CWH
$33.11
Camping World Holdings
$1.22
3.83%
Earnings Details
Quarter December 2020
Thursday, February 25, 2021 7:49:00 AM
Tweet Share Watch
Summary

Camping World Holdings Beats

Camping World Holdings (CWH) reported Quarter December 2020 earnings of $0.58 per share on revenue of $1.1 billion. The consensus earnings estimate was $0.40 per share on revenue of $1.1 billion. The Earnings Whisper number was $0.36 per share. Revenue grew 17.5% on a year-over-year basis.

Results
Reported Earnings
$0.58
Earnings Whisper
$0.36
Consensus Estimate
$0.40
Reported Revenue
$1.13 Bil
Revenue Estimate
$1.06 Bil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

Camping World Holdings, Inc. Reports Fourth Quarter and Full Year 2020 Results

LINCOLNSHIRE, IL--(BUSINESS WIRE)--Camping World Holdings, Inc. (NYSE: CWH) (the “Company”), America’s largest retailer of recreational vehicles (“RVs”) and related services and products, today reported results for the fourth quarter and full year ended December 31, 2020.

Marcus Lemonis, Chairman and CEO of Camping World Holdings, Inc. stated, “We have one focus in our company and that’s on our long-term plan.”

Full Year-over-Year Operating Highlights:

  • Revenue increased 11.3% to $5.4 billion
  • Gross profit increased 32.2% to $1.7 billion
  • Income from operations of $476.2 million, an increase of $467.4 million
  • Net income of $344.2 million, an increase of $464.5 million, and included long-lived asset impairment and restructuring costs of $30.0 million primarily related to the 2019 strategic shift away from locations that do not sell and/or service RVs (“2019 Strategic Shift”)
  • Diluted earnings per share of Class A common stock and adjusted earnings per share - diluted(1) of Class A common stock were $3.09, and $3.66, respectively
  • Adjusted EBITDA(1) of $565.0 million, an increase of $399.0 million
  • Vehicle inventories decreased $262.6 million: new vehicle inventories were down $275.0 million and used vehicle inventories were up $12.4 million
  • Products, parts, accessories and other inventories increased $40.9 million to $266.8 million
  • The number of Active Customers(2) increased 3.8% to approximately 5.31 million, and the number of Good Sam Club members decreased 1.7% to approximately 2.09 million primarily due to expiring members related to store closures resulting from the 2019 Strategic Shift.

Fourth Quarter-over-Quarter Operating Highlights:

  • Revenue increased 17.5% to $1.1 billion
  • Gross profit increased 57.1% to $378.0 million
  • Income from operations of $66.5 million, an increase of $132.6 million
  • Net income of $40.3 million, an increase of $121.2 million, and included long-lived asset impairment and restructuring costs of $4.5 million related to the 2019 Strategic Shift
  • Diluted earnings per share of Class A common stock, and adjusted earnings per share - diluted(1) of Class A common stock were $0.34 and $0.48, respectively
  • Adjusted EBITDA(1) of $91.2 million,an increase of $106.4 million, and was positively impacted by a strong RV market resulting in year over year increased revenue

________________

(1)

 

Adjusted earnings per share – diluted, and adjusted EBITDA are non-GAAP measures. For a reconciliation of these non-GAAP measures to the most directly comparable GAAP measures, see the “Non-GAAP Financial Measures” section later in this press release.

(2)

 

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.

2019 Strategic Shift and Long-lived Asset Impairment

In 2019, we made a strategic decision to refocus our business around our core RV competencies and consolidated our non-RV retail business through the closure of a number of stores and liquidation of select products and merchandise categories. The Company currently estimates the total restructuring costs associated with the 2019 Strategic Shift will be in the range of $89.6 million to $110.6 million. In 2020 and 2019, we recorded restructuring costs of $17.6 million and $47.2 million, respectively, related to the 2019 Strategic Shift. The remaining costs relate to lease termination and other costs for locations that continue in a wind-down period in 2021, primarily comprised of lease costs accounted for under ASC 842.

During the year ended December 31, 2020, the Company identified indicators of impairment at previously closed stores in certain markets. Of the $12.4 million long-lived asset impairment charge during the year ended December 31, 2020, $12.3 million related to the 2019 Strategic Shift. Of the $66.3 million long-lived asset impairment charge during the year ended December 31, 2019, $57.4 million related to the 2019 Strategic Shift discussed above.

Earnings Conference Call and Webcast Information

A conference call to discuss the Company’s fourth quarter and fiscal year 2020 financial results is scheduled for today, February 25, 2021, at 4:05 p.m. Eastern Time. Investors and analysts can participate on the conference call by dialing (800) 263-0877 or (646) 828-8143 and using conference ID# 5100957. 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, of the Company and its subsidiaries, that are presented in accordance with accounting principles generally accepted in the United States (“GAAP”), unless noted as a non-GAAP financial measure. The Company’s initial public offering (“IPO”) and related reorganization transactions (“Reorganization Transactions”) that occurred on October 6, 2016 resulted in the Company as the sole managing member of CWGS Enterprises, LLC (“CWGS, LLC”), with sole voting power in and control of the management of CWGS, LLC. Despite its position as sole managing member of CWGS, LLC, the Company has a minority economic interest in CWGS, LLC. As of December 31, 2020, the Company owned 47.4% of CWGS, LLC. Accordingly, the Company consolidates the financial results of CWGS, LLC and reports a non-controlling interest in its consolidated financial statements. Unless otherwise indicated, all financial comparisons in this press release compare our financial results of the fourth quarter and full year ended December 31, 2020 to our financial results from the fourth quarter and full year ended December 31, 2019.

About Camping World Holdings, Inc.

Camping World Holdings, Inc. (together with its subsidiaries) is America’s largest retailer of RVs and related products and services. Our vision is to build a long-term legacy business that makes RVing fun and easy, and our Camping World and Good Sam brands have been serving RV consumers since 1966. We strive to build long-term value for our customers, employees, and 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 our long-term plan and costs related to the 2019 Strategic Shift. 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 five 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 December 31,

Year Ended December 31,

2020

2019

2020

2019

Revenue:
Good Sam Services and Plans

$

43,309

 

$

45,643

 

$

180,977

 

$

179,538

 

RV and Outdoor Retail
New vehicles

 

520,231

 

 

381,158

 

 

2,823,311

 

 

2,370,321

 

Used vehicles

 

204,627

 

 

184,720

 

 

984,853

 

 

857,628

 

Products, service and other

 

268,473

 

 

274,504

 

 

948,890

 

 

1,034,577

 

Finance and insurance, net

 

85,708

 

 

66,720

 

 

464,261

 

 

401,302

 

Good Sam Club

 

11,472

 

 

12,186

 

 

44,299

 

 

48,653

 

Subtotal

 

1,090,511

 

 

919,288

 

 

5,265,614

 

 

4,712,481

 

Total revenue

 

1,133,820

 

 

964,931

 

 

5,446,591

 

 

4,892,019

 

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

 

17,245

 

 

19,176

 

 

72,938

 

 

78,054

 

RV and Outdoor Retail
New vehicles

 

411,350

 

 

331,109

 

 

2,320,537

 

 

2,074,270

 

Used vehicles

 

155,374

 

 

148,166

 

 

751,029

 

 

678,640

 

Products, service and other

 

169,440

 

 

225,034

 

 

590,716

 

 

762,919

 

Good Sam Club

 

2,382

 

 

838

 

 

8,892

 

 

10,738

 

Subtotal

 

738,546

 

 

705,147

 

 

3,671,174

 

 

3,526,567

 

Total costs applicable to revenue

 

755,791

 

 

724,323

 

 

3,744,112

 

 

3,604,621

 

 
Gross profit:
Good Sam Services and Plans

 

26,064

 

 

26,467

 

 

108,039

 

 

101,484

 

RV and Outdoor Retail
New vehicles

 

108,881

 

 

50,049

 

 

502,774

 

 

296,051

 

Used vehicles

 

49,253

 

 

36,554

 

 

233,824

 

 

178,988

 

Products, service and other

 

99,033

 

 

49,470

 

 

358,174

 

 

271,658

 

Finance and insurance, net

 

85,708

 

 

66,720

 

 

464,261

 

 

401,302

 

Good Sam Club

 

9,090

 

 

11,348

 

 

35,407

 

 

37,915

 

Subtotal

 

351,965

 

 

214,141

 

 

1,594,440

 

 

1,185,914

 

Total gross profit

 

378,029

 

 

240,608

 

 

1,702,479

 

 

1,287,398

 

 
Operating expenses:
Selling, general, and administrative

 

293,834

 

 

270,648

 

 

1,156,071

 

 

1,141,643

 

Depreciation and amortization

 

13,032

 

 

18,288

 

 

51,981

 

 

59,932

 

Long-lived asset impairment

 

1,406

 

 

16,245

 

 

12,353

 

 

66,270

 

Lease termination

 

2,590

 

 

(686

)

 

4,547

 

 

(686

)

Loss on disposal of assets

 

670

 

 

2,245

 

 

1,332

 

 

11,492

 

Total operating expenses

 

311,532

 

 

306,740

 

 

1,226,284

 

 

1,278,651

 

 
Income (loss) from operations

 

66,497

 

 

(66,132

)

 

476,195

 

 

8,747

 

 
Other income (expense):
Floor plan interest expense

 

(2,972

)

 

(8,224

)

 

(19,689

)

 

(40,108

)

Other interest expense, net

 

(12,588

)

 

(15,941

)

 

(54,689

)

 

(69,363

)

Tax Receivable Agreement liability adjustment

 

141

 

 

1,528

 

 

141

 

 

10,005

 

Total other expense

 

(15,419

)

 

(22,637

)

 

(74,237

)

 

(99,466

)

 
Income (loss) before income taxes

 

51,078

 

 

(88,769

)

 

401,958

 

 

(90,719

)

Income tax (expense) benefit

 

(10,740

)

 

7,915

 

 

(57,743

)

 

(29,582

)

Net income (loss)

 

40,338

 

 

(80,854

)

 

344,215

 

 

(120,301

)

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

 

(25,960

)

 

52,333

 

 

(221,870

)

 

59,710

 

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

$

14,378

 

$

(28,521

)

$

122,345

 

$

(60,591

)

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

$

0.34

 

$

(0.76

)

$

3.11

 

$

(1.62

)

Diluted

$

0.34

 

$

(0.89

)

$

3.09

 

$

(1.62

)

Weighted average shares of Class A common stock outstanding:
Basic

 

42,444

 

 

37,443

 

 

39,383

 

 

37,310

 

Diluted

 

43,233

 

 

89,112

 

 

40,009

 

 

37,350

Camping World Holdings, Inc.
Supplemental Operating Data (unaudited)

Three Months Ended December 31,

Increase

Percent

 

2020

 

 

2019

 

(decrease)

Change

Unit sales
New vehicles

 

13,274

 

 

9,597

 

 

3,677

 

38.3

%

Used vehicles

 

6,930

 

 

7,166

 

 

(236

)

(3.3

%)

Total

 

20,204

 

 

16,763

 

 

3,441

 

20.5

%

Average selling price
New vehicles

$

39,192

 

$

39,716

 

$

(525

)

(1.3

%)

Used vehicles

 

29,528

 

 

25,777

 

 

3,750

 

14.5

%

 
Same store unit sales
New vehicles

 

11,891

 

 

8,714

 

 

3,177

 

36.5

%

Used vehicles

 

6,251

 

 

6,664

 

 

(413

)

(6.2

%)

Total

 

18,142

 

 

15,378

 

 

2,764

 

18.0

%

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

$

467,655

 

$

349,385

 

$

118,270

 

33.9

%

Used vehicles

 

187,150

 

 

175,437

 

 

11,713

 

6.7

%

Products, service and other

 

147,352

 

 

118,459

 

 

28,893

 

24.4

%

Finance and insurance, net

 

78,031

 

 

61,853

 

 

16,178

 

26.2

%

Total

$

880,188

 

$

705,134

 

$

175,054

 

24.8

%

 
Average gross profit per unit
New vehicles

$

8,203

 

$

5,215

 

$

2,988

 

57.3

%

Used vehicle

 

7,107

 

 

5,101

 

 

2,006

 

39.3

%

Finance and insurance, net per vehicle unit

 

4,242

 

 

3,980

 

 

262

 

6.6

%

Total vehicle front-end yield(1)

 

12,069

 

 

9,147

 

 

2,922

 

32.0

%

 
Gross margin
Good Sam Services and Plans

 

60.2

%

 

58.0

%

 

219

 

bps
 
New vehicles

 

20.9

%

 

13.1

%

 

780

 

bps
Used vehicles

 

24.1

%

 

19.8

%

 

428

 

bps
Products, service and other

 

36.9

%

 

18.0

%

 

1,887

 

bps
Finance and insurance, net

 

100.0

%

 

100.0

%

unch.bps
Good Sam Club

 

79.2

%

 

93.1

%

 

(1,389

)

bps
Subtotal RV and Outdoor Retail

 

32.3

%

 

23.3

%

 

898

 

bps
Total gross margin

 

33.3

%

 

24.9

%

 

841

 

bps
 
Inventories ($ in 000's)
New vehicles

$

691,114

 

$

966,134

 

$

(275,020

)

(28.5

%)

Used vehicles

 

178,336

 

 

165,927

 

 

12,409

 

7.5

%

Products, parts, accessories and misc.

 

266,786

 

 

225,888

 

 

40,898

 

18.1

%

Total RV and Outdoor Retail inventories

$

1,136,236

 

$

1,357,949

 

$

(221,713

)

(16.3

%)

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

$

4,319

 

$

6,274

 

$

(1,954

)

(31.1

%)

Used vehicle inventory per dealer location

 

1,115

 

 

1,077

 

 

37

 

3.4

%

 
Vehicle inventory turnover(2)
New vehicle inventory turnover

 

3.1

 

 

2.1

 

 

1.0

 

44.9

%

Used vehicle inventory turnover

 

5.2

 

 

4.8

 

 

0.4

 

9.0

%

 
Retail locations
RV dealerships

 

160

 

 

154

 

 

6

 

3.9

%

RV service & retail centers

 

10

 

 

11

 

 

(1

)

(9.1

%)

Subtotal

 

170

 

 

165

 

 

5

 

3.0

%

Other retail stores

 

1

 

 

10

 

 

(9

)

(90.0

%)

Total

 

171

 

 

175

 

 

(4

)

(2.3

%)

 
Other data
Active Customers(3)

 

5,314,104

 

 

5,118,413

 

 

195,691

 

3.8

%

Good Sam Club members

 

2,088,064

 

 

2,124,724

 

 

(36,660

)

(1.7

%)

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

 

11.8

%

 

11.8

%

 

3

 

bps

n/a

 

Same store locations

 

142

 

 

n/a

 

 

n/a

 

n/a

 

 

Year Ended December 31,

Increase

Percent

 

2020

 

 

2019

 

(decrease)

Change

Unit sales
New vehicles

 

77,827

 

 

66,111

 

 

11,716

 

17.7

%

Used vehicles

 

37,760

 

 

36,213

 

 

1,547

 

4.3

%

Total

 

115,587

 

 

102,324

 

 

13,263

 

13.0

%

 
Average selling price
New vehicles

$

36,277

 

$

35,854

 

$

423

 

1.2

%

Used vehicles

 

26,082

 

 

23,683

 

 

2,399

 

10.1

%

 
Same store unit sales
New vehicles

 

70,313

 

 

61,390

 

 

8,923

 

14.5

%

Used vehicles

 

34,351

 

 

34,477

 

 

(126

)

(0.4

%)

Total

 

104,664

 

 

95,867

 

 

8,797

 

9.2

%

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

$

2,567,103

 

$

2,223,696

 

$

343,406

 

15.4

%

Used vehicles

 

911,315

 

 

828,312

 

 

83,004

 

10.0

%

Products, service and other

 

594,060

 

 

523,328

 

 

70,732

 

13.5

%

Finance and insurance, net

 

426,229

 

 

379,785

 

 

46,444

 

12.2

%

Total

$

4,498,708

 

$

3,955,122

 

$

543,586

 

13.7

%

 
Average gross profit per unit
New vehicles

$

6,460

 

$

4,478

 

$

1,982

 

44.3

%

Used vehicle

 

6,192

 

 

4,943

 

 

1,249

 

25.3

%

Finance and insurance, net per vehicle unit

 

4,017

 

 

3,922

 

 

95

 

2.4

%

Total vehicle front-end yield(1)

 

10,389

 

 

8,564

 

 

1,825

 

21.3

%

 
Gross margin
Good Sam Services and Plans

 

59.7

%

 

56.5

%

 

317

 

bps
 
New vehicles

 

17.8

%

 

12.5

%

 

532

 

bps
Used vehicles

 

23.7

%

 

20.9

%

 

287

 

bps
Products, service and other

 

37.7

%

 

26.3

%

 

1,149

 

bps
Finance and insurance, net

 

100.0

%

 

100.0

%

unch.bps
Good Sam Club

 

79.9

%

 

77.9

%

 

200

 

bps
Subtotal RV and Outdoor Retail

 

30.3

%

 

25.2

%

 

511

 

bps
Total gross margin

 

31.3

%

 

26.3

%

 

494

 

bps
 
Inventories ($ in 000's)
New vehicles

$

691,114

 

$

966,134

 

$

(275,020

)

(28.5

%)

Used vehicles

 

178,336

 

 

165,927

 

 

12,409

 

7.5

%

Products, parts, accessories and misc.

 

266,786

 

 

225,888

 

 

40,898

 

18.1

%

Total RV and Outdoor Retail inventories

$

1,136,236

 

$

1,357,949

 

$

(221,713

)

(16.3

%)

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

 

12.2

%

 

12.4

%

 

(24

)

bps

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 unit revenue.

(2)

Inventory turnover calculated as vehicle costs applicable to revenue divided by average vehicle inventory.

(3)

An Active Customer is a customer who has transacted with us in any of the eight most recently completed fiscal quarters prior to the date of measurement.

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

December 31,

December 31,

2020

2019

Assets
Current assets:
Cash and cash equivalents

$ 166,072

$ 147,521

Contracts in transit

48,175

44,947

Accounts receivable, net

83,422

81,847

Inventories

1,136,345

1,358,539

Prepaid expenses and other assets

60,211

57,827

Total current assets

1,494,225

1,690,681

Property and equipment, net

367,898

314,374

Operating lease assets

769,487

807,537

Deferred tax asset, net

165,708

129,710

Intangibles assets, net

30,122

29,707

Goodwill

413,123

386,941

Other assets

15,868

17,290

Total assets

$ 3,256,431

$ 3,376,240

Liabilities and stockholders' deficit
Current liabilities:
Accounts payable

$ 148,462

$ 106,959

Accrued liabilities

137,688

130,316

Deferred revenues

88,213

87,093

Current portion of operating lease liabilities

62,405

58,613

Current portion of Tax Receivable Agreement liability

8,089

6,563

Current portion of long-term debt

14,414

14,085

Notes payable – floor plan, net

522,455

848,027

Other current liabilities

53,795

44,298

Total current liabilities

1,035,521

1,295,954

Operating lease obligations, net of current portion

804,555

843,312

Tax Receivable Agreement liability, net of current portion

137,845

108,228

Revolving line of credit

20,885

40,885

Long-term debt, net of current portion

1,150,417

1,153,551

Deferred revenues

61,519

58,079

Other long-term liabilities

54,920

35,467

Total liabilities

3,265,662

3,535,476

Commitments and contingencies
Stockholders' deficit:
Preferred stock, par value $0.01 per share – 20,000,000 shares authorized; none
issued and outstanding as of December 31, 2020 and December 31, 2019

Class A common stock, par value $0.01 per share – 250,000,000 shares authorized;
43,083,008 issued and 42,226,389 outstanding as of December 31, 2020 and
37,701,584 issued and 37,488,989 outstanding as of December 31, 2019

428

375

Class B common stock, par value $0.0001 per share – 75,000,000 shares authorized;
69,066,445 issued as of December 31, 2020 and December 31, 2019; and
45,999,132 and 50,706,629 outstanding as of December 31, 2020 and
December 31, 2019

5

5

Class C common stock, par value $0.0001 per share – one share authorized, issued
and outstanding as of December 31, 2020 and December 31, 2019

Additional paid-in capital

63,342

50,152

Treasury stock, at cost; 572,447 and 0 shares as of December 31, 2020 and
December 31, 2019

(15,187)

Retained deficit

(21,814)

(83,134)

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

26,774

(32,602)

Non-controlling interests

(36,005)

(126,634)

Total stockholders' deficit

(9,231)

(159,236)

Total liabilities and stockholders' deficit

$ 3,256,431

$ 3,376,240

Earnings Per Share

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

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

Three Months Ended

Year Ended

December 31

December 31

December 31

December 31

(In thousands except per share amounts)

 

2020

 

 

2019

 

 

2020

 

 

2019

 

Numerator:
Net income (loss)

$

40,338

 

$

(80,854

)

$

344,215

 

$

(120,301

)

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

 

(25,960

)

 

52,333

 

 

(221,870

)

 

59,710

 

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

$

14,378

 

$

(28,521

)

$

122,345

 

$

(60,591

)

Add: reallocation of net income attributable to non-controlling interests
from the assumed dilitive effect of stock options and RSUs

 

160

 

 

 

 

1,304

 

 

(71

)

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

 

 

 

(50,375

)

 

 

 

 

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

$

14,538

 

$

(78,896

)

$

123,649

 

$

(60,662

)

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

 

42,444

 

 

37,443

 

 

39,383

 

 

37,310

 

Dilutive options to purchase Class A common stock

 

125

 

 

 

 

79

 

 

 

Dilutive restricted stock units

 

664

 

 

 

 

547

 

 

40

 

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

 

 

 

51,669

 

 

 

 

 

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

 

43,233

 

 

89,112

 

 

40,009

 

 

37,350

 

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

$

0.34

 

$

(0.76

)

$

3.11

 

$

(1.62

)

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

$

0.34

 

$

(0.89

)

$

3.09

 

$

(1.62

)

 
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

 

 

 

751

 

 

361

 

 

795

 

Restricted stock units

 

2,305

 

 

1,499

 

 

1,349

 

 

1,179

 

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

 

46,825

 

 

 

 

49,916

 

 

51,670

 

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

Year Ended

December 31,

December 31,

($ in thousands)

 

2020

 

 

2019

 

 

2020

 

 

2019

 

 
EBITDA:
Net income (loss)

$

40,338

 

$

(80,854

)

$

344,215

 

$

(120,301

)

Other interest expense, net

 

12,588

 

 

15,941

 

 

54,689

 

 

69,363

 

Depreciation and amortization

 

13,032

 

 

18,288

 

 

51,981

 

 

59,932

 

Income tax expense

 

10,740

 

 

(7,915

)

 

57,743

 

 

29,582

 

Subtotal EBITDA

 

76,698

 

 

(54,540

)

 

508,628

 

 

38,576

 

Long-lived asset impairment (a)

 

1,406

 

 

16,245

 

 

12,353

 

 

66,270

 

Lease termination (b)

 

2,590

 

 

(686

)

 

4,547

 

 

(686

)

Loss on disposal of assets, net (c)

 

670

 

 

2,245

 

 

1,332

 

 

11,492

 

Equity-based compensation (d)

 

6,966

 

 

3,632

 

 

20,661

 

 

13,145

 

Tax Receivable Agreement liability
adjustment (e)

 

(141

)

 

(1,528

)

 

(141

)

 

(10,005

)

Restructuring costs (f)

 

3,047

 

 

19,499

 

 

17,609

 

 

47,223

 

Adjusted EBITDA

$

91,236

 

$

(15,133

)

$

564,989

 

$

166,015

 

 

 

 

 
 

Three Months Ended

Year Ended

December 31,

December 31,

(as percentage of total revenue)

 

2020

 

 

2019

 

 

2020

 

 

2019

 

 
EBITDA margin:
Net income (loss) margin

 

3.6

%

 

(8.4

%)

 

6.3

%

 

(2.5

%)

Other interest expense, net

 

1.1

%

 

1.7

%

 

1.0

%

 

1.4

%

Depreciation and amortization

 

1.1

%

 

1.9

%

 

1.0

%

 

1.2

%

Income tax expense

 

0.9

%

 

(0.8

%)

 

1.1

%

 

0.6

%

Subtotal EBITDA

 

6.8

%

 

(5.7

%)

 

9.3

%

 

0.8

%

Long-lived asset impairment (a)

 

0.1

%

 

1.7

%

 

0.2

%

 

1.4

%

Lease termination (b)

 

0.2

%

 

(0.1

%)

 

0.1

%

 

(0.0

%)

Loss on disposal of assets, net (c)

 

0.1

%

 

0.2

%

 

0.0

%

 

0.2

%

Equity-based compensation (d)

 

0.6

%

 

0.4

%

 

0.4

%

 

0.3

%

Tax Receivable Agreement liability adjustment (e)

 

(0.0

%)

 

(0.2

%)

 

(0.0

%)

 

(0.2

%)

Restructuring costs (f)

 

0.3

%

 

2.0

%

 

0.3

%

 

1.0

%

Adjusted EBITDA

 

8.0

%

 

(1.6

%)

 

10.4

%

 

3.4

%

(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 (gain) on the termination of operating leases relating primarily to the 2019 Strategic Shift, net of lease

termination fees.

(c)

 

Represents an adjustment to eliminate (i) losses on the disposal or sale of real estate at closed RV and Outdoor Retail locations in 2020 and 2019, and (ii) 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 gains on remeasurement of the Tax Receivable Agreement primarily due to changes in our effective income tax rate and the transfer of certain assets from GSS Enterprises LLC (“GSS”) to Camping World, Inc. (“CW”).

(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 exclude 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 (unaudited):

Three Months Ended

Year Ended

December 31,

December 31,

(In thousands except per share amounts)

 

2020

 

 

2019

 

 

2020

 

 

2019

 

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

$

14,378

 

$

(28,521

)

$

122,345

 

$

(60,591

)

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

 

1,406

 

 

16,245

 

 

12,353

 

 

66,270

 

Income tax expense for above adjustment (b)

 

 

 

(138

)

 

(13

)

 

(220

)

Lease termination (c):
Gross adjustment

 

2,590

 

 

(686

)

 

4,547

 

 

(686

)

Income tax (expense) benefit for above adjustment (b)

 

(13

)

 

32

 

 

(36

)

 

32

 

Loss on disposal of assets and other expense, net (d):
Gross adjustment

 

670

 

 

2,245

 

 

1,332

 

 

11,492

 

Income tax benefit (expense) for above adjustment (b)

 

1

 

 

(289

)

 

(1

)

 

(750

)

Equity-based compensation (e):
Gross adjustment

 

6,966

 

 

3,632

 

 

20,661

 

 

13,145

 

Income tax expense for above adjustment (b)

 

(727

)

 

(323

)

 

(2,023

)

 

(1,138

)

Tax Receivable Agreement liability adjustment (f):
Gross adjustment

 

(141

)

 

(1,528

)

 

(141

)

 

(10,005

)

Income tax benefit for above adjustment (b)

 

35

 

 

382

 

 

35

 

 

2,525

 

Restructuring costs (g):
Gross adjustment

 

3,047

 

 

19,499

 

 

17,609

 

 

47,223

 

Income tax expense for above adjustment (b)

 

(14

)

 

 

 

(84

)

 

 

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

 

(7,692

)

 

(23,734

)

 

(31,537

)

 

(79,748

)

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

 

20,506

 

 

(13,184

)

 

145,047

 

 

(12,451

)

Adjustments related to diluted calculation:
Reallocation of net income (loss) attributable to non-
controlling interests from the dilutive effect of stock options and restricted stock units (i)

 

295

 

 

 

 

1,994

 

 

(26

)

Income tax on reallocation of net income attributable to non-
controlling interests from the dilutive effect of stock options and restricted stock units (j)

 

(75

)

 

 

 

(494

)

 

(3

)

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

$

20,726

 

$

(13,184

)

$

146,547

 

$

(12,480

)

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

 

42,444

 

 

37,443

 

 

39,383

 

 

37,310

 

Adjustments related to diluted calculation:
Dilutive options to purchase Class A common stock (k)

 

125

 

 

 

 

79

 

 

 

Dilutive restricted stock units (k)

 

664

 

 

 

 

547

 

 

40

 

Adjusted weighted average Class A common shares
outstanding – diluted

 

43,233

 

 

37,443

 

 

40,009

 

 

37,350

 

 
Adjusted earnings (loss) per share - basic

$

0.48

 

$

(0.35

)

$

3.68

 

$

(0.33

)

Adjusted earnings (loss) per share - diluted

$

0.48

 

$

(0.35

)

$

3.66

 

$

(0.33

)

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

 

33,357

 

$

(28,599

)

$

251,412

 

$

20,064

 

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

 

(8,450

)

$

970

 

$

(64,964

)

$

(25,076

)

Assumed income tax benefit of combining C-corporations
with full valuation allowances with the income of other
consolidated entities after the anti-dilutive exchange of
common units in CWGS, LLC (m)

 

764

 

$

10,548

 

$

6,430

 

$

35,326

 

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

 

46,825

 

 

51,669

 

 

49,916

 

 

51,670

 

Anti-dilutive restricted stock units (k)

 

 

 

114

 

 

 

 

 

(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 effective tax rates between 25.0% and 25.3% for the adjustments for 2020 and 2019, 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 (gain) on the termination of operating leases relating primarily to the 2019 Strategic Shift, net of lease termination costs.

(d)

Represents an adjustment to eliminate (i) losses on the disposal or sale of real estate at closed RV and Outdoor Retail locations in 2020 and 2019, and (ii) the gains and losses on disposal 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 gains on remeasurement of the Tax Receivable Agreement primarily due to changes in our effective income tax rate and the transfer of certain assets from GSS to CW.

(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, and exclude lease terminations costs.

(h)

Represents the adjustment to net (income) loss 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 52.5% and 58.0% for the quarters ended December 31, 2020 and 2019, respectively, and 55.9% and 58.1% for the years ended December 31, 2020 and 2019, 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 effective tax rates between 25.0% to 25.3% for the adjustments in 2020 and 2019, which represents the estimated tax rate that would apply had the above adjustments been included in the determination of our non-GAAP metric.

(k)

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

(l)

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

(m)

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. 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 rates between 25.0% to 25.3% during 2020 and 2019, 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 are included in these amounts.

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 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 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 losses on disposal of assets and other expense, net, equity-based compensation, Tax Receivable Agreement liability, restructuring costs relating 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.

Investors:
InvestorRelations@campingworld.com

Media Outlets:
Karen Porter
PR-CWGS@CampingWorld.com

Source: Camping World Holdings, Inc.