Camping World Holdings, Inc. Reports Strong 2022 Results

LINCOLNSHIRE, Ill., February 21, 2023--(BUSINESS WIRE)--Camping World Holdings, Inc. (NYSE: CWH) (the "Company" or "CWH"), America’s Recreation Dealer, today reported results for the fourth quarter and full year ended December 31, 2022.

Marcus Lemonis, Chairman and CEO of Camping World Holdings, Inc. stated, "The last several years of strong performance has bolstered our confidence in the long-term prospects of our business. In light of the short-term softening of demand and new vehicle margin compression, we recognized the need for aggressive annualized cost reductions, starting in the fall of 2022. This includes reduced headcount, the elimination or reduction of underperforming assets, locations, and business lines, while enhancing the wages and benefits of our employees."

Full Year-over-Year Operating Highlights

• Revenue was $7.0 billion, an increase of $53.3 million, or 0.8%.

• Used vehicle revenue was a record $1.9 billion, an increase of $191.4 million, or 11.3%, while new vehicle revenue declined $71.4 million, or 2.2%. Used vehicle unit sales were a record 51,325 units, an increase of 2,387 units, or 4.9%, while new vehicle unit sales were 70,429 units, a decrease of 7,348 units, or 9.4%.

• Same store used vehicle unit sales increased slightly by 0.1%, while same store new vehicle unit sales decreased 13.6%.

• Gross profit was $2.3 billion, a decrease of $194.0 million, or 7.9%. Total gross margin was 32.5%, a decrease of 306 basis points driven primarily by the higher cost of new vehicles, which was partially offset by the higher average selling price of new vehicles. Used vehicle gross margin decreased to a lesser extent.

• Floor plan interest expense was $42.0 million, an increase of $27.9 million, or 197.9%, as a result of the rise in interest rates and the increased average principal balance from higher new vehicle costs, higher borrowings on used vehicles, and relief from the new vehicle supply constraints that existed during much of 2021.

• Net income was $351.0 million, a decrease of $291.0 million, or 45.3%.

• Diluted earnings per share of Class A common stock was $3.22 in 2022 versus $6.07 in 2021. Adjusted earnings per share - diluted⁽¹⁾ of Class A common stock was $4.17 in 2022 versus $6.88 in 2021.

• Adjusted EBITDA⁽¹⁾ was $653.4 million, a decrease of $288.7 million, or 30.6%.

• New and used vehicle inventories were $1.9 billion, an increase of $360.1 million. This increase was driven primarily by higher new vehicle unit costs, an additional 14 dealership locations, restocking to normalized levels of new vehicles and, to a lesser extent, the strategic growth of our used vehicle business.

• The Company paid an annualized cash dividend of $2.50 per share of Class A common stock, an increase of $1.02 per share of Class A common stock.

Fourth Quarter-over-Quarter Operating Highlights

• Revenue was $1.3 billion, a decrease of $97.3 million, or 7.1%.

• Used vehicle revenue was $392.6 million for the fourth quarter, a decrease of $19.7 million, or 4.8%, and new vehicle revenue declined $72.6 million, or 13.1%. Used vehicle unit sales were 10,334 units for the fourth quarter, a decrease of 335 units, or 3.1%.

• Same store used vehicle unit sales decreased 7.6% for the fourth quarter, and same store new vehicle unit sales decreased 14.1%.

• Gross profit was $391.6 million, a decrease of $93.0 million, or 19.2%. Total gross margin was 30.6%, a decrease of 459 basis points driven primarily by the higher cost of new vehicles and the lower average selling price of new vehicles. Used vehicle and products, service and other gross margins decreased to a lesser extent. The products, service and other gross margins declined primarily from clearance and discounting on certain product categories to reduce our retail inventory levels and supply chain costs.

• Floor plan interest expense was $17.5 million, an increase of $13.3 million, or 315.6%, as a result of the rise in interest rates and the increased average principal balance from higher new vehicle costs, higher borrowings on used vehicles, and relief from the new vehicle supply constraints that existed during much of 2021.

• At or around December 31, 2022, the Company completed the conversion of certain subsidiaries to limited liability companies resulting in income tax expense of $28.4 million, which was primarily for the write-off of deferred tax assets, net of the release of valuation allowance. The Company expects this conversion will reduce its ongoing income tax expense and reduce its ongoing tax distribution requirements.

• Net loss was $57.2 million, a decrease of income of $116.5 million, or 196.5%.

• Diluted loss per share of Class A common stock was $0.79 in 2022 versus diluted earnings per share of Class A common stock of $0.54 in 2021. Adjusted loss per share - diluted⁽¹⁾ of Class A common stock was $0.20 in 2022 versus adjusted earnings per share – diluted⁽¹⁾ of Class A common stock of $0.90 in 2021.

• Adjusted EBITDA⁽¹⁾ was $20.2 million, a decrease of $111.3 million, or 84.6%.

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⁽¹⁾ Adjusted (loss) 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.

Earnings Conference Call and Webcast Information

A conference call to discuss the Company’s fourth quarter and fiscal year 2022 financial results is scheduled for February 22, 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# 13735202. Interested parties can also listen to a live webcast or replay of the conference call by logging on to the Investor Relations section on the Company’s website at http://investor.campingworld.com. The replay of the conference call webcast will be available on the investor relations website for approximately 90 days.

Presentation

This press release presents historical results for the periods presented for the Company and its subsidiaries, which are presented in accordance with accounting principles generally accepted in the United States ("GAAP"), unless noted as a non-GAAP financial measure. The Company’s initial public offering ("IPO") and related reorganization transactions ("Reorganization Transactions") that occurred on October 6, 2016 resulted in the Company as the sole managing member of CWGS Enterprises, LLC ("CWGS, LLC"), with sole voting power in and control of the management of CWGS, LLC. The Company’s position as sole managing member of CWGS, LLC includes periods where the Company has held a minority economic interest in CWGS, LLC. As of December 31, 2022, the Company owned 50.2% 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 enables 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, please visit http://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 trends, expected impact of the subsidiary conversions on our ongoing income tax expense and tax distribution requirements, 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, anticipated cost reduction initiatives, including headcount reductions and the elimination of or reduction of underperforming assets, locations, and business lines, anticipated cost savings from cost reduction initiatives, enhancements of wages and benefits of employees, 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: the COVID-19 pandemic, which has had, and could have in the future, certain negative impacts on our business; risks related to the cybersecurity incident announced in February 2022; 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, new store openings and expansion into new markets; our failure to maintain the strength and value of our brands; our ability to manage our inventory; fluctuations in our same store sales; the cyclical and seasonal nature of our business; our dependence on the availability of adequate capital and risks related to our debt; our reliance on our 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; 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 to be 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.

In addition, this press release references projected annualized dividend payments. 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						Year Ended
	December 31,						December 31,
	2022			2021			2022			2021
Revenue:
Good Sam Services and Plans	$	47,624		$	46,368		$	192,128		$	180,722
RV and Outdoor Retail
New vehicles		481,754			554,397			3,228,077			3,299,454
Used vehicles		392,623			412,273			1,877,601			1,686,217
Products, service and other		237,300			238,236			999,214			1,100,942
Finance and insurance, net		109,535			114,757			623,456			598,475
Good Sam Club		11,467			11,561			46,537			47,944
Subtotal		1,232,679			1,331,224			6,774,885			6,733,032
Total revenue		1,280,303			1,377,592			6,967,013			6,913,754
Costs applicable to revenue (exclusive of depreciation and amortization shown separately below):
Good Sam Services and Plans		17,434			19,636			71,966			72,877
RV and Outdoor Retail
New vehicles		404,616			409,272			2,576,276			2,423,478
Used vehicles		302,177			312,920			1,418,053			1,247,794
Products, service and other		163,330			149,532			631,010			706,074
Good Sam Club		1,145			1,617			7,424			7,203
Subtotal		871,268			873,341			4,632,763			4,384,549
Total costs applicable to revenue		888,702			892,977			4,704,729			4,457,426
Gross profit:
Good Sam Services and Plans		30,190			26,732			120,162			107,845
RV and Outdoor Retail
New vehicles		77,138			145,125			651,801			875,976
Used vehicles		90,446			99,353			459,548			438,423
Products, service and other		73,970			88,704			368,204			394,868
Finance and insurance, net		109,535			114,757			623,456			598,475
Good Sam Club		10,322			9,944			39,113			40,741
Subtotal		361,411			457,883			2,142,122			2,348,483
Total gross profit		391,601			484,615			2,262,284			2,456,328
Operating expenses:
Selling, general, and administrative		361,444			379,941			1,606,984			1,573,609
Debt restructure expense		—			3,023			—			12,078
Depreciation and amortization		18,935			17,121			80,304			66,418
Long-lived asset impairment		726			1,646			4,231			3,044
Lease termination		492			126			1,614			2,211
Loss (gain) on sale or disposal of assets		232			(583)			622			(576)
Total operating expenses		381,829			401,274			1,693,755			1,656,784
Income from operations		9,772			83,341			568,529			799,544
Other expense:
Floor plan interest expense		(17,548)			(4,222)			(42,031)			(14,108)
Other interest expense, net		(25,983)			(11,650)			(75,745)			(46,912)
Loss on debt restructure		—			—			—			(1,390)
Tax Receivable Agreement liability adjustment		114			707			114			(2,813)
Other expense, net		(280)			(45)			(752)			(122)
Total other expense		(43,697)			(15,210)			(118,414)			(65,345)
(Loss) income before income taxes		(33,925)			68,131			450,115			734,199
Income tax expense		(23,276)			(8,865)			(99,084)			(92,124)
Net (loss) income		(57,201)			59,266			351,031			642,075
Less: net (loss) income attributable to non-controlling interests		23,981			(32,018)			(214,084)			(363,614)
Net (loss) income attributable to Camping World Holdings, Inc.	$	(33,220)		$	27,248		$	136,947		$	278,461
(Loss) earnings per share of Class A common stock:
Basic	$	(0.79)		$	0.61		$	3.23		$	6.19
Diluted	$	(0.79)		$	0.54		$	3.22		$	6.07
Weighted average shares of Class A common stock outstanding:
Basic		42,287			44,820			42,386			45,009
Diluted		42,287			88,566			42,854			89,762

Camping World Holdings, Inc. and Subsidiaries Supplemental Data
		Three Months Ended December 31,						Increase				Percent
		2022			2021			(decrease)				Change
Unit sales
New vehicles			10,389			11,415			(1,026)				(9.0%)
Used vehicles			10,334			10,669			(335)				(3.1%)
Total			20,723			22,084			(1,361)				(6.2%)
Average selling price
New vehicles		$	46,372		$	48,567		$	(2,196)				(4.5%)
Used vehicles		$	37,993		$	38,642		$	(649)				(1.7%)
Same store unit sales(1)
New vehicles			9,244			10,759			(1,515)				(14.1%)
Used vehicles			9,271			10,036			(765)				(7.6%)
Total			18,515			20,795			(2,280)				(11.0%)
Same store revenue(1) ($ in 000's)
New vehicles		$	429,983		$	521,884		$	(91,901)				(17.6%)
Used vehicles			353,130			389,308			(36,178)				(9.3%)
Products, service and other			143,682			147,133			(3,451)				(2.3%)
Finance and insurance, net			98,335			107,752			(9,417)				(8.7%)
Total		$	1,025,130		$	1,166,077		$	(140,947)				(12.1%)
Average gross profit per unit
New vehicles		$	7,425		$	12,714		$	(5,289)				(41.6%)
Used vehicles		$	8,752			9,312		$	(560)				(6.0%)
Finance and insurance, net per vehicle unit		$	5,286			5,196		$	89				1.7%
Total vehicle front-end yield(2)		$	13,373			16,267		$	(2,894)				(17.8%)
Gross margin
Good Sam Services and Plans			63.4%			57.7%			574	bps
New vehicles			16.0%			26.2%			(1,017)	bps
Used vehicles			23.0%			24.1%			(106)	bps
Products, service and other			31.2%			37.2%