Camping World Holdings, Inc. Reports First Quarter 2023 Results, Record Used Unit Sales and Used Gross Profit, Plans to Continue Aggressively Acquiring RV Dealerships

LINCOLNSHIRE, Ill., May 02, 2023--(BUSINESS WIRE)--Camping World Holdings, Inc. (NYSE: CWH) (the "Company" or "CWH"), America’s Recreation Dealer, today reported results for the first quarter ended March 31, 2023.

Marcus Lemonis, Chairman and CEO of Camping World Holdings, Inc. stated, "As we predicted, despite softer new vehicle demand and gross margin in the quarter, we saw record setting gross profit performance in used vehicles and Good Sam Services and Plans. What’s most unusual about this moment is the rapid and recent influx of dealership acquisition opportunities, which we haven’t seen since we went public. Based on our acquisition activity year to date, we anticipate the pipeline will fill up, and we plan to capitalize on it."

First Quarter-over-Quarter Operating Highlights

• Revenue was $1.5 billion for the first quarter, a decrease of $175.5 million, or 10.6%.

• Used vehicle revenue was a record $444.7 million for the first quarter, an increase of $41.7 million, or 10.4%, and used vehicle unit sales were a record 12,432 units, an increase of 1,456 units, or 13.3%.

• New vehicle revenue was $646.8 million for the first quarter, a decline of $188.2 million, or 22.5%, and new vehicle unit sales were 13,912 units, a decrease of 5,108 units, or 26.9%.

• Products, service and other revenue was $207.7 million for the first quarter, a decline of $7.3 million, or 3.4%. Growth in service and parts revenues partly offset larger declines in our direct to manufacturer RV furniture revenues.

• Same store used vehicle unit sales increased 7.0% for the first quarter, and same store new vehicle unit sales decreased 30.6%.

• Gross profit was $441.0 million, a decrease of $119.2 million, or 21.3%. Total gross margin was 29.7%, a decrease of 404 basis points. The decrease in gross profit and gross margin was driven largely by the decrease in new vehicle revenue and related finance and insurance revenue and an increase in the cost of new vehicles sold.

• Floor plan interest expense was $20.8 million, an increase of $14.5 million, or 232.1%, primarily as a result of the rise in interest rates. Other interest expense, net was $31.1 million, an increase of $16.8 million, or 117.6%, primarily as a result of the rise in interest rates and a higher average principal balance.

• Net income was $4.9 million, a decrease of $102.4 million, or 95.4%, driven primarily by the pretax $101.4 million decrease in new vehicle gross profit, the $23.6 million decrease in finance and insurance gross profit on fewer vehicles sold, the $16.8 million increase in other interest expense, net, and the $14.5 million increase in floor plan interest, which was partially offset from the $19.6 million decrease in selling, general, and administrative expenses and the benefit to income tax expense from these net reductions of pretax income.

• Diluted earnings per share of Class A common stock was $0.05 in 2023 versus diluted earnings per share of Class A common stock of $1.02 in 2022. Adjusted earnings per share - diluted⁽¹⁾ of Class A common stock was $0.14 in 2023 versus adjusted earnings per share – diluted⁽¹⁾ of Class A common stock of $1.15 in 2022.

• Adjusted EBITDA⁽¹⁾ was $60.8 million, a decrease of $121.3 million, or 66.6%, driven primarily by the $101.4 million decrease in new vehicle gross profit, the $23.6 million decrease in finance and insurance gross profit on fewer vehicles sold, and the $14.5 million increase in floor plan interest, which was partially offset from the $19.6 million decrease in selling, general, and administrative expenses⁽²⁾.

____________________
(1)	Adjusted earnings per share – diluted and adjusted EBITDA are non-GAAP measures. For a reconciliation of these non-GAAP measures to the most directly comparable GAAP measures, see the "Non-GAAP Financial Measures" section later in this press release.
(2)	The $19.6 million decrease in selling, general, and administrative expenses includes a $5.3 million decrease in equity-based compensation. Equity-based compensation is excluded from the calculation of Adjusted EBITDA (see the "Non-GAAP Financial Measures" section later in this press release).

Earnings Conference Call and Webcast Information

A conference call to discuss the Company’s first quarter 2023 financial results is scheduled for May 3, 2023, at 7:30 am Central Time. Investors and analysts can participate on the conference call by dialing 1-877-407-9039 (international callers please dial 1-201-689-8470) and using conference ID# 13737788. 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 March 31, 2023, the Company owned 52.6% of CWGS, LLC. Accordingly, the Company consolidates the financial results of CWGS, LLC and reports a non-controlling interest in its consolidated financial statements.

About Camping World Holdings, Inc.

Camping World Holdings, Inc., headquartered in Lincolnshire, IL, (together with its subsidiaries) is America’s largest retailer of RVs and related products and services. Our vision is to build a long-term legacy business that makes RVing fun and easy, and our Camping World and Good Sam brands have been serving RV consumers since 1966. We strive to build long-term value for our customers, employees, and shareholders by combining a unique and comprehensive assortment of RV products and services with a national network of RV dealerships, service centers and customer support centers along with the industry’s most extensive online presence and a highly trained and knowledgeable team of associates serving our customers, the RV lifestyle, and the communities in which we operate. We also believe that our Good Sam organization and family of programs and services uniquely enable us to connect with our customers as stewards of the RV enthusiast community and the RV lifestyle. With RV sales and service locations in 42 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 macroeconomic and industry trends, expected impact of the subsidiary conversions on our ongoing income tax expense and tax distribution requirements, dividend payments, our business plans and goals, the strength of our business, our long-term plan, the Company’s strategic focuses including growing its used RV business, enhancements of wages and benefits of employees, the Company’s acquisition pipeline and plans, and future financial results. These forward-looking statements are based on management’s current expectations.

These statements are neither promises nor guarantees, but involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements, including, but not limited to, the following: general economic conditions, including inflation and interest rates; the availability of financing to us and our customers; fuel shortages or high prices for fuel; the success of our manufacturers; general economic conditions in our markets; changes in consumer preferences; competition in our industry; risks related to acquisitions, new store openings and expansion into new markets; our failure to maintain the strength and value of our brands; our ability to manage our inventory; fluctuations in our same store sales; the cyclical and seasonal nature of our business; risks related to the cybersecurity incident announced in February 2022; our dependence on the availability of adequate capital and risks related to our debt; risks related to the COVID-19 pandemic; our ability to execute and achieve the expected benefits of our cost cutting or restructuring initiatives; our reliance on our fulfillment and distribution centers; natural disasters, including epidemic outbreaks; our dependence on our relationships with third party suppliers and lending institutions; risks associated with selling goods manufactured abroad; our ability to retain senior executives and attract and retain other qualified employees; risks associated with leasing substantial amounts of space; risks associated with our private brand offerings; we may incur asset impairment charges for goodwill, intangible assets or other long-lived assets; tax risks; regulatory risks; data privacy and cybersecurity risks; risks related to our intellectual property; the impact of ongoing or future lawsuits against us and certain of our officers and directors; and risks related to our organizational structure.

These and other important factors discussed under the caption "Risk Factors" in our Annual Report on Form 10‑K filed for the year ended December 31, 2022 and our other reports filed with the SEC could cause actual results to differ materially from those indicated by the forward-looking statements made in this press release. Any such forward-looking statements represent management’s estimates as of the date of this press release. While we may elect to update such forward-looking statements at some point in the future, we disclaim any obligation to do so, even if subsequent events cause our views to change, except as required under applicable law. These forward-looking statements should not be relied upon as representing our views as of any date subsequent to the date of this press release.

Future declarations of quarterly dividends are subject to the determination and discretion of the Company’s Board of Directors based on its consideration of various factors, including the Company’s results of operations, financial condition, level of indebtedness, anticipated capital requirements, contractual restrictions, restrictions in its debt agreements, restrictions under applicable law, receipt of excess tax distributions from CWGS Enterprises, LLC, its business prospects and other factors that Camping World’s Board of Directors may deem relevant.

We intend to use our official Facebook, Twitter, and Instagram accounts, each at the handle @CampingWorld, as well as the investor page of our website, investor.campingworld.com, as a distribution channel of material information about the Company and for complying with our disclosure obligations under Regulation FD. The information we post through these social media channels and on our investor webpage may be deemed material. Accordingly, investors should subscribe to these accounts and our investor alerts, in addition to following our press releases, SEC filings, public conference calls and webcasts. These social media channels may be updated from time to time.

Camping World Holdings, Inc. and Subsidiaries
Consolidated Statements of Operations (unaudited)
(In Thousands Except Per Share Amounts)
	Three Months Ended
	March 31,
	2023				2022
Revenue:
Good Sam Services and Plans	$	46,367			$	44,559
RV and Outdoor Retail
New vehicles		646,752				834,959
Used vehicles		444,746				403,032
Products, service and other		207,661				214,973
Finance and insurance, net		129,772				153,378
Good Sam Club		11,582				11,495
Subtotal		1,440,513				1,617,837
Total revenue		1,486,880				1,662,396
Costs applicable to revenue (exclusive of depreciation and amortization shown separately below):
Good Sam Services and Plans		16,152				16,703
RV and Outdoor Retail
New vehicles		557,542				644,370
Used vehicles		341,947				302,825
Products, service and other		129,018				136,160
Good Sam Club		1,201				2,136
Subtotal		1,029,708				1,085,491
Total costs applicable to revenue		1,045,860				1,102,194
Gross profit (exclusive of depreciation and amortization shown separately below):
Good Sam Services and Plans		30,215				27,856
RV and Outdoor Retail:
New vehicles		89,210				190,589
Used vehicles		102,799				100,207
Products, service and other		78,643				78,813
Finance and insurance, net		129,772				153,378
Good Sam Club		10,381				9,359
Subtotal		410,805				532,346
Total gross profit		441,020				560,202
Operating expenses:
Selling, general, and administrative expenses		365,726				385,315
Depreciation and amortization		14,637				25,535
Long-lived asset impairment		7,045				—
Lease termination		—				178
(Gain) loss on sale or disposal of assets		(4,987	)			49
Total operating expenses		382,421				411,077
Income from operations		58,599				149,125
Other expense:
Floor plan interest expense		(20,810	)			(6,266	)
Other interest expense, net		(31,113	)			(14,301	)
Other expense, net		(1,500	)			(223	)
Total other expense		(53,423	)			(20,790	)
Income before income taxes		5,176				128,335
Income tax expense		(273	)			(21,036	)
Net income		4,903				107,299
Less: net income attributable to non-controlling interests		(1,734	)			(62,569	)
Net income attributable to Camping World Holdings, Inc.	$	3,169			$	44,730
Earnings per share of Class A common stock:
Basic	$	0.07			$	1.03
Diluted	$	0.05			$	1.02
Weighted average shares of Class A common stock outstanding:
Basic		44,455				43,553
Diluted		84,717				44,215

Camping World Holdings, Inc. and Subsidiaries
Supplemental Data
		Three Months Ended March 31,								Increase					Percent
		2023				2022				(decrease)					Change
Unit sales
New vehicles			13,912				19,020				(5,108	)				(26.9	%)
Used vehicles			12,432				10,976				1,456					13.3	%
Total			26,344				29,996				(3,652	)				(12.2	%)
Average selling price
New vehicles		$	46,489			$	43,899			$	2,590					5.9	%
Used vehicles		$	35,774			$	36,719			$	(945	)				(2.6	%)
Same store unit sales(1)
New vehicles			13,080				18,838				(5,758	)				(30.6	%)
Used vehicles			11,689				10,920				769					7.0	%
Total			24,769				29,758				(4,989	)				(16.8	%)
Same store revenue(1) ($ in 000s)
New vehicles		$	608,041			$	827,676			$	(219,635	)				(26.5	%)
Used vehicles			417,988				400,902				17,086					4.3	%
Products, service and other			150,476				158,652				(8,176	)				(5.2	%)
Finance and insurance, net			121,893				152,275				(30,382	)				(20.0	%)
Total		$	1,298,398			$	1,539,505			$	(241,107	)				(15.7	%)
Average gross profit per unit
New vehicles		$	6,412			$	10,020			$	(3,608	)				(36.0	%)
Used vehicles			8,269				9,130			$	(861	)				(9.4	%)
Finance and insurance, net per vehicle unit			4,926				5,113			$	(187	)				(3.7	%)
Total vehicle front-end yield(2)			12,215				14,808			$	(2,593	)				(17.5	%)
Gross margin
Good Sam Services and Plans			65.2	%			62.5	%			265		bps
New vehicles			13.8	%			22.8	%			(903	)	bps
Used vehicles			23.1	%			24.9	%			(175	)	bps
Products, service and other			37.9	%			36.7	%			121		bps
Finance and insurance, net			100.0	%			100.0	%			0		bps
Good Sam Club			89.6	%			81.4	%			821		bps
Subtotal RV and Outdoor Retail			28.5	%			32.9	%			(439	)	bps
Total gross margin			29.7	%			33.7	%			(404	)	bps
RV and Outdoor Retail Inventories ($ in 000s)
New vehicles		$	1,219,889			$	1,420,136			$	(200,247	)				(14.1	%)
Used vehicles			510,689				423,409				87,280					20.6	%
Products, parts, accessories and misc.			248,998				308,855				(59,857	)				(19.4	%)
Total RV and Outdoor Retail inventories		$	1,979,576			$	2,152,400			$	(172,824	)				(8.0	%)
Vehicle inventory per location ($ in 000s)
New vehicle inventory per dealer location		$	6,489			$	7,934			$	(1,445	)				(18.2	%)
Used vehicle inventory per dealer location		$	2,716			$	2,365			$	351					14.8	%
Vehicle inventory turnover(3)
New vehicle inventory turnover			1.9				2.5				(0.6	)				(22.1	%)
Used vehicle inventory turnover			3.3				3.4				(0.1	)				(2.1	%)
Retail locations
RV dealerships			188				179				9					5.0	%
RV service & retail centers			6				10				(4	)				(40.0	%)
Subtotal			194				189				5					2.6	%
Other retail stores			1				1				—					0.0	%
Total			195				190				5					2.6	%
Other data
Active Customers(4)			5,291,750				5,464,510				(172,760	)				(3.2	%)
Good Sam Club members			2,025,438				2,101,399				(75,961	)				(3.6	%)
Service bays (5)			2,682				2,538				144					5.7	%
Finance and insurance gross profit as a % of total vehicle revenue			11.9	%			12.4	%			(50	)	bps			n/a
Same store locations			179				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 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/or collision offerings.

Camping World Holdings, Inc. and Subsidiaries
Consolidated Balance Sheets (unaudited)
(In Thousands Except Per Share Amounts)
		March 31,				December 31,				March 31,
		2023				2022				2022
Assets
Current assets:
Cash and cash equivalents		$	72,828			$	130,131			$	139,480
Contracts in transit			104,148				50,349				135,513
Accounts receivable, net			109,105				112,411				116,593
Inventories			1,980,106				2,123,858				2,152,400
Prepaid expenses and other assets			58,761				66,913				57,763
Assets held for sale			13,971				—				—
Total current assets			2,338,919				2,483,662				2,601,749
Property and equipment, net			751,287				758,281				636,500
Operating lease assets			729,958				742,306				748,893
Deferred tax assets, net			145,413				143,226				185,616
Intangible assets, net			15,381				20,945				21,450
Goodwill			622,545				622,423				506,954
Other assets			27,010				29,304				26,373
Total assets		$	4,630,513			$	4,800,147			$	4,727,535
Liabilities and stockholders' equity
Current liabilities:
Accounts payable		$	185,652			$	127,691			$	221,990
Accrued liabilities			172,428				147,833				224,995
Deferred revenues			94,166				95,695				92,747
Current portion of operating lease liabilities			61,421				61,745				63,490
Current portion of finance lease liabilities			5,590				10,244				10,393
Current portion of Tax Receivable Agreement liability			10,935				10,873				11,322
Current portion of long-term debt			26,969				25,229				15,825
Notes payable – floor plan, net			1,042,099				1,319,941				1,237,208
Other current liabilities			77,924				73,076				78,369
Liabilities related to assets held for sale			7,650				—				—
Total current liabilities			1,684,834				1,872,327				1,956,339
Operating lease liabilities, net of current portion			753,451				764,835				770,778
Finance lease liabilities, net of current portion			100,701				94,216				72,192
Tax Receivable Agreement liability, net of current portion			165,054				159,743				171,476
Revolving line of credit			20,885				20,885				20,885
Long-term debt, net of current portion			1,525,304				1,484,416				1,374,592
Deferred revenues			68,690				70,247				69,902
Other long-term liabilities			85,841				85,792				81,201
Total liabilities			4,404,760				4,552,461				4,517,365
Commitments and contingencies
Stockholders' equity:
Preferred stock, par value $0.01 per share – 20,000 shares authorized; none issued and outstanding			—				—				—
Class A common stock, par value $0.01 per share – 250,000 shares authorized; 49,571, 47,571, and 47,855 shares issued, respectively; 44,467, 42,441, and 41,688 shares outstanding, respectively			496				476				476
Class B common stock, par value $0.0001 per share – 75,000 shares authorized; 39,466, 41,466, and 69,066 shares issued, respectively; 39,466, 41,466, and 41,466 shares outstanding, respectively			4				4				4
Class C common stock, par value $0.0001 per share – 0.001 share authorized, issued and outstanding			—				—				—
Additional paid-in capital			114,017				106,051				126,071
Treasury stock, at cost; 5,104, 5,130, and 5,883 shares, respectively			(178,832	)			(179,732	)			(206,098	)
Retained earnings			196,409				221,031				207,774
Total stockholders' equity attributable to Camping World Holdings, Inc.			132,094				147,830				128,227
Non-controlling interests			93,659				99,856				81,943
Total stockholders' equity			225,753				247,686				210,170
Total liabilities and stockholders' equity		$	4,630,513			$	4,800,147			$	4,727,535

Camping World Holdings, Inc. and Subsidiaries
Summary of Consolidated Statements of Cash Flows (unaudited)
(In Thousands)
		Three Months Ended March 31,
		2023				2022
Net cash provided by (used in) operating activities		$	199,217			$	(210,054	)
Investing activities
Purchases of property and equipment			(25,314	)			(31,665	)
Proceeds from sale of property and equipment			183				199
Purchases of real property			(18,236	)			(17,018	)
Proceeds from the sale of real property			22,703				—
Purchases of businesses, net of cash acquired			—				(34,808	)
Purchases of intangible assets			(23	)			(715	)
Net cash used in investing activities			(20,687	)			(84,007	)
Financing activities
Proceeds from long-term debt			59,227				—
Payments on long-term debt			(9,058	)			(3,954	)
Net (payments) proceeds on notes payable – floor plan, net			(249,822	)			275,296
Payments on finance leases			(1,233	)			(1,021	)
Proceeds from sale-leaseback arrangement			—				27,951
Payments on sale-leaseback arrangement			(46	)			(36	)
Payment of debt issuance costs			(767	)			—
Dividends on Class A common stock			(27,791	)			(26,427	)
Proceeds from exercise of stock options			41				231
RSU shares withheld for tax			(338	)			(1,238	)
Repurchases of Class A common stock to treasury stock			—				(79,757	)
Distributions to holders of LLC common units			(6,046	)			(24,836	)
Net cash (used in) provided by financing activities			(235,833	)			166,209
Decrease in cash and cash equivalents			(57,303	)			(127,852	)
Cash and cash equivalents at beginning of the period			130,131				267,332
Cash and cash equivalents at end of the period		$	72,828			$	139,480

Comparison of Certain Trends to Pre-COVID-19 Pandemic Periods

Beginning in the first quarter of 2021 and continuing through the first quarter of 2023, the Company has experienced sequential decreases in new vehicle gross margin, primarily due to the higher cost of new vehicles resulting from the lower industry supply of travel trailers and motorhomes for much of 2021. However, first quarter 2023 new vehicle gross margins were within a similar range that the Company experienced in the first quarter pre-COVID-19 pandemic periods of 2016 to 2019, which we believe are more typical demand environments than during the COVID-19 pandemic.

Additionally, the percentage of total unit sales relating to used vehicles was significantly higher in the first quarter of 2023 compared to the pre-COVID-19 pandemic periods of 2016 to 2019. The Company is continuing to execute on its used vehicle strategy, which differentiates it from the competition with proprietary tools, such as the RV Valuator, focus on the development and retention of its service technician team, and investment in its service bay infrastructure.

The following table presents vehicle gross margin and unit sales mix for the three months ended March 31, 2023 and pre-COVID-19 pandemic periods for the three months ended March 31, 2019, 2018, 2017, and 2016 (unaudited):

		Three Months Ended March 31,
		2023		2019(1)		2018(1)		2017(1)		2016(1)
Gross margin:
New vehicles		13.8%		12.6%		13.0%		13.6%		14.5%
Used vehicles		23.1%		20.6%		22.0%		23.3%		18.3%
Unit sales mix:
New vehicles		52.8%		64.7%		66.4%		67.9%		56.7%
Used vehicles		47.2%		35.3%		33.6%		32.1%		43.3%

(1)	These periods were prior to the COVID-19 pandemic.

Earnings Per Share

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

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

		Three Months Ended March 31,
(In thousands except per share amounts)		2023				2022
Numerator:
Net income		$	4,903			$	107,299
Less: net income attributable to non-controlling interests			(1,734	)			(62,569	)
Net income attributable to Camping World Holdings, Inc. — basic		$	3,169			$	44,730
Add: reallocation of net income attributable to non-controlling interests from the assumed dilutive effect of stock options and RSUs			—				332
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			1,297				—
Net income attributable to Camping World Holdings, Inc. — diluted		$	4,466			$	45,062
Denominator:
Weighted-average shares of Class A common stock outstanding — basic			44,455				43,553
Dilutive options to purchase Class A common stock			15				88
Dilutive restricted stock units			202				574
Dilutive common units of CWGS, LLC that are convertible into Class A common stock			40,045				—
Weighted-average shares of Class A common stock outstanding — diluted			84,717				44,215
Earnings per share of Class A common stock — basic		$	0.07			$	1.03
Earnings per share of Class A common stock — diluted		$	0.05			$	1.02
Weighted-average anti-dilutive securities excluded from the computation of diluted earnings per share of Class A common stock:
Restricted stock units			2,122				1,632
Common units of CWGS, LLC that are convertible into Class A common stock			—				42,045

Non-GAAP Financial Measures

To supplement our condensed consolidated financial statements, which are prepared and presented in accordance with accounting principles generally accepted in the United States ("GAAP"), we use the following non-GAAP financial measures: EBITDA, Adjusted EBITDA, Adjusted EBITDA Margin, trailing twelve-month ("TTM") Adjusted EBITDA, Adjusted Net Income Attributable to Camping World Holdings, Inc. – Basic, Adjusted Net Income Attributable to Camping World Holdings, Inc. – Diluted, Adjusted Earnings Per Share – Basic, and Adjusted Earnings Per Share – Diluted (collectively the "Non-GAAP Financial Measures"). We believe that these Non-GAAP Financial Measures, when used in conjunction with GAAP financial measures, provide useful information about operating results, enhance the overall understanding of past financial performance and future prospects, and allow for greater transparency with respect to the key metrics we use in our financial and operational decision making. These Non-GAAP Financial Measures are also frequently used by analysts, investors and other interested parties to evaluate companies in the Company’s industry and are used by management to evaluate our operating performance, to evaluate the effectiveness of strategic initiatives and for planning purposes. By providing these Non-GAAP Financial Measures, together with reconciliations, we believe we are enhancing investors’ understanding of our business and our results of operations, as well as assisting investors in evaluating how well we are executing our strategic initiatives. In addition, our Senior Secured Credit Facilities use Adjusted EBITDA, as calculated for our subsidiary CWGS Group, LLC, to measure our compliance with covenants such as the consolidated leverage ratio. The Non-GAAP Financial Measures have limitations as analytical tools, and the presentation of this financial information is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP. They should not be construed as an inference that the Company’s future results will be unaffected by any items adjusted for in these Non-GAAP Financial Measures. In evaluating these Non-GAAP Financial Measures, it is reasonable to expect that certain of these items will occur in future periods. However, we believe these adjustments are appropriate because the amounts recognized can vary significantly from period to period, do not directly relate to the ongoing operations of our business and complicate comparisons of our internal operating results and operating results of other companies over time. Each of the normal recurring adjustments and other adjustments described in this section and in the reconciliation tables below help management with a measure of our core operating performance over time by removing items that are not related to day-to-day operations.

For periods beginning after December 31, 2022, we are no longer including the other associated costs category of expenses relating to the 2019 Strategic Shift as restructuring costs for purposes of our Non-GAAP Financial Measures, since these costs are not expected to be significant in future periods.

The Non-GAAP Financial Measures that we use are not necessarily comparable to similarly titled measures used by other companies due to different methods of calculation.

EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin

We define "EBITDA" as net income before other interest expense, net (excluding floor plan interest expense), provision for income tax expense and depreciation and amortization. We define "Adjusted EBITDA" as EBITDA further adjusted for the impact of certain noncash and other items that we do not consider in our evaluation of ongoing operating performance. These items include, among other things, long-lived asset impairment, lease termination costs, gains and losses on sale or disposal of assets, net, equity-based compensation, Tax Receivable Agreement liability adjustment, restructuring costs related to the 2019 Strategic Shift, loss and impairment on investments in equity securities, and other unusual or one-time items. We define "Adjusted EBITDA Margin" as Adjusted EBITDA as a percentage of total revenue. We caution investors that amounts presented in accordance with our definitions of EBITDA, Adjusted EBITDA, and Adjusted EBITDA Margin may not be comparable to similar measures disclosed by our competitors, because not all companies and analysts calculate EBITDA, Adjusted EBITDA, and Adjusted EBITDA Margin in the same manner. We present EBITDA, Adjusted EBITDA, and Adjusted EBITDA Margin because we consider them to be important supplemental measures of our performance and believe they are frequently used by securities analysts, investors and other interested parties in the evaluation of companies in our industry. Management believes that investors’ understanding of our performance is enhanced by including these Non-GAAP Financial Measures as a reasonable basis for comparing our ongoing results of operations.

The following table reconciles EBITDA, Adjusted EBITDA, Adjusted EBITDA Margin, and TTM Adjusted EBITDA to the most directly comparable GAAP financial performance measures (unaudited):

		Three Months Ended March 31,
($ in thousands)		2023				2022
EBITDA and Adjusted EBITDA:
Net income		$	4,903			$	107,299
Other interest expense, net			31,113				14,301
Depreciation and amortization			14,637				25,535
Income tax expense			273				21,036
Subtotal EBITDA			50,926				168,171
Long-lived asset impairment (a)			7,045				—
Lease termination (b)			—				178
(Gain) loss on sale or disposal of assets, net (c)			(4,987	)			49
Equity-based compensation (d)			6,358				11,674
Restructuring costs (e)			—				2,023
Loss and impairment on investments in equity securities (f)			1,499				—
Adjusted EBITDA		$	60,841			$	182,095

		Three Months Ended March 31,
(as percentage of total revenue)		2023			2022
Adjusted EBITDA margin:
Net income		0.3	%		6.5	%
Other interest expense, net		2.1	%		0.9	%
Depreciation and amortization		1.0	%		1.5	%
Income tax expense		0.0	%		1.3	%
Subtotal EBITDA margin		3.4	%		10.1	%
Long-lived asset impairment (a)		0.5	%		—
Lease termination (b)		—			0.0	%
(Gain) loss on sale or disposal of assets, net (c)		(0.3	%)		0.0	%
Equity-based compensation (d)		0.4	%		0.7	%
Restructuring costs (e)		—			0.1	%
Loss and impairment on investments in equity securities (f)		0.1	%		—
Adjusted EBITDA margin		4.1	%		11.0	%

	Three Months Ended															TTM Ended
	March 31,				December 31,				September 30,				June 30,			March 31,
($ in thousands)	2023				2022				2022				2022			2023
Adjusted EBITDA:
Net income	$	4,903			$	(57,201	)		$	102,948			$	197,985		$	248,635
Other interest expense, net		31,113				25,983				20,526				14,935			92,557
Depreciation and amortization		14,637				18,935				18,207				17,627			69,406
Income tax expense		273				23,276				22,397				32,375			78,321
Subtotal EBITDA		50,926				10,993				164,078				262,922			488,919
Long-lived asset impairment (a)		7,045				726				887				2,618			11,276
Lease termination (b)		—				492				—				944			1,436
(Gain) loss on sale or disposal of assets, net (c)		(4,987	)			232				(40	)			381			(4,414	)
Equity-based compensation (d)		6,358				6,413				6,792				8,968			28,531
Restructuring costs (e)		—				1,478				1,671				1,854			5,003
Loss and impairment on investments in equity securities (f)		1,499				—				—				—			1,499
Tax Receivable Agreement liability adjustment (g)		—				(114	)			—				—			(114	)
Adjusted EBITDA	$	60,841			$	20,220			$	173,388			$	277,687		$	532,136

(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, relating primarily to the 2019 Strategic Shift, 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 restructuring costs relating to our 2019 Strategic Shift for periods ending on or before December 31, 2022. 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 (see (b) above).
(f)	Represents loss and impairment on investments in equity securities for periods beginning after December 31, 2022. Amounts relating to periods prior to 2023 were not significant. These amounts are included in other expense, net in the condensed consolidated statements of operations. During the three months ended March 31, 2023, this amount included a $1.3 million impairment on an equity method investment.
(g)	Represents an adjustment to eliminate the gain on remeasurement of the Tax Receivable Agreement primarily due to changes in our blended statutory income tax rate.

Adjusted Net Income Attributable to Camping World Holdings, Inc. and Adjusted Earnings Per Share

We define "Adjusted Net Income Attributable to Camping World Holdings, Inc. – Basic" as net income attributable to Camping World Holdings, Inc. adjusted for the impact of certain non-cash and other items that we do not consider in our evaluation of ongoing operating performance. These items include, among other things, long-lived asset impairment, lease termination costs, gains and losses on sale or disposal of assets, net, equity-based compensation, restructuring costs related to the 2019 Strategic Shift, loss and impairment on investments in equity securities, other unusual or one-time items, the income tax expense effect of these adjustments, and the effect of net income attributable to non-controlling interests from these adjustments.

We define "Adjusted Net Income Attributable to Camping World Holdings, Inc. – Diluted" as Adjusted Net Income Attributable to Camping World Holdings, Inc. – Basic adjusted for the reallocation of net income attributable to non-controlling interests from stock options and restricted stock units, if dilutive, or the assumed redemption, if dilutive, of all outstanding common units in CWGS, LLC for shares of newly-issued Class A common stock of Camping World Holdings, Inc.

We define "Adjusted Earnings Per Share – Basic" as Adjusted Net Income Attributable to Camping World Holdings, Inc. - Basic divided by the weighted-average shares of Class A common stock outstanding. We define "Adjusted Earnings Per Share – Diluted" as Adjusted Net Income Attributable to Camping World Holdings, Inc. – Diluted divided by the weighted-average shares of Class A common stock outstanding, assuming (i) the redemption of all outstanding common units in CWGS, LLC for newly-issued shares of Class A common stock of Camping World Holdings, Inc., if dilutive, and (ii) the dilutive effect of stock options and restricted stock units, if any. We present Adjusted Net Income Attributable to Camping World Holdings, Inc. – Basic, Adjusted Net Income Attributable to Camping World Holdings, Inc. – Diluted, Adjusted Earnings Per Share – Basic, and Adjusted Earnings Per Share – Diluted because we consider them to be important supplemental measures of our performance and we believe that investors’ understanding of our performance is enhanced by including these Non-GAAP financial measures as a reasonable basis for comparing our ongoing results of operations.

The following table reconciles Adjusted Net Income Attributable to Camping World Holdings, Inc. – Basic, Adjusted Net Income Attributable to Camping World Holdings, Inc. – Diluted, Adjusted Earnings Per Share – Basic, and Adjusted Earnings Per Share – Diluted to the most directly comparable GAAP financial performance measure:

		Three Months Ended
		March 31,
(In thousands except per share amounts)		2023				2022
Numerator:
Net income attributable to Camping World Holdings, Inc.		$	3,169			$	44,730
Adjustments related to basic calculation:
Long-lived asset impairment (a):
Gross adjustment			7,045				—
Income tax expense for above adjustment (b)			(938	)			—
Lease termination (c):
Gross adjustment			—				178
Income tax expense for above adjustment (b)			—				—
(Gain) loss on sale or disposal of assets (d):
Gross adjustment			(4,987	)			49
Income tax expense for above adjustment (b)			665				—
Equity-based compensation (e):
Gross adjustment			6,358				11,674
Income tax expense for above adjustment (b)			(857	)			(1,337	)
Restructuring costs (f):
Gross adjustment			—				2,023
Income tax expense for above adjustment (b)			—				—
Loss and impairment on investments in equity securities (g):
Gross adjustment			1,499				—
Income tax expense for above adjustment (b)			(200	)			—
Adjustment to net income attributable to non-controlling interests resulting from the above adjustments (h)			(4,688	)			(6,827	)
Adjusted net income attributable to Camping World Holdings, Inc. – basic			7,066				50,490
Adjustments related to diluted calculation:
Reallocation of net income attributable to non-controlling interests from the dilutive effect of stock options and restricted stock units (i)			—				533
Income tax on reallocation of net income attributable to non-controlling interests from the dilutive effect of stock options and restricted stock units (j)			—				(158	)
Reallocation of net income attributable to non-controlling interests from the dilutive redemption of common units in CWGS, LLC (i)			6,422				—
Income tax on reallocation of net income attributable to non-controlling interests from the dilutive redemption of common units in CWGS, LLC (j)			(1,615	)			—
Adjusted net income attributable to Camping World Holdings, Inc. – diluted		$	11,873			$	50,865
Denominator:
Weighted-average Class A common shares outstanding – basic			44,455				43,553
Adjustments related to diluted calculation:
Dilutive redemption of common units in CWGS, LLC for shares of Class A common stock (l)			40,045				—
Dilutive options to purchase Class A common stock (l)			15				88
Dilutive restricted stock units (l)			202				574
Adjusted weighted average Class A common shares outstanding – diluted			84,717				44,215
Adjusted earnings per share - basic		$	0.16			$	1.16
Adjusted earnings per share - diluted		$	0.14			$	1.15
Anti-dilutive amounts (m):
Numerator:
Reallocation of net income attributable to non-controlling interests from the anti-dilutive redemption of common units in CWGS, LLC (i)		$	—			$	68,863
Income tax on reallocation of net income attributable to non-controlling interests from the anti-dilutive redemption of common units in CWGS, LLC (j)		$	—			$	(20,392	)
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 (k)		$	—			$	6,348
Denominator:
Anti-dilutive redemption of common units in CWGS, LLC for shares of Class A common stock (l)			—				42,045
Reconciliation of per share amounts:
Earnings per share of Class A common stock — basic		$	0.07			$	1.03
Non-GAAP Adjustments (n)			0.09				0.13
Adjusted earnings per share - basic		$	0.16			$	1.16
Earnings per share of Class A common stock — diluted		$	0.05			$	1.02
Non-GAAP Adjustments (n)			0.09				0.13
Adjusted earnings per share - diluted		$	0.14			$	1.15

(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 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 an effective tax rate of 25.3% and 25.4% for the adjustments for the 2023 and 2022 periods, 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 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 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 restructuring costs relating to the 2019 Strategic Shift for periods ended on or before December 31, 2022. These restructuring costs include other associated costs. These costs exclude lease termination costs, which are presented separately above.
(g)	Represents loss and impairment on investments in equity securities for periods beginning after December 31, 2022. Amounts relating to periods prior to 2023 were not significant. These amounts are included in other expense, net in the condensed consolidated statements of operations. During the three months ended March 31, 2023, this amount included a $1.3 million impairment on an equity method investment.
(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 47.4% and 49.1% for the three months ended March 31, 2023 and 2022, 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 25.3% and 25.4% for the adjustments for 2023 and 2022 periods, respectively.
(k)	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.
(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.
(n)	Represents the per share impact of the Non-GAAP adjustments to net income detailed above (see (a) through (g) above).

Our "Up-C" corporate structure may make it difficult to compare our results with those of companies with a more traditional corporate structure. There can be a significant fluctuation in the numerator and denominator for the calculation of our adjusted earnings per share – diluted depending on if the common units in CWGS, LLC are considered dilutive or anti-dilutive for a given period. To improve comparability of our financial results, users of our financial statements may find it useful to review our earnings per share assuming the full redemption of common units in CWGS, LLC for all periods, even when those common units would be anti-dilutive. The relevant numerator and denominator adjustments have been provided under "Anti-dilutive amounts" in the table above (see (m) above).

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Contacts

Investors:
Brett Andress
InvestorRelations@campingworld.com

Media Outlets:
PR-CWGS@CampingWorld.com