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Camping World Holdings, Inc. Reports Third Quarter 2023 Results, Total Unit Sales of 32,330 Exceeds 2022, Rigorous Inventory Discipline and Continued Acquisitions Set Stage for Improved 2024

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

Marcus Lemonis, Chairman and Chief Executive Officer of Camping World Holdings, Inc. stated, “We are laser focused on the final stages of cleansing our inventory going into 2024. These actions have come with near-term gross margin compression, but we believe now is the moment to put the finishing touches on our industry-leading inventory position and prepare the business for the next up-cycle. In 2024, we expect total company revenue, same store unit sales, total gross margin, and earnings to increase year over year.”

Third Quarter-over-Quarter Operating Highlights

  • Revenue was $1.7 billion for the third quarter, a decrease of $126.1 million, or 6.8%.
  • Used vehicle revenue was a record $590.2 million for the third quarter, an increase of $64.2 million, or 12.2%, and used vehicle unit sales were a record 17,125 units, an increase of 2,665 units, or 18.4%.
  • New vehicle revenue was $679.2 million for the third quarter, a decline of $154.9 million, or 18.6%, and new vehicle unit sales were 15,205 units, a decrease of 2,411 units, or 13.7%.
  • Average selling price of new and used vehicles declined 5.7% and 5.2%, respectively, during the third quarter. As the procurement prices of model year 2024 new vehicles declined compared to model years 2022 and 2023, the Company actively discounted certain used vehicles during the third quarter to reduce inventory levels of aged used vehicles.
  • Products, service and other revenue was $235.6 million for the third quarter, a decline of $33.3 million, or 12.4%. The decrease was driven largely by lower demand and lower stocking levels of lifestyle, activities, design, and home products, as well as declines in our direct to manufacturer RV furniture revenues due to RV manufacturer production slowdowns and discounting related to our Active Sports Restructuring.
  • Same store used vehicle unit sales increased 10.9% for the third quarter, and same store new vehicle unit sales decreased 21.5%.
  • Gross profit was $523.1 million, a decrease of $70.6 million, or 11.9%. Total gross margin was 30.2%, a decrease of 175 basis points. The decrease in gross profit and gross margin was driven largely by the decrease in average selling price of new and used vehicles discussed above. The decrease in finance and insurance, net gross profit was partially offset by improved retention on finance and insurance products, which drove favorable adjustments to reserves in the third quarter of 2023. Good Sam Services and Plans gross profit and gross margin was favorably impacted by finalizing contract negotiations to exit an arrangement with a service partner in the quarter.
  • Selling, general and administrative expenses were $415.3 million, a decrease of $3.8 million, or 0.9%, primarily as a result of our efforts to reduce expenses. In the quarter, the Company closed two underperforming retail stores and one distribution center, whose leases were successfully terminated. These cost reductions were partially offset by additional employee compensation and facility costs resulting from the 8.3% increase in store location count to 209 at September 30, 2023 from 193 at September 30, 2022.
  • Subsequent to September 30, 2023, the Company made the decision to consolidate or close seven underperforming dealership locations in order to redeploy working capital to higher returning investments.
  • Floor plan interest expense was $19.8 million, an increase of $10.3 million, or 108.9%, and other interest expense, net was $35.2 million, an increase of $14.7 million, or 71.7%. These increases were primarily as a result of the rise in interest rates.
  • Net income was $30.9 million, a decrease of $72.1 million, or 70.0%, driven primarily by the pretax $71.7 million decrease in new and used vehicle gross profit, the $14.7 million increase in other interest expense, net, and the $10.3 million increase in floor plan interest, which was partially offset by the $3.8 million decrease in selling, general, and administrative expenses and lower income tax expense from net reductions of pretax income.
  • Diluted earnings per share of Class A common stock was $0.32 in 2023 versus diluted earnings per share of Class A common stock of $0.97 in 2022. Adjusted earnings per share - diluted(1) of Class A common stock was $0.39 in 2023 versus adjusted earnings per share – diluted(1) of Class A common stock of $1.07 in 2022.
  • Adjusted EBITDA(1) was $95.0 million, a decrease of $78.4 million, or 45.2%, driven primarily by the $71.7 million decrease in new and used vehicle gross profit and the $10.3 million increase in floor plan interest, which was partially offset by the $3.8 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 $3.8 million decrease in selling, general, and administrative expenses includes a $1.3 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 third quarter 2023 financial results is scheduled for November 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# 13741006. 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, 2023, the Company owned 52.8% 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 cleansing our inventory, 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 anticipated gross margin compression and outlook for 2024. 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

 

Nine Months Ended

 

 

September 30,

 

September 30,

 

 

2023

 

2022

 

2023

 

2022

Revenue:

 

 

 

 

 

 

 

 

 

 

 

 

Good Sam Services and Plans

 

$

49,889

 

 

$

50,352

 

 

$

147,294

 

 

$

144,504

 

RV and Outdoor Retail

 

 

 

 

 

 

 

 

 

 

 

 

New vehicles

 

 

679,207

 

 

 

834,112

 

 

 

2,126,862

 

 

 

2,746,323

 

Used vehicles

 

 

590,227

 

 

 

525,988

 

 

 

1,657,935

 

 

 

1,484,978

 

Products, service and other

 

 

235,609

 

 

 

268,940

 

 

 

691,030

 

 

 

761,914

 

Finance and insurance, net

 

 

163,630

 

 

 

165,136

 

 

 

460,336

 

 

 

513,921

 

Good Sam Club

 

 

11,051

 

 

 

11,154

 

 

 

33,757

 

 

 

35,070

 

Subtotal

 

 

1,679,724

 

 

 

1,805,330

 

 

 

4,969,920

 

 

 

5,542,206

 

Total revenue

 

 

1,729,613

 

 

 

1,855,682

 

 

 

5,117,214

 

 

 

5,686,710

 

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

 

 

 

 

 

 

 

 

 

 

 

 

Good Sam Services and Plans

 

 

10,021

 

 

 

18,871

 

 

 

43,844

 

 

 

54,532

 

RV and Outdoor Retail

 

 

 

 

 

 

 

 

 

 

 

 

New vehicles

 

 

576,480

 

 

 

675,119

 

 

 

1,811,398

 

 

 

2,171,660

 

Used vehicles

 

 

478,595

 

 

 

398,882

 

 

 

1,300,961

 

 

 

1,115,876

 

Products, service and other

 

 

139,976

 

 

 

167,298

 

 

 

422,037

 

 

 

467,680

 

Good Sam Club

 

 

1,455

 

 

 

1,824

 

 

 

3,766

 

 

 

6,279

 

Subtotal

 

 

1,196,506

 

 

 

1,243,123

 

 

 

3,538,162

 

 

 

3,761,495

 

Total costs applicable to revenue

 

 

1,206,527

 

 

 

1,261,994

 

 

 

3,582,006

 

 

 

3,816,027

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

 

 

 

Good Sam Services and Plans

 

 

39,868

 

 

 

31,481

 

 

 

103,450

 

 

 

89,972

 

RV and Outdoor Retail:

 

 

 

 

 

 

 

 

 

 

 

 

New vehicles

 

 

102,727

 

 

 

158,993

 

 

 

315,464

 

 

 

574,663

 

Used vehicles

 

 

111,632

 

 

 

127,106

 

 

 

356,974

 

 

 

369,102

 

Products, service and other

 

 

95,633

 

 

 

101,642

 

 

 

268,993

 

 

 

294,234

 

Finance and insurance, net

 

 

163,630

 

 

 

165,136

 

 

 

460,336

 

 

 

513,921

 

Good Sam Club

 

 

9,596

 

 

 

9,330

 

 

 

29,991

 

 

 

28,791

 

Subtotal

 

 

483,218

 

 

 

562,207

 

 

 

1,431,758

 

 

 

1,780,711

 

Total gross profit

 

 

523,086

 

 

 

593,688

 

 

 

1,535,208

 

 

 

1,870,683

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Selling, general, and administrative

 

 

415,288

 

 

 

419,102

 

 

 

1,201,901

 

 

 

1,245,540

 

Depreciation and amortization

 

 

17,619

 

 

 

18,207

 

 

 

49,462

 

 

 

61,369

 

Long-lived asset impairment

 

 

1,747

 

 

 

887

 

 

 

9,269

 

 

 

3,505

 

Lease termination

 

 

375

 

 

 

 

 

 

375

 

 

 

1,122

 

Loss (gain) on sale or disposal of assets

 

 

131

 

 

 

(40

)

 

 

(5,001

)

 

 

390

 

Total operating expenses

 

 

435,160

 

 

 

438,156

 

 

 

1,256,006

 

 

 

1,311,926

 

Income from operations

 

 

87,926

 

 

 

155,532

 

 

 

279,202

 

 

 

558,757

 

Other expense:

 

 

 

 

 

 

 

 

 

 

 

 

Floor plan interest expense

 

 

(19,816

)

 

 

(9,484

)

 

 

(61,298

)

 

 

(24,483

)

Other interest expense, net

 

 

(35,242

)

 

 

(20,526

)

 

 

(99,873

)

 

 

(49,762

)

Tax Receivable Agreement liability adjustment

 

 

1,680

 

 

 

 

 

 

1,680

 

 

 

 

Other income (expense), net

 

 

24

 

 

 

(177

)

 

 

(1,659

)

 

 

(472

)

Total other expense

 

 

(53,354

)

 

 

(30,187

)

 

 

(161,150

)

 

 

(74,717

)

Income before income taxes

 

 

34,572

 

 

 

125,345

 

 

 

118,052

 

 

 

484,040

 

Income tax expense

 

 

(3,679

)

 

 

(22,397

)

 

 

(17,533

)

 

 

(75,808

)

Net income

 

 

30,893

 

 

 

102,948

 

 

 

100,519

 

 

 

408,232

 

Less: net income attributable to non-controlling interests

 

 

(14,932

)

 

 

(61,822

)

 

 

(52,686

)

 

 

(238,065

)

Net income attributable to Camping World Holdings, Inc.

 

$

15,961

 

 

$

41,126

 

 

$

47,833

 

 

$

170,167

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per share of Class A common stock:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.36

 

 

$

0.98

 

 

$

1.07

 

 

$

4.01

 

Diluted

 

$

0.32

 

 

$

0.97

 

 

$

1.03

 

 

$

3.99

 

Weighted average shares of Class A common stock outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

44,666

 

 

 

41,985

 

 

 

44,538

 

 

 

42,419

 

Diluted

 

 

85,180

 

 

 

42,505

 

 

 

84,917

 

 

 

42,947

 

Camping World Holdings, Inc. and Subsidiaries

Supplemental Data

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended September 30,

 

Increase

 

 

Percent

 

 

2023

 

2022

 

(decrease)

 

 

Change

Unit sales

 

 

 

 

 

 

 

 

 

 

 

 

 

New vehicles

 

 

15,205

 

 

 

17,616

 

 

 

(2,411

)

 

 

 

(13.7

%)

Used vehicles

 

 

17,125

 

 

 

14,460

 

 

 

2,665

 

 

 

 

18.4

%

Total

 

 

32,330

 

 

 

32,076

 

 

 

254

 

 

 

 

0.8

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average selling price

 

 

 

 

 

 

 

 

 

 

 

 

 

New vehicles

 

$

44,670

 

 

$

47,350

 

 

$

(2,680

)

 

 

 

(5.7

%)

Used vehicles

 

 

34,466

 

 

 

36,375

 

 

 

(1,909

)

 

 

 

(5.2

%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Same store unit sales(1)

 

 

 

 

 

 

 

 

 

 

 

 

 

New vehicles

 

 

13,483

 

 

 

17,166

 

 

 

(3,683

)

 

 

 

(21.5

%)

Used vehicles

 

 

15,599

 

 

 

14,072

 

 

 

1,527

 

 

 

 

10.9

%

Total

 

 

29,082

 

 

 

31,238

 

 

 

(2,156

)

 

 

 

(6.9

%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

New vehicles

 

$

602,014

 

 

$

814,326

 

 

$

(212,312

)

 

 

 

(26.1

%)

Used vehicles

 

 

535,521

 

 

 

514,350

 

 

 

21,171

 

 

 

 

4.1

%

Products, service and other

 

 

180,071

 

 

 

207,032

 

 

 

(26,961

)

 

 

 

(13.0

%)

Finance and insurance, net

 

 

146,112

 

 

 

161,332

 

 

 

(15,220

)

 

 

 

(9.4

%)

Total

 

$

1,463,718

 

 

$

1,697,040

 

 

$

(233,322

)

 

 

 

(13.7

%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average gross profit per unit

 

 

 

 

 

 

 

 

 

 

 

 

 

New vehicles

 

$

6,756

 

 

$

9,025

 

 

$

(2,269

)

 

 

 

(25.1

%)

Used vehicles

 

 

6,519

 

 

 

8,790

 

 

 

(2,271

)

 

 

 

(25.8

%)

Finance and insurance, net per vehicle unit

 

 

5,061

 

 

 

5,148

 

 

 

(87

)

 

 

 

(1.7

%)

Total vehicle front-end yield(2)

 

 

11,692

 

 

 

14,068

 

 

 

(2,376

)

 

 

 

(16.9

%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross margin

 

 

 

 

 

 

 

 

 

 

 

 

 

Good Sam Services and Plans

 

 

79.9

%

 

 

62.5

%

 

 

1,739

 

bps

 

 

 

New vehicles

 

 

15.1

%

 

 

19.1

%

 

 

(394

)

bps

 

 

 

Used vehicles

 

 

18.9

%

 

 

24.2

%

 

 

(525

)

bps

 

 

 

Products, service and other

 

 

40.6

%

 

 

37.8

%

 

 

280

 

bps

 

 

 

Finance and insurance, net

 

 

100.0

%

 

 

100.0

%

 

 

unch.

bps

 

 

 

Good Sam Club

 

 

86.8

%

 

 

83.6

%

 

 

319

 

bps

 

 

 

Subtotal RV and Outdoor Retail

 

 

28.8

%

 

 

31.1

%

 

 

(237

)

bps

 

 

 

Total gross margin

 

 

30.2

%

 

 

32.0

%

 

 

(175

)

bps

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

RV and Outdoor Retail inventories ($ in 000s)

 

 

 

 

 

 

 

 

 

 

 

 

 

New vehicles

 

$

1,131,575

 

 

$

1,180,364

 

 

$

(48,789

)

 

 

 

(4.1

%)

Used vehicles

 

 

534,155

 

 

 

425,824

 

 

 

108,331

 

 

 

 

25.4

%

Products, parts, accessories and misc.

 

 

202,786

 

 

 

293,588

 

 

 

(90,802

)

 

 

 

(30.9

%)

Total RV and Outdoor Retail inventories

 

$

1,868,516

 

 

$

1,899,776

 

 

$

(31,260

)

 

 

 

(1.6

%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Vehicle inventory per location ($ in 000s)

 

 

 

 

 

 

 

 

 

 

 

 

 

New vehicle inventory per dealer location

 

$

5,520

 

 

$

6,415

 

 

$

(895

)

 

 

 

(14.0

%)

Used vehicle inventory per dealer location

 

 

2,606

 

 

 

2,314

 

 

 

291

 

 

 

 

12.6

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Vehicle inventory turnover(3)

 

 

 

 

 

 

 

 

 

 

 

 

 

New vehicle inventory turnover

 

 

1.8

 

 

 

2.0

 

 

 

(0.3

)

 

 

 

(12.9

%)

Used vehicle inventory turnover

 

 

3.0

 

 

 

3.5

 

 

 

(0.6

)

 

 

 

(16.2

%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Retail locations

 

 

 

 

 

 

 

 

 

 

 

 

 

RV dealerships

 

 

205

 

 

 

184

 

 

 

21

 

 

 

 

11.4

%

RV service & retail centers

 

 

4

 

 

 

8

 

 

 

(4

)

 

 

 

(50.0

%)

Subtotal

 

 

209

 

 

 

192

 

 

 

17

 

 

 

 

8.9

%

Other retail stores

 

 

 

 

 

1

 

 

 

(1

)

 

 

 

(100.0

%)

Total

 

 

209

 

 

 

193

 

 

 

16

 

 

 

 

8.3

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other data

 

 

 

 

 

 

 

 

 

 

 

 

 

Active Customers(4)

 

 

5,111,478

 

 

 

5,366,558

 

 

 

(255,080

)

 

 

 

(4.8

%)

Good Sam Club members

 

 

2,051,768

 

 

 

2,038,826

 

 

 

12,942

 

 

 

 

0.6

%

Service bays (5)

 

 

2,800

 

 

 

2,639

 

 

 

161

 

 

 

 

6.1

%

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

 

 

12.9

%

 

 

12.1

%

 

 

75

 

bps

 

 

n/a

 

Same store locations

 

 

175

 

 

 

n/a

 

 

 

n/a

 

 

 

 

n/a

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nine Months Ended September 30,

 

Increase

 

 

Percent

 

 

2023

 

2022

 

(decrease)

 

 

Change

Unit sales

 

 

 

 

 

 

 

 

 

 

 

 

 

New vehicles

 

 

48,014

 

 

 

60,040

 

 

 

(12,026

)

 

 

 

(20.0

%)

Used vehicles

 

 

47,331

 

 

 

40,991

 

 

 

6,340

 

 

 

 

15.5

%

Total

 

 

95,345

 

 

 

101,031

 

 

 

(5,686

)

 

 

 

(5.6

%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average selling price

 

 

 

 

 

 

 

 

 

 

 

 

 

New vehicles

 

$

44,297

 

 

$

45,742

 

 

$

(1,445

)

 

 

 

(3.2

%)

Used vehicles

 

 

35,029

 

 

 

36,227

 

 

 

(1,198

)

 

 

 

(3.3

%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Same store unit sales(1)

 

 

 

 

 

 

 

 

 

 

 

 

 

New vehicles

 

 

43,989

 

 

 

58,831

 

 

 

(14,842

)

 

 

 

(25.2

%)

Used vehicles

 

 

43,916

 

 

 

40,280

 

 

 

3,636

 

 

 

 

9.0

%

Total

 

 

87,905

 

 

 

99,111

 

 

 

(11,206

)

 

 

 

(11.3

%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

New vehicles

 

$

1,949,145

 

 

$

2,695,945

 

 

$

(746,800

)

 

 

 

(27.7

%)

Used vehicles

 

 

1,533,574

 

 

 

1,463,333

 

 

 

70,241

 

 

 

 

4.8

%

Products, service and other

 

 

519,211

 

 

 

576,843

 

 

 

(57,632

)

 

 

 

(10.0

%)

Finance and insurance, net

 

 

422,725

 

 

 

505,391

 

 

 

(82,666

)

 

 

 

(16.4

%)

Total

 

$

4,424,655

 

 

$

5,241,512

 

 

$

(816,857

)

 

 

 

(15.6

%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average gross profit per unit

 

 

 

 

 

 

 

 

 

 

 

 

 

New vehicles

 

$

6,570

 

 

$

9,571

 

 

$

(3,001

)

 

 

 

(31.4

%)

Used vehicles

 

 

7,542

 

 

 

9,004

 

 

 

(1,462

)

 

 

 

(16.2

%)

Finance and insurance, net per vehicle unit

 

 

4,828

 

 

 

5,087

 

 

 

(259

)

 

 

 

(5.1

%)

Total vehicle front-end yield(2)

 

 

11,881

 

 

 

14,428

 

 

 

(2,547

)

 

 

 

(17.7

%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross margin

 

 

 

 

 

 

 

 

 

 

 

 

 

Good Sam Services and Plans

 

 

70.2

%

 

 

62.3

%

 

 

797

 

bps

 

 

 

New vehicles

 

 

14.8

%

 

 

20.9

%

 

 

(609

)

bps

 

 

 

Used vehicles

 

 

21.5

%

 

 

24.9

%

 

 

(332

)

bps

 

 

 

Products, service and other

 

 

38.9

%

 

 

38.6

%

 

 

31

 

bps

 

 

 

Finance and insurance, net

 

 

100.0

%

 

 

100.0

%

 

 

unch.

bps

 

 

 

Good Sam Club

 

 

88.8

%

 

 

82.1

%

 

 

675

 

bps

 

 

 

Subtotal RV and Outdoor Retail

 

 

28.8

%

 

 

32.1

%

 

 

(332

)

bps

 

 

 

Total gross margin

 

 

30.0

%

 

 

32.9

%

 

 

(289

)

bps

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other data

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

12.2

%

 

 

12.1

%

 

 

2

 

bps

 

 

n/a

 

Same store locations

 

 

175

 

 

 

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 is 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)

 

 

 

 

 

 

 

 

 

 

 

 

September 30,

 

December 31,

 

September 30,

 

 

2023

 

2022

 

2022

Assets

 

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

53,318

 

 

$

130,131

 

 

$

148,235

 

Contracts in transit

 

 

100,831

 

 

 

50,349

 

 

 

87,487

 

Accounts receivable, net

 

 

135,832

 

 

 

112,411

 

 

 

117,428

 

Inventories

 

 

1,869,042

 

 

 

2,123,858

 

 

 

1,900,127

 

Prepaid expenses and other assets

 

 

38,979

 

 

 

66,913

 

 

 

46,869

 

Assets held for sale

 

 

4,635

 

 

 

 

 

 

 

Total current assets

 

 

2,202,637

 

 

 

2,483,662

 

 

 

2,300,146

 

 

 

 

 

 

 

 

 

 

 

Property and equipment, net

 

 

841,548

 

 

 

758,281

 

 

 

728,208

 

Operating lease assets

 

 

736,246

 

 

 

742,306

 

 

 

719,656

 

Deferred tax assets, net

 

 

142,187

 

 

 

143,226

 

 

 

178,808

 

Intangible assets, net

 

 

14,444

 

 

 

20,945

 

 

 

21,819

 

Goodwill

 

 

688,139

 

 

 

622,423

 

 

 

533,217

 

Other assets

 

 

32,058

 

 

 

29,304

 

 

 

29,532

 

Total assets

 

$

4,657,259

 

 

$

4,800,147

 

 

$

4,511,386

 

Liabilities and stockholders' equity

 

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

 

Accounts payable

 

$

200,433

 

 

$

127,691

 

 

$

187,613

 

Accrued liabilities

 

 

171,956

 

 

 

147,833

 

 

 

252,644

 

Deferred revenues

 

 

99,813

 

 

 

95,695

 

 

 

101,917

 

Current portion of operating lease liabilities

 

 

62,987

 

 

 

61,745

 

 

 

61,001

 

Current portion of finance lease liabilities

 

 

5,563

 

 

 

10,244

 

 

 

10,397

 

Current portion of Tax Receivable Agreement liability

 

 

13,999

 

 

 

10,873

 

 

 

11,686

 

Current portion of long-term debt

 

 

23,257

 

 

 

25,229

 

 

 

15,827

 

Notes payable – floor plan, net

 

 

1,017,543

 

 

 

1,319,941

 

 

 

899,568

 

Other current liabilities

 

 

79,381

 

 

 

73,076

 

 

 

83,959

 

Liabilities related to assets held for sale

 

 

4,022

 

 

 

 

 

 

 

Total current liabilities

 

 

1,678,954

 

 

 

1,872,327

 

 

 

1,624,612

 

 

 

 

 

 

 

 

 

 

 

Operating lease liabilities, net of current portion

 

 

759,952

 

 

 

764,835

 

 

 

743,914

 

Finance lease liabilities, net of current portion

 

 

99,060

 

 

 

94,216

 

 

 

95,496

 

Tax Receivable Agreement liability, net of current portion

 

 

149,134

 

 

 

159,743

 

 

 

159,790

 

Revolving line of credit

 

 

20,885

 

 

 

20,885

 

 

 

20,885

 

Long-term debt, net of current portion

 

 

1,522,495

 

 

 

1,484,416

 

 

 

1,368,380

 

Deferred revenues

 

 

70,214

 

 

 

70,247

 

 

 

73,294

 

Other long-term liabilities

 

 

85,710

 

 

 

85,792

 

 

 

87,517

 

Total liabilities

 

 

4,386,404

 

 

 

4,552,461

 

 

 

4,173,888

 

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; 44,780, 42,441, and 42,129 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

 

 

108,942

 

 

 

106,051

 

 

 

117,151

 

Treasury stock, at cost; 4,791, 5,130, and 5,442 shares, respectively

 

 

(167,847

)

 

 

(179,732

)

 

 

(190,658

)

Retained earnings

 

 

207,657

 

 

 

221,031

 

 

 

280,772

 

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

 

 

149,252

 

 

 

147,830

 

 

 

207,745

 

Non-controlling interests

 

 

121,603

 

 

 

99,856

 

 

 

129,753

 

Total stockholders' equity

 

 

270,855

 

 

 

247,686

 

 

 

337,498

 

Total liabilities and stockholders' equity

 

$

4,657,259

 

 

$

4,800,147

 

 

$

4,511,386

Camping World Holdings, Inc. and Subsidiaries

Summary of Consolidated Statements of Cash Flows (unaudited)

(In Thousands)

 

 

 

 

 

 

 

 

 

Nine Months Ended September 30,

 

 

2023

 

2022

 

 

 

 

 

 

 

Net cash provided by operating activities

 

$

543,273

 

 

$

523,919

 

 

 

 

 

 

 

 

Investing activities

 

 

 

 

 

 

Purchases of property and equipment

 

 

(95,641

)

 

 

(118,445

)

Proceeds from sale of property and equipment

 

 

2,723

 

 

 

1,105

 

Purchases of real property

 

 

(64,302

)

 

 

(41,696

)

Proceeds from the sale of real property

 

 

35,603

 

 

 

6,809

 

Purchases of businesses, net of cash acquired

 

 

(150,475

)

 

 

(83,227

)

Purchases of and loans to other investments

 

 

(3,444

)

 

 

(3,000

)

Purchases of intangible assets

 

 

(1,999

)

 

 

(851

)

Net cash used in investing activities

 

 

(277,535

)

 

 

(239,305

)

 

 

 

 

 

 

 

Financing activities

 

 

 

 

 

 

Proceeds from long-term debt

 

 

59,227

 

 

 

 

Payments on long-term debt

 

 

(26,556

)

 

 

(11,869

)

Net payments on notes payable – floor plan, net

 

 

(273,478

)

 

 

(99,802

)

Proceeds from landlord funded construction on finance leases

 

 

 

 

 

6,028

 

Payments on finance leases

 

 

(4,160

)

 

 

(4,541

)

Proceeds from sale-leaseback arrangement

 

 

 

 

 

27,951

 

Payments on sale-leaseback arrangement

 

 

(139

)

 

 

(87

)

Payment of debt issuance costs

 

 

(881

)

 

 

 

Dividends on Class A common stock

 

 

(61,207

)

 

 

(78,866

)

Proceeds from exercise of stock options

 

 

319

 

 

 

317

 

RSU shares withheld for tax

 

 

(4,083

)

 

 

(6,474

)

Repurchases of Class A common stock to treasury stock

 

 

 

 

 

(79,757

)

Distributions to holders of LLC common units

 

 

(31,593

)

 

 

(156,611

)

Net cash used in financing activities

 

 

(342,551

)

 

 

(403,711

)

 

 

 

 

 

 

 

Decrease in cash and cash equivalents

 

 

(76,813

)

 

 

(119,097

)

Cash and cash equivalents at beginning of the period

 

 

130,131

 

 

 

267,332

 

Cash and cash equivalents at end of the period

 

$

53,318

 

 

$

148,235

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. Additionally, new and used vehicle gross margins have declined for each of the first three quarters of 2023 compared to the corresponding periods in 2022. However, third quarter 2023 new vehicle gross margins were slightly higher than a similar range that the Company experienced in the third quarter pre-COVID-19 pandemic periods of 2016 to 2019, which we believe are more typical demand environments than during the COVID-19 pandemic.

During the third quarter of 2023, as the procurement prices of model year 2024 new vehicles declined compared to model years 2022 and 2023, the Company actively discounted certain used vehicles to reduce inventory levels of aged used vehicles. This discounting had a negative impact on used vehicle gross margins during the third quarter of 2023.

Additionally, the percentage of total unit sales relating to used vehicles was significantly higher in the third 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, a 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 September 30, 2023 and pre-COVID-19 pandemic periods for the three months ended September 30, 2019, 2018, 2017, and 2016 (unaudited):

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended September 30,

 

 

2023

 

2019(1)

 

2018(1)

 

2017(1)

 

2016(1)

Gross margin:

 

 

 

 

 

 

 

 

 

 

New vehicles

 

15.1%

 

12.0%

 

12.6%

 

14.3%

 

13.9%

Used vehicles

 

18.9%

 

21.1%

 

22.9%

 

25.3%

 

23.0%

 

 

 

 

 

 

 

 

 

 

 

Unit sales mix:

 

 

 

 

 

 

 

 

 

 

New vehicles

 

47.0%

 

64.9%

 

69.0%

 

69.1%

 

64.2%

Used vehicles

 

53.0%

 

35.1%

 

31.0%

 

30.9%

 

35.8%

 

(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 September 30,

 

Nine Months Ended September 30,

(In thousands except per share amounts)

 

2023

 

2022

 

2023

 

2022

Numerator:

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

30,893

 

 

$

102,948

 

 

$

100,519

 

 

$

408,232

 

Less: net income attributable to non-controlling interests

 

 

(14,932

)

 

 

(61,822

)

 

 

(52,686

)

 

 

(238,065

)

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

 

$

15,961

 

 

$

41,126

 

 

 

47,833

 

 

 

170,167

 

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

 

 

 

 

 

281

 

 

 

 

 

 

1,019

 

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

 

 

11,468

 

 

 

 

 

 

40,037

 

 

 

 

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

 

$

27,429

 

 

$

41,407

 

 

$

87,870

 

 

$

171,186

 

Denominator:

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

44,666

 

 

 

41,985

 

 

 

44,538

 

 

 

42,419

 

Dilutive options to purchase Class A common stock

 

 

35

 

 

 

53

 

 

 

26

 

 

 

62

 

Dilutive restricted stock units

 

 

434

 

 

 

467

 

 

 

308

 

 

 

466

 

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

 

 

40,045

 

 

 

 

 

 

40,045

 

 

 

 

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

 

 

85,180

 

 

 

42,505

 

 

 

84,917

 

 

 

42,947

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per share of Class A common stock — basic

 

$

0.36

 

 

$

0.98

 

 

$

1.07

 

 

$

4.01

 

Earnings per share of Class A common stock — diluted

 

$

0.32

 

 

$

0.97

 

 

$

1.03

 

 

$

3.99

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

 

 

 

Restricted stock units

 

 

852

 

 

 

1,396

 

 

 

1,353

 

 

 

2,094

 

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

 

 

 

 

 

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, (gain) 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 September 30,

 

Nine Months Ended September 30,

($ in thousands)

2023

 

2022

 

2023

 

2022

EBITDA and Adjusted EBITDA:

 

 

 

 

 

 

 

 

 

 

 

Net income

$

30,893

 

 

$

102,948

 

 

$

100,519

 

 

$

408,232

 

Other interest expense, net

 

35,242

 

 

 

20,526

 

 

 

99,873

 

 

 

49,762

 

Depreciation and amortization

 

17,619

 

 

 

18,207

 

 

 

49,462

 

 

 

61,369

 

Income tax expense

 

3,679

 

 

 

22,397

 

 

 

17,533

 

 

 

75,808

 

Subtotal EBITDA

 

87,433

 

 

 

164,078

 

 

 

267,387

 

 

 

595,171

 

Long-lived asset impairment (a)

 

1,747

 

 

 

887

 

 

 

9,269

 

 

 

3,505

 

Lease termination (b)

 

375

 

 

 

 

 

 

375

 

 

 

1,122

 

Loss (gain) on sale or disposal of assets, net (c)

 

131

 

 

 

(40

)

 

 

(5,001

)

 

 

390

 

Equity-based compensation (d)

 

5,466

 

 

 

6,792

 

 

 

18,316

 

 

 

27,434

 

Tax Receivable Agreement liability adjustment (e)

 

(1,680

)

 

 

 

 

 

(1,680

)

 

 

 

Restructuring costs (f)

 

1,549

 

 

 

1,671

 

 

 

4,808

 

 

 

5,548

 

(Gain) loss and impairment on investments in equity securities (g)

 

(23

)

 

 

 

 

 

1,660

 

 

 

 

Adjusted EBITDA

$

94,998

 

 

$

173,388

 

 

$

295,134

 

 

$

633,170

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

(as percentage of total revenue)

2023

 

2022

 

2023

 

2022

Adjusted EBITDA margin:

 

 

 

 

 

 

 

 

 

 

 

Net income margin

 

1.8

%

 

 

5.5

%

 

 

2.0

%

 

 

7.2

%

Other interest expense, net

 

2.0

%

 

 

1.1

%

 

 

2.0

%

 

 

0.9

%

Depreciation and amortization

 

1.0

%

 

 

1.0

%

 

 

1.0

%

 

 

1.1

%

Income tax expense

 

0.2

%

 

 

1.2

%

 

 

0.3

%

 

 

1.3

%

Subtotal EBITDA margin

 

5.1

%

 

 

8.8

%

 

 

5.2

%

 

 

10.5

%

Long-lived asset impairment (a)

 

0.1

%

 

 

0.0

%

 

 

0.2

%

 

 

0.1

%

Lease termination (b)

 

0.0

%

 

 

 

 

 

0.0

%

 

 

0.0

%

Loss (gain) on sale or disposal of assets, net (c)

 

0.0

%

 

 

(0.0

%)

 

 

(0.1

%)

 

 

0.0

%

Equity-based compensation (d)

 

0.3

%

 

 

0.4

%

 

 

0.4

%

 

 

0.5

%

Tax Receivable Agreement liability adjustment (e)

 

(0.1

%)

 

 

 

 

 

(0.0

%)

 

 

 

Restructuring costs (f)

 

0.1

%

 

 

0.1

%

 

 

0.1

%

 

 

0.1

%

(Gain) loss and impairment on investments in equity securities (g)

 

(0.0

%)

 

 

 

 

 

0.0

%

 

 

 

Adjusted EBITDA margin

 

5.5

%

 

 

9.3

%

 

 

5.8

%

 

 

11.1

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

TTM Ended

 

September 30,

 

June 30,

 

March 31,

 

December 31,

 

September 30,

($ in thousands)

2023

 

2023

 

2023

 

2022

 

2023

Adjusted EBITDA:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss)

$

30,893

 

 

$

64,723

 

 

$

4,903

 

 

$

(57,201

)

 

$

43,318

 

Other interest expense, net

 

35,242

 

 

 

33,518

 

 

 

31,113

 

 

 

25,983

 

 

 

125,856

 

Depreciation and amortization

 

17,619

 

 

 

17,206

 

 

 

14,637

 

 

 

18,935

 

 

 

68,397

 

Income tax expense

 

3,679

 

 

 

13,581

 

 

 

273

 

 

 

23,276

 

 

 

40,809

 

Subtotal EBITDA

 

87,433

 

 

 

129,028

 

 

 

50,926

 

 

 

10,993

 

 

 

278,380

 

Long-lived asset impairment (a)

 

1,747

 

 

 

477

 

 

 

7,045

 

 

 

726

 

 

 

9,995

 

Lease termination (b)

 

375

 

 

 

 

 

 

 

 

 

492

 

 

 

867

 

Loss (gain) on sale or disposal of assets, net (c)

 

131

 

 

 

(145

)

 

 

(4,987

)

 

 

232

 

 

 

(4,769

)

Equity-based compensation (d)

 

5,466

 

 

 

6,492

 

 

 

6,358

 

 

 

6,413

 

 

 

24,729

 

Tax Receivable Agreement liability adjustment (e)

 

(1,680

)

 

 

 

 

 

 

 

 

(114

)

 

 

(1,794

)

Restructuring costs (f)

 

1,549

 

 

 

3,259

 

 

 

 

 

 

1,478

 

 

 

6,286

 

(Gain) loss and impairment on investments in equity securities (g)

 

(23

)

 

 

184

 

 

 

1,499

 

 

 

 

 

 

1,660

 

Adjusted EBITDA

$

94,998

 

 

$

139,295

 

 

$

60,841

 

 

$

20,220

 

 

$

315,354

 

(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 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 an adjustment to eliminate the gains on remeasurement of the Tax Receivable Agreement primarily due to changes in the Company’s blended statutory income tax rate.

(f)

Represents restructuring costs relating to the Active Sports Restructuring during the three and nine months ended September 30, 2023 and the 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.

(g)

Represents gain and 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 nine months ended September 30, 2023, this amount included a $1.3 million impairment on an equity method investment.

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, 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, 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)

 

2023

 

2022

 

2023

 

2022

Numerator:

 

 

 

 

 

 

 

 

 

 

 

 

Net income attributable to Camping World Holdings, Inc.

 

$

15,961

 

 

$

41,126

 

 

$

47,833

 

 

$

170,167

 

Adjustments related to basic calculation:

 

 

 

 

 

 

 

 

 

 

 

 

Long-lived asset impairment (a):

 

 

 

 

 

 

 

 

 

 

 

 

Gross adjustment

 

 

1,747

 

 

 

887

 

 

 

9,269

 

 

 

3,505

 

Income tax expense for above adjustment (b)

 

 

(231

)

 

 

 

 

 

(1,233

)

 

 

(99

)

Lease termination (c):

 

 

 

 

 

 

 

 

 

 

 

 

Gross adjustment

 

 

375

 

 

 

 

 

 

375

 

 

 

1,122

 

Income tax expense for above adjustment (b)

 

 

(50

)

 

 

 

 

 

(50

)

 

 

 

Loss (gain) on sale or disposal of assets (d):

 

 

 

 

 

 

 

 

 

 

 

 

Gross adjustment

 

 

131

 

 

 

(40

)

 

 

(5,001

)

 

 

390

 

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

 

 

(17

)

 

 

(12

)

 

 

667

 

 

 

(15

)

Equity-based compensation (e):

 

 

 

 

 

 

 

 

 

 

 

 

Gross adjustment

 

 

5,466

 

 

 

6,792

 

 

 

18,316

 

 

 

27,434

 

Income tax expense for above adjustment (b)

 

 

(730

)

 

 

(792

)

 

 

(2,459

)

 

 

(3,080

)

Tax Receivable Agreement liability adjustment (f):

 

 

 

 

 

 

 

 

 

 

 

 

Gross adjustment

 

 

(1,680

)

 

 

 

 

 

(1,680

)

 

 

 

Income tax benefit for above adjustment (b)

 

 

422

 

 

 

 

 

 

422

 

 

 

 

Restructuring costs (g):

 

 

 

 

 

 

 

 

 

 

 

 

Gross adjustment

 

 

1,549

 

 

 

1,671

 

 

 

4,808

 

 

 

5,548

 

Income tax expense for above adjustment (b)

 

 

(205

)

 

 

 

 

 

(639

)

 

 

 

(Gain) loss and impairment on investments in equity securities (h):

 

 

 

 

 

 

 

 

 

 

 

 

Gross adjustment

 

 

(23

)

 

 

 

 

 

1,660

 

 

 

 

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

 

 

3

 

 

 

 

 

 

(222

)

 

 

 

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

 

 

(4,364

)

 

 

(4,642

)

 

 

(13,907

)

 

 

(18,866

)

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

 

 

18,354

 

 

 

44,990

 

 

 

58,159

 

 

 

186,106

 

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

 

 

 

 

 

 

1,519

 

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

)

 

 

 

 

 

(404

)

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

 

 

19,296

 

 

 

 

 

 

66,593

 

 

 

 

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

 

 

(4,554

)

 

 

 

 

 

(16,140

)

 

 

 

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

 

$

33,096

 

 

$

45,295

 

 

$

108,612

 

 

$

187,221

 

Denominator:

 

 

 

 

 

 

 

 

 

 

 

 

Weighted-average Class A common shares outstanding – basic

 

 

44,666

 

 

 

41,985

 

 

 

44,538

 

 

 

42,419

 

Adjustments related to diluted calculation:

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

40,045

 

 

 

 

 

 

40,045

 

 

 

 

Dilutive options to purchase Class A common stock (m)

 

 

35

 

 

 

53

 

 

 

26

 

 

 

62

 

Dilutive restricted stock units (m)

 

 

434

 

 

 

467

 

 

 

308

 

 

 

466

 

Adjusted weighted average Class A common shares outstanding – diluted

 

 

85,180

 

 

 

42,505

 

 

 

84,917

 

 

 

42,947

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted earnings per share - basic

 

$

0.41

 

 

$

1.07

 

 

$

1.31

 

 

$

4.39

 

Adjusted earnings per share - diluted

 

$

0.39

 

 

$

1.07

 

 

$

1.28

 

 

$

4.36

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

$

 

 

$

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

)

 

$

 

 

$

(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

 

 

$

 

 

$

6,464

 

Denominator:

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

42,045

 

 

 

 

 

 

42,045

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reconciliation of per share amounts:

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per share of Class A common stock — basic

 

$

0.36

 

 

$

0.98

 

 

$

1.07

 

 

$

4.01

 

Non-GAAP Adjustments (o)

 

 

0.05

 

 

 

0.09

 

 

 

0.24

 

 

 

0.38

 

Adjusted earnings per share - basic

 

$

0.41

 

 

$

1.07

 

 

$

1.31

 

 

$

4.39

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per share of Class A common stock — diluted

 

$

0.32

 

 

$

0.97

 

 

$

1.03

 

 

$

3.99

 

Non-GAAP Adjustments (o)

 

 

0.05

 

 

 

0.10

 

 

 

0.23

 

 

 

0.37

 

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

 

 

0.02

 

 

 

 

 

 

0.02

 

 

 

 

Adjusted earnings per share - diluted

 

$

0.39

 

 

$

1.07

 

 

$

1.28

 

 

$

4.36

 

(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 effective tax rates between 25.1% and 25.4% for the adjustments for the 2023 and 2022 periods, which represent the estimated tax rates 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 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 an adjustment to eliminate the gain on remeasurement of the Tax Receivable Agreement primarily due to changes in the Company’s blended statutory income tax rate.

(g)

Represents restructuring costs relating to the Active Sports Restructuring during the three and nine months ended September 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.

(h)

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 nine months ended September 30, 2023, this amount included a $1.3 million impairment on an equity method investment.

(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 47.3% and 50.0% for the three months ended September 30, 2023 and 2022, respectively, and 47.3% and 49.8% for the nine months ended September 30, 2023 and 2022, 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 effective tax rates between 25.1% and 25.4% for the adjustments for 2023 and 2022 periods.

(l)

As a result of the LLC Conversion, this adjustment only relates to periods ended on or before December 31, 2022. Typically represents adjustments to reflect the income tax benefit of losses of consolidated C-corporations that under the Company’s previous equity structure, prior to the LLC Conversion, could not be used against the income of other consolidated subsidiaries of CWGS, LLC. Subsequent to the redemption of all common units in CWGS, LLC and prior to the LLC Conversion, the Company believes certain actions could have been 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% during 2022 for the losses experienced by the consolidated C-corporations for which valuation allowances had been recorded. No assumed release of valuation allowance established for previous periods were included in these amounts. Beginning in 2023, these C-corporation losses offset income of other consolidated subsidiaries as a result of LLC Conversion at or around December 31, 2022.

(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).

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