Camping World Holdings, Inc. Reports Strong Third Quarter Results With More Than 32,000 Units Sold, Driven by a Record 14,460 Used Unit Sales

November 01, 2022

Camping World Holdings, Inc. (NYSE: CWH) (the “Company” or “CWH”), America’s Recreation Dealer, today reported results for the third quarter ended September 30, 2022.

Marcus Lemonis, Chairman and CEO of Camping World Holdings, Inc. stated, “In this current environment, our Company is focused on growing our overall used RV business, strategic and opportunistic dealership acquisitions, and tightening SG&A and capital expenditures with precision.”

Third Quarter Operating Highlights

  • Revenue was $1.9 billion for the third quarter, a decrease of $60.9 million, or 3.2%, driven primarily by a $45.7 million reduction in product revenues from categories we exited in 2021 including fishing, hunting, and apparel.
  • Used vehicle revenue was a record $526.0 million for the third quarter(1), an increase of $6.4 million, or 1.2%, while new vehicle revenue declined $30.2 million, or 3.5%. Used vehicle unit sales were a record 14,460 units for the third quarter, an increase of 829 units, or 6.1%.
  • Same store used vehicle unit sales increased 2.0% for the third quarter, while same store new vehicle unit sales decreased 7.2%.
  • Gross profit was $593.7 million, a decrease of $97.7 million, or 14.1%, and total gross margin was 32.0%, a decrease of 408 basis points driven primarily by the higher cost of new vehicles. Used vehicle gross margin decreased to a lesser extent.
  • Net income was $102.9 million, a decrease of $86.4 million, or 45.6%.
  • Diluted earnings per share of Class A common stock was $0.97 in 2022 versus $1.72 in 2021. Adjusted earnings per share - diluted(2) of Class A common stock was $1.07 in 2022 versus $1.98 in 2021.
  • Adjusted EBITDA(2) was $173.4 million, a decrease of $114.6 million, or 39.8%.
  • New and used vehicle inventories were $1.6 billion, an increase of $491.1 million from September 30, 2021. This increase was driven primarily by restocking to normalized levels of new vehicles and, to a lesser extent, the strategic growth of our used vehicle business and an additional eight dealership locations.
  • On September 29, 2022, the Company paid our regular quarterly dividend of $0.625 per share of Class A common stock, or $2.50 per share on an annualized basis.

________________________

(1) Trailing twelve-month (“TTM”) used vehicle revenue as of September 30, 2022 and 2021 was $1.9 billion and $1.5 billion, respectively. The TTM used vehicle revenue as of September 30, 2022 is comprised of $1.5 billion and $0.4 billion for the nine months ended September 30, 2022 and three months ended December 31, 2021, respectively. The TTM used vehicle revenue as of September 30, 2021 is comprised of $1.3 billion and $0.2 billion for the nine months ended September 30, 2021 and three months ended December 31, 2020, respectively.

(2) Adjusted earnings per share – diluted and 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.

Earnings Conference Call and Webcast Information

A conference call to discuss the Company’s third quarter 2022 financial results is scheduled for November 2, 2022, at 7:30 am Central Time. Investors and analysts can participate on the conference call by dialing 1-877-407-9039 (international callers please dial 1-201-689-8470) and using conference ID# 13732920. 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. The Company’s position as sole managing member of CWGS, LLC includes periods where the Company has held a minority economic interest in CWGS, LLC. As of September 30, 2022 and December 31, 2021, the Company owned 50.1% and 51.2%, respectively, of CWGS, LLC. Accordingly, the Company consolidates the financial results of CWGS, LLC and reports a non-controlling interest in its consolidated financial statements. Unless otherwise indicated, all financial comparisons in this press release compare our financial results for the third quarter ended September 30, 2022 to our financial results from the third quarter ended September 30, 2021.

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 RV sales and service locations in 42 states, Camping World has grown to become the prime destination for everything RV.

For more information, please visit http://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 macroeconomic trends and our business plans and goals, including statements regarding the strength of our business, our long-term plan, the Company’s strategic focuses, including growing its used RV business, potential acquisitions and tightening SG&A expenses and capital expenditures, potential stock repurchases, future dividend payments 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; risks related to the cybersecurity incident announced in February 2022; 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, 2021 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.

In addition, this press release references projected annualized dividend payments. Future declarations of quarterly dividends are subject to the determination and discretion of the Company’s Board of Directors based on its consideration of various factors, including the Company’s results of operations, financial condition, level of indebtedness, anticipated capital requirements, contractual restrictions, restrictions in its debt agreements, restrictions under applicable law, receipt of excess tax distributions from CWGS Enterprises, LLC, its business prospects and other factors that Camping World’s Board of Directors may deem relevant.

We intend to use our official Facebook, Twitter, and Instagram accounts, each at the handle @CampingWorld, as well as the investor page of our website, investor.campingworld.com, as a distribution channel of material information about the Company and for complying with our disclosure obligations under Regulation FD. The information we post through these social media channels and on our investor webpage may be deemed material. Accordingly, investors should subscribe to these accounts and our investor alerts, in addition to following our press releases, SEC filings, public conference calls and webcasts. These social media channels may be updated from time to time.

 

Camping World Holdings, Inc. and Subsidiaries
Consolidated Statements of Operations (unaudited)
(In Thousands Except Per Share Amounts)

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Nine Months Ended

 

September 30,

 

September 30,

 

2022

 

2021

 

2022

 

2021

Revenue:

 

 

 

 

 

 

 

 

 

 

 

Good Sam Services and Plans

$

50,352

 

$

46,581

 

$

144,504

 

$

134,354

RV and Outdoor Retail

 

 

 

 

 

 

 

 

 

 

 

New vehicles

 

834,112

 

 

864,303

 

 

2,746,323

 

 

2,745,057

Used vehicles

 

525,988

 

 

519,550

 

 

1,484,978

 

 

1,273,944

Products, service and other

 

268,940

 

 

305,882

 

 

761,914

 

 

862,706

Finance and insurance, net

 

165,136

 

 

167,779

 

 

513,921

 

 

483,718

Good Sam Club

 

11,154

 

 

12,479

 

 

35,070

 

 

36,383

Subtotal

 

1,805,330

 

 

1,869,993

 

 

5,542,206

 

 

5,401,808

Total revenue

 

1,855,682

 

 

1,916,574

 

 

5,686,710

 

 

5,536,162

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

 

 

 

 

 

 

 

 

 

 

 

Good Sam Services and Plans

 

18,871

 

 

21,637

 

 

54,532

 

 

53,241

RV and Outdoor Retail

 

 

 

 

 

 

 

 

 

 

 

New vehicles

 

675,119

 

 

612,418

 

 

2,171,660

 

 

2,014,206

Used vehicles

 

398,882

 

 

376,852

 

 

1,115,876

 

 

934,874

Products, service and other

 

167,298

 

 

212,444

 

 

467,680

 

 

556,542

Good Sam Club

 

1,824

 

 

1,847

 

 

6,279

 

 

5,586

Subtotal

 

1,243,123

 

 

1,203,561

 

 

3,761,495

 

 

3,511,208

Total costs applicable to revenue

 

1,261,994

 

 

1,225,198

 

 

3,816,027

 

 

3,564,449

 

 

 

 

 

 

 

 

 

 

 

 

Gross profit:

 

 

 

 

 

 

 

 

 

 

 

Good Sam Services and Plans

 

31,481

 

 

24,944

 

 

89,972

 

 

81,113

RV and Outdoor Retail

 

 

 

 

 

 

 

 

 

 

 

New vehicles

 

158,993

 

 

251,885

 

 

574,663

 

 

730,851

Used vehicles

 

127,106

 

 

142,698

 

 

369,102

 

 

339,070

Products, service and other

 

101,642

 

 

93,438

 

 

294,234

 

 

306,164

Finance and insurance, net

 

165,136

 

 

167,779

 

 

513,921

 

 

483,718

Good Sam Club

 

9,330

 

 

10,632

 

 

28,791

 

 

30,797

Subtotal

 

562,207

 

 

666,432

 

 

1,780,711

 

 

1,890,600

Total gross profit

 

593,688

 

 

691,376

 

 

1,870,683

 

 

1,971,713

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

Selling, general, and administrative

 

419,102

 

 

424,385

 

 

1,245,540

 

 

1,193,668

Debt restructure expense

 

 

 

24

 

 

 

 

9,055

Depreciation and amortization

 

18,207

 

 

23,552

 

 

61,369

 

 

49,297

Long-lived asset impairment

 

887

 

 

316

 

 

3,505

 

 

1,398

Lease termination

 

 

 

329

 

 

1,122

 

 

2,085

(Gain) loss on sale or disposal of assets

 

(40)

 

 

96

 

 

390

 

 

7

Total operating expenses

 

438,156

 

 

448,702

 

 

1,311,926

 

 

1,255,510

Income from operations

 

155,532

 

 

242,674

 

 

558,757

 

 

716,203

Other expense:

 

 

 

 

 

 

 

 

 

 

 

Floor plan interest expense

 

(9,484)

 

 

(3,125)

 

 

(24,483)

 

 

(9,886)

Other interest expense, net

 

(20,526)

 

 

(11,250)

 

 

(49,762)

 

 

(35,262)

Loss on debt restructure

 

 

 

 

 

 

 

(1,390)

Tax Receivable Agreement liability adjustment

 

 

 

 

 

 

 

(3,520)

Other expense, net

 

(177)

 

 

(122)

 

 

(472)

 

 

(77)

Total other expense

 

(30,187)

 

 

(14,497)

 

 

(74,717)

 

 

(50,135)

Income before income taxes

 

125,345

 

 

228,177

 

 

484,040

 

 

666,068

Income tax expense

 

(22,397)

 

 

(38,869)

 

 

(75,808)

 

 

(83,259)

Net income

 

102,948

 

 

189,308

 

 

408,232

 

 

582,809

Less: net income attributable to non-controlling interests

 

(61,822)

 

 

(109,605)

 

 

(238,065)

 

 

(331,596)

Net income attributable to Camping World Holdings, Inc.

$

41,126

 

$

79,703

 

$

170,167

 

$

251,213

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per share of Class A common stock:

 

 

 

 

 

 

 

 

 

 

 

Basic

$

0.98

 

$

1.75

 

$

4.01

 

$

5.57

Diluted

$

0.97

 

$

1.72

 

$

3.99

 

$

5.49

Weighted average shares of Class A common stock outstanding:

 

 

 

 

 

 

 

 

 

 

 

Basic

 

41,985

 

 

45,628

 

 

42,419

 

 

45,072

Diluted

 

42,505

 

 

47,022

 

 

42,947

 

 

46,433

 

Camping World Holdings, Inc. and Subsidiaries
Supplemental Data

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended September 30,

 

Increase

 

 

Percent

 

 

2022

 

2021

 

(decrease)

 

 

Change

Unit sales

 

 

 

 

 

 

 

 

 

 

 

 

 

New vehicles

 

 

17,616

 

 

18,748

 

 

(1,132)

 

 

 

(6.0%)

Used vehicles

 

 

14,460

 

 

13,631

 

 

829

 

 

 

6.1%

Total

 

 

32,076

 

 

32,379

 

 

(303)

 

 

 

(0.9%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average selling price

 

 

 

 

 

 

 

 

 

 

 

 

 

New vehicles

 

$

47,350

 

$

46,101

 

$

1,249

 

 

 

2.7%

Used vehicles

 

$

36,375

 

$

38,115

 

$

(1,740)

 

 

 

(4.6%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Same store unit sales(1)

 

 

 

 

 

 

 

 

 

 

 

 

 

New vehicles

 

 

16,045

 

 

17,293

 

 

(1,248)

 

 

 

(7.2%)

Used vehicles

 

 

13,114

 

 

12,852

 

 

262

 

 

 

2.0%

Total

 

 

29,159

 

 

30,145

 

 

(986)

 

 

 

(3.3%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

New vehicles

 

$

764,144

 

$

801,412

 

$

(37,268)

 

 

 

(4.7%)

Used vehicles

 

 

482,329

 

 

493,914

 

 

(11,585)

 

 

 

(2.3%)

Products, service and other

 

 

186,260

 

 

211,591

 

 

(25,331)

 

 

 

(12.0%)

Finance and insurance, net

 

 

151,039

 

 

156,870

 

 

(5,831)

 

 

 

(3.7%)

Total

 

$

1,583,772

 

$

1,663,787

 

$

(80,015)

 

 

 

(4.8%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average gross profit per unit

 

 

 

 

 

 

 

 

 

 

 

 

 

New vehicles

 

$

9,025

 

$

13,435

 

$

(4,410)

 

 

 

(32.8%)

Used vehicles

 

$

8,790

 

 

10,469

 

$

(1,679)

 

 

 

(16.0%)

Finance and insurance, net per vehicle unit

 

$

5,148

 

 

5,182

 

$

(34)

 

 

 

(0.7%)

Total vehicle front-end yield(2)

 

$

14,068

 

 

17,368

 

$

(3,300)

 

 

 

(19.0%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross margin

 

 

 

 

 

 

 

 

 

 

 

 

 

Good Sam Services and Plans

 

 

62.5%

 

 

53.5%

 

 

897

bps

 

 

 

New vehicles

 

 

19.1%

 

 

29.1%

 

 

(1,008)

bps

 

 

 

Used vehicles

 

 

24.2%

 

 

27.5%

 

 

(330)

bps

 

 

 

Products, service and other

 

 

37.8%

 

 

30.5%

 

 

725

bps

 

 

 

Finance and insurance, net

 

 

100.0%

 

 

100.0%

 

 

unch.

bps

 

 

 

Good Sam Club

 

 

83.6%

 

 

85.2%

 

 

(155)

bps

 

 

 

Subtotal RV and Outdoor Retail

 

 

31.1%

 

 

35.6%

 

 

(450)

bps

 

 

 

Total gross margin

 

 

32.0%

 

 

36.1%

 

 

(408)

bps

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Inventories ($ in 000's)

 

 

 

 

 

 

 

 

 

 

 

 

 

New vehicles

 

$

1,180,364

 

$

723,593

 

$

456,771

 

 

 

63.1%

Used vehicles

 

 

425,824

 

 

391,466

 

 

34,358

 

 

 

8.8%

Products, parts, accessories and misc.

 

 

293,588

 

 

246,900

 

 

46,688

 

 

 

18.9%

Total RV and Outdoor Retail inventories

 

$

1,899,776

 

$

1,361,959

 

$

537,817

 

 

 

39.5%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Vehicle inventory per location ($ in 000's)

 

 

 

 

 

 

 

 

 

 

 

 

 

New vehicle inventory per dealer location

 

$

6,415

 

$

4,111

 

$

2,304

 

 

 

56.0%

Used vehicle inventory per dealer location

 

$

2,314

 

 

2,224

 

$

90

 

 

 

4.0%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Vehicle inventory turnover(3)

 

 

 

 

 

 

 

 

 

 

 

 

 

New vehicle inventory turnover

 

 

2.0

 

 

3.6

 

 

(1.5)

 

 

 

(42.9%)

Used vehicle inventory turnover

 

 

3.5

 

 

4.4

 

 

(0.8)

 

 

 

(18.8%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Retail locations

 

 

 

 

 

 

 

 

 

 

 

 

 

RV dealerships

 

 

184

 

 

176

 

 

8

 

 

 

4.5%

RV service & retail centers

 

 

8

 

 

10

 

 

(2)

 

 

 

(20.0%)

Subtotal

 

 

192

 

 

186

 

 

6

 

 

 

3.2%

Other retail stores

 

 

1

 

 

1

 

 

 

 

 

0.0%

Total

 

 

193

 

 

187

 

 

6

 

 

 

3.2%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other data

 

 

 

 

 

 

 

 

 

 

 

 

 

Active Customers(4)

 

 

5,366,558

 

 

5,458,531

 

 

(91,973)

 

 

 

(1.7%)

Good Sam Club members

 

 

2,038,826

 

 

2,185,100

 

 

(146,274)

 

 

 

(6.7%)

Service bays (5)

 

 

2,639

 

 

2,599

 

 

40

 

 

 

1.5%

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

 

 

12.1%

 

 

12.1%

 

 

2

bps

 

 

n/a

Same store locations

 

 

168

 

 

n/a

 

 

n/a

 

 

 

n/a

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nine Months Ended September 30,

 

Increase

 

 

Percent

 

 

2022

 

2021

 

(decrease)

 

 

Change

Unit sales

 

 

 

 

 

 

 

 

 

 

 

 

 

New vehicles

 

 

60,040

 

 

66,362

 

 

(6,322)

 

 

 

(9.5%)

Used vehicles

 

 

40,991

 

 

38,269

 

 

2,722

 

 

 

7.1%

Total

 

 

101,031

 

 

104,631

 

 

(3,600)

 

 

 

(3.4%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average selling price

 

 

 

 

 

 

 

 

 

 

 

 

 

New vehicles

 

$

45,742

 

$

41,365

 

$

4,377

 

 

 

10.6%

Used vehicles

 

$

36,227

 

$

33,289

 

$

2,938

 

 

 

8.8%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Same store unit sales(1)

 

 

 

 

 

 

 

 

 

 

 

 

 

New vehicles

 

 

54,831

 

 

63,436

 

 

(8,605)

 

 

 

(13.6%)

Used vehicles

 

 

37,670

 

 

36,870

 

 

800

 

 

 

2.2%

Total

 

 

92,501

 

 

100,306

 

 

(7,805)

 

 

 

(7.8%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

New vehicles

 

$

2,524,359

 

$

2,628,952

 

$

(104,593)

 

 

 

(4.0%)

Used vehicles

 

 

1,379,819

 

 

1,233,022

 

 

146,797

 

 

 

11.9%

Products, service and other

 

 

553,833

 

 

650,283

 

 

(96,450)

 

 

 

(14.8%)

Finance and insurance, net

 

 

473,898

 

 

465,100

 

 

8,798

 

 

 

1.9%

Total

 

$

4,931,909

 

$

4,977,357

 

$

(45,448)

 

 

 

(0.9%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average gross profit per unit

 

 

 

 

 

 

 

 

 

 

 

 

 

New vehicles

 

$

9,571

 

$

11,013

 

$

(1,442)

 

 

 

(13.1%)

Used vehicles

 

 

9,004

 

 

8,860

 

 

144

 

 

 

1.6%

Finance and insurance, net per vehicle unit

 

 

5,087

 

 

4,623

 

 

464

 

 

 

10.0%

Total vehicle front-end yield(2)

 

 

14,428

 

 

14,849

 

 

(421)

 

 

 

(2.8%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross margin

 

 

 

 

 

 

 

 

 

 

 

 

 

Good Sam Services and Plans

 

 

62.3%

 

 

60.4%

 

 

189

bps

 

 

 

New vehicles

 

 

20.9%

 

 

26.6%

 

 

(570)

bps

 

 

 

Used vehicles

 

 

24.9%

 

 

26.6%

 

 

(176)

bps

 

 

 

Products, service and other

 

 

38.6%

 

 

35.5%

 

 

313

bps

 

 

 

Finance and insurance, net

 

 

100.0%

 

 

100.0%

 

 

unch.

bps

 

 

 

Good Sam Club

 

 

82.1%

 

 

84.6%

 

 

(255)

bps

 

 

 

Subtotal RV and Outdoor Retail

 

 

32.1%

 

 

35.0%

 

 

(287)

bps

 

 

 

Total gross margin

 

 

32.9%

 

 

35.6%

 

 

(272)

bps

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Inventories ($ in 000's)

 

 

 

 

 

 

 

 

 

 

 

 

 

New vehicles

 

$

1,180,364

 

$

723,593

 

$

456,771

 

 

 

63.1%

Used vehicles

 

 

425,824

 

 

391,466

 

 

34,358

 

 

 

8.8%

Products, parts, accessories and misc.

 

 

293,588

 

 

246,900

 

 

46,688

 

 

 

18.9%

Total RV and Outdoor Retail inventories

 

$

1,899,776

 

$

1,361,959

 

$

537,817

 

 

 

39.5%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Vehicle inventory per location ($ in 000's)

 

 

 

 

 

 

 

 

 

 

 

 

 

New vehicle inventory per dealer location

 

$

6,415

 

$

4,111

 

$

2,304

 

 

 

56.0%

Used vehicle inventory per dealer location

 

 

2,314

 

 

2,224

 

 

90

 

 

 

4.0%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Vehicle inventory turnover(3)

 

 

 

 

 

 

 

 

 

 

 

 

 

New vehicle inventory turnover

 

 

2.0

 

 

3.6

 

 

(1.5)

 

 

 

(42.9%)

Used vehicle inventory turnover

 

 

3.5

 

 

4.4

 

 

(0.8)

 

 

 

(18.8%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Retail locations

 

 

 

 

 

 

 

 

 

 

 

 

 

RV dealerships

 

 

184

 

 

176

 

 

8

 

 

 

4.5%

RV service & retail centers

 

 

8

 

 

10

 

 

(2)

 

 

 

(20.0%)

Subtotal

 

 

192

 

 

186

 

 

6

 

 

 

3.2%

Other retail stores

 

 

1

 

 

1

 

 

 

 

 

0.0%

Total

 

 

193

 

 

187

 

 

6

 

 

 

3.2%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other data

 

 

 

 

 

 

 

 

 

 

 

 

 

Active Customers(4)

 

 

5,366,558

 

 

5,458,531

 

 

(91,973)

 

 

 

(1.7%)

Good Sam Club members

 

 

2,038,826

 

 

2,185,100

 

 

(146,274)

 

 

 

(6.7%)

Service bays (5)

 

 

2,639

 

 

2,599

 

 

40

 

 

 

1.5%

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

 

 

12.1%

 

 

12.0%

 

 

11

bps

 

 

n/a

Same store locations

 

 

168

 

 

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 vehicle unit sales.
(3) Inventory turnover calculated as vehicle costs applicable to revenue over the last twelve months divided by the 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.
(5) A service bay is a fully-constructed bay dedicated to service, installation, and collision offerings.

 

Camping World Holdings, Inc. and Subsidiaries
Consolidated Balance Sheets (unaudited)
(In Thousands Except Share and Per Share Amounts)

 

 

 

 

 

 

 

 

 

September 30,

 

December 31,

 

 

2022

 

2021

Assets

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

148,235

 

$

267,332

Contracts in transit

 

 

87,487

 

 

57,741

Accounts receivable, net

 

 

117,428

 

 

101,644

Inventories

 

 

1,900,127

 

 

1,792,865

Prepaid expenses and other assets

 

 

46,869

 

 

64,295

Total current assets

 

 

2,300,146

 

 

2,283,877

Property and equipment, net

 

 

728,208

 

 

599,324

Operating lease assets

 

 

719,656

 

 

750,876

Deferred tax assets, net

 

 

178,808

 

 

199,321

Intangible assets, net

 

 

21,819

 

 

30,970

Goodwill

 

 

533,217

 

 

483,634

Other assets

 

 

29,532

 

 

24,927

Total assets

 

$

4,511,386

 

$

4,372,929

Liabilities and stockholders' equity

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

187,613

 

$

136,757

Accrued liabilities

 

 

252,644

 

 

189,595

Deferred revenues

 

 

101,917

 

 

95,467

Current portion of operating lease liabilities

 

 

61,001

 

 

62,217

Current portion of finance lease liabilities

 

 

10,397

 

 

4,964

Current portion of Tax Receivable Agreement liability

 

 

11,686

 

 

11,322

Current portion of long-term debt

 

 

15,827

 

 

15,822

Notes payable – floor plan, net

 

 

899,568

 

 

1,011,345

Other current liabilities

 

 

83,959

 

 

70,834

Total current liabilities

 

 

1,624,612

 

 

1,598,323

Operating lease liabilities, net of current portion

 

 

743,914

 

 

774,889

Finance lease liabilities, net of current portion

 

 

95,496

 

 

74,752

Tax Receivable Agreement liability, net of current portion

 

 

159,790

 

 

171,073

Revolving line of credit

 

 

20,885

 

 

20,885

Long-term debt, net of current portion

 

 

1,368,380

 

 

1,377,751

Deferred revenues

 

 

73,294

 

 

69,024

Other long-term liabilities

 

 

87,517

 

 

52,338

Total liabilities

 

 

4,173,888

 

 

4,139,035

Commitments and contingencies

 

 

 

 

 

 

Stockholders' equity:

 

 

 

 

 

 

Preferred stock, par value $0.01 per share – 20,000,000 shares authorized; none issued and outstanding as of September 30, 2022 and December 31, 2021

 

 

 

 

Class A common stock, par value $0.01 per share – 250,000,000 shares authorized; 47,855,259 issued and 42,129,078 outstanding as of September 30, 2022 and 47,805,259 issued and 44,130,956 outstanding as of December 31, 2021

 

 

476

 

 

475

Class B common stock, par value $0.0001 per share – 75,000,000 shares authorized; 69,066,445 issued as of September 30, 2022 and December 31, 2021; and 41,466,964 outstanding as of September 30, 2022 and December 31, 2021

 

 

4

 

 

4

Class C common stock, par value $0.0001 per share – one share authorized, issued and outstanding as of September 30, 2022 and December 31, 2021

 

 

 

 

Additional paid-in capital

 

 

117,151

 

 

98,113

Treasury stock, at cost; 5,442,009 and 3,390,131 shares as of September 30, 2022 and December 31, 2021, respectively

 

 

(190,658)

 

 

(130,006)

Retained earnings

 

 

280,772

 

 

189,471

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

 

 

207,745

 

 

158,057

Non-controlling interests

 

 

129,753

 

 

75,837

Total stockholders' equity

 

 

337,498

 

 

233,894

Total liabilities and stockholders' equity

 

$

4,511,386

 

$

4,372,929

 

Camping World Holdings, Inc. and Subsidiaries
Summary of Consolidated Statements of Cash Flows (unaudited)
(In Thousands)

 

 

 

 

 

 

 

 

 

Nine Months Ended September 30,

 

 

2022

 

2021

 

 

 

 

 

 

 

Net cash provided by operating activities

 

$

523,919

 

$

571,876

 

 

 

 

 

 

 

Investing activities

 

 

 

 

 

 

Purchases of property and equipment

 

 

(118,445)

 

 

(88,560)

Proceeds from sale of property and equipment

 

 

1,105

 

 

2,253

Purchase of real property

 

 

(41,696)

 

 

(61,056)

Proceeds from the sale of real property

 

 

6,809

 

 

1,360

Purchases of businesses, net of cash acquired

 

 

(83,227)

 

 

(99,749)

Purchase of other investments

 

 

(3,000)

 

 

(7,983)

Purchases of intangible assets

 

 

(851)

 

 

(2,580)

Net cash used in investing activities

 

 

(239,305)

 

 

(256,315)

 

 

 

 

 

 

 

Financing activities

 

 

 

 

 

 

Proceeds from long-term debt

 

 

 

 

124,893

Payments on long-term debt

 

 

(11,869)

 

 

(174,148)

Net (payments) proceeds on notes payable – floor plan, net

 

 

(99,802)

 

 

19,199

Proceeds from landlord funded construction on finance leases

 

 

6,028

 

 

Payments on finance leases

 

 

(4,541)

 

 

(2,169)

Proceeds from sale-leaseback arrangement

 

 

27,951

 

 

Payments on sale-leaseback arrangement

 

 

(87)

 

 

Payment of debt issuance costs

 

 

 

 

(1,827)

Dividends on Class A common stock

 

 

(78,866)

 

 

(44,846)

Proceeds from exercise of stock options

 

 

317

 

 

3,775

RSU shares withheld for tax

 

 

(6,474)

 

 

(7,166)

Repurchases of Class A common stock to treasury stock

 

 

(79,757)

 

 

(86,824)

Distributions to holders of LLC common units

 

 

(156,611)

 

 

(179,725)

Net cash used in financing activities

 

 

(403,711)

 

 

(348,838)

 

 

 

 

 

 

 

Decrease in cash and cash equivalents

 

 

(119,097)

 

 

(33,277)

Cash and cash equivalents at beginning of the period

 

 

267,332

 

 

166,072

Cash and cash equivalents at end of the period

 

$

148,235

 

$

132,795

 

Earnings Per Share

Basic earnings per share of Class A common stock is computed by dividing net income attributable 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 attributable 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 September 30,

 

Nine Months Ended September 30,

(In thousands except per share amounts)

 

2022

 

2021

 

2022

 

2021

Numerator:

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

102,948

 

$

189,308

 

$

408,232

 

$

582,809

Less: net income attributable to non-controlling interests

 

 

(61,822)

 

 

(109,605)

 

 

(238,065)

 

 

(331,596)

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

 

$

41,126

 

$

79,703

 

 

170,167

 

 

251,213

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

 

 

281

 

 

1,226

 

 

1,019

 

 

3,793

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

 

$

41,407

 

$

80,929

 

$

171,186

 

$

255,006

Denominator:

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

41,985

 

 

45,628

 

 

42,419

 

 

45,072

Dilutive options to purchase Class A common stock

 

 

53

 

 

138

 

 

62

 

 

157

Dilutive restricted stock units

 

 

467

 

 

1,256

 

 

466

 

 

1,204

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

 

 

42,505

 

 

47,022

 

 

42,947

 

 

46,433

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per share of Class A common stock — basic

 

$

0.98

 

$

1.75

 

$

4.01

 

$

5.57

Earnings per share of Class A common stock — diluted

 

$

0.97

 

$

1.72

 

$

3.99

 

$

5.49

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

 

 

 

Restricted stock units

 

 

1,396

 

 

10

 

 

2,094

 

 

9

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

 

 

42,045

 

 

42,635

 

 

42,045

 

 

43,731

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, TTM Adjusted EBITDA, 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 and are used by management to evaluate our operating performance, liquidity and capital resources, to evaluate the effectiveness of strategic initiatives and for planning purposes. 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 Adjusted EBITDA, as calculated for our subsidiary CWGS Group, LLC, to measure our compliance with covenants such as the consolidated leverage ratio. The Non-GAAP Financial Measures have limitations as analytical tools, and 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. 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, 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 section and in the reconciliation tables below help management with a measure of our core operating performance over time by removing items that are not related to day-to-day operations.

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 noncash 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 sale or disposal of assets, net, 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 TTM Adjusted EBITDA to the most directly comparable GAAP financial performance measures (unaudited):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

($ in thousands)

 

2022

 

2021

 

2022

 

2021

EBITDA and Adjusted EBITDA:

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

102,948

 

$

189,308

 

$

408,232

 

$

582,809

Other interest expense, net

 

 

20,526

 

 

11,250

 

 

49,762

 

 

35,262

Depreciation and amortization

 

 

18,207

 

 

23,552

 

 

61,369

 

 

49,297

Income tax expense

 

 

22,397

 

 

38,869

 

 

75,808

 

 

83,259

Subtotal EBITDA

 

 

164,078

 

 

262,979

 

 

595,171

 

 

750,627

Long-lived asset impairment (a)

 

 

887

 

 

316

 

 

3,505

 

 

1,398

Lease termination (b)

 

 

 

 

329

 

 

1,122

 

 

2,085

(Gain) loss on sale or disposal of assets, net (c)

 

 

(40)

 

 

96

 

 

390

 

 

7

Equity-based compensation (d)

 

 

6,792

 

 

6,913

 

 

27,434

 

 

19,069

Tax Receivable Agreement liability adjustment (e)

 

 

 

 

 

 

 

 

3,520

Restructuring costs (f)

 

 

1,671

 

 

17,362

 

 

5,548

 

 

23,439

Loss and expense on debt restructure (g)

 

 

 

 

24

 

 

 

 

10,445

Adjusted EBITDA

 

$

173,388

 

$

288,019

 

$

633,170

 

$

810,590

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

(as percentage of total revenue)

 

2022

 

2021

 

2022

 

2021

Adjusted EBITDA margin:

 

 

 

 

 

 

 

 

Net income margin

 

5.5%

 

9.9%

 

7.2%

 

10.5%

Other interest expense, net

 

1.1%

 

0.6%

 

0.9%

 

0.6%

Depreciation and amortization

 

1.0%

 

1.2%

 

1.1%

 

0.9%

Income tax expense

 

1.2%

 

2.0%

 

1.3%

 

1.5%

Subtotal EBITDA margin

 

8.8%

 

13.7%

 

10.5%

 

13.6%

Long-lived asset impairment (a)

 

0.0%

 

0.0%

 

0.1%

 

0.0%

Lease termination (b)

 

 

0.0%

 

0.0%

 

0.0%

(Gain) loss on sale or disposal of assets, net (c)

 

(0.0%)

 

0.0%

 

0.0%

 

0.0%

Equity-based compensation (d)

 

0.4%

 

0.4%

 

0.5%

 

0.3%

Tax Receivable Agreement liability adjustment (e)

 

 

 

 

0.1%

Restructuring costs (f)

 

0.1%

 

0.9%

 

0.1%

 

0.4%

Loss and expense on debt restructure (g)

 

 

0.0%

 

 

0.2%

Adjusted EBITDA margin

 

9.3%

 

15.0%

 

11.1%

 

14.6%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

TTM Ended

 

September 30,

 

June 30,

 

March 31,

 

December 31,

 

 

September 30,

($ in thousands)

2022

 

2022

 

2022

 

 

2021

 

 

2022

Adjusted EBITDA:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

$

102,948

 

$

197,985

 

$

107,299

 

$

59,266

 

$

467,498

Other interest expense, net

 

20,526

 

 

14,935

 

 

14,301

 

 

11,650

 

 

61,412

Depreciation and amortization

 

18,207

 

 

17,627

 

 

25,535

 

 

17,121

 

 

78,490

Income tax expense

 

22,397

 

 

32,375

 

 

21,036

 

 

8,865

 

 

84,673

Subtotal EBITDA

 

164,078

 

 

262,922

 

 

168,171

 

 

96,902

 

 

692,073

Long-lived asset impairment (a)

 

887

 

 

2,618

 

 

 

 

1,646

 

 

5,151

Lease termination (b)

 

 

 

944

 

 

178

 

 

126

 

 

1,248

(Gain) loss on sale or disposal of assets, net (c)

 

(40)

 

 

381

 

 

49

 

 

(583)

 

 

(193)

Equity-based compensation (d)

 

6,792

 

 

8,968

 

 

11,674

 

 

28,867

 

 

56,301

Tax Receivable Agreement liability adjustment (e)

 

 

 

 

 

 

 

(707)

 

 

(707)

Restructuring costs (f)

 

1,671

 

 

1,854

 

 

2,023

 

 

2,262

 

 

7,810

Loss and expense on debt restructure (g)

 

 

 

 

 

 

 

3,023

 

 

3,023

Adjusted EBITDA

$

173,388

 

$

277,687

 

$

182,095

 

$

131,536

 

$

764,706

(a)

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

(b)

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

(c)

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

(d)

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

(e)

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

(f)

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 (see (b) above).

(g)

Represents the loss and expense incurred on debt restructure and financing expense for the nine months ended September 30, 2021. which is comprised of $0.4 million in extinguishment of the original issue discount and $1.0 of 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 in 2021. For the twelve months ended September 30, 2022, represents $3.0 million of legal and other expenses related to the New Term Loan Facility in 2021.

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 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 sale or disposal of assets, net, 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 redemption, 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 redemption 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:

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Nine Months Ended

 

September 30,

 

September 30,

(In thousands except per share amounts)

2022

 

2021

 

2022

 

2021

Numerator:

 

 

 

 

 

 

 

 

 

 

 

Net income attributable to Camping World Holdings, Inc.

$

41,126

 

$

79,703

 

$

170,167

 

$

251,213

Adjustments related to basic calculation:

 

 

 

 

 

 

 

 

 

 

 

Loss and expense on debt restructure (a):

 

 

 

 

 

 

 

 

 

 

 

Gross adjustment

 

 

 

24

 

 

 

 

10,445

Income tax expense for above adjustment (b)

 

 

 

(3)

 

 

 

 

(1,376)

Long-lived asset impairment (c):

 

 

 

 

 

 

 

 

 

 

 

Gross adjustment

 

887

 

 

316

 

 

3,505

 

 

1,398

Income tax expense for above adjustment (b)

 

 

 

 

 

(99)

 

 

Lease termination (d):

 

 

 

 

 

 

 

 

 

 

 

Gross adjustment

 

 

 

329

 

 

1,122

 

 

2,085

Income tax expense for above adjustment (b)

 

 

 

1

 

 

 

 

(38)

(Gain) loss on sale or disposal of assets (e):

 

 

 

 

 

 

 

 

 

 

 

Gross adjustment

 

(40)

 

 

96

 

 

390

 

 

7

Income tax expense for above adjustment (b)

 

(12)

 

 

3

 

 

(15)

 

 

5

Equity-based compensation (f):

 

 

 

 

 

 

 

 

 

 

 

Gross adjustment

 

6,792

 

 

6,913

 

 

27,434

 

 

19,069

Income tax expense for above adjustment (b)

 

(792)

 

 

(820)

 

 

(3,080)

 

 

(2,181)

Tax Receivable Agreement liability adjustment (g):

 

 

 

 

 

 

 

 

 

 

 

Gross adjustment

 

 

 

 

 

 

 

3,520

Income tax expense for above adjustment (b)

 

 

 

 

 

 

 

(898)

Restructuring costs (h)

 

 

 

 

 

 

 

 

 

 

 

Gross adjustment

 

1,671

 

 

17,362

 

 

5,548

 

 

23,439

Income tax expense for above adjustment (b)

 

 

 

23

 

 

 

 

(42)

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

 

(4,642)

 

 

(12,091)

 

 

(18,866)

 

 

(27,580)

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

 

44,990

 

 

91,856

 

 

186,106

 

 

279,066

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)

 

409

 

 

1,892

 

 

1,519

 

 

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

 

(104)

 

 

(489)

 

 

(404)

 

 

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

 

 

 

 

 

 

 

359,176

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

 

 

 

 

 

 

 

(89,668)

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

 

 

 

 

 

 

 

(11,227)

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

$

45,295

 

$

93,259

 

$

187,221

 

$

537,347

Denominator:

 

 

 

 

 

 

 

 

 

 

 

Weighted-average Class A common shares outstanding – basic

 

41,985

 

 

45,628

 

 

42,419

 

 

45,072

Adjustments related to diluted calculation:

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

43,731

Dilutive options to purchase Class A common stock (m)

 

53

 

 

138

 

 

62

 

 

157

Dilutive restricted stock units (m)

 

467

 

 

1,256

 

 

466

 

 

1,204

Adjusted weighted average Class A common shares outstanding – diluted

 

42,505

 

 

47,022

 

 

42,947

 

 

90,164

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted earnings per share - basic

$

1.07

 

$

2.01

 

$

4.39

 

$

6.19

Adjusted earnings per share - diluted

$

1.07

 

$

1.98

 

$

4.36

 

$

5.96

 

 

 

 

 

 

 

 

 

 

 

 

Anti-dilutive amounts (n):

 

 

 

 

 

 

 

 

 

 

 

Numerator:

 

 

 

 

 

 

 

 

 

 

 

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

$

66,055

 

$

119,804

 

$

255,412

 

$

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

$

(16,804)

 

$

(30,965)

 

$

(66,789)

 

$

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 redemption of common units in CWGS, LLC (l)

$

627

 

$

1,466

 

$

6,464

 

$

Denominator:

 

 

 

 

 

 

 

 

 

 

 

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

 

42,045

 

 

42,635

 

 

42,045

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reconciliation of per share amounts:

 

 

 

 

 

 

 

 

 

 

 

Earnings per share of Class A common stock - basic

$

0.98

 

$

1.75

 

$

4.01

 

$

5.57

Non-GAAP Adjustments (o)

 

0.09

 

 

0.26

 

 

0.38

 

 

0.62

Adjusted earnings per share - basic

$

1.07

 

$

2.01

 

$

4.39

 

$

6.19

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per share of Class A common stock - diluted

$

0.97

 

$

1.72

 

$

3.99

 

$

5.49

Non-GAAP Adjustments (o)

 

0.10

 

 

0.26

 

 

0.37

 

 

0.62

Dilutive redemption of common units in CWGS, LLC for shares of Class A common stock (p)

 

 

 

 

 

 

 

(0.14)

Dilutive options to purchase Class A common stock and/or restricted stock units (p)

 

 

 

 

 

 

 

(0.01)

Adjusted earnings per share - diluted

$

1.07

 

$

1.98

 

$

4.36

 

$

5.96

(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 25.4% and 25.5% for the adjustments for the 2022 and 2021 periods, 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 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 disposals and sales 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 other associated costs. These costs exclude lease termination costs, which are presented separately above (see (d) 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 50.0% and 48.3% for the three months ended September 30, 2022 and 2021, respectively, and 49.8% and 49.2% for the nine months ended September 30, 2022 and 2021, 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 25.4% and 25.5% for the adjustments for 2022 and 2021 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 nine months ended September 30, 2021, this adjustment included the reversal of the $0.3 million expense and $14.5 million benefit, respectively, from changes in the valuation allowance for Camping World, Inc. Subsequent to the redemption 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 25.4% and 25.5% during the 2022 and 2021 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 $0.3 million and $14.5 million release of valuation allowance during the three and nine months ended September 30, 2021, respectively, was considered to be reversed and excluded from adjusted net income 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.

(o)

Represents the per share impact of the Non-GAAP adjustments to net income detailed above (see (a) through (h) above).

(p)

Represents the per share impact of stock options, restricted stock units, and/or common units of CWGS, LLC from the difference in their dilutive impact between the GAAP and Non-GAAP earnings per share calculations.

Our “Up-C” corporate structure may make it difficult to compare our results with those of companies with a more traditional corporate structure. There can be a significant fluctuation in the numerator and denominator for the calculation of our adjusted earnings per share – diluted depending on if the common units in CWGS, LLC are considered dilutive or anti-dilutive for a given period. To improve comparability of our financial results, users of our financial statements may find it useful to review our earnings per share assuming the full redemption of common units in CWGS, LLC for all periods, even when those common units would be anti-dilutive. The relevant numerator and denominator adjustments have been provided under “Anti-dilutive amounts” in the table above (see (n) above).

Investors:
Brett Andress
InvestorRelations@campingworld.com

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

Source: Camping World Holdings, Inc.
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