Camping World Holdings, Inc. Reports Second Quarter 2023 Results, Record Used Vehicle Unit Sales, Aggressive RV Dealership Acquisition Pace Continues

August 01, 2023

Camping World Holdings, Inc. (NYSE: CWH) (the “Company” or “CWH”), America’s Recreation Dealer, today reported results for the second quarter ended June 30, 2023.

Marcus Lemonis, Chairman and Chief Executive Officer of Camping World Holdings, Inc. stated, “We sold the most used units in our Company’s history, with record setting used vehicle gross profit. We’ve opened, acquired, or signed letters of intent on 30 dealership locations year-to-date. The unprecedented influx of acquisition opportunities has continued and the pipeline is robust. We plan to capitalize on it as we invest ahead of anticipated revenue growth in 2024 and beyond.”

Second Quarter-over-Quarter Operating Highlights

  • Revenue was $1.9 billion for the second quarter, a decrease of $267.9 million, or 12.4%.
  • Used vehicle revenue was a record $623.0 million for the second quarter, an increase of $67.0 million, or 12.1%, and used vehicle unit sales were a record 17,774 units, an increase of 2,219 units, or 14.3%.
  • New vehicle revenue was $800.9 million for the second quarter, a decline of $276.3 million, or 25.7%, and new vehicle unit sales were 18,897 units, a decrease of 4,507 units, or 19.3%.
  • Products, service and other revenue was $247.8 million for the second quarter, a decline of $30.2 million, or 10.9%. The decrease was driven by declines in our direct to manufacturer RV furniture revenues due to manufacturer shutdowns, our Active Sports Restructuring, and discounting to reduce inventory levels.
  • Same store used vehicle unit sales increased 8.8% for the second quarter, and same store new vehicle unit sales decreased 23.7%.
  • Gross profit was $571.1 million, a decrease of $145.7 million, or 20.3%. Total gross margin was 30.0%, a decrease of 301 basis points. The decrease in gross profit was driven largely by the decrease in new vehicle revenue and related finance and insurance revenue. The decrease in gross margin was primarily the result of lower average selling prices of new vehicles, which was partially offset by the increased sales mix of higher margin used vehicles.
  • Floor plan interest expense was $20.7 million, an increase of $11.9 million, or 136.7%, primarily as a result of the rise in interest rates. Other interest expense, net was $33.5 million, an increase of $18.6 million, or 124.4%, primarily as a result of the rise in interest rates and a higher average principal balance.
  • Net income was $64.7 million, a decrease of $133.3 million, or 67.3%, driven primarily by the pretax $101.6 million decrease in new vehicle gross profit, the $28.5 million decrease in finance and insurance gross profit on fewer vehicles sold, the $18.6 million increase in other interest expense, net, and the $11.9 million increase in floor plan interest, which was partially offset from the $20.2 million decrease in selling, general, and administrative expenses and lower income tax expense from these net reductions of pretax income.
  • Diluted earnings per share of Class A common stock was $0.64 in 2023 versus diluted earnings per share of Class A common stock of $2.01 in 2022. Adjusted earnings per share - diluted(1) of Class A common stock was $0.73 in 2023 versus adjusted earnings per share – diluted(1) of Class A common stock of $2.16 in 2022.
  • Adjusted EBITDA(1) was $139.3 million, a decrease of $138.4 million, or 49.8%, driven primarily by the $101.6 million decrease in new vehicle gross profit, the $28.5 million decrease in finance and insurance gross profit on fewer vehicles sold, and the $11.9 million increase in floor plan interest, which was partially offset from the $20.2 million decrease in selling, general, and administrative expenses(2).

________________

(1)

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.

(2)

The $20.2 million decrease in selling, general, and administrative expenses includes a $2.5 million decrease in equity-based compensation. Equity-based compensation is excluded from the calculation of Adjusted EBITDA (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 second quarter 2023 financial results is scheduled for August 2, 2023, 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# 13739824. 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 June 30, 2023, the Company owned 52.6% 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 enable us to connect with our customers as stewards of the RV enthusiast community and the RV lifestyle. With RV sales and service locations in 43 states, Camping World has grown to become the prime destination for everything RV. For more information, 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 macroeconomic and industry trends, dividend payments and capital allocation, our business plans and goals, the Company’s acquisition pipeline and plans, and future financial results, including long term revenue growth. 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: general economic conditions, including inflation and interest rates; 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, new store openings 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; risks related to the cybersecurity incident announced in February 2022; our dependence on the availability of adequate capital and risks related to our debt; risks related to COVID-19; our ability to execute and achieve the expected benefits of our cost cutting or restructuring initiatives; our reliance on our fulfillment and distribution centers; natural disasters, including epidemic outbreaks; our dependence on our relationships with third party suppliers and lending institutions; risks associated with selling goods manufactured abroad; our ability to retain senior executives and attract and retain other qualified employees; risks associated with leasing substantial amounts of space; risks associated with our private brand offerings; we may incur asset impairment charges for goodwill, intangible assets or other long-lived assets; tax risks; 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, 2022 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.

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 the Company’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

 

Six Months Ended

 

June 30,

 

June 30,

 

2023

 

2022

 

2023

 

2022

Revenue:

 

 

 

 

 

 

 

 

 

 

 

Good Sam Services and Plans

$

51,038

 

 

$

49,593

 

 

$

97,405

 

 

$

94,152

 

RV and Outdoor Retail

 

 

 

 

 

 

 

 

 

 

 

New vehicles

 

800,903

 

 

 

1,077,252

 

 

 

1,447,655

 

 

 

1,912,211

 

Used vehicles

 

622,962

 

 

 

555,958

 

 

 

1,067,708

 

 

 

958,990

 

Products, service and other

 

247,760

 

 

 

278,001

 

 

 

455,421

 

 

 

492,974

 

Finance and insurance, net

 

166,934

 

 

 

195,407

 

 

 

296,706

 

 

 

348,785

 

Good Sam Club

 

11,124

 

 

 

12,421

 

 

 

22,706

 

 

 

23,916

 

Subtotal

 

1,849,683

 

 

 

2,119,039

 

 

 

3,290,196

 

 

 

3,736,876

 

Total revenue

 

1,900,721

 

 

 

2,168,632

 

 

 

3,387,601

 

 

 

3,831,028

 

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

 

 

 

 

 

 

 

 

 

 

 

Good Sam Services and Plans

 

17,671

 

 

 

18,958

 

 

 

33,823

 

 

 

35,661

 

RV and Outdoor Retail

 

 

 

 

 

 

 

 

 

 

 

New vehicles

 

677,376

 

 

 

852,171

 

 

 

1,234,918

 

 

 

1,496,541

 

Used vehicles

 

480,419

 

 

 

414,169

 

 

 

822,366

 

 

 

716,994

 

Products, service and other

 

153,043

 

 

 

164,222

 

 

 

282,061

 

 

 

300,382

 

Good Sam Club

 

1,110

 

 

 

2,319

 

 

 

2,311

 

 

 

4,455

 

Subtotal

 

1,311,948

 

 

 

1,432,881

 

 

 

2,341,656

 

 

 

2,518,372

 

Total costs applicable to revenue

 

1,329,619

 

 

 

1,451,839

 

 

 

2,375,479

 

 

 

2,554,033

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross profit (exclusive of depreciation and amortization shown separately below):

 

 

 

 

 

 

 

 

 

 

 

Good Sam Services and Plans

 

33,367

 

 

 

30,635

 

 

 

63,582

 

 

 

58,491

 

RV and Outdoor Retail:

 

 

 

 

 

 

 

 

 

 

 

New vehicles

 

123,527

 

 

 

225,081

 

 

 

212,737

 

 

 

415,670

 

Used vehicles

 

142,543

 

 

 

141,789

 

 

 

245,342

 

 

 

241,996

 

Products, service and other

 

94,717

 

 

 

113,779

 

 

 

173,360

 

 

 

192,592

 

Finance and insurance, net

 

166,934

 

 

 

195,407

 

 

 

296,706

 

 

 

348,785

 

Good Sam Club

 

10,014

 

 

 

10,102

 

 

 

20,395

 

 

 

19,461

 

Subtotal

 

537,735

 

 

 

686,158

 

 

 

948,540

 

 

 

1,218,504

 

Total gross profit

 

571,102

 

 

 

716,793

 

 

 

1,012,122

 

 

 

1,276,995

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

Selling, general, and administrative expenses

 

420,887

 

 

 

441,123

 

 

 

786,613

 

 

 

826,438

 

Depreciation and amortization

 

17,206

 

 

 

17,627

 

 

 

31,843

 

 

 

43,162

 

Long-lived asset impairment

 

477

 

 

 

2,618

 

 

 

7,522

 

 

 

2,618

 

Lease termination

 

 

 

 

944

 

 

 

 

 

 

1,122

 

(Gain) loss on sale or disposal of assets

 

(145

)

 

 

381

 

 

 

(5,132

)

 

 

430

 

Total operating expenses

 

438,425

 

 

 

462,693

 

 

 

820,846

 

 

 

873,770

 

Income from operations

 

132,677

 

 

 

254,100

 

 

 

191,276

 

 

 

403,225

 

Other expense:

 

 

 

 

 

 

 

 

 

 

 

Floor plan interest expense

 

(20,672

)

 

 

(8,733

)

 

 

(41,482

)

 

 

(14,999

)

Other interest expense, net

 

(33,518

)

 

 

(14,935

)

 

 

(64,631

)

 

 

(29,236

)

Other expense, net

 

(183

)

 

 

(72

)

 

 

(1,683

)

 

 

(295

)

Total other expense

 

(54,373

)

 

 

(23,740

)

 

 

(107,796

)

 

 

(44,530

)

Income before income taxes

 

78,304

 

 

 

230,360

 

 

 

83,480

 

 

 

358,695

 

Income tax expense

 

(13,581

)

 

 

(32,375

)

 

 

(13,854

)

 

 

(53,411

)

Net income

 

64,723

 

 

 

197,985

 

 

 

69,626

 

 

 

305,284

 

Less: net income attributable to non-controlling interests

 

(36,020

)

 

 

(113,674

)

 

 

(37,754

)

 

 

(176,243

)

Net income attributable to Camping World Holdings, Inc.

$

28,703

 

 

$

84,311

 

 

$

31,872

 

 

$

129,041

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per share of Class A common stock:

 

 

 

 

 

 

 

 

 

 

 

Basic

$

0.65

 

 

$

2.02

 

 

$

0.72

 

 

$

3.03

 

Diluted

$

0.64

 

 

$

2.01

 

 

$

0.71

 

 

$

3.01

 

Weighted average shares of Class A common stock outstanding:

 

 

 

 

 

 

 

 

 

 

 

Basic

 

44,490

 

 

 

41,737

 

 

 

44,473

 

 

 

42,640

 

Diluted

 

44,804

 

 

 

42,139

 

 

 

84,783

 

 

 

43,171

 

 

Camping World Holdings, Inc. and Subsidiaries

Supplemental Data

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended June 30,

 

Increase

 

 

Percent

 

 

2023

 

2022

 

(decrease)

 

 

Change

Unit sales

 

 

 

 

 

 

 

 

 

 

 

 

 

New vehicles

 

 

18,897

 

 

 

23,404

 

 

 

(4,507

)

 

 

 

(19.3

%)

Used vehicles

 

 

17,774

 

 

 

15,555

 

 

 

2,219

 

 

 

 

14.3

%

Total

 

 

36,671

 

 

 

38,959

 

 

 

(2,288

)

 

 

 

(5.9

%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average selling price

 

 

 

 

 

 

 

 

 

 

 

 

 

New vehicles

 

$

42,383

 

 

$

46,029

 

 

$

(3,646

)

 

 

 

(7.9

%)

Used vehicles

 

$

35,049

 

 

$

35,741

 

 

$

(692

)

 

 

 

(1.9

%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Same store unit sales(1)

 

 

 

 

 

 

 

 

 

 

 

 

 

New vehicles

 

 

17,426

 

 

 

22,827

 

 

 

(5,401

)

 

 

 

(23.7

%)

Used vehicles

 

 

16,630

 

 

 

15,288

 

 

 

1,342

 

 

 

 

8.8

%

Total

 

 

34,056

 

 

 

38,115

 

 

 

(4,059

)

 

 

 

(10.6

%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

New vehicles

 

$

739,091

 

 

$

1,053,943

 

 

$

(314,852

)

 

 

 

(29.9

%)

Used vehicles

 

 

580,065

 

 

 

548,082

 

 

 

31,983

 

 

 

 

5.8

%

Products, service and other

 

 

188,653

 

 

 

211,157

 

 

 

(22,504

)

 

 

 

(10.7

%)

Finance and insurance, net

 

 

154,389

 

 

 

191,786

 

 

 

(37,397

)

 

 

 

(19.5

%)

Total

 

$

1,662,198

 

 

$

2,004,968

 

 

$

(342,770

)

 

 

 

(17.1

%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average gross profit per unit

 

 

 

 

 

 

 

 

 

 

 

 

 

New vehicles

 

$

6,537

 

 

$

9,617

 

 

$

(3,080

)

 

 

 

(32.0

%)

Used vehicles

 

 

8,020

 

 

 

9,115

 

 

 

(1,096

)

 

 

 

(12.0

%)

Finance and insurance, net per vehicle unit

 

 

4,552

 

 

 

5,016

 

 

 

(463

)

 

 

 

(9.2

%)

Total vehicle front-end yield(2)

 

 

11,808

 

 

 

14,433

 

 

 

(2,625

)

 

 

 

(18.2

%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross margin

 

 

 

 

 

 

 

 

 

 

 

 

 

Good Sam Services and Plans

 

 

65.4

%

 

 

61.8

%

 

 

361

 

bps

 

 

 

New vehicles

 

 

15.4

%

 

 

20.9

%

 

 

(547

)

bps

 

 

 

Used vehicles

 

 

22.9

%

 

 

25.5

%

 

 

(262

)

bps

 

 

 

Products, service and other

 

 

38.2

%

 

 

40.9

%

 

 

(270

)

bps

 

 

 

Finance and insurance, net

 

 

100.0

%

 

 

100.0

%

 

 

unch.

bps

 

 

 

Good Sam Club

 

 

90.0

%

 

 

81.3

%

 

 

869

 

bps

 

 

 

Subtotal RV and Outdoor Retail

 

 

29.1

%

 

 

32.4

%

 

 

(331

)

bps

 

 

 

Total gross margin

 

 

30.0

%

 

 

33.1

%

 

 

(301

)

bps

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

RV and Outdoor Retail inventories ($ in 000s)

 

 

 

 

 

 

 

 

 

 

 

 

 

New vehicles

 

$

1,206,493

 

 

$

1,329,604

 

 

$

(123,111

)

 

 

 

(9.3

%)

Used vehicles

 

 

651,396

 

 

 

358,060

 

 

 

293,336

 

 

 

 

81.9

%

Products, parts, accessories and misc.

 

 

218,570

 

 

 

307,789

 

 

 

(89,219

)

 

 

 

(29.0

%)

Total RV and Outdoor Retail inventories

 

$

2,076,459

 

 

$

1,995,453

 

 

$

81,006

 

 

 

 

4.1

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Vehicle inventory per location ($ in 000s)

 

 

 

 

 

 

 

 

 

 

 

 

 

New vehicle inventory per dealer location

 

$

6,156

 

 

$

7,346

 

 

$

(1,190

)

 

 

 

(16.2

%)

Used vehicle inventory per dealer location

 

$

3,323

 

 

$

1,978

 

 

$

1,345

 

 

 

 

68.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Vehicle inventory turnover(3)

 

 

 

 

 

 

 

 

 

 

 

 

 

New vehicle inventory turnover

 

 

1.8

 

 

 

2.4

 

 

 

(0.6

)

 

 

 

(23.4

%)

Used vehicle inventory turnover

 

 

3.0

 

 

 

3.7

 

 

 

(0.7

)

 

 

 

(18.8

%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Retail locations

 

 

 

 

 

 

 

 

 

 

 

 

 

RV dealerships

 

 

196

 

 

 

181

 

 

 

15

 

 

 

 

8.3

%

RV service & retail centers

 

 

7

 

 

 

8

 

 

 

(1

)

 

 

 

(12.5

%)

Subtotal

 

 

203

 

 

 

189

 

 

 

14

 

 

 

 

7.4

%

Other retail stores

 

 

 

 

 

1

 

 

 

(1

)

 

 

 

(100.0

%)

Total

 

 

203

 

 

 

190

 

 

 

13

 

 

 

 

6.8

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other data

 

 

 

 

 

 

 

 

 

 

 

 

 

Active Customers(4)

 

 

5,218,340

 

 

 

5,460,819

 

 

 

(242,479

)

 

 

 

(4.4

%)

Good Sam Club members

 

 

2,036,119

 

 

 

2,077,410

 

 

 

(41,291

)

 

 

 

(2.0

%)

Service bays (5)

 

 

2,720

 

 

 

2,613

 

 

 

107

 

 

 

 

4.1

%

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

 

 

11.7

%

 

 

12.0

%

 

 

(24

)

bps

 

 

n/a

 

Same store locations

 

 

178

 

 

 

n/a

 

 

 

n/a

 

 

 

 

n/a

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Six Months Ended June 30,

 

Increase

 

 

Percent

 

 

2023

 

2022

 

(decrease)

 

 

Change

Unit sales

 

 

 

 

 

 

 

 

 

 

 

 

 

New vehicles

 

 

32,809

 

 

 

42,424

 

 

 

(9,615

)

 

 

 

(22.7

%)

Used vehicles

 

 

30,206

 

 

 

26,531

 

 

 

3,675

 

 

 

 

13.9

%

Total

 

 

63,015

 

 

 

68,955

 

 

 

(5,940

)

 

 

 

(8.6

%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average selling price

 

 

 

 

 

 

 

 

 

 

 

 

 

New vehicles

 

$

44,124

 

 

$

45,074

 

 

$

(950

)

 

 

 

(2.1

%)

Used vehicles

 

$

35,348

 

 

$

36,146

 

 

$

(798

)

 

 

 

(2.2

%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Same store unit sales(1)

 

 

 

 

 

 

 

 

 

 

 

 

 

New vehicles

 

 

30,506

 

 

 

41,665

 

 

 

(11,159

)

 

 

 

(26.8

%)

Used vehicles

 

 

28,319

 

 

 

26,208

 

 

 

2,111

 

 

 

 

8.1

%

Total

 

 

58,825

 

 

 

67,873

 

 

 

(9,048

)

 

 

 

(13.3

%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

New vehicles

 

$

1,347,131

 

 

$

1,881,619

 

 

$

(534,488

)

 

 

 

(28.4

%)

Used vehicles

 

 

998,053

 

 

 

948,984

 

 

 

49,069

 

 

 

 

5.2

%

Products, service and other

 

 

339,122

 

 

 

369,814

 

 

 

(30,692

)

 

 

 

(8.3

%)

Finance and insurance, net

 

 

276,259

 

 

 

344,027

 

 

 

(67,768

)

 

 

 

(19.7

%)

Total

 

$

2,960,565

 

 

$

3,544,444

 

 

$

(583,879

)

 

 

 

(16.5

%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average gross profit per unit

 

 

 

 

 

 

 

 

 

 

 

 

 

New vehicles

 

$

6,484

 

 

$

9,798

 

 

$

(3,314

)

 

 

 

(33.8

%)

Used vehicles

 

 

8,122

 

 

 

9,121

 

 

 

(999

)

 

 

 

(11.0

%)

Finance and insurance, net per vehicle unit

 

 

4,709

 

 

 

5,058

 

 

 

(350

)

 

 

 

(6.9

%)

Total vehicle front-end yield(2)

 

 

11,978

 

 

 

14,596

 

 

 

(2,618

)

 

 

 

(17.9

%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross margin

 

 

 

 

 

 

 

 

 

 

 

 

 

Good Sam Services and Plans

 

 

65.3

%

 

 

62.1

%

 

 

315

 

bps

 

 

 

New vehicles

 

 

14.7

%

 

 

21.7

%

 

 

(704

)

bps

 

 

 

Used vehicles

 

 

23.0

%

 

 

25.2

%

 

 

(226

)

bps

 

 

 

Products, service and other

 

 

38.1

%

 

 

39.1

%

 

 

(100

)

bps

 

 

 

Finance and insurance, net

 

 

100.0

%

 

 

100.0

%

 

 

unch.

bps

 

 

 

Good Sam Club

 

 

89.8

%

 

 

81.4

%

 

 

845

 

bps

 

 

 

Subtotal RV and Outdoor Retail

 

 

28.8

%

 

 

32.6

%

 

 

(378

)

bps

 

 

 

Total gross margin

 

 

29.9

%

 

 

33.3

%

 

 

(346

)

bps

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

RV and Outdoor Retail inventories ($ in 000s)

 

 

 

 

 

 

 

 

 

 

 

 

 

New vehicles

 

$

1,206,493

 

 

$

1,329,604

 

 

$

(123,111

)

 

 

 

(9.3

%)

Used vehicles

 

 

651,396

 

 

 

358,060

 

 

 

293,336

 

 

 

 

81.9

%

Products, parts, accessories and misc.

 

 

218,570

 

 

 

307,789

 

 

 

(89,219

)

 

 

 

(29.0

%)

Total RV and Outdoor Retail inventories

 

$

2,076,459

 

 

$

1,995,453

 

 

$

81,006

 

 

 

 

4.1

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Vehicle inventory per location ($ in 000s)

 

 

 

 

 

 

 

 

 

 

 

 

 

New vehicle inventory per dealer location

 

$

6,156

 

 

$

7,346

 

 

$

(1,190

)

 

 

 

(16.2

%)

Used vehicle inventory per dealer location

 

$

3,323

 

 

$

1,978

 

 

$

1,345

 

 

 

 

68.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Vehicle inventory turnover(3)

 

 

 

 

 

 

 

 

 

 

 

 

 

New vehicle inventory turnover

 

 

1.8

 

 

 

2.4

 

 

 

(0.6

)

 

 

 

(23.4

%)

Used vehicle inventory turnover

 

 

3.0

 

 

 

3.7

 

 

 

(0.7

)

 

 

 

(18.8

%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Retail locations

 

 

 

 

 

 

 

 

 

 

 

 

 

RV dealerships

 

 

196

 

 

 

181

 

 

 

15

 

 

 

 

8.3

%

RV service & retail centers

 

 

7

 

 

 

8

 

 

 

(1

)

 

 

 

(12.5

%)

Subtotal

 

 

203

 

 

 

189

 

 

 

14

 

 

 

 

7.4

%

Other retail stores

 

 

 

 

 

1

 

 

 

(1

)

 

 

 

(100.0

%)

Total

 

 

203

 

 

 

190

 

 

 

13

 

 

 

 

6.8

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other data

 

 

 

 

 

 

 

 

 

 

 

 

 

Active Customers(4)

 

 

5,218,340

 

 

 

5,460,819

 

 

 

(242,479

)

 

 

 

(4.4

%)

Good Sam Club members

 

 

2,036,119

 

 

 

2,077,410

 

 

 

(41,291

)

 

 

 

(2.0

%)

Service bays(5)

 

 

2,720

 

 

 

2,613

 

 

 

107

 

 

 

 

4.1

%

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

 

 

11.8

%

 

 

12.1

%

 

 

(35

)

bps

 

 

n/a

 

Same store locations

 

 

178

 

 

 

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 Per Share Amounts)

 

 

 

 

 

 

 

 

 

 

 

 

June 30,

 

December 31,

 

June 30,

 

 

2023

 

2022

 

2022

Assets

 

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

54,458

 

 

$

130,131

 

 

$

133,957

 

Contracts in transit

 

 

132,466

 

 

 

50,349

 

 

 

150,929

 

Accounts receivable, net

 

 

119,247

 

 

 

112,411

 

 

 

125,957

 

Inventories

 

 

2,077,024

 

 

 

2,123,858

 

 

 

1,995,796

 

Prepaid expenses and other assets

 

 

56,063

 

 

 

66,913

 

 

 

61,308

 

Assets held for sale

 

 

4,635

 

 

 

 

 

 

 

Total current assets

 

 

2,443,893

 

 

 

2,483,662

 

 

 

2,467,947

 

 

 

 

 

 

 

 

 

 

 

Property and equipment, net

 

 

785,003

 

 

 

758,281

 

 

 

688,297

 

Operating lease assets

 

 

730,460

 

 

 

742,306

 

 

 

711,589

 

Deferred tax assets, net

 

 

141,233

 

 

 

143,226

 

 

 

182,212

 

Intangible assets, net

 

 

15,028

 

 

 

20,945

 

 

 

22,943

 

Goodwill

 

 

655,744

 

 

 

622,423

 

 

 

507,284

 

Other assets

 

 

31,732

 

 

 

29,304

 

 

 

30,029

 

Total assets

 

$

4,803,093

 

 

$

4,800,147

 

 

$

4,610,301

 

Liabilities and stockholders' equity

 

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

 

Accounts payable

 

$

200,516

 

 

$

127,691

 

 

$

249,218

 

Accrued liabilities

 

 

192,639

 

 

 

147,833

 

 

 

238,941

 

Deferred revenues

 

 

96,850

 

 

 

95,695

 

 

 

95,730

 

Current portion of operating lease liabilities

 

 

61,808

 

 

 

61,745

 

 

 

60,816

 

Current portion of finance lease liabilities

 

 

5,337

 

 

 

10,244

 

 

 

10,563

 

Current portion of Tax Receivable Agreement liability

 

 

13,999

 

 

 

10,873

 

 

 

11,686

 

Current portion of long-term debt

 

 

26,766

 

 

 

25,229

 

 

 

15,826

 

Notes payable – floor plan, net

 

 

1,155,356

 

 

 

1,319,941

 

 

 

1,000,808

 

Other current liabilities

 

 

84,552

 

 

 

73,076

 

 

 

86,975

 

Liabilities related to assets held for sale

 

 

4,125

 

 

 

 

 

 

 

Total current liabilities

 

 

1,841,948

 

 

 

1,872,327

 

 

 

1,770,563

 

 

 

 

 

 

 

 

 

 

 

Operating lease liabilities, net of current portion

 

 

753,999

 

 

 

764,835

 

 

 

735,267

 

Finance lease liabilities, net of current portion

 

 

99,341

 

 

 

94,216

 

 

 

96,604

 

Tax Receivable Agreement liability, net of current portion

 

 

151,053

 

 

 

159,743

 

 

 

159,790

 

Revolving line of credit

 

 

20,885

 

 

 

20,885

 

 

 

20,885

 

Long-term debt, net of current portion

 

 

1,521,629

 

 

 

1,484,416

 

 

 

1,371,444

 

Deferred revenues

 

 

69,809

 

 

 

70,247

 

 

 

73,076

 

Other long-term liabilities

 

 

86,186

 

 

 

85,792

 

 

 

82,741

 

Total liabilities

 

 

4,544,850

 

 

 

4,552,461

 

 

 

4,310,370

 

Commitments and contingencies

 

 

 

 

 

 

 

 

 

Stockholders' equity:

 

 

 

 

 

 

 

 

 

Preferred stock, par value $0.01 per share – 20,000 shares authorized; none issued and outstanding

 

 

 

 

 

 

 

 

 

Class A common stock, par value $0.01 per share – 250,000 shares authorized; 49,571, 47,571, and 47,855 shares issued, respectively; 44,525, 42,441, and 41,789 shares outstanding, respectively

 

 

496

 

 

 

476

 

 

 

476

 

Class B common stock, par value $0.0001 per share – 75,000 shares authorized; 39,466, 41,466, and 69,066 shares issued, respectively; 39,466, 41,466, and 41,466 shares outstanding, respectively

 

 

4

 

 

 

4

 

 

 

4

 

Class C common stock, par value $0.0001 per share – 0.001 share authorized, issued and outstanding

 

 

 

 

 

 

 

 

 

Additional paid-in capital

 

 

115,844

 

 

 

106,051

 

 

 

127,508

 

Treasury stock, at cost; 5,046, 5,130, and 5,782 shares, respectively

 

 

(176,783

)

 

 

(179,732

)

 

 

(202,561

)

Retained earnings

 

 

197,293

 

 

 

221,031

 

 

 

265,974

 

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

 

 

136,854

 

 

 

147,830

 

 

 

191,401

 

Non-controlling interests

 

 

121,389

 

 

 

99,856

 

 

 

108,530

 

Total stockholders' equity

 

 

258,243

 

 

 

247,686

 

 

 

299,931

 

Total liabilities and stockholders' equity

 

$

4,803,093

 

 

$

4,800,147

 

 

$

4,610,301

 

Camping World Holdings, Inc. and Subsidiaries

Summary of Consolidated Statements of Cash Flows (unaudited)

(In Thousands)

 

 

 

 

 

 

 

 

 

Six Months Ended June 30,

 

 

2023

 

2022

 

 

 

 

 

 

 

Net cash provided by operating activities

 

$

227,964

 

 

$

183,994

 

 

 

 

 

 

 

 

Investing activities

 

 

 

 

 

 

Purchases of property and equipment

 

 

(53,053

)

 

 

(69,004

)

Proceeds from sale of property and equipment

 

 

2,034

 

 

 

654

 

Purchases of real property

 

 

(36,981

)

 

 

(28,033

)

Proceeds from the sale of real property

 

 

35,603

 

 

 

6,809

 

Purchases of businesses, net of cash acquired

 

 

(74,414

)

 

 

(38,188

)

Purchases of and loans to other investments

 

 

(3,444

)

 

 

(3,000

)

Purchases of intangible assets

 

 

(1,652

)

 

 

(743

)

Net cash used in investing activities

 

 

(131,907

)

 

 

(131,505

)

 

 

 

 

 

 

 

Financing activities

 

 

 

 

 

 

Proceeds from long-term debt

 

 

59,227

 

 

 

 

Payments on long-term debt

 

 

(22,776

)

 

 

(7,913

)

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

 

 

(131,462

)

 

 

40,372

 

Proceeds from landlord funded construction on finance leases

 

 

 

 

 

6,028

 

Payments on finance leases

 

 

(2,847

)

 

 

(3,042

)

Proceeds from sale-leaseback arrangement

 

 

 

 

 

27,951

 

Payments on sale-leaseback arrangement

 

 

(92

)

 

 

(42

)

Payment of debt issuance costs

 

 

(858

)

 

 

 

Dividends on Class A common stock

 

 

(55,610

)

 

 

(52,538

)

Proceeds from exercise of stock options

 

 

143

 

 

 

272

 

RSU shares withheld for tax

 

 

(625

)

 

 

(1,517

)

Repurchases of Class A common stock to treasury stock

 

 

 

 

 

(79,757

)

Distributions to holders of LLC common units

 

 

(16,830

)

 

 

(115,678

)

Net cash used in financing activities

 

 

(171,730

)

 

 

(185,864

)

 

 

 

 

 

 

 

Decrease in cash and cash equivalents

 

 

(75,673

)

 

 

(133,375

)

Cash and cash equivalents at beginning of the period

 

 

130,131

 

 

 

267,332

 

Cash and cash equivalents at end of the period

 

$

54,458

 

 

$

133,957

Comparison of Certain Trends to Pre-COVID-19 Pandemic Periods

Beginning in the first quarter of 2021 and continuing through the first quarter of 2023, the Company experienced sequential decreases in new vehicle gross margin, primarily due to the higher cost of new vehicles resulting from the lower industry supply of travel trailers and motorhomes for much of 2021. However, second quarter 2023 new vehicle gross margins were slightly higher than a similar range that the Company experienced in the second quarter pre-COVID-19 pandemic periods of 2016 to 2019, which we believe are more typical demand environments than during the COVID-19 pandemic.

Additionally, the percentage of total unit sales relating to used vehicles was significantly higher in the second quarter of 2023 compared to the pre-COVID-19 pandemic periods of 2016 to 2019. The Company is continuing to execute on its used vehicle strategy, which differentiates it from the competition with proprietary tools, such as the RV Valuator, focus on the development and retention of its service technician team, and investment in its service bay infrastructure.

The following table presents vehicle gross margin and unit sales mix for the three months ended June 30, 2023 and pre-COVID-19 pandemic periods for the three months ended June 30, 2019, 2018, 2017, and 2016 (unaudited):

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended June 30,

 

 

2023

 

2019(1)

 

2018(1)

 

2017(1)

 

2016(1)

Gross margin:

 

 

 

 

 

 

 

 

 

 

New vehicles

 

15.4%

 

12.5%

 

13.6%

 

15.1%

 

14.9%

Used vehicles

 

22.9%

 

21.6%

 

22.9%

 

25.9%

 

20.4%

 

 

 

 

 

 

 

 

 

 

 

Unit sales mix:

 

 

 

 

 

 

 

 

 

 

New vehicles

 

51.5%

 

67.9%

 

72.7%

 

70.7%

 

61.6%

Used vehicles

 

48.5%

 

32.1%

 

27.3%

 

29.3%

 

38.4%

(1)

These periods were prior to the COVID-19 pandemic.

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 June 30,

 

Six Months Ended June 30,

(In thousands except per share amounts)

 

2023

 

2022

 

2023

 

2022

Numerator:

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

64,723

 

 

$

197,985

 

 

$

69,626

 

 

$

305,284

 

Less: net income attributable to non-controlling interests

 

 

(36,020

)

 

 

(113,674

)

 

 

(37,754

)

 

 

(176,243

)

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

 

$

28,703

 

 

$

84,311

 

 

 

31,872

 

 

 

129,041

 

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

 

 

101

 

 

 

405

 

 

 

 

 

 

738

 

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

 

 

 

 

 

 

 

 

28,569

 

 

 

 

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

 

$

28,804

 

 

$

84,716

 

 

$

60,441

 

 

$

129,779

 

Denominator:

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

44,490

 

 

 

41,737

 

 

 

44,473

 

 

 

42,640

 

Dilutive options to purchase Class A common stock

 

 

29

 

 

 

44

 

 

 

22

 

 

 

66

 

Dilutive restricted stock units

 

 

285

 

 

 

358

 

 

 

243

 

 

 

465

 

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

 

 

 

 

 

 

 

 

40,045

 

 

 

 

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

 

 

44,804

 

 

 

42,139

 

 

 

84,783

 

 

 

43,171

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per share of Class A common stock — basic

 

$

0.65

 

 

$

2.02

 

 

$

0.72

 

 

$

3.03

 

Earnings per share of Class A common stock — diluted

 

$

0.64

 

 

$

2.01

 

 

$

0.71

 

 

$

3.01

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

 

 

 

Restricted stock units

 

 

1,099

 

 

 

3,256

 

 

 

1,608

 

 

 

2,448

 

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

 

 

40,045

 

 

 

42,045

 

 

 

 

 

 

42,045

 

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, trailing twelve-month (“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, 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.

For periods beginning after December 31, 2022, we are no longer including the other associated costs category of expenses relating to the 2019 Strategic Shift as restructuring costs for purposes of our Non-GAAP Financial Measures, since these costs are not expected to be significant in future periods.

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, 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 Active Sports Restructuring and the 2019 Strategic Shift, loss and impairment on investments in equity securities, 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 June 30,

 

Six Months Ended June 30,

($ in thousands)

2023

 

2022

 

2023

 

2022

EBITDA and Adjusted EBITDA:

 

 

 

 

 

 

 

 

 

 

 

Net income

$

64,723

 

 

$

197,985

 

$

69,626

 

 

$

305,284

Other interest expense, net

 

33,518

 

 

 

14,935

 

 

64,631

 

 

 

29,236

Depreciation and amortization

 

17,206

 

 

 

17,627

 

 

31,843

 

 

 

43,162

Income tax expense

 

13,581

 

 

 

32,375

 

 

13,854

 

 

 

53,411

Subtotal EBITDA

 

129,028

 

 

 

262,922

 

 

179,954

 

 

 

431,093

Long-lived asset impairment (a)

 

477

 

 

 

2,618

 

 

7,522

 

 

 

2,618

Lease termination (b)

 

 

 

 

944

 

 

 

 

 

1,122

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

 

(145

)

 

 

381

 

 

(5,132

)

 

 

430

Equity-based compensation (d)

 

6,492

 

 

 

8,968

 

 

12,850

 

 

 

20,642

Restructuring costs (e)

 

3,259

 

 

 

1,854

 

 

3,259

 

 

 

3,877

Loss and impairment on investments in equity securities (f)

 

184

 

 

 

 

 

1,683

 

 

 

Adjusted EBITDA

$

139,295

 

 

$

277,687

 

$

200,136

 

 

$

459,782

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

(as percentage of total revenue)

2023

 

2022

 

2023

 

2022

Adjusted EBITDA margin:

 

 

 

 

 

 

 

Net income margin

3.4

%

 

9.1

%

 

2.1

%

 

8.0

%

Other interest expense, net

1.8

%

 

0.7

%

 

1.9

%

 

0.8

%

Depreciation and amortization

0.9

%

 

0.8

%

 

0.9

%

 

1.1

%

Income tax expense

0.7

%

 

1.5

%

 

0.4

%

 

1.4

%

Subtotal EBITDA margin

6.8

%

 

12.1

%

 

5.3

%

 

11.3

%

Long-lived asset impairment (a)

0.0

%

 

0.1

%

 

0.2

%

 

0.1

%

Lease termination (b)

 

 

0.0

%

 

 

 

0.0

%

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

(0.0

%)

 

0.0

%

 

(0.2

%)

 

0.0

%

Equity-based compensation (d)

0.3

%

 

0.4

%

 

0.4

%

 

0.5

%

Restructuring costs (e)

0.2

%

 

0.1

%

 

0.1

%

 

0.1

%

Loss and impairment on investments in equity securities (f)

0.0

%

 

 

 

0.0

%

 

 

Adjusted EBITDA margin

7.3

%

 

12.8

%

 

5.9

%

 

12.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

TTM Ended

 

June 30,

 

March 31,

 

December 31,

 

September 30,

 

June 30,

($ in thousands)

2023

 

2023

 

2022

 

2022

 

2023

Adjusted EBITDA:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

$

64,723

 

 

$

4,903

 

 

$

(57,201

)

 

$

102,948

 

 

$

115,373

 

Other interest expense, net

 

33,518

 

 

 

31,113

 

 

 

25,983

 

 

 

20,526

 

 

 

111,140

 

Depreciation and amortization

 

17,206

 

 

 

14,637

 

 

 

18,935

 

 

 

18,207

 

 

 

68,985

 

Income tax expense

 

13,581

 

 

 

273

 

 

 

23,276

 

 

 

22,397

 

 

 

59,527

 

Subtotal EBITDA

 

129,028

 

 

 

50,926

 

 

 

10,993

 

 

 

164,078

 

 

 

355,025

 

Long-lived asset impairment (a)

 

477

 

 

 

7,045

 

 

 

726

 

 

 

887

 

 

 

9,135

 

Lease termination (b)

 

 

 

 

 

 

 

492

 

 

 

 

 

 

492

 

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

 

(145

)

 

 

(4,987

)

 

 

232

 

 

 

(40

)

 

 

(4,940

)

Equity-based compensation (d)

 

6,492

 

 

 

6,358

 

 

 

6,413

 

 

 

6,792

 

 

 

26,055

 

Restructuring costs (e)

 

3,259

 

 

 

 

 

 

1,478

 

 

 

1,671

 

 

 

6,408

 

Loss and impairment on investments in equity securities (f)

 

184

 

 

 

1,499

 

 

 

 

 

 

 

 

 

1,683

 

Tax Receivable Agreement liability adjustment (g)

 

 

 

 

 

 

 

(114

)

 

 

 

 

 

(114

)

Adjusted EBITDA

$

139,295

 

 

$

60,841

 

 

$

20,220

 

 

$

173,388

 

 

$

393,744

 

(a)

Represents long-lived asset impairment charges related to the RV and Outdoor Retail segment.

(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 gains and losses 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 restructuring costs relating to the Active Sports Restructuring during the three and six months ended June 30, 2023 and our 2019 Strategic Shift for periods ended on or before December 31, 2022. These restructuring costs include one-time termination benefits, incremental inventory reserve charges, and other associated costs. These costs exclude lease termination costs, which are presented separately above.

(f)

Represents loss and impairment on investments in equity securities and interest income relating to any notes receivables with those investments for periods beginning after December 31, 2022. Amounts relating to periods prior to 2023 were not significant. These amounts are included in other expense, net in the condensed consolidated statements of operations. During the six months ended June 30, 2023, this amount included a $1.3 million impairment on an equity method investment.

(g)

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

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, long-lived asset impairment, lease termination costs, gains and losses on sale or disposal of assets, net, equity-based compensation, restructuring costs related to the Active Sports Restructuring and the 2019 Strategic Shift, loss and impairment on investments in equity securities, 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

 

Six Months Ended

 

 

June 30,

 

June 30,

(In thousands except per share amounts)

 

2023

 

2022

 

2023

 

2022

Numerator:

 

 

 

 

 

 

 

 

 

 

 

 

Net income attributable to Camping World Holdings, Inc.

 

$

28,703

 

 

$

84,311

 

 

$

31,872

 

 

$

129,041

 

Adjustments related to basic calculation:

 

 

 

 

 

 

 

 

 

 

 

 

Long-lived asset impairment (a):

 

 

 

 

 

 

 

 

 

 

 

 

Gross adjustment

 

 

477

 

 

 

2,618

 

 

 

7,522

 

 

 

2,618

 

Income tax expense for above adjustment (b)

 

 

(64

)

 

 

(99

)

 

 

(1,002

)

 

 

(99

)

Lease termination (c):

 

 

 

 

 

 

 

 

 

 

 

 

Gross adjustment

 

 

 

 

 

944

 

 

 

 

 

 

1,122

 

Income tax expense for above adjustment (b)

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

 

 

 

Gross adjustment

 

 

(145

)

 

 

381

 

 

 

(5,132

)

 

 

430

 

Income tax benefit (expense) for above adjustment (b)

 

 

19

 

 

 

(3

)

 

 

684

 

 

 

(3

)

Equity-based compensation (e):

 

 

 

 

 

 

 

 

 

 

 

 

Gross adjustment

 

 

6,492

 

 

 

8,968

 

 

 

12,850

 

 

 

20,642

 

Income tax expense for above adjustment (b)

 

 

(872

)

 

 

(951

)

 

 

(1,729

)

 

 

(2,288

)

Restructuring costs (f):

 

 

 

 

 

 

 

 

 

 

 

 

Gross adjustment

 

 

3,259

 

 

 

1,854

 

 

 

3,259

 

 

 

3,877

 

Income tax expense for above adjustment (b)

 

 

(434

)

 

 

 

 

 

(434

)

 

 

 

Loss and impairment on investments in equity securities (g):

 

 

 

 

 

 

 

 

 

 

 

 

Gross adjustment

 

 

184

 

 

 

 

 

 

1,683

 

 

 

 

Income tax expense for above adjustment (b)

 

 

(25

)

 

 

 

 

 

(225

)

 

 

 

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

 

 

(4,855

)

 

 

(7,397

)

 

 

(9,543

)

 

 

(14,224

)

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

 

 

32,739

 

 

 

90,626

 

 

 

39,805

 

 

 

141,116

 

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 (i)

 

 

151

 

 

 

 

 

 

 

 

 

1,110

 

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

 

 

(37

)

 

 

 

 

 

 

 

 

(299

)

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

 

 

 

 

 

121,071

 

 

 

47,298

 

 

 

 

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

 

 

 

 

 

(29,735

)

 

 

(11,586

)

 

 

 

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 (k)

 

 

 

 

 

(511

)

 

 

 

 

 

 

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

 

$

32,853

 

 

$

181,451

 

 

$

75,517

 

 

$

141,927

 

Denominator:

 

 

 

 

 

 

 

 

 

 

 

 

Weighted-average Class A common shares outstanding – basic

 

 

44,490

 

 

 

41,737

 

 

 

44,473

 

 

 

42,640

 

Adjustments related to diluted calculation:

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

42,045

 

 

 

40,045

 

 

 

 

Dilutive options to purchase Class A common stock (l)

 

 

29

 

 

 

44

 

 

 

22

 

 

 

66

 

Dilutive restricted stock units (l)

 

 

285

 

 

 

358

 

 

 

243

 

 

 

465

 

Adjusted weighted average Class A common shares outstanding – diluted

 

 

44,804

 

 

 

84,184

 

 

 

84,783

 

 

 

43,171

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted earnings per share - basic

 

$

0.74

 

 

$

2.17

 

 

$

0.90

 

 

$

3.31

 

Adjusted earnings per share - diluted

 

$

0.73

 

 

$

2.16

 

 

$

0.89

 

 

$

3.29

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Anti-dilutive amounts (m):

 

 

 

 

 

 

 

 

 

 

 

 

Numerator:

 

 

 

 

 

 

 

 

 

 

 

 

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

 

$

40,724

 

 

$

 

 

$

 

 

$

189,357

 

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

 

$

(9,934

)

 

$

 

 

$

 

 

$

(49,986

)

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 (k)

 

$

 

 

$

 

 

$

 

 

$

5,837

 

Denominator:

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

40,045

 

 

 

 

 

 

 

 

 

42,045

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reconciliation of per share amounts:

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per share of Class A common stock — basic

 

$

0.65

 

 

$

2.02

 

 

$

0.72

 

 

$

3.03

 

Non-GAAP Adjustments (n)

 

 

0.09

 

 

 

0.15

 

 

 

0.18

 

 

 

0.28

 

Adjusted earnings per share - basic

 

$

0.74

 

 

$

2.17

 

 

$

0.90

 

 

$

3.31

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per share of Class A common stock — diluted

 

$

0.64

 

 

$

2.01

 

 

$

0.71

 

 

$

3.01

 

Non-GAAP Adjustments (n)

 

 

0.09

 

 

 

0.15

 

 

 

0.18

 

 

 

0.28

 

Adjusted earnings per share - diluted

 

$

0.73

 

 

$

2.16

 

 

$

0.89

 

 

$

3.29

 

(a)

Represents long-lived asset impairment charges related to the RV and Outdoor Retail segment.

(b)

Represents the current and deferred income tax expense or benefit effect of the above adjustments. For periods that ended on or before December 31, 2022, many of these adjustments were related to entities with full valuation allowances for which no tax benefit could be recognized. This assumption uses an effective tax rate of 25.3% and 25.4% for the adjustments for the 2023 and 2022 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 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.

(d)

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

(e)

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

(f)

Represents restructuring costs relating to the Active Sports Restructuring during the three and six months ended June 30, 2023 and the 2019 Strategic Shift for periods that ended on or before December 31, 2022. These restructuring costs include one-time termination benefits, incremental inventory reserve charges, and other associated costs. These costs exclude lease termination costs, which are presented separately above.

(g)

Represents loss and impairment on investments in equity securities and interest income relating to any notes receivables with those investments for periods beginning after December 31, 2022. Amounts relating to periods prior to 2023 were not significant. These amounts are included in other expense, net in the condensed consolidated statements of operations. During the six months ended June 30, 2023, this amount included a $1.3 million impairment on an equity method investment.

(h)

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 47.4% and 50.2% for the three months ended June 30, 2023 and 2022, respectively, and 47.4% and 49.6% for the six months ended June 30, 2023 and 2022, respectively.

(i)

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.

(j)

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 25.3% and 25.4% for the adjustments for 2023 and 2022 periods, respectively.

(k)

As a result of the LLC Conversion, this adjustment only relates to periods ended on or before December 31, 202