UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

Form 10-Q

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

For the quarterly period ended September 30, 2007

OR

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

For the transition period from              to

Commission File Number: 333-118185

LAZY DAYS' R.V. CENTER, INC.

(Exact name of registrant as specified in its charter)

Florida	59-1764794
(State of incorporation)	(I.R.S. Employer Identification No.)
6130 Lazy Days Boulevard Seffner, Florida 33584-2968	(813) 246-4333
(Address of principal executive offices, including zip code)	(Registrant's telephone number, including area code)

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

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition

of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer o Accelerated Filer o   Non-accelerated filer x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  o    No  x 

As of November 14, 2007, the registrant had 100 shares of common stock outstanding.

TABLE OF CONTENTS

PART I. FINANCIAL INFORMATION
ITEM 1. Financial Statements:
Condensed Balance Sheets	1
Condensed Statements of Operations	2
Condensed Statements of Cash Flows	3
Notes to Condensed Financial Statements	4
ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	9
ITEM 3. Quantitative and Qualitative Disclosures About Market Risk	19
ITEM 4. Controls and Procedures	20
PART II. OTHER INFORMATION
ITEM 1. Legal Proceedings	21
ITEM 1A. Risk Factors	21
ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds	21
ITEM 3. Defaults Upon Senior Securities	21
ITEM 4. Submission of Matters to a Vote of Security Holders	21
ITEM 5. Other Information	21
ITEM 6. Exhibits	21
SIGNATURES	22

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PART I. FINANCIAL INFORMATION

ITEM 1. Financial Statements

Lazy Days’ R.V. Center, Inc., a wholly owned subsidiary of LD Holdings, Inc.

Condensed Balance Sheets

ASSETS	September 30, 2007		December 31, 2006
Current assets	(Unaudited)
Cash	$	6,292,792	$	3,253,637
Receivables, net		16,982,009		15,514,990
Refundable income taxes		-		377,633
Inventories		76,007,187		100,688,336
Prepaid expenses and other		3,003,524		3,001,928
Total current assets		102,285,512		122,836,524
Property and equipment, net		34,771,260		36,970,987
Loan and other costs, net		4,165,162		4,647,963
Goodwill		104,865,672		104,865,672
Intangible assets, net		73,786,473		75,222,812
Other assets		224,885		228,445
Total assets	$	320,098,964	$	344,772,403
LIABILITIES AND STOCKHOLDER’S EQUITY
Current liabilities
Floor plan notes payable	$	37,431,073	$	67,275,431
Current maturities of long-term debt		2,600,000		-
Accounts payable and accrued expenses		12,335,389		11,903,098
Accrued interest		6,520,340		2,548,495
Reserve for chargebacks		1,241,000		1,110,000
Customer deposits		1,729,310		1,421,168
Income taxes payable		579,821		-
Deferred income taxes		2,171,148		2,157,135
Total current liabilities		64,608,081		86,415,327
Long-term debt, less current maturities		138,365,062		140,796,654
Reserve for chargebacks		1,050,000		1,042,000
Deferred rent		14,086,747		14,134,249
Deferred income taxes		27,879,610		28,707,187
Other		19,189		11,494
Total liabilities		246,008,689		271,106,911
Stockholder’s equity
Common stock, $.01 par value: 100 shares issued and outstanding		1		1
Paid-in capital		67,000,000		67,000,000
Retained earnings		7,090,274		6,665,491
Total stockholder’s equity		74,090,275		73,665,492
Total liabilities and stockholder’s equity	$	320,098,964	$	344,772,403

See accompanying notes to condensed financial statements.

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Lazy Days’ R.V. Center, Inc., a wholly owned subsidiary of LD Holdings, Inc.

Condensed Statements of Operations (Unaudited)

	Three Months Ended					Nine Months Ended
	September 30, 2007			September  30, 2006		September  30, 2007		September 30, 2006
Revenues
New vehicle	$	84,270,269		$	100,456,710	$	351,962,489	$	347,690,303
Pre-owned vehicle		57,539,024			44,807,301		206,644,303		191,344,703
Parts, service and other		9,016,470			6,012,372		31,101,657		28,993,313
Finance and insurance		5,024,804			4,396,095		17,167,902		16,193,861
Rally Park		166,416			125,602		1,233,176		1,184,879
Other		137,254			359,854		632,076		1,349,626
Total revenues		156,154,237			156,157,934		608,741,603		586,756,685
Cost of revenues
New vehicle		77,844,741			92,016,607		325,280,019		316,542,683
Pre-owned vehicle		52,106,355			39,806,706		186,561,953		170,342,799
Parts, service and other		4,519,838			2,264,925		14,772,714		11,897,342
Total cost of revenues		134,470,934			134,088,238		526,614,686		498,782,824
Gross profit		21,683,303			22,069,696		82,126,917		87,973,861
Selling, general and administrative expenses		20,105,147			21,251,305		66,067,341		67,648,336
Income before interest expense and income taxes		1,578,156			818,391		16,059,576		20,325,525
Interest expense		4,922,748			5,315,467		15,317,813		15,977,027
Income (loss) before income taxes		(3,344,592	)		(4,497,076)		741,763		4,348,498
Income tax expense (benefit)		(1,272,995	)		(1,741,857)		316,980		1,682,869
Net income (loss)	$	(2,071,597	)	$	(2,755,219)	$	424,783	$	2,665,629

See accompanying notes to condensed financial statements.

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Lazy Days’ R.V. Center, Inc., a wholly owned subsidiary of LD Holdings, Inc.

Condensed Statements of Cash Flows (Unaudited)

	Nine Months Ended
	September  30, 2007			September 30, 2006
Cash flows from operating activities
Net income	$	424,783		$	2,665,629
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation of property and equipment		2,818,108			2,390,279
Depreciation of rental vehicle inventory		2,653			430,128
Amortization of intangible costs		1,436,339			1,850,625
Amortization and write-off of loan and other costs		670,472			1,141,032
Amortization of discount on long-term debt		168,408			171,375
Loss (gain) on sale of property and equipment		(11,086)			(2,519	)
Provision for doubtful accounts		60,211			–
Reserve for chargebacks		139,000			157,000
Deferred income taxes		(813,564	)		(643,671	)
Change in assets and liabilities
Receivables		(1,527,230	)		4,459,961
Inventories		24,678,496			10,281,986
Prepaid expenses and other		(1,596)			53,095
Refundable income taxes		377,633			491,266
Other assets		3,560			30,630
Accounts payable, other accrued expenses, customer deposits, and other		748,128			(2,334,385)
Accrued interest		3,971,845			3,845,864
Income taxes payable		579,821			500,274
Deferred rent		(47,502	)		(61,448	)
Net cash provided by operating activities		33,678,479			25,427,121
Cash flows from investing activities
Proceeds from sale of property and equipment		17,954			15,982
Purchases of property and equipment		(625,249	)		(2,937,429	)
Net cash used in investing activities		(607,295	)		(2,921,447	)
Cash flows from financing activities
Net payments under floor plan		(29,844,358	)		(19,014,834	)
Loan and other costs		(187,671	)		–
Net cash used in financing activities		(30,032,029	)		(19,014,834	)
Net change in cash		3,039,155			3,490,840
Cash at beginning of period		3,253,637			4,726,164
Cash at end of period	$	6,292,792		$	8,217,004
Supplemental disclosure of cash flow information
Cash paid during the period for interest	$	11,345,968		$	11,770,186
Cash paid during the period for income taxes		150,000			1,335,000

See accompanying notes to condensed financial statements.

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Lazy Days’ R.V. Center, Inc., a wholly owned subsidiary of LD Holdings, Inc.

Notes to Condensed Financial Statements

NOTE 1 - BASIS OF PRESENTATION AND OPINION OF MANAGEMENT

The accompanying unaudited interim condensed financial statements include the accounts of Lazy Days’ R.V. Center, Inc. (the “Company” or “Lazy Days”), a wholly owned subsidiary of LD Holdings, Inc. (“LD Holdings”), a non-operating holding company, and have been prepared in accordance with the instructions to Form 10-Q and therefore do not include all of the information and financial statement disclosures necessary for a fair presentation of financial position, results of operations and cash flows in conformity with accounting principles generally accepted in the United States of America. In the opinion of management, the information furnished herein includes all adjustments necessary to reflect a fair statement of the interim periods reported. All adjustments are of a normal and recurring nature. Due to the seasonal nature of our business, interim results are not necessarily indicative of results for the entire fiscal year. The December 31, 2006 condensed balance sheet data was derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States of America. These interim financial statements and the related notes should be read in conjunction with the financial statements and notes included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2006.

NOTE 2 - RECEIVABLES

Receivables consist of the following:

	September 30, 2007		December 31, 2006
Contracts in transit and vehicle receivables	$	8,927,600	$	9,262,233
Manufacturer receivables		6,634,447		5,371,397
Finance and other receivables		2,029,480		1,430,667
		17,591,527		16,064,297
Less: Allowance for doubtful accounts		609,518		549,307
	$	16,982,009	$	15,514,990

Contracts in transit represent receivables from financial institutions for the portion of the vehicle sales price financed by the Company’s customers through financing sources arranged by the Company. Manufacturer receivables are due from the manufacturers for incentives, holdbacks and other programs.

NOTE 3 - INVENTORIES

Inventories consist of the following:

	September 30, 2007		December 31, 2006
New recreational vehicles	$	53,104,579	$	68,398,121
Pre-owned recreational vehicles		24,434,489		32,386,060
Parts, accessories and other		1,851,852		1,707,848
		79,390,920		102,492,029
Less: LIFO reserve		3,383,733		1,810,355
		76,007,187		100,681,674
Rental recreational vehicles, less accumulated depreciation of $11,660 in 2007 and $38,775 in 2006		–		6,662
	$	76,007,187	$	100,688,336

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Lazy Days’ R.V. Center, Inc., a wholly owned subsidiary of LD Holdings, Inc.

Notes to Condensed Financial Statements

NOTE 4 - GOODWILL AND OTHER INTANGIBLE ASSETS

Goodwill totaling $104,865,672 at September 30, 2007 and December 31, 2006, represents the excess of costs over fair value of net assets of an acquired business. Pursuant to Statement of Financial Accounting Standards (“SFAS”) No. 142, Goodwill and Other Intangible Assets, goodwill and intangible assets acquired in a purchase business combination and determined to have an indefinite life are not amortized, but instead tested for impairment at least annually. At December 31, 2006, management determined there was no impairment of goodwill. SFAS No. 142 also requires that intangible assets with estimable useful lives be amortized over their respective estimated useful lives, addressed annually and reviewed for impairment in accordance with SFAS No. 144, Accounting for Impairment or Disposal of Long-Lived Assets.

Intangible assets and the related accumulated amortization are summarized as follows:

	September 30, 2007				December 31, 2006
	Gross Carrying Amount		Accumulated Amortization		Gross Carrying Amount		Accumulated Amortization
Amortizable intangible assets:
Manufacturer relationships	$	26,700,000	$	2,252,813	$	26,700,000	$	1,752,188
Non-compete agreement		9,000,000		5,660,714		9,000,000		4,725,000
Customer database		3,600,000		3,600,000		3,600,000		3,600,000
		39,300,000		11,513,527		39,300,000		10,077,188
Unamortizable intangible assets:
Trade names and trademarks		46,000,000		–		46,000,000		–
	$	85,300,000	$	11,513,527	$	85,300,000	$	10,077,188

Amortizable intangible assets are being amortized using the straight-line method over 40 years for manufacturer relationships, six years for the non-compete agreement (which was extended an additional year in March 2007 as part of the former Chairman’s retirement agreement) and one year for the customer database. The weighted-average amortization period for all amortizable intangible assets acquired in 2004 is 28.7 years. Trade names and trademarks are considered to have indefinite useful lives and are not being amortized.

Amortization expense for intangible assets for the three and nine-month periods ended September 30, 2007 was $461,518 and $1,436,339 respectively, compared to $616,875 and $1,850,625 for the three and nine-month periods ended September 30, 2006. Estimated amortization expense for the three-month period ending December 31, 2007 and for each of the subsequent five years ending December 31 is: 2007 (three-months) - $461,518, 2008 - $1,846,071, 2009 - $1,846,072, 2010 - $1,355,000, 2011 - $667,500, and 2012 - $667,500.

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Lazy Days’ R.V. Center, Inc., a wholly owned subsidiary of LD Holdings, Inc.

Notes to Condensed Financial Statements

NOTE 5 - FLOOR PLAN NOTES PAYABLE

The Company maintains a floor plan financing agreement (the"Floor Plan Credit Facility") with two financial institutions, collateralized by new and pre-owned recreational vehicles aggregating up to $85,000,000. The entire facility may be used to finance new vehicle inventory but only up to $26,000,000 may be used to finance pre-owned vehicle inventory. The financial institutions collateralize all vehicles purchased under these agreements and all receivables generated from the sale of these vehicles. The interest rate charged (7.27% and 8.08% at September, 2007 and 2006, respectively) is based on the prime rate or LIBOR. Principal is due upon the sale of the respective vehicle.

Effective February 22, 2007, the Company amended the floor plan financing agreements extending the terms through February 22, 2011. The Company has the option to increase the aggregate floor plan commitments to $100,000,000 from $85,000,000. The amended and restated floor plan credit facility also includes a $15,000,000 revolving credit facility (see Note 6). 

Borrowings under our Floor Plan Credit Facility to finance our new vehicle inventory may not exceed (i) 100% of the factory invoices for the related vehicles, (ii) 85% of the wholesale value of all pre-owned inventory (as determined in accordance with National Automobile Dealers Association RV Industry Appraisal Guide, or appraised NADA value) for vehicles in the current through 7th prior model years and (iii) 65% of the appraised NADA value with respect to pre-owned vehicles in the 8th, 9th and 10th prior model years.

The Company’s floor plan notes payable are subject to certain financial and restrictive covenants including interest coverage ratio; current ratio; and limitations on certain executive compensation, capital expenditures, accounts payable, additional debt, liens, dividends, distributions, certain restricted investments, and certain other corporate activities, all as defined in the credit agreement. The minimum interest coverage ratio currently allowable under the Floor Plan Credit Facility is 1.30, through February 2007 and 1.35 thereafter. The Company was in compliance with all covenants at September 30, 2007.

Interest expense on the floor plan notes payable for the three and nine-month periods ended September 30, 2007 was $734,848 and $2,762,376, respectively, compared to $996,479 and $3,024,213 for the three and nine-month periods ended September 30, 2006.

NOTE 6 - LONG-TERM DEBT

On May 14, 2004, the Company issued $152 million of unsecured, senior notes (the “Senior Notes”) through a private placement exempt from the registration requirements of the Securities Act. Subsequently, on December 6, 2004, the Company successfully completed the exchange of $137 million of its Senior Notes. The remaining Senior Notes totaling $15 million were ineligible for exchange. The Senior Notes mature May 15, 2012 and bear interest at an annual rate of 11.75% payable each November 15 and May 15, to the registered holders at the close of business on November 1 and May 1 immediately preceding the interest payment date. The outstanding balance of unsecured Senior Notes at September 30, 2007 was $140,965,062, net of unearned discount of $1,038,938.  Interest expense on the Senior Notes for the three and nine month periods ended September 30, 2007 was $4,187,900 and $12,555,437 compared to $4,318,988 and $12,952,814 for the three and nine month periods ended September 30, 2006.

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Lazy Days’ R.V. Center, Inc., a wholly owned subsidiary of LD Holdings, Inc.

Notes to Condensed Financial Statements

The Senior Notes rank pari passu with the Company’s existing and future senior debt. The Senior Notes are effectively subordinated to the Revolver and amended floor plan credit facility to the extent of the assets securing such debt.

The Company has the option to redeem the Senior Notes at any time before May 15, 2008, at a defined premium plus accrued and unpaid interest to the date of redemption.

The Company shall offer to repurchase Senior Notes from all holders, on a pro rata basis, to the extent of 50% of the Company’s free cash flow, as defined, for any six-month period ending on either June 30 or December 31 of any fiscal year. To the extent the Company’s free cash flow for any six month period is less than $1.0 million, the Company may elect not to make a free cash flow offer for such period and, in lieu thereof, add such free cash flow to the amount of free cash flow for the next succeeding six-month period. The Company’s estimated free cash flow for the six month period ended June 30, 2007 was recorded as a current maturity of long-term debt.  In October, the offer was completed for $2,633,052, consisting of $2,450,000 in bond redemption, a $73,500 redemption premium and $109,552 in accrued interest.

The Company maintained a five-year senior secured revolving line of credit facility.  This facility provided for borrowings up to $15 million, as defined, which included a $10 million sub-facility for the issuance of letters of credit.  This facility was terminated February 22, 2007 and replaced with a new $15 million revolving credit facility (the “Revolver”) included in the Floor Plan Credit Facility (see Note 5).  The terms of the new Revolver have not significantly changed from the prior agreement.  There were no outstanding advances under the Revolver at September 30, 2007 or December 31, 2006. The Company is eligible to borrow under the Revolver when its interest coverage ratio, as defined, exceeds 1.40 and the Company’s trailing twelve month net income, as defined, exceeds $500,000.  At September 30, 2007, the Company's interest coverage ratio is 1.45 and the trailing twelve month net income was less than $500,000.

The Company had outstanding letters of credit amounting to $225,000 at September 30, 2007. Interest on outstanding advances is payable monthly and is based on the prime rate (7.75% at September 30, 2007).  Borrowings are collateralized by substantially all of the Company's assets.

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Lazy Days’ R.V. Center, Inc., a wholly owned subsidiary of LD Holdings, Inc.

Notes to Condensed Financial Statements

NOTE 7 - LD HOLDINGS AND RV ACQUISITION

The balance sheets of LD Holdings, a wholly owned subsidiary of RV Acquisition, consisted of the following:

	September 30, 2007		December 31, 2006
ASSETS
Investment in Lazy Days' R.V. Center, Inc.	$	74,090,275	$	73,665,492
STOCKHOLDER’S EQUITY
Common stock, Class A	$	1	$	1
Paid-in capital		67,000,000		67,000,000
Retained earnings		7,090,274		6,665,491
Total stockholder’s equity	$	74,090,275	$	73,665,492

The balance sheets of RV Acquisition consisted of the following:

	September 30, 2007			December 31, 2006
ASSETS
Investment in LD Holdings	$	74,090,275		$	73,665,492
LIABILITIES
Due to Lazy Days' R.V. Center, Inc.	$	51,372		$	51,372
STOCKHOLDERS’ EQUITY
Preferred stock, Series A, including accrued dividends of $36,016,146 in 2007 and $26,547,610 in 2006		98,016,146			88,547,610
Common stock, $.01 par value		49,947			49,947
Paid-in capital		4,941,771			4,941,771
Accumulated deficit		(28,968,961	)		(19,925,208	)
Total stockholders’ equity		74,038,903			73,614,120
Total liabilities and stockholders’ equity	$	74,090,275		$	73,665,492

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Lazy Days’ R.V. Center, Inc., a wholly owned subsidiary of LD Holdings, Inc.

Notes to Condensed Financial Statements

NOTE 8 - EFFECT OF RECENTLY ISSUED ACCOUNTING STANDARDS ON THE FINANCIAL STATEMENTS

In July 2006, the Financial Accounting Standards Board issued Financial Interpretation No. 48, "Accounting for Uncertainty in Income Taxes" ("FIN 48").  This Interpretation revises the recognition test for tax positions taken in tax returns such that a tax benefit is recorded only when it is more likely than not that the tax position will be allowed upon examination by taxing authorities, which is presumed to occur.  The amount of such a tax benefit to be recorded is the largest amount that is more likely than not to be allowed. The Company adopted FIN 48 effective January 1, 2007.  The adoption of FIN 48 had no material impact on the Company's consolidated financial position or results of operations. The amount of unrecognized tax benefits at January 1, 2007 totaled $460,000 ($539,000 at September 30, 2007) and the full amount would decrease the Company's effective tax rate, if ultimately recognized into income.

The Company is subject to U.S. Federal income tax as well as income tax of the State of Florida, and is no longer subject to examination by taxing authorities for years before 2003.  The Company does not expect the total amount of unrecognized tax benefits to significantly increase in the next twelve months.  Interest and penalties related to income tax matters are recognized in income tax expense. Interest and penalties accrued for at September 30, 2007 were insignificant.

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ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion regarding Lazy Days' R.V. Center, Inc.'s financial condition and results of operations should be read in conjunction with our financial statements and the notes to those statements included in our Annual Report on Form 10-K for the year ended December 31, 2006.  Unless stated otherwise, the information provided in this section relates to Lazy Days' R.V. Center, Inc. only and not to its parent, LD Holdings.  This report contains forward-looking statements that involve risks and uncertainties.  Our actual results may differ materially from those indicated in forward-looking statements.

Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A) is designed to discuss our financial condition, changes in financial condition and results of operations, liquidity, critical accounting policies and the future impact of accounting standards that have been issued but are not yet effective.

Certain Defined Terms

In this report, “Lazy Days,” the “Company,” “we,” “us” or “our” refers to Lazy Days’ R.V. Center, Inc. In this report, “LD Holdings” refers to LD Holdings, Inc., our parent company, and, unless the context otherwise requires, its subsidiaries.

Overview

We are the world’s largest single-site dealer of recreational vehicles (“RVs”) with the industry’s broadest selection of new and previously-owned RVs. We are a primary point of distribution for nine of the leading manufacturers in the recreational vehicle retail industry, an industry with sales of approximately $12 billion in new, and $14 billion in pre-owned RV vehicles annually. Located on a 126-acre site outside of Tampa, Florida, we are widely recognized in the RV community as the premier destination for RV enthusiasts, attracting over 250,000 visitors each year to our RV dealership, and approximately 1.3 million visitors per year to our facility

(including visitors to additional attractions that appeal to RV owners located adjacent to our site, namely Camping World, Cracker Barrel and Flying J Travel Plaza).

We offer our customers an extensive selection of RVs and a variety of services, such as financing, insurance and a 230-bay, fully-staffed service and repair department. Our inventory is displayed in a park-like setting and our facility also includes a full-service RV park, two swimming pools, tennis courts and meeting and dining facilities.

We derive our revenues principally from sales and rental of new units, sales of pre-owned units, commissions earned on sales of third-party financing and insurance products, service and repairs, and visitors fees at Rally Park. In 2006, we derived our revenues from these categories in the following percentages, 58.8%, 32.8%, 2.8%, 5.1% and 0.5%, respectively. New and pre-owned unit sales accounted for more than 91% of total revenues.

The vast majority of our costs of revenues are related to inventory purchases. New and pre-owned vehicles have accounted for 97% or more of cost of revenues in each of the previous three years. Our gross profit margin has been 15.0%, 14.9% and 14.5% for the years ended December 31, 2006, 2005 and 2004, respectively.

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Our gross profit margins on pre-owned vehicles are typically higher on a percentage basis while our gross profit margins on an absolute dollar basis are typically higher on new vehicles. In 2006, gross profit margins on new vehicles averaged 9.1% compared to 10.7% for pre-owned vehicles, and our gross profit from sales of new vehicles was $40.5 million and $26.6 million for pre-owned vehicles. Although gross profit margins on new and pre-owned vehicles were down slightly from 2005, overall margins slightly increased due to improved margins relative to parts, service and other.

Salaries, commissions and benefits represent more than 50% of our total selling, general and administrative expense and is its largest component. In 2006, approximately 13.3% of our selling, general and administrative expense consisted of commissions for our sales force which are directly correlated to RV vehicle sales levels. Selling, general and administrative expense is typically consistent with revenue on a percentage basis. 

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Results of Operations

Three Months Ended September 30, 2007 Compared to Three Months Ended September 30, 2006 (Unaudited)

Revenues. Revenues at $156.2 million in the three months ended September 30, 2007 were equal to the three month period ended September 30, 2006. Total new units sold decreased 82 units from the comparable period in 2006.  Total pre-owned units sold increased 85 units from the comparable period in 2006.   Despite the total units sold remaining relatively flat, vehicle revenues declined $3.4 million due to lower new unit sales which carry a higher average sales price per unit sold.  Finance and insurance related revenues as well as parts and service revenues were up year over year. 

New Unit Sales. Sales of new vehicles decreased $16.2 million to $84.3 million in the three months ended September 30, 2007 from $100.5 million in the comparable period in 2006.  Class A diesel unit sales were down 12.1% in the three months ended September 2007 versus the comparable period in 2006.  Class A gas and Class C units remained relatively unchanged while towables declined 17.8%.   New unit sales by class in the three months ended September 30, 2007 as compared to the three months ended September 30, 2006 are summarized as follows:

	Three Months Ended
	September 30, 2007		September 30, 2006
Class A – Diesel		261		297
Class A – Gas		105		106
Class C		69		69
Total Motorized		435		472
Fifth Wheel		117		133
Travel Trailer		90		119
Total Towable		207		252
Total New Units		642		724

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Pre-Owned Unit Sales. Sales of pre-owned vehicles increased $12.7 million to $57.5 million in the three months ended September 30, 2007 from $44.8 million in the comparable period in 2006 driven by the higher volume and more favorable mix of high-end units.   Class A diesel and Class C units improved 27.5% and 53.8%, respectively while Class A gas and total towable units remained relatively flat. Pre-owned unit sales by class in the three months ended September 30, 2007 compared to the three months ended September 30, 2006 are summarized as follows:

	Three Months Ended
	September 30, 2007		September 30, 2006
Class A – Diesel		255		200
Class A – Gas		163		168
Class C		100		65
Total Motorized		518		433
Fifth Wheel		68		77
Travel Trailer		119		120
Other		84		74
Total Towable		271		271
Total Pre-Owned Units		789		704

Parts, Service and Other Revenues. Parts and service revenues in the three months ended September 30, 2007 increased $3.0 million to $9.0 million versus $6.0 million from the comparable period in 2006.  Retail and warranty sales increased 42.9% and 69.7% respectively.

Finance and Insurance Related Revenues. Finance, insurance and extended warranty related revenues increased from $4.4 million in the three months ended September 30, 2006 to $5.0 million in the comparable period in 2007.  The increase in finance, insurance and extended warranty related revenues were primarily attributable to favorable warranty income and improved finance penetration ratios.

Gross Profit. Gross profit consists of gross revenues less our cost of sales and services. Gross profit decreased from $22.1 million in the three months ended September 30, 2006 to $21.7 million in the comparable period in 2007. Gross profit margin was 13.9% in the three months ended September 30, 2007 as compared to 14.1% in 2006. The decrease in gross profit was primarily due to a $2.0 million decrease in new vehicle margin, offset by a $0.4 million increase in pre-owned vehicle margin and $0.8 million increase in parts & service margin. New vehicle margin in 2007 was negatively impacted by a non-cash LIFO adjustment representing $1.1 million of the variance quarter over quarter, lower volume, and lower average margins on new units. Pre-owned margin increase was due to increased volume (primarily driven by 85 increased motorized units). Despite the unit decline, finance & insurance performed well versus prior year with additional warranty income and improved finance penetration ratios.

Selling, General and Administrative Expenses. Selling, general and administrative expenses, including depreciation and amortization, decreased from $21.3 million the three months ended September 30, 2006 to $20.1 million in the comparable period in 2007. This decrease is primarily due to lower commissions expense (driven by lower gross margin), lower rent expense, decreased amortization expense and advertising partially offset by increased insurance costs, and professional service fees (driven by Sarbanes-Oxley implementation).

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Operating Profit. Operating profit represents our gross profit, less selling, general and administrative expenses including depreciation and amortization. Operating profit increased from $0.8 million in the three months ended September 30, 2006 to $1.6 million in the comparable period in 2007. This increase was due to decreased selling, general and administrative expenses in conjunction with a decline in gross profit.

Interest Expense—Floor Plan Credit Facility. Interest expense on our Floor Plan Credit Facility was $1.0 million in the three months ended September 30, 2006 and $0.7 million in the comparable period in 2007. The decrease is primarily due to the more favorable terms of the renegotiated floor plan facility, as well as a decrease in average borrowings.  We utilize all excess cash generated from operating activities after capital expenditures to pay down the floor plan.

Other Interest Expense. Other interest expense was related to interest expense under our Senior Notes. Other interest expense decreased from $4.3 million in the three months ended September 30, 2006 to $4.2 million in the comparable period in 2007.

Income Tax Expense. Income tax benefit approximated $1.7million in the three months ended September 30, 2006 compared to a $1.3 million benefit for the comparable period in 2007.  The Company’s effective income tax rate was 38.1% and 38.7% for the three-month periods ended September 30, 2007 and 2006, respectively.

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Nine Months Ended September 30, 2007 Compared to Nine Months Ended September 30, 2006 (Unaudited)

Revenues. Revenues increased $21.9 million to $608.7 million in the nine months ended September 30, 2007 from $586.8 million in the comparable period in 2006. Total retail vehicle sales decreased 174 units from 2006.  Despite the decrease in overall units, vehicle revenues increased due to a better product mix, higher average unit sales price and better finance penetration ratios.  In addition to the vehicle sales increase, finance and insurance, parts and service, and RallyPark also improved, partially offset by a decline in other income which was primarily due to an advertising revenue decrease from the discontinuation of the publication, RV Living.

New Unit Sales. Sales of new vehicles increased $4.3 million to $352.0 million in the nine months ended September 30, 2007 from $347.7 million in the comparable period in 2006.  While, 2007 new vehicle sales decreasing by 81 units, Class A unit sales increased 5.6% over the first nine months in 2006. The gain in motorized units was partially offset by a decline in towable units of 17.5%. New unit sales by class in the nine months ended September 30, 2007 compared to the nine months ended September 30, 2006 are summarized as follows:

	Nine Months Ended
	September 30, 2007		September 30, 2006
Class A – Diesel		1,100		1,032
Class A – Gas		438		424
Class C		260		276
Total Motorized		1,798		1,732
Fifth Wheel		402		463
Travel Trailer		290		376
Total Towable		692		839
Total New Units		2,490		2,571

Pre-Owned Unit Sales. Sales of pre-owned vehicles increased $15.3 million to $206.6 million in the nine months ended September 30, 2007 from $191.3 million in the comparable period in 2006.  The sales increase, despite a decline of 93 units sold, was attributable to a more favorable mix of motorized units with Class A diesels up 2.6% and Class C units up 23.7%.  Pre-owned unit sales by class in the nine months ended September 30, 2007 compared to the nine months ended September 30, 2006 are summarized as follows:

	Nine Months Ended
	September 30, 2007		September 30, 2006
Class A – Diesel		915		891
Class A – Gas		637		702
Class C		323		261
Total Motorized		1,875		1,854
Fifth Wheel		276		308
Travel Trailer		333		419
Other		282		278
Total Towable		891		1,005
Total Pre-Owned Units		2,766		2,859

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Parts, Service and Other Revenues. Parts and service revenues in the nine months ended September 30, 2007 increased $2.1 million to $31.1 million from $29.0 million in the comparable period in 2006.  Retail sales increased 6.4%, partially offset by a decline in warranty sales of 3.5%.

Finance and Insurance Related Revenues. Finance, insurance and extended warranty related revenues increased by $1.0 million to $17.2 million in the nine months ended September 30, 2007 compared to $16.2 million for the same period in 2006.  The increase in finance, insurance and extended warranty related revenues were primarily attributable to warranty income and improved finance penetration ratios; partially offset by lower finance margins and lower volume.

Gross Profit. Gross profit consists of gross revenues less our cost of sales and services. Gross profit decreased from $88.0 million in the nine months ended September 30, 2006 to $82.1 million in the comparable period in 2007. Gross profit margin was 13.5% in the nine months ended September 30, 2007 compared to 15.0% in the comparable period in 2006. The decrease in gross profit was primarily due to a $4.5 million decrease in new vehicle margin, a $0.9 million decrease in pre-owned vehicle margin and $0.8 million decrease in parts & service margin.  New vehicle margin in 2007 was negatively impacted by the decline in rental profit of $0.5 million, a non-cash LIFO adjustment representing $2.8 million of the variance year over year, lower volume, and lower average margins on new units. Pre-owned margins were negatively impacted by lower volume (primarily driven by 111 lower returned rental units that were sold in 2006 as part of the rental program in 2006).  Despite the unit decline, finance & insurance performed well versus prior year with additional warranty profit participation income and improved penetration ratios.

Selling, General and Administrative Expenses. Selling, general and administrative expenses, including depreciation and amortization, decreased $1.5 million from $67.6 million in the nine months ended September 30, 2006 to $66.1 million in the comparable period in 2007. This decrease is primarily due to lower commissions expense (driven by lower volume), lower rent expense, decreased amortization expense and advertising partially offset by increased insurance costs and professional service fees (driven by Sarbanes-Oxley implementation).

Operating Profit. Operating profit represents our gross profit, less selling, general and administrative expenses including depreciation and amortization. Operating profit decreased from $20.3 million in the nine months ended September 30, 2006 to $16.1 million in the comparable period in 2007. This decrease was due to the overall decline in gross profit offset by a decrease in selling, general and administrative expenses.

Interest Expense—Floor Plan Credit Facility. Interest expense on our Floor Plan Credit Facility decreased from $3.0 million in the nine months ended September 30, 2006 to $2.8 million in the comparable period in 2007.

Other Interest Expense. Other interest expense was related to interest expense under our Senior Notes. Other interest expense decreased from $13.0 million in the nine months ended September 30, 2006 to $12.6 million in the comparable period in 2007.

Income Tax Expense. Income tax expense decreased from $1.7 million in the nine months ended September 30, 2006 to $0.3 million in the comparable period in 2007.  The Company’s effective income tax rate was 42.7% and 38.7% for the nine-month periods ended September 30, 2007 and 2006, respectively.  The increase in the rates is due to additional interest for uncertain tax positions in accordance with FIN 48.

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Liquidity and Capital Resources

Liquidity. Historically, we have satisfied our liquidity needs through cash from operations and various borrowing arrangements.  Our cash requirements consist principally of scheduled payments of principal and interest on outstanding indebtedness (including indebtedness under our Floor Plan Credit Facility), purchase of inventory, capital expenditures, salary and sales commissions and lease expenses.  Based upon our current level of operations, we believe that our cash flow from operations, available cash and available borrowing under our Floor Plan Credit Facility will be adequate to meet our future liquidity needs for the next several years.

Operating Activities. Net cash provided by operating activities during the nine months ended September 30, 2007 was equal to $33.7 million, compared to $25.4 million during the comparable period in 2006. This increase in net cash provided by operating activities for 2007 was primarily the result of a decrease in inventories partially offset by an increase in receivables, and a decrease in net income (driven by decreases in vehicle unit sales).

Investing Activities. Net cash used in investing activities was $0.6 million during the nine months ended September 30, 2007, compared with net cash used in investing activities of $2.9 million during the comparable period in 2006. The decrease in net cash used in investing activities during the nine month period ended September 30, 2007 versus 2006 was attributable to a decrease in purchases of property and equipment.

Financing Activities. Net cash used in financing activities during the nine months ended September 30, 2007 was $30.0 million, compared to $19.0 million during the comparable period in 2006. The change was due to utilizing increased cash provided by operating activities to increase net payments under our Floor Plan Credit Facility in 2007.

Working Capital. Working capital, including cash and cash equivalents, totaled approximately $37.8 million at September 30, 2007. We maintain sizable inventories in order to meet the expectations of our customers, and believe that we will continue to require working capital consistent with past experience. Historically, we have funded our operations with internally generated cash flow and borrowings.

Our principal sources of funds are cash flows from operating activities and available borrowings under our Floor Plan Credit Facility, including the Revolver. As of September 30, 2007, we had $100.0 million of borrowing capacity and $36.6 million of availability under our Floor Plan Credit Facility.  Borrowings under the Floor Plan Credit Facility are subject to certain restrictive covenants, including a minimum interest coverage ratio, as defined, which is 1.30 through February 2007 and 1.35 thereafter. We have nothing drawn under our Revolver as of September 30, 2007.  The Company is eligible to borrow under the Revolver when its interest coverage ratio, as defined, exceeds 1.40 and the Company’s trailing twelve month net income, as defined, exceeds $500,000.

The Company shall offer to repurchase Senior Notes from all holders, on a pro rata basis, to the extent of 50% of the Company’s free cash flow, as defined, for any six month period ending on either June 30 or December 31 of any fiscal year (“Free Cash Flow Offer”).  The Company’s estimated free cash flow for the six-month period ended June 30, 2007 was recorded as a current maturity of long-term debt.  In October, the offer was completed for $2,633,052, consisting of $2,450,000 in bond redemption, a $73,500 redemption premium and $109,552 in accrued interest.

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As of September 30, 2007, our capital expenditures approximated $0.6 million for the nine-month period. Our Floor Plan Credit Facility limits our ability to make capital expenditures in excess of $5.0 million per annum. Based on current estimates, management believes that the amount of capital expenditures permitted to be made under our Floor Plan Credit Facility will be adequate to grow our business according to our business strategy and to maintain the properties and business of our continuing operations.

Based on current facts and circumstances, we believe we have adequate cash flow coupled with borrowing capacity under our Floor Plan Credit Facility to fund our current operations, Free Cash Flow Offer and capital expenditures.

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Cautionary Statement for Forward-Looking Information

Certain information set forth in this report contains “forward-looking statements” within the meaning of the federal securities laws. Forward-looking statements include statements concerning our plans, objectives, goals, strategies, future events, future revenues or performance, capital expenditures, financing needs, plans or intentions relating to acquisitions and other information that is not historical information. In some cases, forward-looking statements can be identified by terminology such as “believes,” “expects,” “may,” “will,” “should,” or “anticipates,” or the negative of such terms or other comparable terminology, or by discussions of strategy. We may also make additional forward-looking statements from time to time. All such subsequent forward-looking statements, whether written or oral, by us or on our behalf, are also expressly qualified by these cautionary statements.

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

There are a number of risks and uncertainties that could cause our actual results to differ materially from the forward-looking statements contained in or contemplated by this report. The following are among the factors that could cause actual results to differ materially from the forward-looking statements. There may be other factors, including those discussed elsewhere in this report, which may cause our actual results to differ materially from the forward-looking statements. Any forward-looking statements should be considered in light of the risk factors specified in our Annual Report on Form 10-K for the fiscal year ended December 31, 2006, some of which are summarized below.

§   We may experience unanticipated fluctuations in our operating results for a variety of reasons.

§   Reduced availability of financing for our customers could adversely affect our sales volume.

§   Our geographic concentration heightens our exposure to adverse regional developments, including adverse economic conditions, demographic changes, severe weather events and natural disasters.

§   Our business is cyclical and seasonal and this can lead to fluctuations in our sales and operating results.

§   Changes in consumer preferences for our products or our failure to gauge those preferences could lead to reduced sales and additional costs.

§   We are dependent on continued relationships with major manufacturers who supply our products.

§   If the frequency and size of product liability and other claims against us, including wrongful death, increase, our business, results of operations and financial condition may be harmed.

§   Fuel shortages, or higher prices for fuel, could have a negative effect on sales of recreational vehicles.

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§   We require floor plan financing to purchase our inventory.  The absence of available floor plan financing could have a material adverse effect on our operations and hinder our ability to achieve our growth strategy.

§   A substantial portion of our income is from financing, insurance and extended service contracts, which depend on third-party lenders and insurance companies.  We cannot assure you third-party lending institutions will continue to provide financing for RV purchases.

§   The loss of key personnel and/or failure to attract and retain highly qualified personnel could make it more difficult for us to generate cash flow from operations and service our debt.

§   The interests of our controlling stockholder may be in conflict with your interests as a holder of Notes.

§   We are subject to extensive government regulation.  Changes in these regulations could have a negative effect on our financial condition.

§   ·The occurrence of extraordinary events, such as a major terrorist attack in the United States, may adversely affect our business, resulting in a decrease in our revenues.

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ITEM 3. Quantitative and Qualitative Disclosures about Market Risk

Interest Rates. We are exposed to market risk from changes in the interest rates on a portion of our outstanding indebtedness. There were no borrowings outstanding at September 30, 2007 under our Revolver credit facility. Amounts outstanding under the Floor Plan Credit Facility bear interest at a variable rate based on prime or LIBOR as adjusted each interest period. As of September 30, 2007, based on the aggregate amount of $37.4 million outstanding under our Floor Plan Financing Facility as of such date, a 100 basis point change in interest rates would have changed our annual floor plan interest expense by approximately $0.4 million. Outstanding balances under our Revolver bear interest at a variable rate on prime or LIBOR as adjusted each interest period.

We continually evaluate our exposure to interest rate fluctuations and follow established policies and procedures to implement strategies designed to manage the amount of variable rate indebtedness outstanding at any point in time in an effort to mitigate the effect of interest rate fluctuations on our earnings and cash flows.

Interest rate fluctuations affect the fair market value of our fixed rate debt, including the Senior Notes, but with respect to such fixed rate instruments, do not impact our earnings or cash flows.

Foreign Currency Exchange Rates. We currently have very limited exposure to exchange rate risk as we have very limited foreign operations. Nearly all of our new and pre-owned vehicle inventories are sourced domestically.

Inflation. Although we cannot accurately anticipate the effect of inflation on our operations, we believe that inflation has not had, and is not likely in the foreseeable future to have, a material impact on our results of operations.

Cyclicality. Unit sales of recreational vehicles historically have been cyclical, fluctuating with general economic cycles. During economic downturns, the RV retailing industry tends to experience similar periods of decline and recession as the general economy. We believe that the industry is influenced by general economic conditions and particularly by consumer confidence, the level of personal discretionary spending, fuel prices, interest rates and credit availability.

Seasonality and Effects of Weather. Our operations generally experience higher volumes of vehicle sales in the first and fourth quarters of each year due in part to consumer buying trends and our hospitable warm climate during the winter months. The service and parts business experiences relatively modest seasonal fluctuations.

We have a single location near Tampa, Florida, which is in close proximity to the Gulf of Mexico. As a single-site operator, a severe weather event such as a hurricane could cause severe damage to our property and inventory. Although we believe we have adequate insurance coverage, if we were to experience a catastrophic loss, we may exceed our policy limits and/or we may have difficulty obtaining similar insurance coverage in the future. There was minimal impact to our facility as a result of hurricane activity throughout the state of Florida in 2005 and 2004.

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ITEM 4. Controls and Procedures

Our management, with the participation of our chief executive officer and chief financial officer, has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”) as of September 30, 2007. Based on this evaluation, our chief executive officer and chief financial officer have concluded that, as of September 30, 2007, our disclosure controls and procedures were (1) designed to ensure that material information relating to our Company, is made known to the chief executive officer and chief financial officer by others within those entities, particularly during the period in which this report was being prepared, and (2) effective, in that they provide reasonable assurance that information required to be disclosed by our Company in the reports that we file or submit, or would have filed or submitted, under the Exchange Act are recorded, processed, summarized and reported within the time periods specified in the applicable rules and forms.

No change in our internal control over financial reporting occurred during the three and nine-months ended September 30, 2007 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act).

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PART II. OTHER INFORMATION

ITEM 1. Legal Proceedings

We are party to numerous legal proceedings that arise in the ordinary course of our business. We do not believe that the ultimate resolution of these matters will have a material adverse effect on our business, results of operations, financial condition or cash flows. However, the results of these matters cannot be predicted with certainty and an unfavorable resolution of one or more of these matters could have a material adverse effect on our business, results of operations, financial condition and cash flows.

ITEM 1A. Risk Factors

There have been no material changes to the factors disclosed in ITEM 1A. Risk Factors in our Annual Report on Form 10-K for the fiscal year ended December 31, 2006.

ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds

Not applicable.

ITEM 3. Defaults Upon Senior Securities

Not applicable.

ITEM 4. Submission of Matters to a Vote of Security Holders

Not applicable.

ITEM 5. Other Information

Not applicable.

ITEM 6. Exhibits

31.1   Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2   Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes –Oxley Act of 2002.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Lazy Days’ R.V. Center, Inc.
/s/ John Horton
By:	John Horton
Its:	Chief Executive Officer
/s/ Randall Lay
By:	Randall Lay
Its:	Chief Financial Officer
Dated:  November 14, 2007

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EXHIBIT INDEX

Number	Description of Exhibits
31.1	Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

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