Camping World Holdings, Inc. (NYSE: CWH) (the “Company” or
“CWH”), America’s Recreation Dealer, today reported results for the
year and fourth quarter ended December 31, 2023.
Marcus Lemonis, Chairman and Chief Executive Officer of Camping
World Holdings, Inc. stated, “Beginning in December, our new
vehicle same store unit growth turned positive, with January and
February to date trending up from mid-single to low-double digits.
We achieved our goal of significantly improving our new unit
inventory position, with less than 7,500 new model year 2023’s
remaining as of today. We believe we are outpacing the industry
with close to 80% in 2024 models currently. We believe that
successful negotiations in year-over-year pricing reductions on
like-for-like new units has sparked early demand and new gross
margin stabilization.”
Matt Wagner, Chief Operating Officer of Camping World Holdings,
Inc. commented, “Any reduction of new model pricing causes us to
reset used vehicle values and slow down the purchases of used RV
inventory while market values correct themselves. We expect this
short-term maneuver to allow used vehicle volumes to improve over
time, with gross margin improvement beginning in the second quarter
and continuing through the balance of the year.”
Mr. Wagner concluded, “Positive demand trends, inventory
discipline, strength in our Good Sam segment and the service and
parts portion of our business, acquisitions, and cost reductions,
give us confidence in delivering unit volume and strong earnings
growth in 2024 while continuing our march to 320 locations by
2028.”
Full Year-over-Year Operating Highlights
- Revenue was $6.2 billion, a decrease of $740.5 million, or
10.6%.
- Used vehicle revenue was a record $2.0 billion, an increase of
$102.0 million, or 5.4%, and used vehicle unit sales were a record
56,823 units, an increase of 5,498 units, or 10.7%.
- New vehicle revenue was $2.6 billion, a decline of $651.8
million, or 20.2%, and new vehicle unit sales were 58,731 units, a
decrease of 11,698 units, or 16.6%.
- Average selling price of new and used vehicles declined 4.3%
and 4.8%, respectively.
- Same store used vehicle unit sales increased 5.0%, and same
store new vehicle unit sales decreased 22.1%.
- Products, services and other revenue was $870.0 million, a
decline of $129.2 million, or 12.9%, driven largely by lower demand
and lower stocking levels of lifestyle and activities, and design
and home products, as well as decreases in our direct to
manufacturer RV furniture revenues due to RV manufacturer
production slowdowns and discounting and discontinuation of certain
product categories related to our Active Sports Restructuring.
- Gross profit was $1.9 billion, a decrease of $383.6 million, or
17.0%. Total gross margin was 30.2%, a decrease of 230 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 and gross profit was further impacted by the decrease in
combined RV unit sales and the related decrease in finance and
insurance, net. This decrease was partially offset by the $14.3
million increase in gross profit and 682 basis point increase in
gross margin of the Good Sam Services and Plans segment.
- Selling, general and administrative expenses were $1.5 billion,
a decrease of $68.0 million, or 4.2%, primarily due to
approximately $49.2 million of reduced advertising expenses and
$35.1 million of reduced variable compensation costs, partially
offset by incremental costs related to the net six additional store
locations added during the year ended December 31, 2023.
- Floor plan interest expense was $83.1 million, an increase of
$41.0 million, or 97.7%, and other interest expense, net was $135.3
million, an increase of $59.5 million, or 78.6%. These increases
were primarily as a result of the rise in interest rates.
- Net income was $50.6 million, a decrease of $300.4 million, or
85.6%.
- Diluted earnings per share of Class A common stock was $0.55 in
2023 versus diluted earnings per share of Class A common stock of
$3.22 in 2022. Adjusted earnings per share - diluted(1) of Class A
common stock was $0.81 in 2023 versus adjusted earnings per share –
diluted(1) of Class A common stock of $4.17 in 2022.
- Adjusted EBITDA(1) was $286.2 million, a decrease of $367.2
million, or 56.2%.
- New and used vehicle inventories were $1.8 billion, a decrease
of $32.1 million.
- The Company paid an annualized cash dividend of $1.50 per share
of Class A common stock, a decrease of $1.00 per share of Class A
common stock.
Fourth Quarter-over-Quarter Operating Highlights
- Revenue was $1.1 billion for the fourth quarter, a decrease of
$171.0 million, or 13.4%.
- Used vehicle revenue was $321.7 million for the fourth quarter,
a decrease of $70.9 million, or 18.1%, and used vehicle unit sales
were 9,492 units, a decrease of 842 units, or 8.1%.
- New vehicle revenue was $449.4 million for the fourth quarter,
a decline of $32.3 million, or 6.7%, and new vehicle unit sales
were 10,717 units, an increase of 328 units, or 3.2%.
- Average selling price of new and used vehicles declined 9.6%
and 10.8%, respectively, during the fourth 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 and certain pre-2024 model year
new vehicles during the fourth quarter to reduce inventory levels
of aged vehicles.
- Same store used vehicle unit sales decreased 11.2% for the
fourth quarter, and same store new vehicle unit sales decreased
2.2%.
- Products, services and other revenue was $179.0 million, a
decline of $58.3 million, or 24.6%, driven largely by lower demand
and lower stocking levels of lifestyle and activities, and design
and home products, as well as discounting and discontinuation of
certain product categories related to our Active Sports
Restructuring.
- Gross profit was $343.4 million, a decrease of $48.2 million,
or 12.3%. Total gross margin was 31.0%, an increase of 37 basis
points. The decrease in gross profit was driven largely by the new
and used vehicle discounting as discussed above.
- Selling, general and administrative expenses were $337.1
million, a decrease of $24.4 million, or 6.7%, primarily as a
result of our efforts to reduce expenses.
- Floor plan interest expense was $21.8 million, an increase of
$4.2 million, or 24.1%, and other interest expense, net was $35.4
million, an increase of $9.4 million, or 36.2%. These increases
were primarily as a result of the rise in interest rates.
- Net loss was $49.9 million, a decrease of $7.3 million, or
12.7%.
- Diluted loss per share of Class A common stock was $0.49 in
2023 versus diluted loss per share of Class A common stock of $0.79
in 2022. Adjusted loss per share - diluted(1) of Class A common
stock was $0.47 in 2023 versus adjusted loss per share – diluted(1)
of Class A common stock of $0.20 in 2022.
- Adjusted EBITDA(1) was a negative $8.9 million, a decrease of
$29.1 million, or 144.1%.
________________
(1)
Adjusted earnings (loss) per share –
diluted and adjusted EBITDA are non-GAAP measures. For a
reconciliation of these non-GAAP measures to the most directly
comparable GAAP measures, see the “Non-GAAP Financial Measures”
section later in this press release.
Earnings Conference Call and Webcast Information
A conference call to discuss the Company’s fourth quarter and
fiscal year 2023 financial results and 2024 outlook is scheduled
for February 22, 2024, 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# 13743788. Interested parties can also
listen to a live webcast or replay of the conference call by
logging on to the Investor Relations section on the Company’s
website at http://investor.campingworld.com. The replay of the
conference call webcast will be available on the investor relations
website for approximately 90 days.
Presentation
This press release presents historical results for the periods
presented for the Company and its subsidiaries, which are presented
in accordance with accounting principles generally accepted in the
United States (“GAAP”), unless noted as a non-GAAP financial
measure. The Company’s initial public offering (“IPO”) and related
reorganization transactions (“Reorganization Transactions”) that
occurred on October 6, 2016 resulted in the Company as the sole
managing member of CWGS Enterprises, LLC (“CWGS, LLC”), with sole
voting power in and control of the management of CWGS, LLC. The
Company’s position as sole managing member of CWGS, LLC includes
periods where the Company has held a minority economic interest in
CWGS, LLC. As of December 31, 2023, the Company owned 52.9% 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 the world’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. 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 employees 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 expectations regarding new and used vehicle unit
volume trends, our ability to deliver unit volume and increased
market share, 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 earnings growth and gross margin 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, high prices for fuel or changes in
energy sources; the success of our manufacturers; changes in
consumer preferences; risks related to our strategic review of our
Good Sam business; competition in our industry; risks related to
acquisitions, new store openings and expansion into new markets;
our failure to maintain the strength and value of our brands; our
ability to manage our inventory; fluctuations in our same store
sales; the cyclical and seasonal nature of our business; our
dependence on the availability of adequate capital and risks
related to our debt; 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; risks related to climate change and other environmental,
social and governance matters; 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 for the year ended
December 31, 2022, as updated by our Annual Report on Form 10-K for
the year ended December 31, 2023 following the date hereof, 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, X (formerly known as
Twitter), and Instagram accounts, each at the handle @CampingWorld,
as well as the investor page of our website,
investor.campingworld.com, as a distribution channel of material
information about the Company and for complying with our disclosure
obligations under Regulation FD. The information we post through
these social media channels and on our investor webpage may be
deemed material. Accordingly, investors should subscribe to these
accounts and our investor alerts, in addition to following our
press releases, SEC filings, public conference calls and webcasts.
These social media channels may be updated from time to time.
Camping World Holdings, Inc. and
Subsidiaries
Consolidated Statements of Operations
(unaudited)
(In Thousands Except Per Share
Amounts)
Three Months Ended
Year Ended
December 31,
December 31,
2023
2022
2023
2022
Revenue:
Good Sam Services and Plans
$
46,533
$
47,624
$
193,827
$
192,128
RV and Outdoor Retail
New vehicles
449,416
481,754
2,576,278
3,228,077
Used vehicles
321,697
392,623
1,979,632
1,877,601
Products, service and other
179,008
237,300
870,038
999,214
Finance and insurance, net
101,920
109,535
562,256
623,456
Good Sam Club
10,759
11,467
44,516
46,537
Subtotal
1,062,800
1,232,679
6,032,720
6,774,885
Total revenue
1,109,333
1,280,303
6,226,547
6,967,013
Costs applicable to revenue (exclusive of
depreciation and amortization shown separately below):
Good Sam Services and Plans
15,547
17,434
59,391
71,966
RV and Outdoor Retail
New vehicles
364,421
404,616
2,175,819
2,576,276
Used vehicles
273,277
302,177
1,574,238
1,418,053
Products, service and other
111,588
163,330
533,625
631,010
Good Sam Club
1,059
1,145
4,825
7,424
Subtotal
750,345
871,268
4,288,507
4,632,763
Total costs applicable to revenue
765,892
888,702
4,347,898
4,704,729
Gross profit (exclusive of depreciation
and amortization shown separately below):
Good Sam Services and Plans
30,986
30,190
134,436
120,162
RV and Outdoor Retail:
New vehicles
84,995
77,138
400,459
651,801
Used vehicles
48,420
90,446
405,394
459,548
Products, service and other
67,420
73,970
336,413
368,204
Finance and insurance, net
101,920
109,535
562,256
623,456
Good Sam Club
9,700
10,322
39,691
39,113
Subtotal
312,455
361,411
1,744,213
2,142,122
Total gross profit
343,441
391,601
1,878,649
2,262,284
Operating expenses:
Selling, general, and administrative
337,087
361,444
1,538,988
1,606,984
Depreciation and amortization
19,181
18,935
68,643
80,304
Long-lived asset impairment
—
726
9,269
4,231
Lease termination
(478
)
492
(103
)
1,614
(Gain) loss on sale or disposal of
assets
(221
)
232
(5,222
)
622
Total operating expenses
355,569
381,829
1,611,575
1,693,755
(Loss) income from operations
(12,128
)
9,772
267,074
568,529
Other expense:
Floor plan interest expense
(21,777
)
(17,548
)
(83,075
)
(42,031
)
Other interest expense, net
(35,397
)
(25,983
)
(135,270
)
(75,745
)
Tax Receivable Agreement liability
adjustment
762
114
2,442
114
Other expense, net
(110
)
(280
)
(1,769
)
(752
)
Total other expense
(56,522
)
(43,697
)
(217,672
)
(118,414
)
(Loss) income before income taxes
(68,650
)
(33,925
)
49,402
450,115
Income tax benefit (expense)
18,732
(23,276
)
1,199
(99,084
)
Net (loss) income
(49,918
)
(57,201
)
50,601
351,031
Less: net (loss) income attributable to
non-controlling interests
33,129
23,981
(19,557
)
(214,084
)
Net (loss) income attributable to Camping
World Holdings, Inc.
$
(16,789
)
$
(33,220
)
$
31,044
$
136,947
(Loss) earnings per share of Class A
common stock:
Basic
$
(0.37
)
$
(0.79
)
$
0.70
$
3.23
Diluted
$
(0.49
)
$
(0.79
)
$
0.55
$
3.22
Weighted average shares of Class A common
stock outstanding:
Basic
44,889
42,287
44,626
42,386
Diluted
84,934
42,287
84,972
42,854
Camping World Holdings, Inc. and
Subsidiaries
Supplemental Data
Three Months Ended December
31,
Increase
Percent
2023
2022
(decrease)
Change
Unit
sales
New vehicles
10,717
10,389
328
3.2
%
Used vehicles
9,492
10,334
(842
)
(8.1
%)
Total
20,209
20,723
(514
)
(2.5
%)
Average selling
price
New vehicles
$
41,935
$
46,372
$
(4,437
)
(9.6
%)
Used vehicles
33,891
37,993
(4,102
)
(10.8
%)
Same store unit
sales(1)
New vehicles
9,324
9,535
(211
)
(2.2
%)
Used vehicles
8,504
9,580
(1,076
)
(11.2
%)
Total
17,828
19,115
(1,287
)
(6.7
%)
Same store
revenue(1) ($ in 000s)
New vehicles
$
385,325
$
441,531
$
(56,206
)
(12.7
%)
Used vehicles
284,861
364,404
(79,543
)
(21.8
%)
Products, service and other
163,138
174,176
(11,038
)
(6.3
%)
Finance and insurance, net
88,681
101,245
(12,564
)
(12.4
%)
Total
$
922,005
$
1,081,356
$
(159,351
)
(14.7
%)
Average gross profit
per unit
New vehicles
$
7,931
$
7,425
$
506
6.8
%
Used vehicles
5,101
8,752
(3,651
)
(41.7
%)
Finance and insurance, net per vehicle
unit
5,043
5,286
(242
)
(4.6
%)
Total vehicle front-end yield(2)
11,645
13,373
(1,728
)
(12.9
%)
Gross
margin
Good Sam Services and Plans
66.6
%
63.4
%
320
bps
New vehicles
18.9
%
16.0
%
290
bps
Used vehicles
15.1
%
23.0
%
(798
)
bps
Products, service and other
37.7
%
31.2
%
649
bps
Finance and insurance, net
100.0
%
100.0
%
unch.
bps
Good Sam Club
90.2
%
90.0
%
14
bps
Subtotal RV and Outdoor Retail
29.4
%
29.3
%
8
bps
Total gross margin
31.0
%
30.6
%
37
bps
RV and Outdoor
Retail inventories ($ in 000s)
New vehicles
$
1,378,403
$
1,411,016
$
(32,613
)
(2.3
%)
Used vehicles
464,833
464,311
522
0.1
%
Products, parts, accessories and misc.
199,261
247,906
(48,645
)
(19.6
%)
Total RV and Outdoor Retail
inventories
$
2,042,497
$
2,123,233
$
(80,736
)
(3.8
%)
Vehicle inventory
per location ($ in 000s)
New vehicle inventory per dealer
location
$
6,962
$
7,466
$
(504
)
(6.8
%)
Used vehicle inventory per dealer
location
2,348
2,457
(109
)
(4.4
%)
Vehicle inventory
turnover(3)
New vehicle inventory turnover
1.8
1.9
(0.2
)
(8.6
%)
Used vehicle inventory turnover
2.9
3.4
(0.5
)
(14.1
%)
Retail
locations
RV dealerships
198
189
9
4.8
%
RV service & retail centers
4
7
(3
)
(42.9
%)
Subtotal
202
196
6
3.1
%
Other retail stores
—
1
(1
)
(100.0
%)
Total
202
197
5
2.5
%
Other
data
Active Customers(4)
4,959,723
5,265,939
(306,216
)
(5.8
%)
Good Sam Club members
2,027,353
2,026,215
1,138
0.1
%
Service bays (5)
2,757
2,693
64
2.4
%
Finance and insurance gross profit as a %
of total vehicle revenue
13.2
%
12.5
%
69
bps
n/a
Same store locations
166
n/a
n/a
n/a
Year Ended December
31,
Increase
Percent
2023
2022
(decrease)
Change
Unit
sales
New vehicles
58,731
70,429
(11,698
)
(16.6
%)
Used vehicles
56,823
51,325
5,498
10.7
%
Total
115,554
121,754
(6,200
)
(5.1
%)
Average selling
price
New vehicles
$
43,866
$
45,834
$
(1,969
)
(4.3
%)
Used vehicles
34,839
36,583
(1,744
)
(4.8
%)
Same store unit
sales(1)
New vehicles
51,858
66,610
(14,752
)
(22.1
%)
Used vehicles
51,072
48,648
2,424
5.0
%
Total
102,930
115,258
(12,328
)
(10.7
%)
Same store
revenue(1) ($ in 000s)
New vehicles
$
2,296,811
$
3,090,711
$
(793,900
)
(25.7
%)
Used vehicles
1,791,352
1,803,943
(12,591
)
(0.7
%)
Products, service and other
635,670
691,044
(55,374
)
(8.0
%)
Finance and insurance, net
504,315
599,435
(95,120
)
(15.9
%)
Total
$
5,228,148
$
6,185,133
$
(956,985
)
(15.5
%)
Average gross profit
per unit
New vehicles
$
6,819
$
9,255
$
(2,436
)
(26.3
%)
Used vehicles
7,134
8,954
(1,819
)
(20.3
%)
Finance and insurance, net per vehicle
unit
4,866
5,121
(255
)
(5.0
%)
Total vehicle front-end yield(2)
11,840
14,248
(2,409
)
(16.9
%)
Gross
margin
Good Sam Services and Plans
69.4
%
62.5
%
682
bps
New vehicles
15.5
%
20.2
%
(465
)
bps
Used vehicles
20.5
%
24.5
%
(400
)
bps
Products, service and other
38.7
%
36.8
%
182
bps
Finance and insurance, net
100.0
%
100.0
%
unch.
bps
Good Sam Club
89.2
%
84.0
%
511
bps
Subtotal RV and Outdoor Retail
28.9
%
31.6
%
(271
)
bps
Total gross margin
30.2
%
32.5
%
(230
)
bps
Other
data
Finance and insurance gross profit as a %
of total vehicle revenue
12.3
%
12.2
%
13
bps
n/a
Same store locations
166
n/a
n/a
n/a
________________
(1)
Our same store revenue and units
calculations for a given period include only those stores that were
open both at the end of the corresponding period and at the
beginning of the preceding fiscal year.
(2)
Front end yield is calculated as gross
profit from new vehicles, used vehicles and finance and insurance
(net), divided by combined new and used vehicle unit sales.
(3)
Inventory turnover 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)
December 31,
December 31,
2023
2022
Assets
Current assets:
Cash and cash equivalents
$
39,647
$
130,131
Contracts in transit
60,229
50,349
Accounts receivable, net
128,070
112,411
Inventories
2,042,949
2,123,858
Prepaid expenses and other assets
48,353
66,913
Assets held for sale
29,864
—
Total current assets
2,349,112
2,483,662
Property and equipment, net
834,426
758,281
Operating lease assets
740,052
742,306
Deferred tax assets, net
157,326
143,226
Intangible assets, net
13,717
20,945
Goodwill
711,222
622,423
Other assets
39,829
29,304
Total assets
$
4,845,684
$
4,800,147
Liabilities and stockholders'
equity
Current liabilities:
Accounts payable
$
133,516
$
127,691
Accrued liabilities
149,096
147,833
Deferred revenues
92,366
95,695
Current portion of operating lease
liabilities
63,695
61,745
Current portion of finance lease
liabilities
17,133
10,244
Current portion of Tax Receivable
Agreement liability
12,943
10,873
Current portion of long-term debt
22,121
25,229
Notes payable – floor plan, net
1,371,145
1,319,941
Other current liabilities
68,536
73,076
Liabilities related to assets held for
sale
17,288
—
Total current liabilities
1,947,839
1,872,327
Operating lease liabilities, net of
current portion
763,958
764,835
Finance lease liabilities, net of current
portion
97,751
94,216
Tax Receivable Agreement liability, net of
current portion
149,866
159,743
Revolving line of credit
20,885
20,885
Long-term debt, net of current portion
1,498,958
1,484,416
Deferred revenues
66,780
70,247
Other long-term liabilities
85,440
85,792
Total liabilities
4,631,477
4,552,461
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 and 47,571 shares issued,
respectively; 45,020 and 42,441 shares outstanding,
respectively
496
476
Class B common stock, par value $0.0001
per share – 75,000 shares authorized; 39,466 and 41,466 shares
issued, respectively; 39,466 and 41,466 shares outstanding,
respectively
4
4
Class C common stock, par value $0.0001
per share – 0.001 share authorized, issued and outstanding
—
—
Additional paid-in capital
98,280
106,051
Treasury stock, at cost; 4,551 and 5,130
shares, respectively
(159,440
)
(179,732
)
Retained earnings
185,244
221,031
Total stockholders' equity attributable to
Camping World Holdings, Inc.
124,584
147,830
Non-controlling interests
89,623
99,856
Total stockholders' equity
214,207
247,686
Total liabilities and stockholders'
equity
$
4,845,684
$
4,800,147
Camping World Holdings, Inc. and
Subsidiaries
Summary of Consolidated Statements of
Cash Flows (unaudited)
(In Thousands)
Year Ended December
31,
2023
2022
Net cash provided by operating
activities
$
310,807
$
189,783
Investing activities
Purchases of property and equipment
(131,080
)
(154,926
)
Proceeds from sale of property and
equipment
3,204
1,623
Purchases of real property
(67,194
)
(55,666
)
Proceeds from the sale of real
property
40,785
7,352
Purchases of businesses, net of cash
acquired
(209,459
)
(217,034
)
Purchases of and loans to other
investments
(3,444
)
(3,000
)
Purchases of intangible assets
(2,218
)
(884
)
Net cash used in investing activities
(369,406
)
(422,535
)
Financing activities
Proceeds from long-term debt
59,227
127,759
Payments on long-term debt
(38,958
)
(12,322
)
Net proceeds on notes payable – floor
plan, net
59,280
314,061
Proceeds from landlord funded construction
on finance leases
—
6,028
Payments on finance leases
(5,497
)
(5,977
)
Proceeds from sale-leaseback
arrangement
—
27,951
Payments on sale-leaseback arrangement
(187
)
(132
)
Payment of debt issuance costs
(937
)
(3,181
)
Dividends on Class A common stock
(66,831
)
(105,387
)
Proceeds from exercise of stock
options
389
541
RSU shares withheld for tax
(6,861
)
(11,128
)
Repurchases of Class A common stock to
treasury stock
—
(79,757
)
Disgorgement of short-swing profits by
Section 16 officer
—
58
Distributions to holders of LLC common
units
(31,510
)
(162,963
)
Net cash (used in) provided by financing
activities
(31,885
)
95,551
Decrease in cash and cash equivalents
(90,484
)
(137,201
)
Cash and cash equivalents at beginning of
the period
130,131
267,332
Cash and cash equivalents at end of the
period
$
39,647
$
130,131
Comparison of Certain Trends to Pre-COVID-19 Pandemic
Periods
During the year and three months ended December 31, 2023, we
experienced a decrease in gross margin for new and used vehicles
compared to the same periods in 2022. However, 2023 new vehicle
gross margins were higher than the pre-COVID-19 pandemic
comparative periods of 2016 to 2019, which we believe are more
typical demand environments than during the COVID-19 pandemic.
During 2023, as the procurement prices of model year 2024 new
vehicles declined compared to model years 2022 and 2023, we
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 2023 and is expected to
continue into the first quarter of 2024, compared to the pre-COVID
pandemic comparative periods.
Additionally, the percentage of total unit sales relating to
used vehicles was significantly higher in 2023 compared to the
pre-COVID-19 pandemic periods of 2016 to 2019. We are continuing to
execute on our used vehicle strategy, which differentiates us from
the competition with proprietary tools, such as the RV Valuator, a
focus on the development and retention of our service technician
team, and investment in our service bay infrastructure.
The following table presents vehicle gross margin and unit sales
mix for the three months ended December 31, 2023 and pre-COVID-19
pandemic periods for the three months ended December 31, 2019,
2018, 2017, and 2016 (unaudited):
Three Months Ended December
31,
2023
2019(1)
2018(1)
2017(1)
2016(1)
Gross
margin:
New vehicles
18.9
%
13.1
%
11.8
%
14.1
%
13.4
%
Used vehicles
15.1
%
19.8
%
21.4
%
22.0
%
21.6
%
Unit sales
mix:
New vehicles
53.0
%
57.3
%
63.4
%
66.3
%
60.0
%
Used vehicles
47.0
%
42.7
%
36.6
%
33.7
%
40.0
%
The following table presents vehicle gross margin and unit sales
mix for the year ended December 31, 2023 and pre-COVID-19 pandemic
periods for the year ended December 31, 2019, 2018, 2017, and 2016
(unaudited):
Year Ended December
31,
2023
2019(1)
2018(1)
2017(1)
2016(1)
Gross
margin:
New vehicles
15.5
%
12.5
%
12.9
%
14.4
%
14.2
%
Used vehicles
20.5
%
20.9
%
22.4
%
24.3
%
20.8
%
Unit sales
mix:
New vehicles
50.8
%
64.6
%
68.6
%
68.8
%
60.9
%
Used vehicles
49.2
%
35.4
%
31.4
%
31.2
%
39.1
%
(1) These periods were prior to the
COVID-19 pandemic.
(Loss) Earnings Per Share
Basic (loss) earnings per share of Class A common stock is
computed by dividing net (loss) income attributable to Camping
World Holdings, Inc. by the weighted-average number of shares of
Class A common stock outstanding during the period. Diluted (loss)
earnings per share of Class A common stock is computed by dividing
net (loss) income attributable to Camping World Holdings, Inc. by
the weighted-average number of shares of Class A common stock
outstanding adjusted to give effect to potentially dilutive
securities.
The following table sets forth reconciliations of the numerators
and denominators used to compute basic and diluted (loss) earnings
per share of Class A common stock (unaudited):
Three Months Ended December
31,
Year Ended December
31,
(In thousands except per share
amounts)
2023
2022
2023
2022
Numerator:
Net (loss) income
$
(49,918
)
$
(57,201
)
$
50,601
$
351,031
Less: net (loss) income attributable to
non-controlling interests
33,129
23,981
(19,557
)
(214,084
)
Net (loss) income attributable to Camping
World Holdings, Inc. — basic
$
(16,789
)
$
(33,220
)
31,044
136,947
Add: reallocation of net income
attributable to non-controlling interests from the assumed dilutive
effect of stock options and RSUs
—
—
—
938
Add: reallocation of net income
attributable to non-controlling interests from the assumed
redemption of common units of CWGS, LLC for Class A common
stock
(24,645
)
—
15,392
—
Net (loss) income attributable to Camping
World Holdings, Inc. — diluted
$
(41,434
)
$
(33,220
)
$
46,436
$
137,885
Denominator:
Weighted-average shares of Class A common
stock outstanding — basic
44,889
42,287
44,626
42,386
Dilutive options to purchase Class A
common stock
—
—
20
56
Dilutive restricted stock units
—
—
281
412
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
84,934
42,287
84,972
42,854
(Loss) earnings per share of Class A
common stock — basic
$
(0.37
)
$
(0.79
)
$
0.70
$
3.23
(Loss) earnings per share of Class A
common stock — diluted
$
(0.49
)
$
(0.79
)
$
0.55
$
3.22
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
199
244
50
—
Restricted stock units
2,074
2,822
1,364
2,146
Common units of CWGS, LLC that are
convertible into Class A common stock
—
42,045
—
42,045
Non-GAAP Financial Measures
To supplement our consolidated financial statements, which are
prepared and presented in accordance with accounting principles
generally accepted in the United States (“GAAP”), we use the
following non-GAAP financial measures: EBITDA, Adjusted EBITDA,
Adjusted EBITDA Margin, trailing twelve-month (“TTM”) Adjusted
EBITDA, Adjusted Net (Loss) Income Attributable to Camping World
Holdings, Inc. – Basic, Adjusted Net (Loss) Income Attributable to
Camping World Holdings, Inc. – Diluted, Adjusted (Loss) Earnings
Per Share – Basic, and Adjusted (Loss) Earnings Per Share – Diluted
(collectively the "Non-GAAP Financial Measures"). We believe that
these Non-GAAP Financial Measures, when used in conjunction with
GAAP financial measures, provide useful information about operating
results, enhance the overall understanding of past financial
performance and future prospects, and allow for greater
transparency with respect to the key metrics we use in our
financial and operational decision making. These Non-GAAP Financial
Measures are also frequently used by analysts, investors and other
interested parties to evaluate companies in the Company’s industry
and are used by management to evaluate our operating performance,
to evaluate the effectiveness of strategic initiatives and for
planning purposes. By providing these Non-GAAP Financial Measures,
together with reconciliations, we believe we are enhancing
investors’ understanding of our business and our results of
operations, as well as assisting investors in evaluating how well
we are executing our strategic initiatives. In addition, our Senior
Secured Credit Facilities use Adjusted EBITDA, as calculated for
our subsidiary CWGS Group, LLC, to measure our compliance with
covenants such as the consolidated leverage ratio. The Non-GAAP
Financial Measures have limitations as analytical tools, and the
presentation of this financial information is not intended to be
considered in isolation or as a substitute for, or superior to, the
financial information prepared and presented in accordance with
GAAP. They should not be construed as an inference that the
Company’s future results will be unaffected by any items adjusted
for in these Non-GAAP Financial Measures. In evaluating these
Non-GAAP Financial Measures, it is reasonable to expect that
certain of these items will occur in future periods. However, we
believe these adjustments are appropriate because the amounts
recognized can vary significantly from period to period, do not
directly relate to the ongoing operations of our business and
complicate comparisons of our internal operating results and
operating results of other companies over time. Each of the normal
recurring adjustments and other adjustments described in this
section and in the reconciliation tables below help management with
a measure of our core operating performance over time by removing
items that are not related to day-to-day operations.
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.
Our earnings call on February 22, 2024 may present guidance that
includes Adjusted EBITDA. A full reconciliation of the forecasted
Adjusted EBITDA to its most-directly comparable GAAP metric cannot
be provided without unreasonable efforts due to the inherent
difficulty in forecasting and quantifying with reasonable accuracy
significant items required for the reconciliations.
The Non-GAAP Financial Measures that we use are not necessarily
comparable to similarly titled measures used by other companies due
to different methods of calculation.
EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin
We define “EBITDA” as net (loss) income before other interest
expense, net (excluding floor plan interest expense), provision for
income tax benefit (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 and
Adjusted EBITDA Margin to the most directly comparable GAAP
financial performance measures (unaudited):
Three Months Ended December
31,
Year Ended December
31,
($ in thousands)
2023
2022
2023
2022
EBITDA and Adjusted EBITDA:
Net (loss) income
$
(49,918
)
$
(57,201
)
$
50,601
$
351,031
Other interest expense, net
35,397
25,983
135,270
75,745
Depreciation and amortization
19,181
18,935
68,643
80,304
Income tax (benefit) expense
(18,732
)
23,276
(1,199
)
99,084
Subtotal EBITDA
(14,072
)
10,993
253,315
606,164
Long-lived asset impairment (a)
—
726
9,269
4,231
Lease termination (b)
(478
)
492
(103
)
1,614
(Gain) loss on sale or disposal of assets,
net (c)
(221
)
232
(5,222
)
622
Equity-based compensation (d)
5,770
6,413
24,086
33,847
Tax Receivable Agreement liability
adjustment (e)
(762
)
(114
)
(2,442
)
(114
)
Restructuring costs (f)
732
1,478
5,540
7,026
Loss and impairment on investments in
equity securities (g)
110
—
1,770
—
Adjusted EBITDA
$
(8,921
)
$
20,220
$
286,213
$
653,390
Three Months Ended December
31,
Year Ended December
31,
(as percentage of total revenue)
2023
2022
2023
2022
Adjusted EBITDA margin:
Net (loss) income margin
(4.5
%)
(4.5
%)
0.8
%
5.0
%
Other interest expense, net
3.2
%
2.0
%
2.2
%
1.1
%
Depreciation and amortization
1.7
%
1.5
%
1.1
%
1.2
%
Income tax (benefit) expense
(1.7
%)
1.8
%
(0.0
%)
1.4
%
Subtotal EBITDA margin
(1.3
%)
0.9
%
4.1
%
8.7
%
Long-lived asset impairment (a)
—
0.1
%
0.1
%
0.1
%
Lease termination (b)
(0.0
%)
0.0
%
(0.0
%)
0.0
%
(Gain) loss on sale or disposal of assets,
net (c)
(0.0
%)
0.0
%
(0.1
%)
0.0
%
Equity-based compensation (d)
0.5
%
0.5
%
0.4
%
0.5
%
Tax Receivable Agreement liability
adjustment (e)
(0.1
%)
(0.0
%)
(0.0
%)
(0.0
%)
Restructuring costs (f)
0.1
%
0.1
%
0.1
%
0.1
%
Loss and impairment on investments in
equity securities (g)
0.0
%
—
0.0
%
—
Adjusted EBITDA margin
(0.8
%)
1.6
%
4.6
%
9.4
%
(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 months and the
year ended December 31, 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 consolidated statements of operations. During the year
ended December 31, 2023, this amount included a $1.3 million
impairment on an equity method investment.
Adjusted Net (Loss) Income Attributable to Camping World
Holdings, Inc. and Adjusted (Loss) Earnings Per Share
We define “Adjusted Net Income (Loss) Attributable to Camping
World Holdings, Inc. – Basic” as net income (loss) 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
benefit (expense) effect of these adjustments, and the effect of
net (loss) income attributable to non-controlling interests from
these adjustments.
We define “Adjusted Net (Loss) Income Attributable to Camping
World Holdings, Inc. – Diluted” as Adjusted Net (Loss) Income
Attributable to Camping World Holdings, Inc. – Basic adjusted for
the reallocation of net (loss) income attributable to
non-controlling interests from stock options and restricted stock
units, if dilutive, or the assumed redemption, if dilutive, of all
outstanding common units in CWGS, LLC for shares of newly-issued
Class A common stock of Camping World Holdings, Inc.
We define “Adjusted (Loss) Earnings Per Share – Basic” as
Adjusted Net (Loss) Income Attributable to Camping World Holdings,
Inc. - Basic divided by the weighted-average shares of Class A
common stock outstanding. We define “Adjusted (Loss) Earnings Per
Share – Diluted” as Adjusted Net (Loss) Income Attributable to
Camping World Holdings, Inc. – Diluted divided by the
weighted-average shares of Class A common stock outstanding,
assuming (i) the redemption of all outstanding common units in
CWGS, LLC for newly-issued shares of Class A common stock of
Camping World Holdings, Inc., if dilutive, and (ii) the dilutive
effect of stock options and restricted stock units, if any. We
present Adjusted Net (Loss) Income Attributable to Camping World
Holdings, Inc. – Basic, Adjusted Net (Loss) Income Attributable to
Camping World Holdings, Inc. – Diluted, Adjusted (Loss) Earnings
Per Share – Basic, and Adjusted (Loss) Earnings Per Share – Diluted
because we consider them to be important supplemental measures of
our performance and we believe that investors’ understanding of our
performance is enhanced by including these Non-GAAP financial
measures as a reasonable basis for comparing our ongoing results of
operations.
The following table reconciles Adjusted Net (Loss) Income
Attributable to Camping World Holdings, Inc. – Basic, Adjusted Net
(Loss) Income Attributable to Camping World Holdings, Inc. –
Diluted, Adjusted (Loss) Earnings Per Share – Basic, and Adjusted
(Loss) Earnings Per Share – Diluted to the most directly comparable
GAAP financial performance measure:
Three Months Ended
Year Ended
December 31,
December 31,
(In thousands except per share
amounts)
2023
2022
2023
2022
Numerator:
Net (loss) income attributable to Camping
World Holdings, Inc.
$
(16,789
)
$
(33,220
)
$
31,044
$
136,947
Adjustments related to basic
calculation:
Long-lived asset impairment (a):
Gross adjustment
—
726
9,269
4,231
Income tax expense for above adjustment
(b)
—
—
(1,233
)
(99
)
Lease termination (c):
Gross adjustment
(478
)
492
(103
)
1,614
Income tax benefit for above adjustment
(b)
63
—
13
—
(Gain) loss on sale or disposal of assets
(d):
Gross adjustment
(221
)
232
(5,222
)
622
Income tax benefit (expense) for above
adjustment (b)
23
(31
)
690
(46
)
Equity-based compensation (e):
Gross adjustment
5,770
6,413
24,086
33,847
Income tax expense for above adjustment
(b)
(769
)
(730
)
(3,228
)
(3,810
)
Tax Receivable Agreement liability
adjustment (f):
Gross adjustment
(762
)
(114
)
(2,442
)
(114
)
Income tax benefit for above adjustment
(b)
191
29
613
29
Restructuring costs (g):
Gross adjustment
732
1,478
5,540
7,026
Income tax expense for above adjustment
(b)
(97
)
—
(736
)
—
Loss and impairment on investments in
equity securities (h):
Gross adjustment
110
—
1,770
—
Income tax expense for above adjustment
(b)
(15
)
—
(237
)
—
Income tax (benefit) expense impact from
LLC conversion (i):
(2,008
)
28,402
(2,008
)
28,402
Adjustment to net (loss) income
attributable to non-controlling interests resulting from the above
adjustments (j)
(2,776
)
(12,199
)
(16,683
)
(31,065
)
Adjusted net (loss) income attributable to
Camping World Holdings, Inc. – basic
(17,026
)
(8,522
)
41,133
177,584
Adjustments related to diluted
calculation:
Reallocation of net (loss) income
attributable to non-controlling interests from the dilutive effect
of stock options and restricted stock units (k)
—
—
—
1,479
Income tax on reallocation of net (loss)
income attributable to non-controlling interests from the dilutive
effect of stock options and restricted stock units (l)
—
—
—
(405
)
Reallocation of net (loss) income
attributable to non-controlling interests from the dilutive
redemption of common units in CWGS, LLC (k)
(30,353
)
—
36,240
—
Income tax on reallocation of net (loss)
income attributable to non-controlling interests from the dilutive
redemption of common units in CWGS, LLC (l)
7,799
—
(8,341
)
—
Adjusted net (loss) income attributable to
Camping World Holdings, Inc. – diluted
$
(39,580
)
$
(8,522
)
$
69,032
$
178,658
Denominator:
Weighted-average Class A common shares
outstanding – basic
44,889
42,287
44,626
42,386
Adjustments related to diluted
calculation:
Dilutive redemption of common units in
CWGS, LLC for shares of Class A common stock (n)
40,045
—
40,045
—
Dilutive options to purchase Class A
common stock (n)
—
—
20
56
Dilutive restricted stock units (n)
—
—
281
412
Adjusted weighted average Class A common
shares outstanding – diluted
84,934
42,287
84,972
42,854
Adjusted (loss) earnings per share -
basic
$
(0.38
)
$
(0.20
)
$
0.92
$
4.19
Adjusted (loss) earnings per share -
diluted
$
(0.47
)
$
(0.20
)
$
0.81
$
4.17
Anti-dilutive amounts (o):
Numerator:
Reallocation of net (loss) income
attributable to non-controlling interests from the anti-dilutive
redemption of common units in CWGS, LLC (k)
$
—
$
(11,782
)
$
—
$
243,670
Income tax on reallocation of net (loss)
income attributable to non-controlling interests from the
anti-dilutive redemption of common units in CWGS, LLC (l)
$
—
$
(362
)
$
—
$
(67,150
)
Assumed income tax benefit of combining
C-corporations with full or partial valuation allowances with the
income of other consolidated entities after the anti-dilutive
redemption of common units in CWGS, LLC (m)
$
—
$
5,816
$
—
$
12,280
Denominator:
Anti-dilutive redemption of common units
in CWGS, LLC for shares of Class A common stock (n)
—
42,045
—
42,045
Anti-dilutive options to purchase Class A
common stock (n)
—
38
—
—
Anti-dilutive restricted stock units
(n)
202
251
—
—
Reconciliation of per share
amounts:
(Loss) earnings per share of Class A
common stock — basic
$
(0.37
)
$
(0.79
)
$
0.70
$
3.23
Non-GAAP Adjustments (p)
(0.01
)
0.59
0.22
0.96
Adjusted (loss) earnings per share -
basic
$
(0.38
)
$
(0.20
)
$
0.92
$
4.19
(Loss) earnings per share of Class A
common stock — diluted
$
(0.49
)
$
(0.79
)
$
0.55
$
3.22
Non-GAAP Adjustments (p)
(0.01
)
0.59
0.22
0.96
Dilutive redemption of common units in
CWGS, LLC for shares of Class A common stock (q)
0.03
—
0.04
—
Dilutive options to purchase Class A
common stock and/or restricted stock units (q)
—
—
—
(0.01
)
Adjusted (loss) earnings per share -
diluted
$
(0.47
)
$
(0.20
)
$
0.81
$
4.17
(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 25.0% 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 months and the
year ended December 31, 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 consolidated statements of operations. During the year
ended December 31, 2023, this amount included a $1.3 million
impairment on an equity method investment.
(i)
Represents income tax (benefit) expense
relating to the LLC Conversion, which was primarily from
adjustments for certain deferred tax assets that were written off
or had changes in their valuation allowance.
(j)
Represents the adjustment to net (loss)
income attributable to non-controlling interests resulting from the
above adjustments that impact the net (loss) income of CWGS, LLC.
This adjustment uses the non-controlling interest’s weighted
average ownership of CWGS, LLC of 47.1% and 49.9% for the three
months ended December 31, 2023 and 2022, respectively, and 47.3%
and 49.8% for the year ended December 31, 2023 and 2022,
respectively.
(k)
Represents the reallocation of net (loss)
income attributable to non-controlling interests from the impact of
the assumed change in ownership of CWGS, LLC from stock options,
restricted stock units, and/or common units of CWGS, LLC.
(l)
Represents the (loss) income tax expense
effect of the above adjustment for reallocation of net (loss)
income attributable to non-controlling interests. This assumption
uses effective tax rates between 25.0% and 25.4% for the
adjustments for 2023 and 2022 periods.
(m)
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.
(n)
Represents the impact to the denominator
for stock options, restricted stock units, and/or common units of
CWGS, LLC.
(o)
The below amounts have not been considered
in our adjusted (loss) earnings per share – diluted amounts as the
effect of these items are anti-dilutive.
(p)
Represents the per share impact of the
Non-GAAP adjustments to net (loss) income detailed above (see (a)
through (k) above).
(q)
Represents the per share impact of stock
options, restricted stock units, and/or common units of CWGS, LLC
from the difference in their dilutive impact between the GAAP and
Non-GAAP (loss) earnings per share calculations.
Our “Up-C” corporate structure may make it difficult to compare
our results with those of companies with a more traditional
corporate structure. There can be a significant fluctuation in the
numerator and denominator for the calculation of our adjusted
(loss) earnings per share – diluted depending on if the common
units in CWGS, LLC are considered dilutive or anti-dilutive for a
given period. To improve comparability of our financial results,
users of our financial statements may find it useful to review our
(loss) earnings per share assuming the full redemption of common
units in CWGS, LLC for all periods, even when those common units
would be anti-dilutive. The relevant numerator and denominator
adjustments have been provided under “Anti-dilutive amounts” in the
table above (see (o) above).
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240221815066/en/
Investors: Brett Andress InvestorRelations@campingworld.com
Media Outlets: PR-CWGS@CampingWorld.com
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