Camping World Holdings, Inc. Reports Second Quarter 2021 Results and Raises Full Year Guidance due to Continued Demand

August 03, 2021

LINCOLNSHIRE, IL--(BUSINESS WIRE)-- Camping World Holdings, Inc. (NYSE: CWH) (the “Company”), America’s Recreation Dealer, today reported results for the second quarter ended June 30, 2021.

Second Quarter Operating Highlights(1)

  • Revenue was a record $2.062 billion, an increase of $455.1 million, or 28.3%
  • Gross profit was a record $759.8 million, an increase of $271.2 million, or 55.5%, and gross margin was 36.9%, an increase of 644 basis points
  • Net income was a record $246.1 million, an increase of $82.9 million, or 50.8%. Net income margin was 11.9% versus 10.2% for the second quarter of 2020
  • Diluted earnings per share of Class A common stock was $2.33 and adjusted earnings per share - diluted(2) of Class A common stock was $2.51
  • Adjusted EBITDA(2) was a record $333.3 million, an increase of $112.6 million, or 51.0%, and adjusted EBITDA margin(2) was 16.2% for the second quarter versus 13.7% for the second quarter of 2020
  • Vehicle inventories increased by $67.3 million: new vehicle inventories were down $65.5 million and used vehicle inventories were up $132.8 million
  • On June 3, 2021, we refinanced our senior secured credit facilities, reducing our outstanding principal by $38.6 million, extending the term to 2028, and lowering the applicable margin rate by 25 bps.
  • Nine RV dealership locations were acquired in the second quarter of 2021. We currently have operating dealerships, agreements to acquire land or existing RV dealerships, or have dealerships under construction in 46 of the 48 contiguous states.

2021 Adjusted EBITDA Guidance Update

Marcus Lemonis, Chairman and CEO of Camping World Holdings, Inc. stated, “Our team’s strong performance for the quarter has allowed us to reach a Company high Trailing Twelve-Month Adjusted EBITDA(2) of $831 million. As a result, we are raising our 2021 fiscal year guidance(3) of Adjusted EBITDA of $770 million to $810 million to a revised Adjusted EBITDA of $840 million to $860 million.”

(1) Unless otherwise indicated, all financial comparisons in this press release compare our financial results for the second quarter ended June 30, 2021 to our financial results from the second quarter ended June 30, 2020.

(2) Adjusted earnings per share – diluted, adjusted EBITDA, adjusted EBITDA Margin, and Trailing Twelve-Month Adjusted EBITDA are non-GAAP measures. For a reconciliation of these non-GAAP measures to the most directly comparable GAAP measures, see the “Non-GAAP Financial Measures” section later in this press release. A reconciliation for the Company’s Adjusted EBITDA outlook to the corresponding GAAP measure on a forward-looking basis cannot be provided without unreasonable efforts, as we are unable to provide reconciling information with respect to certain items. However, in 2021 the Company expects equity-based compensation of approximately $27-30 million, depreciation and amortization of approximately $53-58 million, other interest expense of approximately $47-50 million, and restructuring charges of approximately $10-13 million, each of which is a reconciling item to Net Income.

(3) Prior guidance provided on May 4, 2021.

Stock Repurchase Program

On October 30, 2020, the Company’s Board of Directors authorized a stock repurchase program for the repurchase of up to $100.0 million of the Company’s Class A common stock, expiring on October 31, 2022.

During the three months ended June 30, 2021, the Company repurchased 1,149,742 shares of Class A common stock under this program for approximately $45.5 million, including commissions paid, at a weighted average price per share of $39.55, which is recorded as treasury stock on the condensed consolidated balance sheets. As of June 30, 2021, the remaining approved amount for repurchases of Class A common stock under the share repurchase program was approximately $33.0 million.

Earnings Conference Call and Webcast Information

A conference call to discuss the Company’s second quarter 2021 financial results is scheduled for today, August 3, 2021, at 8:30 am Eastern Time. Investors and analysts can participate on the conference call by dialing (866) 548-4713 or (323) 794-2093 and using conference ID# 7476436. Interested parties can also listen to a live webcast or replay of the conference call by logging on to the Investor Relations section on the Company’s website at http://investor.campingworld.com. The replay of the conference call webcast will be available on the investor relations website for approximately 90 days.

Presentation

This press release presents historical results for the periods presented for the Company and its subsidiaries, which are presented in accordance with accounting principles generally accepted in the United States (“GAAP”), unless noted as a non-GAAP financial measure. The Company’s initial public offering (“IPO”) and related reorganization transactions (“Reorganization Transactions”) that occurred on October 6, 2016 resulted in the Company as the sole managing member of CWGS Enterprises, LLC (“CWGS, LLC”), with sole voting power in and control of the management of CWGS, LLC. Despite its position as sole managing member of CWGS, LLC, the Company had a minority economic interest in CWGS, LLC through March 11, 2021. As of June 30, 2021, the Company owned 51.6% of CWGS, LLC. Accordingly, the Company consolidates the financial results of CWGS, LLC and reports a non-controlling interest in its consolidated financial statements.

About Camping World Holdings, Inc.

Camping World Holdings, Inc., headquartered in Lincolnshire, IL, (together with its subsidiaries) is America’s largest retailer of RVs and related products and services. Our vision is to build a long-term legacy business that makes RVing fun and easy, and our Camping World and Good Sam brands have been serving RV consumers since 1966. We strive to build long-term value for our customers, employees, and shareholders by combining a unique and comprehensive assortment of RV products and services with a national network of RV dealerships, service centers and customer support centers along with the industry’s most extensive online presence and a highly-trained and knowledgeable team of associates serving our customers, the RV lifestyle, and the communities in which we operate. We also believe that our Good Sam organization and family of programs and services uniquely enables us to connect with our customers as stewards of the RV enthusiast community and the RV lifestyle. With over 185 locations in 40 states, Camping World, and sister brand Gander RV & Outdoors, have grown to become prime destinations for everything RV.

For more information, please visit www.CampingWorld.com.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements contained in this press release that do not relate to matters of historical fact should be considered forward-looking statements, including, without limitation, statements about our business plans and goals, including statements regarding the strength of our business, our long-term plan, potential stock repurchases, and our future financial results. These forward-looking statements are based on management’s current expectations.

These statements are neither promises nor guarantees, but involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements, including, but not limited to, the following: the COVID-19 pandemic, which has had, and could have in the future, certain negative impacts on our business; our ability to execute and achieve the expected benefits of our 2019 Strategic Shift; the availability of financing to us and our customers; fuel shortages or high prices for fuel; the success of our manufacturers; general economic conditions in our markets; changes in consumer preferences; competition in our industry; risks related to acquisitions and expansion into new markets; our failure to maintain the strength and value of our brands; our ability to manage our inventory; fluctuations in our same store sales; the cyclical and seasonal nature of our business; our dependence on the availability of adequate capital and risks related to our debt; our reliance on six fulfillment and distribution centers; natural disasters, including epidemic outbreaks; risks associated with selling goods manufactured abroad; our dependence on our relationships with third party suppliers and lending institutions; our ability to retain senior executives and attract and retain other qualified employees; risks associated with leasing substantial amounts of space; regulatory risks; data privacy and cybersecurity risks; risks related to our intellectual property; the impact of ongoing or future lawsuits against us and certain of our officers and directors; and risks related to our organizational structure.

These and other important factors discussed under the caption “Risk Factors” in our Annual Report on Form 10‑K filed for the year ended December 31, 2020 and our other reports filed with the SEC could cause actual results to differ materially from those indicated by the forward-looking statements made in this press release. Any such forward-looking statements represent management’s estimates as of the date of this press release. While we may elect to update such forward-looking statements at some point in the future, we disclaim any obligation to do so, even if subsequent events cause our views to change, except as required under applicable law. These forward-looking statements should not be relied upon as representing our views as of any date subsequent to the date of this press release.

Investor Conference

On September 14th and 15th, we will be holding an In-Person Investor Conference in Salt Lake City, Utah for the purpose of updating and discussing the Company’s strategic goals and initiatives with investors, advisors and analysts, and introduce a new Electric World retail location. To RSVP for this event, please complete the form at https://go.campingworld.com/investor-day/. For hotel guestrooms for this event, please use this link: https://reservations.travelclick.com/5003?groupID=3224259.

 

Camping World Holdings, Inc. and Subsidiaries

 

Consolidated Statements of Operations (unaudited)

 

(In Thousands Except Per Share Amounts)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Six Months Ended

 

 

June 30,

 

June 30,

 

 

2021

 

2020

 

2021

 

2020

Revenue:

 

 

 

 

 

 

 

 

 

 

 

 

Good Sam Services and Plans

 

$

46,902

 

$

44,519

 

$

87,773

 

$

91,727

RV and Outdoor Retail

 

 

 

 

 

 

 

 

 

 

 

 

New vehicles

 

 

1,058,778

 

 

898,175

 

 

1,880,754

 

 

1,395,492

Used vehicles

 

 

460,137

 

 

274,910

 

 

754,394

 

 

481,575

Products, service and other

 

 

305,554

 

 

231,172

 

 

556,824

 

 

403,795

Finance and insurance, net

 

 

177,685

 

 

147,318

 

 

315,939

 

 

239,774

Good Sam Club

 

 

12,751

 

 

10,651

 

 

23,904

 

 

21,655

Subtotal

 

 

2,014,905

 

 

1,562,226

 

 

3,531,815

 

 

2,542,291

Total revenue

 

 

2,061,807

 

 

1,606,745

 

 

3,619,588

 

 

2,634,018

Costs applicable to revenue (exclusive of depreciation and amortization shown separately below):

 

 

 

 

 

 

 

 

 

 

 

 

Good Sam Services and Plans

 

 

17,180

 

 

15,234

 

 

31,604

 

 

37,093

RV and Outdoor Retail

 

 

 

 

 

 

 

 

 

 

 

 

New vehicles

 

 

758,108

 

 

752,570

 

 

1,401,788

 

 

1,179,012

Used vehicles

 

 

334,829

 

 

208,829

 

 

558,022

 

 

372,622

Products, service and other

 

 

189,952

 

 

139,341

 

 

344,098

 

 

249,610

Good Sam Club

 

 

1,895

 

 

2,133

 

 

3,739

 

 

4,380

Subtotal

 

 

1,284,784

 

 

1,102,873

 

 

2,307,647

 

 

1,805,624

Total costs applicable to revenue

 

 

1,301,964

 

 

1,118,107

 

 

2,339,251

 

 

1,842,717

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Selling, general, and administrative

 

 

432,249

 

 

271,591

 

 

769,283

 

 

539,247

Debt restructure expense

 

 

9,031

 

 

 

 

9,031

 

 

Depreciation and amortization

 

 

13,044

 

 

12,567

 

 

25,745

 

 

26,645

Long-lived asset impairment

 

 

536

 

 

 

 

1,082

 

 

6,569

Lease termination

 

 

 

 

868

 

 

1,756

 

 

1,452

(Gain) loss on disposal of assets

 

 

10

 

 

272

 

 

(89)

 

 

783

Total operating expenses

 

 

454,870

 

 

285,298

 

 

806,808

 

 

574,696

Income from operations

 

 

304,973

 

 

203,340

 

 

473,529

 

 

216,605

Other income (expense):

 

 

 

 

 

 

 

 

 

 

 

 

Floor plan interest expense

 

 

(3,371)

 

 

(5,098)

 

 

(6,761)

 

 

(13,702)

Other interest expense, net

 

 

(11,789)

 

 

(14,547)

 

 

(24,012)

 

 

(29,205)

Loss on debt restructure

 

 

(1,390)

 

 

 

 

(1,390)

 

 

Tax Receivable Agreement liability adjustment

 

 

 

 

 

 

(3,520)

 

 

Other income, net

 

 

 

 

 

 

45

 

 

Total other expense

 

 

(16,550)

 

 

(19,645)

 

 

(35,638)

 

 

(42,907)

Income before income taxes

 

 

288,423

 

 

183,695

 

 

437,891

 

 

173,698

Income tax expense

 

 

(42,347)

 

 

(20,473)

 

 

(44,390)

 

 

(24,605)

Net income

 

 

246,076

 

 

163,222

 

 

393,501

 

 

149,093

Less: net income attributable to non-controlling interests

 

 

(136,888)

 

 

(105,145)

 

 

(221,991)

 

 

(99,176)

Net income attributable to Camping World Holdings, Inc.

 

$

109,188

 

$

58,077

 

$

171,510

 

$

49,917

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per share of Class A common stock:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

2.37

 

$

1.54

 

$

3.83

 

$

1.33

Diluted

 

$

2.33

 

$

1.54

 

$

3.74

 

$

1.32

Weighted average shares of Class A common stock outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

45,983

 

 

37,635

 

 

44,790

 

 

37,585

Diluted

 

 

47,550

 

 

89,689

 

 

90,422

 

 

89,578

 

Camping World Holdings, Inc.

 

Supplemental Data

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended June 30,

 

Increase

 

 

Percent

 

 

2021

 

 

2020

 

 

(decrease)

 

 

Change

Unit sales

 

 

 

 

 

 

 

 

 

 

 

 

 

New vehicles

 

 

26,181

 

 

 

27,168

 

 

 

(987

)

 

 

 

(3.6

)%

Used vehicles

 

 

14,319

 

 

 

11,618

 

 

 

2,701

 

 

 

 

23.2

%

Total

 

 

40,500

 

 

 

38,786

 

 

 

1,714

 

 

 

 

4.4

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average selling price

 

 

 

 

 

 

 

 

 

 

 

 

 

New vehicles

 

$

40,441

 

 

$

33,060

 

 

$

7,381

 

 

 

 

22.3

%

Used vehicles

 

$

32,135

 

 

$

23,662

 

 

$

8,472

 

 

 

 

35.8

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Same store unit sales(1)

 

 

 

 

 

 

 

 

 

 

 

 

 

New vehicles

 

 

23,541

 

 

 

26,840

 

 

 

(3,299

)

 

 

 

(12.3

)%

Used vehicles

 

 

13,061

 

 

 

11,501

 

 

 

1,560

 

 

 

 

13.6

%

Total

 

 

36,602

 

 

 

38,341

 

 

 

(1,739

)

 

 

 

(4.5

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Same store revenue(1) ($ in 000's)

 

 

 

 

 

 

 

 

 

 

 

 

 

New vehicles

 

$

958,142

 

 

$

886,778

 

 

$

71,364

 

 

 

 

8.0

%

Used vehicles

 

 

425,396

 

 

 

271,825

 

 

 

153,571

 

 

 

 

56.5

%

Products, service and other

 

 

214,041

 

 

 

171,451

 

 

 

42,590

 

 

 

 

24.8

%

Finance and insurance, net

 

 

162,922

 

 

 

145,882

 

 

 

17,040

 

 

 

 

11.7

%

Total

 

$

1,760,501

 

 

$

1,475,936

 

 

$

284,565

 

 

 

 

19.3

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average gross profit per unit

 

 

 

 

 

 

 

 

 

 

 

 

 

New vehicles

 

$

11,484

 

 

$

5,359

 

 

$

6,125

 

 

 

 

114.3

%

Used vehicles

 

$

8,751

 

 

$

5,688

 

 

$

3,063

 

 

 

 

53.9

%

Finance and insurance, net per vehicle unit

 

$

4,387

 

 

$

3,798

 

 

$

589

 

 

 

 

15.5

%

Total vehicle front-end yield(2)

 

$

14,905

 

 

$

9,256

 

 

$

5,649

 

 

 

 

61.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross margin

 

 

 

 

 

 

 

 

 

 

 

 

 

Good Sam Services and Plans

 

 

63.4

%

 

 

65.8

%

 

 

(241

)

bps

 

 

 

New vehicles

 

 

28.4

%

 

 

16.2

%

 

 

1,219

 

bps

 

 

 

Used vehicles

 

 

27.2

%

 

 

24.0

%

 

 

320

 

bps

 

 

 

Products, service and other

 

 

37.8

%

 

 

39.7

%

 

 

(189

)

bps

 

 

 

Finance and insurance, net

 

 

100.0

%

 

 

100.0

%

 

 

unch.

bps

 

 

 

Good Sam Club

 

 

85.1

%

 

 

80.0

%

 

 

516

 

bps

 

 

 

Subtotal RV and Outdoor Retail

 

 

36.2

%

 

 

29.4

%

 

 

683

 

bps

 

 

 

Total gross margin

 

 

36.9

%

 

 

30.4

%

 

 

644

 

bps

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Inventories ($ in 000's)

 

 

 

 

 

 

 

 

 

 

 

 

 

New vehicles

 

$

645,670

 

 

$

711,164

 

 

$

(65,494

)

 

 

 

(9.2

)%

Used vehicles

 

 

259,511

 

 

 

126,687

 

 

 

132,824

 

 

 

 

104.8

%

Products, parts, accessories and misc.

 

 

291,506

 

 

 

214,357

 

 

 

77,149

 

 

 

 

36.0

%

Total RV and Outdoor Retail inventories

 

$

1,196,687

 

 

$

1,052,208

 

 

$

144,479

 

 

 

 

13.7

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Vehicle inventory per location ($ in 000's)

 

 

 

 

 

 

 

 

 

 

 

 

 

New vehicle inventory per dealer location

 

$

3,669

 

 

$

4,679

 

 

$

(1,010

)

 

 

 

(21.6

)%

Used vehicle inventory per dealer location

 

$

1,474

 

 

 

833

 

 

$

641

 

 

 

 

76.9

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Vehicle inventory turnover(3)

 

 

 

 

 

 

 

 

 

 

 

 

 

New vehicle inventory turnover

 

 

3.9

 

 

 

2.3

 

 

 

1.6

 

 

 

 

66.7

%

Used vehicle inventory turnover

 

 

5.0

 

 

 

4.7

 

 

 

0.3

 

 

 

 

5.6

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Retail locations

 

 

 

 

 

 

 

 

 

 

 

 

 

RV dealerships

 

 

176

 

 

 

152

 

 

 

24

 

 

 

 

15.8

%

RV service & retail centers

 

 

10

 

 

 

10

 

 

 

 

 

 

 

0.0

%

Subtotal

 

 

186

 

 

 

162

 

 

 

24

 

 

 

 

14.8

%

Other retail stores

 

 

1

 

 

 

2

 

 

 

(1

)

 

 

 

(50.0

)%

Total

 

 

187

 

 

 

164

 

 

 

23

 

 

 

 

14.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other data

 

 

 

 

 

 

 

 

 

 

 

 

 

Active Customers(4)

 

 

5,482,640

 

 

 

5,220,367

 

 

 

262,273

 

 

 

 

5.0

%

Good Sam Club members

 

 

2,215,227

 

 

 

2,067,253

 

 

 

147,974

 

 

 

 

7.2

%

Finance and insurance gross profit as a % of total vehicle revenue

 

 

11.7

%

 

 

12.6

%

 

 

(86

)

bps

 

 

n/a

 

Same store locations

 

 

158

 

 

 

n/a

 

 

 

n/a

 

 

 

 

n/a

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Six Months Ended June 30,

 

Increase

 

 

Percent

 

 

2021

 

 

2020

 

 

(decrease)

 

 

Change

Unit sales

 

 

 

 

 

 

 

 

 

 

 

 

 

New vehicles

 

 

47,614

 

 

 

41,376

 

 

 

6,238

 

 

 

 

15.1

%

Used vehicles

 

 

24,638

 

 

 

20,300

 

 

 

4,338

 

 

 

 

21.4

%

Total

 

 

72,252

 

 

 

61,676

 

 

 

10,576

 

 

 

 

17.1

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average selling price

 

 

 

 

 

 

 

 

 

 

 

 

 

New vehicles

 

$

39,500

 

 

$

33,727

 

 

$

5,773

 

 

 

 

17.1

%

Used vehicles

 

$

30,619

 

 

$

23,723

 

 

$

6,896

 

 

 

 

29.1

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Same store unit sales(1)

 

 

 

 

 

 

 

 

 

 

 

 

 

New vehicles

 

 

43,569

 

 

 

40,678

 

 

 

2,891

 

 

 

 

7.1

%

Used vehicles

 

 

22,803

 

 

 

19,985

 

 

 

2,818

 

 

 

 

14.1

%

Total

 

 

66,372

 

 

 

60,663

 

 

 

5,709

 

 

 

 

9.4

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Same store revenue(1) ($ in 000's)

 

 

 

 

 

 

 

 

 

 

 

 

 

New vehicles

 

$

1,729,426

 

 

$

1,371,604

 

 

$

357,822

 

 

 

 

26.1

%

Used vehicles

 

 

704,910

 

 

 

474,016

 

 

 

230,894

 

 

 

 

48.7

%

Products, service and other

 

 

381,929

 

 

 

298,314

 

 

 

83,615

 

 

 

 

28.0

%

Finance and insurance, net

 

 

292,834

 

 

 

236,309

 

 

 

56,525

 

 

 

 

23.9

%

Total

 

$

3,109,099

 

 

$

2,380,243

 

 

$

728,855

 

 

 

 

30.6

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average gross profit per unit

 

 

 

 

 

 

 

 

 

 

 

 

 

New vehicles

 

$

10,059

 

 

$

5,232

 

 

$

4,827

 

 

 

 

92.3

%

Used vehicles

 

 

7,970

 

 

 

5,367

 

 

 

2,603

 

 

 

 

48.5

%

Finance and insurance, net per vehicle unit

 

 

4,373

 

 

 

3,888

 

 

 

485

 

 

 

 

12.5

%

Total vehicle front-end yield(2)

 

 

13,720

 

 

 

9,164

 

 

 

4,556

 

 

 

 

49.7

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross margin

 

 

 

 

 

 

 

 

 

 

 

 

 

Good Sam Services and Plans

 

 

64.0

%

 

 

59.6

%

 

 

443

 

bps

 

 

 

New vehicles

 

 

25.5

%

 

 

15.5

%

 

 

995

 

bps

 

 

 

Used vehicles

 

 

26.0

%

 

 

22.6

%

 

 

341

 

bps

 

 

 

Products, service and other

 

 

38.2

%

 

 

38.2

%

 

 

2

 

bps

 

 

 

Finance and insurance, net

 

 

100.0

%

 

 

100.0

%

 

 

unch.

bps

 

 

 

Good Sam Club

 

 

84.4

%

 

 

79.8

%

 

 

458

 

bps

 

 

 

Subtotal RV and Outdoor Retail

 

 

34.7

%

 

 

29.0

%

 

 

568

 

bps

 

 

 

Total gross margin

 

 

35.4

%

 

 

30.0

%

 

 

533

 

bps

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Inventories ($ in 000's)

 

 

 

 

 

 

 

 

 

 

 

 

 

New vehicles

 

$

645,670

 

 

$

711,164

 

 

$

(65,494

)

 

 

 

(9.2

)%

Used vehicles

 

 

259,511

 

 

 

126,687

 

 

 

132,824

 

 

 

 

104.8

%

Products, parts, accessories and misc.

 

 

291,506

 

 

 

214,357

 

 

 

77,149

 

 

 

 

36.0

%

Total RV and Outdoor Retail inventories

 

$

1,196,687

 

 

$

1,052,208

 

 

$

144,479

 

 

 

 

13.7

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Vehicle inventory per location ($ in 000's)

 

 

 

 

 

 

 

 

 

 

 

 

 

New vehicle inventory per dealer location

 

$

3,669

 

 

$

4,679

 

 

$

(1,010

)

 

 

 

(21.6

)%

Used vehicle inventory per dealer location

 

 

1,474

 

 

 

833

 

 

 

641

 

 

 

 

76.9

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Vehicle inventory turnover(3)

 

 

 

 

 

 

 

 

 

 

 

 

 

New vehicle inventory turnover

 

 

3.9

 

 

 

2.3

 

 

 

1.6

 

 

 

 

66.7

%

Used vehicle inventory turnover

 

 

5.0

 

 

 

4.7

 

 

 

0.3

 

 

 

 

5.6

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Retail locations

 

 

 

 

 

 

 

 

 

 

 

 

 

RV dealerships

 

 

176

 

 

 

152

 

 

 

24

 

 

 

 

15.8

%

RV service & retail centers

 

 

10

 

 

 

10

 

 

 

 

 

 

 

0.0

%

Subtotal

 

 

186

 

 

 

162

 

 

 

24

 

 

 

 

14.8

%

Other retail stores

 

 

1

 

 

 

2

 

 

 

(1

)

 

 

 

(50.0

)%

Total

 

 

187

 

 

 

164

 

 

 

23

 

 

 

 

14.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other data

 

 

 

 

 

 

 

 

 

 

 

 

 

Active Customers(4)

 

 

5,482,640

 

 

 

5,220,367

 

 

 

262,273

 

 

 

 

5.0

%

Good Sam Club members

 

 

2,215,227

 

 

 

2,067,253

 

 

 

147,974

 

 

 

 

7.2

%

Finance and insurance gross profit as a % of total vehicle revenue

 

 

12.0

%

 

 

12.8

%

 

 

(78

)

bps

 

 

n/a

 

Same store locations

 

 

158

 

 

 

n/a

 

 

 

n/a

 

 

 

 

n/a

 

(1) Our same store revenue and units calculations for a given period include only those stores that were open both at the end of the corresponding period and at the beginning of the preceding fiscal year.

(2) Front end yield is calculated as gross profit from new vehicles, used vehicles and finance and insurance (net), divided by combined new and used retail units sold.

(3) Inventory turnover calculated as vehicle costs applicable to revenue divided by average quarterly ending vehicle inventory over the last twelve months.

(4) An Active Customer is a customer who has transacted with us in any of the eight most recently completed fiscal quarters prior to the date of measurement.

 

Camping World Holdings, Inc. and Subsidiaries

 

Consolidated Balance Sheets (unaudited)

 

 ($ in Thousands Except Per Share Amounts)

 

 

 

 

 

 

 

 

 

June 30,

 

December 31,

 

 

2021

 

 

2020

 

Assets

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

191,507

 

 

$

166,072

 

Contracts in transit

 

 

150,919

 

 

 

48,175

 

Accounts receivable, net

 

 

95,854

 

 

 

83,422

 

Inventories

 

 

1,196,705

 

 

 

1,136,345

 

Prepaid expenses and other assets

 

 

55,307

 

 

 

60,211

 

Total current assets

 

 

1,690,292

 

 

 

1,494,225

 

Property and equipment, net

 

 

456,406

 

 

 

367,898

 

Operating lease assets

 

 

795,895

 

 

 

769,487

 

Deferred tax assets, net

 

 

223,248

 

 

 

165,708

 

Intangible assets, net

 

 

30,769

 

 

 

30,122

 

Goodwill

 

 

483,295

 

 

 

413,123

 

Other assets

 

 

16,917

 

 

 

15,868

 

Total assets

 

$

3,696,822

 

 

$

3,256,431

 

Liabilities and stockholders' equity (deficit)

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

261,696

 

 

$

148,462

 

Accrued liabilities

 

 

212,391

 

 

 

137,688

 

Deferred revenues

 

 

94,448

 

 

 

88,213

 

Current portion of operating lease liabilities

 

 

62,961

 

 

 

62,405

 

Current portion of finance lease liabilities

 

 

2,619

 

 

 

2,240

 

Current portion of Tax Receivable Agreement liability

 

 

12,330

 

 

 

8,089

 

Current portion of long-term debt

 

 

11,283

 

 

 

12,174

 

Notes payable – floor plan, net

 

 

485,645

 

 

 

522,455

 

Other current liabilities

 

 

78,749

 

 

 

53,795

 

Total current liabilities

 

 

1,222,122

 

 

 

1,035,521

 

Operating lease liabilities, net of current portion

 

 

830,408

 

 

 

804,555

 

Finance lease liabilities, net of current portion

 

 

36,529

 

 

 

27,742

 

Tax Receivable Agreement liability, net of current portion

 

 

167,521

 

 

 

137,845

 

Revolving line of credit

 

 

20,885

 

 

 

20,885

 

Long-term debt, net of current portion

 

 

1,069,702

 

 

 

1,122,675

 

Deferred revenues

 

 

69,868

 

 

 

61,519

 

Other long-term liabilities

 

 

64,312

 

 

 

54,920

 

Total liabilities

 

 

3,481,347

 

 

 

3,265,662

 

Commitments and contingencies

 

 

 

 

 

 

Stockholders' equity (deficit):

 

 

 

 

 

 

Preferred stock, par value $0.01 per share – 20,000,000 shares authorized; none issued and outstanding as of June 30, 2021 and December 31, 2020

 

 

 

 

 

 

Class A common stock, par value $0.01 per share – 250,000,000 shares authorized; 47,264,560 issued and 45,478,698 outstanding as of June 30, 2021 and 43,083,008 issued and 42,226,389 outstanding as of December 31, 2020

 

 

470

 

 

 

428

 

Class B common stock, par value $0.0001 per share – 75,000,000 shares authorized; 69,066,445 issued as of June 30, 2021 and December 31, 2020; and 42,007,663 and 45,999,132 outstanding as of June 30, 2021 and December 31, 2020

 

 

4

 

 

 

5

 

Class C common stock, par value $0.0001 per share – one share authorized, issued and outstanding as of June 30, 2021 and December 31, 2020

 

 

 

 

 

 

Additional paid-in capital

 

 

93,509

 

 

 

63,342

 

Treasury stock, at cost; 1,501,690 and 572,447 shares as of June 30, 2021 and December 31, 2020

 

 

(54,783

)

 

 

(15,187

)

Retained earnings (deficit)

 

 

127,783

 

 

 

(21,814

)

Total stockholders' equity attributable to Camping World Holdings, Inc.

 

 

166,983

 

 

 

26,774

 

Non-controlling interests

 

 

48,492

 

 

 

(36,005

)

Total stockholders' equity (deficit)

 

 

215,475

 

 

 

(9,231

)

Total liabilities and stockholders' equity (deficit)

 

$

3,696,822

 

 

$

3,256,431

 

 

 

 

 

 

 

 

Earnings Per Share

Basic earnings per share of Class A common stock is computed by dividing net income available to Camping World Holdings, Inc. by the weighted-average number of shares of Class A common stock outstanding during the period. Diluted earnings per share of Class A common stock is computed by dividing net income (loss) available to Camping World Holdings, Inc. by the weighted-average number of shares of Class A common stock outstanding adjusted to give effect to potentially dilutive securities.

The following table sets forth reconciliations of the numerators and denominators used to compute basic and diluted earnings per share of Class A common stock (unaudited):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Six Months Ended

 

 

June 30,

 

June 30,

(In thousands except per share amounts)

 

2021

 

 

2020

 

 

2021

 

 

2020

 

Numerator:

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

246,076

 

 

$

163,222

 

 

$

393,501

 

 

$

149,093

 

Less: net income attributable to non-controlling interests

 

 

(136,888

)

 

 

(105,145

)

 

 

(221,991

)

 

 

(99,176

)

Net income attributable to Camping World Holdings, Inc. — basic

 

$

109,188

 

 

$

58,077

 

 

 

171,510

 

 

 

49,917

 

Add: reallocation of net income attributable to non-controlling interests from the assumed dilutive effect of stock options and RSUs

 

 

1,772

 

 

 

 

 

 

 

 

 

 

Add: reallocation of net income attributable to non-controlling interests from the assumed exchange of common units of CWGS, LLC for Class A common stock

 

 

 

 

 

79,603

 

 

 

166,495

 

 

 

68,383

 

Net income attributable to Camping World Holdings, Inc. — diluted

 

$

110,960

 

 

$

137,680

 

 

$

338,005

 

 

$

118,300

 

Denominator:

 

 

 

 

 

 

 

 

 

 

 

 

Weighted-average shares of Class A common stock outstanding — basic

 

 

45,983

 

 

 

37,635

 

 

 

44,790

 

 

 

37,585

 

Dilutive options to purchase Class A common stock

 

 

169

 

 

 

 

 

 

167

 

 

 

 

Dilutive restricted stock units

 

 

1,398

 

 

 

434

 

 

 

1,177

 

 

 

359

 

Dilutive common units of CWGS, LLC that are convertible into Class A common stock

 

 

 

 

 

51,620

 

 

 

44,288

 

 

 

51,634

 

Weighted-average shares of Class A common stock outstanding — diluted

 

 

47,550

 

 

 

89,689

 

 

 

90,422

 

 

 

89,578

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per share of Class A common stock — basic

 

$

2.37

 

 

$

1.54

 

 

$

3.83

 

 

$

1.33

 

Earnings per share of Class A common stock — diluted

 

$

2.33

 

 

$

1.54

 

 

$

3.74

 

 

$

1.32

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted-average anti-dilutive securities excluded from the computation of diluted earnings per share of Class A common stock:

 

 

 

 

 

 

 

 

 

 

 

 

Stock options to purchase Class A common stock

 

 

 

 

 

715

 

 

 

 

 

 

726

 

Restricted stock units

 

 

14

 

 

 

620

 

 

 

8

 

 

 

658

 

Common units of CWGS, LLC that are convertible into Class A common stock

 

 

43,057

 

 

 

 

 

 

 

 

 

 

Non-GAAP Financial Measures

To supplement our condensed consolidated financial statements, which are prepared and presented in accordance with accounting principles generally accepted in the United States (“GAAP”), we use the following non-GAAP financial measures: EBITDA, Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Net Income Attributable to Camping World Holdings, Inc. – Basic, Adjusted Net Income Attributable to Camping World Holdings, Inc. – Diluted, Adjusted Earnings Per Share – Basic, and Adjusted Earnings Per Share – Diluted (collectively the "Non-GAAP Financial Measures"). We believe that these Non-GAAP Financial Measures, when used in conjunction with GAAP financial measures, provide useful information about operating results, enhance the overall understanding of past financial performance and future prospects, and allow for greater transparency with respect to the key metrics we use in our financial and operational decision making. These Non-GAAP Financial Measures are also frequently used by analysts, investors and other interested parties to evaluate companies in the Company’s industry. The presentation of this financial information is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP, and they should not be construed as an inference that the Company’s future results will be unaffected by any items adjusted for in these Non-GAAP Financial Measures. In evaluating these Non-GAAP Financial Measures, you should be aware that in the future the Company may incur expenses that are the same as or similar to some of those adjusted in this presentation. The Non-GAAP Financial Measures that we use are not necessarily comparable to similarly titled measures used by other companies due to different methods of calculation.

EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin

We define “EBITDA” as net income before other interest expense, net (excluding floor plan interest expense), provision for income tax expense and depreciation and amortization. We define “Adjusted EBITDA” as EBITDA further adjusted for the impact of certain non-cash and other items that we do not consider in our evaluation of ongoing operating performance. These items include, among other things, loss and expense on debt restructure, long-lived asset impairment, lease termination loss, gains and losses on disposal of assets, equity-based compensation, Tax Receivable Agreement liability adjustment, restructuring costs related to the 2019 Strategic Shift, and other unusual or one-time items. We define “Adjusted EBITDA Margin” as Adjusted EBITDA as a percentage of total revenue. We caution investors that amounts presented in accordance with our definitions of EBITDA, Adjusted EBITDA, and Adjusted EBITDA Margin may not be comparable to similar measures disclosed by our competitors, because not all companies and analysts calculate EBITDA, Adjusted EBITDA, and Adjusted EBITDA Margin in the same manner. We present EBITDA, Adjusted EBITDA, and Adjusted EBITDA Margin because we consider them to be important supplemental measures of our performance and believe they are frequently used by securities analysts, investors and other interested parties in the evaluation of companies in our industry. Management believes that investors’ understanding of our performance is enhanced by including these Non-GAAP Financial Measures as a reasonable basis for comparing our ongoing results of operations.

The following table reconciles EBITDA, Adjusted EBITDA, Adjusted EBITDA Margin, and Trailing Twelve-Month Adjusted EBITDA to the most directly comparable GAAP financial performance measures, which are net income (loss) and net income (loss) margin, respectively (unaudited):

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Six Months Ended

 

June 30,

 

June 30,

 

June 30,

 

June 30,

($ in thousands)

2021

 

2020

 

2021

 

2020

EBITDA:

 

 

 

 

 

 

 

 

 

 

 

Net income

$

246,076

 

$

163,222

 

$

393,501

 

$

149,093

Other interest expense, net

 

11,789

 

 

14,547

 

 

24,012

 

 

29,205

Depreciation and amortization

 

13,044

 

 

12,567

 

 

25,745

 

 

26,645

Income tax expense

 

42,347

 

 

20,473

 

 

44,390

 

 

24,605

Subtotal EBITDA

 

313,256

 

 

210,809

 

 

487,648

 

 

229,548

Loss and expense on debt restructure (a)

 

10,421

 

 

 

 

10,421

 

 

Long-lived asset impairment (b)

 

536

 

 

 

 

1,082

 

 

6,569

Lease termination (c)

 

 

 

868

 

 

1,756

 

 

1,452

Loss (gain) on disposal of assets, net (d)

 

10

 

 

272

 

 

(89)

 

 

783

Equity-based compensation (e)

 

6,047

 

 

4,182

 

 

12,156

 

 

7,494

Tax Receivable Agreement adjustment (f)

 

 

 

 

 

3,520

 

 

Restructuring costs (g)

 

3,010

 

 

4,591

 

 

6,077

 

 

10,873

Adjusted EBITDA

$

333,280

 

$

220,722

 

$

522,571

 

$

256,719

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Six Months Ended

 

June 30,

 

June 30,

 

June 30,

 

June 30,

(as percentage of total revenue)

2021

 

2020

 

2021

 

2020

EBITDA margin:

 

 

 

 

 

 

 

 

 

 

 

Net income margin

 

11.9%

 

 

10.2%

 

 

10.9%

 

 

5.7%

Other interest expense, net

 

0.6%

 

 

0.9%

 

 

0.7%

 

 

1.1%

Depreciation and amortization

 

0.6%

 

 

0.8%

 

 

0.7%

 

 

1.0%

Income tax expense

 

2.1%

 

 

1.3%

 

 

1.2%

 

 

0.9%

Subtotal EBITDA margin

 

15.2%

 

 

13.1%

 

 

13.5%

 

 

8.7%

Loss and expense on debt restructure (a)

 

0.5%

 

 

 

 

0.3%

 

 

Long-lived asset impairment (b)

 

0.0%

 

 

 

 

0.0%

 

 

0.2%

Lease termination (c)

 

 

 

0.1%

 

 

0.0%

 

 

0.1%

Loss (gain) on disposal of assets, net (d)

 

0.0%

 

 

0.0%

 

 

(0.0)%

 

 

0.0%

Equity-based compensation (e)

 

0.3%

 

 

0.3%

 

 

0.3%

 

 

0.3%

Tax Receivable Agreement adjustment (f)

 

 

 

 

 

0.1%

 

 

Restructuring costs (g)

 

0.1%

 

 

0.3%

 

 

0.2%

 

 

0.4%

Adjusted EBITDA margin

 

16.2%

 

 

13.7%

 

 

14.4%

 

 

9.7%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

TTM Ended

 

June 30,

 

March 31,

 

December 31,

 

 

September 30,

 

 

June 30,

($ in thousands)

2021

 

2021

 

2020

 

 

2020

 

 

2021

Trailing Twelve-Month Adjusted EBITDA:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

$

246,076

 

$

147,425

 

$

40,338

 

$

154,784

 

$

588,623

Other interest expense, net

 

11,789

 

 

12,223

 

 

12,588

 

 

12,896

 

 

49,496

Depreciation and amortization

 

13,044

 

 

12,701

 

 

13,032

 

 

12,304

 

 

51,081

Income tax expense

 

42,347

 

 

2,043

 

 

10,740

 

 

22,398

 

 

77,528

Subtotal EBITDA

 

313,256

 

 

174,392

 

 

76,698

 

 

202,382

 

 

766,728

Loss and expense on debt restructure (a)

 

10,421

 

 

 

 

 

 

 

 

10,421

Long-lived asset impairment (b)

 

536

 

 

546

 

 

1,406

 

 

4,378

 

 

6,866

Lease termination (c)

 

 

 

1,756

 

 

2,590

 

 

505

 

 

4,851

Loss (gain) on disposal of assets, net (d)

 

10

 

 

(99)

 

 

670

 

 

(121)

 

 

460

Equity-based compensation (e)

 

6,047

 

 

6,109

 

 

6,966

 

 

6,201

 

 

25,323

Tax Receivable Agreement adjustment (f)

 

 

 

3,520

 

 

(141)

 

 

 

 

3,379

Restructuring costs (g)

 

3,010

 

 

3,067

 

 

3,047

 

 

3,689

 

 

12,813

Adjusted EBITDA

$

333,280

 

$

189,291

 

$

91,236

 

$

217,034

 

$

830,841

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(a) Represents the loss and expense incurred on debt restructure and financing expense, which is comprised of $0.4 million in extinguishment of the original issue discount and $1.0 million in extinguishment of capitalized finance costs related to the Previous Term Loan Facility, and $9.0 million in legal and other expenses related to the New Term Loan Facility.

(b) Represents long-lived asset impairment charges related to the RV and Outdoor Retail segment, which primarily relate to locations affected by the 2019 Strategic Shift.

(c) Represents the loss on the termination of operating leases, relating primarily to the 2019 Strategic Shift, resulting from the lease termination fees and the derecognition of the operating lease assets and liabilities.

(d) Represents an adjustment to eliminate the gains and losses on disposal and sales of various assets.

(e) Represents non-cash equity-based compensation expense relating to employees, directors, and consultants of the Company.

(f) Represents an adjustment to eliminate the loss on remeasurement of the Tax Receivable Agreement primarily due to changes in our blended statutory income tax rate.

(g) Represents restructuring costs relating to our 2019 Strategic Shift. These restructuring costs include one-time employee termination benefits relating to retail store or distribution center closures/divestitures, incremental inventory reserve charges, and other associated costs. These costs do not include lease termination costs, which are presented separately above.

Adjusted Net Income Attributable to Camping World Holdings, Inc. and Adjusted Earnings Per Share

We define “Adjusted Net Income Attributable to Camping World Holdings, Inc. – Basic” as net income (loss) attributable to Camping World Holdings, Inc. adjusted for the impact of certain non-cash and other items that we do not consider in our evaluation of ongoing operating performance. These items include, among other things, loss and expense on debt restructure, long-lived asset impairment, lease termination costs, gains and losses on disposal of assets, equity-based compensation, Tax Receivable Agreement liability adjustment, restructuring costs related to the 2019 Strategic Shift, other unusual or one-time items, the income tax expense effect of these adjustments, and the effect of net income attributable to non-controlling interests from these adjustments.

We define “Adjusted Net Income Attributable to Camping World Holdings, Inc. – Diluted” as Adjusted Net Income Attributable to Camping World Holdings, Inc. – Basic adjusted for the reallocation of net income attributable to non-controlling interests from stock options and restricted stock units, if dilutive, or the assumed exchange, if dilutive, of all outstanding common units in CWGS, LLC for shares of newly-issued Class A common stock of Camping World Holdings, Inc.

We define “Adjusted Earnings Per Share – Basic” as Adjusted Net Income Attributable to Camping World Holdings, Inc. - Basic divided by the weighted-average shares of Class A common stock outstanding. We define “Adjusted Earnings Per Share – Diluted” as Adjusted Net Income Attributable to Camping World Holdings, Inc. – Diluted divided by the weighted-average shares of Class A common stock outstanding, assuming (i) the exchange of all outstanding common units in CWGS, LLC for newly-issued shares of Class A common stock of Camping World Holdings, Inc., if dilutive, and (ii) the dilutive effect of stock options and restricted stock units, if any. We present Adjusted Net Income Attributable to Camping World Holdings, Inc. – Basic, Adjusted Net Income Attributable to Camping World Holdings, Inc. – Diluted, Adjusted Earnings Per Share – Basic, and Adjusted Earnings Per Share – Diluted because we consider them to be important supplemental measures of our performance and we believe that investors’ understanding of our performance is enhanced by including these Non-GAAP financial measures as a reasonable basis for comparing our ongoing results of operations.

The following table reconciles Adjusted Net Income Attributable to Camping World Holdings, Inc. – Basic, Adjusted Net Income Attributable to Camping World Holdings, Inc. – Diluted, Adjusted Earnings Per Share – Basic, and Adjusted Earnings Per Share – Diluted to the most directly comparable GAAP financial performance measure, which is net income attributable to Camping World Holdings, Inc., in the case of the Adjusted Net Income non-GAAP financial measures, and weighted-average shares of Class A common stock outstanding – basic, in the case of the Adjusted Earnings Per Share non-GAAP financial measures:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Six Months Ended

 

 

June 30,

 

June 30,

 

June 30,

 

June 30,

(In thousands except per share amounts)

 

2021

 

2020

 

2021

 

2020

Numerator:

 

 

 

 

 

 

 

 

 

 

 

 

Net income attributable to Camping World Holdings, Inc.

 

$

109,188

 

$

58,077

 

$

171,510

 

$

49,917

Adjustments related to basic calculation:

 

 

 

 

 

 

 

 

 

 

 

 

Loss and expense on debt restructure (a):

 

 

 

 

 

 

 

 

 

 

 

 

Gross adjustment

 

 

10,421

 

 

 

 

10,421

 

 

Income tax expense for above adjustment (b)

 

 

(1,373)

 

 

 

 

(1,373)

 

 

Long-lived asset impairment (c):

 

 

 

 

 

 

 

 

 

 

 

 

Gross adjustment

 

 

536

 

 

 

 

1,082

 

 

6,569

Income tax expense for above adjustment (b)

 

 

 

 

 

 

 

 

(13)

Lease termination (d):

 

 

 

 

 

 

 

 

 

 

 

 

Gross adjustment

 

 

 

 

868

 

 

1,756

 

 

1,452

Income tax expense for above adjustment (b)

 

 

 

 

(23)

 

 

(39)

 

 

(23)

Loss (gain) on disposal of assets (e):

 

 

 

 

 

 

 

 

 

 

 

 

Gross adjustment

 

 

10

 

 

272

 

 

(89)

 

 

783

Income tax expense for above adjustment (b)

 

 

3

 

 

(2)

 

 

2

 

 

(3)

Equity-based compensation (f):

 

 

 

 

 

 

 

 

 

 

 

 

Gross adjustment

 

 

6,047

 

 

4,182

 

 

12,156

 

 

7,494

Income tax expense for above adjustment (b)

 

 

(707)

 

 

(383)

 

 

(1,361)

 

 

(685)

Tax Receivable Agreement liability adjustment (g):

 

 

 

 

 

 

 

 

 

 

 

 

Gross adjustment

 

 

 

 

 

 

3,520

 

 

Income tax expense for above adjustment (b)

 

 

 

 

 

 

(898)

 

 

Restructuring costs (h):

 

 

 

 

 

 

 

 

 

 

 

 

Gross adjustment

 

 

3,010

 

 

4,591

 

 

6,077

 

 

10,873

Income tax expense for above adjustment (b)

 

 

(52)

 

 

(23)

 

 

(65)

 

 

(58)

Adjustment to net income attributable to non-controlling interests resulting from the above adjustments (i)

 

 

(9,680)

 

 

(5,733)

 

 

(15,489)

 

 

(15,727)

Adjusted net income attributable to Camping World Holdings, Inc. – basic

 

 

117,403

 

 

61,826

 

 

187,210

 

 

60,579

Adjustments related to diluted calculation:

 

 

 

 

 

 

 

 

 

 

 

 

Reallocation of net income attributable to non-controlling interests from the dilutive effect of stock options and restricted stock units (j)

 

 

2,533

 

 

 

 

 

 

550

Income tax on reallocation of net income attributable to non-controlling interests from the dilutive effect of stock options and restricted stock units (k)

 

 

(628)

 

 

 

 

 

 

(145)

Reallocation of net income attributable to non-controlling interests from the dilutive exchange of common units in CWGS, LLC (j)

 

 

 

 

110,878

 

 

237,480

 

 

Income tax on reallocation of net income attributable to non-controlling interests from the dilutive exchange of common units in CWGS, LLC (k)

 

 

 

 

(26,132)

 

 

(58,213)

 

 

Assumed income tax expense of combining C-corporations with full or partial valuation allowances with the income of other consolidated entities after the dilutive exchange of common units in CWGS, LLC (l)

 

 

 

 

(1,708)

 

 

(12,693)

 

 

Adjusted net income attributable to Camping World Holdings, Inc. – diluted

 

$

119,308

 

$

144,864

 

$

353,784

 

$

60,984

Denominator:

 

 

 

 

 

 

 

 

 

 

 

 

Weighted-average Class A common shares outstanding – basic

 

 

45,983

 

 

37,635

 

 

44,790

 

 

37,585

Adjustments related to diluted calculation:

 

 

 

 

 

 

 

 

 

 

 

 

Dilutive exchange of common units in CWGS, LLC for shares of Class A common stock (m)

 

 

 

 

51,620

 

 

44,288

 

 

Dilutive options to purchase Class A common stock (m)

 

 

169

 

 

 

 

167

 

 

Dilutive restricted stock units (m)

 

 

1,398

 

 

434

 

 

1,177

 

 

359

Adjusted weighted average Class A common shares outstanding – diluted

 

 

47,550

 

 

89,689

 

 

90,422

 

 

37,944

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted earnings per share - basic

 

$

2.55

 

$

1.64

 

$

4.18

 

$

1.61

Adjusted earnings per share - diluted

 

$

2.51

 

$

1.62

 

$

3.91

 

$

1.61

 

 

 

 

 

 

 

 

 

 

 

 

 

Anti-dilutive amounts (n):

 

 

 

 

 

 

 

 

 

 

 

 

Numerator:

 

 

 

 

 

 

 

 

 

 

 

 

Reallocation of net income attributable to non-controlling interests from the anti-dilutive exchange of common units in CWGS, LLC (j)

 

$

144,035

 

$

 

$

 

$

114,353

Income tax on reallocation of net income attributable to non-controlling interests from the anti-dilutive exchange of common units in CWGS, LLC (k)

 

$

(35,733)

 

$

 

$

 

$

(31,720)

Assumed income tax benefit of combining C-corporations with full or partial valuation allowances with the income of other consolidated entities after the anti-dilutive exchange of common units in CWGS, LLC (l)

 

$

226

 

$

 

$

 

$

6,435

Denominator:

 

 

 

 

 

 

 

 

 

 

 

 

Anti-dilutive exchange of common units in CWGS, LLC for shares of Class A common stock (m)

 

 

43,057

 

 

 

 

 

 

51,634

(a) Represents the loss and expense incurred on debt restructure and financing expense, which is comprised of $0.4 million in extinguishment of the original issue discount and $1.0 million in extinguishment of capitalized finance costs related to the Previous Term Loan Facility, and $9.0 million in legal and other expenses related to the New Term Loan Facility.

(b) Represents the current and deferred income tax expense or benefit effect of the above adjustments, many of which are related to entities with full valuation allowances for which no tax benefit can be currently recognized. This assumption uses an effective tax rate of 25.5% and 25.0% for the adjustments for 2021 and 2020, respectively, which represents the estimated tax rate that would apply had the above adjustments been included in the determination of our non-GAAP metric.

(c) Represents long-lived asset impairment charges related to the RV and Outdoor Retail segment, which primarily relate to locations affected by the 2019 Strategic Shift.

(d) Represents the loss on termination of operating leases, relating primarily to the 2019 Strategic Shift, resulting from the lease termination fees and the derecognition of the operating lease assets and liabilities.

(e) Represents an adjustment to eliminate the gains and losses on sales and disposals of various assets.

(f) Represents non-cash equity-based compensation expense relating to employees, directors, and consultants of the Company.

(g) Represents an adjustment to eliminate the loss on remeasurement of the Tax Receivable Agreement primarily due to changes in our blended statutory income tax rate.

(h) Represents restructuring costs relating to our 2019 Strategic Shift. These restructuring costs include one-time employee termination benefits relating to retail store or distribution center closures/divestitures, incremental inventory reserve charges, and other associated costs. These costs exclude lease termination costs, which are presented separately above.

(i) Represents the adjustment to net income attributable to non-controlling interests resulting from the above adjustments that impact the net income of CWGS, LLC. This adjustment uses the non-controlling interest’s weighted average ownership of CWGS, LLC of 48.4% and 57.8% for the three months ended June 30, 2021 and 2020, respectively, and 49.7% and 57.9% for the six months ended June 20, 2021 and 2020, respectively.

(j) Represents the reallocation of net income attributable to non-controlling interests from the impact of the assumed change in ownership of CWGS, LLC from stock options, restricted stock units, and/or common units of CWGS, LLC.

(k) Represents the income tax expense effect of the above adjustment for reallocation of net income attributable to non-controlling interests. This assumption uses an effective tax rate of 25.5% and 25.0% for the adjustments for the 2021 and 2020 periods, respectively.

(l) Typically represents adjustments to reflect the income tax benefit of losses of consolidated C-corporations that under the Company’s current equity structure cannot be used against the income of other consolidated subsidiaries of CWGS, LLC. However, for the three and six months ended June 30, 2021, this adjustment included the reversal of the $0.1 million expense and $14.8 million benefit, respectively, from changes in the valuation allowance for Camping World, Inc. Subsequent to the exchange of all common units in CWGS, LLC, the Company believes certain actions could be taken such that the C-corporations’ losses could offset income of other consolidated subsidiaries. The adjustment reflects the income tax benefit assuming effective tax rate of 25.5% and 25.0% during the 2021 and 2020 periods, respectively, for the losses experienced by the consolidated C-corporations for which valuation allowances have been recorded. No assumed release of valuation allowance established for previous periods were included in these amounts and the $14.8 million release of valuation allowance during the six months ended June 30, 2021 was considered to be reversed and excluded from adjusted net income (loss) attributable to Camping World Holdings, Inc. – diluted for purposes of this calculation.

(m) Represents the impact to the denominator for stock options, restricted stock units, and/or common units of CWGS, LLC.

(n) The below amounts have not been considered in our adjusted earnings per share – diluted amounts as the effect of these items are anti-dilutive.

Uses and Limitations of Non-GAAP Financial Measures

Management and our board of directors use the Non-GAAP Financial Measures:

  • as a measurement of operating performance because they assist us in comparing the operating performance of our business on a consistent basis, as they remove the impact of items not directly resulting from our core operations;
  • for planning purposes, including the preparation of our internal annual operating budget and financial projections;
  • to evaluate the performance and effectiveness of our operational strategies; and
  • to evaluate our capacity to fund capital expenditures and expand our business.

By providing these Non-GAAP Financial Measures, together with reconciliations, we believe we are enhancing investors’ understanding of our business and our results of operations, as well as assisting investors in evaluating how well we are executing our strategic initiatives. In addition, our Senior Secured Credit Facilities use EBITDA to measure our compliance with covenants such as the consolidated leverage ratio. The Non-GAAP Financial Measures have limitations as analytical tools, and should not be considered in isolation, or as an alternative to, or a substitute for net income or other financial statement data presented in our unaudited consolidated financial statements included elsewhere in this press release as indicators of financial performance. Some of the limitations are:

  • such measures do not reflect our cash expenditures, or future requirements for capital expenditures or contractual commitments;
  • such measures do not reflect changes in, or cash requirements for, our working capital needs;
  • some of such measures do not reflect the interest expense, or the cash requirements necessary to service interest or principal payments on our debt;
  • some of such measures do not reflect our tax expense or the cash requirements to pay our taxes;
  • although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future and such measures do not reflect any cash requirements for such replacements; and
  • other companies in our industry may calculate such measures differently than we do, limiting their usefulness as comparative measures.

Due to these limitations, the Non-GAAP Financial Measures should not be considered as measures of discretionary cash available to us to invest in the growth of our business. We compensate for these limitations by relying primarily on our GAAP results and using these Non-GAAP Financial Measures only supplementally. As noted in the tables above, certain of the Non-GAAP Financial Measures include adjustments for loss and expense on debt restructure, long-lived asset impairment, lease termination costs, gains and loss on disposal of assets, equity-based compensation, Tax Receivable Agreement liability, restructuring costs related to the 2019 Strategic Shift, other unusual or one-time items, and the income tax expense effect described above, as applicable. It is reasonable to expect that certain of these items will occur in future periods. However, we believe these adjustments are appropriate because the amounts recognized can vary significantly from period to period, do not directly relate to the ongoing operations of our business and complicate comparisons of our internal operating results and operating results of other companies over time. Each of the normal recurring adjustments and other adjustments described in this paragraph and in the reconciliation tables above help management with a measure of our core operating performance over time by removing items that are not related to day-to-day operations.

Investors:
InvestorRelations@campingworld.com
(866) 895-5330

Media Outlets:
Karen Porter
PR-CWGS@CampingWorld.com

Source: Camping World Holdings, Inc.