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| Share Name | Share Symbol | Market | Type |
|---|---|---|---|
| Camping World Holdings Inc | NYSE:CWH | NYSE | Common Stock |
| Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|
| 0.5325 | 2.30% | 23.7125 | 23.46 | 22.65 | 23.46 | 745,177 | 01:00:00 |
From Jan 2023 to Jan 2025
Camping World Holdings, Inc. (NYSE: CWH) (the “Company” or “CWH”), America’s Recreation Dealer, today reported results for the second quarter ended June 30, 2023.
Marcus Lemonis, Chairman and Chief Executive Officer of Camping World Holdings, Inc. stated, “We sold the most used units in our Company’s history, with record setting used vehicle gross profit. We’ve opened, acquired, or signed letters of intent on 30 dealership locations year-to-date. The unprecedented influx of acquisition opportunities has continued and the pipeline is robust. We plan to capitalize on it as we invest ahead of anticipated revenue growth in 2024 and beyond.”
Second Quarter-over-Quarter Operating Highlights
________________
(1)
Adjusted earnings per share – diluted and adjusted EBITDA are non-GAAP measures. For a reconciliation of these non-GAAP measures to the most directly comparable GAAP measures, see the “Non-GAAP Financial Measures” section later in this press release.
(2)
The $20.2 million decrease in selling, general, and administrative expenses includes a $2.5 million decrease in equity-based compensation. Equity-based compensation is excluded from the calculation of Adjusted EBITDA (see the “Non-GAAP Financial Measures” section later in this press release).
Earnings Conference Call and Webcast Information
A conference call to discuss the Company’s second quarter 2023 financial results is scheduled for August 2, 2023, at 7:30 am Central Time. Investors and analysts can participate on the conference call by dialing 1-877-407-9039 (international callers please dial 1-201-689-8470) and using conference ID# 13739824. Interested parties can also listen to a live webcast or replay of the conference call by logging on to the Investor Relations section on the Company’s website at http://investor.campingworld.com. The replay of the conference call webcast will be available on the investor relations website for approximately 90 days.
Presentation
This press release presents historical results for the periods presented for the Company and its subsidiaries, which are presented in accordance with accounting principles generally accepted in the United States (“GAAP”), unless noted as a non-GAAP financial measure. The Company’s initial public offering (“IPO”) and related reorganization transactions (“Reorganization Transactions”) that occurred on October 6, 2016 resulted in the Company as the sole managing member of CWGS Enterprises, LLC (“CWGS, LLC”), with sole voting power in and control of the management of CWGS, LLC. The Company’s position as sole managing member of CWGS, LLC includes periods where the Company has held a minority economic interest in CWGS, LLC. As of June 30, 2023, the Company owned 52.6% of CWGS, LLC. Accordingly, the Company consolidates the financial results of CWGS, LLC and reports a non-controlling interest in its consolidated financial statements.
About Camping World Holdings, Inc.
Camping World Holdings, Inc., headquartered in Lincolnshire, IL, (together with its subsidiaries) is America’s largest retailer of RVs and related products and services. Our vision is to build a long-term legacy business that makes RVing fun and easy, and our Camping World and Good Sam brands have been serving RV consumers since 1966. We strive to build long-term value for our customers, employees, and shareholders by combining a unique and comprehensive assortment of RV products and services with a national network of RV dealerships, service centers and customer support centers along with the industry’s most extensive online presence and a highly trained and knowledgeable team of associates serving our customers, the RV lifestyle, and the communities in which we operate. We also believe that our Good Sam organization and family of programs and services uniquely enable us to connect with our customers as stewards of the RV enthusiast community and the RV lifestyle. With RV sales and service locations in 43 states, Camping World has grown to become the prime destination for everything RV. For more information, visit www.CampingWorld.com.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements contained in this press release that do not relate to matters of historical fact should be considered forward-looking statements, including, without limitation, statements about macroeconomic and industry trends, dividend payments and capital allocation, our business plans and goals, the Company’s acquisition pipeline and plans, and future financial results, including long term revenue growth. These forward-looking statements are based on management’s current expectations.
These statements are neither promises nor guarantees, but involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements, including, but not limited to, the following: general economic conditions, including inflation and interest rates; the availability of financing to us and our customers; fuel shortages or high prices for fuel; the success of our manufacturers; general economic conditions in our markets; changes in consumer preferences; competition in our industry; risks related to acquisitions, new store openings and expansion into new markets; our failure to maintain the strength and value of our brands; our ability to manage our inventory; fluctuations in our same store sales; the cyclical and seasonal nature of our business; risks related to the cybersecurity incident announced in February 2022; our dependence on the availability of adequate capital and risks related to our debt; risks related to COVID-19; our ability to execute and achieve the expected benefits of our cost cutting or restructuring initiatives; our reliance on our fulfillment and distribution centers; natural disasters, including epidemic outbreaks; our dependence on our relationships with third party suppliers and lending institutions; risks associated with selling goods manufactured abroad; our ability to retain senior executives and attract and retain other qualified employees; risks associated with leasing substantial amounts of space; risks associated with our private brand offerings; we may incur asset impairment charges for goodwill, intangible assets or other long-lived assets; tax risks; regulatory risks; data privacy and cybersecurity risks; risks related to our intellectual property; the impact of ongoing or future lawsuits against us and certain of our officers and directors; and risks related to our organizational structure.
These and other important factors discussed under the caption “Risk Factors” in our Annual Report on Form 10‑K filed for the year ended December 31, 2022 and our other reports filed with the SEC could cause actual results to differ materially from those indicated by the forward-looking statements made in this press release. Any such forward-looking statements represent management’s estimates as of the date of this press release. While we may elect to update such forward-looking statements at some point in the future, we disclaim any obligation to do so, even if subsequent events cause our views to change, except as required under applicable law. These forward-looking statements should not be relied upon as representing our views as of any date subsequent to the date of this press release.
Future declarations of quarterly dividends are subject to the determination and discretion of the Company’s Board of Directors based on its consideration of various factors, including the Company’s results of operations, financial condition, level of indebtedness, anticipated capital requirements, contractual restrictions, restrictions in its debt agreements, restrictions under applicable law, receipt of excess tax distributions from CWGS Enterprises, LLC, its business prospects and other factors that the Company’s Board of Directors may deem relevant.
We intend to use our official Facebook, Twitter, and Instagram accounts, each at the handle @CampingWorld, as well as the investor page of our website, investor.campingworld.com, as a distribution channel of material information about the Company and for complying with our disclosure obligations under Regulation FD. The information we post through these social media channels and on our investor webpage may be deemed material. Accordingly, investors should subscribe to these accounts and our investor alerts, in addition to following our press releases, SEC filings, public conference calls and webcasts. These social media channels may be updated from time to time.
Camping World Holdings, Inc. and Subsidiaries
Consolidated Statements of Operations (unaudited)
(In Thousands Except Per Share Amounts)
Three Months Ended
Six Months Ended
June 30,
June 30,
2023
2022
2023
2022
Revenue:
Good Sam Services and Plans
$
51,038
$
49,593
$
97,405
$
94,152
RV and Outdoor Retail
New vehicles
800,903
1,077,252
1,447,655
1,912,211
Used vehicles
622,962
555,958
1,067,708
958,990
Products, service and other
247,760
278,001
455,421
492,974
Finance and insurance, net
166,934
195,407
296,706
348,785
Good Sam Club
11,124
12,421
22,706
23,916
Subtotal
1,849,683
2,119,039
3,290,196
3,736,876
Total revenue
1,900,721
2,168,632
3,387,601
3,831,028
Costs applicable to revenue (exclusive of depreciation and amortization shown separately below):
Good Sam Services and Plans
17,671
18,958
33,823
35,661
RV and Outdoor Retail
New vehicles
677,376
852,171
1,234,918
1,496,541
Used vehicles
480,419
414,169
822,366
716,994
Products, service and other
153,043
164,222
282,061
300,382
Good Sam Club
1,110
2,319
2,311
4,455
Subtotal
1,311,948
1,432,881
2,341,656
2,518,372
Total costs applicable to revenue
1,329,619
1,451,839
2,375,479
2,554,033
Gross profit (exclusive of depreciation and amortization shown separately below):
Good Sam Services and Plans
33,367
30,635
63,582
58,491
RV and Outdoor Retail:
New vehicles
123,527
225,081
212,737
415,670
Used vehicles
142,543
141,789
245,342
241,996
Products, service and other
94,717
113,779
173,360
192,592
Finance and insurance, net
166,934
195,407
296,706
348,785
Good Sam Club
10,014
10,102
20,395
19,461
Subtotal
537,735
686,158
948,540
1,218,504
Total gross profit
571,102
716,793
1,012,122
1,276,995
Operating expenses:
Selling, general, and administrative expenses
420,887
441,123
786,613
826,438
Depreciation and amortization
17,206
17,627
31,843
43,162
Long-lived asset impairment
477
2,618
7,522
2,618
Lease termination
—
944
—
1,122
(Gain) loss on sale or disposal of assets
(145
)
381
(5,132
)
430
Total operating expenses
438,425
462,693
820,846
873,770
Income from operations
132,677
254,100
191,276
403,225
Other expense:
Floor plan interest expense
(20,672
)
(8,733
)
(41,482
)
(14,999
)
Other interest expense, net
(33,518
)
(14,935
)
(64,631
)
(29,236
)
Other expense, net
(183
)
(72
)
(1,683
)
(295
)
Total other expense
(54,373
)
(23,740
)
(107,796
)
(44,530
)
Income before income taxes
78,304
230,360
83,480
358,695
Income tax expense
(13,581
)
(32,375
)
(13,854
)
(53,411
)
Net income
64,723
197,985
69,626
305,284
Less: net income attributable to non-controlling interests
(36,020
)
(113,674
)
(37,754
)
(176,243
)
Net income attributable to Camping World Holdings, Inc.
$
28,703
$
84,311
$
31,872
$
129,041
Earnings per share of Class A common stock:
Basic
$
0.65
$
2.02
$
0.72
$
3.03
Diluted
$
0.64
$
2.01
$
0.71
$
3.01
Weighted average shares of Class A common stock outstanding:
Basic
44,490
41,737
44,473
42,640
Diluted
44,804
42,139
84,783
43,171
Camping World Holdings, Inc. and Subsidiaries
Supplemental Data
Three Months Ended June 30,
Increase
Percent
2023
2022
(decrease)
Change
Unit sales
New vehicles
18,897
23,404
(4,507
)
(19.3
%)
Used vehicles
17,774
15,555
2,219
14.3
%
Total
36,671
38,959
(2,288
)
(5.9
%)
Average selling price
New vehicles
$
42,383
$
46,029
$
(3,646
)
(7.9
%)
Used vehicles
$
35,049
$
35,741
$
(692
)
(1.9
%)
Same store unit sales(1)
New vehicles
17,426
22,827
(5,401
)
(23.7
%)
Used vehicles
16,630
15,288
1,342
8.8
%
Total
34,056
38,115
(4,059
)
(10.6
%)
Same store revenue(1) ($ in 000s)
New vehicles
$
739,091
$
1,053,943
$
(314,852
)
(29.9
%)
Used vehicles
580,065
548,082
31,983
5.8
%
Products, service and other
188,653
211,157
(22,504
)
(10.7
%)
Finance and insurance, net
154,389
191,786
(37,397
)
(19.5
%)
Total
$
1,662,198
$
2,004,968
$
(342,770
)
(17.1
%)
Average gross profit per unit
New vehicles
$
6,537
$
9,617
$
(3,080
)
(32.0
%)
Used vehicles
8,020
9,115
(1,096
)
(12.0
%)
Finance and insurance, net per vehicle unit
4,552
5,016
(463
)
(9.2
%)
Total vehicle front-end yield(2)
11,808
14,433
(2,625
)
(18.2
%)
Gross margin
Good Sam Services and Plans
65.4
%
61.8
%
361
bps
New vehicles
15.4
%
20.9
%
(547
)
bps
Used vehicles
22.9
%
25.5
%
(262
)
bps
Products, service and other
38.2
%
40.9
%
(270
)
bps
Finance and insurance, net
100.0
%
100.0
%
unch.
bps
Good Sam Club
90.0
%
81.3
%
869
bps
Subtotal RV and Outdoor Retail
29.1
%
32.4
%
(331
)
bps
Total gross margin
30.0
%
33.1
%
(301
)
bps
RV and Outdoor Retail inventories ($ in 000s)
New vehicles
$
1,206,493
$
1,329,604
$
(123,111
)
(9.3
%)
Used vehicles
651,396
358,060
293,336
81.9
%
Products, parts, accessories and misc.
218,570
307,789
(89,219
)
(29.0
%)
Total RV and Outdoor Retail inventories
$
2,076,459
$
1,995,453
$
81,006
4.1
%
Vehicle inventory per location ($ in 000s)
New vehicle inventory per dealer location
$
6,156
$
7,346
$
(1,190
)
(16.2
%)
Used vehicle inventory per dealer location
$
3,323
$
1,978
$
1,345
68.0
%
Vehicle inventory turnover(3)
New vehicle inventory turnover
1.8
2.4
(0.6
)
(23.4
%)
Used vehicle inventory turnover
3.0
3.7
(0.7
)
(18.8
%)
Retail locations
RV dealerships
196
181
15
8.3
%
RV service & retail centers
7
8
(1
)
(12.5
%)
Subtotal
203
189
14
7.4
%
Other retail stores
—
1
(1
)
(100.0
%)
Total
203
190
13
6.8
%
Other data
Active Customers(4)
5,218,340
5,460,819
(242,479
)
(4.4
%)
Good Sam Club members
2,036,119
2,077,410
(41,291
)
(2.0
%)
Service bays (5)
2,720
2,613
107
4.1
%
Finance and insurance gross profit as a % of total vehicle revenue
11.7
%
12.0
%
(24
)
bps
n/a
Same store locations
178
n/a
n/a
n/a
Six Months Ended June 30,
Increase
Percent
2023
2022
(decrease)
Change
Unit sales
New vehicles
32,809
42,424
(9,615
)
(22.7
%)
Used vehicles
30,206
26,531
3,675
13.9
%
Total
63,015
68,955
(5,940
)
(8.6
%)
Average selling price
New vehicles
$
44,124
$
45,074
$
(950
)
(2.1
%)
Used vehicles
$
35,348
$
36,146
$
(798
)
(2.2
%)
Same store unit sales(1)
New vehicles
30,506
41,665
(11,159
)
(26.8
%)
Used vehicles
28,319
26,208
2,111
8.1
%
Total
58,825
67,873
(9,048
)
(13.3
%)
Same store revenue(1) ($ in 000s)
New vehicles
$
1,347,131
$
1,881,619
$
(534,488
)
(28.4
%)
Used vehicles
998,053
948,984
49,069
5.2
%
Products, service and other
339,122
369,814
(30,692
)
(8.3
%)
Finance and insurance, net
276,259
344,027
(67,768
)
(19.7
%)
Total
$
2,960,565
$
3,544,444
$
(583,879
)
(16.5
%)
Average gross profit per unit
New vehicles
$
6,484
$
9,798
$
(3,314
)
(33.8
%)
Used vehicles
8,122
9,121
(999
)
(11.0
%)
Finance and insurance, net per vehicle unit
4,709
5,058
(350
)
(6.9
%)
Total vehicle front-end yield(2)
11,978
14,596
(2,618
)
(17.9
%)
Gross margin
Good Sam Services and Plans
65.3
%
62.1
%
315
bps
New vehicles
14.7
%
21.7
%
(704
)
bps
Used vehicles
23.0
%
25.2
%
(226
)
bps
Products, service and other
38.1
%
39.1
%
(100
)
bps
Finance and insurance, net
100.0
%
100.0
%
unch.
bps
Good Sam Club
89.8
%
81.4
%
845
bps
Subtotal RV and Outdoor Retail
28.8
%
32.6
%
(378
)
bps
Total gross margin
29.9
%
33.3
%
(346
)
bps
RV and Outdoor Retail inventories ($ in 000s)
New vehicles
$
1,206,493
$
1,329,604
$
(123,111
)
(9.3
%)
Used vehicles
651,396
358,060
293,336
81.9
%
Products, parts, accessories and misc.
218,570
307,789
(89,219
)
(29.0
%)
Total RV and Outdoor Retail inventories
$
2,076,459
$
1,995,453
$
81,006
4.1
%
Vehicle inventory per location ($ in 000s)
New vehicle inventory per dealer location
$
6,156
$
7,346
$
(1,190
)
(16.2
%)
Used vehicle inventory per dealer location
$
3,323
$
1,978
$
1,345
68.0
%
Vehicle inventory turnover(3)
New vehicle inventory turnover
1.8
2.4
(0.6
)
(23.4
%)
Used vehicle inventory turnover
3.0
3.7
(0.7
)
(18.8
%)
Retail locations
RV dealerships
196
181
15
8.3
%
RV service & retail centers
7
8
(1
)
(12.5
%)
Subtotal
203
189
14
7.4
%
Other retail stores
—
1
(1
)
(100.0
%)
Total
203
190
13
6.8
%
Other data
Active Customers(4)
5,218,340
5,460,819
(242,479
)
(4.4
%)
Good Sam Club members
2,036,119
2,077,410
(41,291
)
(2.0
%)
Service bays(5)
2,720
2,613
107
4.1
%
Finance and insurance gross profit as a % of total vehicle revenue
11.8
%
12.1
%
(35
)
bps
n/a
Same store locations
178
n/a
n/a
n/a
(1)
Our same store revenue and units calculations for a given period include only those stores that were open both at the end of the corresponding period and at the beginning of the preceding fiscal year.
(2)
Front end yield is calculated as gross profit from new vehicles, used vehicles and finance and insurance (net), divided by combined new and used vehicle unit sales.
(3)
Inventory turnover calculated as vehicle costs applicable to revenue over the last twelve months divided by the average quarterly ending vehicle inventory over the last twelve months.
(4)
An Active Customer is a customer who has transacted with us in any of the eight most recently completed fiscal quarters prior to the date of measurement.
(5)
A service bay is a fully-constructed bay dedicated to service, installation, and collision offerings.
Camping World Holdings, Inc. and Subsidiaries
Consolidated Balance Sheets (unaudited)
(In Thousands Except Per Share Amounts)
June 30,
December 31,
June 30,
2023
2022
2022
Assets
Current assets:
Cash and cash equivalents
$
54,458
$
130,131
$
133,957
Contracts in transit
132,466
50,349
150,929
Accounts receivable, net
119,247
112,411
125,957
Inventories
2,077,024
2,123,858
1,995,796
Prepaid expenses and other assets
56,063
66,913
61,308
Assets held for sale
4,635
—
—
Total current assets
2,443,893
2,483,662
2,467,947
Property and equipment, net
785,003
758,281
688,297
Operating lease assets
730,460
742,306
711,589
Deferred tax assets, net
141,233
143,226
182,212
Intangible assets, net
15,028
20,945
22,943
Goodwill
655,744
622,423
507,284
Other assets
31,732
29,304
30,029
Total assets
$
4,803,093
$
4,800,147
$
4,610,301
Liabilities and stockholders' equity
Current liabilities:
Accounts payable
$
200,516
$
127,691
$
249,218
Accrued liabilities
192,639
147,833
238,941
Deferred revenues
96,850
95,695
95,730
Current portion of operating lease liabilities
61,808
61,745
60,816
Current portion of finance lease liabilities
5,337
10,244
10,563
Current portion of Tax Receivable Agreement liability
13,999
10,873
11,686
Current portion of long-term debt
26,766
25,229
15,826
Notes payable – floor plan, net
1,155,356
1,319,941
1,000,808
Other current liabilities
84,552
73,076
86,975
Liabilities related to assets held for sale
4,125
—
—
Total current liabilities
1,841,948
1,872,327
1,770,563
Operating lease liabilities, net of current portion
753,999
764,835
735,267
Finance lease liabilities, net of current portion
99,341
94,216
96,604
Tax Receivable Agreement liability, net of current portion
151,053
159,743
159,790
Revolving line of credit
20,885
20,885
20,885
Long-term debt, net of current portion
1,521,629
1,484,416
1,371,444
Deferred revenues
69,809
70,247
73,076
Other long-term liabilities
86,186
85,792
82,741
Total liabilities
4,544,850
4,552,461
4,310,370
Commitments and contingencies
Stockholders' equity:
Preferred stock, par value $0.01 per share – 20,000 shares authorized; none issued and outstanding
—
—
—
Class A common stock, par value $0.01 per share – 250,000 shares authorized; 49,571, 47,571, and 47,855 shares issued, respectively; 44,525, 42,441, and 41,789 shares outstanding, respectively
496
476
476
Class B common stock, par value $0.0001 per share – 75,000 shares authorized; 39,466, 41,466, and 69,066 shares issued, respectively; 39,466, 41,466, and 41,466 shares outstanding, respectively
4
4
4
Class C common stock, par value $0.0001 per share – 0.001 share authorized, issued and outstanding
—
—
—
Additional paid-in capital
115,844
106,051
127,508
Treasury stock, at cost; 5,046, 5,130, and 5,782 shares, respectively
(176,783
)
(179,732
)
(202,561
)
Retained earnings
197,293
221,031
265,974
Total stockholders' equity attributable to Camping World Holdings, Inc.
136,854
147,830
191,401
Non-controlling interests
121,389
99,856
108,530
Total stockholders' equity
258,243
247,686
299,931
Total liabilities and stockholders' equity
$
4,803,093
$
4,800,147
$
4,610,301
Camping World Holdings, Inc. and Subsidiaries
Summary of Consolidated Statements of Cash Flows (unaudited)(In Thousands)
Six Months Ended June 30,
2023
2022
Net cash provided by operating activities
$
227,964
$
183,994
Investing activities
Purchases of property and equipment
(53,053
)
(69,004
)
Proceeds from sale of property and equipment
2,034
654
Purchases of real property
(36,981
)
(28,033
)
Proceeds from the sale of real property
35,603
6,809
Purchases of businesses, net of cash acquired
(74,414
)
(38,188
)
Purchases of and loans to other investments
(3,444
)
(3,000
)
Purchases of intangible assets
(1,652
)
(743
)
Net cash used in investing activities
(131,907
)
(131,505
)
Financing activities
Proceeds from long-term debt
59,227
—
Payments on long-term debt
(22,776
)
(7,913
)
Net (payments) proceeds on notes payable – floor plan, net
(131,462
)
40,372
Proceeds from landlord funded construction on finance leases
—
6,028
Payments on finance leases
(2,847
)
(3,042
)
Proceeds from sale-leaseback arrangement
—
27,951
Payments on sale-leaseback arrangement
(92
)
(42
)
Payment of debt issuance costs
(858
)
—
Dividends on Class A common stock
(55,610
)
(52,538
)
Proceeds from exercise of stock options
143
272
RSU shares withheld for tax
(625
)
(1,517
)
Repurchases of Class A common stock to treasury stock
—
(79,757
)
Distributions to holders of LLC common units
(16,830
)
(115,678
)
Net cash used in financing activities
(171,730
)
(185,864
)
Decrease in cash and cash equivalents
(75,673
)
(133,375
)
Cash and cash equivalents at beginning of the period
130,131
267,332
Cash and cash equivalents at end of the period
$
54,458
$
133,957
Comparison of Certain Trends to Pre-COVID-19 Pandemic Periods
Beginning in the first quarter of 2021 and continuing through the first quarter of 2023, the Company experienced sequential decreases in new vehicle gross margin, primarily due to the higher cost of new vehicles resulting from the lower industry supply of travel trailers and motorhomes for much of 2021. However, second quarter 2023 new vehicle gross margins were slightly higher than a similar range that the Company experienced in the second quarter pre-COVID-19 pandemic periods of 2016 to 2019, which we believe are more typical demand environments than during the COVID-19 pandemic.
Additionally, the percentage of total unit sales relating to used vehicles was significantly higher in the second quarter of 2023 compared to the pre-COVID-19 pandemic periods of 2016 to 2019. The Company is continuing to execute on its used vehicle strategy, which differentiates it from the competition with proprietary tools, such as the RV Valuator, focus on the development and retention of its service technician team, and investment in its service bay infrastructure.
The following table presents vehicle gross margin and unit sales mix for the three months ended June 30, 2023 and pre-COVID-19 pandemic periods for the three months ended June 30, 2019, 2018, 2017, and 2016 (unaudited):
Three Months Ended June 30,
2023
2019(1)
2018(1)
2017(1)
2016(1)
Gross margin:
New vehicles
15.4%
12.5%
13.6%
15.1%
14.9%
Used vehicles
22.9%
21.6%
22.9%
25.9%
20.4%
Unit sales mix:
New vehicles
51.5%
67.9%
72.7%
70.7%
61.6%
Used vehicles
48.5%
32.1%
27.3%
29.3%
38.4%
(1)
These periods were prior to the COVID-19 pandemic.
Earnings Per Share
Basic earnings per share of Class A common stock is computed by dividing net income attributable to Camping World Holdings, Inc. by the weighted-average number of shares of Class A common stock outstanding during the period. Diluted earnings per share of Class A common stock is computed by dividing net income attributable to Camping World Holdings, Inc. by the weighted-average number of shares of Class A common stock outstanding adjusted to give effect to potentially dilutive securities.
The following table sets forth reconciliations of the numerators and denominators used to compute basic and diluted earnings per share of Class A common stock (unaudited):
Three Months Ended June 30,
Six Months Ended June 30,
(In thousands except per share amounts)
2023
2022
2023
2022
Numerator:
Net income
$
64,723
$
197,985
$
69,626
$
305,284
Less: net income attributable to non-controlling interests
(36,020
)
(113,674
)
(37,754
)
(176,243
)
Net income attributable to Camping World Holdings, Inc. — basic
$
28,703
$
84,311
31,872
129,041
Add: reallocation of net income attributable to non-controlling interests from the assumed dilutive effect of stock options and RSUs
101
405
—
738
Add: reallocation of net income attributable to non-controlling interests from the assumed redemption of common units of CWGS, LLC for Class A common stock
—
—
28,569
—
Net income attributable to Camping World Holdings, Inc. — diluted
$
28,804
$
84,716
$
60,441
$
129,779
Denominator:
Weighted-average shares of Class A common stock outstanding — basic
44,490
41,737
44,473
42,640
Dilutive options to purchase Class A common stock
29
44
22
66
Dilutive restricted stock units
285
358
243
465
Dilutive common units of CWGS, LLC that are convertible into Class A common stock
—
—
40,045
—
Weighted-average shares of Class A common stock outstanding — diluted
44,804
42,139
84,783
43,171
Earnings per share of Class A common stock — basic
$
0.65
$
2.02
$
0.72
$
3.03
Earnings per share of Class A common stock — diluted
$
0.64
$
2.01
$
0.71
$
3.01
Weighted-average anti-dilutive securities excluded from the computation of diluted earnings per share of Class A common stock:
Restricted stock units
1,099
3,256
1,608
2,448
Common units of CWGS, LLC that are convertible into Class A common stock
40,045
42,045
—
42,045
Non-GAAP Financial Measures
To supplement our condensed consolidated financial statements, which are prepared and presented in accordance with accounting principles generally accepted in the United States (“GAAP”), we use the following non-GAAP financial measures: EBITDA, Adjusted EBITDA, Adjusted EBITDA Margin, trailing twelve-month (“TTM”) Adjusted EBITDA, Adjusted Net Income Attributable to Camping World Holdings, Inc. – Basic, Adjusted Net Income Attributable to Camping World Holdings, Inc. – Diluted, Adjusted Earnings Per Share – Basic, and Adjusted Earnings Per Share – Diluted (collectively the "Non-GAAP Financial Measures"). We believe that these Non-GAAP Financial Measures, when used in conjunction with GAAP financial measures, provide useful information about operating results, enhance the overall understanding of past financial performance and future prospects, and allow for greater transparency with respect to the key metrics we use in our financial and operational decision making. These Non-GAAP Financial Measures are also frequently used by analysts, investors and other interested parties to evaluate companies in the Company’s industry and are used by management to evaluate our operating performance, to evaluate the effectiveness of strategic initiatives and for planning purposes. By providing these Non-GAAP Financial Measures, together with reconciliations, we believe we are enhancing investors’ understanding of our business and our results of operations, as well as assisting investors in evaluating how well we are executing our strategic initiatives. In addition, our Senior Secured Credit Facilities use Adjusted EBITDA, as calculated for our subsidiary CWGS Group, LLC, to measure our compliance with covenants such as the consolidated leverage ratio. The Non-GAAP Financial Measures have limitations as analytical tools, and the presentation of this financial information is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP. They should not be construed as an inference that the Company’s future results will be unaffected by any items adjusted for in these Non-GAAP Financial Measures. In evaluating these Non-GAAP Financial Measures, it is reasonable to expect that certain of these items will occur in future periods. However, we believe these adjustments are appropriate because the amounts recognized can vary significantly from period to period, do not directly relate to the ongoing operations of our business and complicate comparisons of our internal operating results and operating results of other companies over time. Each of the normal recurring adjustments and other adjustments described in this section and in the reconciliation tables below help management with a measure of our core operating performance over time by removing items that are not related to day-to-day operations.
For periods beginning after December 31, 2022, we are no longer including the other associated costs category of expenses relating to the 2019 Strategic Shift as restructuring costs for purposes of our Non-GAAP Financial Measures, since these costs are not expected to be significant in future periods.
The Non-GAAP Financial Measures that we use are not necessarily comparable to similarly titled measures used by other companies due to different methods of calculation.
EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin
We define “EBITDA” as net income before other interest expense, net (excluding floor plan interest expense), provision for income tax expense and depreciation and amortization. We define “Adjusted EBITDA” as EBITDA further adjusted for the impact of certain noncash and other items that we do not consider in our evaluation of ongoing operating performance. These items include, among other things, long-lived asset impairment, lease termination costs, gains and losses on sale or disposal of assets, net, equity-based compensation, Tax Receivable Agreement liability adjustment, restructuring costs related to the Active Sports Restructuring and the 2019 Strategic Shift, loss and impairment on investments in equity securities, and other unusual or one-time items. We define “Adjusted EBITDA Margin” as Adjusted EBITDA as a percentage of total revenue. We caution investors that amounts presented in accordance with our definitions of EBITDA, Adjusted EBITDA, and Adjusted EBITDA Margin may not be comparable to similar measures disclosed by our competitors, because not all companies and analysts calculate EBITDA, Adjusted EBITDA, and Adjusted EBITDA Margin in the same manner. We present EBITDA, Adjusted EBITDA, and Adjusted EBITDA Margin because we consider them to be important supplemental measures of our performance and believe they are frequently used by securities analysts, investors and other interested parties in the evaluation of companies in our industry. Management believes that investors’ understanding of our performance is enhanced by including these Non-GAAP Financial Measures as a reasonable basis for comparing our ongoing results of operations.
The following table reconciles EBITDA, Adjusted EBITDA, Adjusted EBITDA Margin, and TTM Adjusted EBITDA to the most directly comparable GAAP financial performance measures (unaudited):
Three Months Ended June 30,
Six Months Ended June 30,
($ in thousands)
2023
2022
2023
2022
EBITDA and Adjusted EBITDA:
Net income
$
64,723
$
197,985
$
69,626
$
305,284
Other interest expense, net
33,518
14,935
64,631
29,236
Depreciation and amortization
17,206
17,627
31,843
43,162
Income tax expense
13,581
32,375
13,854
53,411
Subtotal EBITDA
129,028
262,922
179,954
431,093
Long-lived asset impairment (a)
477
2,618
7,522
2,618
Lease termination (b)
—
944
—
1,122
(Gain) loss on sale or disposal of assets, net (c)
(145
)
381
(5,132
)
430
Equity-based compensation (d)
6,492
8,968
12,850
20,642
Restructuring costs (e)
3,259
1,854
3,259
3,877
Loss and impairment on investments in equity securities (f)
184
—
1,683
—
Adjusted EBITDA
$
139,295
$
277,687
$
200,136
$
459,782
Three Months Ended June 30,
Six Months Ended June 30,
(as percentage of total revenue)
2023
2022
2023
2022
Adjusted EBITDA margin:
Net income margin
3.4
%
9.1
%
2.1
%
8.0
%
Other interest expense, net
1.8
%
0.7
%
1.9
%
0.8
%
Depreciation and amortization
0.9
%
0.8
%
0.9
%
1.1
%
Income tax expense
0.7
%
1.5
%
0.4
%
1.4
%
Subtotal EBITDA margin
6.8
%
12.1
%
5.3
%
11.3
%
Long-lived asset impairment (a)
0.0
%
0.1
%
0.2
%
0.1
%
Lease termination (b)
—
0.0
%
—
0.0
%
(Gain) loss on sale or disposal of assets, net (c)
(0.0
%)
0.0
%
(0.2
%)
0.0
%
Equity-based compensation (d)
0.3
%
0.4
%
0.4
%
0.5
%
Restructuring costs (e)
0.2
%
0.1
%
0.1
%
0.1
%
Loss and impairment on investments in equity securities (f)
0.0
%
—
0.0
%
—
Adjusted EBITDA margin
7.3
%
12.8
%
5.9
%
12.0
%
Three Months Ended
TTM Ended
June 30,
March 31,
December 31,
September 30,
June 30,
($ in thousands)
2023
2023
2022
2022
2023
Adjusted EBITDA:
Net income
$
64,723
$
4,903
$
(57,201
)
$
102,948
$
115,373
Other interest expense, net
33,518
31,113
25,983
20,526
111,140
Depreciation and amortization
17,206
14,637
18,935
18,207
68,985
Income tax expense
13,581
273
23,276
22,397
59,527
Subtotal EBITDA
129,028
50,926
10,993
164,078
355,025
Long-lived asset impairment (a)
477
7,045
726
887
9,135
Lease termination (b)
—
—
492
—
492
(Gain) loss on sale or disposal of assets, net (c)
(145
)
(4,987
)
232
(40
)
(4,940
)
Equity-based compensation (d)
6,492
6,358
6,413
6,792
26,055
Restructuring costs (e)
3,259
—
1,478
1,671
6,408
Loss and impairment on investments in equity securities (f)
184
1,499
—
—
1,683
Tax Receivable Agreement liability adjustment (g)
—
—
(114
)
—
(114
)
Adjusted EBITDA
$
139,295
$
60,841
$
20,220
$
173,388
$
393,744
(a)
Represents long-lived asset impairment charges related to the RV and Outdoor Retail segment.
(b)
Represents the loss on the termination of operating leases, relating primarily to the 2019 Strategic Shift, resulting from lease termination fees and the derecognition of the operating lease assets and liabilities.
(c)
Represents an adjustment to eliminate the gains and losses on disposals and sales of various assets.
(d)
Represents non-cash equity-based compensation expense relating to employees, directors, and consultants of the Company.
(e)
Represents restructuring costs relating to the Active Sports Restructuring during the three and six months ended June 30, 2023 and our 2019 Strategic Shift for periods ended on or before December 31, 2022. These restructuring costs include one-time termination benefits, incremental inventory reserve charges, and other associated costs. These costs exclude lease termination costs, which are presented separately above.
(f)
Represents loss and impairment on investments in equity securities and interest income relating to any notes receivables with those investments for periods beginning after December 31, 2022. Amounts relating to periods prior to 2023 were not significant. These amounts are included in other expense, net in the condensed consolidated statements of operations. During the six months ended June 30, 2023, this amount included a $1.3 million impairment on an equity method investment.
(g)
Represents an adjustment to eliminate the gain on remeasurement of the Tax Receivable Agreement primarily due to changes in our blended statutory income tax rate.
Adjusted Net Income Attributable to Camping World Holdings, Inc. and Adjusted Earnings Per Share
We define “Adjusted Net Income Attributable to Camping World Holdings, Inc. – Basic” as net income attributable to Camping World Holdings, Inc. adjusted for the impact of certain non-cash and other items that we do not consider in our evaluation of ongoing operating performance. These items include, among other things, long-lived asset impairment, lease termination costs, gains and losses on sale or disposal of assets, net, equity-based compensation, restructuring costs related to the Active Sports Restructuring and the 2019 Strategic Shift, loss and impairment on investments in equity securities, other unusual or one-time items, the income tax expense effect of these adjustments, and the effect of net income attributable to non-controlling interests from these adjustments.
We define “Adjusted Net Income Attributable to Camping World Holdings, Inc. – Diluted” as Adjusted Net Income Attributable to Camping World Holdings, Inc. – Basic adjusted for the reallocation of net income attributable to non-controlling interests from stock options and restricted stock units, if dilutive, or the assumed redemption, if dilutive, of all outstanding common units in CWGS, LLC for shares of newly-issued Class A common stock of Camping World Holdings, Inc.
We define “Adjusted Earnings Per Share – Basic” as Adjusted Net Income Attributable to Camping World Holdings, Inc. - Basic divided by the weighted-average shares of Class A common stock outstanding. We define “Adjusted Earnings Per Share – Diluted” as Adjusted Net Income Attributable to Camping World Holdings, Inc. – Diluted divided by the weighted-average shares of Class A common stock outstanding, assuming (i) the redemption of all outstanding common units in CWGS, LLC for newly-issued shares of Class A common stock of Camping World Holdings, Inc., if dilutive, and (ii) the dilutive effect of stock options and restricted stock units, if any. We present Adjusted Net Income Attributable to Camping World Holdings, Inc. – Basic, Adjusted Net Income Attributable to Camping World Holdings, Inc. – Diluted, Adjusted Earnings Per Share – Basic, and Adjusted Earnings Per Share – Diluted because we consider them to be important supplemental measures of our performance and we believe that investors’ understanding of our performance is enhanced by including these Non-GAAP financial measures as a reasonable basis for comparing our ongoing results of operations.
The following table reconciles Adjusted Net Income Attributable to Camping World Holdings, Inc. – Basic, Adjusted Net Income Attributable to Camping World Holdings, Inc. – Diluted, Adjusted Earnings Per Share – Basic, and Adjusted Earnings Per Share – Diluted to the most directly comparable GAAP financial performance measure:
Three Months Ended
Six Months Ended
June 30,
June 30,
(In thousands except per share amounts)
2023
2022
2023
2022
Numerator:
Net income attributable to Camping World Holdings, Inc.
$
28,703
$
84,311
$
31,872
$
129,041
Adjustments related to basic calculation:
Long-lived asset impairment (a):
Gross adjustment
477
2,618
7,522
2,618
Income tax expense for above adjustment (b)
(64
)
(99
)
(1,002
)
(99
)
Lease termination (c):
Gross adjustment
—
944
—
1,122
Income tax expense for above adjustment (b)
—
—
—
—
(Gain) loss on sale or disposal of assets (d):
Gross adjustment
(145
)
381
(5,132
)
430
Income tax benefit (expense) for above adjustment (b)
19
(3
)
684
(3
)
Equity-based compensation (e):
Gross adjustment
6,492
8,968
12,850
20,642
Income tax expense for above adjustment (b)
(872
)
(951
)
(1,729
)
(2,288
)
Restructuring costs (f):
Gross adjustment
3,259
1,854
3,259
3,877
Income tax expense for above adjustment (b)
(434
)
—
(434
)
—
Loss and impairment on investments in equity securities (g):
Gross adjustment
184
—
1,683
—
Income tax expense for above adjustment (b)
(25
)
—
(225
)
—
Adjustment to net income attributable to non-controlling interests resulting from the above adjustments (h)
(4,855
)
(7,397
)
(9,543
)
(14,224
)
Adjusted net income attributable to Camping World Holdings, Inc. – basic
32,739
90,626
39,805
141,116
Adjustments related to diluted calculation:
Reallocation of net income attributable to non-controlling interests from the dilutive effect of stock options and restricted stock units (i)
151
—
—
1,110
Income tax on reallocation of net income attributable to non-controlling interests from the dilutive effect of stock options and restricted stock units (j)
(37
)
—
—
(299
)
Reallocation of net income attributable to non-controlling interests from the dilutive redemption of common units in CWGS, LLC (i)
—
121,071
47,298
—
Income tax on reallocation of net income attributable to non-controlling interests from the dilutive redemption of common units in CWGS, LLC (j)
—
(29,735
)
(11,586
)
—
Assumed income tax expense of combining C-corporations with full or partial valuation allowances with the income of other consolidated entities after the dilutive redemption of common units in CWGS, LLC (k)
—
(511
)
—
—
Adjusted net income attributable to Camping World Holdings, Inc. – diluted
$
32,853
$
181,451
$
75,517
$
141,927
Denominator:
Weighted-average Class A common shares outstanding – basic
44,490
41,737
44,473
42,640
Adjustments related to diluted calculation:
Dilutive redemption of common units in CWGS, LLC for shares of Class A common stock (l)
—
42,045
40,045
—
Dilutive options to purchase Class A common stock (l)
29
44
22
66
Dilutive restricted stock units (l)
285
358
243
465
Adjusted weighted average Class A common shares outstanding – diluted
44,804
84,184
84,783
43,171
Adjusted earnings per share - basic
$
0.74
$
2.17
$
0.90
$
3.31
Adjusted earnings per share - diluted
$
0.73
$
2.16
$
0.89
$
3.29
Anti-dilutive amounts (m):
Numerator:
Reallocation of net income attributable to non-controlling interests from the anti-dilutive redemption of common units in CWGS, LLC (i)
$
40,724
$
—
$
—
$
189,357
Income tax on reallocation of net income attributable to non-controlling interests from the anti-dilutive redemption of common units in CWGS, LLC (j)
$
(9,934
)
$
—
$
—
$
(49,986
)
Assumed income tax benefit of combining C-corporations with full or partial valuation allowances with the income of other consolidated entities after the anti-dilutive redemption of common units in CWGS, LLC (k)
$
—
$
—
$
—
$
5,837
Denominator:
Anti-dilutive redemption of common units in CWGS, LLC for shares of Class A common stock (l)
40,045
—
—
42,045
Reconciliation of per share amounts:
Earnings per share of Class A common stock — basic
$
0.65
$
2.02
$
0.72
$
3.03
Non-GAAP Adjustments (n)
0.09
0.15
0.18
0.28
Adjusted earnings per share - basic
$
0.74
$
2.17
$
0.90
$
3.31
Earnings per share of Class A common stock — diluted
$
0.64
$
2.01
$
0.71
$
3.01
Non-GAAP Adjustments (n)
0.09
0.15
0.18
0.28
Adjusted earnings per share - diluted
$
0.73
$
2.16
$
0.89
$
3.29
(a)
Represents long-lived asset impairment charges related to the RV and Outdoor Retail segment.
(b)
Represents the current and deferred income tax expense or benefit effect of the above adjustments. For periods that ended on or before December 31, 2022, many of these adjustments were related to entities with full valuation allowances for which no tax benefit could be recognized. This assumption uses an effective tax rate of 25.3% and 25.4% for the adjustments for the 2023 and 2022 periods, respectively, which represents the estimated tax rate that would apply had the above adjustments been included in the determination of our non-GAAP metric.
(c)
Represents the loss on termination of operating leases, relating primarily to the 2019 Strategic Shift, resulting from the lease termination fees and the derecognition of the operating lease assets and liabilities.
(d)
Represents an adjustment to eliminate the gains and losses on disposals and sales of various assets.
(e)
Represents non-cash equity-based compensation expense relating to employees, directors, and consultants of the Company.
(f)
Represents restructuring costs relating to the Active Sports Restructuring during the three and six months ended June 30, 2023 and the 2019 Strategic Shift for periods that ended on or before December 31, 2022. These restructuring costs include one-time termination benefits, incremental inventory reserve charges, and other associated costs. These costs exclude lease termination costs, which are presented separately above.
(g)
Represents loss and impairment on investments in equity securities and interest income relating to any notes receivables with those investments for periods beginning after December 31, 2022. Amounts relating to periods prior to 2023 were not significant. These amounts are included in other expense, net in the condensed consolidated statements of operations. During the six months ended June 30, 2023, this amount included a $1.3 million impairment on an equity method investment.
(h)
Represents the adjustment to net income attributable to non-controlling interests resulting from the above adjustments that impact the net income of CWGS, LLC. This adjustment uses the non-controlling interest’s weighted average ownership of CWGS, LLC of 47.4% and 50.2% for the three months ended June 30, 2023 and 2022, respectively, and 47.4% and 49.6% for the six months ended June 30, 2023 and 2022, respectively.
(i)
Represents the reallocation of net income attributable to non-controlling interests from the impact of the assumed change in ownership of CWGS, LLC from stock options, restricted stock units, and/or common units of CWGS, LLC.
(j)
Represents the income tax expense effect of the above adjustment for reallocation of net income attributable to non-controlling interests. This assumption uses an effective tax rate of 25.3% and 25.4% for the adjustments for 2023 and 2022 periods, respectively.
(k)
As a result of the LLC Conversion, this adjustment only relates to periods ended on or before December 31, 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.
(l)
Represents the impact to the denominator for stock options, restricted stock units, and/or common units of CWGS, LLC.
(m)
The below amounts have not been considered in our adjusted earnings per share – diluted amounts as the effect of these items are anti-dilutive.
(n)
Represents the per share impact of the Non-GAAP adjustments to net income detailed above (see (a) through (g) above).
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 (m) above).
View source version on businesswire.com: https://www.businesswire.com/news/home/20230801204066/en/
Investors: Brett Andress InvestorRelations@campingworld.com Media Outlets: PR-CWGS@CampingWorld.com
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