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Camping World Holdings, Inc. Reports Strong 2022 Results

Camping World Holdings, Inc. (NYSE: CWH) (the “Company” or “CWH”), America’s Recreation Dealer, today reported results for the fourth quarter and full year ended December 31, 2022.

Marcus Lemonis, Chairman and CEO of Camping World Holdings, Inc. stated, “The last several years of strong performance has bolstered our confidence in the long-term prospects of our business. In light of the short-term softening of demand and new vehicle margin compression, we recognized the need for aggressive annualized cost reductions, starting in the fall of 2022. This includes reduced headcount, the elimination or reduction of underperforming assets, locations, and business lines, while enhancing the wages and benefits of our employees.”

Full Year-over-Year Operating Highlights

  • Revenue was $7.0 billion, an increase of $53.3 million, or 0.8%.
  • Used vehicle revenue was a record $1.9 billion, an increase of $191.4 million, or 11.3%, while new vehicle revenue declined $71.4 million, or 2.2%. Used vehicle unit sales were a record 51,325 units, an increase of 2,387 units, or 4.9%, while new vehicle unit sales were 70,429 units, a decrease of 7,348 units, or 9.4%.
  • Same store used vehicle unit sales increased slightly by 0.1%, while same store new vehicle unit sales decreased 13.6%.
  • Gross profit was $2.3 billion, a decrease of $194.0 million, or 7.9%. Total gross margin was 32.5%, a decrease of 306 basis points driven primarily by the higher cost of new vehicles, which was partially offset by the higher average selling price of new vehicles. Used vehicle gross margin decreased to a lesser extent.
  • Floor plan interest expense was $42.0 million, an increase of $27.9 million, or 197.9%, as a result of the rise in interest rates and the increased average principal balance from higher new vehicle costs, higher borrowings on used vehicles, and relief from the new vehicle supply constraints that existed during much of 2021.
  • Net income was $351.0 million, a decrease of $291.0 million, or 45.3%.
  • Diluted earnings per share of Class A common stock was $3.22 in 2022 versus $6.07 in 2021. Adjusted earnings per share - diluted(1) of Class A common stock was $4.17 in 2022 versus $6.88 in 2021.
  • Adjusted EBITDA(1) was $653.4 million, a decrease of $288.7 million, or 30.6%.
  • New and used vehicle inventories were $1.9 billion, an increase of $360.1 million. This increase was driven primarily by higher new vehicle unit costs, an additional 14 dealership locations, restocking to normalized levels of new vehicles and, to a lesser extent, the strategic growth of our used vehicle business.
  • The Company paid an annualized cash dividend of $2.50 per share of Class A common stock, an increase of $1.02 per share of Class A common stock.

Fourth Quarter-over-Quarter Operating Highlights

  • Revenue was $1.3 billion, a decrease of $97.3 million, or 7.1%.
  • Used vehicle revenue was $392.6 million for the fourth quarter, a decrease of $19.7 million, or 4.8%, and new vehicle revenue declined $72.6 million, or 13.1%. Used vehicle unit sales were 10,334 units for the fourth quarter, a decrease of 335 units, or 3.1%.
  • Same store used vehicle unit sales decreased 7.6% for the fourth quarter, and same store new vehicle unit sales decreased 14.1%.
  • Gross profit was $391.6 million, a decrease of $93.0 million, or 19.2%. Total gross margin was 30.6%, a decrease of 459 basis points driven primarily by the higher cost of new vehicles and the lower average selling price of new vehicles. Used vehicle and products, service and other gross margins decreased to a lesser extent. The products, service and other gross margins declined primarily from clearance and discounting on certain product categories to reduce our retail inventory levels and supply chain costs.
  • Floor plan interest expense was $17.5 million, an increase of $13.3 million, or 315.6%, as a result of the rise in interest rates and the increased average principal balance from higher new vehicle costs, higher borrowings on used vehicles, and relief from the new vehicle supply constraints that existed during much of 2021.
  • At or around December 31, 2022, the Company completed the conversion of certain subsidiaries to limited liability companies resulting in income tax expense of $28.4 million, which was primarily for the write-off of deferred tax assets, net of the release of valuation allowance. The Company expects this conversion will reduce its ongoing income tax expense and reduce its ongoing tax distribution requirements.
  • Net loss was $57.2 million, a decrease of income of $116.5 million, or 196.5%.
  • Diluted loss per share of Class A common stock was $0.79 in 2022 versus diluted earnings per share of Class A common stock of $0.54 in 2021. Adjusted loss per share - diluted(1) of Class A common stock was $0.20 in 2022 versus adjusted earnings per share – diluted(1) of Class A common stock of $0.90 in 2021.
  • Adjusted EBITDA(1) was $20.2 million, a decrease of $111.3 million, or 84.6%.

________________________

(1) Adjusted (loss) earnings per share – diluted and adjusted EBITDA are non-GAAP measures. For a reconciliation of these non-GAAP measures to the most directly comparable GAAP measures, see the “Non-GAAP Financial Measures” section later in this press release.

Earnings Conference Call and Webcast Information

A conference call to discuss the Company’s fourth quarter and fiscal year 2022 financial results is scheduled for February 22, 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# 13735202. 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 December 31, 2022, the Company owned 50.2% of CWGS, LLC. Accordingly, the Company consolidates the financial results of CWGS, LLC and reports a non-controlling interest in its consolidated financial statements.

About Camping World Holdings, Inc.

Camping World Holdings, Inc., headquartered in Lincolnshire, IL, (together with its subsidiaries) is America’s largest retailer of RVs and related products and services. Our vision is to build a long-term legacy business that makes RVing fun and easy, and our Camping World and Good Sam brands have been serving RV consumers since 1966. We strive to build long-term value for our customers, employees, and shareholders by combining a unique and comprehensive assortment of RV products and services with a national network of RV dealerships, service centers and customer support centers along with the industry’s most extensive online presence and a highly-trained and knowledgeable team of associates serving our customers, the RV lifestyle, and the communities in which we operate. We also believe that our Good Sam organization and family of programs and services uniquely enables us to connect with our customers as stewards of the RV enthusiast community and the RV lifestyle. With RV sales and service locations in 42 states, Camping World has grown to become the prime destination for everything RV.

For more information, please visit http://www.CampingWorld.com.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements contained in this press release that do not relate to matters of historical fact should be considered forward-looking statements, including, without limitation, statements about macroeconomic trends, expected impact of the subsidiary conversions on our ongoing income tax expense and tax distribution requirements, our business plans and goals, the strength of our business, our long-term plan, the Company’s strategic focuses including growing its used RV business, anticipated cost reduction initiatives, including headcount reductions and the elimination of or reduction of underperforming assets, locations, and business lines, anticipated cost savings from cost reduction initiatives, enhancements of wages and benefits of employees, and future financial results. These forward-looking statements are based on management’s current expectations.

These statements are neither promises nor guarantees, but involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements, including, but not limited to, the following: the COVID-19 pandemic, which has had, and could have in the future, certain negative impacts on our business; risks related to the cybersecurity incident announced in February 2022; our ability to execute and achieve the expected benefits of our 2019 Strategic Shift; the availability of financing to us and our customers; fuel shortages or high prices for fuel; the success of our manufacturers; general economic conditions in our markets; changes in consumer preferences; competition in our industry; risks related to acquisitions, 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; our dependence on the availability of adequate capital and risks related to our debt; our reliance on our fulfillment and distribution centers; natural disasters, including epidemic outbreaks; risks associated with selling goods manufactured abroad; our dependence on our relationships with third party suppliers and lending institutions; our ability to retain senior executives and attract and retain other qualified employees; risks associated with leasing substantial amounts of space; 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 to be 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.

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

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

Camping World Holdings, Inc. and Subsidiaries

Consolidated Statements of Operations (unaudited)

(In Thousands Except Per Share Amounts)

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Year Ended

 

December 31,

 

December 31,

 

2022

 

2021

 

2022

 

2021

Revenue:

 

 

 

 

 

 

 

 

 

 

 

Good Sam Services and Plans

$

47,624

 

$

46,368

 

$

192,128

 

$

180,722

RV and Outdoor Retail

 

 

 

 

 

 

 

 

 

 

 

New vehicles

 

481,754

 

 

554,397

 

 

3,228,077

 

 

3,299,454

Used vehicles

 

392,623

 

 

412,273

 

 

1,877,601

 

 

1,686,217

Products, service and other

 

237,300

 

 

238,236

 

 

999,214

 

 

1,100,942

Finance and insurance, net

 

109,535

 

 

114,757

 

 

623,456

 

 

598,475

Good Sam Club

 

11,467

 

 

11,561

 

 

46,537

 

 

47,944

Subtotal

 

1,232,679

 

 

1,331,224

 

 

6,774,885

 

 

6,733,032

Total revenue

 

1,280,303

 

 

1,377,592

 

 

6,967,013

 

 

6,913,754

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

 

 

 

 

 

 

 

 

 

 

 

Good Sam Services and Plans

 

17,434

 

 

19,636

 

 

71,966

 

 

72,877

RV and Outdoor Retail

 

 

 

 

 

 

 

 

 

 

 

New vehicles

 

404,616

 

 

409,272

 

 

2,576,276

 

 

2,423,478

Used vehicles

 

302,177

 

 

312,920

 

 

1,418,053

 

 

1,247,794

Products, service and other

 

163,330

 

 

149,532

 

 

631,010

 

 

706,074

Good Sam Club

 

1,145

 

 

1,617

 

 

7,424

 

 

7,203

Subtotal

 

871,268

 

 

873,341

 

 

4,632,763

 

 

4,384,549

Total costs applicable to revenue

 

888,702

 

 

892,977

 

 

4,704,729

 

 

4,457,426

 

 

 

 

 

 

 

 

 

 

 

 

Gross profit:

 

 

 

 

 

 

 

 

 

 

 

Good Sam Services and Plans

 

30,190

 

 

26,732

 

 

120,162

 

 

107,845

RV and Outdoor Retail

 

 

 

 

 

 

 

 

 

 

 

New vehicles

 

77,138

 

 

145,125

 

 

651,801

 

 

875,976

Used vehicles

 

90,446

 

 

99,353

 

 

459,548

 

 

438,423

Products, service and other

 

73,970

 

 

88,704

 

 

368,204

 

 

394,868

Finance and insurance, net

 

109,535

 

 

114,757

 

 

623,456

 

 

598,475

Good Sam Club

 

10,322

 

 

9,944

 

 

39,113

 

 

40,741

Subtotal

 

361,411

 

 

457,883

 

 

2,142,122

 

 

2,348,483

Total gross profit

 

391,601

 

 

484,615

 

 

2,262,284

 

 

2,456,328

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

Selling, general, and administrative

 

361,444

 

 

379,941

 

 

1,606,984

 

 

1,573,609

Debt restructure expense

 

 

 

3,023

 

 

 

 

12,078

Depreciation and amortization

 

18,935

 

 

17,121

 

 

80,304

 

 

66,418

Long-lived asset impairment

 

726

 

 

1,646

 

 

4,231

 

 

3,044

Lease termination

 

492

 

 

126

 

 

1,614

 

 

2,211

Loss (gain) on sale or disposal of assets

 

232

 

 

(583)

 

 

622

 

 

(576)

Total operating expenses

 

381,829

 

 

401,274

 

 

1,693,755

 

 

1,656,784

Income from operations

 

9,772

 

 

83,341

 

 

568,529

 

 

799,544

Other expense:

 

 

 

 

 

 

 

 

 

 

 

Floor plan interest expense

 

(17,548)

 

 

(4,222)

 

 

(42,031)

 

 

(14,108)

Other interest expense, net

 

(25,983)

 

 

(11,650)

 

 

(75,745)

 

 

(46,912)

Loss on debt restructure

 

 

 

 

 

 

 

(1,390)

Tax Receivable Agreement liability adjustment

 

114

 

 

707

 

 

114

 

 

(2,813)

Other expense, net

 

(280)

 

 

(45)

 

 

(752)

 

 

(122)

Total other expense

 

(43,697)

 

 

(15,210)

 

 

(118,414)

 

 

(65,345)

(Loss) income before income taxes

 

(33,925)

 

 

68,131

 

 

450,115

 

 

734,199

Income tax expense

 

(23,276)

 

 

(8,865)

 

 

(99,084)

 

 

(92,124)

Net (loss) income

 

(57,201)

 

 

59,266

 

 

351,031

 

 

642,075

Less: net (loss) income attributable to non-controlling interests

 

23,981

 

 

(32,018)

 

 

(214,084)

 

 

(363,614)

Net (loss) income attributable to Camping World Holdings, Inc.

$

(33,220)

 

$

27,248

 

$

136,947

 

$

278,461

 

 

 

 

 

 

 

 

 

 

 

 

(Loss) earnings per share of Class A common stock:

 

 

 

 

 

 

 

 

 

 

 

Basic

$

(0.79)

 

$

0.61

 

$

3.23

 

$

6.19

Diluted

$

(0.79)

 

$

0.54

 

$

3.22

 

$

6.07

Weighted average shares of Class A common stock outstanding:

 

 

 

 

 

 

 

 

 

 

 

Basic

 

42,287

 

 

44,820

 

 

42,386

 

 

45,009

Diluted

 

42,287

 

 

88,566

 

 

42,854

 

 

89,762

Camping World Holdings, Inc. and Subsidiaries

Supplemental Data

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended December 31,

 

Increase

 

 

Percent

 

 

2022

 

2021

 

(decrease)

 

 

Change

Unit sales

 

 

 

 

 

 

 

 

 

 

 

 

 

New vehicles

 

 

10,389

 

 

11,415

 

 

(1,026)

 

 

 

(9.0%)

Used vehicles

 

 

10,334

 

 

10,669

 

 

(335)

 

 

 

(3.1%)

Total

 

 

20,723

 

 

22,084

 

 

(1,361)

 

 

 

(6.2%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average selling price

 

 

 

 

 

 

 

 

 

 

 

 

 

New vehicles

 

$

46,372

 

$

48,567

 

$

(2,196)

 

 

 

(4.5%)

Used vehicles

 

$

37,993

 

$

38,642

 

$

(649)

 

 

 

(1.7%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Same store unit sales(1)

 

 

 

 

 

 

 

 

 

 

 

 

 

New vehicles

 

 

9,244

 

 

10,759

 

 

(1,515)

 

 

 

(14.1%)

Used vehicles

 

 

9,271

 

 

10,036

 

 

(765)

 

 

 

(7.6%)

Total

 

 

18,515

 

 

20,795

 

 

(2,280)

 

 

 

(11.0%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

New vehicles

 

$

429,983

 

$

521,884

 

$

(91,901)

 

 

 

(17.6%)

Used vehicles

 

 

353,130

 

 

389,308

 

 

(36,178)

 

 

 

(9.3%)

Products, service and other

 

 

143,682

 

 

147,133

 

 

(3,451)

 

 

 

(2.3%)

Finance and insurance, net

 

 

98,335

 

 

107,752

 

 

(9,417)

 

 

 

(8.7%)

Total

 

$

1,025,130

 

$

1,166,077

 

$

(140,947)

 

 

 

(12.1%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average gross profit per unit

 

 

 

 

 

 

 

 

 

 

 

 

 

New vehicles

 

$

7,425

 

$

12,714

 

$

(5,289)

 

 

 

(41.6%)

Used vehicles

 

$

8,752

 

 

9,312

 

$

(560)

 

 

 

(6.0%)

Finance and insurance, net per vehicle unit

 

$

5,286

 

 

5,196

 

$

89

 

 

 

1.7%

Total vehicle front-end yield(2)

 

$

13,373

 

 

16,267

 

$

(2,894)

 

 

 

(17.8%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross margin

 

 

 

 

 

 

 

 

 

 

 

 

 

Good Sam Services and Plans

 

 

63.4%

 

 

57.7%

 

 

574

bps

 

 

 

New vehicles

 

 

16.0%

 

 

26.2%

 

 

(1,017)

bps

 

 

 

Used vehicles

 

 

23.0%

 

 

24.1%

 

 

(106)

bps

 

 

 

Products, service and other

 

 

31.2%

 

 

37.2%

 

 

(606)

bps

 

 

 

Finance and insurance, net

 

 

100.0%

 

 

100.0%

 

 

unch.

bps

 

 

 

Good Sam Club

 

 

90.0%

 

 

86.0%

 

 

400

bps

 

 

 

Subtotal RV and Outdoor Retail

 

 

29.3%

 

 

34.4%

 

 

(508)

bps

 

 

 

Total gross margin

 

 

30.6%

 

 

35.2%

 

 

(459)

bps

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Inventories ($ in 000's)

 

 

 

 

 

 

 

 

 

 

 

 

 

New vehicles

 

$

1,411,016

 

$

1,108,836

 

$

302,180

 

 

 

27.3%

Used vehicles

 

 

464,311

 

 

406,398

 

 

57,913

 

 

 

14.3%

Products, parts, accessories and misc.

 

 

247,906

 

 

277,631

 

 

(29,725)

 

 

 

(10.7%)

Total RV and Outdoor Retail inventories

 

$

2,123,233

 

$

1,792,865

 

$

330,368

 

 

 

18.4%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Vehicle inventory per location ($ in 000's)

 

 

 

 

 

 

 

 

 

 

 

 

 

New vehicle inventory per dealer location

 

$

7,466

 

$

6,336

 

$

1,129

 

 

 

17.8%

Used vehicle inventory per dealer location

 

$

2,457

 

$

2,322

 

$

134

 

 

 

5.8%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Vehicle inventory turnover(3)

 

 

 

 

 

 

 

 

 

 

 

 

 

New vehicle inventory turnover

 

 

1.9

 

 

3.0

 

 

(1.1)

 

 

 

(36.4%)

Used vehicle inventory turnover

 

 

3.4

 

 

4.0

 

 

(0.6)

 

 

 

(15.2%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Retail locations

 

 

 

 

 

 

 

 

 

 

 

 

 

RV dealerships

 

 

189

 

 

175

 

 

14

 

 

 

8.0%

RV service & retail centers

 

 

7

 

 

10

 

 

(3)

 

 

 

(30.0%)

Subtotal

 

 

196

 

 

185

 

 

11

 

 

 

5.9%

Other retail stores

 

 

1

 

 

2

 

 

(1)

 

 

 

(50.0%)

Total

 

 

197

 

 

187

 

 

10

 

 

 

5.3%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other data

 

 

 

 

 

 

 

 

 

 

 

 

 

Active Customers(4)

 

 

5,265,939

 

 

5,452,287

 

 

(186,348)

 

 

 

(3.4%)

Good Sam Club members

 

 

2,026,215

 

 

2,124,284

 

 

(98,069)

 

 

 

(4.6%)

Service bays (5)

 

 

2,693

 

 

2,575

 

 

118

 

 

 

4.6%

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

 

 

12.5%

 

 

11.9%

 

 

66

bps

 

 

n/a

Same store locations

 

 

166

 

 

n/a

 

 

n/a

 

 

 

n/a

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended December 31,

 

Increase

 

 

Percent

 

 

2022

 

2021

 

(decrease)

 

 

Change

Unit sales

 

 

 

 

 

 

 

 

 

 

 

 

 

New vehicles

 

 

70,429

 

 

77,777

 

 

(7,348)

 

 

 

(9.4%)

Used vehicles

 

 

51,325

 

 

48,938

 

 

2,387

 

 

 

4.9%

Total

 

 

121,754

 

 

126,715

 

 

(4,961)

 

 

 

(3.9%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average selling price

 

 

 

 

 

 

 

 

 

 

 

 

 

New vehicles

 

$

45,834

 

$

42,422

 

$

3,413

 

 

 

8.0%

Used vehicles

 

$

36,583

 

$

34,456

 

$

2,126

 

 

 

6.2%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Same store unit sales(1)

 

 

 

 

 

 

 

 

 

 

 

 

 

New vehicles

 

 

64,075

 

 

74,195

 

 

(10,120)

 

 

 

(13.6%)

Used vehicles

 

 

46,941

 

 

46,906

 

 

35

 

 

 

0.1%

Total

 

 

111,016

 

 

121,101

 

 

(10,085)

 

 

 

(8.3%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

New vehicles

 

$

2,953,314

 

$

3,150,002

 

$

(196,688)

 

 

 

(6.2%)

Used vehicles

 

 

1,732,361

 

 

1,621,953

 

 

110,408

 

 

 

6.8%

Products, service and other

 

 

667,442

 

 

771,564

 

 

(104,122)

 

 

 

(13.5%)

Finance and insurance, net

 

 

572,857

 

 

573,293

 

 

(436)

 

 

 

(0.1%)

Total

 

$

5,925,974

 

$

6,116,812

 

$

(190,838)

 

 

 

(3.1%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average gross profit per unit

 

 

 

 

 

 

 

 

 

 

 

 

 

New vehicles

 

$

9,255

 

$

11,263

 

$

(2,008)

 

 

 

(17.8%)

Used vehicles

 

 

8,954

 

 

8,959

 

 

(5)

 

 

 

(0.1%)

Finance and insurance, net per vehicle unit

 

 

5,121

 

 

4,723

 

 

398

 

 

 

8.4%

Total vehicle front-end yield(2)

 

 

14,248

 

 

15,096

 

 

(847)

 

 

 

(5.6%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross margin

 

 

 

 

 

 

 

 

 

 

 

 

 

Good Sam Services and Plans

 

 

62.5%

 

 

59.7%

 

 

287

bps

 

 

 

New vehicles

 

 

20.2%

 

 

26.5%

 

 

(636)

bps

 

 

 

Used vehicles

 

 

24.5%

 

 

26.0%

 

 

(153)

bps

 

 

 

Products, service and other

 

 

36.8%

 

 

35.9%

 

 

98

bps

 

 

 

Finance and insurance, net

 

 

100.0%

 

 

100.0%

 

 

unch.

bps

 

 

 

Good Sam Club

 

 

84.0%

 

 

85.0%

 

 

(93)

bps

 

 

 

Subtotal RV and Outdoor Retail

 

 

31.6%

 

 

34.9%

 

 

(326)

bps

 

 

 

Total gross margin

 

 

32.5%

 

 

35.5%

 

 

(306)

bps

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Inventories ($ in 000's)

 

 

 

 

 

 

 

 

 

 

 

 

 

New vehicles

 

$

1,411,016

 

$

1,108,836

 

$

302,180

 

 

 

27.3%

Used vehicles

 

 

464,311

 

 

406,398

 

 

57,913

 

 

 

14.3%

Products, parts, accessories and misc.

 

 

247,906

 

 

277,631

 

 

(29,725)

 

 

 

(10.7%)

Total RV and Outdoor Retail inventories

 

$

2,123,233

 

$

1,792,865

 

$

330,368

 

 

 

18.4%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Vehicle inventory per location ($ in 000's)

 

 

 

 

 

 

 

 

 

 

 

 

 

New vehicle inventory per dealer location

 

$

7,466

 

$

6,336

 

$

1,129

 

 

 

17.8%

Used vehicle inventory per dealer location

 

$

2,457

 

$

2,322

 

$

134

 

 

 

5.8%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Vehicle inventory turnover(3)

 

 

 

 

 

 

 

 

 

 

 

 

 

New vehicle inventory turnover

 

 

1.9

 

 

3.0

 

 

(1.1)

 

 

 

(36.4%)

Used vehicle inventory turnover

 

 

3.4

 

 

4.0

 

 

(0.6)

 

 

 

(15.2%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Retail locations

 

 

 

 

 

 

 

 

 

 

 

 

 

RV dealerships

 

 

189

 

 

175

 

 

14

 

 

 

8.0%

RV service & retail centers

 

 

7

 

 

10

 

 

(3)

 

 

 

(30.0%)

Subtotal

 

 

196

 

 

185

 

 

11

 

 

 

5.9%

Other retail stores

 

 

1

 

 

2

 

 

(1)

 

 

 

(50.0%)

Total

 

 

197

 

 

187

 

 

10

 

 

 

5.3%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other data

 

 

 

 

 

 

 

 

 

 

 

 

 

Active Customers(4)

 

 

5,265,939

 

 

5,452,287

 

 

(186,348)

 

 

 

(3.4%)

Good Sam Club members

 

 

2,026,215

 

 

2,124,284

 

 

(98,069)

 

 

 

(4.6%)

Service bays (5)

 

 

2,693

 

 

2,575

 

 

118

 

 

 

4.6%

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

 

 

12.2%

 

 

12.0%

 

 

21

bps

 

 

n/a

Same store locations

 

 

166

 

 

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/or collision offerings.

Camping World Holdings, Inc. and Subsidiaries

Consolidated Balance Sheets (unaudited)

(In Thousands Except Share and Per Share Amounts)

 

 

 

 

 

 

 

 

 

December 31,

 

December 31,

 

 

2022

 

2021

Assets

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

130,131

 

$

267,332

Contracts in transit

 

 

50,349

 

 

57,741

Accounts receivable, net

 

 

112,411

 

 

101,644

Inventories

 

 

2,123,858

 

 

1,792,865

Prepaid expenses and other assets

 

 

66,913

 

 

64,295

Total current assets

 

 

2,483,662

 

 

2,283,877

Property and equipment, net

 

 

758,281

 

 

599,324

Operating lease assets

 

 

742,306

 

 

750,876

Deferred tax assets, net

 

 

143,226

 

 

199,321

Intangible assets, net

 

 

20,945

 

 

30,970

Goodwill

 

 

622,423

 

 

483,634

Other assets

 

 

29,304

 

 

24,927

Total assets

 

$

4,800,147

 

$

4,372,929

Liabilities and stockholders' equity

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

127,691

 

$

136,757

Accrued liabilities

 

 

147,833

 

 

189,595

Deferred revenues

 

 

95,695

 

 

95,467

Current portion of operating lease liabilities

 

 

61,745

 

 

62,217

Current portion of finance lease liabilities

 

 

10,244

 

 

4,964

Current portion of Tax Receivable Agreement liability

 

 

10,873

 

 

11,322

Current portion of long-term debt

 

 

25,229

 

 

15,822

Notes payable – floor plan, net

 

 

1,319,941

 

 

1,011,345

Other current liabilities

 

 

73,076

 

 

70,834

Total current liabilities

 

 

1,872,327

 

 

1,598,323

Operating lease liabilities, net of current portion

 

 

764,835

 

 

774,889

Finance lease liabilities, net of current portion

 

 

94,216

 

 

74,752

Tax Receivable Agreement liability, net of current portion

 

 

159,743

 

 

171,073

Revolving line of credit

 

 

20,885

 

 

20,885

Long-term debt, net of current portion

 

 

1,484,416

 

 

1,377,751

Deferred revenues

 

 

70,247

 

 

69,024

Other long-term liabilities

 

 

85,792

 

 

52,338

Total liabilities

 

 

4,552,461

 

 

4,139,035

Commitments and contingencies

 

 

 

 

 

 

Stockholders' equity:

 

 

 

 

 

 

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

 

 

 

 

Class A common stock, par value $0.01 per share – 250,000,000 shares authorized; 47,571,087 issued and 42,440,940 outstanding as of December 31, 2022 and 47,805,259 issued and 44,130,956 outstanding as of December 31, 2021

 

 

476

 

 

475

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

 

 

4

 

 

4

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

 

 

 

 

Additional paid-in capital

 

 

106,051

 

 

98,113

Treasury stock, at cost; 5,130,147 and 3,390,131 shares as of December 31, 2022 and 2021, respectively

 

 

(179,732)

 

 

(130,006)

Retained earnings

 

 

221,031

 

 

189,471

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

 

 

147,830

 

 

158,057

Non-controlling interests

 

 

99,856

 

 

75,837

Total stockholders' equity

 

 

247,686

 

 

233,894

Total liabilities and stockholders' equity

 

$

4,800,147

 

$

4,372,929

Camping World Holdings, Inc. and Subsidiaries

Summary of Consolidated Statements of Cash Flows (unaudited)

(In Thousands)

 

 

 

 

 

 

 

 

 

Year Ended December 31,

 

 

2022

 

2021

 

 

 

 

 

 

 

Net cash provided by operating activities

 

$

189,783

 

$

154,004

 

 

 

 

 

 

 

Investing activities

 

 

 

 

 

 

Purchases of property and equipment

 

 

(154,926)

 

 

(118,657)

Proceeds from sale of property and equipment

 

 

1,623

 

 

2,199

Purchase of real property

 

 

(55,666)

 

 

(129,154)

Proceeds from the sale of real property

 

 

7,352

 

 

3,635

Purchases of businesses, net of cash acquired

 

 

(217,034)

 

 

(100,117)

Purchase of other investments

 

 

(3,000)

 

 

(7,983)

Purchases of intangible assets

 

 

(884)

 

 

(5,695)

Net cash used in investing activities

 

 

(422,535)

 

 

(355,772)

 

 

 

 

 

 

 

Financing activities

 

 

 

 

 

 

Proceeds from long-term debt

 

 

127,759

 

 

430,698

Payments on long-term debt

 

 

(12,322)

 

 

(177,948)

Net proceeds on notes payable – floor plan, net

 

 

314,061

 

 

487,946

Borrowings on revolving line of credit

 

 

 

 

20,000

Payments on revolving line of credit

 

 

 

 

(20,000)

Proceeds from landlord funded construction on finance leases

 

 

6,028

 

 

Payments on finance leases

 

 

(5,977)

 

 

(2,871)

Proceeds from sale-leaseback arrangement

 

 

27,951

 

 

Payments on sale-leaseback arrangement

 

 

(132)

 

 

Payment of debt issuance costs

 

 

(3,181)

 

 

(1,925)

Dividends on Class A common stock

 

 

(105,387)

 

 

(67,176)

Proceeds from exercise of stock options

 

 

541

 

 

4,111

RSU shares withheld for tax

 

 

(11,128)

 

 

(12,089)

Stock award shares withheld for tax

 

 

 

 

(7,727)

Repurchases of Class A common stock to treasury stock

 

 

(79,757)

 

 

(156,256)

Disgorgement of short-swing profits by Section 16 officer

 

 

58

 

 

Distributions to holders of LLC common units

 

 

(162,963)

 

 

(193,735)

Net cash provided by financing activities

 

 

95,551

 

 

303,028

 

 

 

 

 

 

 

(Decrease) increase in cash and cash equivalents

 

 

(137,201)

 

 

101,260

Cash and cash equivalents at beginning of the period

 

 

267,332

 

 

166,072

Cash and cash equivalents at end of the period

 

$

130,131

 

$

267,332

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

Beginning in the fourth quarter of 2021 and continuing through the fourth quarter of 2022, the Company has experienced sequential decreases in new vehicle gross margin, primarily from the higher cost of new vehicles from the lower industry supply of travel trailers and motorhomes for much of 2021. However, fourth quarter 2022 gross margins were higher than the Company experienced in any of the 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 fourth quarter of 2022 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 sale mix for the three months ended December 31, 2022 and pre-COVID-19 pandemic periods of the three months ended December 31, 2019, 2018, 2017, and 2016 (unaudited):

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended December 31,

 

 

2022

 

2019(1)

 

2018(1)

 

2017(1)

 

2016(1)

Gross margin

 

 

 

 

 

 

 

 

 

 

New vehicles

 

16.0%

 

13.1%

 

11.8%

 

14.1%

 

13.4%

Used vehicles

 

23.0%

 

19.8%

 

21.4%

 

22.0%

 

21.6%

 

 

 

 

 

 

 

 

 

 

 

Unit sales mix

 

 

 

 

 

 

 

 

 

 

New vehicles

 

50.1%

 

57.3%

 

63.4%

 

66.3%

 

60.0%

Used vehicles

 

49.9%

 

42.7%

 

36.6%

 

33.7%

 

40.0%

 

(1) These periods were prior to the COVID-19 Pandemic.

(Loss) Earnings Per Share

Basic (loss) earnings per share of Class A common stock is computed by dividing net (loss) income attributable to Camping World Holdings, Inc. by the weighted-average number of shares of Class A common stock outstanding during the period. Diluted (loss) earnings per share of Class A common stock is computed by dividing net (loss) 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 (loss) earnings per share of Class A common stock (unaudited):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended December 31,

 

Year Ended December 31,

(In thousands except per share amounts)

 

2022

 

2021

 

2022

 

2021

Numerator:

 

 

 

 

 

 

 

 

 

 

 

 

Net (loss) income

 

$

(57,201)

 

$

59,266

 

$

351,031

 

$

642,075

Less: net income (loss) attributable to non-controlling interests

 

 

23,981

 

 

(32,018)

 

 

(214,084)

 

 

(363,614)

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

 

$

(33,220)

 

$

27,248

 

 

136,947

 

 

278,461

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

 

 

 

 

 

 

938

 

 

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

 

 

 

 

21,001

 

 

 

 

266,381

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

 

$

(33,220)

 

$

48,249

 

$

137,885

 

$

544,842

Denominator:

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

42,287

 

 

44,820

 

 

42,386

 

 

45,009

Dilutive options to purchase Class A common stock

 

 

 

 

127

 

 

56

 

 

150

Dilutive restricted stock units

 

 

 

 

1,050

 

 

412

 

 

1,165

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

 

 

 

 

42,569

 

 

 

 

43,438

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

 

 

42,287

 

 

88,566

 

 

42,854

 

 

89,762

 

 

 

 

 

 

 

 

 

 

 

 

 

(Loss) earnings per share of Class A common stock — basic

 

$

(0.79)

 

$

0.61

 

$

3.23

 

$

6.19

(Loss) earnings per share of Class A common stock — diluted

 

$

(0.79)

 

$

0.54

 

$

3.22

 

$

6.07

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

 

 

 

Stock options to purchase Class A common stock

 

 

244

 

 

 

 

 

 

Restricted stock units

 

 

2,822

 

 

 

 

2,146

 

 

6

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

 

 

42,045

 

 

 

 

42,045

 

 

Non-GAAP Financial Measures

To supplement our consolidated financial statements, which are prepared and presented in accordance with accounting principles generally accepted in the United States (“GAAP”), we use the following non-GAAP financial measures: EBITDA, Adjusted EBITDA, Adjusted EBITDA Margin, TTM Adjusted EBITDA, Adjusted Net (Loss) Income Attributable to Camping World Holdings, Inc. – Basic, Adjusted Net (Loss)Income Attributable to Camping World Holdings, Inc. – Diluted, Adjusted (Loss) Earnings Per Share – Basic, and Adjusted (Loss) 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.

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

The following table reconciles EBITDA, Adjusted EBITDA, Adjusted EBITDA Margin, and TTM Adjusted EBITDA to the most directly comparable GAAP financial performance measures (unaudited):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended December 31,

 

Year Ended December 31,

($ in thousands)

 

2022

 

2021

 

2022

 

2021

EBITDA and Adjusted EBITDA:

 

 

 

 

 

 

 

 

 

 

 

 

Net (loss) income

 

$

(57,201)

 

$

59,266

 

$

351,031

 

$

642,075

Other interest expense, net

 

 

25,983

 

 

11,650

 

 

75,745

 

 

46,912

Depreciation and amortization

 

 

18,935

 

 

17,121

 

 

80,304

 

 

66,418

Income tax expense

 

 

23,276

 

 

8,865

 

 

99,084

 

 

92,124

Subtotal EBITDA

 

 

10,993

 

 

96,902

 

 

606,164

 

 

847,529

Long-lived asset impairment (a)

 

 

726

 

 

1,646

 

 

4,231

 

 

3,044

Lease termination (b)

 

 

492

 

 

126

 

 

1,614

 

 

2,211

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

 

 

232

 

 

(583)

 

 

622

 

 

(576)

Equity-based compensation (d)

 

 

6,413

 

 

28,867

 

 

33,847

 

 

47,936

Tax Receivable Agreement liability adjustment (e)

 

 

(114)

 

 

(707)

 

 

(114)

 

 

2,813

Restructuring costs (f)

 

 

1,478

 

 

2,262

 

 

7,026

 

 

25,701

Loss and expense on debt restructure (g)

 

 

 

 

3,023

 

 

 

 

13,468

Adjusted EBITDA

 

$

20,220

 

$

131,536

 

$

653,390

 

$

942,126

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended December 31,

 

Year Ended December 31,

(as percentage of total revenue)

 

2022

 

2021

 

2022

 

2021

Adjusted EBITDA margin:

 

 

 

 

 

 

 

 

Net (loss) income margin

 

(4.5%)

 

4.3%

 

5.0%

 

9.3%

Other interest expense, net

 

2.0%

 

0.8%

 

1.1%

 

0.7%

Depreciation and amortization

 

1.5%

 

1.2%

 

1.2%

 

1.0%

Income tax expense

 

1.8%

 

0.6%

 

1.4%

 

1.3%

Subtotal EBITDA margin

 

0.9%

 

7.0%

 

8.7%

 

12.3%

Long-lived asset impairment (a)

 

0.1%

 

0.1%

 

0.1%

 

0.0%

Lease termination (b)

 

0.0%

 

0.0%

 

0.0%

 

0.0%

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

 

0.0%

 

(0.0%)

 

0.0%

 

(0.0%)

Equity-based compensation (d)

 

0.5%

 

2.1%

 

0.5%

 

0.7%

Tax Receivable Agreement liability adjustment (e)

 

(0.0%)

 

(0.1%)

 

(0.0%)

 

0.0%

Restructuring costs (f)

 

0.1%

 

0.2%

 

0.1%

 

0.4%

Loss and expense on debt restructure (g)

 

 

0.2%

 

 

0.2%

Adjusted EBITDA margin

 

1.6%

 

9.5%

 

9.4%

 

13.6%

(a)

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

(b)

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

(c)

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

(d)

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

(e)

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

(f)

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

(g)

Represents the loss and expense incurred on debt restructure and financing expenses. For the three months ended December 31, 2021, it comprised of $3.0 million in legal and other expenses related to the existing term loan facility. For the year ended December 31, 2021, it comprised of $0.4 million in extinguishment of the original issue discount, $1.0 million in extinguishment of capitalized finance costs related to the previous term loan facility, and $12.1 million in legal and other expenses related to the existing term loan facility.

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

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

We define “Adjusted Net (Loss) Income Attributable to Camping World Holdings, Inc. – Diluted” as Adjusted Net (Loss) Income Attributable to Camping World Holdings, Inc. – Basic adjusted for the reallocation of net (loss) 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 (Loss) Earnings Per Share – Basic” as Adjusted Net (Loss) Income Attributable to Camping World Holdings, Inc. - Basic divided by the weighted-average shares of Class A common stock outstanding. We define “Adjusted (Loss) Earnings Per Share – Diluted” as Adjusted Net (Loss) 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 (Loss) Income Attributable to Camping World Holdings, Inc. – Basic, Adjusted Net (Loss) Income Attributable to Camping World Holdings, Inc. – Diluted, Adjusted (Loss) Earnings Per Share – Basic, and Adjusted (Loss) 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 (Loss) Income Attributable to Camping World Holdings, Inc. – Basic, Adjusted Net (Loss) Income Attributable to Camping World Holdings, Inc. – Diluted, Adjusted (Loss) Earnings Per Share – Basic, and Adjusted (Loss) Earnings Per Share – Diluted to the most directly comparable GAAP financial performance measure:

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Year Ended

 

December 31,

 

December 31,

(In thousands except per share amounts)

2022

 

2021

 

2022

 

2021

Numerator:

 

 

 

 

 

 

 

 

 

 

 

Net (loss) income attributable to Camping World Holdings, Inc.

$

(33,220)

 

$

27,248

 

$

136,947

 

$

278,461

Adjustments related to basic calculation:

 

 

 

 

 

 

 

 

 

 

 

Loss and expense on debt restructure (a):

 

 

 

 

 

 

 

 

 

 

 

Gross adjustment

 

 

 

3,023

 

 

 

 

13,468

Income tax expense for above adjustment (b)

 

 

 

(394)

 

 

 

 

(1,770)

Long-lived asset impairment (c):

 

 

 

 

 

 

 

 

 

 

 

Gross adjustment

 

726

 

 

1,646

 

 

4,231

 

 

3,044

Income tax expense for above adjustment (b)

 

 

 

(24)

 

 

(99)

 

 

(24)

Lease termination (d):

 

 

 

 

 

 

 

 

 

 

 

Gross adjustment

 

492

 

 

126

 

 

1,614

 

 

2,211

Income tax expense for above adjustment (b)

 

 

 

(16)

 

 

 

 

(54)

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

 

 

 

 

 

 

 

 

 

 

 

Gross adjustment

 

232

 

 

(583)

 

 

622

 

 

(576)

Income tax expense for above adjustment (b)

 

(31)

 

 

(1)

 

 

(46)

 

 

4

Equity-based compensation (f):

 

 

 

 

 

 

 

 

 

 

 

Gross adjustment

 

6,413

 

 

28,867

 

 

33,847

 

 

47,936

Income tax expense for above adjustment (b)

 

(730)

 

 

(3,631)

 

 

(3,810)

 

 

(5,812)

Tax Receivable Agreement liability adjustment (g):

 

 

 

 

 

 

 

 

 

 

 

Gross adjustment

 

(114)

 

 

(707)

 

 

(114)

 

 

2,813

Income tax expense for above adjustment (b)

 

29

 

 

180

 

 

29

 

 

(718)

Restructuring costs (h)

 

 

 

 

 

 

 

 

 

 

 

Gross adjustment

 

1,478

 

 

2,262

 

 

7,026

 

 

25,701

Income tax expense for above adjustment (b)

 

 

 

(14)

 

 

 

 

(56)

Income tax expense impact from LLC conversion (i)

 

28,402

 

 

 

 

28,402

 

 

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

 

(12,199)

 

 

(17,207)

 

 

(31,065)

 

 

(44,787)

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

 

(8,522)

 

 

40,775

 

 

177,584

 

 

319,841

Adjustments related to diluted calculation:

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

654

 

 

1,479

 

 

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

 

 

 

(197)

 

 

(405)

 

 

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

 

 

 

 

 

 

 

408,401

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

 

 

 

 

 

 

 

(104,543)

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 (m)

 

 

 

 

 

 

 

(6,169)

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

$

(8,522)

 

$

41,232

 

$

178,658

 

$

617,530

Denominator:

 

 

 

 

 

 

 

 

 

 

 

Weighted-average Class A common shares outstanding – basic

 

42,287

 

 

44,820

 

 

42,386

 

 

45,009

Adjustments related to diluted calculation:

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

43,438

Dilutive options to purchase Class A common stock (n)

 

 

 

127

 

 

56

 

 

150

Dilutive restricted stock units (n)

 

 

 

1,050

 

 

412

 

 

1,165

Adjusted weighted average Class A common shares outstanding – diluted

 

42,287

 

 

45,997

 

 

42,854

 

 

89,762

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted (loss) earnings per share - basic

$

(0.20)

 

$

0.91

 

$

4.19

 

$

7.11

Adjusted (loss) earnings per share - diluted

$

(0.20)

 

$

0.90

 

$

4.17

 

$

6.88

 

 

 

 

 

 

 

 

 

 

 

 

Anti-dilutive amounts (o):

 

 

 

 

 

 

 

 

 

 

 

Numerator:

 

 

 

 

 

 

 

 

 

 

 

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

$

(11,782)

 

$

48,571

 

$

243,670

 

$

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

$

(362)

 

$

(14,678)

 

$

(67,150)

 

$

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 (m)

$

5,816

 

$

5,058

 

$

12,280

 

$

Denominator:

 

 

 

 

 

 

 

 

 

 

 

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

 

42,045

 

 

42,569

 

 

42,045

 

 

Anti-dilutive options to purchase Class A common stock (n)

 

38

 

 

 

 

 

 

Anti-dilutive restricted stock units (n)

 

251

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reconciliation of per share amounts:

 

 

 

 

 

 

 

 

 

 

 

(Loss) earnings per share of Class A common stock - basic

$

(0.79)

 

$

0.61

 

$

3.23

 

$

6.19

Non-GAAP Adjustments (p)

 

0.59

 

 

0.30

 

 

0.96

 

 

0.92

Adjusted (loss) earnings per share - basic

$

(0.20)

 

$

0.91

 

$

4.19

 

$

7.11

 

 

 

 

 

 

 

 

 

 

 

 

(Loss) earnings per share of Class A common stock - diluted

$

(0.79)

 

$

0.54

 

$

3.22

 

$

6.07

Non-GAAP Adjustments (p)

 

0.59

 

 

0.30

 

 

0.96

 

 

0.92

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

 

 

 

0.06

 

 

 

 

(0.10)

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

 

 

 

 

 

(0.01)

 

 

(0.01)

Adjusted (loss) earnings per share - diluted

$

(0.20)

 

$

0.90

 

$

4.17

 

$

6.88

(a)

Represents the loss and expense incurred on debt restructure and financing expenses. For the three months ended December 31, 2021, it comprised of $3.0 million in legal and other expenses related to the existing term loan facility. For the year ended December 31, 2021, it comprised of $0.4 million in extinguishment of the original issue discount, $1.0 million in extinguishment of capitalized finance costs related to the previous term loan facility, and $12.1 million in legal and other expenses related to the existing term loan facility.

(b)

Represents the current and deferred income tax expense or benefit effect of the above adjustments, many of which are related to entities with full valuation allowances for which no tax benefit can be currently recognized. This assumption uses an effective tax rate of between 25.4% and 25.5% for the adjustments for the 2022 and 2021 periods, which represents the estimated tax rate that would apply had the above adjustments been included in the determination of our non-GAAP metric.

(c)

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

(d)

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

(e)

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

(f)

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

(g)

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

(h)

Represents restructuring costs relating to our 2019 Strategic Shift. These restructuring costs include other associated costs. These costs exclude lease termination costs, which are presented separately above (see (d) above).

(i)

For the three months and year ended December 31, 2022, the Company recognized $28.4 million of income tax expense relating to the LLC Conversion. This income tax expense was primarily from the write-off of deferred tax assets.

(j)

Represents the adjustment to net (loss) income attributable to non-controlling interests resulting from the above adjustments that impact the net (loss)

income of CWGS, LLC. This adjustment uses the non-controlling interest’s weighted average ownership of CWGS, LLC of 49.9% and 48.7% for the three months ended December 31, 2022 and 2021, respectively, and 49.8% and 49.1% for the year ended December 31, 2022 and 2021, respectively.

(k)

Represents the reallocation of net (loss) 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.

(l)

Represents the income tax expense effect of the above adjustment for reallocation of net (loss) income attributable to non-controlling interests. This assumption uses an effective tax rate of between 25.4% and 25.5% for the adjustments for 2022 and 2021.

(m)

Typically represents adjustments to reflect the income tax benefit of losses of consolidated C-corporations that under the Company’s equity structure, prior to the LLC Conversion, could not be used against the income of other consolidated subsidiaries of CWGS, LLC. However, for the three months and the year ended December 31, 2021, this adjustment included the reversal of the $0.7 million benefit and $15.2 million benefit, respectively, from changes in the valuation allowance for Camping World, Inc. Subsequent to the redemption of all common units in CWGS, LLC and prior to the LLC Conversion, the Company believes certain actions could be taken such that the C-corporations’ losses could offset income of other consolidated subsidiaries. The adjustment reflects the income tax benefit assuming effective tax rate of between 25.4% and 25.5% during the 2022 and 2021 periods for the losses experienced by the consolidated C-corporations for which valuation allowances have been recorded. No assumed release of valuation allowance established for previous periods were included in these amounts. The $0.7 million and $15.2 million releases of valuation allowance during the three months and the year ended December 31, 2021, respectively, were considered to be reversed and excluded from adjusted net income attributable to Camping World Holdings, Inc. – diluted for purposes of this calculation. Beginning in 2023, these C-corporation losses will offset income of other consolidated subsidiaries as a result of LLC Conversion at or around December 31, 2022.

(n)

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

(o)

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

(p)

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

(q)

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 (loss) 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 (loss) 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 (loss) 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 (o) above).

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