[PART I. FINANCIAL INFORMATION](index=3&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Item 1. Financial Statements (unaudited)](index=3&type=section&id=Item%201.%20Financial%20Statements%20(unaudited)) Presents the unaudited condensed consolidated financial statements and accompanying notes detailing key accounting policies and events [Unaudited Condensed Consolidated Balance Sheets](index=6&type=section&id=Unaudited%20Condensed%20Consolidated%20Balance%20Sheets) Condensed Consolidated Balance Sheet Highlights (in thousands) | Metric | March 31, 2020 | December 31, 2019 | |:---|:---|:---| | Total Assets | $3,402,561 | $3,376,240 | | Total Liabilities | $3,586,979 | $3,535,476 | | Total Stockholders' Deficit | $(184,418) | $(159,236) | | Cash and Cash Equivalents | $109,406 | $147,521 | | Inventories | $1,439,453 | $1,358,539 | [Unaudited Condensed Consolidated Statements of Operations](index=7&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Operations) Condensed Consolidated Statements of Operations Highlights (in thousands) | Metric | Three Months Ended March 31, 2020 | Three Months Ended March 31, 2019 | Change (YoY) | % Change (YoY) | |:---|:---|:---|:---|:---| | Total Revenue | $1,027,273 | $1,064,769 | $(37,496) | (3.5%) | | Net Loss | $(14,129) | $(26,807) | $12,678 | 47.3% | | Net Loss Attributable to Camping World Holdings, Inc. | $(8,160) | $(19,395) | $11,235 | 57.9% | | Basic Loss Per Share | $(0.22) | $(0.52) | $0.30 | 57.7% | [Unaudited Condensed Consolidated Statements of Stockholders' Equity (Deficit)](index=8&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Equity%20(Deficit)) Stockholders' Equity (Deficit) Highlights (in thousands) | Metric | March 31, 2020 | December 31, 2019 | |:---|:---|:---| | Total Stockholders' Deficit | $(184,418) | $(159,236) | | Dividends per share of Class A common stock | $0.15 | $0.15 | [Unaudited Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Condensed Consolidated Statements of Cash Flows Highlights (in thousands) | Metric | Three Months Ended March 31, 2020 | Three Months Ended March 31, 2019 | |:---|:---|:---| | Net Cash Used in Operating Activities | $(15,189) | $(74,020) | | Net Cash Used in Investing Activities | $(8,456) | $(22,916) | | Net Cash (Used in) Provided by Financing Activities | $(14,470) | $28,364 | | Decrease in Cash and Cash Equivalents | $(38,115) | $(68,572) | [Notes to Unaudited Condensed Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) [1. Summary of Significant Accounting Policies](index=11&type=section&id=1.%20Summary%20of%20Significant%20Accounting%20Policies) - Camping World Holdings, Inc. (CWH) consolidates the financial results of CWGS, LLC, in which CWH held a **42.1% economic interest** as of March 31, 2020, and **42.0%** as of December 31, 2019[44](index=44&type=chunk) - The COVID-19 pandemic has impacted the Company's business, leading to **decreased revenue** from reduced retail and online traffic, temporary store closures, and implemented cost-reduction measures including salary and hour reductions[46](index=46&type=chunk)[47](index=47&type=chunk) - In 2019, the Company initiated a '2019 Strategic Shift' to refocus on core RV competencies, resulting in the sale, closing, or divestiture of **34 non-RV retail stores** and the liquidation of approximately **$108 million** of non-RV related inventory[50](index=50&type=chunk) Retail Store Locations (March 31, 2019 to March 31, 2020) | Category | March 31, 2019 | Opened | Closed / Divested | Temporarily Closed (1) | Converted | March 31, 2020 | |:---|:---|:---|:---|:---|:---|:---| | Dealerships | 147 | 10 | (6) | — | 6 | 157 | | Retail Centers | 12 | — | (2) | — | — | 10 | | Retail Stores | 67 | — | (56) | (4) | (6) | 1 | | **Total** | **226** | **10** | **(64)** | **(4)** | **—** | **168** | [2. Revenue](index=17&type=section&id=2.%20Revenue) Unsatisfied Performance Obligations (in thousands) | Year | Amount (March 31, 2020) | |:---|:---| | 2020 | $69,977 | | 2021 | $34,535 | | 2022 | $16,788 | | 2023 | $8,467 | | 2024 | $4,667 | | Thereafter | $5,668 | | **Total** | **$140,102** | [3. Inventories and Floor Plan Payable](index=18&type=section&id=3.%20Inventories%20and%20Floor%20Plan%20Payable) Inventories (in thousands) | Category | March 31, 2020 | December 31, 2019 | |:---|:---|:---| | Good Sam services and plans | $38 | $590 | | New RVs | $1,053,802 | $966,134 | | Used RVs | $151,058 | $165,927 | | Products, parts, accessories and other | $234,555 | $225,888 | | **Total** | **$1,439,453** | **$1,358,539** | - The Floor Plan Facility has a total commitment of **$1.38 billion** and matures on March 15, 2023[71](index=71&type=chunk) As of March 31, 2020, the unencumbered borrowing capacity was **$316.4 million**[74](index=74&type=chunk) [4. Restructuring and Long-lived Asset Impairment](index=20&type=section&id=4.%20Restructuring%20and%20Long-lived%20Asset%20Impairment) - As part of the 2019 Strategic Shift, the Company closed or divested **36 Outdoor Lifestyle Locations**, three distribution centers, and **19 specialty retail locations** through March 31, 2020[77](index=77&type=chunk) - During the three months ended March 31, 2020, the Company recorded **$6.6 million** in long-lived asset impairment charges, with **$6.5 million** related to the 2019 Strategic Shift[86](index=86&type=chunk) Expected Costs for 2019 Strategic Shift (in millions) | Cost Category | Expected Range | Incurred through March 31, 2020 | |:---|:---|:---| | One-time employee termination benefits | $1.2 - $1.5 | $1.2 | | Lease termination costs | $15.0 - $20.0 | $5.5 | | Incremental inventory reserve charges | $42.4 | $42.4 | | Other associated costs | $20.0 - $25.0 | $9.9 | [5. Goodwill and Intangible Assets](index=24&type=section&id=5.%20Goodwill%20and%20Intangible%20Assets) - Despite a triggering event (decline in Class A common stock market price and potential COVID-19 impact), **no goodwill impairment was recorded** for the RV and Outdoor Retail reporting unit in Q1 2020, as its fair value was substantially above its carrying amount[89](index=89&type=chunk) Goodwill by Segment (in thousands) | Segment | December 31, 2019 | Acquisitions (1) | March 31, 2020 | |:---|:---|:---|:---| | Good Sam Services and Plans | $23,829 | — | $23,829 | | RV and Outdoor Retail | $363,112 | $4 | $363,116 | | **Consolidated** | **$386,941** | **$4** | **$386,945** | Net Intangible Assets (in thousands) | Category | March 31, 2020 | December 31, 2019 | |:---|:---|:---| | Good Sam Services and Plans | $987 | $1,168 | | RV and Outdoor Retail | $27,837 | $28,539 | | **Total Net Intangible Assets** | **$28,824** | **$29,707** | [6. Long-Term Debt](index=26&type=section&id=6.%20Long-Term%20Debt) - The Senior Secured Credit Facilities include a **$1.19 billion Term Loan Facility** (matures Nov 8, 2023) and a **$35.0 million Revolving Credit Facility** (matures Nov 8, 2021)[93](index=93&type=chunk) As of March 31, 2020, the Revolving Credit Facility had an additional borrowing capacity of **$9.4 million**[95](index=95&type=chunk) - The Real Estate Facility had a principal balance of **$19.2 million** outstanding as of March 31, 2020, with no available capacity[100](index=100&type=chunk) The Company was in compliance with all debt covenants for both facilities[101](index=101&type=chunk) Outstanding Long-Term Debt (in thousands) | Metric | March 31, 2020 | December 31, 2019 | |:---|:---|:---| | Total Long-Term Debt (net of current portion) | $1,151,097 | $1,153,551 | | Term Loan Facility (net of current portion) | $1,134,071 | $1,136,124 | | Real Estate Facility (net of current portion) | $17,026 | $17,427 | [7. Lease Obligations](index=30&type=section&id=7.%20Lease%20Obligations) - Cash paid for operating leases was **$30.7 million** for the three months ended March 31, 2020, compared to **$30.0 million** for the same period in 2019[102](index=102&type=chunk) Net Lease Costs (in thousands) | Metric | Three Months Ended March 31, 2020 | Three Months Ended March 31, 2019 | |:---|:---|:---| | Operating lease cost | $31,000 | $30,202 | | Short-term lease cost | $489 | $713 | | Variable lease cost | $5,028 | $552 | | Sublease income | $(412) | $(305) | | **Net lease costs** | **$36,105** | **$31,162** | [8. Fair Value Measurements](index=30&type=section&id=8.%20Fair%20Value%20Measurements) Fair Value vs. Carrying Value of Debt Instruments (in thousands) | Debt Instrument | March 31, 2020 Carrying Value | March 31, 2020 Fair Value | December 31, 2019 Carrying Value | December 31, 2019 Fair Value | |:---|:---|:---|:---|:---| | Term Loan Facility | $1,146,062 | $783,071 | $1,148,115 | $1,104,947 | | Floor Plan Facility Revolving Line of Credit | $40,885 | $40,021 | $40,885 | $41,299 | | Real Estate Facility | $18,997 | $18,347 | $19,521 | $21,030 | [9. Commitments and Contingencies](index=32&type=section&id=9.%20Commitments%20and%20Contingencies) - The Company is involved in several putative class action lawsuits (Ronge, Strougo, IUOE, Geis) and shareholder derivative suits (Hunnewell, LPPF, Janssen, Sandler) alleging violations of securities laws and breaches of fiduciary duty[109](index=109&type=chunk)[110](index=110&type=chunk)[114](index=114&type=chunk)[115](index=115&type=chunk)[116](index=116&type=chunk)[117](index=117&type=chunk)[120](index=120&type=chunk) - A preliminary approval for a class action settlement in the Ronge case was granted on April 7, 2020, following an unopposed motion filed on March 13, 2020[110](index=110&type=chunk) - The Company believes it has meritorious defenses to the claims and is not currently able to estimate a range of reasonably possible loss in excess of any amount that would be paid directly by its insurance carriers[111](index=111&type=chunk)[114](index=114&type=chunk)[115](index=115&type=chunk)[117](index=117&type=chunk) [10. Statement of Cash Flows](index=36&type=section&id=10.%20Statement%20of%20Cash%20Flows) Supplemental Cash Flow Information (in thousands) | Metric | Three Months Ended March 31, 2020 | Three Months Ended March 31, 2019 | |:---|:---|:---| | Cash paid for interest | $22,955 | $26,977 | | Cash paid for income taxes | $53 | $119 | | Capital expenditures in accounts payable and accrued liabilities | $3,325 | $6,634 | [11. Acquisitions](index=36&type=section&id=11.%20Acquisitions) - During the three months ended March 31, 2019, the RV and Outdoor Retail segment acquired the assets of an RV dealership group (two locations) for approximately **$21.2 million**, partially funded by **$8.4 million** from the Floor Plan Facility[123](index=123&type=chunk) - Acquisitions in Q1 2019 resulted in **$12.0 million of goodwill**, primarily representing expected synergies and the acquired assembled workforce[126](index=126&type=chunk) - For the three months ended March 31, 2020, there were **no material acquisitions**, with reported fair values representing measurement period adjustments for prior year acquisitions[126](index=126&type=chunk) [12. Income Taxes](index=38&type=section&id=12.%20Income%20Taxes) - The decrease in income tax expense by **$18.8 million** in Q1 2020 was primarily due to lower income at CWGS, LLC and the absence of a **$16.3 million** deferred income tax expense from an asset transfer in the prior year[131](index=131&type=chunk) - The CARES Act, enacted March 27, 2020, had **no material tax impacts** on the Company's condensed consolidated financial statements for the three months ended March 31, 2020[130](index=130&type=chunk) Income Tax Highlights | Metric | Three Months Ended March 31, 2020 | Three Months Ended March 31, 2019 | |:---|:---|:---| | Effective Income Tax Rate | (41.3)% | (588.4)% | | Income Tax Expense | $4,132 | $22,913 | | Tax Receivable Agreement liability | $114,800 | N/A | [13. Related Party Transactions](index=42&type=section&id=13.%20Related%20Party%20Transactions) Related Party Transactions (in thousands) | Transaction | Three Months Ended March 31, 2020 | Three Months Ended March 31, 2019 | |:---|:---|:---| | Related party lease expense | $500 | $500 | | Purchases from Precise Graphix (CEO interest) | $100 | $200 | | Purchases from Adams Radio (Director interest) | $0 | $200 | [14. Stockholders' Equity](index=42&type=section&id=14.%20Stockholders'%20Equity) - CWH has authorized preferred stock and three classes of common stock (Class A, B, and C)[139](index=139&type=chunk) Class A holders receive dividends and distributions, while Class B and C holders have voting rights but no dividends or distributions[139](index=139&type=chunk) - CWH is the sole managing member of CWGS, LLC, controlling its management, despite holding a minority economic interest (**42.1%** as of March 31, 2020)[140](index=140&type=chunk)[144](index=144&type=chunk) [15. Non-Controlling Interests](index=44&type=section&id=15.%20Non-Controlling%20Interests) - Non-controlling interests represent the common units of CWGS, LLC held by Continuing Equity Owners, which was **57.9%** as of March 31, 2020[144](index=144&type=chunk) Net Loss Attributable to Non-Controlling Interests (in thousands) | Metric | Three Months Ended March 31, 2020 | Three Months Ended March 31, 2019 | |:---|:---|:---| | Net loss attributable to non-controlling interests | $5,969 | $7,412 | [16. Equity-based Compensation Plans](index=44&type=section&id=16.%20Equity-based%20Compensation%20Plans) Equity-based Compensation Expense (in thousands) | Metric | Three Months Ended March 31, 2020 | Three Months Ended March 31, 2019 | |:---|:---|:---| | Total equity-based compensation expense | $3,312 | $2,716 | Stock Option and Restricted Stock Unit Activity (in thousands) | Metric | Stock Options (March 31, 2020) | Restricted Stock Units (March 31, 2020) | |:---|:---|:---| | Outstanding at December 31, 2019 | 745 | 1,806 | | Forfeited | (18) | (109) | | Vested | — | (47) | | Outstanding at March 31, 2020 | 727 | 1,650 | [17. Earnings Per Share](index=45&type=section&id=17.%20Earnings%20Per%20Share) Loss Per Share of Class A Common Stock | Metric | Three Months Ended March 31, 2020 | Three Months Ended March 31, 2019 | |:---|:---|:---| | Basic Loss Per Share | $(0.22) | $(0.52) | | Diluted Loss Per Share | $(0.22) | $(0.52) | | Weighted-average shares of Class A common stock outstanding (Basic/Diluted) | 37,534 | 37,195 | [18. Segments Information](index=46&type=section&id=18.%20Segments%20Information) - The Company operates two reportable segments: **Good Sam Services and Plans**, and **RV and Outdoor Retail**[152](index=152&type=chunk) Segment Revenue (in thousands) | Segment | Three Months Ended March 31, 2020 | Three Months Ended March 31, 2019 | Change (YoY) | % Change (YoY) | |:---|:---|:---|:---|:---| | Good Sam Services and Plans | $47,208 | $46,966 | $242 | 0.5% | | RV and Outdoor Retail | $980,065 | $1,017,803 | $(37,738) | (3.7%) | | **Total Consolidated Revenue** | **$1,027,273** | **$1,064,769** | **$(37,496)** | **(3.5%)** | Segment Income (Loss) (in thousands) | Segment | Three Months Ended March 31, 2020 | Three Months Ended March 31, 2019 | Change (YoY) | % Change (YoY) | |:---|:---|:---|:---|:---| | Good Sam Services and Plans | $21,340 | $22,414 | $(1,074) | (4.8%) | | RV and Outdoor Retail | $128 | $(375) | $503 | 134.1% | | **Total Segment Income** | **$21,468** | **$22,039** | **$(571)** | **(2.6%)** | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=48&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Analyzes financial performance for Q1 2020, discussing COVID-19 impacts, strategic shifts, segment results, and liquidity [Overview](index=48&type=section&id=Overview) - Camping World Holdings, Inc. is America's largest retailer of RVs and related products/services, operating **168 retail locations** as of March 31, 2020, with 167 selling and/or servicing RVs[160](index=160&type=chunk) - The overall RV industry experienced decelerating demand in 2018 and 2019, but new RV wholesale shipments **increased 0.4%** in Q1 2020 compared to Q1 2019[161](index=161&type=chunk) - Increased competition and lower RV pricing have **adversely impacted** the Company's gross margin, selling, general and administrative expenses, and operating margin[161](index=161&type=chunk) [Segments](index=49&type=section&id=Segments) - The Company has two reportable segments: **Good Sam Services and Plans**, and **RV and Outdoor Retail**[163](index=163&type=chunk) [COVID-19](index=50&type=section&id=COVID-19) - COVID-19 has **negatively impacted the business**, particularly revenue, due to decreased retail and online traffic[165](index=165&type=chunk) The Company implemented preparedness plans including social distancing, protective clothing, increased sanitization, and work-from-home directives[165](index=165&type=chunk) - The majority of RV and Outdoor Retail locations continued to operate as essential businesses[165](index=165&type=chunk) Four specialty retail locations were temporarily closed by March 31, 2020, with three additional dealerships closing post-March 31, 2020[165](index=165&type=chunk) - The Company **reduced salaries and hours**, and implemented headcount and other cost reductions to align expenses with reduced sales[165](index=165&type=chunk) - The Company believes the RV industry is poised for a **quicker recovery** than other sectors like cruise lines and air travel, and is implementing marketing and operational plans to optimize its position during the recovery[166](index=166&type=chunk) [Strategic Shift](index=50&type=section&id=Strategic%20Shift) - In 2019, the Company made a strategic decision to **refocus its business around core RV competencies**, as detailed in Note 4 – Restructuring and Long-lived Asset Impairment[168](index=168&type=chunk) [Results of Operations](index=51&type=section&id=Results%20of%20Operations) [Three Months Ended March 31, 2020 Compared to Three Months Ended March 31, 2019](index=51&type=section&id=Three%20Months%20Ended%20March%2031%2C%202020%20Compared%20to%20Three%20Months%20Ended%20March%2031%2C%202019) Consolidated Financial Performance (in thousands) | Metric | Q1 2020 | Q1 2019 | Change (YoY) | % Change (YoY) | |:---|:---|:---|:---|:---| | Total Revenue | $1,027,273 | $1,064,769 | $(37,496) | (3.5%) | | Total Gross Profit | $302,663 | $298,327 | $4,336 | 1.5% | | Income from Operations | $13,265 | $16,882 | $(3,617) | (21.4%) | | Loss before Income Taxes | $(9,997) | $(3,894) | $(6,103) | (156.7%) | | Net Loss | $(14,129) | $(26,807) | $12,678 | 47.3% | [Good Sam Services and Plans](index=54&type=section&id=Good%20Sam%20Services%20and%20Plans_Results) - Revenue increase was driven by roadside assistance programs (**+ $0.5M**), vehicle insurance products (**+ $0.6M**), and extended vehicle warranty programs (**+ $0.3M**), partially offset by a decrease in consumer shows revenue (**- $1.1M**)[179](index=179&type=chunk) - Gross profit decrease was primarily due to increased accrual for program costs (**- $0.9M**), reduction from consumer shows (**- $0.5M**), and annual directory publication (**- $0.4M**)[180](index=180&type=chunk) Good Sam Services and Plans Performance (in thousands) | Metric | Q1 2020 | Q1 2019 | Change (YoY) | % Change (YoY) | |:---|:---|:---|:---|:---| | Revenue | $47,208 | $46,966 | $242 | 0.5% | | Gross Profit | $25,349 | $26,235 | $(886) | (3.4%) | | Gross Margin | 53.7% | 55.9% | (216) bps | N/A | [RV and Outdoor Retail](index=54&type=section&id=RV%20and%20Outdoor%20Retail_Results) - New vehicle revenue decreased due to a **5.4% reduction in vehicles sold** and a **0.8% reduction in average price per vehicle sold**[181](index=181&type=chunk) Used vehicle revenue increased due to a **6.2% increase in vehicles sold** and an **8.1% increase in average selling price per vehicle sold**[185](index=185&type=chunk) - Products, service and other revenue decreased primarily due to store closures related to the **2019 Strategic Shift**[187](index=187&type=chunk) RV and Outdoor Retail Segment Performance (in thousands) | Metric | Q1 2020 | Q1 2019 | Change (YoY) | % Change (YoY) | |:---|:---|:---|:---|:---| | New Vehicle Revenue | $497,317 | $529,577 | $(32,260) | (6.1%) | | Used Vehicle Revenue | $206,665 | $180,008 | $26,657 | 14.8% | | Products, Service and Other Revenue | $172,623 | $204,876 | $(32,253) | (15.7%) | | Finance and Insurance, net Revenue | $92,456 | $91,891 | $565 | 0.6% | | Good Sam Club Revenue | $11,004 | $11,451 | $(447) | (3.9%) | | New Vehicle Gross Margin | 14.3% | 12.6% | 169 bps | N/A | | Used Vehicle Gross Margin | 20.7% | 20.6% | 10 bps | N/A | | Products, Service and Other Gross Margin | 36.1% | 33.6% | 255 bps | N/A | | Good Sam Club Gross Margin | 79.6% | 67.5% | 1,204 bps | N/A | [Selling, general and administrative expenses](index=58&type=section&id=Selling%2C%20general%20and%20administrative%20expenses) - The decrease in SG&A expenses was primarily due to reductions in personal property expense and professional fees, partially offset by increases in wage-related expenses and selling expenses[194](index=194&type=chunk) Selling, General and Administrative Expenses (in thousands) | Metric | Q1 2020 | Q1 2019 | Change (YoY) | % Change (YoY) | |:---|:---|:---|:---|:---| | SG&A Expenses | $267,656 | $268,065 | $(409) | (0.2%) | | SG&A as % of Total Gross Profit | 88.4% | 89.9% | (150) bps | N/A | [Depreciation and amortization](index=58&type=section&id=Depreciation%20and%20amortization_Results) - The increase was due to the impact of capital expenditures from 2019[195](index=195&type=chunk) Depreciation and Amortization (in thousands) | Metric | Q1 2020 | Q1 2019 | Change (YoY) | % Change (YoY) | |:---|:---|:---|:---|:---| | Depreciation and Amortization | $14,078 | $13,594 | $484 | 3.6% | [Long-lived asset impairment](index=58&type=section&id=Long-lived%20asset%20impairment_Results) - The **$6.6 million impairment charge** in Q1 2020 primarily related to the 2019 Strategic Shift[196](index=196&type=chunk) Long-lived Asset Impairment (in thousands) | Metric | Q1 2020 | Q1 2019 | |:---|:---|:---| | Long-lived Asset Impairment | $6,569 | $0 | [Lease termination](index=58&type=section&id=Lease%20termination_Results) - The lease termination expense in Q1 2020 was related to the **2019 Strategic Shift**[197](index=197&type=chunk) Lease Termination Expense (in thousands) | Metric | Q1 2020 | Q1 2019 | |:---|:---|:---| | Lease Termination Expense | $584 | $0 | [Floor plan interest expense](index=58&type=section&id=Floor%20plan%20interest%20expense_Results) - The decrease was primarily due to a **91 basis point decrease** in the average floor plan borrowing rate and an **8.3% decrease** in average floor plan borrowings from lower average inventory levels[198](index=198&type=chunk) Floor Plan Interest Expense (in thousands) | Metric | Q1 2020 | Q1 2019 | Change (YoY) | % Change (YoY) | |:---|:---|:---|:---|:---| | Floor Plan Interest Expense | $(8,604) | $(11,610) | $3,006 | 25.9% | | Average Floor Plan Borrowing Rate | N/A | N/A | (91) bps | N/A | | Average Floor Plan Borrowings | N/A | N/A | (8.3%) | N/A | [Other interest expense, net](index=58&type=section&id=Other%20interest%20expense%2C%20net_Results) - The decrease was primarily due to a **94 basis point decrease** in the average interest rate[199](index=199&type=chunk) Other Interest Expense, Net (in thousands) | Metric | Q1 2020 | Q1 2019 | Change (YoY) | % Change (YoY) | |:---|:---|:---|:---|:---| | Other Interest Expense, net | $(14,658) | $(17,643) | $2,985 | 16.9% | | Average Interest Rate | N/A | N/A | (94) bps | N/A | [Income tax expense](index=58&type=section&id=Income%20tax%20expense_Results) - The decrease was primarily due to lower income incurred at CWGS, LLC and the absence of a **$16.3 million** deferred income tax expense from an asset transfer in the prior year[200](index=200&type=chunk)[201](index=201&type=chunk) Income Tax Expense (in thousands) | Metric | Q1 2020 | Q1 2019 | Change (YoY) | % Change (YoY) | |:---|:---|:---|:---|:---| | Income Tax Expense | $(4,132) | $(22,913) | $18,781 | 82.0% | [Net loss](index=60&type=section&id=Net%20loss_Results) - The net loss **decreased by 47.3%** primarily due to the factors mentioned above, including reduced income tax expense and changes in gross profit and operating expenses[202](index=202&type=chunk) Net Loss (in thousands) | Metric | Q1 2020 | Q1 2019 | Change (YoY) | % Change (YoY) | |:---|:---|:---|:---|:---| | Net Loss | $(14,129) | $(26,807) | $12,678 | 47.3% | [Segment results](index=60&type=section&id=Segment%20results) [Good Sam Services and Plans](index=60&type=section&id=Good%20Sam%20Services%20and%20Plans_Segment) - Revenue increase was driven by roadside assistance programs (**+ $0.5M**), vehicle insurance products (**+ $0.6M**), and extended vehicle warranty programs (**+ $0.3M**), partially offset by a decrease in consumer shows revenue (**- $1.0M**)[204](index=204&type=chunk) - Segment income decrease was primarily due to increased accrual for program costs (**- $0.9M**), reduction from consumer shows (**- $0.6M**), and annual directory publication (**- $0.4M**)[205](index=205&type=chunk) Good Sam Services and Plans Segment Performance (in thousands) | Metric | Q1 2020 | Q1 2019 | Change (YoY) | % Change (YoY) | |:---|:---|:---|:---|:---| | Segment Revenue | $48,692 | $48,298 | $394 | 0.8% | | Segment Income | $21,340 | $22,414 | $(1,074) | (4.8%) | | Segment Margin | 43.8% | 46.4% | (258) bps | N/A | [RV and Outdoor Retail](index=60&type=section&id=RV%20and%20Outdoor%20Retail_Segment) - Revenue decrease was primarily driven by a **$37.2 million decrease** in products, service and other revenue (due to 2019 Strategic Shift) and a **$32.4 million decrease** in new vehicle revenue, partially offset by a **$26.6 million increase** in used vehicle revenue[209](index=209&type=chunk) - Segment income increased due to higher segment gross profit (**+ $5.2M**), reduced floor plan interest expense (**+ $3.0M**), and reduced SG&A expenses (**+ $0.2M**), partially offset by long-lived asset impairment (**- $6.6M**) and lease termination losses (**- $0.6M**)[210](index=210&type=chunk) RV and Outdoor Retail Segment Performance (in thousands) | Metric | Q1 2020 | Q1 2019 | Change (YoY) | % Change (YoY) | |:---|:---|:---|:---|:---| | Segment Revenue | $984,093 | $1,027,283 | $(43,190) | (4.2%) | | Segment Income (Loss) | $128 | $(375) | $503 | 134.1% | | Segment Margin | 0% | (0%) | 5 bps | N/A | [Corporate and other expenses](index=62&type=section&id=Corporate%20and%20other%20expenses_Segment) - The decrease in corporate and other expenses was primarily from **reduced professional fees**[211](index=211&type=chunk) Corporate and Other Expenses (in thousands) | Metric | Q1 2020 | Q1 2019 | Change (YoY) | % Change (YoY) | |:---|:---|:---|:---|:---| | Corporate & Other Expenses | $(2,729) | $(3,173) | $444 | 14.0% | [Non-GAAP Financial Measures](index=62&type=section&id=Non-GAAP%20Financial%20Measures) [EBITDA, Adjusted EBITDA, and Adjusted EBITDA Margin](index=62&type=section&id=EBITDA%2C%20Adjusted%20EBITDA%2C%20and%20Adjusted%20EBITDA%20Margin) - **Adjusted EBITDA increased significantly** due to adjustments for long-lived asset impairment, lease termination, loss on disposal of assets, equity-based compensation, and restructuring costs, while the prior year included a Tax Receivable Agreement liability adjustment[216](index=216&type=chunk) EBITDA and Adjusted EBITDA (in thousands) | Metric | Q1 2020 | Q1 2019 | Change (YoY) | % Change (YoY) | |:---|:---|:---|:---|:---| | EBITDA | $18,739 | $27,343 | $(8,604) | (31.5%) | | Adjusted EBITDA | $35,997 | $21,368 | $14,629 | 68.5% | | Adjusted EBITDA Margin | 3.5% | 2.0% | 150 bps | N/A | [Adjusted Net Income Attributable to Camping World Holdings, Inc. and Adjusted Earnings Per Share](index=65&type=section&id=Adjusted%20Net%20Income%20Attributable%20to%20Camping%20World%20Holdings%2C%20Inc.%20and%20Adjusted%20Earnings%20Per%20Share) Adjusted Net Income and EPS (in thousands, except per share amounts) | Metric | Q1 2020 | Q1 2019 | |:---|:---|:---| | Adjusted Net Income Attributable to Camping World Holdings, Inc. – Basic and Diluted | $(1,247) | $(24,892) | | Adjusted Earnings Per Share – Basic | $(0.03) | $(0.67) | | Adjusted Earnings Per Share – Diluted | $(0.03) | $(0.67) | [Uses and Limitations of Non-GAAP Financial Measures](index=68&type=section&id=Uses%20and%20Limitations%20of%20Non-GAAP%20Financial%20Measures) - Management and the board use Non-GAAP Financial Measures to assess operating performance, for planning, to evaluate operational strategies, and to gauge capital funding capacity[225](index=225&type=chunk) - Limitations of these measures include not reflecting cash expenditures, changes in working capital, debt service, tax expenses, or asset replacement costs[226](index=226&type=chunk)[228](index=228&type=chunk) [Liquidity and Capital Resources](index=70&type=section&id=Liquidity%20and%20Capital%20Resources) [General](index=70&type=section&id=General_Liquidity) - Primary liquidity sources include cash from operating activities, cash and cash equivalents, proceeds from equity offerings, and borrowings under Senior Secured Credit Facilities, Floor Plan Facility, and Real Estate Facility[230](index=230&type=chunk) - Future liquidity needs include working capital, inventory management, new/existing retail location development, debt service, distributions to equity holders, Tax Receivable Agreement payments, and public company costs[230](index=230&type=chunk)[231](index=231&type=chunk) - In Q1 2020, the Company paid a regular quarterly cash dividend of **$0.08 per share** and a special cash dividend of **$0.0732 per share** of Class A common stock[233](index=233&type=chunk) - In response to COVID-19, the Company is reducing cash expenditures (wage reductions, layoffs, furloughs), negotiating lease payment deferrals (approx. **$14.0 million** from 2020 to 2021), reducing marketing, and delaying strategic capital expenditures[235](index=235&type=chunk) Working Capital and Cash (in thousands) | Metric | March 31, 2020 | December 31, 2019 | |:---|:---|:---| | Working Capital | $378,400 | $394,700 | | Cash and Cash Equivalents | $109,400 | $147,500 | [Seasonality](index=74&type=section&id=Seasonality) - The Company's revenue, net income, and cash flows are subject to annual seasonality, with sales and profits generally highest during the **spring and summer months (Q2 and Q3)**[240](index=240&type=chunk)[241](index=241&type=chunk) - SG&A expenses as a percentage of gross profit tend to be higher in the **first and fourth quarters** due to the timing of acquisitions and the seasonal nature of the business[242](index=242&type=chunk) [Cash Flow](index=74&type=section&id=Cash%20Flow_Liquidity) - Net cash used in operating activities **decreased by $58.8 million** in Q1 2020, primarily due to reduced receivables and contracts in transit, increased net income, and other decreases, partially offset by increased inventory purchases[244](index=244&type=chunk) Summary Cash Flows (in thousands) | Metric | Q1 2020 | Q1 2019 | |:---|:---|:---| | Net cash used in operating activities | $(15,189) | $(74,020) | | Net cash used in investing activities | $(8,456) | $(22,916) | | Net cash (used in) provided by financing activities | $(14,470) | $28,364 | | Net decrease in cash and cash equivalents | $(38,115) | $(68,572) | Capital Expenditures (in thousands) | Category | Q1 2020 | Q1 2019 | |:---|:---|:---| | IT hardware and software | $2,645 | $1,677 | | Greenfield and acquired retail locations | $1,831 | $8,278 | | Existing retail locations | $4,022 | $1,777 | | Corporate and other | $170 | $29 | | **Total Capital Expenditures** | **$8,668** | **$11,761** | [Description of Senior Secured Credit Facilities, Floor Plan Facility and Real Estate Facility](index=76&type=section&id=Description%20of%20Senior%20Secured%20Credit%20Facilities%2C%20Floor%20Plan%20Facility%20and%20Real%20Estate%20Facility) - The Real Estate Facility had **$19.2 million** outstanding as of March 31, 2020, with no available capacity[258](index=258&type=chunk) The Company was in compliance with all applicable debt covenants for all facilities as of March 31, 2020 and December 31, 2019[263](index=263&type=chunk)[266](index=266&type=chunk) Senior Secured Credit Facilities (in thousands) | Metric | March 31, 2020 | December 31, 2019 | |:---|:---|:---| | Term Loan Facility (net of current portion) | $1,134,071 | $1,136,124 | | Revolving Credit Facility Total Commitment | $35,000 | $35,000 | | Revolving Credit Facility Additional Borrowing Capacity | $9,413 | $9,266 | Floor Plan Facility (in thousands) | Metric | March 31, 2020 | December 31, 2019 | |:---|:---|:---| | Total Commitment | $1,379,750 | $1,379,750 | | Unencumbered Borrowing Capacity | $316,406 | $408,809 | | Revolving Line of Credit Additional Borrowing Capacity | $16,115 | $19,115 | | Letters of Credit Capacity | $3,825 | $3,825 | [Sale/Leaseback Arrangements](index=80&type=section&id=Sale%2FLeaseback%20Arrangements) - The Company has historically used and may continue to use **sale-leaseback transactions** to finance property acquisitions and capital expenditures[268](index=268&type=chunk)[271](index=271&type=chunk) [Deferred Revenue](index=82&type=section&id=Deferred%20Revenue) - Deferred revenue, primarily from club memberships, totaled **$140.1 million** as of March 31, 2020[272](index=272&type=chunk) [Off-Balance Sheet Arrangements](index=82&type=section&id=Off-Balance%20Sheet%20Arrangements) - As of March 31, 2020, the Company had **no off-balance sheet arrangements** other than short-term leases not included in its lease obligation[273](index=273&type=chunk) [Contractual Obligations](index=82&type=section&id=Contractual%20Obligations) - There were **no material changes** in contractual obligations during Q1 2020 from those disclosed in the Annual Report, outside the normal course of business[274](index=274&type=chunk) [Critical Accounting Policies and Estimates](index=82&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) - **No material changes** in critical accounting policies from those previously reported in the Annual Report[276](index=276&type=chunk) [Recent Accounting Pronouncements](index=82&type=section&id=Recent%20Accounting%20Pronouncements) - Refer to Note 1 – Summary of Significant Accounting Policies for details on recently adopted and issued accounting pronouncements[277](index=277&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=82&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Refers to the Annual Report for market risk disclosures, noting no material changes as of March 31, 2020 - **No material changes** to the Company's quantitative and qualitative disclosures about market risks as of March 31, 2020, compared to those in the Annual Report[278](index=278&type=chunk) [Item 4. Controls and Procedures](index=82&type=section&id=Item%204.%20Controls%20and%20Procedures) Confirms the effectiveness of disclosure controls as of March 31, 2020, despite minor COVID-19 related modifications - The Chief Executive Officer and Chief Financial Officer concluded that the Company's disclosure controls and procedures were **effective** at the reasonable assurance level as of March 31, 2020[281](index=281&type=chunk) - Certain internal controls were modified to allow for remote performance in response to COVID-19, but these changes **did not materially affect** the internal control over financial reporting[282](index=282&type=chunk) [PART II. OTHER INFORMATION](index=83&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=32&type=section&id=Item%201.%20Legal%20Proceedings) Details multiple lawsuits alleging securities violations, noting a preliminary settlement in one case and meritorious defenses in others - The Company is a defendant in several class action lawsuits (Ronge, Strougo, IUOE, Geis) and shareholder derivative suits (Hunnewell, LPPF, Janssen, Sandler) alleging securities law violations and breaches of fiduciary duty[109](index=109&type=chunk)[110](index=110&type=chunk)[114](index=114&type=chunk)[115](index=115&type=chunk)[116](index=116&type=chunk)[117](index=117&type=chunk)[120](index=120&type=chunk)[284](index=284&type=chunk) - A **preliminary approval for a class action settlement** in the Ronge case was granted on April 7, 2020, following an unopposed motion filed on March 13, 2020[110](index=110&type=chunk) - The Company believes it has **meritorious defenses** to the claims and cannot currently estimate a range of reasonably possible loss in excess of any amount that would be paid directly by its insurance carriers[111](index=111&type=chunk)[114](index=114&type=chunk)[115](index=115&type=chunk)[117](index=117&type=chunk) [Item 1A. Risk Factors](index=83&type=section&id=Item%201A.%20Risk%20Factors) The COVID-19 pandemic has introduced and exacerbated risks including decreased sales, supply chain disruptions, and operational costs - The COVID-19 pandemic has led to **decreased traffic and sales** at RV and Outdoor Retail locations, temporary store closures, and reduced demand for services[287](index=287&type=chunk)[290](index=290&type=chunk)[291](index=291&type=chunk) - Risks include deteriorating economic conditions, **supply chain disruptions** (e.g., Thor Industries' temporary closures), limitations on borrowing capacity, potential credit rating downgrades, and increased operational costs due to safety measures[292](index=292&type=chunk)[294](index=294&type=chunk)[295](index=295&type=chunk)[296](index=296&type=chunk)[297](index=297&type=chunk) - The full extent of the COVID-19 pandemic's negative impact on results of operations, financial condition, and cash flows is **highly uncertain** and depends on future developments[307](index=307&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=87&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No unregistered sales of equity securities or use of proceeds to report for the period - No unregistered sales of equity securities and use of proceeds to report[308](index=308&type=chunk) [Item 3. Defaults Upon Senior Securities](index=87&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) No defaults upon senior securities to report for the period - No defaults upon senior securities to report[309](index=309&type=chunk) [Item 4. Mine Safety Disclosures](index=89&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the Company's operations - Mine Safety Disclosures are not applicable to the Company[316](index=316&type=chunk) [Item 5. Other Information](index=89&type=section&id=Item%205.%20Other%20Information) No other information to report for the period - No other information to report[317](index=317&type=chunk) [Item 6. Exhibits](index=89&type=section&id=Item%206.%20Exhibits) Lists the exhibits filed with the Form 10-Q, including certifications, XBRL documents, and corporate amendments - Exhibits include Rule 13a-14(a)/15d-14(a) and Section 1350 Certifications of the Chief Executive Officer and Chief Financial Officer[312](index=312&type=chunk)[313](index=313&type=chunk)[314](index=314&type=chunk) - Inline XBRL documents (Instance, Schema, Calculation, Definition, Label, Presentation Linkbase Documents) are submitted electronically[314](index=314&type=chunk)[315](index=315&type=chunk)[322](index=322&type=chunk)[323](index=323&type=chunk) - Other exhibits include amendments to the Amended and Restated Certificate of Incorporation, Bylaws, and an Employment Agreement[319](index=319&type=chunk)

Part I [Business](index=6&type=section&id=Item%201.%20Business) Camping World Holdings, Inc. is the largest U.S. RV retailer, operating through Good Sam Services and RV & Outdoor Retail segments, with a 2019 strategic shift to refocus on its core business - The company operates **175 retail locations** as of December 31, 2019, with **165** dedicated to selling and/or servicing RVs[12](index=12&type=chunk) - In 2019, the company initiated a "2019 Strategic Shift" to refocus on its core RV business by divesting or closing locations that could not sell or service RVs, resulting in the closure or sale of **34 non-RV retail stores**[22](index=22&type=chunk)[339](index=339&type=chunk) Business Segments Overview (FY 2019) | Segment | Description | % of Total Revenue | % of Total Gross Profit | | :--- | :--- | :--- | :--- | | **Good Sam Services and Plans** | Offers protection plans, insurance, roadside assistance, and other recurring services | 3.7% | 7.9% | | **RV and Outdoor Retail** | Sells new/used RVs, parts, accessories, repair services, and Good Sam Club memberships | 96.3% | 92.1% | - The business is highly seasonal, with the second and third quarters (spring and summer) accounting for an average of **30.0%** and **28.2%** of annual revenue, respectively, over the last three years[60](index=60&type=chunk)[128](index=128&type=chunk) - The company has strategic relationships with leading RV manufacturers, with Thor Industries, Inc. and Forest River, Inc. accounting for approximately **71.6%** and **17.6%** of new RV inventory, respectively[47](index=47&type=chunk) [Risk Factors](index=25&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant business, operational, and organizational risks, including strategic shift execution, financing dependency, manufacturer reliance, economic downturns, and substantial CEO control - The **2019 Strategic Shift** away from non-RV locations may not achieve expected benefits, could be costly and disruptive, and may result in further asset impairment charges[83](index=83&type=chunk)[84](index=84&type=chunk) - The business is heavily dependent on the availability of floor plan financing for inventory and consumer financing for customers, where worsening credit conditions could decrease sales[85](index=85&type=chunk)[88](index=88&type=chunk) - A significant portion of new RV inventory is supplied by two manufacturers: Thor Industries, Inc. (**71.6%**) and Forest River, Inc. (**17.6%**), where any disruption could adversely impact the business[91](index=91&type=chunk) - Chairman and CEO Marcus Lemonis has substantial control over the company through his beneficial ownership, influencing major corporate decisions, and the company is a "controlled company" exempt from certain NYSE governance requirements[220](index=220&type=chunk)[221](index=221&type=chunk)[231](index=231&type=chunk) - The company has a Tax Receivable Agreement requiring significant cash payments to pre-IPO owners for realized tax benefits, which could be substantial and accelerated, impacting liquidity[238](index=238&type=chunk)[240](index=240&type=chunk) [Unresolved Staff Comments](index=85&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports that it has no unresolved staff comments from the Securities and Exchange Commission - None[286](index=286&type=chunk) [Properties](index=85&type=section&id=Item%202.%20Properties) The company primarily leases its properties, including most RV and Outdoor Retail locations, administrative offices, and distribution centers, with key corporate offices in Lincolnshire, IL, and Englewood, CO - As of December 31, 2019, the company leases **161 of its 175 RV and Outdoor Retail locations** across 37 states[291](index=291&type=chunk) - The company's corporate headquarters is a leased **29,495 sq. ft.** facility in Lincolnshire, Illinois[288](index=288&type=chunk) - Two distribution centers in Greenville, North Carolina, are owned by the company but are slated for closure in the first half of 2020 as part of the strategic shift[290](index=290&type=chunk)[288](index=288&type=chunk) [Legal Proceedings](index=87&type=section&id=Item%203.%20Legal%20Proceedings) The company is involved in various legal proceedings arising from ordinary business, with details referenced in Note 13 of the Consolidated Financial Statements, and management believes the resolution will not have a material adverse effect - For detailed information on legal proceedings, the report refers to Note 13 – Commitments and Contingencies – Litigation[292](index=292&type=chunk) - The company is engaged in various legal actions, claims, and proceedings in the ordinary course of business, including matters related to employment, contracts, product liabilities, consumer protection, and intellectual property[293](index=293&type=chunk) [Mine Safety Disclosures](index=87&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company's operations - Not applicable[295](index=295&type=chunk) Part II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=93&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) Camping World Holdings, Inc.'s Class A common stock trades on the NYSE under "CWH" since October 2016, with a dividend policy including a regular quarterly cash dividend of approximately $0.08 per share and potential special cash dividends from excess tax distributions - The company's Class A common stock began trading on the NYSE under the symbol **"CWH"** on October 7, 2016[313](index=313&type=chunk) - The company intends to pay a regular quarterly cash dividend of approximately **$0.08 per share** on its Class A common stock, funded by distributions from CWGS, LLC[315](index=315&type=chunk) - The company also intends to pay special cash dividends from time to time, funded by "Excess Tax Distributions" received from CWGS, LLC, which are tax distributions exceeding the company's actual tax liability and payments under the Tax Receivable Agreement[318](index=318&type=chunk) [Selected Financial Data](index=96&type=section&id=Item%206.%20Selected%20Financial%20Data) The company presents five years of selected historical financial data, showing revenue growth but significant declines in operating and net income from 2017 to 2019, attributed to restructuring, impairments, and increased expenses Selected Consolidated Financial Data (2017-2019) | Metric ($ in thousands) | 2019 | 2018 | 2017 | | :--- | :--- | :--- | :--- | | **Total Revenue** | $4,892,019 | $4,792,017 | $4,279,830 | | **Total Gross Profit** | $1,287,398 | $1,362,932 | $1,240,914 | | **Operating Income** | $8,747 | $201,015 | $355,955 | | **Net (Loss) Income** | $(120,301) | $65,581 | $230,692 | | **Net (Loss) Income Attributable to CWH** | $(60,591) | $10,398 | $29,853 | | **Adjusted EBITDA** | $166,015 | $312,502 | $394,187 | - The financial data reflects significant accounting changes, including the adoption of ASC 606 (Revenue) in 2018 and ASC 842 (Leases) in 2019, as well as the impact of the 2017 U.S. Tax Cuts and Jobs Act[327](index=327&type=chunk)[328](index=328&type=chunk)[329](index=329&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=101&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes 2019 revenue growth to used vehicles and Good Sam services, but gross profit and operating income declined sharply due to restructuring costs, asset impairments, and higher SG&A expenses related to the 2019 Strategic Shift, with liquidity deemed sufficient from operations and debt facilities - In 2019, the company executed the **"2019 Strategic Shift"** to refocus on its core RV business, resulting in the closure or divestiture of **34 non-RV retail stores** and the liquidation of approximately **$108 million** in non-RV inventory[339](index=339&type=chunk) 2019 vs. 2018 Performance Summary | Metric ($ in millions) | 2019 | 2018 | % Change | | :--- | :--- | :--- | :--- | | **Total Revenue** | $4,892.0 | $4,792.0 | 2.1% | | **Total Gross Profit** | $1,287.4 | $1,362.9 | (5.5%) | | **Income from Operations** | $8.7 | $201.0 | (95.6%) | | **Net (Loss) Income** | $(120.3) | $65.6 | (283.4%) | - The decline in profitability in 2019 was driven by a **$75.5 million** decrease in gross profit, a **$72.3 million** increase in SG&A, and **$66.3 million** in long-lived asset impairment charges, largely related to the strategic shift[368](index=368&type=chunk) - The company's primary liquidity sources are cash from operations and borrowings under its Senior Secured Credit Facilities and Floor Plan Facility, which management believes are sufficient to fund operations and growth for at least the next twelve months[474](index=474&type=chunk)[480](index=480&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=172&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company is exposed to market risks from inflation and interest rate fluctuations, with a hypothetical 1% increase in interest rates on variable-rate debt increasing annual interest expense by approximately $20.9 million based on 2019 debt levels - The company is exposed to interest rate risk as its major debt facilities, including the Term Loan, Floor Plan Facility, and Real Estate Facility, bear variable interest rates[563](index=563&type=chunk) - Based on debt levels at December 31, 2019, a **1% increase** in the effective interest rate would cause an aggregate annual increase in interest expense of approximately **$20.9 million** ($11.8M from Term Loan, $8.9M from Floor Plan, $0.2M from Real Estate)[565](index=565&type=chunk) [Financial Statements and Supplementary Data](index=175&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section contains the company's audited consolidated financial statements for 2017-2019, reflecting a significant net loss in 2019 and an increase in total assets due to the adoption of ASC 842, with notes detailing the impact of the 2019 Strategic Shift - The independent auditor, Deloitte & Touche LLP, issued an unqualified opinion on the financial statements and the effectiveness of internal control over financial reporting as of December 31, 2019[569](index=569&type=chunk)[570](index=570&type=chunk) - The company adopted the new lease accounting standard (ASC 842) on January 1, 2019, resulting in the recognition of **$809.7 million** in operating lease assets and **$867.5 million** in operating lease liabilities on the balance sheet[652](index=652&type=chunk)[656](index=656&type=chunk) Key Balance Sheet Items (As of Dec 31) | Account ($ in thousands) | 2019 | 2018 | | :--- | :--- | :--- | | Cash and cash equivalents | $147,521 | $138,557 | | Inventories | $1,358,539 | $1,558,970 | | Total Assets | $3,376,240 | $2,806,687 | | Total Liabilities | $3,535,476 | $2,773,770 | | Total stockholders' equity (deficit) | $(159,236) | $32,917 | - The **2019 Strategic Shift** resulted in significant charges, including **$41.9 million** in incremental inventory reserves, **$1.0 million** in termination benefits, and **$57.4 million** in long-lived asset impairments[677](index=677&type=chunk)[678](index=678&type=chunk)[684](index=684&type=chunk) [Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=263&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company states that information required by this item was previously reported in a Current Report on Form 8-K filed on May 22, 2018 - Information regarding changes in and disagreements with accountants was previously reported on a Form 8-K filed on May 22, 2018[858](index=858&type=chunk) [Controls and Procedures](index=263&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded the company's disclosure controls and procedures were effective as of December 31, 2019, having remediated previously reported material weaknesses through enhanced review processes, additional personnel, and specialized resources - Management concluded that the company's disclosure controls and procedures were effective as of December 31, 2019[861](index=861&type=chunk) - The company has remediated the material weaknesses in internal control over financial reporting that were previously reported as of December 31, 2018[862](index=862&type=chunk)[868](index=868&type=chunk) - Remediation measures included enhancing controls around insurance reserve calculations, hiring additional experienced accounting staff, and improving the review process for tax liabilities and deferred tax balances[863](index=863&type=chunk)[864](index=864&type=chunk)[867](index=867&type=chunk) - Management's assessment concluded that internal control over financial reporting was effective as of December 31, 2019, supported by an unqualified opinion from the independent auditor, Deloitte & Touche LLP[871](index=871&type=chunk)[874](index=874&type=chunk) [Other Information](index=268&type=section&id=Item%209B.%20Other%20Information) There is no other information to report for this item - Not applicable[883](index=883&type=chunk) Part III [Directors, Executive Officers, Corporate Governance, Compensation, Security Ownership, and Accountant Fees](index=269&type=section&id=Items%2010%2C%2011%2C%2012%2C%2013%2C%20and%2014) This section incorporates information by reference from the company's 2020 Proxy Statement, covering directors, executive officers, corporate governance, executive compensation, security ownership, related party transactions, director independence, and principal accountant fees and services - Information for Item 10 (Directors, Executive Officers and Corporate Governance) will be included in the 2020 Proxy Statement[886](index=886&type=chunk) - Information for Item 11 (Executive Compensation) will be included in the 2020 Proxy Statement[887](index=887&type=chunk) - Information for Item 12 (Security Ownership) will be included in the 2020 Proxy Statement[888](index=888&type=chunk) - Information for Item 13 (Certain Relationships and Related Transactions, and Director Independence) will be included in the 2020 Proxy Statement[889](index=889&type=chunk) - Information for Item 14 (Principal Accountant Fees and Services) will be included in the 2020 Proxy Statement[891](index=891&type=chunk) Part IV [Exhibits, Financial Statement Schedules](index=272&type=section&id=Item%2015.%20Exhibits%2C%20Financial%20Statement%20Schedules) This section lists the financial statements, financial statement schedules, and exhibits filed as part of the Form 10-K, including key corporate documents and certifications from the CEO and CFO - This section provides an index of all financial statements, schedules, and exhibits included in or incorporated by reference into the Form 10-K[894](index=894&type=chunk)[895](index=895&type=chunk)[896](index=896&type=chunk) [Form 10-K Summary](index=280&type=section&id=Item%2016.%20Form%2010-K%20Summary) The company indicates that there is no Form 10-K summary provided - None[910](index=910&type=chunk)

Camping World Holdings, Inc. (NYSE:CWH) Q4 2019 Earnings Conference Call February 27, 2020 4:30 PM ET Company Participants Brent Moody - President Marcus Lemonis - Chairman & Chief Executive Officer Mel Flanigan - Chief Financial Officer Conference Call Participants Rick Nelson - Stephens Craig Kennison - Baird Mark Jordan - Jefferies Brandon Rolle - Northcoast Research John Lovallo - Bank of America Gerrick Johnson - BMO Capital Markets Marc Torrente - Wells Fargo Sanjay Gulati - ArrowMark Partners Operato ...

PART I. FINANCIAL INFORMATION [Item 1. Financial Statements](index=11&type=section&id=Item%201.%20Financial%20Statements) Unaudited financials for Q3 2019 report a **$65.3 million net loss** due to impairment and restructuring, a sharp decline from 2018, despite positive operating cash flow Condensed Consolidated Balance Sheet Data | Account | Sep 30, 2019 (in thousands) | Dec 31, 2018 (in thousands) | | :--- | :--- | :--- | | **Total Current Assets** | $1,723,757 | $1,888,162 | | **Operating Lease Assets** | $823,475 | $— | | **Total Assets** | $3,441,027 | $2,806,687 | | **Total Current Liabilities** | $1,253,005 | $1,305,118 | | **Operating Lease Liabilities** | $850,948 | $— | | **Total Liabilities** | $3,506,632 | $2,773,770 | | **Total Stockholders' Equity (Deficit)** | $(65,605) | $32,917 | Condensed Consolidated Statements of Operations Data | Metric | Three Months Ended Sep 30, 2019 (in thousands) | Three Months Ended Sep 30, 2018 (in thousands) | Nine Months Ended Sep 30, 2019 (in thousands) | Nine Months Ended Sep 30, 2018 (in thousands) | | :--- | :--- | :--- | :--- | :--- | | **Total Revenue** | $1,387,972 | $1,309,486 | $3,927,088 | $3,809,624 | | **Income from Operations** | $(32,307) | $80,662 | $74,879 | $244,038 | | **Net (Loss) Income** | $(65,263) | $46,155 | $(39,447) | $136,835 | | **Net (Loss) Income Attributable to CWH** | $(30,692) | $14,123 | $(32,070) | $40,726 | | **Diluted EPS** | $(0.82) | $0.38 | $(0.86) | $1.10 | Condensed Consolidated Statements of Cash Flows Data (Nine Months Ended) | Cash Flow Activity | Sep 30, 2019 (in thousands) | Sep 30, 2018 (in thousands) | | :--- | :--- | :--- | | **Net cash provided by operating activities** | $323,141 | $254,073 | | **Net cash used in investing activities** | $(91,691) | $(289,798) | | **Net cash used in financing activities** | $(239,773) | $(63,072) | | **Decrease in cash and cash equivalents** | $(8,323) | $(98,797) | [Notes to Unaudited Condensed Consolidated Financial Statements](index=18&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) Notes detail segment realignment, the '2019 Strategic Shift' with **$50.0 million impairment**, ASC 842 adoption adding **$800 million** in lease assets/liabilities, and ongoing litigation - The company realigned its reportable segments from three (Consumer Services and Plans; Dealership; Retail) to two (Good Sam Services and Plans; RV and Outdoor Retail) during the first quarter of 2019, with prior period information recast to reflect this change[48](index=48&type=chunk)[173](index=173&type=chunk)[174](index=174&type=chunk) - The '2019 Strategic Shift' approved on September 3, 2019, to exit non-RV locations, resulted in **$27.7 million** in restructuring costs and a **$50.0 million** long-lived asset impairment charge in Q3 2019[80](index=80&type=chunk)[84](index=84&type=chunk)[89](index=89&type=chunk) - Adoption of ASC 842 on January 1, 2019, added **$809.7 million** in operating lease assets and **$867.5 million** in operating lease liabilities to the balance sheet[65](index=65&type=chunk)[66](index=66&type=chunk) - The company is involved in several putative class action and shareholder derivative lawsuits alleging securities law violations, breaches of fiduciary duty, and misleading statements[123](index=123&type=chunk)[124](index=124&type=chunk)[129](index=129&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=64&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations%20(MD%26A)) Management discusses the challenging RV industry, the '2019 Strategic Shift' leading to **$50.0 million impairment** and restructuring costs, and Q3 2019 operating loss despite revenue growth [Results of Operations](index=68&type=section&id=Results%20of%20Operations) Q3 2019 total revenue grew 6.0% to **$1.4 billion**, but the company swung to a **$65.3 million net loss** due to impairment, restructuring, and heavy discounting Q3 2019 vs Q3 2018 Performance | Metric | Q3 2019 (in thousands) | Q3 2018 (in thousands) | Change (%) | | :--- | :--- | :--- | :--- | | **Total Revenue** | $1,387,972 | $1,309,486 | 6.0% | | **Total Gross Profit** | $338,473 | $373,014 | (9.3%) | | **Income from Operations** | $(32,307) | $80,662 | (140.1%) | | **Net (Loss) Income** | $(65,263) | $46,155 | (241.4%) | Nine Months 2019 vs 2018 Performance | Metric | YTD 2019 (in thousands) | YTD 2018 (in thousands) | Change (%) | | :--- | :--- | :--- | :--- | | **Total Revenue** | $3,927,088 | $3,809,624 | 3.1% | | **Total Gross Profit** | $1,046,790 | $1,087,350 | (3.7%) | | **Income from Operations** | $74,879 | $244,038 | (69.3%) | | **Net (Loss) Income** | $(39,447) | $136,835 | (128.8%) | - The company recognized a **$50.0 million** long-lived asset impairment charge in Q3 2019, with **$48.3 million** related to the 2019 Strategic Shift[221](index=221&type=chunk)[266](index=266&type=chunk) - Products, service and other gross profit decreased **44.1%** in Q3 2019, primarily due to promotions, merchandise markdowns, and **$27.3 million** in incremental inventory reserve charges related to the 2019 Strategic Shift[213](index=213&type=chunk) [Liquidity and Capital Resources](index=102&type=section&id=Liquidity%20and%20Capital%20Resources) The company's liquidity is supported by operating cash flow and credit facilities, despite reduced working capital and limited revolving credit capacity due to covenant restrictions Working Capital and Cash Position | Metric | Sep 30, 2019 (in millions) | Dec 31, 2018 (in millions) | | :--- | :--- | :--- | | **Working Capital** | $470.8 | $583.0 | | **Cash and Cash Equivalents** | $130.2 | $138.6 | - Net cash provided by operating activities increased to **$323.1 million** for the nine months ended September 30, 2019, up from **$254.1 million** in the prior-year period[309](index=309&type=chunk)[311](index=311&type=chunk) - Borrowing capacity under the Revolving Credit Facility was limited to **$9.4 million** as of September 30, 2019, due to the company not meeting the maximum Total Leverage Ratio covenant if borrowings exceeded a 30% threshold[325](index=325&type=chunk)[326](index=326&type=chunk) - The company expects future cash expenditures of approximately **$15.0 million to $22.0 million** related to its 2019 Strategic Shift, covering employee termination, contract termination, and other associated costs[301](index=301&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=112&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) There have been no material changes to the company's market risk disclosures since its 2018 Annual Report on Form 10-K - As of September 30, 2019, there have been no material changes to the company's market risk disclosures from those in the 2018 Annual Report on Form 10-K[341](index=341&type=chunk) [Item 4. Controls and Procedures](index=112&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were ineffective as of September 30, 2019, due to persistent material weaknesses in internal control over financial reporting - The CEO and CFO concluded that disclosure controls and procedures were not effective as of September 30, 2019, due to ongoing material weaknesses[343](index=343&type=chunk) - Material weaknesses identified in the 2018 annual report persist, relating to reserves for finance and insurance product cancellations, review of asset activity and valuations, and accounting for income taxes[344](index=344&type=chunk)[346](index=346&type=chunk) - Remediation efforts are underway, including using third-party actuarial analysis for reserves, hiring more accounting staff, and improving the review process for tax calculations[347](index=347&type=chunk)[348](index=348&type=chunk)[349](index=349&type=chunk)[350](index=350&type=chunk) PART II. OTHER INFORMATION [Item 1. Legal Proceedings](index=116&type=section&id=Item%201.%20Legal%20Proceedings) The company is a defendant in multiple consolidated putative class action and shareholder derivative lawsuits alleging securities law violations and breaches of fiduciary duty - The company is defending against a consolidated putative class action lawsuit (Ronge v. Camping World and Strougo v. Camping World) alleging violations of the Securities Act of 1933 and the Securities Exchange Act of 1934 related to statements made between March 2017 and August 2018[355](index=355&type=chunk)[356](index=356&type=chunk) - Multiple shareholder derivative suits (Hunnewell, LPPF, Janssen, and Sandler) have been filed, naming the company as a nominal defendant and alleging breaches of fiduciary duty, failure of internal controls, and insider trading, currently stayed pending the main class action resolution[361](index=361&type=chunk)[362](index=362&type=chunk)[363](index=363&type=chunk) [Item 1A. Risk Factors](index=120&type=section&id=Item%201A.%20Risk%20Factors) The company faces risks from the '2019 Strategic Shift' potentially failing, adverse economic conditions impacting consumer spending, inventory management issues, tariffs, and ongoing litigation costs - The '2019 Strategic Shift' may not be successfully executed or achieve expected benefits, potentially leading to further asset impairment charges, increased costs, and business disruption[367](index=367&type=chunk)[368](index=368&type=chunk) - The business is sensitive to general economic conditions, and a decline in consumer discretionary spending has adversely affected financial results, particularly through increased competition and promotional pricing[369](index=369&type=chunk)[376](index=376&type=chunk) - Failure to successfully manage inventory and anticipate changing consumer preferences in a volatile market has led to discounting programs that negatively impacted margins[381](index=381&type=chunk)[382](index=382&type=chunk) - A portion of products are manufactured abroad, exposing the company to risks from new or increased tariffs, particularly from China, which could increase costs and reduce profitability[383](index=383&type=chunk)[384](index=384&type=chunk)[385](index=385&type=chunk) [Item 5. Other Information](index=130&type=section&id=Item%205.%20Other%20Information) The company amended the employment agreement for its Chief Financial Officer, Melvin Flanigan, increasing his annual base salary - Effective October 1, 2019, the annual base salary of CFO Melvin Flanigan was increased from **$250,000** to **$350,000**[412](index=412&type=chunk)

Camping World Holdings, Inc. (NYSE:CWH) Q3 2019 Earnings Conference Call November 7, 2019 4:30 PM ET Company Participants Brent Moody – President Marcus Lemonis – Chairman and Chief Executive Officer Mel Flanigan – Chief Financial Officer Conference Call Participants Rick Nelson – Stephens Brett Andress – KeyBanc Capital Markets Tim Conder – Wells Fargo Security Craig Kennison – Baird Bret Jordan – Jefferies Fred Wightman – Citi John Lovallo – Bank of America Ryan Brinkman – JPMorgan Operator Good afternoon ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2019 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _____________ to _______________ Commission file number: 001-37908 CAMPING WORLD HOLDINGS, INC. (Exact name of registrant as specified in its charter) D ...

Financial Data and Key Metrics Changes - The company reported record revenue of approximately $1.5 billion for Q2 2019, up 2% from the previous year [27] - Adjusted EBITDA was nearly $100 million, down from $138 million a year ago [27] - Gross profit was $410 million, a decrease of 0.6% from $412 million in the previous year, with a gross margin of 27.8%, down from 28.6% [27][28] - SG&A expenses increased by 7.2%, primarily due to higher variable selling expenses and increased advertising costs [29] Business Line Data and Key Metrics Changes - The Good Sam services and plans segment revenue increased by 5.6% to $45 million, with gross profit of $26 million [30] - RV and Outdoor Retail segment revenue was $1.43 billion, up 2.2% from just under $1.4 billion last year, with gross profit of $384 million, down 1% [31][33] - The company ended the quarter with 5.25 million active customers, a 26% increase year-over-year [10] Market Data and Key Metrics Changes - The RV industry experienced a decline in manufacturer shipments and retail registrations, leading to increased promotional activity and margin compression [8][9] - Same-store sales for new and used RVs were down approximately 7% for the quarter [48] Company Strategy and Development Direction - The company aims to operate as an omni-channel RV and outdoor company, focusing on core RV products and services while expanding into curated outdoor products [14] - Plans to liquidate non-RV inventory and reinvest in higher-margin products, technology, and debt reduction [15][69] - The company is focused on improving customer service and addressing quality issues that arose during previous growth periods [21][22] Management's Comments on Operating Environment and Future Outlook - Management anticipates that the current market conditions will continue, with a revenue projection of approximately $5 billion for 2019 and adjusted EBITDA guidance around the mid-to-low $200 million range [46] - The company believes that the softness in the RV market is typically short-term and is focused on maintaining strong transaction counts and inventory turns [41][44] Other Important Information - The company has reduced its inventory by $75 million, or 4.6%, during the quarter [34] - The company plans to continue investing in the used RV category, which has shown strong demand and better inventory turns compared to new RVs [19] Q&A Session Summary Question: Can you discuss the sales trends during the quarter and what you are seeing in July and August? - Overall sales remained decent, with same-store sales down just under 7% for the quarter, while new RV sales were down nearly 18% [48][49] Question: How long do you think the downturn might last? - Historically, downturns last 12 to 18 months, and the company is focused on right-sizing inventory and SG&A [51][53] Question: How are Gander Outdoors stores performing? - Locations selling RVs are performing well, and the company is analyzing which non-RV locations to consolidate or exit [57][59] Question: What is the plan for reducing non-RV inventory? - The company plans to liquidate $50 million to $60 million of non-RV inventory to reinvest in higher-margin categories [69][88] Question: How is the company addressing cost structure optimization? - The company has made progress in reducing SG&A and is focused on ensuring the right human capital is in place [76][78] Question: What is the outlook for free cash flow? - The company expects reasonably healthy pre-planned cash flow for the year despite margin compression [103] Question: How is the company accessing used RV inventory? - The company utilizes a proprietary system to aggregate trade values and has been successful in growing its consignment business [110][112]

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2019 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _____________ to _______________ Commission file number: 001-37908 CAMPING WORLD HOLDINGS, INC. (Exact name of registrant as specified in its chart ...

Camping World Holdings (NYSE:CWH) Q1 2019 Earnings Conference Call May 8, 2019 4:30 PM ET Company Participants Marcus Lemonis - Chairman & CEO Brent Moody - President Melvin Flanigan - CFO Conference Call Participants Rick Nelson - Stephens Craig Kennison - Baird Brett Andress - KeyBanc Capital Markets Fred Wightman - Citi Brett Jordan - Jefferies Tim Conder - Wells Fargo Securities Operator Good afternoon, and welcome to Camping World Holdings Conference Call to discuss Financial Results for the First Quar ...

[Part I](index=7&type=section&id=Part%20I) [Business](index=7&type=section&id=Item%201.%20Business) Camping World Holdings is a leading U.S. RV and outdoor lifestyle retailer serving 5.1 million active customers through 227 locations across three segments - The company operates through three business segments: Consumer Services and Plans, Dealership, and Retail, utilizing its iconic brands Good Sam, Camping World, and Gander[18](index=18&type=chunk)[20](index=20&type=chunk) - As of December 31, 2018, the company served a base of **5.1 million Active Customers** and operated **227 retail locations** across 36 states[18](index=18&type=chunk)[24](index=24&type=chunk) - The company's growth strategy includes expanding its retail footprint through acquisitions (like Gander Mountain) and greenfield openings, targeted marketing, and cross-selling products to its large customer database of over **29.0 million contacts**[35](index=35&type=chunk)[36](index=36&type=chunk)[39](index=39&type=chunk) [Business Segments](index=13&type=section&id=Item%201.%20Business%23Our%20Business%20Segments) The company operates three segments: Consumer Services and Plans, Dealership, and Retail, offering diverse RV and outdoor lifestyle products and services - The Consumer Services and Plans segment includes offerings such as extended vehicle service contracts, emergency roadside assistance, property and casualty insurance, and membership clubs like the Good Sam Club, which had approximately **2.1 million members** as of December 31, 2018[48](index=48&type=chunk) - The Dealership segment's offerings include new and used vehicles, repair and maintenance services, collision repair, and finance and insurance products, with approximately **71,500 new** and **32,800 used vehicles** sold in 2018[52](index=52&type=chunk)[53](index=53&type=chunk)[54](index=54&type=chunk) - The Retail segment provides a wide array of products including RV supplies, equipment, outdoor gear for camping, hiking, boating, fishing, and hunting, as well as related apparel and footwear[62](index=62&type=chunk)[63](index=63&type=chunk)[65](index=65&type=chunk) [Customers and Markets](index=17&type=section&id=Item%201.%20Business%23Customers%20and%20Markets) The company targets 9 million U.S. RV-owning households and 77 million camping households, benefiting from favorable demographic trends - The estimated number of U.S. households owning an RV is approximately **9 million**, with the company having about **5.1 million Active Customers**[67](index=67&type=chunk) - New RV shipments grew at a compounded annual rate of **9.7%** from 2012 to 2018, although 2018 saw a decline of **4.1%** from the previous year[69](index=69&type=chunk) - The total number of camping households in the U.S. is estimated at **77 million**, with significant growth among younger and more diverse demographics[72](index=72&type=chunk)[73](index=73&type=chunk) [Product Sourcing and Distribution](index=21&type=section&id=Item%201.%20Business%23Product%20Sourcing%20and%20Distribution) The company sources RVs from major manufacturers and accessories from 2,400 vendors, distributing through eight U.S. fulfillment centers - As of December 31, 2018, key new RV suppliers were Thor Industries, Inc. (**73.8%**), Forest River, Inc. (**15.3%**), and Winnebago Industries, Inc. (**5.9%**)[91](index=91&type=chunk) - The company purchased merchandise from approximately **2,400 vendors** for its parts, accessories, and outdoor lifestyle products in 2018, with no single vendor accounting for more than **5%** of total purchases[97](index=97&type=chunk) - The company operates a network of **eight distribution and fulfillment centers** to support its retail, e-commerce, and catalog businesses[99](index=99&type=chunk)[100](index=100&type=chunk) [Seasonality](index=30&type=section&id=Item%201.%20Business%23Seasonality) The company's business is seasonal, with peak RV-related demand in Q2 and Q3, impacting revenue and expenses - Demand for RV products and services typically declines in the winter and is highest in the spring and summer[160](index=160&type=chunk) - Over the last three years, the second and third quarters generated **30.1%** and **28.1%** of annual revenues, respectively[160](index=160&type=chunk) [Risk Factors](index=31&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant business risks including economic sensitivity, financing dependence, manufacturer reliance, and integration challenges, alongside structural and internal control weaknesses [Risks Related to Business](index=31&type=section&id=Item%201A.%20Risk%20Factors%23Risks%20Related%20to%20Our%20Business) Business risks include RV industry cyclicality, financing dependence, reliance on key manufacturers, acquisition integration challenges, and identified material weaknesses in internal controls - The business is highly dependent on the availability of floor plan financing for inventory and consumer financing for customers' purchases[165](index=165&type=chunk)[166](index=166&type=chunk) - Significant reliance on key manufacturers, with Thor Industries, Inc., Forest River, Inc., and Winnebago Industries, Inc. supplying **73.8%**, **15.3%**, and **5.9%** of new RV inventory, respectively, as of year-end 2018[170](index=170&type=chunk) - The integration of Gander Outdoors and Overton's presents risks, including higher-than-expected costs, unfamiliarity with new product lines like firearms, and potential for slower profitability compared to traditional locations[320](index=320&type=chunk)[321](index=321&type=chunk)[322](index=322&type=chunk) - Material weaknesses in internal control over financial reporting were identified, which could have a significant adverse effect on the business and stock price[395](index=395&type=chunk)[398](index=398&type=chunk)[399](index=399&type=chunk) [Risks Relating to Organizational Structure](index=56&type=section&id=Item%201A.%20Risk%20Factors%23Risks%20Relating%20to%20Our%20Organizational%20Structure) Organizational risks stem from Marcus Lemonis's substantial voting control, the company's "controlled company" status, and significant payment obligations under the Tax Receivable Agreement - Marcus Lemonis, through his beneficial ownership, has substantial control, casting up to **52%** of total votes (**47%** via Class B stock and **5%** via Class C stock), influencing nearly all matters requiring stockholder approval[327](index=327&type=chunk) - The company is a "controlled company" under NYSE rules, exempting it from requirements like having a majority of independent directors and fully independent compensation and nominating committees[337](index=337&type=chunk)[338](index=338&type=chunk) - The Tax Receivable Agreement requires the company to make potentially significant cash payments to Continuing Equity Owners, equal to **85%** of certain tax benefits realized, which could be accelerated under certain conditions[343](index=343&type=chunk)[347](index=347&type=chunk)[348](index=348&type=chunk) [Properties](index=69&type=section&id=Item%202.%20Properties) As of December 31, 2018, the company operated 227 mostly leased retail locations across 36 states, supported by corporate offices and eight distribution centers Company Locations as of December 31, 2018 | Location Type | 2018 | 2017 | 2016 | | :--- | :--- | :--- | :--- | | Co-habited Dealership and Retail locations | 126 | 116 | 104 | | Stand-alone Dealership locations | 15 | 8 | 1 | | Stand-alone Retail locations | 86 | 29 | 17 | | **Total locations** | **227** | **153** | **122** | - The company leases substantially all of its operational properties, including **216 of its 227 retail locations** and **seven of its eight distribution centers** as of year-end 2018[255](index=255&type=chunk)[410](index=410&type=chunk) [Legal Proceedings](index=70&type=section&id=Item%203.%20Legal%20Proceedings) The company faces multiple class action and shareholder derivative lawsuits alleging securities law violations and breach of fiduciary duty - The company is a defendant in consolidated putative class action lawsuits (Ronge and Strougo) alleging violations of securities laws based on allegedly misleading statements between March 2017 and August 2018[413](index=413&type=chunk)[415](index=415&type=chunk)[416](index=416&type=chunk) - A separate class action (IUOE Complaint) alleges violations related to the October 2017 secondary offering, and another (Geis Complaint) relates to the October 2016 IPO[417](index=417&type=chunk)[418](index=418&type=chunk) - A shareholder derivative suit (Hunnewell Complaint) was filed in March 2019 alleging breach of fiduciary duty by certain officers and directors[419](index=419&type=chunk) [Part II](index=75&type=section&id=Part%20II) [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=75&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's Class A common stock trades on the NYSE, with a policy of regular quarterly dividends and potential special dividends - The company's Class A common stock began trading on the NYSE under the symbol "CWH" on October 7, 2016[440](index=440&type=chunk) - The company intends to pay a regular quarterly cash dividend of approximately **$0.08 per share** of Class A common stock and may pay special dividends from excess tax distributions[442](index=442&type=chunk)[446](index=446&type=chunk) Dividends Declared per Class A Share | Year | Dividend per Share | | :--- | :--- | | 2018 | $0.61 | | 2017 | $0.74 | | 2016 | $0.08 | [Selected Financial Data](index=77&type=section&id=Item%206.%20Selected%20Financial%20Data) This section summarizes five years of financial data, showing **$4.8 billion** total revenue and **$10.4 million** net income in 2018, impacted by acquisitions and accounting changes Selected Consolidated Financial Data (in thousands) | Metric | FY 2018 | FY 2017 | | :--- | :--- | :--- | | **Total Revenue** | **$4,792,017** | **$4,279,830** | | Gross Profit | $1,362,932 | $1,240,914 | | Operating Income | $201,015 | $355,955 | | Net Income | $65,581 | $230,692 | | Net Income Attributable to CWH | $10,398 | $29,853 | | Adjusted EBITDA | $312,502 | $394,187 | | **Total Assets** | **$2,806,687** | **$2,567,026** | | Total Debt | $1,165,865 | $916,902 | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=81&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Total revenue grew to **$4.8 billion** in 2018, but net income declined significantly due to goodwill impairment, increased SG&A, and higher interest expenses [Results of Operations](index=89&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations%23Results%20of%20Operations) Total revenue increased **12.0%** to **$4.8 billion** in 2018, but operating income fell **43.5%** and net income **65.2%** due to impairment and higher expenses Results of Operations Comparison: 2018 vs 2017 (in thousands) | Metric | FY 2018 | FY 2017 | Change (%) | | :--- | :--- | :--- | :--- | | Total Revenue | $4,792,017 | $4,279,830 | 12.0% | | Gross Profit | $1,362,932 | $1,240,914 | 9.8% | | SG&A Expenses | $1,069,359 | $853,160 | 25.3% | | Goodwill Impairment | $40,046 | $0 | N/A | | Income from Operations | $201,015 | $355,955 | (43.5%) | | Net Income | $65,581 | $230,692 | (71.6%) | - Retail segment revenue surged **65.0%** to **$669.9 million** in 2018, primarily due to the opening of a net **60 Gander Outdoors locations**[534](index=534&type=chunk) - A goodwill impairment charge of **$40.0 million** was recorded in the fourth quarter of 2018 related to the Retail reporting unit, reducing its goodwill to zero[540](index=540&type=chunk) [Non-GAAP Financial Measures](index=103&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations%23Non-GAAP%20Financial%20Measures) Adjusted EBITDA decreased to **$312.5 million** in 2018, primarily due to lower gross profit and significant SG&A expenses from the Gander Outdoors rollout Reconciliation of Net Income to Adjusted EBITDA (in thousands) | Reconciliation Item | FY 2018 | FY 2017 | FY 2016 | | :--- | :--- | :--- | :--- | | **Net income** | **$65,581** | **$230,692** | **$198,476** | | Other interest expense, net | $63,329 | $42,959 | $48,318 | | Depreciation and amortization | $49,322 | $31,545 | $24,695 | | Income tax expense | $30,790 | $154,910 | $5,800 | | **EBITDA** | **$209,022** | **$460,106** | **$277,289** | | Goodwill impairment | $40,046 | $0 | $0 | | Gander Outdoors pre-opening costs | $43,156 | $26,352 | $0 | | Equity-based compensation | $14,088 | $5,109 | $1,597 | | Tax Receivable Agreement liability adj. | $1,324 | ($100,758) | $0 | | Other adjustments | $4,866 | $3,381 | $7,571 | | **Adjusted EBITDA** | **$312,502** | **$394,187** | **$286,467** | [Liquidity and Capital Resources](index=108&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations%23Liquidity%20and%20Capital%20Resources) The company's liquidity is supported by **$136.3 million** in operating cash flow and **$2.6 billion** in credit facilities, with **$583.0 million** working capital - As of December 31, 2018, the company had working capital of **$583.0 million**, including **$138.6 million** in cash and cash equivalents[624](index=624&type=chunk) Key Debt Facilities as of Dec 31, 2018 (in billions) | Facility | Commitment/Size | Outstanding | | :--- | :--- | :--- | | Term Loan Facility | $1.19 | $1.18 | | Floor Plan Facility | $1.415 | $0.886 | Summary of Cash Flows (in millions) | Cash Flow Activity | FY 2018 | FY 2017 | | :--- | :--- | :--- | | Operating Activities | $136.3 | ($16.3) | | Investing Activities | ($292.7) | ($468.5) | | Financing Activities | $70.8 | $594.7 | [Financial Statements and Supplementary Data](index=130&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents audited consolidated financial statements for 2016-2018, including balance sheets, income statements, and cash flows, with detailed notes on accounting changes and material weaknesses Consolidated Balance Sheet Summary (in thousands) | Account | Dec 31, 2018 | Dec 31, 2017 | | :--- | :--- | :--- | | Total Current Assets | $1,888,162 | $1,807,324 | | Total Assets | $2,806,687 | $2,567,026 | | Total Current Liabilities | $1,305,118 | $1,331,134 | | Total Liabilities | $2,773,770 | $2,495,263 | | Total Stockholders' Equity | $32,917 | $71,763 | Consolidated Statement of Income Summary (in thousands) | Account | FY 2018 | FY 2017 | FY 2016 | | :--- | :--- | :--- | :--- | | Total Revenue | $4,792,017 | $4,279,830 | $3,516,307 | | Gross Profit | $1,362,932 | $1,240,914 | $993,733 | | Income from Operations | $201,015 | $355,955 | $276,500 | | Net Income | $65,581 | $230,692 | $198,476 | | Net Income Attributable to CWH | $10,398 | $29,853 | $188,885 | - The financial statements for prior periods were revised to correct for immaterial errors, primarily related to the cancellation reserve for certain finance and insurance products and the calculation of the Tax Receivable Agreement liability[748](index=748&type=chunk) - A goodwill impairment charge of **$40.0 million** was recorded in Q4 2018 for the Retail segment, reducing its goodwill balance to zero due to a decline in expected future cash flows[826](index=826&type=chunk) [Controls and Procedures](index=198&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded disclosure controls were ineffective due to material weaknesses in internal control over financial reporting, leading to an adverse auditor opinion - Management concluded that disclosure controls and procedures were not effective as of December 31, 2018[1030](index=1030&type=chunk) - Material weaknesses were identified related to: 1) Insufficient accounting resources for proper review of valuations and estimates, and 2) Ineffective design and operation of controls over the accounting for income taxes[1037](index=1037&type=chunk)[1038](index=1038&type=chunk)[1056](index=1056&type=chunk)[1057](index=1057&type=chunk) - The independent registered public accounting firm, Deloitte & Touche LLP, issued an adverse opinion on the company's internal control over financial reporting as of December 31, 2018[1039](index=1039&type=chunk)[1048](index=1048&type=chunk) - A remediation plan is underway, focusing on assessing and hiring additional accounting resources and improving the design of controls around income tax accounting[1040](index=1040&type=chunk)[1043](index=1043&type=chunk)[1044](index=1044&type=chunk) [Part III](index=204&type=section&id=Part%20III) [Directors, Executive Officers and Corporate Governance](index=204&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) Information on directors, executive officers, and corporate governance is incorporated by reference from the 2019 Proxy Statement - The information required by this item is incorporated by reference from the registrant's Proxy Statement for its 2019 Annual Meeting of Shareholders[1063](index=1063&type=chunk) [Executive Compensation](index=204&type=section&id=Item%2011.%20Executive%20Compensation) Executive and director compensation details are incorporated by reference from the 2019 Proxy Statement - The information required by this item is incorporated by reference from the registrant's Proxy Statement for its 2019 Annual Meeting of Shareholders[1064](index=1064&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=204&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) This section details equity compensation plans and security ownership, with further information incorporated from the 2019 Proxy Statement Equity Compensation Plan Information as of December 31, 2018 | Plan Category | Securities to be Issued Upon Exercise | Weighted-Average Exercise Price | Securities Remaining for Future Issuance | | :--- | :--- | :--- | :--- | | Equity compensation plans approved by security holders | 2,311,624 | $21.85 | 11,964,302 | | Equity compensation plans not approved by security holders | — | — | — | | **Total** | **2,311,624** | **$21.85** | **11,964,302** | - Other information regarding security ownership is incorporated by reference from the registrant's Proxy Statement for its 2019 Annual Meeting of Shareholders[1066](index=1066&type=chunk) [Part IV](index=206&type=section&id=Part%20IV) [Exhibits, Financial Statement Schedules](index=206&type=section&id=Item%2015.%20Exhibits%2C%20Financial%20Statement%20Schedules) This section lists all financial statements, schedules, and exhibits included in the Annual Report, with details on key corporate documents - The report includes financial statements as listed in Item 8[1072](index=1072&type=chunk) - Financial statement schedules filed include Schedule I (Condensed Financial Information of Registrant) and Schedule II (Valuation and Qualifying Accounts)[1073](index=1073&type=chunk)