Skip to main content

Camping World Holdings, Inc. Reports First Quarter 2021 Results and Raises Full Year Guidance

Camping World Holdings, Inc. (NYSE: CWH) (the “Company”), America’s Recreation Dealer, today reported results for the first quarter ended March 31, 2021.

First Quarter Operating Highlights

  • Revenue increased by $530.5 million to $1.558 billion
  • Gross profit increased by $217.8 million to $520.5 million, and gross margin increased by 395 basis points to 33.4%
  • Income from operations increased by $155.3 million to $168.6 million
  • Net income increased by $161.6 million to $147.4 million and included long-lived asset impairment and restructuring costs of $3.6 million related to the 2019 Strategic Shift. Net income margin was 9.5% versus a net loss margin of 1.4% for the first quarter of 2020
  • Diluted earnings per share of Class A common stock and adjusted earnings per share - diluted(1) of Class A common stock were each $1.40
  • Adjusted EBITDA(1) increased by $153.3 million to $189.3 million and adjusted EBITDA margin(1) was 12.2% for the first quarter versus 3.5% for the first quarter of 2020
  • Vehicle inventories decreased by $299.6 million: new vehicle inventories were down $338.7 million and used vehicle inventories were up $39.1 million
  • Products, parts, accessories and other inventories increased by $49.6 million to $284.2 million

Marcus Lemonis, Chairman and CEO of Camping World Holdings, Inc. stated, “As a result of our financial performance during the three months ended March 31, 2021, the continued strength of our business and the confidence in our business model, we are raising our 2021 fiscal year guidance(2) of Adjusted EBITDA of $640 million to $690 million to a revised Adjusted EBITDA of $770 million to $810 million.”

________________

(1)

Adjusted earnings per share – diluted, adjusted EBITDA and adjusted EBITDA Margin 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. A reconciliation for the Company’s Adjusted EBITDA outlook to the corresponding GAAP measures on a forward-looking basis cannot be provided without unreasonable efforts, as we are unable to provide reconciling information with respect to certain items. However, in 2021 the Company expects equity-based compensation of approximately $27-30 million, depreciation and amortization of approximately $53-58 million, other interest expense of approximately $47-50 million, and restructuring charges of approximately $10-13 million, each of which is a reconciling item to Net Income.

(2)

Prior guidance provided on February 25, 2021.

Earnings Conference Call and Webcast Information

A conference call to discuss the Company’s first quarter 2021 financial results is scheduled for today, May 4, 2021, at 8:30 am Eastern Time. Investors and analysts can participate on the conference call by dialing (866) 548-4713 or (323) 794-2093 and using conference ID# 2210962. 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. Despite its position as sole managing member of CWGS, LLC, the Company had a minority economic interest in CWGS, LLC through March 11, 2021. As of March 31, 2021, the Company owned 50.9% of CWGS, LLC. Accordingly, the Company consolidates the financial results of CWGS, LLC and reports a non-controlling interest in its consolidated financial statements. Unless otherwise indicated, all financial comparisons in this press release compare our financial results for the first quarter ended March 31, 2021 to our financial results from the first quarter ended March 31, 2020.

About Camping World Holdings, Inc.

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

For more information, please visit www.CampingWorld.com.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements contained in this press release that do not relate to matters of historical fact should be considered forward-looking statements, including, without limitation, statements about our business plans and goals, including statements regarding strength of our business, our long-term plan and our financial outlook. These forward-looking statements are based on management’s current expectations.

These statements are neither promises nor guarantees, but involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements, including, but not limited to, the following: the COVID-19 pandemic, which has had, and could have in the future, certain negative impacts on our business; our ability to execute and achieve the expected benefits of our 2019 Strategic Shift; the availability of financing to us and our customers; fuel shortages or high prices for fuel; the success of our manufacturers; general economic conditions in our markets; changes in consumer preferences; competition in our industry; risks related to acquisitions and expansion into new markets; our failure to maintain the strength and value of our brands; our ability to manage our inventory; fluctuations in our same store sales; the cyclical and seasonal nature of our business; our dependence on the availability of adequate capital and risks related to our debt; our reliance on six fulfillment and distribution centers; natural disasters, including epidemic outbreaks; risks associated with selling goods manufactured abroad; our dependence on our relationships with third party suppliers and lending institutions; our ability to retain senior executives and attract and retain other qualified employees; risks associated with leasing substantial amounts of space; 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, 2020 and our other reports filed with the SEC could cause actual results to differ materially from those indicated by the forward-looking statements made in this press release. Any such forward-looking statements represent management’s estimates as of the date of this press release. While we may elect to update such forward-looking statements at some point in the future, we disclaim any obligation to do so, even if subsequent events cause our views to change, except as required under applicable law. These forward-looking statements should not be relied upon as representing our views as of any date subsequent to the date of this press release.

Camping World Holdings, Inc. and Subsidiaries
Consolidated Statements of Operations (unaudited)
(In Thousands Except Per Share Amounts)
 
Three Months Ended March 31,

2021

2020

Revenue:
Good Sam Services and Plans

$

40,871

$

47,208

RV and Outdoor Retail
New vehicles

821,976

497,317

Used vehicles

294,257

206,665

Products, service and other

251,270

172,623

Finance and insurance, net

138,254

92,456

Good Sam Club

11,153

11,004

Subtotal

1,516,910

980,065

Total revenue

1,557,781

1,027,273

 
Costs applicable to revenue (exclusive of depreciation
and amortization shown separately below):
Good Sam Club Services and Plans

14,424

21,859

RV and Outdoor Retail
New vehicles

643,680

426,442

Used vehicles

223,193

163,793

Products, service and other

154,146

110,269

Good Sam Club

1,844

2,247

Subtotal

1,022,863

702,751

Total costs applicable to revenue

1,037,287

724,610

 
Gross profit:
Good Sam Services and Plans

26,447

25,349

RV and Outdoor Retail
New vehicles

178,296

70,875

Used vehicles

71,064

42,872

Products, service and other

97,124

62,354

Finance and insurance, net

138,254

92,456

Good Sam Club

9,309

8,757

Subtotal

494,047

277,314

Total gross profit

520,494

302,663

 
Operating expenses:
Selling, general, and administrative

337,034

267,656

Depreciation and amortization

12,701

14,078

Long-lived asset impairment

546

6,569

Lease termination

1,756

584

(Gain) loss on disposal of assets

(99

)

511

Total operating expenses

351,938

289,398

Income from operations

168,556

13,265

 
Other income (expense):
Floor plan interest expense

(3,390

)

(8,604

)

Other interest expense, net

(12,223

)

(14,658

)

Tax Receivable Agreement liability adjustment

(3,520

)

Other income, net

45

Total other expense

(19,088

)

(23,262

)

 
Income (loss) before income taxes

149,468

(9,997

)

Income tax expense

(2,043

)

(4,132

)

Net income (loss)

147,425

(14,129

)

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

(85,103

)

5,969

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

$

62,322

$

(8,160

)

 
Earnings (loss) per share of Class A common stock:
Basic

$

1.43

$

(0.22

)

Diluted

$

1.40

$

(0.22

)

Weighted average shares of Class A common stock outstanding:
Basic

43,584

37,534

Diluted

90,238

37,534

Camping World Holdings, Inc.
Supplemental DataThree Months Ended March 31,IncreasePercent

2021

2020

(decrease)

Change

Unit sales
New vehicles

21,433

14,208

7,225

50.9

%

Used vehicles

10,319

8,682

1,637

18.9

%

Total

31,752

22,890

8,862

38.7

%

Average selling price
New vehicles

$

38,351

$

35,003

$

3,348

9.6

%

Used vehicles

$

28,516

$

23,804

$

4,712

19.8

%

 
Same store unit sales
New vehicles

20,028

13,838

6,190

44.7

%

Used vehicles

9,742

8,484

1,258

14.8

%

Total

29,770

22,322

7,448

33.4

%

 
Same store revenue ($ in 000's)
New vehicles

$

771,283

$

484,825

$

286,458

59.1

%

Used vehicles

279,514

202,191

77,323

38.2

%

Products, service and other

167,907

126,866

41,041

32.3

%

Finance and insurance, net

129,925

90,379

39,546

43.8

%

Total

$

1,348,629

$

904,261

$

444,368

49.1

%

 
Average gross profit per unit
New vehicles

$

8,319

$

4,988

$

3,330

66.8

%

Used vehicle

$

6,887

$

4,938

$

1,949

39.5

%

Finance and insurance, net per vehicle unit

$

4,354

$

4,039

$

315

7.8

%

Total vehicle front-end yield(1)

$

12,208

$

9,008

$

3,199

35.5

%

 
Gross margin
Good Sam Services and Plans

64.7

%

53.7

%

1,101

bps
New vehicles

21.7

%

14.3

%

744

bps
Used vehicles

24.2

%

20.7

%

341

bps
Products, service and other

38.7

%

36.1

%

253

bps
Finance and insurance, net

100.0

%

100.0

%

unch.bps
Good Sam Club

83.5

%

79.6

%

389

bps
Subtotal RV and Outdoor Retail

32.6

%

28.3

%

427

bps
Total gross margin

33.4

%

29.5

%

395

bps
 
Inventories ($ in 000's)
New vehicles

$

715,085

$

1,053,802

$

(338,717

)

(32.1

%)

Used vehicles

190,176

151,058

39,118

25.9

%

Products, parts, accessories and misc.

284,203

234,555

49,648

21.2

%

Total RV and Outdoor Retail inventories

$

1,189,464

$

1,439,415

$

(249,951

)

(17.4

%)

 
Vehicle inventory per location ($ in 000's)
New vehicle inventory per dealer location

$

4,334

$

6,712

$

(2,378

)

(35.4

%)

Used vehicle inventory per dealer location

$

1,153

$

962

$

190

19.8

%

 
Vehicle inventory turnover(2)
New vehicle inventory turnover

3.8

2.1

1.7

81.4

%

Used vehicle inventory turnover

5.2

4.6

0.6

12.6

%

 
Retail locations
RV dealerships

165

157

8

5.1

%

RV service & retail centers

10

10

-

0.0

%

Subtotal

175

167

8

4.8

%

Other retail stores

1

1

-

0.0

%

Total

176

168

8

4.8

%

 
Other data
Active Customers(3)

5,488,280

5,131,687

356,593

6.9

%

Good Sam Club members

2,120,143

2,094,134

26,009

1.2

%

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

12.4

%

13.1

%

(75

)

bps

n/a

Same store locations

158

n/a

n/a

n/a

(1)

Front end yield is calculated as gross profit from new vehicles, used vehicles and finance and insurance (net), divided by combined new and used retail units sold.

(2)

Inventory turnover calculated as vehicle costs applicable to revenue divided by average quarterly ending vehicle inventory over the last twelve months.

(3)

An Active Customer is a customer who has transacted with us in any of the eight most recently completed fiscal quarters prior to the date of measurement. The Active Customer quantity as of March 31, 2020 has been revised to 5,131,687 from 4,921,246 for a correction to the Active Customers for our specialty retail business.

Camping World Holdings, Inc. and Subsidiaries
Consolidated Balance Sheets (unaudited)
($ in Thousands Except Per Share Amounts)
 
March 31,December 31,

2021

2020

Assets
Current assets:
Cash and cash equivalents

$

256,870

$

166,072

Contracts in transit

165,751

48,175

Accounts receivable, net

89,142

83,422

Inventories

1,189,508

1,136,345

Prepaid expenses and other assets

51,082

60,211

Total current assets

1,752,353

1,494,225

Property and equipment, net

405,035

367,898

Operating lease assets

767,256

769,487

Deferred tax asset, net

213,180

165,708

Intangibles assets, net

29,185

30,122

Goodwill

420,135

413,123

Other assets

16,016

15,868

Total assets

$

3,603,160

$

3,256,431

Liabilities and stockholders' equity (deficit)
Current liabilities:
Accounts payable

$

245,261

$

148,462

Accrued liabilities

185,788

137,688

Deferred revenues

88,006

88,213

Current portion of operating lease liabilities

63,007

62,405

Current portion of finance lease liabilities

2,585

2,240

Current portion of Tax Receivable Agreement liability

8,089

8,089

Current portion of long-term debt

12,174

12,174

Notes payable – floor plan, net

539,687

522,455

Other current liabilities

66,748

53,795

Total current liabilities

1,211,345

1,035,521

Operating lease obligations, net of current portion

801,181

804,555

Finance lease obligations, net of current portion

37,791

27,742

Tax Receivable Agreement liability, net of current portion

167,457

137,845

Revolving line of credit

20,885

20,885

Long-term debt, net of current portion

1,120,581

1,122,675

Deferred revenues

64,269

61,519

Other long-term liabilities

55,001

54,920

Total liabilities

3,478,510

3,265,662

Commitments and contingencies
Stockholders' equity (deficit):
Preferred stock, par value $0.01 per share – 20,000,000 shares authorized; none issued and outstanding as of March 31, 2021 and December 31, 2020

Class A common stock, par value $0.01 per share – 250,000,000 shares authorized; 46,112,336 issued and 45,388,998 outstanding as of March 31, 2021 and 43,083,008 issued and 42,226,389 outstanding as of December 31, 2020

458

428

Class B common stock, par value $0.0001 per share – 75,000,000 shares authorized; 69,066,445 issued as of March 31, 2021 and December 31, 2020; and 43,151,528 and 45,999,132 outstanding as of March 31, 2021 and December 31, 2020

4

5

Class C common stock, par value $0.0001 per share – one share authorized, issued and outstanding as of March 31, 2021 and December 31, 2020

Additional paid-in capital

69,209

63,342

Treasury stock, at cost; 439,166 and 572,447 shares as of March 31, 2021 and December 31, 2020

(11,651

)

(15,187

)

Retained earnings (deficit)

30,155

(21,814

)

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

88,175

26,774

Non-controlling interests

36,475

(36,005

)

Total stockholders' equity (deficit)

124,650

(9,231

)

Total liabilities and stockholders' equity (deficit)

$

3,603,160

$

3,256,431

Earnings Per Share

Basic earnings per share of Class A common stock is computed by dividing net income (loss) available to Camping World Holdings, Inc. by the weighted-average number of shares of Class A common stock outstanding during the period. Diluted earnings per share of Class A common stock is computed by dividing net income (loss) available to Camping World Holdings, Inc. by the weighted-average number of shares of Class A common stock outstanding adjusted to give effect to potentially dilutive securities.

The following table sets forth reconciliations of the numerators and denominators used to compute basic and diluted earnings per share of Class A common stock (unaudited):

Camping World Holdings, Inc.
 
 
Three Months Ended March 31,
(In thousands except per share amounts)

2021

2020

Numerator:
Net income (loss)

$

147,425

$

(14,129

)

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

(85,103

)

5,969

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

62,322

(8,160

)

Add: reallocation of net income attributable to non-controlling interests from the assumed exchange of common units of CWGS, LLC for Class A common stock

63,980

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

$

126,302

$

(8,160

)

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

43,584

37,534

Dilutive options to purchase Class A common stock

165

Dilutive restricted stock units

955

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

45,534

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

90,238

37,534

 
Earnings (loss) per share of Class A common stock — basic

$

1.43

$

(0.22

)

Earnings (loss) per share of Class A common stock — diluted

$

1.40

$

(0.22

)

 
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

738

Restricted stock units

1

1,732

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

51,649

Non-GAAP Financial Measures

To supplement our consolidated financial statements, which are prepared and presented in accordance with accounting principles generally accepted in the United States (“GAAP”), we use the following non-GAAP financial measures: EBITDA, Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Net Income Attributable to Camping World Holdings, Inc. – 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. 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, and 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, you should be aware that in the future the Company may incur expenses that are the same as or similar to some of those adjusted in this presentation. 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 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 disposal of assets and other expense, net, equity-based compensation, Tax Receivable Agreement liability adjustment, restructuring costs related to the 2019 Strategic Shift, and other unusual or one-time items. We define “Adjusted EBITDA Margin” as Adjusted EBITDA as a percentage of total revenue. We caution investors that amounts presented in accordance with our definitions of EBITDA, Adjusted EBITDA, and Adjusted EBITDA Margin may not be comparable to similar measures disclosed by our competitors, because not all companies and analysts calculate EBITDA, Adjusted EBITDA, and Adjusted EBITDA Margin in the same manner. We present EBITDA, Adjusted EBITDA, and Adjusted EBITDA Margin because we consider them to be important supplemental measures of our performance and believe they are frequently used by securities analysts, investors and other interested parties in the evaluation of companies in our industry. Management believes that investors’ understanding of our performance is enhanced by including these Non-GAAP Financial Measures as a reasonable basis for comparing our ongoing results of operations.

The following table reconciles EBITDA, Adjusted EBITDA, and Adjusted EBITDA Margin to the most directly comparable GAAP financial performance measures, which are net income (loss) and net income (loss) margin, respectively (unaudited):

Three Months Ended
March 31,
($ in thousands)

2021

2020

 
EBITDA:
Net income (loss)

$

147,425

$

(14,129

)

Other interest expense, net

12,223

14,658

Depreciation and amortization

12,701

14,078

Income tax expense

2,043

4,132

Subtotal EBITDA

174,392

18,739

Long-lived asset impairment (a)

546

6,569

Lease termination (b)

1,756

584

(Gain) loss on disposal of assets, net (c)

(99

)

511

Equity-based compensation (d)

6,109

3,312

Tax Receivable Agreement liability adjustment (e)

3,520

Restructuring costs (f)

3,067

6,282

Adjusted EBITDA

$

189,291

$

35,997

 
 
 
Three Months Ended
March 31,
(as percentage of total revenue)

2021

2020

 
EBITDA margin:
Net income (loss) margin

9.5

%

(1.4

%)

Other interest expense, net

0.8

%

1.4

%

Depreciation and amortization

0.8

%

1.4

%

Income tax expense

0.1

%

0.4

%

Subtotal EBITDA margin

11.2

%

1.8

%

Long-lived asset impairment (a)

0.0

%

0.6

%

Lease termination (b)

0.1

%

0.1

%

(Gain) loss on disposal of assets, net (c)

(0.0

%)

0.0

%

Equity-based compensation (d)

0.4

%

0.3

%

Tax Receivable Agreement liability adjustment (e)

0.2

%

Restructuring costs (f)

0.2

%

0.6

%

Adjusted EBITDA margin

12.2

%

3.5

%

(a)

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

(b)

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

(c)

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

(d)

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

(e)

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

(f)

Represents restructuring costs relating to our 2019 Strategic Shift. These restructuring costs include one-time employee termination benefits relating to retail store or distribution center closures/divestitures, incremental inventory reserve charges, and other associated costs. These costs do not include lease termination costs, which are presented separately above.

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 disposal of assets and other expense, net, equity-based compensation, Tax Receivable Agreement liability adjustment, restructuring costs related to the 2019 Strategic Shift, 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 exchange, 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 exchange 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, which is net income attributable to Camping World Holdings, Inc., in the case of the Adjusted Net Income non-GAAP financial measures, and weighted-average shares of Class A common stock outstanding – basic, in the case of the Adjusted Earnings Per Share non-GAAP financial measures:

Three Months Ended

March 31,
(In thousands except per share amounts)

2021

2020

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

$

62,322

$

(8,160

)

Adjustments related to basic calculation:
Long-lived asset impairment (a):
Gross adjustment

546

6,569

Income tax expense for above adjustment (b)

(13

)

Lease termination (c):
Gross adjustment

1,756

584

Income tax expense for above adjustment (b)

(39

)

(Gain) loss on disposal of assets (d):
Gross adjustment

(99

)

511

Income tax expense for above adjustment (b)

(1

)

(1

)

Equity-based compensation (e):
Gross adjustment

6,109

3,312

Income tax expense for above adjustment (b)

(654

)

(302

)

Tax Receivable Agreement liability adjustment (f):
Gross adjustment

3,520

Income tax expense for above adjustment (b)

(898

)

Restructuring costs (g):
Gross adjustment

3,067

6,282

Income tax expense for above adjustment (b)

(13

)

(35

)

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

(5,809

)

(9,994

)

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

69,807

(1,247

)

Adjustments related to diluted calculation:
Reallocation of net income attributable to non-controlling interests from the dilutive exchange of common units in CWGS, LLC (i)

90,912

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

(21,852

)

Assumed income tax expense of combining C-corporations with full or partial valuation allowances with the income of other consolidated entities after the dilutive exchange of common units in CWGS, LLC (k)

(12,919

)

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

$

125,948

$

(1,247

)

Denominator:
Weighted-average Class A common shares outstanding – basic

43,584

37,534

Adjustments related to diluted calculation:
Dilutive exchange of common units in CWGS, LLC for shares of Class A common stock (l)

45,534

Dilutive options to purchase Class A common stock (l)

165

Dilutive restricted stock units (l)

955

Adjusted weighted average Class A common shares outstanding – diluted

90,238

37,534

 
Adjusted earnings per share - basic

$

1.60

$

(0.03

)

Adjusted earnings per share - diluted

$

1.40

$

(0.03

)

 
Anti-dilutive amounts (m):
Numerator:
Reallocation of net income attributable to non-controlling interests from the anti-dilutive exchange of common units in CWGS, LLC (i)

$

-

$

4,025

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

$

-

$

(5,734

)

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 exchange of common units in CWGS, LLC (k)

$

-

$

8,143

Denominator:
Anti-dilutive exchange of common units in CWGS, LLC for shares of Class A common stock (l)

51,649

Anti-dilutive restricted stock units (l)

284

 
(a)

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

(b)

Represents the current and deferred income tax expense or benefit effect of the above adjustments, many of which are related to entities with full valuation allowances for which no tax benefit can be currently recognized. This assumption uses an effective tax rate of 25.5% and 25.0% for the adjustments for 2021 and 2020, respectively, which represents the estimated tax rate that would apply had the above adjustments been included in the determination of our non-GAAP metric.

(c)

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

(d)

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

(g)

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

(h)

Represents the adjustment to net income attributable to non-controlling interests resulting from the above adjustments that impact the net income of CWGS, LLC. This adjustment uses the non-controlling interest’s weighted average ownership of CWGS, LLC of 51.1% and 57.9% for the three months ended March 31, 2021 and 2020, respectively.

(i)

Represents the reallocation of net income attributable to non-controlling interests from the impact of the assumed change in ownership of CWGS, LLC from stock options, restricted stock units, and/or common units of CWGS, LLC.

(j)

Represents the income tax expense effect of the above adjustment for reallocation of net income attributable to non-controlling interests. This assumption uses an effective tax rate of 25.5% and 25.0% for the adjustments for the 2021 and 2020 periods, respectively.

(k)

Typically represents adjustments to reflect the income tax benefit of losses of consolidated C-corporations that under the Company’s current equity structure cannot be used against the income of other consolidated subsidiaries of CWGS, LLC. However, for the three months ended March 31, 2021, this adjustment included the reversal of the $14.9 million release of valuation allowance for Camping World, Inc. Subsequent to the exchange of all common units in CWGS, LLC, the Company believes certain actions could be taken such that the C-corporations’ losses could offset income of other consolidated subsidiaries. The adjustment reflects the income tax benefit assuming effective tax rate of 25.5% and 25.0% during 2021 and 2020 periods, respectively, for the losses experienced by the consolidated C-corporations for which valuation allowances have been recorded. No assumed release of valuation allowance established for previous periods were included in these amounts and the $14.9 million release of valuation allowance during the three months ended March 31, 2021 was considered to be reversed and excluded from adjusted net income (loss) attributable to Camping World Holdings, Inc. – diluted for purposes of this calculation.

(l)

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

(m)

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

Uses and Limitations of Non-GAAP Financial Measures

Management and our board of directors use the Non-GAAP Financial Measures:

  • as a measurement of operating performance because they assist us in comparing the operating performance of our business on a consistent basis, as they remove the impact of items not directly resulting from our core operations;
  • for planning purposes, including the preparation of our internal annual operating budget and financial projections;
  • to evaluate the performance and effectiveness of our operational strategies; and
  • to evaluate our capacity to fund capital expenditures and expand our business.

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 EBITDA to measure our compliance with covenants such as the consolidated leverage ratio. The Non-GAAP Financial Measures have limitations as analytical tools, and should not be considered in isolation, or as an alternative to, or a substitute for net income or other financial statement data presented in our unaudited consolidated financial statements included elsewhere in this press release as indicators of financial performance. Some of the limitations are:

  • such measures do not reflect our cash expenditures, or future requirements for capital expenditures or contractual commitments;
  • such measures do not reflect changes in, or cash requirements for, our working capital needs;
  • some of such measures do not reflect the interest expense, or the cash requirements necessary to service interest or principal payments on our debt;
  • some of such measures do not reflect our tax expense or the cash requirements to pay our taxes;
  • although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future and such measures do not reflect any cash requirements for such replacements; and
  • other companies in our industry may calculate such measures differently than we do, limiting their usefulness as comparative measures.

Due to these limitations, the Non-GAAP Financial Measures should not be considered as measures of discretionary cash available to us to invest in the growth of our business. We compensate for these limitations by relying primarily on our GAAP results and using these Non-GAAP Financial Measures only supplementally. As noted in the tables above, certain of the Non-GAAP Financial Measures include adjustments for long-lived asset impairment, lease termination costs, gains and loss on disposal of assets, equity-based compensation, Tax Receivable Agreement liability, restructuring costs related to the 2019 Strategic Shift, other unusual or one-time items, and the income tax expense effect described above, as applicable. 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 paragraph and in the reconciliation tables above help management with a measure of our core operating performance over time by removing items that are not related to day-to-day operations.

Contacts:

Investors:
InvestorRelations@campingworld.com
(866) 895-5330

Data & News supplied by www.cloudquote.io
Stock quotes supplied by Barchart
Quotes delayed at least 20 minutes.
By accessing this page, you agree to the following
Privacy Policy and Terms and Conditions.