Camping World Holdings, Inc. (NYSE: CWH) (the “Company” or
“CWH”), America’s Recreation Dealer, today reported results for the
third quarter ended September 30, 2023.
Marcus Lemonis, Chairman and Chief Executive Officer of Camping
World Holdings, Inc. stated, “We are laser focused on the final
stages of cleansing our inventory going into 2024. These actions
have come with near-term gross margin compression, but we believe
now is the moment to put the finishing touches on our
industry-leading inventory position and prepare the business for
the next up-cycle. In 2024, we expect total company revenue, same
store unit sales, total gross margin, and earnings to increase year
over year.”
Third Quarter-over-Quarter Operating Highlights
- Revenue was $1.7 billion for the third quarter, a decrease of
$126.1 million, or 6.8%.
- Used vehicle revenue was a record $590.2 million for the third
quarter, an increase of $64.2 million, or 12.2%, and used vehicle
unit sales were a record 17,125 units, an increase of 2,665 units,
or 18.4%.
- New vehicle revenue was $679.2 million for the third quarter, a
decline of $154.9 million, or 18.6%, and new vehicle unit sales
were 15,205 units, a decrease of 2,411 units, or 13.7%.
- Average selling price of new and used vehicles declined 5.7%
and 5.2%, respectively, during the third quarter. As the
procurement prices of model year 2024 new vehicles declined
compared to model years 2022 and 2023, the Company actively
discounted certain used vehicles during the third quarter to reduce
inventory levels of aged used vehicles.
- Products, service and other revenue was $235.6 million for the
third quarter, a decline of $33.3 million, or 12.4%. The decrease
was driven largely by lower demand and lower stocking levels of
lifestyle, activities, design, and home products, as well as
declines in our direct to manufacturer RV furniture revenues due to
RV manufacturer production slowdowns and discounting related to our
Active Sports Restructuring.
- Same store used vehicle unit sales increased 10.9% for the
third quarter, and same store new vehicle unit sales decreased
21.5%.
- Gross profit was $523.1 million, a decrease of $70.6 million,
or 11.9%. Total gross margin was 30.2%, a decrease of 175 basis
points. The decrease in gross profit and gross margin was driven
largely by the decrease in average selling price of new and used
vehicles discussed above. The decrease in finance and insurance,
net gross profit was partially offset by improved retention on
finance and insurance products, which drove favorable adjustments
to reserves in the third quarter of 2023. Good Sam Services and
Plans gross profit and gross margin was favorably impacted by
finalizing contract negotiations to exit an arrangement with a
service partner in the quarter.
- Selling, general and administrative expenses were $415.3
million, a decrease of $3.8 million, or 0.9%, primarily as a result
of our efforts to reduce expenses. In the quarter, the Company
closed two underperforming retail stores and one distribution
center, whose leases were successfully terminated. These cost
reductions were partially offset by additional employee
compensation and facility costs resulting from the 8.3% increase in
store location count to 209 at September 30, 2023 from 193 at
September 30, 2022.
- Subsequent to September 30, 2023, the Company made the decision
to consolidate or close seven underperforming dealership locations
in order to redeploy working capital to higher returning
investments.
- Floor plan interest expense was $19.8 million, an increase of
$10.3 million, or 108.9%, and other interest expense, net was $35.2
million, an increase of $14.7 million, or 71.7%. These increases
were primarily as a result of the rise in interest rates.
- Net income was $30.9 million, a decrease of $72.1 million, or
70.0%, driven primarily by the pretax $71.7 million decrease in new
and used vehicle gross profit, the $14.7 million increase in other
interest expense, net, and the $10.3 million increase in floor plan
interest, which was partially offset by the $3.8 million decrease
in selling, general, and administrative expenses and lower income
tax expense from net reductions of pretax income.
- Diluted earnings per share of Class A common stock was $0.32 in
2023 versus diluted earnings per share of Class A common stock of
$0.97 in 2022. Adjusted earnings per share - diluted(1) of Class A
common stock was $0.39 in 2023 versus adjusted earnings per share –
diluted(1) of Class A common stock of $1.07 in 2022.
- Adjusted EBITDA(1) was $95.0 million, a decrease of $78.4
million, or 45.2%, driven primarily by the $71.7 million decrease
in new and used vehicle gross profit and the $10.3 million increase
in floor plan interest, which was partially offset by the $3.8
million decrease in selling, general, and administrative
expenses(2).
________________
(1)
Adjusted earnings per share – diluted and
adjusted EBITDA are non-GAAP measures. For a reconciliation of
these non-GAAP measures to the most directly comparable GAAP
measures, see the “Non-GAAP Financial Measures” section later in
this press release.
(2)
The $3.8 million decrease in selling,
general, and administrative expenses includes a $1.3 million
decrease in equity-based compensation. Equity-based compensation is
excluded from the calculation of Adjusted EBITDA (see the “Non-GAAP
Financial Measures” section later in this press release).
Earnings Conference Call and Webcast Information
A conference call to discuss the Company’s third quarter 2023
financial results is scheduled for November 2, 2023, at 7:30 am
Central Time. Investors and analysts can participate on the
conference call by dialing 1-877-407-9039 (international callers
please dial 1-201-689-8470) and using conference ID# 13741006.
Interested parties can also listen to a live webcast or replay of
the conference call by logging on to the Investor Relations section
on the Company’s website at http://investor.campingworld.com. The
replay of the conference call webcast will be available on the
investor relations website for approximately 90 days.
Presentation
This press release presents historical results for the periods
presented for the Company and its subsidiaries, which are presented
in accordance with accounting principles generally accepted in the
United States (“GAAP”), unless noted as a non-GAAP financial
measure. The Company’s initial public offering (“IPO”) and related
reorganization transactions (“Reorganization Transactions”) that
occurred on October 6, 2016 resulted in the Company as the sole
managing member of CWGS Enterprises, LLC (“CWGS, LLC”), with sole
voting power in and control of the management of CWGS, LLC. The
Company’s position as sole managing member of CWGS, LLC includes
periods where the Company has held a minority economic interest in
CWGS, LLC. As of September 30, 2023, the Company owned 52.8% of
CWGS, LLC. Accordingly, the Company consolidates the financial
results of CWGS, LLC and reports a non-controlling interest in its
consolidated financial statements.
About Camping World Holdings, Inc.
Camping World Holdings, Inc., headquartered in Lincolnshire, IL,
(together with its subsidiaries) is America’s largest retailer of
RVs and related products and services. Our vision is to build a
long-term legacy business that makes RVing fun and easy, and our
Camping World and Good Sam brands have been serving RV consumers
since 1966. We strive to build long-term value for our customers,
employees, and shareholders by combining a unique and comprehensive
assortment of RV products and services with a national network of
RV dealerships, service centers and customer support centers along
with the industry’s most extensive online presence and a highly
trained and knowledgeable team of associates serving our customers,
the RV lifestyle, and the communities in which we operate. We also
believe that our Good Sam organization and family of programs and
services uniquely enable us to connect with our customers as
stewards of the RV enthusiast community and the RV lifestyle. With
RV sales and service locations in 43 states, Camping World has
grown to become the prime destination for everything RV. For more
information, visit www.CampingWorld.com.
Forward-Looking Statements
This press release contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of
1995. All statements contained in this press release that do not
relate to matters of historical fact should be considered
forward-looking statements, including, without limitation,
statements about cleansing our inventory, macroeconomic and
industry trends, dividend payments and capital allocation, our
business plans and goals, the Company’s acquisition pipeline and
plans, and future financial results, including anticipated gross
margin compression and outlook for 2024. These forward-looking
statements are based on management’s current expectations.
These statements are neither promises nor guarantees, but
involve known and unknown risks, uncertainties and other important
factors that may cause our actual results, performance or
achievements to be materially different from any future results,
performance or achievements expressed or implied by the
forward-looking statements, including, but not limited to, the
following: general economic conditions, including inflation and
interest rates; the availability of financing to us and our
customers; fuel shortages or high prices for fuel; the success of
our manufacturers; general economic conditions in our markets;
changes in consumer preferences; competition in our industry; risks
related to acquisitions, new store openings and expansion into new
markets; our failure to maintain the strength and value of our
brands; our ability to manage our inventory; fluctuations in our
same store sales; the cyclical and seasonal nature of our business;
risks related to the cybersecurity incident announced in February
2022; our dependence on the availability of adequate capital and
risks related to our debt; risks related to COVID-19; our ability
to execute and achieve the expected benefits of our cost cutting or
restructuring initiatives; our reliance on our fulfillment and
distribution centers; natural disasters, including epidemic
outbreaks; our dependence on our relationships with third party
suppliers and lending institutions; risks associated with selling
goods manufactured abroad; our ability to retain senior executives
and attract and retain other qualified employees; risks associated
with leasing substantial amounts of space; risks associated with
our private brand offerings; we may incur asset impairment charges
for goodwill, intangible assets or other long-lived assets; tax
risks; regulatory risks; data privacy and cybersecurity risks;
risks related to our intellectual property; the impact of ongoing
or future lawsuits against us and certain of our officers and
directors; and risks related to our organizational structure.
These and other important factors discussed under the caption
“Risk Factors” in our Annual Report on Form 10‑K filed for the year
ended December 31, 2022 and our other reports filed with the SEC
could cause actual results to differ materially from those
indicated by the forward-looking statements made in this press
release. Any such forward-looking statements represent management’s
estimates as of the date of this press release. While we may elect
to update such forward-looking statements at some point in the
future, we disclaim any obligation to do so, even if subsequent
events cause our views to change, except as required under
applicable law. These forward-looking statements should not be
relied upon as representing our views as of any date subsequent to
the date of this press release.
Future declarations of quarterly dividends are subject to the
determination and discretion of the Company’s Board of Directors
based on its consideration of various factors, including the
Company’s results of operations, financial condition, level of
indebtedness, anticipated capital requirements, contractual
restrictions, restrictions in its debt agreements, restrictions
under applicable law, receipt of excess tax distributions from CWGS
Enterprises, LLC, its business prospects and other factors that the
Company’s Board of Directors may deem relevant.
We intend to use our official Facebook, Twitter, and Instagram
accounts, each at the handle @CampingWorld, as well as the investor
page of our website, investor.campingworld.com, as a distribution
channel of material information about the Company and for complying
with our disclosure obligations under Regulation FD. The
information we post through these social media channels and on our
investor webpage may be deemed material. Accordingly, investors
should subscribe to these accounts and our investor alerts, in
addition to following our press releases, SEC filings, public
conference calls and webcasts. These social media channels may be
updated from time to time.
Camping World Holdings, Inc. and
Subsidiaries
Consolidated Statements of Operations
(unaudited)
(In Thousands Except Per Share
Amounts)
Three Months Ended
Nine Months Ended
September 30,
September 30,
2023
2022
2023
2022
Revenue:
Good Sam Services and Plans
$
49,889
$
50,352
$
147,294
$
144,504
RV and Outdoor Retail
New vehicles
679,207
834,112
2,126,862
2,746,323
Used vehicles
590,227
525,988
1,657,935
1,484,978
Products, service and other
235,609
268,940
691,030
761,914
Finance and insurance, net
163,630
165,136
460,336
513,921
Good Sam Club
11,051
11,154
33,757
35,070
Subtotal
1,679,724
1,805,330
4,969,920
5,542,206
Total revenue
1,729,613
1,855,682
5,117,214
5,686,710
Costs applicable to revenue (exclusive of
depreciation and amortization shown separately below):
Good Sam Services and Plans
10,021
18,871
43,844
54,532
RV and Outdoor Retail
New vehicles
576,480
675,119
1,811,398
2,171,660
Used vehicles
478,595
398,882
1,300,961
1,115,876
Products, service and other
139,976
167,298
422,037
467,680
Good Sam Club
1,455
1,824
3,766
6,279
Subtotal
1,196,506
1,243,123
3,538,162
3,761,495
Total costs applicable to revenue
1,206,527
1,261,994
3,582,006
3,816,027
Gross profit (exclusive of depreciation
and amortization shown separately below):
Good Sam Services and Plans
39,868
31,481
103,450
89,972
RV and Outdoor Retail:
New vehicles
102,727
158,993
315,464
574,663
Used vehicles
111,632
127,106
356,974
369,102
Products, service and other
95,633
101,642
268,993
294,234
Finance and insurance, net
163,630
165,136
460,336
513,921
Good Sam Club
9,596
9,330
29,991
28,791
Subtotal
483,218
562,207
1,431,758
1,780,711
Total gross profit
523,086
593,688
1,535,208
1,870,683
Operating expenses:
Selling, general, and administrative
415,288
419,102
1,201,901
1,245,540
Depreciation and amortization
17,619
18,207
49,462
61,369
Long-lived asset impairment
1,747
887
9,269
3,505
Lease termination
375
—
375
1,122
Loss (gain) on sale or disposal of
assets
131
(40
)
(5,001
)
390
Total operating expenses
435,160
438,156
1,256,006
1,311,926
Income from operations
87,926
155,532
279,202
558,757
Other expense:
Floor plan interest expense
(19,816
)
(9,484
)
(61,298
)
(24,483
)
Other interest expense, net
(35,242
)
(20,526
)
(99,873
)
(49,762
)
Tax Receivable Agreement liability
adjustment
1,680
—
1,680
—
Other income (expense), net
24
(177
)
(1,659
)
(472
)
Total other expense
(53,354
)
(30,187
)
(161,150
)
(74,717
)
Income before income taxes
34,572
125,345
118,052
484,040
Income tax expense
(3,679
)
(22,397
)
(17,533
)
(75,808
)
Net income
30,893
102,948
100,519
408,232
Less: net income attributable to
non-controlling interests
(14,932
)
(61,822
)
(52,686
)
(238,065
)
Net income attributable to Camping World
Holdings, Inc.
$
15,961
$
41,126
$
47,833
$
170,167
Earnings per share of Class A common
stock:
Basic
$
0.36
$
0.98
$
1.07
$
4.01
Diluted
$
0.32
$
0.97
$
1.03
$
3.99
Weighted average shares of Class A common
stock outstanding:
Basic
44,666
41,985
44,538
42,419
Diluted
85,180
42,505
84,917
42,947
Camping World Holdings, Inc. and
Subsidiaries
Supplemental Data
Three Months Ended September
30,
Increase
Percent
2023
2022
(decrease)
Change
Unit
sales
New vehicles
15,205
17,616
(2,411
)
(13.7
%)
Used vehicles
17,125
14,460
2,665
18.4
%
Total
32,330
32,076
254
0.8
%
Average selling
price
New vehicles
$
44,670
$
47,350
$
(2,680
)
(5.7
%)
Used vehicles
34,466
36,375
(1,909
)
(5.2
%)
Same store unit
sales(1)
New vehicles
13,483
17,166
(3,683
)
(21.5
%)
Used vehicles
15,599
14,072
1,527
10.9
%
Total
29,082
31,238
(2,156
)
(6.9
%)
Same store
revenue(1) ($ in 000s)
New vehicles
$
602,014
$
814,326
$
(212,312
)
(26.1
%)
Used vehicles
535,521
514,350
21,171
4.1
%
Products, service and other
180,071
207,032
(26,961
)
(13.0
%)
Finance and insurance, net
146,112
161,332
(15,220
)
(9.4
%)
Total
$
1,463,718
$
1,697,040
$
(233,322
)
(13.7
%)
Average gross profit
per unit
New vehicles
$
6,756
$
9,025
$
(2,269
)
(25.1
%)
Used vehicles
6,519
8,790
(2,271
)
(25.8
%)
Finance and insurance, net per vehicle
unit
5,061
5,148
(87
)
(1.7
%)
Total vehicle front-end yield(2)
11,692
14,068
(2,376
)
(16.9
%)
Gross
margin
Good Sam Services and Plans
79.9
%
62.5
%
1,739
bps
New vehicles
15.1
%
19.1
%
(394
)
bps
Used vehicles
18.9
%
24.2
%
(525
)
bps
Products, service and other
40.6
%
37.8
%
280
bps
Finance and insurance, net
100.0
%
100.0
%
unch.
bps
Good Sam Club
86.8
%
83.6
%
319
bps
Subtotal RV and Outdoor Retail
28.8
%
31.1
%
(237
)
bps
Total gross margin
30.2
%
32.0
%
(175
)
bps
RV and Outdoor
Retail inventories ($ in 000s)
New vehicles
$
1,131,575
$
1,180,364
$
(48,789
)
(4.1
%)
Used vehicles
534,155
425,824
108,331
25.4
%
Products, parts, accessories and misc.
202,786
293,588
(90,802
)
(30.9
%)
Total RV and Outdoor Retail
inventories
$
1,868,516
$
1,899,776
$
(31,260
)
(1.6
%)
Vehicle inventory
per location ($ in 000s)
New vehicle inventory per dealer
location
$
5,520
$
6,415
$
(895
)
(14.0
%)
Used vehicle inventory per dealer
location
2,606
2,314
291
12.6
%
Vehicle inventory
turnover(3)
New vehicle inventory turnover
1.8
2.0
(0.3
)
(12.9
%)
Used vehicle inventory turnover
3.0
3.5
(0.6
)
(16.2
%)
Retail
locations
RV dealerships
205
184
21
11.4
%
RV service & retail centers
4
8
(4
)
(50.0
%)
Subtotal
209
192
17
8.9
%
Other retail stores
—
1
(1
)
(100.0
%)
Total
209
193
16
8.3
%
Other
data
Active Customers(4)
5,111,478
5,366,558
(255,080
)
(4.8
%)
Good Sam Club members
2,051,768
2,038,826
12,942
0.6
%
Service bays (5)
2,800
2,639
161
6.1
%
Finance and insurance gross profit as a %
of total vehicle revenue
12.9
%
12.1
%
75
bps
n/a
Same store locations
175
n/a
n/a
n/a
Nine Months Ended September
30,
Increase
Percent
2023
2022
(decrease)
Change
Unit
sales
New vehicles
48,014
60,040
(12,026
)
(20.0
%)
Used vehicles
47,331
40,991
6,340
15.5
%
Total
95,345
101,031
(5,686
)
(5.6
%)
Average selling
price
New vehicles
$
44,297
$
45,742
$
(1,445
)
(3.2
%)
Used vehicles
35,029
36,227
(1,198
)
(3.3
%)
Same store unit
sales(1)
New vehicles
43,989
58,831
(14,842
)
(25.2
%)
Used vehicles
43,916
40,280
3,636
9.0
%
Total
87,905
99,111
(11,206
)
(11.3
%)
Same store
revenue(1) ($ in 000s)
New vehicles
$
1,949,145
$
2,695,945
$
(746,800
)
(27.7
%)
Used vehicles
1,533,574
1,463,333
70,241
4.8
%
Products, service and other
519,211
576,843
(57,632
)
(10.0
%)
Finance and insurance, net
422,725
505,391
(82,666
)
(16.4
%)
Total
$
4,424,655
$
5,241,512
$
(816,857
)
(15.6
%)
Average gross profit
per unit
New vehicles
$
6,570
$
9,571
$
(3,001
)
(31.4
%)
Used vehicles
7,542
9,004
(1,462
)
(16.2
%)
Finance and insurance, net per vehicle
unit
4,828
5,087
(259
)
(5.1
%)
Total vehicle front-end yield(2)
11,881
14,428
(2,547
)
(17.7
%)
Gross
margin
Good Sam Services and Plans
70.2
%
62.3
%
797
bps
New vehicles
14.8
%
20.9
%
(609
)
bps
Used vehicles
21.5
%
24.9
%
(332
)
bps
Products, service and other
38.9
%
38.6
%
31
bps
Finance and insurance, net
100.0
%
100.0
%
unch.
bps
Good Sam Club
88.8
%
82.1
%
675
bps
Subtotal RV and Outdoor Retail
28.8
%
32.1
%
(332
)
bps
Total gross margin
30.0
%
32.9
%
(289
)
bps
Other
data
Finance and insurance gross profit as a %
of total vehicle revenue
12.2
%
12.1
%
2
bps
n/a
Same store locations
175
n/a
n/a
n/a
(1)
Our same store revenue and units
calculations for a given period include only those stores that were
open both at the end of the corresponding period and at the
beginning of the preceding fiscal year.
(2)
Front end yield is calculated as gross
profit from new vehicles, used vehicles and finance and insurance
(net), divided by combined new and used vehicle unit sales.
(3)
Inventory turnover is calculated as
vehicle costs applicable to revenue over the last twelve months
divided by the average quarterly ending vehicle inventory over the
last twelve months.
(4)
An Active Customer is a customer who has
transacted with us in any of the eight most recently completed
fiscal quarters prior to the date of measurement.
(5)
A service bay is a fully-constructed bay
dedicated to service, installation, and collision offerings.
Camping World Holdings, Inc. and
Subsidiaries
Consolidated Balance Sheets
(unaudited)
(In Thousands Except Per Share
Amounts)
September 30,
December 31,
September 30,
2023
2022
2022
Assets
Current assets:
Cash and cash equivalents
$
53,318
$
130,131
$
148,235
Contracts in transit
100,831
50,349
87,487
Accounts receivable, net
135,832
112,411
117,428
Inventories
1,869,042
2,123,858
1,900,127
Prepaid expenses and other assets
38,979
66,913
46,869
Assets held for sale
4,635
—
—
Total current assets
2,202,637
2,483,662
2,300,146
Property and equipment, net
841,548
758,281
728,208
Operating lease assets
736,246
742,306
719,656
Deferred tax assets, net
142,187
143,226
178,808
Intangible assets, net
14,444
20,945
21,819
Goodwill
688,139
622,423
533,217
Other assets
32,058
29,304
29,532
Total assets
$
4,657,259
$
4,800,147
$
4,511,386
Liabilities and stockholders'
equity
Current liabilities:
Accounts payable
$
200,433
$
127,691
$
187,613
Accrued liabilities
171,956
147,833
252,644
Deferred revenues
99,813
95,695
101,917
Current portion of operating lease
liabilities
62,987
61,745
61,001
Current portion of finance lease
liabilities
5,563
10,244
10,397
Current portion of Tax Receivable
Agreement liability
13,999
10,873
11,686
Current portion of long-term debt
23,257
25,229
15,827
Notes payable – floor plan, net
1,017,543
1,319,941
899,568
Other current liabilities
79,381
73,076
83,959
Liabilities related to assets held for
sale
4,022
—
—
Total current liabilities
1,678,954
1,872,327
1,624,612
Operating lease liabilities, net of
current portion
759,952
764,835
743,914
Finance lease liabilities, net of current
portion
99,060
94,216
95,496
Tax Receivable Agreement liability, net of
current portion
149,134
159,743
159,790
Revolving line of credit
20,885
20,885
20,885
Long-term debt, net of current portion
1,522,495
1,484,416
1,368,380
Deferred revenues
70,214
70,247
73,294
Other long-term liabilities
85,710
85,792
87,517
Total liabilities
4,386,404
4,552,461
4,173,888
Commitments and contingencies
Stockholders' equity:
Preferred stock, par value $0.01 per share
– 20,000 shares authorized; none issued and outstanding
—
—
—
Class A common stock, par value $0.01 per
share – 250,000 shares authorized; 49,571, 47,571, and 47,855
shares issued, respectively; 44,780, 42,441, and 42,129 shares
outstanding, respectively
496
476
476
Class B common stock, par value $0.0001
per share – 75,000 shares authorized; 39,466, 41,466, and 69,066
shares issued, respectively; 39,466, 41,466, and 41,466 shares
outstanding, respectively
4
4
4
Class C common stock, par value $0.0001
per share – 0.001 share authorized, issued and outstanding
—
—
—
Additional paid-in capital
108,942
106,051
117,151
Treasury stock, at cost; 4,791, 5,130, and
5,442 shares, respectively
(167,847
)
(179,732
)
(190,658
)
Retained earnings
207,657
221,031
280,772
Total stockholders' equity attributable to
Camping World Holdings, Inc.
149,252
147,830
207,745
Non-controlling interests
121,603
99,856
129,753
Total stockholders' equity
270,855
247,686
337,498
Total liabilities and stockholders'
equity
$
4,657,259
$
4,800,147
$
4,511,386
Camping World Holdings, Inc. and
Subsidiaries
Summary of Consolidated Statements of
Cash Flows (unaudited)
(In Thousands)
Nine Months Ended September
30,
2023
2022
Net cash provided by operating
activities
$
543,273
$
523,919
Investing activities
Purchases of property and equipment
(95,641
)
(118,445
)
Proceeds from sale of property and
equipment
2,723
1,105
Purchases of real property
(64,302
)
(41,696
)
Proceeds from the sale of real
property
35,603
6,809
Purchases of businesses, net of cash
acquired
(150,475
)
(83,227
)
Purchases of and loans to other
investments
(3,444
)
(3,000
)
Purchases of intangible assets
(1,999
)
(851
)
Net cash used in investing activities
(277,535
)
(239,305
)
Financing activities
Proceeds from long-term debt
59,227
—
Payments on long-term debt
(26,556
)
(11,869
)
Net payments on notes payable – floor
plan, net
(273,478
)
(99,802
)
Proceeds from landlord funded construction
on finance leases
—
6,028
Payments on finance leases
(4,160
)
(4,541
)
Proceeds from sale-leaseback
arrangement
—
27,951
Payments on sale-leaseback arrangement
(139
)
(87
)
Payment of debt issuance costs
(881
)
—
Dividends on Class A common stock
(61,207
)
(78,866
)
Proceeds from exercise of stock
options
319
317
RSU shares withheld for tax
(4,083
)
(6,474
)
Repurchases of Class A common stock to
treasury stock
—
(79,757
)
Distributions to holders of LLC common
units
(31,593
)
(156,611
)
Net cash used in financing activities
(342,551
)
(403,711
)
Decrease in cash and cash equivalents
(76,813
)
(119,097
)
Cash and cash equivalents at beginning of
the period
130,131
267,332
Cash and cash equivalents at end of the
period
$
53,318
$
148,235
Comparison of Certain Trends to Pre-COVID-19 Pandemic
Periods
Beginning in the first quarter of 2021 and continuing through
the first quarter of 2023, the Company experienced sequential
decreases in new vehicle gross margin, primarily due to the higher
cost of new vehicles resulting from the lower industry supply of
travel trailers and motorhomes for much of 2021. Additionally, new
and used vehicle gross margins have declined for each of the first
three quarters of 2023 compared to the corresponding periods in
2022. However, third quarter 2023 new vehicle gross margins were
slightly higher than a similar range that the Company experienced
in the third quarter pre-COVID-19 pandemic periods of 2016 to 2019,
which we believe are more typical demand environments than during
the COVID-19 pandemic.
During the third quarter of 2023, as the procurement prices of
model year 2024 new vehicles declined compared to model years 2022
and 2023, the Company actively discounted certain used vehicles to
reduce inventory levels of aged used vehicles. This discounting had
a negative impact on used vehicle gross margins during the third
quarter of 2023.
Additionally, the percentage of total unit sales relating to
used vehicles was significantly higher in the third quarter of 2023
compared to the pre-COVID-19 pandemic periods of 2016 to 2019. The
Company is continuing to execute on its used vehicle strategy,
which differentiates it from the competition with proprietary
tools, such as the RV Valuator, a focus on the development and
retention of its service technician team, and investment in its
service bay infrastructure.
The following table presents vehicle gross margin and unit sales
mix for the three months ended September 30, 2023 and pre-COVID-19
pandemic periods for the three months ended September 30, 2019,
2018, 2017, and 2016 (unaudited):
Three Months Ended September
30,
2023
2019(1)
2018(1)
2017(1)
2016(1)
Gross
margin:
New vehicles
15.1%
12.0%
12.6%
14.3%
13.9%
Used vehicles
18.9%
21.1%
22.9%
25.3%
23.0%
Unit sales
mix:
New vehicles
47.0%
64.9%
69.0%
69.1%
64.2%
Used vehicles
53.0%
35.1%
31.0%
30.9%
35.8%
(1) These periods were prior to the
COVID-19 pandemic.
Earnings Per Share
Basic earnings per share of Class A common stock is computed by
dividing net income attributable to Camping World Holdings, Inc. by
the weighted-average number of shares of Class A common stock
outstanding during the period. Diluted earnings per share of Class
A common stock is computed by dividing net income attributable to
Camping World Holdings, Inc. by the weighted-average number of
shares of Class A common stock outstanding adjusted to give effect
to potentially dilutive securities.
The following table sets forth reconciliations of the numerators
and denominators used to compute basic and diluted earnings per
share of Class A common stock (unaudited):
Three Months Ended September
30,
Nine Months Ended September
30,
(In thousands except per share
amounts)
2023
2022
2023
2022
Numerator:
Net income
$
30,893
$
102,948
$
100,519
$
408,232
Less: net income attributable to
non-controlling interests
(14,932
)
(61,822
)
(52,686
)
(238,065
)
Net income attributable to Camping World
Holdings, Inc. — basic
$
15,961
$
41,126
47,833
170,167
Add: reallocation of net income
attributable to non-controlling interests from the assumed dilutive
effect of stock options and RSUs
—
281
—
1,019
Add: reallocation of net income
attributable to non-controlling interests from the assumed
redemption of common units of CWGS, LLC for Class A common
stock
11,468
—
40,037
—
Net income attributable to Camping World
Holdings, Inc. — diluted
$
27,429
$
41,407
$
87,870
$
171,186
Denominator:
Weighted-average shares of Class A common
stock outstanding — basic
44,666
41,985
44,538
42,419
Dilutive options to purchase Class A
common stock
35
53
26
62
Dilutive restricted stock units
434
467
308
466
Dilutive common units of CWGS, LLC that
are convertible into Class A common stock
40,045
—
40,045
—
Weighted-average shares of Class A common
stock outstanding — diluted
85,180
42,505
84,917
42,947
Earnings per share of Class A common stock
— basic
$
0.36
$
0.98
$
1.07
$
4.01
Earnings per share of Class A common stock
— diluted
$
0.32
$
0.97
$
1.03
$
3.99
Weighted-average anti-dilutive securities
excluded from the computation of diluted earnings per share of
Class A common stock:
Restricted stock units
852
1,396
1,353
2,094
Common units of CWGS, LLC that are
convertible into Class A common stock
—
42,045
—
42,045
Non-GAAP Financial Measures
To supplement our condensed consolidated financial statements,
which are prepared and presented in accordance with accounting
principles generally accepted in the United States (“GAAP”), we use
the following non-GAAP financial measures: EBITDA, Adjusted EBITDA,
Adjusted EBITDA Margin, trailing twelve-month (“TTM”) Adjusted
EBITDA, Adjusted Net Income Attributable to Camping World Holdings,
Inc. – Basic, Adjusted Net Income Attributable to Camping World
Holdings, Inc. – Diluted, Adjusted Earnings Per Share – Basic, and
Adjusted Earnings Per Share – Diluted (collectively the "Non-GAAP
Financial Measures"). We believe that these Non-GAAP Financial
Measures, when used in conjunction with GAAP financial measures,
provide useful information about operating results, enhance the
overall understanding of past financial performance and future
prospects, and allow for greater transparency with respect to the
key metrics we use in our financial and operational decision
making. These Non-GAAP Financial Measures are also frequently used
by analysts, investors and other interested parties to evaluate
companies in the Company’s industry and are used by management to
evaluate our operating performance, to evaluate the effectiveness
of strategic initiatives and for planning purposes. By providing
these Non-GAAP Financial Measures, together with reconciliations,
we believe we are enhancing investors’ understanding of our
business and our results of operations, as well as assisting
investors in evaluating how well we are executing our strategic
initiatives. In addition, our Senior Secured Credit Facilities use
Adjusted EBITDA, as calculated for our subsidiary CWGS Group, LLC,
to measure our compliance with covenants such as the consolidated
leverage ratio. The Non-GAAP Financial Measures have limitations as
analytical tools, and the presentation of this financial
information is not intended to be considered in isolation or as a
substitute for, or superior to, the financial information prepared
and presented in accordance with GAAP. They should not be construed
as an inference that the Company’s future results will be
unaffected by any items adjusted for in these Non-GAAP Financial
Measures. In evaluating these Non-GAAP Financial Measures, it is
reasonable to expect that certain of these items will occur in
future periods. However, we believe these adjustments are
appropriate because the amounts recognized can vary significantly
from period to period, do not directly relate to the ongoing
operations of our business and complicate comparisons of our
internal operating results and operating results of other companies
over time. Each of the normal recurring adjustments and other
adjustments described in this section and in the reconciliation
tables below help management with a measure of our core operating
performance over time by removing items that are not related to
day-to-day operations.
For periods beginning after December 31, 2022, we are no longer
including the other associated costs category of expenses relating
to the 2019 Strategic Shift as restructuring costs for purposes of
our Non-GAAP Financial Measures, since these costs are not expected
to be significant in future periods.
The Non-GAAP Financial Measures that we use are not necessarily
comparable to similarly titled measures used by other companies due
to different methods of calculation.
EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin
We define “EBITDA” as net income before other interest expense,
net (excluding floor plan interest expense), provision for income
tax expense and depreciation and amortization. We define “Adjusted
EBITDA” as EBITDA further adjusted for the impact of certain
noncash and other items that we do not consider in our evaluation
of ongoing operating performance. These items include, among other
things, long-lived asset impairment, lease termination costs, gains
and losses on sale or disposal of assets, net, equity-based
compensation, Tax Receivable Agreement liability adjustment,
restructuring costs related to the Active Sports Restructuring and
the 2019 Strategic Shift, (gain) loss and impairment on investments
in equity securities, and other unusual or one-time items. We
define “Adjusted EBITDA Margin” as Adjusted EBITDA as a percentage
of total revenue. We caution investors that amounts presented in
accordance with our definitions of EBITDA, Adjusted EBITDA, and
Adjusted EBITDA Margin may not be comparable to similar measures
disclosed by our competitors, because not all companies and
analysts calculate EBITDA, Adjusted EBITDA, and Adjusted EBITDA
Margin in the same manner. We present EBITDA, Adjusted EBITDA, and
Adjusted EBITDA Margin because we consider them to be important
supplemental measures of our performance and believe they are
frequently used by securities analysts, investors and other
interested parties in the evaluation of companies in our industry.
Management believes that investors’ understanding of our
performance is enhanced by including these Non-GAAP Financial
Measures as a reasonable basis for comparing our ongoing results of
operations.
The following table reconciles EBITDA, Adjusted EBITDA, Adjusted
EBITDA Margin, and TTM Adjusted EBITDA to the most directly
comparable GAAP financial performance measures (unaudited):
Three Months Ended September
30,
Nine Months Ended September
30,
($ in thousands)
2023
2022
2023
2022
EBITDA and Adjusted EBITDA:
Net income
$
30,893
$
102,948
$
100,519
$
408,232
Other interest expense, net
35,242
20,526
99,873
49,762
Depreciation and amortization
17,619
18,207
49,462
61,369
Income tax expense
3,679
22,397
17,533
75,808
Subtotal EBITDA
87,433
164,078
267,387
595,171
Long-lived asset impairment (a)
1,747
887
9,269
3,505
Lease termination (b)
375
—
375
1,122
Loss (gain) on sale or disposal of assets,
net (c)
131
(40
)
(5,001
)
390
Equity-based compensation (d)
5,466
6,792
18,316
27,434
Tax Receivable Agreement liability
adjustment (e)
(1,680
)
—
(1,680
)
—
Restructuring costs (f)
1,549
1,671
4,808
5,548
(Gain) loss and impairment on investments
in equity securities (g)
(23
)
—
1,660
—
Adjusted EBITDA
$
94,998
$
173,388
$
295,134
$
633,170
Three Months Ended September
30,
Nine Months Ended September
30,
(as percentage of total revenue)
2023
2022
2023
2022
Adjusted EBITDA margin:
Net income margin
1.8
%
5.5
%
2.0
%
7.2
%
Other interest expense, net
2.0
%
1.1
%
2.0
%
0.9
%
Depreciation and amortization
1.0
%
1.0
%
1.0
%
1.1
%
Income tax expense
0.2
%
1.2
%
0.3
%
1.3
%
Subtotal EBITDA margin
5.1
%
8.8
%
5.2
%
10.5
%
Long-lived asset impairment (a)
0.1
%
0.0
%
0.2
%
0.1
%
Lease termination (b)
0.0
%
—
0.0
%
0.0
%
Loss (gain) on sale or disposal of assets,
net (c)
0.0
%
(0.0
%)
(0.1
%)
0.0
%
Equity-based compensation (d)
0.3
%
0.4
%
0.4
%
0.5
%
Tax Receivable Agreement liability
adjustment (e)
(0.1
%)
—
(0.0
%)
—
Restructuring costs (f)
0.1
%
0.1
%
0.1
%
0.1
%
(Gain) loss and impairment on investments
in equity securities (g)
(0.0
%)
—
0.0
%
—
Adjusted EBITDA margin
5.5
%
9.3
%
5.8
%
11.1
%
Three Months Ended
TTM Ended
September 30,
June 30,
March 31,
December 31,
September 30,
($ in thousands)
2023
2023
2023
2022
2023
Adjusted EBITDA:
Net income (loss)
$
30,893
$
64,723
$
4,903
$
(57,201
)
$
43,318
Other interest expense, net
35,242
33,518
31,113
25,983
125,856
Depreciation and amortization
17,619
17,206
14,637
18,935
68,397
Income tax expense
3,679
13,581
273
23,276
40,809
Subtotal EBITDA
87,433
129,028
50,926
10,993
278,380
Long-lived asset impairment (a)
1,747
477
7,045
726
9,995
Lease termination (b)
375
—
—
492
867
Loss (gain) on sale or disposal of assets,
net (c)
131
(145
)
(4,987
)
232
(4,769
)
Equity-based compensation (d)
5,466
6,492
6,358
6,413
24,729
Tax Receivable Agreement liability
adjustment (e)
(1,680
)
—
—
(114
)
(1,794
)
Restructuring costs (f)
1,549
3,259
—
1,478
6,286
(Gain) loss and impairment on investments
in equity securities (g)
(23
)
184
1,499
—
1,660
Adjusted EBITDA
$
94,998
$
139,295
$
60,841
$
20,220
$
315,354
(a)
Represents long-lived asset impairment
charges related to the RV and Outdoor Retail segment.
(b)
Represents the loss on the termination of
operating leases resulting from lease termination fees and the
derecognition of the operating lease assets and liabilities.
(c)
Represents an adjustment to eliminate the
gains and losses on disposals and sales of various assets.
(d)
Represents non-cash equity-based
compensation expense relating to employees, directors, and
consultants of the Company.
(e)
Represents an adjustment to eliminate the
gains on remeasurement of the Tax Receivable Agreement primarily
due to changes in the Company’s blended statutory income tax
rate.
(f)
Represents restructuring costs relating to
the Active Sports Restructuring during the three and nine months
ended September 30, 2023 and the 2019 Strategic Shift for periods
ended on or before December 31, 2022. These restructuring costs
include one-time termination benefits, incremental inventory
reserve charges, and other associated costs. These costs exclude
lease termination costs, which are presented separately above.
(g)
Represents gain and loss and impairment on
investments in equity securities and interest income relating to
any notes receivables with those investments for periods beginning
after December 31, 2022. Amounts relating to periods prior to 2023
were not significant. These amounts are included in other expense,
net in the condensed consolidated statements of operations. During
the nine months ended September 30, 2023, this amount included a
$1.3 million impairment on an equity method investment.
Adjusted Net Income Attributable to Camping World Holdings, Inc.
and Adjusted Earnings Per Share
We define “Adjusted Net Income Attributable to Camping World
Holdings, Inc. – Basic” as net income attributable to Camping World
Holdings, Inc. adjusted for the impact of certain non-cash and
other items that we do not consider in our evaluation of ongoing
operating performance. These items include, among other things,
long-lived asset impairment, lease termination costs, gains and
losses on sale or disposal of assets, net, equity-based
compensation, Tax Receivable Agreement liability adjustment,
restructuring costs related to the Active Sports Restructuring and
the 2019 Strategic Shift, loss and impairment on investments in
equity securities, other unusual or one-time items, the income tax
expense effect of these adjustments, and the effect of net income
attributable to non-controlling interests from these
adjustments.
We define “Adjusted Net Income Attributable to Camping World
Holdings, Inc. – Diluted” as Adjusted Net Income Attributable to
Camping World Holdings, Inc. – Basic adjusted for the reallocation
of net income attributable to non-controlling interests from stock
options and restricted stock units, if dilutive, or the assumed
redemption, if dilutive, of all outstanding common units in CWGS,
LLC for shares of newly-issued Class A common stock of Camping
World Holdings, Inc.
We define “Adjusted Earnings Per Share – Basic” as Adjusted Net
Income Attributable to Camping World Holdings, Inc. - Basic divided
by the weighted-average shares of Class A common stock outstanding.
We define “Adjusted Earnings Per Share – Diluted” as Adjusted Net
Income Attributable to Camping World Holdings, Inc. – Diluted
divided by the weighted-average shares of Class A common stock
outstanding, assuming (i) the redemption of all outstanding common
units in CWGS, LLC for newly-issued shares of Class A common stock
of Camping World Holdings, Inc., if dilutive, and (ii) the dilutive
effect of stock options and restricted stock units, if any. We
present Adjusted Net Income Attributable to Camping World Holdings,
Inc. – Basic, Adjusted Net Income Attributable to Camping World
Holdings, Inc. – Diluted, Adjusted Earnings Per Share – Basic, and
Adjusted Earnings Per Share – Diluted because we consider them to
be important supplemental measures of our performance and we
believe that investors’ understanding of our performance is
enhanced by including these Non-GAAP financial measures as a
reasonable basis for comparing our ongoing results of
operations.
The following table reconciles Adjusted Net Income Attributable
to Camping World Holdings, Inc. – Basic, Adjusted Net Income
Attributable to Camping World Holdings, Inc. – Diluted, Adjusted
Earnings Per Share – Basic, and Adjusted Earnings Per Share –
Diluted to the most directly comparable GAAP financial performance
measure:
Three Months Ended
Nine Months Ended
September 30,
September 30,
(In thousands except per share
amounts)
2023
2022
2023
2022
Numerator:
Net income attributable to Camping World
Holdings, Inc.
$
15,961
$
41,126
$
47,833
$
170,167
Adjustments related to basic
calculation:
Long-lived asset impairment (a):
Gross adjustment
1,747
887
9,269
3,505
Income tax expense for above adjustment
(b)
(231
)
—
(1,233
)
(99
)
Lease termination (c):
Gross adjustment
375
—
375
1,122
Income tax expense for above adjustment
(b)
(50
)
—
(50
)
—
Loss (gain) on sale or disposal of assets
(d):
Gross adjustment
131
(40
)
(5,001
)
390
Income tax (expense) benefit for above
adjustment (b)
(17
)
(12
)
667
(15
)
Equity-based compensation (e):
Gross adjustment
5,466
6,792
18,316
27,434
Income tax expense for above adjustment
(b)
(730
)
(792
)
(2,459
)
(3,080
)
Tax Receivable Agreement liability
adjustment (f):
Gross adjustment
(1,680
)
—
(1,680
)
—
Income tax benefit for above adjustment
(b)
422
—
422
—
Restructuring costs (g):
Gross adjustment
1,549
1,671
4,808
5,548
Income tax expense for above adjustment
(b)
(205
)
—
(639
)
—
(Gain) loss and impairment on investments
in equity securities (h):
Gross adjustment
(23
)
—
1,660
—
Income tax benefit (expense) for above
adjustment (b)
3
—
(222
)
—
Adjustment to net income attributable to
non-controlling interests resulting from the above adjustments
(i)
(4,364
)
(4,642
)
(13,907
)
(18,866
)
Adjusted net income attributable to
Camping World Holdings, Inc. – basic
18,354
44,990
58,159
186,106
Adjustments related to diluted
calculation:
Reallocation of net income attributable to
non-controlling interests from the dilutive effect of stock options
and restricted stock units (j)
—
409
—
1,519
Income tax on reallocation of net income
attributable to non-controlling interests from the dilutive effect
of stock options and restricted stock units (k)
—
(104
)
—
(404
)
Reallocation of net income attributable to
non-controlling interests from the dilutive redemption of common
units in CWGS, LLC (j)
19,296
—
66,593
—
Income tax on reallocation of net income
attributable to non-controlling interests from the dilutive
redemption of common units in CWGS, LLC (k)
(4,554
)
—
(16,140
)
—
Adjusted net income attributable to
Camping World Holdings, Inc. – diluted
$
33,096
$
45,295
$
108,612
$
187,221
Denominator:
Weighted-average Class A common shares
outstanding – basic
44,666
41,985
44,538
42,419
Adjustments related to diluted
calculation:
Dilutive redemption of common units in
CWGS, LLC for shares of Class A common stock (m)
40,045
—
40,045
—
Dilutive options to purchase Class A
common stock (m)
35
53
26
62
Dilutive restricted stock units (m)
434
467
308
466
Adjusted weighted average Class A common
shares outstanding – diluted
85,180
42,505
84,917
42,947
Adjusted earnings per share - basic
$
0.41
$
1.07
$
1.31
$
4.39
Adjusted earnings per share - diluted
$
0.39
$
1.07
$
1.28
$
4.36
Anti-dilutive amounts (n):
Numerator:
Reallocation of net income attributable to
non-controlling interests from the anti-dilutive redemption of
common units in CWGS, LLC (j)
$
—
$
66,055
$
—
$
255,412
Income tax on reallocation of net income
attributable to non-controlling interests from the anti-dilutive
redemption of common units in CWGS, LLC (k)
$
—
$
(16,804
)
$
—
$
(66,789
)
Assumed income tax benefit of combining
C-corporations with full or partial valuation allowances with the
income of other consolidated entities after the anti-dilutive
redemption of common units in CWGS, LLC (l)
$
—
$
627
$
—
$
6,464
Denominator:
Anti-dilutive redemption of common units
in CWGS, LLC for shares of Class A common stock (m)
—
42,045
—
42,045
Reconciliation of per share
amounts:
Earnings per share of Class A common stock
— basic
$
0.36
$
0.98
$
1.07
$
4.01
Non-GAAP Adjustments (o)
0.05
0.09
0.24
0.38
Adjusted earnings per share - basic
$
0.41
$
1.07
$
1.31
$
4.39
Earnings per share of Class A common stock
— diluted
$
0.32
$
0.97
$
1.03
$
3.99
Non-GAAP Adjustments (o)
0.05
0.10
0.23
0.37
Dilutive redemption of common units in
CWGS, LLC for shares of Class A common stock (p)
0.02
—
0.02
—
Adjusted earnings per share - diluted
$
0.39
$
1.07
$
1.28
$
4.36
(a)
Represents long-lived asset impairment
charges related to the RV and Outdoor Retail segment.
(b)
Represents the current and deferred income
tax expense or benefit effect of the above adjustments. For periods
that ended on or before December 31, 2022, many of these
adjustments were related to entities with full valuation allowances
for which no tax benefit could be recognized. This assumption uses
effective tax rates between 25.1% and 25.4% for the adjustments for
the 2023 and 2022 periods, which represent the estimated tax rates
that would apply had the above adjustments been included in the
determination of our non-GAAP metric.
(c)
Represents the loss on termination of
operating leases resulting from the lease termination fees and the
derecognition of the operating lease assets and liabilities.
(d)
Represents an adjustment to eliminate the
gains and losses on disposals and sales of various assets.
(e)
Represents non-cash equity-based
compensation expense relating to employees, directors, and
consultants of the Company.
(f)
Represents an adjustment to eliminate the
gain on remeasurement of the Tax Receivable Agreement primarily due
to changes in the Company’s blended statutory income tax rate.
(g)
Represents restructuring costs relating to
the Active Sports Restructuring during the three and nine months
ended September 30, 2023 and the 2019 Strategic Shift for periods
that ended on or before December 31, 2022. These restructuring
costs include one-time termination benefits, incremental inventory
reserve charges, and other associated costs. These costs exclude
lease termination costs, which are presented separately above.
(h)
Represents loss and impairment on
investments in equity securities and interest income relating to
any notes receivables with those investments for periods beginning
after December 31, 2022. Amounts relating to periods prior to 2023
were not significant. These amounts are included in other expense,
net in the condensed consolidated statements of operations. During
the nine months ended September 30, 2023, this amount included a
$1.3 million impairment on an equity method investment.
(i)
Represents the adjustment to net income
attributable to non-controlling interests resulting from the above
adjustments that impact the net income of CWGS, LLC. This
adjustment uses the non-controlling interest’s weighted average
ownership of CWGS, LLC of 47.3% and 50.0% for the three months
ended September 30, 2023 and 2022, respectively, and 47.3% and
49.8% for the nine months ended September 30, 2023 and 2022,
respectively.
(j)
Represents the reallocation of net income
attributable to non-controlling interests from the impact of the
assumed change in ownership of CWGS, LLC from stock options,
restricted stock units, and/or common units of CWGS, LLC.
(k)
Represents the income tax expense effect
of the above adjustment for reallocation of net income attributable
to non-controlling interests. This assumption uses effective tax
rates between 25.1% and 25.4% for the adjustments for 2023 and 2022
periods.
(l)
As a result of the LLC Conversion, this
adjustment only relates to periods ended on or before December 31,
2022. Typically represents adjustments to reflect the income tax
benefit of losses of consolidated C-corporations that under the
Company’s previous equity structure, prior to the LLC Conversion,
could not be used against the income of other consolidated
subsidiaries of CWGS, LLC. Subsequent to the redemption of all
common units in CWGS, LLC and prior to the LLC Conversion, the
Company believes certain actions could have been taken such that
the C-corporations’ losses could offset income of other
consolidated subsidiaries. The adjustment reflects the income tax
benefit assuming effective tax rate of 25.4% during 2022 for the
losses experienced by the consolidated C-corporations for which
valuation allowances had been recorded. No assumed release of
valuation allowance established for previous periods were included
in these amounts. Beginning in 2023, these C-corporation losses
offset income of other consolidated subsidiaries as a result of LLC
Conversion at or around December 31, 2022.
(m)
Represents the impact to the denominator
for stock options, restricted stock units, and/or common units of
CWGS, LLC.
(n)
The below amounts have not been considered
in our adjusted earnings per share – diluted amounts as the effect
of these items are anti-dilutive.
(o)
Represents the per share impact of the
Non-GAAP adjustments to net income detailed above (see (a) through
(h) above).
(p)
Represents the per share impact of stock options, restricted
stock units, and/or common units of CWGS, LLC from the difference
in their dilutive impact between the GAAP and Non-GAAP earnings per
share calculations.
Our “Up-C” corporate structure may make it difficult to compare
our results with those of companies with a more traditional
corporate structure. There can be a significant fluctuation in the
numerator and denominator for the calculation of our adjusted
earnings per share – diluted depending on if the common units in
CWGS, LLC are considered dilutive or anti-dilutive for a given
period. To improve comparability of our financial results, users of
our financial statements may find it useful to review our earnings
per share assuming the full redemption of common units in CWGS, LLC
for all periods, even when those common units would be
anti-dilutive. The relevant numerator and denominator adjustments
have been provided under “Anti-dilutive amounts” in the table above
(see (n) above).
View source
version on businesswire.com: https://www.businesswire.com/news/home/20231101777353/en/
Investors: Brett Andress InvestorRelations@campingworld.com
Media Outlets: PR-CWGS@CampingWorld.com
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