for our customers with third-party lenders. Financing fee based revenues represented approximately 67% of 2004 financing and related services revenue.

Insurance and Extended Warranties

We offer extended warranties and various insurance products for new and pre-owned RVs. As with our financing related products, we are paid a fee for placing the warranty or insurance product with one of seven different insurance underwriters. Approximately 44% of our customers purchased extended warranties during 2004, and we offer other insurance products, including tire, life and physical damage insurance. Together, revenue from insurance and warranties represented approximately 33% of our 2004 financing and related services revenue.

RallyPark and Related Services

RallyPark is our full service RV campground that includes a 12,000 sq. it recreation hall, screened-in heated pool and Jacuzzi, computer room and commercial kitchen facilities and exists primarily to attract visitors to Lazydays and enhance their overall experience. Our RallyPark attracts over 60,000 visitors each year and has 299 full hook-up sites which provide utilities, wireless internet access, cable TV and a morning newspaper.

More than 100 rallies were held at RallyPark in 2004, with many sponsored by us as a marketing promotion tool to create additional customer traffic. We also prominently display marketing and promotional materials throughout the park. All park guests are invited to the Café in the main building for complimentary breakfast and lunch with a shuttle service running frequently between the park and the dealership. Our 12,000 square foot climate-controlled RallyCenter can accommodate up to 600 people and is utilized for dinners, meetings, award ceremonies and live entertainment. RallyPark represents an important and successful marketing tool for us and our RallyPark guests contributed $11.2 million to our 2004 vehicle revenues, in addition to $1.3 million in fees generated from RallyPark visitors.

Served Markets

We generated approximately 58% of our retail deliveries from Florida residents in 2004, the third largest RV buying state in the United States, and we are by far the dominant player in the Florida market with a 37% share of Class A motorhome unit sales in 2004. While Florida is Lazydays’ primary market, we have experienced great success penetrating other markets, with unit sales to residents outside the state of Florida reaching 42% of our retail deliveries in 2004. Our U.S. market share in Class A motorhome unit sales in 2004 was approximately 6%, and represents a substantial opportunity for further market penetration and expansion for us.

Target Customer

We estimate that approximately 80-90% of our customers have previously owned an RV. These customers have adopted the RV lifestyle and do not generally view RVs as luxury or recreational items, as the broader market may view them. Accordingly, for many of our customers, the RV represents a necessary purchase that will occur periodically as the time comes to trade in and upgrade the vehicle.

Consistent with their RV enthusiast lifestyle, Lazydays customers are frequently repeat purchasers. Management estimates that Lazydays’ average customer owns his or her RV three to four years before trading it in, compared to an estimated industry average of approximately seven years. In 2004, 25% of the vehicles we sold were to repeat customers, representing $203 million in revenues. In addition, the RV lifestyle includes frequent social interaction between RVers that creates an environment in which word-of-mouth marketing becomes a powerful tool. The loyalty of the Lazydays customer is perhaps demonstrated by the fact that referral customers represented 28% of our total customers and generated approximately $191 million in revenue in 2004.

While our typical customers are in their mid-sixties, we have an increasing number of customers in their mid-40s with young children. RV ownership provides this younger customer group access to relatively safe and economical vacation and travel alternatives. While this younger demographic is currently a small portion of the RV buying group, management believes its growing interest in RVs demonstrates the broadening appeal of RVs in general and represents an opportunity for us to penetrate a greater portion of the population.

Sales Overview

The entire Lazydays culture is built on the sales philosophy of making “Customers for Life.” All Lazydays employees are committed to providing premier customer service and developing a relationship with the customer that ensures that he or she will return to Lazydays for all future RV purchases and service needs. This culture is evident in the way each customer is greeted by every employee with the phrase, “Welcome to Lazydays.” Though ingrained deeply in all facets of the business, the Lazydays culture is most readily apparent to customers in their interaction with our sales force.

Our direct sales organization is comprised of eight sales managers who oversee approximately 160 salespeople, as well as managers that oversee other aspects of the sales process, such as Internet, telephone and wholesale sales, pricing and the appraisal of trade-in units. Each sales manager is responsible for a team of 20 to 24 salespeople and is compensated based on team and Company performance goals. Additionally, each sales manager administers a relationship with a manufacturer by understanding new products and monitoring inventory levels.

Our salespeople are divided into three levels based on customer satisfaction and sales performance. Our sales professionals’ compensation structure is 100% commission based and is driven by profit achievement and customer satisfaction ratings. In 2004, our compensation per year per salesperson averaged approximately $90,000 and annual compensation was as high as $220,000, which we believe is significantly higher than at other dealerships in the country , thus allowing us to attract and retain a high quality sales force. Because of the opportunities offered to our salespeople, we have historically maintained low turnover within our sales staff.

Sales Organization

Our sales team has consistently improved its success in converting sales opportunities into RV deliveries over the years, as management continuously refines the sales process. From 2000 to 2004, we improved our delivery ratio (the number of sales divided by the number of sales opportunities or “ups”) from 16.9% to20.8%. Through the ongoing development of the sales process and training of personnel, management believes its sales force’s productivity will continue to improve.

Our success in developing and maintaining a productive sales force is a function of our ability to execute our “Customers for Life” sales philosophy. We have identified and outlined a number of important tenets that embody this philosophy and provide a blueprint for the operation of the sales organization. At a high level, these include our keys to building a great company, such as “find and keep great people” and “be easy to do business with.” The importance of premier customer service is emphasized through our Golden Rule of Customer Service, the Ten Rules of Customer Service and the Thirteen Keys to Being the Best at Customer Service. These rules are reinforced every week through sales training sessions and ensure that salespeople execute our sales philosophy. This philosophy defines our culture, which is built around a focus on the needs and wants of the customer, a constant pursuit of premier customer service and the consistent execution of a proven sales system. The embodiment of this philosophy is the greeting of “Welcome to Lazydays,” that each employee delivers to each and every customer.

We strive to ensure that our sales personnel are consistent in their approach to the customer and in their application of these tenets through extensive training. Each salesperson must complete an initial one-week customer service and sales process training program. Thereafter, all salespeople are required to attend daily one-hour product and selling skills training sessions. The emphasis on continuous training ensures that sales personnel are knowledgeable in their representation of the products and skilled in their approach to the customer.

Marketing Overview

Lazydays attracted over 250,000 visitors to its complex and generated over 36,000 sales opportunities in 2004. This traffic is generated through a comprehensive program that includes referrals, direct mail, television and

print advertising, rallies and trade shows, marketing partners and the Lazydays website. All of our marketing work, including the development of strategies and concepts, the maintenance of the customer database and the design and layout of advertisements, is performed in-house, with the exception of high volume printing and television production. By performing the majority of our marketing functions internally, we are able to manage our marketing cost effectively. We spent $4.8 million on our marketing efforts in 2004, or 0.6% of total revenues, a level that is consistent with historical expenditures as a percentage of revenues.

Referrals

In 2004, 28% of total deliveries were made on a customer referral basis, generating $191 million in revenues. Customer referrals are our most productive and inexpensive advertising source. The introduction of the Lazydays Friends & Family Program in July 1997 served as a catalyst for referral based business. Friends & Family based referrals accounted for 44% of the referral-based revenue in 2004, or approximately $84 million. The program promotes referral activity by rewarding customer loyalty and referral business with awards and recognition for each referral that leads to a sale. As customers make new, qualified referrals, they receive rewards, such as complimentary stays at RallyPark for Friends & Family rallies, award certificates and entries in drawings for cash prizes. In addition, based on their number of referrals, Friends & Family members have their names prominently displayed on plaques along the Wall of Honor in the lobby of the main dealership building.

Direct Mail, Print and Television

We manage a proprietary database of approximately 450,000 RV owners and potential owners to maintain regular mail-based contact with existing and potential customers. We have used direct mail marketing for the past nine years, we advertise in numerous industry publications and, on a limited basis, through local television. In 2004, direct mail, print and television generated 7% of total deliveries and represented approximately $46 million of revenues.

We design our own direct mail marketing materials in-house and have millions of postcards, posters, brochures and mailers printed each year to generate interest in our RVs. Our largest publication is our bi-monthly Venture catalog, which showcases RVs for sale at Lazydays and has an annual circulation of approximately 2.1 million. In addition, we seasonally publish Rally Times, in which we outline upcoming events at RallyPark with an annual circulation of approximately 0.5 million. In 2005 we will discontinue “Venture” and “Rally Times” and launch Lazydays RVLiving magazine. The magazine will be published every two months and will target the fastest growing segment of RV owners and aspirants – the baby boomer generation. We also send over 1 million large format postcards and personalized notes each year for a variety of occasions, including the anniversary of an RV purchase, to maintain strong customer goodwill.

Internet Website

The Lazydays website is a user-friendly marketing and informational tool. We believe our web site offers the only real-time inventory site in the industry, allowing customers to view new and pre-owned RV photos and specifications within minutes after the vehicle becomes available for sale. Users can search for available RVs by make and model, as well as learn more about the numerous value added benefits offered by us. Users have the ability to purchase our RVs without visiting our facility by learning about products online and by calling or emailing Lazydays to further their inquiry. Additionally, users can obtain an estimate of the value of their trade-ins prior to arriving at Lazydays. In 2004, the Internet and Lazydays’ web site generated 19% of total deliveries and represented approximately $139 million in revenues.

Rallies and Trade Shows

Rallies and trade shows serve as an ideal opportunity to market Lazydays to concentrated groups of RV enthusiasts. Hundreds of rallies and trade shows take place throughout the U.S. each year. Lazydays attends approximately 50 off-site rallies each year. We send sales representatives and a selection of RVs to the rallies and trade shows to promote products, answer questions and build excitement around the dealership. In 2004, attendance at RV rallies and trade shows generated 2% of our total deliveries and represented $29 million of revenu