Camping World Holdings, Inc. Reports Second Quarter 2020 Results

August 5, 2020

LINCOLNSHIRE, IL–(BUSINESS WIRE)–Camping World Holdings, Inc. (NYSE: CWH) (the “Company”), America’s largest retailer of recreational vehicles (“RVs”) and related services and products, today reported results for the second quarter ended June 30, 2020.

Marcus Lemonis, Chairman and CEO of Camping World Holdings, Inc. stated, “I am extremely proud of the way our team has evolved their processes to changing business conditions. Over the past 24 months, we have made significant investments and enhancements in our digital capabilities, which has allowed us to quickly pivot and handle the surge in web traffic, call center volume and lead volume that we have seen since mid-April for our products and services. Through our enhanced platform, we have been successful in engaging new and existing customers in all areas of our business, including customer service, tech support, RV unit selection and demonstration, RV service assistance, retail product selection and installation, and the sale of Good Sam protection plans and services such as roadside assistance, extended warranties, insurance and travel assistance. In addition, our team has done an amazing job at managing our supply chain and replenishing inventory levels in key products and categories. As a result, we are very pleased with our year-to-date and quarterly results, and the prospects for the future.”

Second quarter operating highlights and year-over-year comparisons:

Revenue increased 9.0%, or $132.4 million, to $1.607 billion;
Gross profit increased 19.2% to $488.6 million and gross margin increased 260 basis points to 30.4%;
Selling, general and administrative expenses decreased 10.5% to $271.6 million and selling, general and administrative expenses as a percentage of gross profit were 56% for the second quarter and 68% for the six-month period ended June 30, 2020;
Net income increased 210.2% to $163.2 million and net income margin was 10.2% for the second quarter and 5.7% for the six-month period ended June 30, 2020;
Adjusted EBITDA⁽¹⁾ increased 122.5% to $220.7 million and adjusted EBITDA margin was 13.7% for the second quarter and 9.7% for the six-month period ended June 30, 2020; and
Cash and cash equivalents, maintained in our primary cash accounts, was $227.9 million on June 30, 2020 and we also maintained an additional $216.9 million of cash in our floorplan interest offset account on June 30, 2020.

________________
⁽¹⁾		Adjusted EBITDA is a non-GAAP measure. For a reconciliation of this non-GAAP measure to the most directly comparable GAAP measure, 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 2020 financial results is scheduled for today, August 5, 2020, at 4:00 p.m. Central Time. Investors and analysts can participate on the conference call by dialing (800) 289-0438 or (323) 794-2423 and using conference ID# 2353595. 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. In addition, a live stream of the Company’s second quarter conference call will be broadcast by Marcus Lemonis on Facebook and Twitter using Mr. Lemonis’ Facebook and Twitter accounts and their respective Live streaming features. Mr. Lemonis also uses his Facebook and Twitter accounts as a means for personal communications and observations.

Presentation

This press release presents historical results for the periods presented of 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. Despite its position as sole managing member of CWGS, LLC, the Company has a minority economic interest in CWGS, LLC. As of June 30, 2020, the Company owned 42.3% of CWGS, LLC. Accordingly, the Company consolidates the financial results of CWGS, LLC and reports a non-controlling interest in its consolidated financial statements. Unless otherwise indicated, all financial comparisons in this press release compare our financial results of the second quarter ended June 30, 2020 to our financial results from the second quarter ended June 30, 2019.

About Camping World Holdings, Inc.

Camping World Holdings, Inc. (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 stockholders 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.

For more information, please 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 our business plans and goals, including the impact of COVID-19 on our business, financial results and financial condition, demand for our products, our liquidity and working capital, and our beliefs regarding our competitive position and prospects for the future. 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: risks related to the COVID-19 pandemic and its impact on our business, financial results and financial condition; our ability to execute and achieve the expected benefits of our 2019 Strategic Shift; the availability of financing to us and our customers; fuel shortages or high prices for fuel; the success of our manufacturers; general economic conditions in our markets; changes in consumer preferences; competition in our industry; risks related to acquisitions and expansion into new markets; our failure to maintain the strength and value of our brands; our ability to manage our inventory; fluctuations in our same store revenue; 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 four 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; our ability to retain senior executives and attract and retain other qualified employees; risks associated with leasing substantial amounts of space; regulatory risks; data privacy and cybersecurity risks; risks related to our intellectual property; the impact of ongoing or future lawsuits against us and certain of our officers and directors; and risks related to our organizational structure.

These and other important factors discussed under the caption “Risk Factors” in our Annual Report on Form 10-K filed for the year ended December 31, 2019, as updated in our Quarterly Report on Form 10-Q for the quarter ended June 30, 2020, 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.


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

	Three Months Ended June 30,						Six Months Ended June 30,
	2020			2019			2020			2019
Revenue:
Good Sam Services and Plans	$	44,519		$	44,694		$	91,727		$	91,660
RV and Outdoor Retail
New vehicles		898,175			778,870			1,395,492			1,308,447
Used vehicles		274,910			245,749			481,575			425,757
Products, service and other		231,172			264,426			403,795			469,302
Finance and insurance, net		147,318			128,225			239,774			220,116
Good Sam Club		10,651			12,383			21,655			23,834
Subtotal		1,562,226			1,429,653			2,542,291			2,447,456
Total revenue		1,606,745			1,474,347			2,634,018			2,539,116

Costs applicable to revenue (exclusive of depreciation and amortization shown separately below):
Good Sam Services and Plans		15,234			18,746			37,093			39,477
RV and Outdoor Retail
New vehicles		752,570			681,399			1,179,012			1,144,443
Used vehicles		208,829			192,681			372,622			335,527
Products, service and other		139,341			168,607			249,610			304,711
Good Sam Club		2,133			2,924			4,380			6,641
Subtotal		1,102,873			1,045,611			1,805,624			1,791,322
Total costs applicable to revenue		1,118,107			1,064,357			1,842,717			1,830,799

Gross profit:
Good Sam Services and Plans		29,285			25,948			54,634			52,183
RV and Outdoor Retail
New vehicles		145,605			97,471			216,480			164,004
Used vehicles		66,081			53,068			108,953			90,230
Products, service and other		91,831			95,819			154,185			164,591
Finance and insurance, net		147,318			128,225			239,774			220,116
Good Sam Club		8,518			9,459			17,275			17,193
Subtotal		459,353			384,042			736,667			656,134
Total gross profit		488,638			409,990			791,301			708,317

Operating expenses:
Selling, general, and administrative		271,591			303,366			539,247			571,431
Depreciation and amortization		12,567			13,946			26,645			27,540
Long-lived asset impairment		–			–			6,569			–
Lease termination		868			–			1,452			–
Loss on disposal of assets		272			2,374			783			2,160
Total operating expenses		285,298			319,686			574,696			601,131

Income from operations		203,340			90,304			216,605			107,186

Other income (expense):
Floor plan interest expense		(5,098	)		(11,269	)		(13,702	)		(22,879	)
Other interest expense, net		(14,547	)		(18,211	)		(29,205	)		(35,854	)
Tax Receivable Agreement liability adjustment		–			–			–			8,477
Total other income (expense)		(19,645	)		(29,480	)		(42,907	)		(50,256	)

Income before income taxes		183,695			60,824			173,698			56,930
Income tax expense		(20,473	)		(8,201	)		(24,605	)		(31,114	)
Net income		163,222			52,623			149,093			25,816
Less: net income attributable to non-controlling interests		(105,145	)		(34,606	)		(99,176	)		(27,194	)
Net income attributable to Camping World Holdings, Inc.	$	58,077		$	18,017		$	49,917		$	(1,378	)

Earnings per share of Class A common stock:
Basic	$	1.54		$	0.48		$	1.33		$	(0.04	)
Diluted	$	1.54		$	0.46		$	1.32		$	(0.04	)
Weighted average shares of Class A common stock outstanding:
Basic		37,635			37,239			37,585			37,217
Diluted		89,689			88,925			89,578			37,217


Camping World Holdings, Inc.
Supplemental Data	Three Months Ended June 30,						Increase				Percent
	2020			2019			(decrease)				Change
Unit sales
New vehicles		27,168			22,906			4,262			18.6	%
Used vehicles		11,618			10,809			809			7.5	%
Total		38,786			33,715			5,071			15.0	%
Average selling price
New vehicles	$	33,060		$	34,003		$	(943	)		(2.8	%)
Used vehicles	$	23,662		$	22,736		$	927			4.1	%

Same store unit sales
New vehicles		24,628			21,413			3,215			15.0	%
Used vehicles		10,610			10,365			245			2.4	%
Total		35,238			31,778			3,460			10.9	%

Same store revenue ($ in 000’s)
New vehicles	$	818,865		$	736,661		$	82,204			11.2	%
Used vehicles		255,201			238,822			16,379			6.9	%
Products, service and other		151,406			147,713			3,693			2.5	%
Finance and insurance, net		135,844			122,264			13,580			11.1	%
Total	$	1,361,316		$	1,245,460		$	115,856			9.3	%

Average gross profit per unit
New vehicles	$	5,359		$	4,255		$	1,104			25.9	%
Used vehicle	$	5,688		$	4,910		$	778			15.9	%
Finance and insurance, net per vehicle unit	$	3,798		$	3,803		$	(5	)		(0.1	%)
Total vehicle front-end yield⁽¹⁾	$	9,256		$	8,268		$	988			11.9	%

Gross margin
Good Sam Services and Plans		65.8	%		58.1	%		772		bps
New vehicles		16.2	%		12.5	%		370		bps
Used vehicles		24.0	%		21.6	%		244		bps
Products, service and other		39.7	%		36.2	%		349		bps
Finance and insurance, net		100.0	%		100.0	%		unch.		bps
Good Sam Club		80.0	%		76.4	%		359		bps
Subtotal RV and Outdoor Retail		29.4	%		26.9	%		254		bps
Total gross margin		30.4	%		27.8	%		260		bps

Inventories ($ in 000’s)
New vehicles	$	711,164		$	1,000,977		$	(289,813	)		(29.0	%)
Used vehicles		126,687			121,744			4,943			4.1	%
Products, parts, accessories and misc.		214,357			424,756			(210,399	)		(49.5	%)
Total RV and Outdoor Retail inventories	$	1,052,208		$	1,547,477		$	(495,269	)		(32.0	%)

Vehicle inventory per location ($ in 000’s)
New vehicle inventory per dealer location	$	4,679		$	6,629		$	(1,950	)		(29.4	%)
Used vehicle inventory per dealer location	$	833		$	806		$	27			3.4	%

Vehicle inventory turnover⁽²⁾
New vehicle inventory turnover		2.3			2.1			0.2			9.6	%
Used vehicle inventory turnover		4.7			5.0			(0.3	)		(5.2	%)

Retail locations
RV dealerships		152			151			1			0.7	%
RV service & retail centers		10			14			(4	)		(28.6	%)
Subtotal		162			165			(3	)		(1.8	%)
Other retail stores		2			62			(60	)		(96.8	%)
Total		164			227			(63	)		(27.8	%)

Other data
Active customers⁽³⁾		5,220,367			5,251,874			(31,507	)		(0.6	%)
Good Sam Club members		2,067,253			2,177,743			(110,490	)		(5.1	%)
Finance and insurance gross profit as a % of total vehicle revenue		12.6	%		12.5	%		4			n/a
Same store locations		143			n/a			n/a			n/a

⁽¹⁾		Front end yield is calculated as gross profit from new vehicles, used vehicles and finance and insurance (net), divided by combined new and used retail units sold.
⁽²⁾		Inventory turnover calculated as vehicle costs applicable to revenue divided by average vehicle inventory.
⁽³⁾		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.


Camping World Holdings, Inc.
Supplemental Data	Six Months Ended June 30,						Increase				Percent
	2020			2019			(decrease)				Change
Unit sales
New vehicles		41,376			37,922			3,454			9.1	%
Used vehicles		20,300			18,986			1,314			6.9	%
Total		61,676			56,908			4,768			8.4	%
Average selling price
New vehicles	$	33,727		$	34,504		$	(777	)		(2.3	%)
Used vehicles	$	23,723		$	22,425		$	1,298			5.8	%

Same store unit sales
New vehicles		37,382			35,681			1,701			4.8	%
Used vehicles		18,521			18,303			218			1.2	%
Total		55,903			53,984			1,919			3.6	%

Same store revenue ($ in 000’s)
New vehicles	$	1,269,206		$	1,245,892		$	23,314			1.9	%
Used vehicles		447,863			414,978			32,885			7.9	%
Products, service and other		263,955			261,088			2,867			1.1	%
Finance and insurance, net		220,224			211,166			9,058			4.3	%
Total	$	2,201,248		$	2,133,124		$	68,124			3.2	%

Average gross profit per unit
New vehicles	$	5,232		$	4,325		$	907			21.0	%
Used vehicle	$	5,367		$	4,752		$	615			12.9	%
Finance and insurance, net per vehicle unit	$	3,888		$	3,868		$	20			0.5	%
Total vehicle front-end yield⁽¹⁾	$	9,164		$	8,335		$	829			9.9	%

Gross margin
Good Sam Services and Plans		59.6	%		56.9	%		263		bps
New vehicles		15.5	%		12.5	%		298		bps
Used vehicles		22.6	%		21.2	%		143		bps
Products, service and other		38.2	%		35.1	%		311		bps
Finance and insurance, net		100.0	%		100.0	%		unch.		bps
Good Sam Club		79.8	%		72.1	%		764		bps
Subtotal RV and Outdoor Retail		29.0	%		26.8	%		217		bps
Total gross margin		30.0	%		27.9	%		215		bps

Inventories ($ in 000’s)
New vehicles	$	711,164		$	1,000,977		$	(289,813	)		(29.0	%)
Used vehicles		126,687			121,744			4,943			4.1	%
Products, parts, accessories and misc.		214,357			424,756			(210,399	)		(49.5	%)
Total RV and Outdoor Retail inventories	$	1,052,208		$	1,547,477		$	(495,269	)		(32.0	%)

Vehicle inventory per location ($ in 000’s)
New vehicle inventory per dealer location	$	4,679		$	6,629		$	(1,950	)		(29.4	%)
Used vehicle inventory per dealer location	$	833		$	806		$	27			3.4	%

Vehicle inventory turnover⁽²⁾
New vehicle inventory turnover		2.3			2.1			0.2			9.6	%
Used vehicle inventory turnover		4.7			5.0			(0.3	)		(5.2	%)

Retail locations
RV dealerships		152			151			1			0.7	%
RV service & retail centers		10			14			(4	)		(28.6	%)
Subtotal		162			165			(3	)		(1.8	%)
Other retail stores		2			62			(60	)		(96.8	%)
Total		164			227			(63	)		(27.8	%)

Other data
Active customers⁽³⁾		5,220,367			5,251,874			(31,507	)		(0.6	%)
Good Sam Club members		2,067,253			2,177,743			(110,490	)		(5.1	%)
Finance and insurance gross profit as a % of total vehicle revenue		12.8	%		12.7	%		8		bps	n/a
Same store locations		143			n/a			n/a			n/a

⁽¹⁾		Front end yield is calculated as gross profit from new vehicles, used vehicles and finance and insurance (net), divided by combined new and used retail units sold.
⁽²⁾		Inventory turnover calculated as vehicle costs applicable to revenue divided by average vehicle inventory.
⁽³⁾		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.


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

	June 30,			December 31,
	2020			2019
Assets
Current assets:
Cash and cash equivalents	$	227,902		$	147,521
Contracts in transit		171,437			44,947
Accounts receivable, net		84,493			81,847
Inventories		1,052,222			1,358,539
Prepaid expenses and other assets		55,974			57,827
Total current assets		1,592,028			1,690,681
Property and equipment, net		325,053			314,374
Operating lease assets		789,539			807,537
Deferred tax asset, net		126,097			129,710
Intangibles assets, net		28,101			29,707
Goodwill		387,049			386,941
Other assets		16,684			17,290
Total assets	$	3,264,551		$	3,376,240
Liabilities and stockholders’ deficit
Current liabilities:
Accounts payable	$	232,989		$	106,959
Accrued liabilities		184,751			130,316
Deferred revenues		84,286			87,093
Current portion of operating lease liabilities		60,315			58,613
Current portion of Tax Receivable Agreement liability		6,909			6,563
Current portion of long-term debt		15,828			14,085
Notes payable – floor plan, net		470,871			848,027
Other current liabilities		61,391			44,298
Total current liabilities		1,117,340			1,295,954
Operating lease obligations, net of current portion		823,929			843,312
Tax Receivable Agreement liability, net of current portion		101,702			108,228
Revolving line of credit		20,885			40,885
Long-term debt, net of current portion		1,165,227			1,153,551
Deferred revenues		61,928			58,079
Other long-term liabilities		43,479			35,467
Total liabilities		3,334,490			3,535,476
Commitments and contingencies
Stockholders’ deficit:
Preferred stock, par value $0.01 per share – 20,000,000 shares authorized; none issued and outstanding as of June 30, 2020 and December 31, 2019		–			–
Class A common stock, par value $0.01 per share – 250,000,000 shares authorized; 38,018,386 issued and 37,773,109 outstanding as of June 30, 2020 and 37,701,584 issued and 37,488,989 outstanding as of December 31, 2019		378			375
Class B common stock, par value $0.0001 per share – 75,000,000 shares authorized; 69,066,445 issued; and 50,706,629 outstanding as of June 30, 2020 and December 31, 2019		5			5
Class C common stock, par value $0.0001 per share – one share authorized, issued and outstanding as of June 30, 2020 and December 31, 2019		–			–
Additional paid-in capital		52,747			50,152
Retained deficit		(44,754	)		(83,134	)
Total stockholders’ equity (deficit) attributable to Camping World Holdings, Inc.		8,376			(32,602	)
Non-controlling interests		(78,315	)		(126,634	)
Total stockholders’ deficit		(69,939	)		(159,236	)
Total liabilities and stockholders’ deficit	$	3,264,551		$	3,376,240

Earnings Per Share

Basic earnings per share of Class A common stock is computed by dividing net income (loss) available 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 (loss) available 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)	2020			2019			2020			2019
Numerator:
Net income	$	163,222		$	52,623		$	149,093		$	25,816
Less: net income attributable to non-controlling interests		(105,145	)		(34,606	)		(99,176	)		(27,194	)
Net income (loss) attributable to Camping World Holdings, Inc. — basic and diluted	$	58,077		$	18,017		$	49,917		$	(1,378	)
Add: reallocation of net income attributable to non-controlling interests from the assumed exchange of common units of CWGS, LLC for Class A common stock		79,603			22,565			68,383			—
Net income (loss) attributable to Camping World Holdings, Inc. – diluted	$	137,680		$	40,582		$	118,300		$	(1,378	)
Denominator:
Weighted-average shares of Class A common stock outstanding — basic and diluted		37,635			37,239			37,585			37,217
Dilutive restricted stock units		434			17			359			—
Dilutive common units of CWGS, LLC that are convertible into Class A common stock		51,620			51,669			51,634			—
Weighted-average shares of Class A common stock outstanding — diluted		89,689			88,925			89,578			37,217

Earnings (loss) per share of Class A common stock — basic	$	1.54		$	0.48		$	1.33		$	(0.04	)
Earnings (loss) per share of Class A common stock — diluted	$	1.54		$	0.46		$	1.32		$	(0.04	)

Weighted-average anti-dilutive securities excluded from the computation of diluted earnings per share of Class A common stock:
Stock options to purchase Class A common stock		715			804			726			831
Restricted stock units		620			1,351			658			1,427
Common units of CWGS, LLC that are convertible into Class A common stock		—			—			—			51,671

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, Adjusted Net Income Attributable to Camping World Holdings, Inc.

Contacts

Investors:

John Rouleau

John.Rouleau@CampingWorld.com

Media Outlets:

Karen Porter

PR-CWGS@CampingWorld.com

Read full story here