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~~2020

ORor


~~[ ]~~☐	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)

Delaware	81-1737145
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

250 Parkway Drive, Suite 270

Lincolnshire, IL60069

~~Telephone: (847) 808-3000~~

(Address ~~including zip code, and~~of registrant’s principal executive offices) (Zip Code)

Telephone: (847) 808-3000

(Registrant’s telephone number, including area ~~code, of registrant’s principal executive offices)~~code)

N/A

(Former ~~Name, Former Address~~name, former address and ~~Former Fiscal Year,~~former fiscal year, if ~~Changed Since Last Report)~~changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Class A Common Stock,

$0.01 par value per share

CWH

New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒⌧ No ☐◻

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒⌧No ☐◻

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☒◻	Accelerated filer ☐⌧
Non-accelerated filer ☐◻	Smaller reporting company ☐
	Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐No ☒⌧

~~Securities registered pursuant to Section 12(b) of the Act:~~

~~Title of each class~~

~~Trading Symbol(s)~~

~~Name of each exchange on which registered~~

~~Class A Common Stock,~~

~~$0.01 par value per share~~

~~CWH~~

~~New York Stock Exchange~~

As of May ~~6, 2018,~~4, 2020, the registrant had ~~37,215,759~~37,539,786 shares of Class A common stock, 50,706,629 shares of Class B common stock and ~~one~~1 share of Class C common stock outstanding.

BASIS OF PRESENTATION

As used in this Quarterly Report on Form 10-Q (this “Form 10-Q”), unless the context otherwise requires, references to:

●

“we,” “us,” “our,” “CWH,” the “Company,” “Camping World” and similar references refer to Camping World Holdings, Inc., and, unless otherwise stated, all of its subsidiaries, including CWGS Enterprises, LLC, which we refer to as “CWGS, LLC” and, unless otherwise stated, all of its subsidiaries.

●

“Annual Report” refers to our Annual Report on Form 10-K for the year ended December 31, ~~2018~~2019 filed with the Securities and Exchange Commission (“SEC”) on ~~March 15, 2019.~~

February 28, 2020.

●

“Continuing Equity Owners” refers collectively to ML Acquisition, funds controlled by Crestview Partners II GP, L.P. and the Former Profit Unit Holders and each of their permitted transferees that continue to own common units in CWGS, LLC after the ~~IPO~~initial public offering (“IPO”) of our stock and the Reorganization Transactions (each as defined in Note 1 – Summary of Significant Accounting Policies to our consolidated financial statements included in Part I, Item 1 of this Form 10-Q) and who may redeem at each of their options their common units for, at our election (determined solely by our independent directors within the meaning of the rules of the New York Stock Exchange who are disinterested), cash or newly issued shares of our Class A common stock.

●

“Crestview” refers to Crestview Advisors, L.L.C., a registered investment adviser to private equity funds, including funds affiliated with Crestview Partners II GP, L.P.

●

“CWGS LLC Agreement” refers to CWGS, LLC’s amended and restated limited liability company agreement, as amended to date.

●

“Former Profit Unit Holders” refers collectively to our named executive officers (excluding Marcus A. ~~Lemonis)~~Lemonis and Melvin Flanigan), Andris A. Baltins and K. Dillon Schickli, who are members of our board of directors, and certain other current and former non-executive employees and former directors, in each case, who held existing common units in CWGS, LLC pursuant to CWGS, LLC’s equity incentive plan that was in existence prior to our IPO and who received common units of CWGS, LLC in exchange for their profit units in connection with our IPO.

●

“ML Acquisition” refers to ML Acquisition Company, LLC, a Delaware limited liability company, indirectly owned by each of Stephen Adams and our Chairman and Chief Executive Officer, Marcus A. Lemonis.

●

“ML RV Group” refers to ML RV Group, LLC, a Delaware limited liability company, wholly owned by our Chairman and Chief Executive Officer, Marcus A. Lemonis.

●

“Tax Receivable Agreement” refers to the tax receivable agreement that the Company entered into with CWGS, LLC, each of the Continuing Equity Owners and Crestview Partners II GP, L.P. in connection with the Company’s IPO.

Table of Contents

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Form 10-Q contains forward-looking statements. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements other than statements of historical facts contained in this Form 10-Q may be forward-looking statements. Statements regarding our future results of operations and financial ~~position,~~position; the impact of the novel coronavirus (“COVID-19”) pandemic on our business, results of operations and financial position; business strategy and plans and objectives of management for future ~~operations, including, among others, statements regarding~~operations; the timeline for and benefits of our 2019 Strategic Shift (as defined below); expected new retail location openings and closures, including greenfield locations and acquired locations; ~~sufficiency of~~ our sources of liquidity and capital and any potential need for additional ~~financing;~~financing or refinancing, retirement or exchange of outstanding debt; future capital expenditures and debt service obligations; ~~refinancing, retirement or exchange of outstanding debt;~~ expectations regarding industry ~~trend~~

~~Table of Contents~~

trends and consumer behavior and growth; our ability to capture positive industry trends and pursue growth; our plans to increase new products offered to our customers and grow our businesses to enhance our visibility with respect to revenue and cash flow, and to increase our overall profitability; volatility in sales and potential impact of miscalculating the demand for our products or our product mix; remediation of material weaknesses; anticipated impact of the acquisition of Gander Mountain Company (“Gander Mountain”, and upon acquisition and rebranding, “Gander Outdoors” ) and its Overton’s boating business (the “Gander Mountain Acquisition”); anticipated Gander Outdoors location openings, expectations regarding ~~increase of certain expenses in connection with~~ our ~~growth;~~pending litigation, and our plans related to dividend payments, are forward-looking statements. In some cases, you can identify forward-looking statements by terms such as ‘‘may,’’ ‘‘will,’’ ‘‘should,’’ ‘‘expects,’’ ‘‘plans,’’ ‘‘anticipates,’’ ‘‘could,’’ ‘‘intends,’’ ‘‘targets,’’ ‘‘projects,’’ ‘‘contemplates,’’ ‘‘believes,’’ ‘‘estimates,’’ ‘‘predicts,’’ ‘‘potential’’ or ‘‘continue’’ or the negative of these terms or other similar expressions.

Forward-looking statements involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. We believe that these important factors include, but are not limited to, the following:

~~the availability of financing to us and our customers;~~

~~fuel shortages, or high prices for fuel;~~

~~the well-being, as well as the continued popularity and reputation for quality, of our manufacturers;~~

~~general economic conditions in our markets, and ongoing economic and financial uncertainties;~~

~~changes in consumer preferences or our failure to gauge those preferences;~~

~~our ability to attract and retain customers;~~

~~competition in the market for services, protection plans, products and resources targeting the RV lifestyle or RV enthusiast;~~

~~our expansion into new, unfamiliar markets, businesses, or product lines or categories, as well as delays in opening or acquiring new retail locations;~~

~~unforeseen expenses, difficulties, and delays frequently encountered in connection with expansion through acquisitions;~~

~~our failure to maintain the strength and value of our brands;~~

~~our ability to successfully order and manage our inventory to reflect consumer demand in a volatile market and anticipate changing consumer preferences and buying trends;~~

~~fluctuations in our same store sales and whether they will be a meaningful indicator of future performance;~~

~~the cyclical and seasonal nature of our business;~~

~~our ability to operate and expand our business and to respond to changing business and economic conditions, which depends on the availability of adequate capital;~~

~~the restrictive covenants imposed by our Senior Secured Credit Facilities and Floor Plan Facility;~~

~~our reliance on eight fulfillment and distribution centers for our retail, e-commerce and catalog businesses;~~

~~our pending securities class action lawsuits;~~

~~Table of Contents~~

~~natural disasters, whether or not caused by climate change, unusual weather conditions, epidemic outbreaks, terrorist acts and political events;~~

~~our dependence on our relationships with third party providers of services, protection plans, products and resources and a disruption of these relationships or of these providers’ operations;~~

~~any delays, new or increased tariffs, increased cost or quality control deficiencies in the importation of our products manufactured abroad;~~

~~whether third party lending institutions and insurance companies will continue to provide financing for RV purchases;~~

~~our inability to retain senior executives and attract and retain other qualified employees;~~

~~our ability to meet our labor needs;~~

risks associated with leasing substantial amounts of space, including our inability to maintain the leases for our retail locations or locate alternative sites for our stores in our target markets and on terms that are acceptable to us;

~~our business being subject to numerous federal, state and local regulations;~~

~~regulations applicable to the sale of extended service contracts;~~

~~our dealerships’ susceptibility to termination, non-renewal or renegotiation of dealer agreements if state dealer laws are repealed or weakened;~~

~~changes in government policies and firearms legislation;~~

~~potential impact of material weaknesses in our internal control over financial reporting;~~

~~our failure to comply with certain environmental regulations;~~

~~climate change legislation or regulations restricting emission of ‘‘greenhouse gases’’;~~

~~a failure in our e-commerce operations, security breaches and cybersecurity risks;~~

~~our inability to enforce our intellectual property rights and accusations of our infringement on the intellectual property rights of third parties;~~

~~our inability to maintain or upgrade our information technology systems or our inability to convert to alternate systems in an efficient and timely manner;~~

~~disruptions to our information technology systems or breaches of our network security;~~

~~increases in the minimum wage;~~

~~increases in paper costs, postage costs and shipping costs;~~

~~feasibility, delays, and difficulties in opening of Gander Outdoors retail locations;~~

~~realization of anticipated benefits and cost savings related to recent acquisitions;~~

~~risk of product liability claims if people or property are harmed by the products we sell and other litigation risks;~~

~~risks associated with our private brand offerings;~~

~~the effectiveness of our risk management policies and procedures;~~

~~Table of Contents~~

~~potential asset impairment charges for goodwill, intangible assets or other long-lived assets;~~

~~potential litigation relating to products we sell as a result of recent acquisitions, including firearms and ammunitions;~~

Marcus Lemonis, through his beneficial ownership of our shares directly or indirectly held by ML Acquisition Company, LLC and ML RV Group, LLC, has substantial control over us including matters requiring approval by our stockholders;

the exemptions from certain corporate governance requirements that we will qualify for, and intend to rely on, due to the fact that we are a ‘‘controlled company’’ within the meaning of the New York Stock Exchange, or NYSE, listing requirements;

~~whether we are able to realize any tax benefits that may arise from our organizational structure and any redemptions or exchanges of CWGS Enterprises, LLC common units for cash or stock;~~

~~other risks relating to our organizational structure and to ownership of shares of our Class A common stock; and~~

~~the other factors set forth under ‘‘Risk Factors’’ in Item 1A of Part I of our Annual Report.~~

~~We qualify all of our forward-looking statements by these cautionary statements. The forward-looking statements in this Form 10-Q are only predictions.~~ We have based these forward-looking statements largely on our current expectations and projections about future events and ~~financial~~ trends that we believe may affect our ~~business,~~ financial condition, ~~and~~ results of ~~operations. Because~~operations, business strategy, short-term and long-term business operations and objectives, and financial needs. These forward-looking statements are ~~inherently~~ subject to a number of risks, uncertainties, and ~~uncertainties, some~~assumptions, including the important factors described in “Risk Factors” in Item 1A of ~~which cannot be predicted~~Part I of our Annual Report, in Item 1A of Part II of this Form 10-Q, and in our other filings with the SEC, that may cause our actual results, performance or ~~quantified,~~achievements to differ materially and adversely from those expressed or implied by the forward-looking statements.

Any forward-looking statements made herein speak only as of the date of this Form 10-Q, and you should not rely on ~~these~~ forward-looking statements as predictions of future events. ~~The events and circumstances~~Although we believe that the expectations reflected in ~~our~~the forward-looking statements ~~may not~~are reasonable, we cannot guarantee that the future effects, results, performance, or achievements reflected in the forward-looking statements will be achieved or ~~occur and~~occur. We undertake no obligation to update any of these forward-looking statements for any reason after the date of this Form 10-Q or to conform these statements to actual results ~~could differ materially from those projected in the forward-looking statements. Except as required by applicable law, we do not plan to publicly update~~ or revise any forward-looking statements contained herein, whether as a result of any new information, future events, changed circumstances or otherwise. For a further discussion of the risks relating to our business, see “Item 1A—Risk Factors” in Part I of our Annual Report. revised expectations.

Part I – FINANCIAL INFORMATION

Item 1. Financial Statements

Camping World Holdings, Inc. and Subsidiaries

Unaudited Condensed Consolidated Balance Sheets

(In Thousands Except Share and Per Share Amounts)

March 31,

December 31,

2019

2018
Assets

Current assets:

Cash and cash equivalents

$
69,985

$
138,557
Contracts in transit

117,226

53,214
Accounts receivable, net

87,006

85,711
Inventories

1,622,964

1,558,970
Prepaid expenses and other assets

46,338

51,710
Total current assets

1,943,519

1,888,162
Property and equipment, net

343,946

359,855
Operating lease assets

820,090

—
Deferred tax assets, net

128,695

145,943
Intangible assets, net

34,144

35,284
Goodwill

371,098

359,117
Other assets

20,931

18,326
Total assets

$
3,662,423

$
2,806,687
Liabilities and stockholders' equity

Current liabilities:

Accounts payable

$
224,821

$
144,808
Accrued liabilities

130,949

124,619
Deferred revenues and gains

81,463

88,054
Current portion of finance lease liabilities

9

23
Current portion of operating lease liabilities

54,878

—
Current portion of Tax Receivable Agreement liability

9,376

9,446
Current portion of long-term debt

12,976

12,977
Notes payable – floor plan, net

882,346

885,980
Other current liabilities

41,573

39,211
Total current liabilities

1,438,391

1,305,118
Right to use liability

—

5,147
Operating lease liabilities, net of current portion

822,543

—
Tax Receivable Agreement liability, net of current portion

116,368

124,763
Revolving line of credit

42,610

38,739
Long-term debt, net of current portion

1,150,605

1,152,888
Deferred revenues and gains

57,393

67,157
Other long-term liabilities

26,879

79,958
Total liabilities

3,654,789

2,773,770
Commitments and contingencies

Stockholders' equity:

Preferred stock, par value $0.01 per share – 20,000,000 shares authorized; none issued and outstanding as of March 31, 2019 and December 31, 2018

—

—
Class A common stock, par value $0.01 per share – 250,000,000 shares authorized; 37,285,248 issued and 37,198,920 outstanding as of March 31, 2019 and 37,278,690 issued and 37,192,364 outstanding as of December 31, 2018

372

372
Class B common stock, par value $0.0001 per share – 75,000,000 shares authorized; 69,066,445 issued; and 50,706,629 outstanding as of March 31, 2019 and December 31, 2018

5

5
Class C common stock, par value $0.0001 per share – one share authorized, issued and outstanding as of March 31, 2019 and December 31, 2018

—

—
Additional paid-in capital

48,573

47,531
Retained deficit

(24,759)

(3,370)
Total stockholders' equity attributable to Camping World Holdings, Inc.

24,191

44,538
Non-controlling interests

(16,557)

(11,621)
Total stockholders' equity

7,634

32,917
Total liabilities and stockholders' equity

$
3,662,423

$
2,806,687


	March 31,		December 31,
	2020		2019
Assets
Current assets:
Cash and cash equivalents	$	109,406	$	147,521
Contracts in transit		54,794		44,947
Accounts receivable, less allowance for doubtful accounts of $3,451 and $3,537 in 2020 and 2019, respectively		71,989		81,847
Inventories		1,439,453		1,358,539
Prepaid expenses and other assets		51,829		57,827
Total current assets		1,727,471		1,690,681
Property and equipment, net		304,234		314,374
Operating lease assets		810,562		807,537
Deferred tax assets, net		127,746		129,710
Intangible assets, net		28,824		29,707
Goodwill		386,945		386,941
Other assets		16,779		17,290
Total assets	$	3,402,561	$	3,376,240
Liabilities and stockholders' deficit
Current liabilities:
Accounts payable	$	159,189	$	106,959
Accrued liabilities		133,611		130,316
Deferred revenues		82,187		87,093
Current portion of operating lease liabilities		60,300		58,613
Current portion of Tax Receivable Agreement liability		6,563		6,563
Current portion of long-term debt		13,962		14,085
Notes payable – floor plan, net		846,424		848,027
Other current liabilities		46,833		44,298
Total current liabilities		1,349,069		1,295,954
Operating lease liabilities, net of current portion		845,106		843,312
Tax Receivable Agreement liability, net of current portion		108,286		108,228
Revolving line of credit		40,885		40,885
Long-term debt, net of current portion		1,151,097		1,153,551
Deferred revenues		57,915		58,079
Other long-term liabilities		34,621		35,467
Total liabilities		3,586,979		3,535,476
Commitments and contingencies
Stockholders' deficit:
Preferred stock, par value $0.01 per share – 20,000,000 shares authorized; none issued and outstanding as of March 31, 2020 and December 31, 2019		—		—
Class A common stock, par value $0.01 per share – 250,000,000 shares authorized; 37,768,220 issued and 37,539,786 outstanding as of March 31, 2020 and 37,701,584 issued and 37,488,989 outstanding as of December 31, 2019		375		375
Class B common stock, par value $0.0001 per share – 75,000,000 shares authorized; 69,066,445 issued; and 50,706,629 outstanding as of March 31, 2020 and December 31, 2019		5		5
Class C common stock, par value $0.0001 per share – 1 share authorized, issued and outstanding as of March 31, 2020 and December 31, 2019		—		—
Additional paid-in capital		51,596		50,152
Retained deficit		(97,046)		(83,134)
Total stockholders' deficit attributable to Camping World Holdings, Inc.		(45,070)		(32,602)
Non-controlling interests		(139,348)		(126,634)
Total stockholders' deficit		(184,418)		(159,236)
Total liabilities and stockholders' deficit	$	3,402,561	$	3,376,240

See accompanying Notes to Unaudited Condensed Consolidated Financial Statements

Camping World Holdings, Inc. and Subsidiaries

Unaudited Condensed Consolidated Statements of Operations

(In Thousands Except Per Share Amounts)

Three Months Ended

March 31,

2019

2018
Revenue:

Good Sam Services and Plans

$
46,966

$
44,825
RV and Outdoor Retail

New vehicles

529,577

579,510
Used vehicles

180,008

172,091
Products, service and other

204,876

164,152
Finance and insurance, net

91,891

89,100
Good Sam Club

11,451

8,983
Subtotal

1,017,803

1,013,836
Total revenue

1,064,769

1,058,661
Costs applicable to revenue (exclusive of depreciation and amortization shown separately below):

Good Sam Services and Plans

20,731

20,460
RV and Outdoor Retail

New vehicles

463,044

503,884
Used vehicles

142,846

134,293
Products, service and other

136,104

95,802
Good Sam Club

3,717

2,329
Subtotal

745,711

736,308
Total costs applicable to revenue

766,442

756,768
Operating expenses:

Selling, general, and administrative

268,065

246,313
Debt restructure expense

—

424
Depreciation and amortization

13,594

9,400
(Gain) loss on sale of assets

(214)

85
Total operating expenses

281,445

256,222
Income from operations

16,882

45,671
Other income (expense):

Floor plan interest expense

(11,610)

(10,743)
Other interest expense, net

(17,643)

(12,839)
Loss on debt restructure

—

(1,676)
Tax Receivable Agreement liability adjustment

8,477

—
Total other income (expense)

(20,776)

(25,258)
(Loss) income before income taxes

(3,894)

20,413
Income tax expense

(22,913)

(6,865)
Net (loss) income

(26,807)

13,548
Less: net loss (income) attributable to non-controlling interests

7,412

(11,727)
Net (loss) income attributable to Camping World Holdings, Inc.

$
(19,395)

$
1,821

(Loss) earnings per share of Class A common stock:

Basic

$
(0.52)

$
0.05
Diluted

$
(0.52)

$
0.05
Weighted average shares of Class A common stock outstanding:

Basic

37,195

36,816
Diluted

37,195

37,320


	Three Months Ended
	March 31,
	2020		2019
Revenue:
Good Sam Services and Plans	$	47,208	$	46,966
RV and Outdoor Retail
New vehicles		497,317		529,577
Used vehicles		206,665		180,008
Products, service and other		172,623		204,876
Finance and insurance, net		92,456		91,891
Good Sam Club		11,004		11,451
Subtotal		980,065		1,017,803
Total revenue		1,027,273		1,064,769
Costs applicable to revenue (exclusive of depreciation and amortization shown separately below):
Good Sam Services and Plans		21,859		20,731
RV and Outdoor Retail
New vehicles		426,442		463,044
Used vehicles		163,793		142,846
Products, service and other		110,269		136,104
Good Sam Club		2,247		3,717
Subtotal		702,751		745,711
Total costs applicable to revenue		724,610		766,442
Operating expenses:
Selling, general, and administrative		267,656		268,065
Depreciation and amortization		14,078		13,594
Long-lived asset impairment		6,569		—
Lease termination		584		—
Loss (gain) on disposal of assets		511		(214)
Total operating expenses		289,398		281,445
Income from operations		13,265		16,882
Other income (expense):
Floor plan interest expense		(8,604)		(11,610)
Other interest expense, net		(14,658)		(17,643)
Tax Receivable Agreement liability adjustment		—		8,477
Total other income (expense)		(23,262)		(20,776)
Loss before income taxes		(9,997)		(3,894)
Income tax expense		(4,132)		(22,913)
Net loss		(14,129)		(26,807)
Less: net loss attributable to non-controlling interests		5,969		7,412
Net loss attributable to Camping World Holdings, Inc.	$	(8,160)	$	(19,395)

Loss per share of Class A common stock:
Basic	$	(0.22)	$	(0.52)
Diluted	$	(0.22)	$	(0.52)
Weighted average shares of Class A common stock outstanding:
Basic		37,534		37,195
Diluted		37,534		37,195

See accompanying Notes to Unaudited Condensed Consolidated Financial Statements

Camping World Holdings, Inc. and Subsidiaries

Unaudited Condensed Consolidated ~~Statement~~Statements of Stockholders' Equity (Deficit)

(In Thousands)

Additional

Retained

Non-

Class A Common Stock

Class B Common Stock

Class C Common Stock

Paid-In

Earnings

Controlling


Shares

Amounts

Shares

Amounts

Shares

Amounts

Capital

(Deficit)

Interest

Total
Balance at December 31, 2018

37,192

372

50,707

5

—

—

47,531

(3,370)

(11,621)

32,917
Adoption of accounting standard (see Note 1 — Summary of Significant Accounting Policies)

—

—

—

—

—

—

—

3,705

6,332

10,037
Equity-based compensation

—

—

—

—

—

—

2,716

—

—

2,716
Vesting of restricted stock units

1

—

—

—

—

—

—

—

—

—
Redemption of LLC common units for Class A common stock

6

—

—

—

—

—

12

—

—

12
Distributions to holders of LLC common units

—

—

—

—

—

—

—

—

(5,534)

(5,534)
Dividends(1)

—

—

—

—

—

—

—

(5,699)

—

(5,699)
Establishment of liabilities under the Tax Receivable Agreement and related changes to deferred tax assets associated with that liability

—

—

—

—

—

—

(8)

—

—

(8)
Non-controlling interest adjustment

—

—

—

—

—

—

(1,678)

—

1,678

—
Net loss

—

—

—

—

—

—

—

(19,395)

(7,412)

(26,807)
Balance at March 31, 2019

37,199

$
372

50,707

$
5

—

$
—

$
48,573

$
(24,759)

$
(16,557)

$
7,634

Balance at December 31, 2017

36,749

367

50,837

5

—

—

42,520

7,619

21,252

71,763
Adoption of accounting standard (ASC No. 606, Revenue from Contracts with Customers)

—

—

—

—

—

—

—

1,310

2,476

3,786
Equity-based compensation

—

—

—

—

—

—

3,218

—

—

3,218
Exercise of stock options

6

—

—

—

—

—

137

—

—

137
Non-controlling interest adjustment for capital contribution of proceeds from the exercise of stock options

—

—

—

—

—

—

(77)

—

77

—
Vesting of restricted stock units

2

—

—

—

—

—

—

—

—

—
Redemption of LLC common units for Class A common stock

173

2

(130)

—

—

—

1,848

—

(115)

1,735
Distributions to holders of LLC common units

—

—

—

—

—

—

—

—

(19,938)

(19,938)
Dividends(1)

—

—

—

—

—

—

—

(5,662)

—

(5,662)
Establishment of liabilities under the Tax Receivable Agreement and related changes to deferred tax assets associated with that liability

—

—

—

—

—

—

(1,414)

—

—

(1,414)
Non-controlling interest adjustment

—

—

—

—

—

—

(1,592)

—

1,592

—
Net income

—

—

—

—

—

—

—

1,821

11,727

13,548
Balance at March 31, 2018

36,930

$
369

50,707

$
5

—

$
—

$
44,640

$
5,088

$
17,071

$
67,173


										Additional		Retained		Non-
	Class A Common Stock			Class B Common Stock			Class C Common Stock			Paid-In		Earnings		Controlling
	Shares	Amounts		Shares	Amounts		Shares	Amounts		Capital		(Deficit)		Interest		Total
Balance at December 31, 2019	37,489	$	375	50,707	$	5	—	$	—	$	50,152	$	(83,134)	$	(126,634)	$	(159,236)
Equity-based compensation	—		—	—		—	—		—		3,312		—		—		3,312
Vesting of restricted stock units	47		—	—		—	—		—		82		—		(82)		—
Repurchases of Class A common stock for withholding taxes on vested RSUs	(16)		—	—		—	—		—		(212)		—		—		(212)
Redemption of LLC common units for Class A common stock	20		—	—		—	—		—		4		—		49		53
Distributions to holders of LLC common units	—		—	—		—	—		—		—		—		(8,410)		(8,410)
Dividends⁽¹⁾	—		—	—		—	—		—		—		(5,752)		—		(5,752)
Establishment of liabilities under the Tax Receivable Agreement and related changes to deferred tax assets associated with that liability	—		—	—		—	—		—		(44)		—		—		(44)
Non-controlling interest adjustment	—		—	—		—	—		—		(1,698)		—		1,698		—
Net loss	—		—	—		—	—		—		—		(8,160)		(5,969)		(14,129)
Balance at March 31, 2020	37,540	$	375	50,707	$	5	—	$	—	$	51,596	$	(97,046)	$	(139,348)	$	(184,418)

⁽¹⁾

The Company declared dividends per share of Class A common stock of $0.15 for the three months ended March 31, ~~2019 and 2018.~~

2020.


										Additional		Retained		Non-
	Class A Common Stock			Class B Common Stock			Class C Common Stock			Paid-In		Earnings		Controlling
	Shares	Amounts		Shares	Amounts		Shares	Amounts		Capital		(Deficit)		Interest		Total
Balance at December 31, 2018	37,192	$	372	50,707	$	5	—		—	$	47,531	$	(3,370)	$	(11,621)	$	32,917
Adoption of ASC 842 accounting standard	—		—	—		—	—		—		—		3,705		6,332		10,037
Equity-based compensation	—		—	—		—	—		—		2,716		—		—		2,716
Vesting of restricted stock units	1		—	—		—	—		—		—		—		—		—
Redemption of LLC common units for Class A common stock	6		—	—		—	—		—		12		—		—		12
Distributions to holders of LLC common units	—		—	—		—	—		—		—		—		(5,534)		(5,534)
Dividends⁽²⁾	—		—	—		—	—		—		—		(5,699)		—		(5,699)
Establishment of liabilities under the Tax Receivable Agreement and related changes to deferred tax assets associated with that liability	—		—	—		—	—		—		(8)		—		—		(8)
Non-controlling interest adjustment	—		—	—		—	—		—		(1,678)		—		1,678		—
Net loss	—		—	—		—	—		—		—		(19,395)		(7,412)		(26,807)
Balance at March 31, 2019	37,199		372	50,707		5	—		—		48,573		(24,759)		(16,557)		7,634

(2)

The Company declared dividends per share of Class A common stock of $0.15 for the three months ended March 31, 2019.

See accompanying Notes to Unaudited Condensed Consolidated Financial Statements

Camping World Holdings, Inc. and Subsidiaries

Unaudited Condensed Consolidated Statements of Cash Flows

(In Thousands)

Three Months Ended March 31,

2019

2018
Operating activities

Net (loss) income

$
(26,807)

$
13,548

Adjustments to reconcile net (loss) income to net cash used in operating activities:

Depreciation and amortization

13,594

9,400
Equity-based compensation

2,716

3,218
Loss on debt restructure

—

1,676
Loss (gain) on sale of assets

(214)

85
Provision for losses on accounts receivable

186

106
Non-cash lease expense

13,495

—
Accretion of original debt issuance discount

267

229
Non-cash interest

1,162

1,274
Deferred income taxes

16,412

2,426
Tax Receivable Agreement liability adjustment

(8,477)

—
Change in assets and liabilities, net of acquisitions:

Receivables and contracts in transit

(65,493)

(63,567)
Inventories

(54,496)

(153,637)
Prepaid expenses and other assets

4,976

5,619
Accounts payable and other accrued expenses

55,392

122,806
Payment pursuant to Tax Receivable Agreement

—

(7)
Accrued rent for cease-use locations

542

(416)
Deferred revenue and gains

(5,805)

(1,986)
Operating lease liability

(13,941)

—
Other, net

(7,529)

2,256
Net cash used in operating activities

(74,020)

(56,970)

Investing activities

Purchases of property and equipment

(11,761)

(43,269)
Purchase of real property

(665)

(24,426)
Proceeds from the sale of real property

10,226

—
Purchases of businesses, net of cash acquired

(21,169)

(12,484)
Proceeds from sale of property and equipment

453

513
Net cash used in investing activities

$
(22,916)

$
(79,666)


	Three Months Ended March 31,
	2020		2019

Operating activities
Net loss	$	(14,129)	$	(26,807)

Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		14,078		13,594
Equity-based compensation		3,312		2,716
Loss on lease termination		584		—
Long-lived asset impairment		6,569		—
Loss (gain) on disposal of assets		511		(214)
Provision for losses on accounts receivable		483		186
Non-cash lease expense		14,208		13,495
Accretion of original debt issuance discount		263		267
Non-cash interest		1,014		1,162
Deferred income taxes		2,031		16,412
Tax Receivable Agreement liability adjustment		—		(8,477)
Change in assets and liabilities, net of acquisitions:
Receivables and contracts in transit		(472)		(65,493)
Inventories		(80,799)		(54,496)
Prepaid expenses and other assets		5,678		4,976
Accounts payable and other accrued expenses		53,864		55,392
Accrued rent for cease-use locations		—		542
Deferred revenue		(5,070)		(5,805)
Operating lease liabilities		(18,415)		(13,941)
Other, net		1,101		(7,529)
Net cash used in operating activities		(15,189)		(74,020)

Investing activities
Purchases of property and equipment		(8,668)		(11,761)
Purchase of real property		—		(665)
Proceeds from the sale of real property		—		10,226
Purchases of businesses, net of cash acquired		—		(21,169)
Proceeds from sale of property and equipment		212		453
Net cash used in investing activities	$	(8,456)	$	(22,916)

Camping World Holdings, Inc. and Subsidiaries

Unaudited Condensed Consolidated Statements of Cash Flows

(In Thousands)

Three Months Ended March 31,

2019

2018

Financing activities

Proceeds from long-term debt

$
—

$
319,913
Payments on long-term debt

(3,232)

(70,714)
Net borrowings (payments) on notes payable – floor plan, net

38,972

(962)
Borrowings on revolving line of credit

3,871

24,403
Payments of principal on finance lease obligations

(14)

(250)
Payments of principal on right to use liability

—

(38)
Payment of debt issuance costs

—

(3,115)
Dividends on Class A common stock

(5,699)

(5,662)
Proceeds from exercise of stock options

—

137
Members' distributions

(5,534)

(19,938)
Net cash provided by financing activities

28,364

243,774

Increase (decrease) in cash and cash equivalents

(68,572)

107,138
Cash and cash equivalents at beginning of the period

138,557

224,163
Cash and cash equivalents at end of the period

$
69,985

$
331,301


	Three Months Ended March 31,
	2020		2019

Financing activities
Payments on long-term debt	$	(3,534)	$	(3,232)
Net borrowings on notes payable – floor plan, net		3,438		38,972
Borrowings on revolving line of credit		—		3,871
Payments of principal on finance lease obligations		—		(14)
Dividends on Class A common stock		(5,752)		(5,699)
RSU shares withheld for tax		(212)		—
Members' distributions		(8,410)		(5,534)
Net cash (used in) provided by financing activities		(14,470)		28,364

Decrease in cash and cash equivalents		(38,115)		(68,572)
Cash and cash equivalents at beginning of the period		147,521		138,557
Cash and cash equivalents at end of the period	$	109,406	$	69,985

See accompanying Notes to Unaudited Condensed Consolidated Financial Statements

Camping World Holdings, Inc. and Subsidiaries

Notes to Unaudited Condensed Consolidated Financial Statements

March 31, ~~2019~~2020

1. Summary of Significant Accounting Policies

Principles of Consolidation and Basis of Presentation

The condensed consolidated financial statements include the accounts of Camping World Holdings, Inc. ~~(“CWH”)~~ and its subsidiaries, ~~(collectively, the “Company”),~~ and are presented in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and pursuant to the rules and regulations of the ~~Securities and Exchange Commission (the “SEC”).~~SEC. Accordingly, these interim financial statements do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) necessary for fair presentation of the results of operations, financial position and cash flows for the periods presented have been reflected. All intercompany accounts and transactions of the Company and its subsidiaries have been eliminated in consolidation.

The condensed consolidated financial statements as of and for the three months ended March 31, ~~2019~~2020 are unaudited. The condensed consolidated balance sheet as of December 31, ~~2018~~2019 has been derived from the audited financial statements at that date but does not include all of the disclosures required by GAAP. These interim condensed consolidated financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2018~~2019 (the “Annual Report”) filed with the SEC on ~~March 15, 2019.~~February 28, 2020. Operating results for ~~the~~ interim periods are not necessarily indicative of the results that may be expected for the full year.

CWH was formed on March 8, 2016 as a Delaware corporation for the purpose of facilitating an ~~initial public offering (the “IPO”)~~IPO and other related transactions in order to carry on the business of CWGS, ~~Enterprises, LLC (“CWGS, LLC”).~~LLC. CWGS, LLC was formed in March 2011 when it received, through contribution from its then parent company, all of the membership interests of Affinity Group Holding, LLC and FreedomRoads Holding Company, LLC (“FreedomRoads”). The IPO and related reorganization transactions ~~(the “Reorganization Transactions”)~~ that occurred on October 6, 2016 resulted in CWH as the sole managing member of CWGS, LLC, with CWH having sole voting power in and control of the management of CWGS, ~~LLC.~~LLC (see Note 14 — Stockholders’ Equity). Despite its position as sole managing member of CWGS, LLC, CWH has a minority economic interest in CWGS, LLC. As of March 31, 2020 and December 31, 2019, CWH owned ~~41.9%~~42.1% and 42.0%, respectively, of CWGS, LLC. Accordingly, the Company consolidates the financial results of CWGS, LLC and reports a non-controlling interest in its condensed consolidated financial statements.

The Company does not have any components of other comprehensive income recorded within its condensed consolidated financial statements, and, therefore, does not separately present a statement of comprehensive income in its condensed consolidated financial statements.

COVID-19

A novel strain of coronavirus was first identified in Wuhan, China in December 2019 and COVID-19 was subsequently declared a pandemic by the World Health Organization. To date, COVID-19 has surfaced in nearly all regions of the world and resulted in travel restrictions and business slowdowns or shutdowns in affected areas. As a result, COVID-19 has impacted the Company’s business, in particular its revenue, due to decreased retail and online traffic. The Company has implemented preparedness plans to keep its employees and customers healthy and safe, which include social distancing, providing employees with face coverings and/or other protective clothing as required, implementing additional cleaning and sanitization routines, and work-from-home directives for a significant portion of our workforce. The majority of the Company’s RV and Outdoor Retail locations have continued to operate as essential businesses and consequently have remained open to serve its customers through the pandemic, and the Company continues to operate its e-commerce business. The Company has temporarily reduced salaries and hours throughout the business, including for its executive officers, and implemented headcount and other cost reductions in an attempt to better align expenses with reduced sales since the middle of March 2020 and early April 2020 resulting from the impact of COVID-19 on its business.

Table of Contents

Description of the Business

Camping World Holdings, Inc, together with its subsidiaries, is America’s largest retailer of recreational vehicles (“RVs”) and related products and services. As noted above, CWGS, LLC is a holding company and operates through its subsidiaries. The Company realigned the structure of its internal organization during the three months ended March 31, 2019. The Company previously had three reportable segments: (i) Consumer Services and Plans; (ii) Dealership, and (iii) Retail. Following the realignment, the Company now has the following ~~two~~2 reportable segments: (i) Good Sam Services and Plans and (ii) RV and Outdoor Retail. In conjunction with the first quarter 2019 realignment of our reporting structure, the company combined our prior Dealership and Retail segments into the RV and Outdoor Retail segment. The Company has also reclassified a portion of the former Consumer Services and Plans segment, the Good Sam Club and co-branded credit card operations, to the RV and Outdoor Retail segment which reflects the synergies of those two programs with the RV and Outdoor Retail locations. The remaining portion of the former Consumer Services and Plans segment is now called the Good Sam Services and Plans segment. The Company’s reportable segment financial information has been recast to reflect the updated reportable segment structure for all periods presented. See Note 1718 – Segments Information to the Condensed Consolidated

~~Table of Contents~~

Financial Statements for further information about the Company’s segments. ~~The Company primarily provides Good Sam Services and Plans offerings under its Good Sam brand and provides RV and Outdoor Retail offerings primarily under its Camping World and Gander Outdoors brands.~~ Within the Good Sam Services and Plans segment, the Company primarily derives revenue from the sale of the following offerings: emergency roadside ~~assistance;~~assistance plans; property and casualty insurance programs; travel assist programs; extended vehicle service contracts; vehicle financing and ~~refinancing;~~refinancing assistance; consumer shows and events; and consumer publications and directories. Within the RV and Outdoor Retail segment, the Company primarily derives revenue from the sale of new and used recreational vehicles (“RVs”); the sale of RV products and services, including the sale of parts, accessories, supplies and services for RVs; equipment, gear and supplies for camping, hunting, fishing, skiing, snowboarding, bicycling, skateboarding, marine and watersport and other outdoor activities;vehicles; commissions on the finance and insurance contracts related to the sale of RVs; the sale of RV services and maintenance work; the sale of RV parts, accessories, and supplies; the sale of outdoor products, equipment, gear and supplies and the sale of Good Sam Club memberships and co-branded credit cards. The Company operates a national network of RV dealerships and service centers as well as a comprehensive e-commerce platform primarily ~~operates in various regions throughout~~under the ~~United States~~Camping World and Gander RV & Outdoors brands, and markets its products and services primarily to RV ~~owners~~ and outdoor enthusiasts.

~~Through~~In 2019, the Company made a strategic decision to refocus its business around its core RV competencies, and on September 3, 2019, the board of directors approved a strategic plan to shift the business away from locations that did not have the ability or where it was not feasible to sell and/or service RVs (the “2019 Strategic Shift”) (see Note 4 – Restructuring and Long-lived Asset Impairment). This resulted in the sale, closing or divestiture of 34 non-RV retail ~~acquisitions~~stores and ~~retail expansions, we have expanded our~~the liquidation of approximately $108 million of non-RV related inventory in 2019.

In connection with the 2019 Strategic Shift, the Company has reduced its number of retail store locations to ~~226 on March 31, 2019 from 183 on March 31, 2018. The table below summarizes our store locations~~168 as of March 31, ~~2019 and~~2020 from 226 as of March 31, ~~2018:~~

March 31,

2019

2018
Co-habited RV and Outdoor Retail locations

131

117
Stand-alone RV locations

16

9
Stand-alone Outdoor Retail locations

79

57
Total locations

226

183

~~Reclassifications of Prior Period Amounts~~

Certain prior-period amounts have been reclassified to conform to the current period presentation. Specifically, as discussed in Note 17 — Segment Information, the Company has made changes to its operating segments and transferred certain assets relating to the Good Sam Club and co-branded credit card from its Good Sam Services and Plans segment to its RV and Outdoor Retail segment. Additionally, as a result of these changes, the Company has updated its disaggregated revenue categories to the following:

~~Good Sam services and plans~~ – includes extended vehicle service contracts, emergency roadside assistance, property and casualty insurance programs, vehicle financing and refinancing, travel protection, consumer shows, directories, consumer magazines, and the Coast to Coast Club;

~~New vehicles~~ ~~– represents the sale of new RVs;~~

~~Used vehicles~~ ~~– represents the sale of used RVs;~~

~~Products, service and other~~ ~~– includes repair and maintenance, installation of parts and accessories, collision repair, sales of RV equipment and accessories, sales of outdoor lifestyle products and apparel, and other;~~

~~Finance and insurance, net~~ ~~– includes vehicle financing and protection plans typically sold in conjunction with the sale of new and used vehicles; and~~

~~Good Sam Club~~ ~~– includes the Good Sam Club and co-branded credit card.~~

~~Revisions for Correction of Immaterial Errors~~

~~Subsequent to the issuance~~2019. A summary of the ~~Company’s Condensed Consolidated Financial Statements for the three months ended~~retail store openings, closings, divestitures, conversions and locations from March 31, ~~2018, errors were identified in connection with the preparation of the financial statements for the year ended December~~2019 to March 31, 2018, and related primarily to i) the cancellation reserve for certain of its finance and insurance offerings within the former Dealership segment in other current liabilities and other long-term liabilities, ii) the calculation of the Tax Receivable Agreement liability that arose from transactions in 2017, iii) the classification2020, are in the ~~condensed consolidated statement of cash flows of non-cash capital expenditures included in accounts payable and non-cash leasehold improvements paid by lessor in~~

~~Table of Contents~~

other, net, and iv) the adoption of Accounting Standards Codification (“ASC”) No. 606, Revenue from Contracts with Customers (“ASC 606”) on January 1, 2018. The Company corrected the errors in the accompanying Condensed Consolidated Financial Statements for the three months ended March 31, 2018. The Company believes the correction of the errors is immaterial to the previously issued Condensed Consolidated Financial Statements.table below:

The Company revised stockholders’ equity as of January 1, 2018 to correct these errors as of the beginning of the earliest year presented in these condensed consolidated financial statements, resulting in a decrease of $19.1 million from the previously reported amount of $90.8 million to the correct amount of $71.8 million.


	RV		RV Service &		Other
	Dealerships		Retail Centers		Retail Stores		Total
Store locations as of March 31, 2019		147		12		67		226
Opened		10		—		—		10
Closed / divested		(6)		(2)		(56)		(64)
Temporarily closed⁽¹⁾		—		—		(4)		(4)
Converted		6		—		(6)		—
Store locations as of March 31, 2020		157		10		1		168

~~The following table presents the effect of the error corrections on the condensed consolidated statement of operations for the period indicated:~~

Three Months Ended March 31, 2018
($ in thousands except per share amounts)

As Reported

Adjustment

As Corrected
Revenue - Products, service and other

$
164,308

$
(156)

$
164,152
Revenue - Finance and insurance, net

91,849

(2,749)

89,100
Total revenue

1,061,566

(2,905)

1,058,661
Costs applicable to revenue - Good Sam services and plans(1)

20,423

37

20,460
Costs applicable to revenue - Products, service and other

95,888

(86)

95,802
Costs applicable to revenue -  Good Sam Club(1)

2,302

27

2,329
Total costs applicable to revenue

756,790

(22)

756,768
Selling, general and administrative expenses

245,114

1,199

246,313
Total operating expenses

255,023

1,199

256,222
Income from operations

49,753

(4,082)

45,671
Income before income taxes

24,495

(4,082)

20,413
Income tax expense

(7,219)

354

(6,865)
Net income

17,276

(3,728)

13,548
Net income attributable to non-controlling interests

(14,095)

2,368

(11,727)
Net income attributable to Camping World Holdings, Inc.

3,181

(1,360)

1,821
Earnings per share of Class A common stock:

Basic

$
0.09

$
(0.04)

$
0.05
Diluted

$
0.08

$
(0.03)

$
0.05

(1)

⁽¹⁾

~~Amounts were combined and previously reported as costs applicable~~These locations are temporarily closed in response to ~~revenue - consumer services and plans prior to reclassifications made for changes in segment reporting as disclosed in Note 17 – Segments Information.~~

the COVID-19 pandemic.

~~The following table presents the effect of the error corrections on the condensed consolidated statement of cash flows for the period indicated:~~

Three Months Ended March 31, 2018
($ in thousands except per share amounts)

As Reported

Adjustment

As Corrected
Net income

$
17,276

$
(3,728)

$
13,548
Deferred income taxes

2,736

(310)

2,426
Receivables and contracts in transit

(56,104)

(7,463)

(63,567)
Inventories

(150,918)

(2,719)

(153,637)
Prepaid expenses and other assets

1,675

3,944

5,619
Accounts payable and other accrued expenses

123,987

(1,181)

122,806
Deferred revenue and gains

(2,959)

973

(1,986)
Other

524

1,732

2,256
Net cash used in operating activities

(48,218)

(8,752)

(56,970)
Purchases of property and equipment

(52,021)

8,752

(43,269)
Net cash used in investing activities

(88,418)

8,752

(79,666)

Use of Estimates

The preparation of these unaudited condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results may differ from those estimates. In preparing these financial statements, management has made its best estimates and judgments of certain amounts included in the financial statements, giving due consideration to materiality. The Company bases its estimates and judgments on historical experience and other assumptions that management believes

~~Table of Contents~~

are reasonable. However, application of these accounting policies involves the exercise of judgment and use of assumptions as to future uncertainties, including those uncertainties arising from COVID-19, and, as a result, actual results could differ materially from these estimates. The Company periodically evaluates estimates and assumptions used in the preparation of the financial statements and makes changes on a prospective basis when adjustments are necessary. Significant estimates made in the accompanying unaudited condensed consolidated financial statements include certain assumptions related to accounts receivable, inventory, goodwill, intangible assets, long lived assets, long-lived asset impairments, program cancellation reserves, chargebacks, and accruals related to ~~self-insurance programs,~~ estimated tax liabilities, product return reserves, and other liabilities.

Table of Contents

Contracts in Transit, Accounts Receivable and Current Expected Credit Losses

Contracts in transit consist of amounts due from non-affiliated financing institutions on retail finance contracts from vehicle sales for the portion of the vehicle sales price financed by the Company’s customers. These retail installment sales contracts are typically funded within ten days of the initial approval of the retail installment sales contract by the third-party lender.

Accounts receivable are stated at realizable value, net of an allowance for doubtful accounts, which includes a reserve for expected credit losses. Accounts receivable balances due in excess of one year was $8.6 million at each of March 31, 2020 and December 31, 2019 and included in other assets in the Condensed Consolidated Balance Sheets.

The allowance for doubtful accounts is based on management’s assessment of the collectability of its customer accounts. The Company regularly reviews the composition of the accounts receivable aging, historical bad debts, changes in payment patterns, customer creditworthiness, current economic trends, and reasonable and supportable forecasts about the future. Relevant risks characteristics include customer size and historical loss patterns. Management has evaluated the expected credit losses related to contracts in transit and determined that no allowance for doubtful accounts was required at either March 31, 2020 or December 31, 2019. Management additionally has evaluated the expected credit losses related to accounts receivable and determined that allowances of approximately $3.5 million for uncollectible accounts were required as of both March 31, 2020 and December 31, 2019.

The following table details the changes in the allowance for doubtful accounts (in thousands):


	Three Months Ended
	March 31,		March 31,
	2020		2019
Allowance for doubtful accounts:
Balance, beginning of period	$	3,537	$	4,398
Charged to bad debt expense		483		186
Deductions ⁽¹⁾		(569)		29
Balance, end of period	$	3,451	$	4,613

(1)

These amounts primarily relate to the write off of uncollectable accounts after collection efforts have been exhausted.

Recently Adopted Accounting Pronouncements

In February 2016, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) No. 2016-02, Leases (Topic 842) (“ASU 2016-02” or “ASC 842”). The FASB had subsequently issued several related ASUs that clarified the implementation guidance for certain aspects of ASU 2016-02, which were effective upon the adoption of ASU 2016-02. The amendments in this ASU related to the accounting for leasing transactions. ASC 842 requires lessees to recognize a right-of-use asset and a lease liability on the balance sheet for all leases (with the exception of short-term leases) at the lease commencement date and recognize expenses on the income statement in a similar manner to the previous guidance in Accounting Standards Codification (“ASC”) 840, Leases ("ASC 840"). The lease liability is measured as the present value of the unpaid lease payments and the right-of-use asset is derived from the calculation of the lease liability adjusted for initial direct costs, prepaid lease payments, and lease incentives. Lease payments include fixed and in-substance fixed payments, variable payments based on an index or rate, reasonably certain purchase options, termination penalties where the lease term reflects the election of a termination option, fees paid by the lessee to the owners of a special-purpose entity for restructuring the transaction, and probable amounts the lessee will owe under a residual value guarantee. Lease payments do not include variable lease payments other than those that depend on an index or rate, any guarantee by the lessee of the lessor’s debt, or any amount allocated to non-lease components. The discount rate used to derive the present value of unpaid lease payments is based on the rates implicit in the lease, or if not available, the incremental borrowing rate.

The most significant impact of ASC 842 on the Company’s accounting was the balance sheet impact of its real estate operating leases, which significantly increased assets and liabilities. In addition, ASC 842 eliminated the previous build-to-suit lease accounting guidance and resulted in derecognition of build-to-suit assets and liabilities that remained on the balance sheet after the end of the construction period, including any related deferred taxes. Also, ASC 842 made changes to sale-leaseback accounting to result in the recognition of the gain on the transaction at the time of the sale instead of recognizing over the leaseback period, when the transaction is deemed to be a sale instead of a financing arrangement. ASC 842 further changes the assessment of sale accounting from a transfer of risk and rewards assessment to a transfer of control assessment.

The Company elected the package of practical expedients available under the transition provisions of ASC 842, including (i) not reassessing whether expired or existing contracts contain leases, (ii) lease classification, and (iii) not revaluing initial direct costs for existing leases. Also, the Company elected the practical expedient which allows aggregation of non-lease components with the related lease components when evaluating accounting treatment for equipment and billboard leases. Lastly, the Company applied the modified retrospective adoption method, utilizing the simplified transition option available in ASC 842, which allows entities to continue to apply the legacy guidance in ASC 840, including its disclosure requirements, in the comparative periods presented in the year of adoption. The Company adopted ASC 842 on January 1, 2019.

The impact of applying ASC 842 effective as of January 1, 2019, to the Company’s condensed consolidated statements of operations and cash flows was not significant. The major impacts to the balance sheet were 1) the addition of $809.7 million in operating lease assets, 2) the addition of $867.5 million of operating lease liabilities, 3) the removal of approximately $4.9 million, $10.6 million, $7.6 million, and $54.5 million of property and equipment, net; deferred revenues and gains; accrued liabilities; and other liabilities, respectively, and 4) a cumulative-effect adjustment for the adoption of ASC 842 of $3.7 million and $6.3

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~~million was recorded to retained earnings and non-controlling interests, respectively. The adoption of ASC 842 did not impact any of its existing debt covenants.~~

~~Recently Issued Accounting Pronouncements~~

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326) (“ASU 2016-13”). This standard requires the use of a forward-looking expected loss impairment model for trade and other receivables, held-to-maturity debt securities, loans and other instruments. This standard also requires impairments and recoveries for available-for-sale debt securities to be recorded through an allowance account and revises certain disclosure requirements. In April 2019, the FASB issued ASU 2019-04, Codification Improvements, which provides guidance on accounting for credit losses on accrued interest receivable balances and guidance on including recoveries when estimating the allowance. In May 2019, the FASB issued ASU 2019-05, Targeted Transition Relief, which allows entities with an option to elect fair value for certain instruments upon adoption of Topic 326. The standard is effective for public companies for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. The Company ~~does not expect that~~adopted ASU 2016-13 on January 1, 2020 and the adoption ~~of the provisions of this ASU will have a material~~did not materially impact on its condensed consolidated financial ~~statements~~statements.

In August 2018, the FASB issued ASU No. 2018-15, Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract (“ASU 2018-15”). This standard aligns the accounting for implementation costs incurred in a cloud computing arrangement that is a service arrangement (i.e., hosting arrangement) with the guidance on capitalizing costs in ASC 350-40, Internal-Use Software. The ASU permits either a prospective or retrospective transition approach. The standard will be effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. The

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Company ~~will adopt~~adopted ASU 2018-15 on January 1, ~~2020.~~2020 using the prospective transition approach and the adoption did not materially impact its condensed consolidated financial statements.

In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848) (“ASU 2020-04”). This standard, effective for reporting periods through December 31, 2022, provides accounting relief for contract modifications that replace an interest rate impacted by reference rate reform (e.g., London Interbank Offered Rate (“LIBOR”)) with a new alternative reference rate. The guidance is applicable to investment securities, receivables, loans, debt, leases, derivatives and hedge accounting elections and other contractual arrangements. The Company adopted ASU 2020-04 as of January 1, 2020 and the adoption did not materially impact its condensed consolidated financial statements.

Recently Issued Accounting Pronouncements

In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (“ASU 2019-12”). This standard reduces complexity by removing specific exceptions to general principles related to intraperiod tax allocations, ownership changes in foreign investments, and interim period income tax accounting for year-to-date losses that exceed anticipated losses. This standard also simplifies accounting for franchise taxes that are partially based on income, transactions with a government that result in a step up in the tax basis of goodwill, separate financial statements of legal entities that are not subject to tax, and enacted changes in tax laws in interim periods. The standard is effective for public companies for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020, with early adoption permitted. The ASU permits either a retrospective basis or a modified retrospective transition approach. The Company is currently evaluating the impact that the adoption of the provisions of ~~the~~this ASU will have on its consolidated financial statements.

2. Revenue

Contract Assets

As of March 31, ~~2019~~2020 and December 31, ~~2018,~~2019, a contract asset of ~~$5.7~~$5.0 million and ~~$6.3~~$6.1 million, respectively, relating to RV service revenues was included in accounts receivable in the accompanying unaudited condensed consolidated balance sheet.

Deferred Revenues

As of March 31, ~~2019,~~2020, the Company has unsatisfied performance obligations relating to multi-year plans for its Good Sam Club, roadside assistance, Coast to Coast memberships, and magazine publication revenue streams. The total unsatisfied performance obligation for these revenue streams at March 31, ~~2019 and~~2020 for the periods during which the Company expects to recognize the amounts as revenue are presented as follows (in thousands):


	As of
	March 31, 2019
2019	$	68,897

			As of
			March 31, 2020
2020		34,475	$	69,977
2021		16,324		34,535
2022		8,057		16,788
2023		4,115		8,467
2024				4,667
Thereafter		6,988		5,668
Total	$	138,856	$	140,102

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3. Inventories and Floor Plan Payable

Inventories consisted of the following (in thousands):


	March 31,		December 31,
	2019		2018

					March 31,		December 31,
					2020		2019
Good Sam services and plans	$	401	$	459	$	38	$	590
New RVs		1,062,448		1,017,910		1,053,802		966,134
Used RVs		120,418		124,527		151,058		165,927
Products, parts, accessories and miscellaneous		439,697		416,074
	$	1,622,964	$	1,558,970
Products, parts, accessories and other						234,555		225,888
					$	1,439,453	$	1,358,539

New ~~and used~~ RV inventory, included in the RV and Outdoor Retail segment, ~~are~~is primarily financed by floor plan arrangements through a syndication of banks. The arrangements are collateralized by substantially all of the assets of FreedomRoads, LLC (“FR”), a wholly owned subsidiary of FreedomRoads, which operates the RV dealerships, and bear interest at one-month ~~London Interbank Offered Rate (“LIBOR”)~~LIBOR plus ~~2.50%~~2.15% as of March 31, ~~2019~~2020 and ~~2.15%~~December 31, 2019. LIBOR was 1.58% at March 31, 2020 and 1.71% as of December 31, ~~2018. LIBOR was 2.49% at March 31, 2019 and 2.35% as of December 31, 2018.~~2019. Borrowings are tied to specific vehicles and principal is due upon the sale of the related ~~vehicle.~~vehicle or upon reaching certain aging criteria.

As of March 31, ~~2019~~2020 and December 31, ~~2018,~~2019, FR maintained floor plan financing through the Seventh Amended and Restated Credit Agreement (“Floor Plan Facility”) ~~with~~. On October 8, 2019, FR entered into a ~~maturity date of December 12, 2020~~Second Amendment to the Seventh Amended and anRestated Credit Agreement (the “Amendment”). The applicable borrowing rate margin on LIBOR and base rate loans ~~ranging~~ranges from 2.05% to 2.50% and 0.55% and 1.00%, respectively, based on the consolidated current ratio at FR. The Floor Plan Facility ~~allows~~at March 31, 2020 allowed FR to borrow (a) up to ~~$1.415~~$1.38 billion under a floor plan facility, (b) up to $15.0 million under a letter of credit facility and (c) up to a maximum amount outstanding of ~~$60.0~~$57.0 million under the revolving line of credit, which maximum amount outstanding ~~will decrease~~further decreases by $3.0 million on the last day of each fiscal ~~quarter, commencing with~~quarter. The maturity date of the ~~fiscal quarter ending~~Floor Plan Facility is March ~~31, 2020.~~15, 2023.

The Floor Plan Facility includes ana flooring line aggregate interest reduction (“Flair”) offset account that allows the Company to transfer cash as an offset to the payable under the Floor Plan Facility. These transfers reduce the amount of liability outstanding under the floor plan notes payable that would otherwise accrue interest, while retaining the ability to transfer amounts from the Flair offset account into the Company’s operating cash accounts. As a result of using the ~~floor plan~~Flair offset account, the Company experiences a reduction in floor plan interest expense in its consolidated statements of ~~income.~~operations.

~~The~~Management has determined that the credit agreement governing the Floor Plan Facility includes subjective acceleration clauses which could impact debt classification. Management has determined that no events have occurred at March 31, 2020 that would trigger a subjective acceleration clause. Additionally, the credit agreement governing the Floor Plan Facility contains certain financial covenants. FR was in compliance with all debt covenants at March 31, ~~2019~~2020 and December 31, ~~2018.~~2019.

The following table details the outstanding amounts and available borrowings under the Floor Plan Facility as of March 31, ~~2019~~2020 and December 31, ~~2018~~2019 (in thousands):


	March 31,		December 31,
	2020		2019
Floor Plan Facility
Notes payable - floor plan:
Total commitment	$	1,379,750	$	1,379,750
Less: borrowings, net		(846,424)		(848,027)
Less: flooring line aggregate interest reduction account		(173,853)		(87,016)
Additional borrowing capacity		359,473		444,707
Less: accounts payable for sold inventory		(32,934)		(27,892)
Less: purchase commitments		(10,133)		(8,006)
Unencumbered borrowing capacity	$	316,406	$	408,809

March 31,

December 31,

2019

2018
Floor Plan Facility

Notes payable - floor plan:

Total commitment

$
1,415,000

$
1,415,000
Less: borrowings, net

(882,346)

(885,980)
Less: flooring line aggregate interest reduction account

(152,346)

(97,757)
Additional borrowing capacity

380,308

431,263
Less: accounts payable for sold inventory

(76,534)

(33,928)
Less: purchase commitments

(37,671)

(22,530)
Unencumbered borrowing capacity

$
266,103

$
374,805

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	March 31,		December 31,
	2020		2019
Revolving line of credit:	$	57,000	$	60,000
Less borrowings		(40,885)		(40,885)
Additional borrowing capacity	$	16,115	$	19,115

Letters of credit:
Total commitment	$	15,000	$	15,000
Less: outstanding letters of credit		(11,175)		(11,175)
Additional letters of credit capacity	$	3,825	$	3,825

4. Restructuring and Long-lived Asset Impairment

Restructuring

On September 3, 2019, the board of directors of CWH approved a plan to strategically shift its business away from locations where the Company does not have the ability or where it is not feasible to sell and/or service RVs at a sufficient capacity (the “Outdoor Lifestyle Locations”). Of the Outdoor Lifestyle Locations in the RV and Outdoor Retail segment operating at September 3, 2019, the Company closed or divested 36 Outdoor Lifestyle Locations, 3 distribution centers, and 19 specialty retail locations through March 31, 2020. NaN Outdoor Lifestyle Locations were closed in April 2020 and the Company expects that the remaining limited number of store closures and/or divestitures will be completed by December 31, 2020. As part of the 2019 Strategic Shift, the Company evaluated the impact on its supporting infrastructure and operations, which included rationalizing inventory levels and composition, closing 3 of its distribution centers, and realigning other resources. The Company had a reduction of headcount and labor costs for those locations that were closed or divested and the Company incurred material charges associated with the activities contemplated under the 2019 Strategic Shift.

In connection with the 2019 Strategic Shift, the Company expects to incur, in the aggregate, costs relating to:

●

one-time employee termination benefits of $1.2 million to $1.5 million, of which $1.2 million has been incurred through March 31, 2020;

●

lease termination costs of $15.0 million to $20.0 million, of which $5.5 million has been incurred through March 31, 2020;

●

incremental inventory reserve charges of $42.4 million, of which $42.4 million has been incurred through March 31, 2020; and

●

other associated costs of $20.0 million to $25.0 million, of which $9.9 million has been incurred through March 31, 2020.

Through March 31, 2020, the Company has incurred $9.9 million of such other associated costs primarily representing labor, lease, and other operating expenses incurred during the post-close wind-down period for the locations related to the 2019 Strategic Shift. The additional amount of $10.1 million to $15.1 million represents similar costs that may be incurred during the last nine months of 2020 for locations that continue in a wind-down period, primarily comprised of lease costs accounted for under ASC 842 prior to lease termination. The Company intends to negotiate terminations of these leases where prudent and pursue sublease arrangements for the remaining leases. Lease costs may continue to be incurred after December 31, 2020 on these leases if the Company is unable to terminate the leases under acceptable terms or offset the lease costs through sublease arrangements. The foregoing lease termination cost estimate represents the expected cash payments to terminate certain leases, but does not include the gain or loss from derecognition of the related operating lease assets and liabilities, which is dependent on the particular leases that will be terminated.

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The following table details the costs incurred during the three months ended March 31, 2020 associated with the 2019 Strategic Shift (in thousands):


	Three Months Ended
	March 31, 2020
Restructuring costs:
One-time termination benefits⁽¹⁾	$	180
Lease termination costs⁽²⁾		589
Incremental inventory reserve charges⁽³⁾		486
Other associated costs⁽⁴⁾		5,616
Total restructuring costs	$	6,871

(1)	These costs were primarily in costs applicable to revenues – products, service and other, in the condensed consolidated statements of operations.

(2)	These costs were included in lease termination charges in the condensed consolidated statements of operations. This reflects termination fees paid, net of any gain from derecognition of the related operating lease assets and liabilities.

(3)	These costs were included in costs applicable to revenue – products, service and other in the condensed consolidated statements of operations.

(4)

Other associated costs primarily represent labor, lease, and other operating expenses incurred during the post-close wind-down period for the locations related to the 2019 Strategic Shift. For the three months ended March 31, 2020, costs of approximately $0.3 million were included in costs applicable to revenue – products, service and other, and $5.3 million were included in selling, general, and administrative expenses in the condensed consolidated statements of operations.

The following table details changes in the restructuring accrual associated with the 2019 Strategic Shift (in thousands):


	One-time		Lease		Other
	Termination		Termination		Associated
	Benefits		Costs ⁽¹⁾		Costs		Total
Balance at June 30, 2019	$	—	$	—	$	—	$	—
Charged to expense		1,008		1,350		4,321		6,679
Paid or otherwise settled		(286)		(1,350)		(4,036)		(5,672)
Balance at December 31, 2019		722		—		285		1,007
Charged to expense		180		4,170		5,616		9,966
Paid or otherwise settled		(617)		(4,170)		(4,819)		(9,606)
Balance at March 31, 2020	$	285	$	—	$	1,082	$	1,367

(1)

Lease termination costs exclude the $1.3 million and the $3.6 million of gains from the derecognition of the operating lease assets and liabilities relating to the terminated leases as part of the 2019 Strategic Shift for the six months ended December 31, 2019 and for the three months ended March 31, 2020, respectively.

The Company evaluated the requirements of ASC No. 205-20, Presentation of Financial Statements – Discontinued Operations relative to the 2019 Strategic Shift and determined that discontinued operations treatment is not applicable. Accordingly, the results of operations of the locations impacted by the 2019 Strategic Shift are reported as part of continuing operations in the accompanying unaudited condensed consolidated financial statements.

Long-lived Asset Impairment

During the three months ended March 31, 2020, the Company had indicators of impairment of the long-lived assets for certain of its locations. For locations that failed the recoverability test based on an analysis of undiscounted cash flows, the Company estimated the fair value of the locations based on a discounted cash flow analysis. After performing the long-lived asset impairment test for these locations, the Company

March 31,

December 31,

2019

2018
Revolving line of credit:

$
60,000

$
60,000
Less borrowings

(42,610)

(38,739)
Additional borrowing capacity

$
17,390

$
21,261

Letters of credit:

Total commitment

$
15,000

$
15,000
Less: outstanding letters of credit

(10,380)

(10,380)
Additional letters of credit capacity

$
4,620

$
4,620

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determined that 10 locations within the RV and Outdoor Retail segment had long-lived assets that were impaired. The long-lived asset impairment charge, subject to limitations described below, was calculated as the amount that the carrying value of the locations exceeded the estimated fair value. The calculated long-lived asset impairment charge was allocated to each of the categories of long-lived assets at each location pro rata based on the long-lived assets’ carrying values, except that individual assets cannot be impaired below their individual fair values when that fair value can be determined without undue cost and effort. For most of these locations, the operating lease right-of-use assets and furniture and equipment were written down to their individual fair values and the remaining impairment charge was allocated to the remaining long-lived assets up to the fair value estimated on these assets based on liquidation value estimates.

During the three months ended March 31, 2020, the Company recorded long-lived asset impairment charges relating to leasehold improvements, furniture and equipment, and operating lease right-of-use assets of $2.4 million, $2.6 million, and $1.6 million, respectively. Of the $6.6 million long-lived asset impairment charge during the three months ended March 31, 2020, $6.5 million related to the 2019 Strategic Shift discussed above.

5. Goodwill and Intangible Assets

Goodwill

The following is a summary of changes in the Company’s goodwill by segment for the three months ended March 31, ~~2019~~2020 (in thousands):

Good Sam

Services and

RV and


Plans

Outdoor Retail

Consolidated
Balance as of December 31, 2018

50,320

308,797

359,117
Acquisitions (1)

—

11,981

11,981
Transfers of assets between reporting units

(26,491)

26,491

—
Balance as of March 31, 2019

$
23,829

$
347,269

$
371,098


	Good Sam
	Services and		RV and
	Plans		Outdoor Retail		Consolidated
Balance as of December 31, 2019 (excluding impairment charges)	$	70,713	$	558,065	$	628,778
Accumulated impairment charges		(46,884)		(194,953)		(241,837)
Balance as of December 31, 2019		23,829		363,112		386,941
Acquisitions ⁽¹⁾		—		4		4
Balance as of March 31, 2020	$	23,829	$	363,116	$	386,945

(1)

⁽¹⁾

~~See~~Represents measurement period adjustments relating to prior period acquisitions (see Note 1011 — ~~Acquisitions.~~

Acquisitions).

The Company evaluates goodwill for impairment on an annual basis as of the beginning of the fourth quarter, or more frequently if events or changes in circumstances indicate that the Company’s goodwill or indefinite-lived intangible assets might be impaired. The Company assesses qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If the Company determines it is more likely than not that the fair value of a reporting unit is less than its carrying amount, then it is required to perform the first step of a two-step impairment test by calculating the fair value of the reporting unit and comparing the fair value with the carrying amount of the reporting unit. If the carrying amount of a reporting unit exceeds its fair value, then the Company records an impairment of goodwill equal to the amount that the carrying amount of a reporting unit exceeds its fair value.

~~As of January 1, 2019,~~During the three months ended March 31, 2020, the Company ~~transferred certain assets related to~~determined that a triggering event for an interim goodwill impairment test of its RV and Outdoor Retail reporting unit had occurred as a result of the ~~Good Sam Club~~decline in the market price of the Company’s Class A common stock and ~~co-branded credit card from GSS Enterprises, LLC (“GSS”) within~~ the ~~Good Sam Services and Plans segment to CWI, Inc. (“CWI”) within~~potential impact of COVID-19 on the Company’s business. As a result of the interim goodwill impairment test, the Company determined that the fair value of the RV and Outdoor Retail segment. This resulted in a transfer of $26.5 million of goodwill from the Good Sam Services and Plans segment to the RV and Outdoor Retail segment based on relative fair value as of January 1, 2019 of the portion of the reporting unit ~~transferred.~~

was substantially above its respective carrying amount, therefore, no goodwill impairment was recorded.

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Intangible Assets

~~Finite–lived~~Finite-lived intangible assets and related accumulated amortization consisted of the following at March 31, ~~2019~~2020 and December 31, ~~2018~~2019 (in thousands):


	March 31, 2019
	Cost or		Accumulated
	Fair Value		Amortization		Net

							March 31, 2020
							Cost or		Accumulated
							Fair Value		Amortization		Net
Good Sam Services and Plans:
Membership and customer lists	$	9,140	$	(7,374)	$	1,766	$	9,140	$	(8,153)	$	987
RV and Outdoor Retail:
Customer lists and domain names		3,415		(1,811)		1,604		2,065		(1,792)		273
Trademarks and trade names		29,304		(3,342)		25,962		28,955		(5,343)		23,612
Websites		6,074		(1,262)		4,812		5,990		(2,038)		3,952
	$	47,933	$	(13,789)	$	34,144

	December 31, 2018
	Cost or		Accumulated
	Fair Value		Amortization		Net
							$	46,150	$	(17,326)	$	28,824

							December 31, 2019
							Cost or		Accumulated
							Fair Value		Amortization		Net
Good Sam Services and Plans:
Membership and customer lists	$	9,140	$	(7,174)	$	1,966	$	9,140	$	(7,972)	$	1,168
RV and Outdoor Retail:
Customer lists and domain names		3,415		(1,559)		1,856		2,065		(1,768)		297
Trademarks and trade names		29,304		(2,853)		26,451		28,955		(4,862)		24,093
Websites		6,074		(1,063)		5,011		5,990		(1,841)		4,149
	$	47,933	$	(12,649)	$	35,284

							$	46,150	$	(16,443)	$	29,707

6. Long-Term Debt

Outstanding long-term debt consisted of the following (in thousands):


	March 31,		December 31,
	2019		2018

					March 31,		December 31,
					2020		2019
Term Loan Facility (1)	$	1,154,295	$	1,156,345	$	1,146,062	$	1,148,115
Real Estate Facility (2)		9,286		9,520		18,997		19,521
Subtotal		1,163,581		1,165,865		1,165,059		1,167,636
Less: current portion		(12,976)		(12,977)		(13,962)		(14,085)
Total	$	1,150,605	$	1,152,888	$	1,151,097	$	1,153,551

(1)

⁽¹⁾

Net of ~~$5.1~~$4.1 million and ~~$5.4~~$4.3 million of original issue discount at March 31, ~~2019~~2020 and December 31, ~~2018,~~2019, respectively, and ~~$12.7~~$10.0 million and ~~$13.4~~$10.7 million of finance costs at March 31, ~~2019~~2020 and December 31, ~~2018,~~2019, respectively.

(2)

⁽²⁾

Net of $0.2 million and $0.2 million of finance costs at March 31, ~~2019~~2020 and December 31, ~~2018,~~2019, respectively.

Senior Secured Credit Facilities

As of March 31, ~~2019~~2020 and December 31, ~~2018,~~2019, CWGS Group, LLC (the “Borrower”), a wholly owned subsidiary of CWGS, LLC, was party to a credit agreement (as amended from time to time, the “Credit Agreement”) for a senior secured credit facility (the “Senior Secured Credit Facilities”). The Senior Secured Credit Facilities ~~consists~~consist of a $1.19 billion term loan facility (the “Term Loan Facility”) and a $35.0 million revolving credit facility (the “Revolving Credit Facility”). The funds available under the Revolving Credit Facility may be utilized for borrowings or letters of credit; however, a maximum of $15.0 million may be allocated to such letters of credit. The Revolving Credit Facility matures on November 8, 2021, and the Term Loan Facility matures on November 8, 2023. The Term Loan Facility requires mandatory principal payments in equal quarterly installments of $3.0 million. Additionally, the Company is required to prepay the term loan borrowings in an

1716

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aggregate amount equal to 50% of excess cash flow, as defined in the Credit Agreement, for such fiscal year depending on the Total Leverage Ratio. ~~No excess cash flow payment was required relating to the year ended December 31, 2018.~~

As of March 31, ~~2019,~~2020, the average interest rate on the Term Loan Facility was ~~5.24%~~3.90%. ~~As of March 31, 2019,~~The following table details the ~~Company had $9.4 million~~outstanding amounts and available ~~for borrowing and letters of credit in the aggregate amount of $3.7 million outstanding~~borrowings under the ~~Revolving~~Senior Secured Credit ~~Facility,~~Facilities as ~~a result~~ of the 30% threshold described below. As of March 31, 2019, a principal balance of $1.2 billion was outstanding under the Term Loan Facility and no amounts were outstanding on the Revolving Credit Facility.(in thousands):


	March 31,		December 31,
	2020		2019
Senior Secured Credit Facilities:
Term Loan Facility:
Principal amount of borrowings	$	1,195,000	$	1,195,000
Less: cumulative principal payments		(34,895)		(31,898)
Less: unamortized original issue discount		(4,057)		(4,320)
Less: finance costs		(9,986)		(10,667)
		1,146,062		1,148,115
Less: current portion		(11,991)		(11,991)
Long-term debt, net of current portion	$	1,134,071	$	1,136,124
Revolving Credit Facility:
Total commitment	$	35,000	$	35,000
Less: outstanding letters of credit		(3,622)		(4,112)
Less: availability reduction due to Total Leverage Ratio		(21,965)		(21,622)
Additional borrowing capacity	$	9,413	$	9,266

The Senior Secured Credit Facilities are fully and unconditionally guaranteed, jointly and severally, on a senior secured basis by each of the Company’s existing and future domestic restricted subsidiaries with the exception of FreedomRoads Intermediate Holdco, LLC, the direct parent of FR, and FR and its subsidiaries. The Credit Agreement contains certain restrictive covenants pertaining to, but not limited to, mergers, changes in the nature of the business, acquisitions, additional indebtedness, sales of assets, investments, and the prepayment of dividends subject to certain limitations and minimum operating covenants. Additionally, management has determined that the Senior Secured Credit Facilities include subjective acceleration clauses which could impact debt classification. Management has determined that no events have occurred at March 31, ~~2019, including the internal control material weaknesses,~~2020 that would trigger a subjective acceleration clause.

The Credit Agreement requires the Borrower and its subsidiaries to comply on a quarterly basis with a maximum Total Leverage Ratio (as defined in the Credit Agreement), which covenant is in effect only if, as of the end of each calendar quarter, the aggregate amount of borrowings under the revolving credit facility (including swingline loans), letters of credit and unreimbursed letter of credit disbursements outstanding at such time (minus the lesser of (a) $5.0 million and (b) letters of credit outstanding) is greater than 30% of the aggregate amount of the Revolving Lenders’ Revolving Commitments (minus the lesser of (a) $5.0 million and (b) letters of credit outstanding), as defined in the Credit Agreement. As of March 31, ~~2019,~~2020, the Company was not subject to this covenant as borrowings under the Revolving Credit Facility did not exceed the 30% threshold. At March 31, ~~2019,~~2020, the Company would not have met this covenant if the Company had exceeded the 30% threshold. As such, the Company’s borrowing capacity under the Revolving Credit Facility at March 31, ~~2019~~2020 was limited to $9.4 million of additional borrowings. The Company was in compliance with all applicable debt covenants at March 31, ~~2019~~2020 and December 31, ~~2018.~~2019.

Real Estate Facility

As of March 31, ~~2019~~2020 and December 31, ~~2018,~~2019, Camping World Property, Inc. (the ‘‘Real Estate Borrower’’), an indirect wholly-owned subsidiary of CWGS, LLC, and CIBC Bank USA (“Lender”), ~~was~~were party to a loan and security agreement for a real estate credit facility with an aggregate maximum principal ~~amount~~capacity of $21.5 million (“Real Estate Facility”). Borrowings under the Real Estate Facility are guaranteed by CWGS Group, LLC, a wholly-owned subsidiary of CWGS, LLC. The Real Estate Facility may be used to finance the acquisition of real estate assets. The Real Estate Facility is secured by first priority security interest on the real

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estate assets acquired with the proceeds of the Real Estate Facility (“Real Estate Facility Properties”). The Real Estate Facility matures on October 31, 2023.

As of March 31, ~~2019,~~2020, a principal balance of $19.2 million was outstanding under the Real Estate Facility, and the average interest rate ~~on the Real Estate Facility~~ was ~~5.42%~~4.65% with a commitment fee of 0.50% of the aggregate unused principal amount of the Real Estate Facility. As of March 31, ~~2019,~~2020, the Company had noavailable ~~borrowings of $11.7 million~~capacity under the Real Estate Facility. ~~As of March 31, 2019, a principal balance of $9.5 million was outstanding under~~

Management has determined that the credit agreement governing the Real Estate ~~Facility.~~

~~The~~Facility includes subjective acceleration clauses which could impact debt classification. Management has determined that no events have occurred at March 31, 2020 that would trigger a subjective acceleration clause. Additionally, the Real Estate Facility is subject to certain cross default provisions, a debt service coverage ratio, and other customary covenants. The Company was in compliance with all debt covenants at March 31, ~~2019~~2020 and December 31, ~~2018.~~2019.

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~~6. Leases~~

The Company leases property and equipment throughout the United States primarily under operating leases. For leases with terms greater than 12 months, the Company records the related asset and obligation at the present value of lease payments over the term. Many of the Company’s leases include rental escalation clauses, renewal options and/or termination options that are factored into the determination of lease payments when appropriate. The Company aggregates non-lease components with the related lease components when evaluating the accounting treatment for equipment and billboard leases.

Many of the Company’s lease agreements include fixed rental payments. Certain of its lease agreements include fixed rental payments that are adjusted periodically for changes in the Consumer Price Index (“CPI”). Payments based on a change in an index or a rate are not considered in the determination of lease payments for purposes of measuring the related lease liability. While lease liabilities are not remeasured as a result of changes to the CPI, changes to the CPI are treated as variable lease payments and recognized in the period in which the obligation for those payments are incurred.

Most of the Company’s real estate leases include one or more options to renew, with renewal terms that can extend the lease term from one to five years or more. The exercise of lease renewal options is at the Company’s sole discretion. If it is reasonably certain that the Company will exercise such options, the periods covered by such options are included in the lease term and are recognized as part of the operating lease assets and operating lease liabilities. The depreciable life of assets and leasehold improvements are limited by the expected lease term, unless there is a transfer of title or purchase option reasonably certain of exercise.

When available, the Company uses the rate implicit in the lease to discount lease payments to present value; however, most of its leases do not provide a readily determinable implicit rate. Therefore, the Company must estimate its incremental borrowing rate to discount the lease payments based on information available at lease commencement.

The Company leases most of the properties for its RV and outdoor retail locations through 291 operating leases. The Company also leases billboards and certain of its equipment primarily through operating leases. The related right-of-use (“ROU”) assets for these operating leases are included in operating lease assets. The Company has one finance lease for equipment, which is not material.

~~As of March 31, 2019, the weighted-average remaining lease term and weighted-average discount rate of operating leases was 13.1 years and 7.8%, respectively.~~7. Lease Obligations

The following presents certain information related to the costs for operating leases ~~during 2019:~~($ in thousands):


	Three Months Ended
	March 31, 2019

			Three Months Ended March 31,
			2020		2019
Operating lease cost	$	30,202	$	31,000	$	30,202
Short-term lease cost		713		489		713
Variable lease cost		552		5,028		552
Sublease income		(305)		(412)		(305)
Net lease costs	$	31,162	$	36,105	$	31,162

The following presents supplemental cash flow information related to leases ~~during 2019:~~

Three Months Ended

March 31, 2019
Cash paid for amounts included in the measurement of lease liability:

Operating cash flows for operating leases

$
30,044

ROU assets obtained in exchange for lease liabilities:

Operating leases

$
23,403

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~~The following reconciles the undiscounted cash flows for each of the first five years and total of the remaining years to the operating lease liabilities on the balance sheet as of March 31, 2019:~~

Operating


Leases
2019

$
90,408
2020

119,411
2021

119,061
2022

114,092
2023

110,552
Thereafter

868,754
Total lease payments

1,422,278
Less: Imputed interest

(544,857)
Total lease obligations

877,421
Less: Current portion

(54,878)
Noncurrent lease obligations

$
822,543

~~Disclosures related to periods prior to the adoption of ASC 842~~

~~The Company leases operating facilities throughout the United States. Prior to January 1, 2019, the Company analyzed all leases~~($ in ~~accordance with ASC 840 — Leases. The Company has included the right to use assets in property and equipment, net, as follows (in~~ thousands):

December 31,

2018
Right to use assets

$
5,400
Accumulated depreciation

(540)

$
4,860


	Three Months Ended March 31,
	2020		2019
Cash paid for amounts included in the measurement of lease liability:
Operating cash flows for leases	$	30,737	$	30,044

Operating lease assets obtained in exchange for lease liabilities:
New, remeasured, and terminated leases	$	18,804	$	23,403

~~The following is a schedule by year of the future changes in the right to use liabilities as of December 31, 2018 (in thousands):~~

2019

$
486
2020

486
2021

486
2022

486
2023

486
Thereafter

7,889
Total minimum lease payments

10,319
Amounts representing interest

(5,172)
Present value of net minimum right to use liability payments

$
5,147

~~Future~~ ~~minimum~~ ~~annual fixed rentals under operating leases having an original term of more than one year as of December 31, 2018, were as follows (in thousands):~~

Third Party

Related Party

Total
2019

$
116,131

$
2,248

$
118,379
2020

111,008

2,248

113,256
2021

106,740

2,248

108,988
2022

102,496

2,145

104,641
2023

99,594

1,930

101,524
Thereafter

811,228

18,951

830,179
Total

$
1,347,197

$
29,770

$
1,376,967

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~~For the three months ended March 31, 2018, $25.7 million of rent expense was charged to costs and expenses.~~

7.8. Fair Value Measurements

Accounting guidance for fair value measurements establishes a three tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers include Level 1, defined as observable inputs such as quoted prices in active markets; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions.

There have been no transfers of assets or liabilities between the fair value measurement levels and there were no material re-measurements to fair value during ~~2019~~2020 and ~~2018~~2019 of assets and liabilities that are not measured at fair value on a recurring basis.

The following table presents the reported carrying value and fair value information for the Company’s debt instruments. The fair values shown below for the Term Loan Facility, as applicable, are based on quoted prices in the inactive market for identical assets (Level 2) and the fair values shown below for the Floor Plan

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Facility Revolving Line of Credit and the Real Estate Facility are estimated by discounting the future contractual cash flows at the current market interest rate that is available based on similar financial instruments.

Fair Value

3/31/2019

12/31/2018
($ in thousands)

Measurement

Carrying Value

Fair Value

Carrying Value

Fair Value
Term Loan Facility

Level 2

$
1,154,295

$
1,056,292

$
1,156,345

$
1,116,338
Floor Plan Facility Revolving Line of Credit

Level 2

42,610

44,107

38,739

40,139
Real Estate Facility

Level 2

9,286

10,599

9,520

10,850


	Fair Value	March 31, 2020				December 31, 2019
($ in thousands)	Measurement	Carrying Value		Fair Value		Carrying Value		Fair Value
Term Loan Facility	Level 2	$	1,146,062	$	783,071	$	1,148,115	$	1,104,947
Floor Plan Facility Revolving Line of Credit	Level 2		40,885		40,021		40,885		41,299
Real Estate Facility	Level 2		18,997		18,347		19,521		21,030

9. Commitments and Contingencies

Litigation

On October 19, 2018, a purported stockholder of the Company filed a putative class action lawsuit, captioned Ronge v. Camping World Holdings, Inc. et al., in the United States District Court for the Northern District of Illinois against the Company, certain of its officers and directors, and Crestview Partners II GP, L.P. and Crestview Advisors, L.L.C. (the “Ronge Complaint”). On October 25, 2018, a different purported stockholder of the Company filed a putative class action lawsuit, captioned Strougo v. Camping World Holdings, Inc. et al., in the United States District Court for the Northern District of Illinois against the Company, certain of its officers and directors, and Crestview Partners II GP, L.P. and Crestview Advisors, L.L.C. (the “Strougo Complaint”).

The Ronge and Strougo Complaints were consolidated and lead plaintiffs (the “Ronge Lead Plaintiffs”) appointed by the court. On February 27, 2019, the Ronge lead plaintiffs filed a consolidated complaint against the Company, certain of its officers, directors, Crestview Partners II GP, L.P. and Crestview Advisors, L.L.C., and the underwriters of the May and October 2017 secondary offerings of the Company’s Class A common ~~stock.~~stock (the “Consolidated Complaint”). The ~~consolidated complaint~~Consolidated Complaint alleges violations of Sections 11 and 12(a)(2) of the Securities Act of 1933, as well as Section 10(b) of the Securities Exchange Act of 1934, as amended, and ~~rule~~Rule 10b-5 thereunder, based on allegedly materially misleading statements or omissions of material facts necessary to make certain statements not misleading related to the business, operations, and management of the Company. Additionally, it alleges that certain of the Company’s officers and directors, Crestview Partners II GP, L.P., and Crestview Advisors, L.L.C. violated Section 15 of the Securities Act of 1933 and Section 20(a) of the Securities Exchange Act of 1934, as amended, by allegedly acting as controlling persons of the Company. The lawsuit brings claims on behalf of a

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putative class of purchasers of the Company’s Class A common stock between March 8, 2017 and August 7, 2018, and seeks compensatory damages, rescission, attorneys’ fees and costs, and any equitable or injunctive relief the court deems just and proper. On May 17, 2019, the Company, along with the other defendants, moved to dismiss the Consolidated Complaint. On March 12, 2020, Ronge Lead Plaintiffs filed an Amended Consolidated Complaint, adding those allegations contained in the Geis Complaint (defined below). On March 13, Ronge Lead Plaintiffs filed an unopposed motion for preliminary approval of class action settlement, which the Court granted on April 7, 2020. The Settlement Hearing is scheduled for August 5, 2020.

However, there can be no assurance that the proposed settlement will be approved by the Court. The parties have informed the court of the status of their negotiations, and on January 24, 2020, the court struck the pending motions to dismiss without prejudice. Any losses that the Company believes ~~it has meritorious defenses~~are probable are expected to be covered directly by the ~~claims of the plaintiffs and members of the putative class, and any liability for the alleged claims~~Company’s applicable insurance policies. The Company is not currently ~~probable~~able to estimate a range of reasonably possible loss in excess of any amount that would be paid directly by the Company’s insurance carriers. Moreover, no assurance can be made that this matter either individually or ~~reasonably estimable.~~together with the potential for similar suits, will not result in a material financial exposure in excess of insurance coverage, which could have a material adverse effect upon the Company's financial condition and results of operations.

On December 12, 2018, a putative class action complaint styled International Union of Operating Engineers Benefit Funds of Eastern Pennsylvania and Delaware v. Camping World Holdings Inc., et al. was filed in the Supreme Court of the State of New York, New York County, on behalf of all purchasers of Camping World Class A common stock issued pursuant and/or traceable to a secondary offering of such securities in

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October 2017 (“IUOE Complaint”). The IUOE Complaint names as defendants the Company, and certain of its officers and directors, among others, and alleges violations of Sections 11, 12(a), and 15 of the Securities Act of 1933 based on allegedly materially misleading statements or omissions of material facts necessary to make certain statements not misleading and seeks compensatory damages, including prejudgment and post-judgement interest, attorneys’ fees and costs, and any equitable or injunctive relief the court deems just and proper, including rescission. On February 28, ~~2019.~~2019, the Company, along with the other defendants, moved to dismiss this action. The parties argued the merits of defendants’ motion to dismiss before the Supreme Court of the State of New York, Commercial Division, on September 6, 2019. The Court granted in part and denied in part the motion to dismiss on April 22, 2020. The Company believes it has meritorious defenses to the claims of the plaintiffs and members of the putative class, and any liability for the alleged claims is not currently probable or reasonably estimable.

On February 22, 2019, a putative class action complaint styled Daniel Geis v. Camping World Holdings, Inc., et al. was filed in the Circuit Court of Cook County, Illinois, Chancery Division, on behalf of all purchasers of Camping World Class A common stock in and/or traceable to the Company’s initial public offering on October 6, 2016 (“Geis Complaint”). The Geis Complaint names as defendants the Company, certain of ~~our~~its officers and directors, and the underwriters of the offering, and alleges violations of Sections 11, 12(a)(2), and 15 of the Securities Act of 1933 based on allegedly materially misleading statements or omissions of material facts necessary to make certain statements not misleading. The Geis Complaint seeks compensatory damages, prejudgment and post-judgment interest, attorneys’ fees and costs, and any other and further relief the court deems just and proper. On April 19, 2019, the Company, along with the other defendants, moved to dismiss this action. The parties argued the merits of defendants’ motion to dismiss before the Circuit Court of Cook County, Illinois, Chancery Division on August 20, 2019. On August 26, 2019, the Court stayed the Geis Complaint pending resolution of the motion to dismiss the Consolidated Complaint that is pending in the United States District Court for the Northern District of Illinois. The Company believes it has meritorious defenses to the claims of the plaintiff and members of the putative class, and any liability for the alleged claims is not currently probable or reasonably estimable.

On March 5, 2019, a shareholder derivative suit styled Hunnewell v. Camping World Holdings, Inc., et al., was filed in the Court of Chancery of the State of Delaware, alleging breaches of fiduciary duty for alleged failure to implement effective disclosure controls and internal controls over financial reporting and to properly oversee certain acquisitions and for alleged insider trading (the “Hunnewell Complaint”). The Hunnewell Complaint names the Company as nominal defendant, and names certain of the Company’s officers and directors, among others, as defendants and seeks restitutionary and/or compensatory damages, disgorgement of all management fees, advisory fees, expenses and other fees paid by ~~Camping World~~the Company during the period in question, disgorgement of profits pursuant to the alleged insider trading, attorneys’ fees and costs, and any other and further relief the court deems just and proper. On April 29, 2019, the Company, along with the other defendants, moved to stay the action pending the resolution of the putative class action in the United States District Court for the Northern District of Illinois. The Company believes it has meritorious defenses to the claims of the plaintiffs, and any liability for the alleged claims is not currently probable or reasonably estimable.

On April 17, 2019, a shareholder derivative suit styled Lincolnshire Police Pension Fund v. Camping World Holdings, Inc., et al., was filed in the Court of Chancery of the State of Delaware, alleging breaches of fiduciary duty for alleged failure to implement effective disclosure controls and internal controls over financial reporting and to properly oversee certain acquisitions and for alleged insider trading and unjust enrichment for compensation received during that time (the “LPPF Complaint”). The LPPF Complaint names the Company as nominal defendant, and names certain of the Company’s officers and directors, among others, as defendants and seeks compensatory damages, extraordinary equitable and/or injunctive relief, restitution and disgorgement, attorneys’ fees and costs, and any other and further relief the court deems just and proper. On May 30, 2019, the Court granted the parties’ joint motion to consolidate the Hunnewell and LPPF Complaints (as well as any future filed actions relating to the subject matter) and stay the newly consolidated action pending the resolution of defendants’ motion to dismiss the Consolidated Complaint pending in the United States District Court for the Northern District of Illinois. The Company believes it has meritorious defenses to the claims of the ~~plaintiff,~~plaintiffs, and any liability for the alleged claims is not currently probable or reasonably estimable.

On August 6, 2019, 2 shareholder derivative suits, styled Janssen v. Camping World Holdings, Inc., et al., and Sandler v. Camping World Holdings, Inc. et al., were filed in the U.S. District Court of Delaware. Both actions name the Company as a nominal defendant, and name certain of the Company’s officers and directors, Crestview Partners II GP, L.P. and Crestview Advisors, L.L.C. as defendants, and allege: (i) violations of Section 14(a) of the Securities Exchange Act for issuing proxy statements that allegedly omitted material

information and allegedly included materially false and misleading financial statements; (ii) violations of Section 10(b) and 20(a) of the Securities Exchange Act of 1934, seeking contribution for causing the Company to issue allegedly false and misleading statements and/or allegedly omit material information in public statements and/or Company filings concerning the Company’s financial performance, the effectiveness of internal controls to ensure accurate financial reporting, and the success and profitability of the integration and rollout of Gander Outdoors (now Gander RV) stores; (iii) breaches of fiduciary duty, unjust enrichment, abuse of control, and gross mismanagement for allegedly causing or allowing the Company to disseminate to Camping World shareholders materially misleading and inaccurate information through the Company’s SEC filings; and (iv) breach of fiduciary duties for alleged insider selling and misappropriation of information (together, the “Janssen and Sandler Complaints”). The Janssen and Sandler Complaints seek restitutionary and/or compensatory damages, injunctive relief, disgorgement of all profits, benefits, and other compensation obtained by the certain of the Company’s officers and directors, attorneys’ fees and costs, and any other and further relief the court deems just and proper. We are only a nominal defendant in the Janssen and Sandler Complaints. On September 25, 2019, the Court granted the parties’ joint motion to consolidate the action and stay the action pending resolution of the motion to dismiss the Consolidated Complaint that is pending in the United States District Court for the Northern District of Illinois.

~~The~~From time to time, the Company is ~~also engaged~~involved in ~~various~~ other ~~legal actions, claims and proceedings~~litigation arising in the ~~ordinary~~normal course of business including claims related to employment-related matters, breach of contracts, products liabilities, consumer protection and intellectual property matters resulting from the Company’s business activities. The Company does not believe that the ultimate resolution of such matters will have a material adverse effect on its business, financial condition or results of operations. However, litigation is subject to many uncertainties, and the outcome of certain of such individual litigated matters may not be reasonably predictable and any related damages may not be estimable. Certain of these litigation matters could result in an adverse outcome to the Company, and any such adverse outcome could have a material adverse effect on the Company’s business, financial condition and results of operations.

9.10. Statement of Cash Flows

Supplemental disclosures of cash flow information for the following periods (in thousands) were as follows:


	Three Months Ended
	March 31,		March 31,
	2019		2018

					Three Months Ended
					March 31,		March 31,
					2020		2019
Cash paid during the period for:
Interest	$	26,977	$	20,333	$	22,955	$	26,977
Income taxes		119		830		53		119
Non-cash investing activities:
Leasehold improvements paid by lessor		1,540		16,259		24		1,540
Vehicles transferred to property and equipment from inventory		402		617		119		402
Capital expenditures in accounts payable and accrued liabilities		6,634		15,676		3,325		6,634
Non-cash financing activities:
Par value of Class A common stock issued in exchange for common units in CWGS, LLC		—		2
Par value of Class A common stock issued for vested restricted stock units						—		—
Par value of Class A common stock repurchased for withholding taxes on vested RSUs						—		—

~~10.~~11. Acquisitions

During the three months ended March 31, 2019, ~~and 2018,~~ subsidiaries of the Company acquired the assets ~~or stock~~ of ~~multiple~~2 RV dealerships that constituted businesses under accounting rules. The Company used a combination of cash and floor plan financing to complete the acquisitions. The Company considers acquisitions of independent dealerships to be a fast and capital efficient alternative to opening new ~~retail~~RV and Outdoor Retail locations to expand its business and grow its customer base. ~~Additionally, the Company believes that its experience and scale allow it to operate these acquired dealerships more efficiently.~~ The acquired businesses were recorded at their estimated fair values under the acquisition method of accounting. The balance of the purchase prices in excess of the fair values of net assets acquired were recorded as goodwill.

During the three months ended March 31, 2019, the RV and Outdoor Retail segment acquired the assets of an RV dealership group comprised of 2 locations for an aggregate purchase price of approximately $21.2 million. The purchases were partially funded through $8.4 million of borrowings under the Floor Plan Facility. For the three months ended March 31, 2019, ~~and 2018,~~ the Company purchased real property of $0.7 million ~~and $0, respectively,~~ from parties related to the sellers of the ~~dealership~~ businesses.

The estimated fair values of the assets acquired and liabilities assumed for the acquisitions of dealerships, retail and consumer shows consist of the following:

Three Months Ended March 31,

Estimated
($ in thousands)

2019

2018

Life
Tangible assets (liabilities) acquired (assumed):

Inventory, net

$
9,096

$
6,609

Prepaid expenses and other assets

87

—

Property and equipment, net

105

281

Other assets

—

55

Accrued liabilities

(100)

(148)

Total tangible net assets acquired

9,188

6,797

Intangible assets acquired:

Membership and customer lists

—

116

4-7 years
Total intangible assets acquired

—

116

Goodwill

11,981

5,571

Cash paid for acquisitions, net of cash acquired

21,169

12,484

Inventory purchases financed via floor plan

(8,416)

(4,222)

Cash payment net of floor plan financing

$
12,753

$
8,262


	Three Months Ended March 31,
($ in thousands)	2020		2019
Tangible assets (liabilities) acquired (assumed):
Inventories, net	$	(4)	$	9,096
Prepaid expenses and other assets		—		87
Property and equipment, net		—		105
Accrued liabilities		—		(100)
Total tangible net assets acquired		(4)		9,188
Goodwill		4		11,981
Purchase price		—		21,169
Cash and cash equivalents acquired		—		—
Cash paid for acquisitions, net of cash acquired		—		21,169
Inventory purchases financed via floor plan		—		(8,416)
Cash payment net of floor plan financing	$	—	$	12,753

~~The fair values above are preliminary relating to~~For the three months ended March 31, ~~2019 as they are subject to~~2020, the fair values above represent measurement period adjustments for ~~up to one year from the date~~valuation of ~~acquisition as new information is obtained about facts and circumstances that existed as of the acquisition date~~acquired inventories relating to dealership acquisitions during the ~~valuation of the acquired assets.~~year ended December 31, 2019. The primary items that generated the goodwill are the value of the expected synergies between the acquired businesses and the Company and the acquired assembled workforce, neither of which qualify for recognition as a separately identified intangible asset. For the three months ended March 31, ~~2019~~2020 and ~~2018, all of the~~2019, acquired goodwill of $0 million and $12.0 million, respectively, is expected to be deductible for tax purposes. Included in the three months ended March 31, 2019 ~~and 2018~~ consolidated financial results were $4.8 million ~~and $0.9 million~~ of revenue ~~respectively,~~ and $0.3 million ~~and $0.2 million~~ of pre-tax loss ~~respectively,~~ of the acquired dealerships from the applicable acquisition dates. Pro forma information on these acquisitions has not been included, because the Company has deemed them to not be individually or cumulatively material.

~~11.~~

12. Income Taxes

CWH is organized as a Subchapter C corporation and, as of March 31, ~~2019,~~2020, is a ~~41.9%~~42.1% owner of CWGS, LLC (see Note 1314 — Stockholders’ Equity and Note 1415 — Non-Controlling Interests). CWGS, LLC is organized as a limited liability company and treated as a partnership for federal tax ~~purposes.~~ purposes, with the exception of Americas Road and Travel Club, Inc., Camping World, Inc. (“CW”), and FreedomRoads RV, Inc. and their wholly-owned subsidiaries, which are Subchapter C corporations.

On January 1, 2019, the Company transferred certain assets relating to its Good Sam Club and co-branded credit card from its indirect wholly-owned subsidiary, GSS aEnterprises LLC (“GSS”), to its indirect wholly-owned subsidiary, ~~CWI,~~CW, a corporation. As a result of this transfer, the Company recorded an estimated $16.3 million of ~~deferred~~net income tax expense ~~pertaining~~during the three months ended March 31, 2019 due to ~~changes in~~the revaluation of certain deferred tax assets and related changes in valuation allowance. ~~Additionally, unrelated~~As a result of transferring certain assets relating to its Good Sam Club and co-branded credit card from GSS to CW, as described above, the Company also re-evaluated the impact on its Tax Receivable Agreement liability related to the reduction of future expected tax amortization. The reduction in future expected tax amortization reduced the Tax Receivable Agreement liability by an estimated $7.2 million. Unrelated to the transfer described above, the ~~Company recorded~~Tax Receivable Agreement liability was reduced by an additional $1.1 million ~~of deferred income tax expense resulting from an~~during the three months ended March 31, 2019 for changes in estimated ~~decrease in its~~ state income tax ~~rates.~~rates applicable to CWH. As a result of these adjustments to the Tax Receivable Agreement liability, the Company recorded an estimated $8.5 million of other income in the Condensed Consolidated Statement of Operations for the three months ended March 31, 2019

As further described in Note 1 — Summary of Significant Accounting Policies — COVID-19, in response to the COVID-19 pandemic, many governments have enacted or are contemplating measures to provide aid and economic stimulus. These measures may include deferring the due dates of tax payments or other changes to their income and non-income-based tax laws. The Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”), which was enacted on March 27, 2020 in the U.S., includes measures to assist companies,

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including temporary changes to income and non-income-based tax laws. For the three months ended March 31, 2020, there were no material tax impacts to the Company’s condensed consolidated financial statements as it relates to COVID-19 measures. The Company will continue to monitor additional guidance issued by the U.S. Treasury Department, the Internal Revenue Service and others.

For the three months ended March 31, ~~2019 and 2018,~~2020, the Company’s effective income tax rate was ~~(588.4)~~(41.3)% ~~and 33.6%, respectively. The amount~~as a result of incurring income tax expense ~~and~~on a loss before income taxes. For the ~~effective~~three months ended March 31, 2020, income tax ~~rate increased in~~expense decreased $18.8 million to $4.1 million from $22.9 million for the three months ended March 31, 2019 primarily ~~due~~as a result of lower income incurred at CWGS, LLC for which the Company is subject to ~~the reasons stated above,~~U.S. federal and state taxes on its allocable share, partially offset by operating losses recorded by ~~CWI~~CW for which no tax benefit can be recognized and ~~an increased ownership percentage~~absent the transfer of ~~CWGS, LLC for~~certain assets between subsidiaries in the prior year which ~~the Company is subject to U.S., federal and state taxes on its allocable share~~had resulted in $16.3 million of net income ~~of CWGS, LLC.~~tax expense as described above. The Company's effective income tax rate for the three months ended March 31, ~~2019~~2020 was ~~higher than~~(41.3)%, which differed from the federal statutory rate of 21.0% primarily due to ~~the reasons discussed above, offset by~~ a portion of the Company’s earnings being attributable to non-controlling interests in limited liability companies which are not subject to corporate level ~~taxes.~~taxes and losses at certain subsidiaries for which an income tax benefit was not recorded, since there was a full valuation allowance against the related deferred tax assets of those subsidiaries. For the three months ended March 31, 2019, the Company’s effective income tax rate was (588.4)%, primarily as a result of the $16.3 million deferred income tax expense on the transfer of certain assets between subsidiaries described above and a portion of the Company’s earnings being attributable to non-controlling interests in limited liability companies which are not subject to corporate level taxes and losses at certain subsidiaries for which an income tax benefit was not recorded, since there was a full valuation allowance against the related deferred tax assets of those subsidiaries.

The Company evaluates its deferred tax assets on a quarterly basis to determine if they can be realized and establishes valuation allowances when it is more likely than not that all or a portion of the

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deferred tax assets may not be realized. At March 31, ~~2019~~2020 and December 31, ~~2018,~~2019, the Company determined that all of its deferred tax assets ~~except~~(except those ~~pertaining to CWI~~of CW and the ~~direct investment in CWGS, LLC,~~Outside Basis Deferred Tax Asset discussed below) are more likely than not to be realized. The Company maintains a full valuation allowance against the deferred tax assets of ~~CWI,~~CW, since it was determined that it is more likely than not, based on available objective evidence, that ~~CWI~~CW would have insufficient taxable income in the current or carryforward periods under the tax laws to realize the future tax benefits of its deferred tax assets. The Company ~~also~~ maintains a partial valuation allowance against the Outside Basis Deferred Tax Asset pertaining to the portion that is not amortizable for tax purposes, since the Company would likely only realize the non-amortizable portion of the ~~deferred tax asset pertaining to its direct~~Outside Basis Deferred Tax Asset if the investment in CWGS, ~~LLC.~~LLC was divested.

~~On October 6, 2016, the~~The Company ~~entered into~~is party to a tax receivable agreement (the “Tax Receivable Agreement”) that provides for the payment by the Company to the Continuing Equity Owners and Crestview Partners II GP, L.P. of 85% of the amount of tax benefits, if any, the Company actually realizes, or in some circumstances is deemed to realize, as a result of (i) increases in the tax basis from the purchase of common units from Crestview Partners II GP, L.P. in exchange for Class A common stock in connection with the consummation of the IPO and the related transactions and any future redemptions that are funded by the Company and any future redemptions or exchanges of common units by Continuing Equity Owners as described above and (ii) certain other tax benefits attributable to payments made under the Tax Receivable Agreement. The above payments are predicated on CWGS, LLC making an election under Section 754 of the Internal Revenue Code effective for each tax year in which a redemption or exchange (including a deemed exchange) of common units for cash or stock occur. These tax benefit payments are not conditioned upon one or more of the Continuing Equity Owners or Crestview Partners II GP, L.P. maintaining a continued ownership interest in CWGS, LLC. In general, the Continuing Equity Owners’ or Crestview Partners II GP, L.P.’s rights under the Tax Receivable Agreement are assignable, including to transferees of its common units in CWGS, LLC (other than the Company as transferee pursuant to a redemption or exchange of common units in CWGS, LLC). The Company expects to benefit from the remaining 15% of the tax benefits, if any, which may be realized. During the three months ended March 31, 2020 and 2019, 20,000 and ~~2018,~~ 5,725 ~~and 173,286~~ common units in CWGS, LLC, respectively, were exchanged for Class A common stock subject to the provisions of the Tax Receivable Agreement. The Company recognized a liability for the Tax Receivable Agreement payments due to those parties that redeemed common units, representing 85% of the aggregate tax benefits the Company expects to realize from the tax basis increases related to the exchange, after concluding it was probable that the Tax Receivable Agreement payments would be paid based on estimates of future taxable income. As of March 31, ~~2019~~2020 and December 31, ~~2018,~~2019, the amount of Tax Receivable Agreement payments due under the Tax Receivable Agreement was ~~$125.7~~$114.8 million ~~and $134.2 million, respectively,~~ of which ~~$9.4~~$6.6 million was included in the current portion of the Tax Receivable Agreement liability in the Condensed Consolidated Balance Sheets.

~~As a result~~23

Table of transferring certain assets relating to its Good Sam Club and co-branded credit card from GSS to CWI, as described above, the Company re-evaluated the impact on its Tax Receivable Agreement liability related to the reduction of future expected tax amortization. The reduction in future expected tax amortization reduced the Tax Receivable Agreement liability by $7.2 million during the three months ended March 31, 2019. Unrelated to the transfer described above, the Tax Receivable Agreement liability was reduced by an additional $1.1 million during the three months ended March 31, 2019 for changes in estimated state income tax rates applicable to CWH. As a result of these adjustments to the Tax Receivable Agreement liability, the Company recorded approximately $8.5 million of other income in the Condensed Consolidated Statement of Operations for the three months ended March 31, 2019.Contents

~~12.~~13. Related Party Transactions

Transactions with Directors, Equity Holders and Executive Officers

FreedomRoads leases various ~~retail~~RV and Outdoor Retail locations from managers and officers. During the three months ended March 31, ~~2019~~2020 and ~~2018,~~2019, the related party lease expense for these locations was $0.5 million and ~~$0.4~~$0.5 million, respectively.

In January 2012, FreedomRoads entered into a lease (the “Original Lease”) ~~with respect to~~for the ~~Company’s~~offices in Lincolnshire, Illinois, ~~offices,~~ which was amended inas of March 2013 ~~in connection with the Company’s leasing of additional premises within the same office building~~ (the ~~“Expansion Lease”~~“First Amendment”). The Original Lease is

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~~payable in 132 monthly payments of~~ base rent ~~equal~~of $29,000 per month was increased to ~~approximately $29,000, commencing April~~$31,500 per month in March 2013 by virtue of the First Amendment and is subject to annual increases. ~~The Expansion~~As of November 1, 2019, by way of the Second Amendment to the Office Lease, ~~is payable in 132~~(together with the Original Lease and the First Amendment, collectively, the “Office Lease”), the Company began leasing additional space for an additional monthly ~~payments of~~ base rent ~~equal to approximately $2,500, commencing May 2013, subject to annual increases. Marcus A. Lemonis, the~~of $5,200. The Company’s Chairman and Chief Executive Officer has personally guaranteed ~~both leases. During~~ the three months ended March 31, 2019 and 2018, the Company made payments of approximately $180,000 and $178,000, respectively, in connection with the Original Lease, which included approximately $78,000 and $79,000, respectively, for common area maintenance charges on the Original Lease, and the Company made payments of ~~approximately $9,000~~ ~~and $8,000, respectively, in connection with the Expansion~~Office Lease.

The Company paid Kaplan, Strangis and Kaplan, P.A., of which Andris A. Baltins is a member, $0.1 million and $0.1 million during the three months ended March 31, 2019 and 2018, respectively, for legal services.

Other Transactions

The Company does business with certain companies in which Mr. Lemonis has a direct or indirect material interest. The Company purchased fixtures for interior store sets at the Company’s retail locations from Precise ~~Graphix, LLC (“Precise Graphix”).~~Graphix. Mr. Lemonis has a ~~33%~~67% economic interest in Precise Graphix and the Company paid Precise Graphix ~~$0.2~~$0.1 million and ~~$1.6~~$0.2 million for the three months ended March 31, 2020 and 2019, ~~and 2018,~~ respectively. The Company purchased point of purchase and visual merchandise displays from JD Custom Design (“JD Custom”) for use in Camping World’s retail store operations. Mr. Lemonis is a holder of 52% of the combined voting power in JD Custom and the Company paid JD Custom $0 million and $0.1 million for the three months ended March 31, 2019 and 2018, respectively.

The Company does business with certain companies in which Stephen Adams, a member of the Company’s board of directors, has a direct or indirect material interest. The Company from time to time purchases advertising services from Adams Radio of Fort Wayne LLC (“Adams Radio”), in which Mr. Adams has an indirect 90% interest. The Company paid Adams Radio ~~$0.2 million~~$0 and ~~$0.1~~$0.2 million for the three months ended March 31, ~~2019~~2020 and ~~2018,~~2019, respectively.

~~13.~~

14. Stockholders’ Equity

CWH has authorized preferred stock and ~~three~~3 classes of common stock. The Class A common stock entitles the holders to receive dividends; distributions upon the liquidation, dissolution, or winding up of the Company; and have voting rights. The Class B common stock and Class C common stock entitles the holders to voting rights, which in certain cases are disproportionate to the voting rights of the Class A common stock; however, the holders of Class B common stock and Class C common stock are not entitled to receive dividends or distributions upon the liquidation, dissolution, or winding up of the Company.

CWH is the sole managing member of CWGS, LLC and, although CWH has a minority economic interest in CWGS, LLC, CWH has the sole voting power in, and controls the management of, CWGS, LLC. Accordingly, the Company consolidated the financial results of CWGS, LLC and reported a non-controlling interest in its consolidated financial statements.

In accordance with the amended and restated limited liability company agreement of CWGS, LLC (the “LLC Agreement””), the ~~holders of the~~Continuing Equity Owners with common units in CWGS, LLC may elect to exchange or redeem the common units for newly-issued shares of the Company’s Class A common stock or cash at the Company’s election, subject to certain restrictions. If the redeeming or exchanging party also holds Class B common stock, then simultaneously with the payment of cash or newly-issued shares of Class A common stock, as applicable, in connection with a redemption or exchange of common units, a number of shares of the Company’s Class B common stock will be cancelled for no consideration on a one-for-one basis with the number of common units so redeemed or exchanged. As required by the LLC Agreement, the Company must, at all times, maintain a one-to-one ratio between the number of outstanding shares of Class A common stock and the number of common units of CWGS, LLC owned by CWH (subject to certain exceptions for treasury shares and shares underlying certain convertible or exchangeable securities).

2624

~~14.~~15. Non-Controlling Interests

As described in Note 1314 — Stockholders’ Equity, CWH is the sole managing member of CWGS, LLC and, as a result, consolidates the financial results of CWGS, LLC. The Company reports a non-controlling interest representing the common units of CWGS, LLC held by Continuing Equity Owners. Changes in CWH’s ownership interest in CWGS, LLC while CWH retains its controlling interest in CWGS, LLC will be accounted for as equity transactions. As such, future redemptions or direct exchanges of common units of CWGS, LLC by the Continuing Equity Owners will result in a change in ownership and reduce or increase the amount recorded as non-controlling interest and increase or decrease additional paid-in ~~capital.~~capital when CWGS, LLC has positive or negative net assets, respectively. At March 31, 2020 and December 31, 2019, CWGS, LLC had negative net assets, which resulted in negative non-controlling interest amounts on the Condensed Consolidated Balance Sheets. At the end of each period, the Company will record a non-controlling interest adjustment to additional paid-in capital such that the non-controlling interest on the Condensed Consolidated Balance Sheet is equal to the non-controlling interest’s ownership share of the underlying CWGS, LLC net assets (see the Condensed Consolidated Statement of Stockholders’ Equity (Deficit)).

As of March 31, ~~2019~~2020 and December 31, ~~2018,~~2019, there were ~~88,868,204~~89,189,070 and ~~88,867,373~~89,158,273 common units of CWGS, LLC outstanding, respectively, of which CWH owned ~~37,198,920~~37,539,786 and ~~37,192,364~~37,488,989 common units of CWGS, LLC, respectively, representing ~~41.9%~~42.1% and 42.0% ownership interests in CWGS, LLC, respectively, and the Continuing Equity Owners owned ~~51,669,284~~51,649,284 and ~~51,675,009~~51,669,284 common units of CWGS, LLC, respectively, representing ~~58.1%~~57.9% and 58.0% ownership interests in CWGS, ~~LLC.~~LLC, respectively.

The following table summarizes the effects of changes in ownership in CWGS, LLC on the Company’s equity:

Three Months Ended

March 31,
($ in thousands)

2019

2018
Net income attributable to Camping World Holdings, Inc.

$
(19,395)

$
1,821
Transfers to non-controlling interests:

Decrease in additional paid-in capital as a result of the purchase of common units from CWGS, LLC with proceeds from the exercise of stock options

—

(77)
Increase in additional paid-in capital as a result of the redemption of common units of CWGS, LLC

12

1,848
Change from net income attributable to Camping World Holdings, Inc. and transfers to non-controlling interests

$
(19,383)

$
3,592


	Three Months Ended
	March 31,
($ in thousands)	2020		2019
Net loss attributable to Camping World Holdings, Inc.	$	(8,160)	$	(19,395)
Transfers to non-controlling interests:
Increase in additional paid-in capital as a result of the vesting of restricted stock units		82		—
Decrease in additional paid-in capital as a result of repurchases of Class A common stock for withholding taxes on vested RSUs		(212)		—
Increase in additional paid-in capital as a result of the redemption of common units of CWGS, LLC		4		12
Change from net loss attributable to Camping World Holdings, Inc. and transfers to non-controlling interests	$	(8,286)	$	(19,383)

~~15.~~16. Equity-based Compensation Plans

The following table summarizes the equity-based compensation that has been included in the following line items within the consolidated statements of operations during:


	Three Months Ended
	March 31,		March 31,
($ in thousands)	2020		2019
Equity-based compensation expense:
Costs applicable to revenue	$	156	$	207
Selling, general, and administrative		3,156		2,509
Total equity-based compensation expense	$	3,312	$	2,716

Three Months Ended

March 31,

March 31,
($ in thousands)

2019

2018
Equity-based compensation expense:

Costs applicable to revenue

$
207

$
175
Selling, general, and administrative

2,509

3,043
Total equity-based compensation expense

$
2,716

$
3,218

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The following table summarizes stock option activity for the three months ended March 31, ~~2019:~~2020:


	Stock Options



	~~Stock Options~~
	(in thousands)
Outstanding at December 31, ~~2018~~2019		~~885~~745
Forfeited		~~(55)~~(18)
Outstanding at March 31, ~~2019~~2020		~~830~~727
Options exercisable at March 31, ~~2019~~2020		~~402~~537

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The following table summarizes restricted stock unit activity for the three months ended March 31, ~~2019:~~2020:


	Restricted
	Stock Units

	~~Restricted~~
	~~Stock Units~~
	(in thousands)
Outstanding at December 31, ~~2018~~2019		~~1,426~~
~~Granted~~		631,806
Vested		~~(1)~~(47)
Forfeited		~~(60)~~(109)
Outstanding at March 31, ~~2019~~2020		~~1,428~~1,650

~~The weighted-average grant date fair value of restricted stock units granted during the three months ended March 31, 2019 was $14.87.~~

~~16.~~17. Earnings Per Share

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

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

Three Months Ended

March 31,
(In thousands except per share amounts)

2019

2018
Numerator:

Net (loss) income

$
(26,807)

$
13,548
Less: net (loss) income attributable to non-controlling interests

7,412

(11,727)
Net (loss) income attributable to Camping World Holdings, Inc. — basic

(19,395)

1,821
Add: reallocation of net income attributable to non-controlling interests from the assumed dilutive effect of stock options and RSUs

—

15
Net (loss) income attributable to Camping World Holdings, Inc. — diluted

$
(19,395)

$
1,836
Denominator:

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

37,195

36,816
Dilutive options to purchase Class A common stock

—

315
Dilutive restricted stock units

—

189
Weighted-average shares of Class A common stock outstanding — diluted

37,195

37,320

(Loss) earnings per share of Class A common stock — basic

$
(0.52)

$
0.05
(Loss) earnings per share of Class A common stock — diluted

$
(0.52)

$
0.05

Weighted-average anti-dilutive securities excluded from the computation of diluted earnings per share of Class A common stock:

Stock options to purchase Class A common stock

859

—
Restricted stock units

1,444

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

51,673

51,830


	Three Months Ended
	March 31,
(In thousands except per share amounts)	2020		2019
Numerator:
Net loss	$	(14,129)	$	(26,807)
Less: net loss attributable to non-controlling interests		5,969		7,412
Net loss attributable to Camping World Holdings, Inc. — basic and diluted	$	(8,160)	$	(19,395)
Denominator:
Weighted-average shares of Class A common stock outstanding — basic and diluted		37,534		37,195

Loss per share of Class A common stock — basic	$	(0.22)	$	(0.52)
Loss per share of Class A common stock — diluted	$	(0.22)	$	(0.52)

Weighted-average anti-dilutive securities excluded from the computation of diluted earnings per share of Class A common stock:
Stock options to purchase Class A common stock		738		859
Restricted stock units		1,732		1,444
Common units of CWGS, LLC that are convertible into Class A common stock		51,649		51,673

Shares of the Company’s Class B common stock and Class C common stock do not share in the earnings or losses of the Company and are therefore not participating securities. As such, separate presentation of basic and diluted earnings per share of Class B common stock or Class C common stock under the two-class method has not been presented.

~~17.~~18. Segments Information

~~Following the resignation of Roger Nuttall from his position as President of Camping World on December 21, 2018, the~~The Company took steps during the quarter ended March 31, 2019 to realign the reporting structure of the Company including management and internal reporting. As a result of these changes, the Company has determined that its reportable segments have changed. The Company’s new reportable segments have been identified based on various commonalities amongst the Company’s individual product lines, which is consistent with the Company’s operating structure and associated management structure and management evaluates the performance of and allocates resources to these segments based on segment revenues and segment profit. The segment reporting for prior comparative periods have been recasted to conform to the current period presentation.

~~As previously discussed, the Company previously had three reportable segments: (i) Consumer Services and Plans; (ii) Dealership and, (iii) Retail. Following the realignment, the Company now~~ has the following ~~two~~2 reportable segments: (i) Good Sam Services and Plans, and (ii) RV and Outdoor Retail. In conjunction with the first quarter 2019 realignment of our reporting structure, the Company combined our prior Dealership and Retail segments into the RV and Outdoor Retail segment. The Company has also reclassified a portion of the former Consumer Services and Plans segment, the Good Sam Club and co-branded credit card operations, to the RV and Outdoor Retail segment, which reflects the synergies of those two programs with the RV and Outdoor Retail locations. Within the Good Sam Services and Plans segment, the Company primarily derives revenue from the sale of the following offerings: emergency roadside ~~assistance;~~assistance plans; property and casualty insurance programs; travel assist programs; extended vehicle service contracts; vehicle financing and ~~refinancing;~~refinancing assistance; consumer shows and events; and consumer publications and directories. Within the RV and Outdoor Retail segment, the Company primarily derives revenue from the sale of new and used RVs; the sale of RV products and services, including the sale of parts, accessories, supplies and services for RVs, and equipment, gear and supplies for camping, hunting, fishing, skiing, snowboarding, bicycling, skateboarding, marine and watersport and other outdoor activities; commissions on the finance and insurance contracts related to the sale of RVs; the sale of RV service and maintenance work; the sale of RV parts, accessories, and supplies; the sale of outdoor products, equipment, gear and supplies and the sale of Good Sam Club memberships and co-branded credit cards.

The reportable segments identified above are the business activities of the Company for which discrete financial information is available and for which operating results are regularly reviewed by the Company’s chief operating decision maker to allocate resources and assess performance. The Company’s chief operating decision maker is a group comprised of the Chief Executive Officer and the President. Segment revenue includes intersegment revenue. Segment income includes intersegment allocations for subsidiaries and shared resources.

Reportable segment ~~revenue,~~revenue; segment ~~income,~~income; floor plan interest ~~expense,~~expense; depreciation and ~~amortization,~~amortization; other interest expense, net; and total assets ~~and capital expenditures~~ are as follows:

Three Months Ended March 31, 2019

Good Sam

RV and

Services

Outdoor

Intersegment

($ in thousands)

and Plans(1)

Retail(1)

Eliminations

Total
Revenue:

Good Sam services and plans

$
48,298

$
—

$
(1,332)

$
46,966
New vehicles

—

530,749

(1,172)

529,577
Used vehicles

—

180,605

(597)

180,008
Products, service and other

—

210,198

(5,322)

204,876
Finance and insurance, net

—

94,280

(2,389)

91,891
Good Sam Club

—

11,451

—

11,451
Total consolidated revenue

$
48,298

$
1,027,283

$
(10,812)

$
1,064,769


	Three Months Ended March 31, 2020
	Good Sam		RV and
	Services		Outdoor		Intersegment
($ in thousands)	and Plans		Retail		Eliminations		Total
Revenue:
Good Sam services and plans	$	48,692	$	—	$	(1,484)	$	47,208
New vehicles		—		498,396		(1,079)		497,317
Used vehicles		—		207,233		(568)		206,665
Products, service and other		—		173,012		(389)		172,623
Finance and insurance, net		—		94,448		(1,992)		92,456
Good Sam Club		—		11,004		—		11,004
Total consolidated revenue	$	48,692	$	984,093	$	(5,512)	$	1,027,273

	Three Months Ended March 31, 2019
	Good Sam		RV and
	Services		Outdoor		Intersegment
($ in thousands)	and Plans		Retail		Eliminations		Total
Revenue:
Good Sam services and plans	$	48,298	$	—	$	(1,332)	$	46,966
New vehicles		—		530,749		(1,172)		529,577
Used vehicles		—		180,605		(597)		180,008
Products, service and other		—		210,198		(5,322)		204,876
Finance and insurance, net		—		94,280		(2,389)		91,891
Good Sam Club		—		11,451		—		11,451
Total consolidated revenue	$	48,298	$	1,027,283	$	(10,812)	$	1,064,769

Three Months Ended March 31, 2018

Good Sam

RV and

Services

Outdoor

Intersegment

($ in thousands)

and Plans(1)(2)

Retail(1)(2)

Eliminations

Total
Revenue:

Good Sam services and plans

$
46,178

$
—

$
(1,353)

$
44,825
New vehicles

—

580,674

(1,164)

579,510
Used vehicles

—

172,583

(492)

172,091
Products, service and other

—

168,968

(4,816)

164,152
Finance and insurance, net

—

91,619

(2,519)

89,100
Good Sam Club

—

8,983

—

8,983
Total consolidated revenue

$
46,178

$
1,022,827

$
(10,344)

$
1,058,661


	Three Months Ended
	March 31,		March 31,
($ in thousands)	2020		2019
Segment income (loss):⁽¹⁾
Good Sam Services and Plans	$	21,340	$	22,414
RV and Outdoor Retail		128		(375)
Total segment income		21,468		22,039
Corporate & other		(2,729)		(3,173)
Depreciation and amortization		(14,078)		(13,594)
Other interest expense, net		(14,658)		(17,643)
Tax Receivable Agreement liability adjustment		—		8,477
Segment loss before income taxes	$	(9,997)	$	(3,894)

⁽¹⁾

~~Segment revenue includes intersegment revenue.~~

⁽²⁾

The Company has adjusted certain prior period amounts for the immaterial correction of errors. See Note 1 – Summary of Significant Accounting Policies – Revisions for Correction of Immaterial Errors.

Three Months Ended March 31,
($ in thousands)

2019

2018
Segment income:(1)

Good Sam Services and Plans(2)

$
22,414

$
21,717
RV and Outdoor Retail(2)

(375)

24,519
Total segment income

22,039

46,236
Corporate & other

(3,173)

(1,484)
Depreciation and amortization

(13,594)

(9,400)
Other interest expense, net

(17,643)

(12,839)
Tax Receivable Agreement liability adjustment

8,477

—
Loss and expense on debt restructure

—

(2,100)
Income before income taxes

$
(3,894)

$
20,413

⁽¹⁾

Segment income (loss) is defined as income (loss) from operations before depreciation and amortization plus floor plan interest expense.

⁽²⁾


	Three Months Ended
	March 31,		March 31,
($ in thousands)	2020		2019
Depreciation and amortization:
Good Sam Services and Plans	$	756	$	852
RV and Outdoor Retail		13,322		12,742
Total depreciation and amortization	$	14,078	$	13,594


	Three Months Ended
	March 31,		March 31,
($ in thousands)	2020		2019
Other interest expense, net:
Good Sam Services and Plans	$	—	$	—
RV and Outdoor Retail		1,892		2,148
Subtotal		1,892		2,148
Corporate & other		12,766		15,495
Total other interest expense, net		14,658		17,643

Three Months Ended March 31,
($ in thousands)

2019

2018
Depreciation and amortization:

Good Sam Services and Plans

$
852

$
731
RV and Outdoor Retail

12,742

8,669
Total depreciation and amortization

$
13,594

$
9,400

Three Months Ended March 31,
($ in thousands)

2019

2018
Other interest expense, net:

Good Sam Services and Plans

$
—

$
(1)
RV and Outdoor Retail

2,148

1,819
Subtotal

2,148

1,818
Corporate & other

15,495

11,021
Total interest expense

$
17,643

$
12,839


	March 31,		December 31,
($ in thousands)	2020		2019
Assets:
Good Sam Services and Plans	$	102,087	$	138,360
RV and Outdoor Retail		3,113,225		3,047,652
Subtotal		3,215,312		3,186,012
Corporate & other		187,249		190,228
Total assets	$	3,402,561	$	3,376,240

March 31,

December 31,
($ in thousands)

2019

2018
Assets:

Good Sam Services and Plans

$
93,215

$
174,623
RV and Outdoor Retail

3,407,429

2,438,908
Subtotal

3,500,644

2,613,531
Corporate & other

161,779

193,156
Total assets

$
3,662,423

$
2,806,687

Item 2: Management’s Discussion and Analysis of Financial Condition and Results of Operations

MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of our financial condition and results of operations should be read together with our financial statements and related notes included in Part I, Item 1 of this Form 10-Q, as well as our Annual Report and reflects the effects of the immaterial correction of errors discussed in Note 1 – Summary of Significant Accounting Policies – Revisions for Correction of Immaterial Errors in of this Form 10-Q.Report. This discussion contains forward-looking statements based upon current plans, expectations and beliefs involving risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of various important factors, including those set forth under “Risk Factors” included in Part I, Item 1A of our Annual Report, Part II, Item 1A of this Form 10-Q, the “Cautionary Note Regarding Forward-Looking Statements” in this Form 10-Q and in other parts of this Form 10-Q. Except to the extent that differences among reportable segments are material to an understanding of our business taken as a whole, we present the discussion in Management’s Discussion and Analysis of Financial Condition and Results of Operations on a consolidated basis.

For purposes of this Form 10-Q, we define an "Active Customer" as a customer who has transacted with us in any of the eight most recently completed fiscal quarters prior to the date of measurement. Unless otherwise indicated, the date of measurement is March 31, ~~2019,~~2020, our most recently completed fiscal quarter. Additionally, references herein to the approximately 1011 million U.S. households that own a recreational vehicle ("RV") are based on data from the RV Industry Association.

Overview

Camping World Holdings, Inc. (together with its subsidiaries) is America’s largest retailer of recreational RVs and related products and services. Our vision is to build a long-term legacy business that makes RVing fun and easy, and our Camping World and Good Sam brands have been serving RV consumers since 1966. We ~~are~~strive to build long-term value for our customers, employees, and shareholders by combining a ~~leading outdoor~~unique and ~~camping retailer, offering an extensive~~comprehensive assortment of ~~recreational vehicles for sale,~~ RV ~~and camping gear, RV maintenance and repair, other outdoor and active sports~~ products and ~~the industry’s broadest and deepest range of~~ services ~~protection plans, products and resources.~~

~~To best serve the estimated 10 million U.S. households that own an RV and our base of 5.1 million Active Customers, we offer~~with a ~~comprehensive portfolio of services, protection plans, products and resources for RV and outdoor enthusiasts through our~~ national network of RV dealerships, service centers and customer support centers along with the industry’s most extensive online presence and a highly-trained and knowledgeable team of associates serving our customers, the RV lifestyle, and the communities in which we operate. We also believe that our Good Sam organization and family of programs and services uniquely enables us to connect with our customers as stewards of the RV lifestyle. On March 31, 2020, we operated a total of 168 retail locations, ~~and~~with 167 of these selling and/or servicing RVs. See Note 1 – Summary of Significant Accounting Policies to our ~~direct marketing business. The table below summarizes our store locations as of March 31, 2019 and 2018:~~

March 31,

2019

2018
Co-habited RV and Outdoor Retail locations

131

117
Stand-alone RV locations

16

9
Stand-alone Outdoor Retail locations

79

57
Total locations

226

183

~~Segments~~

~~As discussed in Note 17 – Segments Information to our~~unaudited condensed consolidated financial statements included in Part I, Item 1 of this Form ~~10-Q, we have determined that our reportable segments have changed during~~10-Q.

After several years of strong growth, the overall RV industry experienced decelerating demand for new vehicles in 2018 and 2019. Along with the decelerating demand trends, wholesale shipments of new RV vehicles declined 16.0% in 2019 according to the RV Industry Association’s survey of manufacturers. In late 2019, the demand for new RVs across the overall RV industry began increasing again, and through the three months ended March 31, ~~2019.~~2020, wholesale shipments of new RV vehicles increased 0.4% over the first three months of 2019, according to the most recent survey of manufacturers. In an effort to sell through existing RV units and lower new RV inventory levels, we believe many dealers have lowered the pricing of new RV units to levels at or below cost in some instances. The ~~segment reporting for prior periods~~result has been ~~reclassified~~increased competition across the industry from lower RV pricing. In an effort to ~~conform~~remain competitive and maintain our market share, we have pursued pricing, marketing and other programs that have adversely impacted our gross margin, selling, general and administrative expenses and operating margin. We expect these trends to continue through at least the ~~current period presentation.~~end of the calendar year ending December 31, 2020 and may be exacerbated as a result of the COVID-19 pandemic described below.

~~We identify our reporting segments based on the organizational units used by management to monitor performance and make operating decisions~~ Segments

The Company ~~previously had three reportable segments: (i) Consumer Services and Plans; (ii) Dealership, and (iii) Retail. Following the realignment, the Company now~~ has the following two reportable segments: (i) Good Sam Services and Plans, and (ii) RV and Outdoor Retail. ~~In conjunction with the first quarter 2019 realignment of our reporting structure, the Company combined our prior Dealership and Retail segments into the RV and Outdoor Retail segment. The Company~~

has also reclassified a portion of the former Consumer Services and Plans segment, the Good Sam Club and co-branded credit card operations, to the RV and Outdoor Retail segment, which reflects the synergies of those two programs with the RV and Outdoor Retail locations. Within the Good Sam Services and Plans segment, the Company primarily derives revenue from the sale of the following offerings: emergency roadside assistance; property and casualty insurance programs; travel assist programs; extended vehicle service contracts; vehicle financing and refinancing; shows and events; and publications and directories. Within the RV and Outdoor Retail segment, the Company primarily derives revenue from the sale of new and used RVs; sale of RV products and services, including the sale of parts, accessories, supplies and service for RVs, and equipment, gear and supplies for camping, hunting, fishing, skiing, snowboarding, bicycling, skateboarding, marine and watersport and other outdoor activities; commissions on the finance and insurance contracts related to the sale of RVs; and Good Sam Club memberships and co-branded credit cards. See Note 1718 — Segment Information to our unaudited condensed consolidated financial statements included in Part I, Item 1 of this Form 10-Q.

Table of Contents

COVID-19

As discussed in Note 1 –— Summary of Significant Accounting Policies ~~– Recently Adopted Accounting Pronouncements and Note 6 – Leases~~— COVID-19 to our unaudited condensed consolidated financial statements included in Part I, Item 1 of this Form 10-Q, COVID-19 has impacted our business, in particular our revenue, due to decreased retail and online traffic. We have implemented preparedness plans to keep our employees and customers healthy and safe, which include social distancing, providing employees with face coverings and/or other protective clothing as required, implementing additional cleaning and sanitization routines, and work-from-home orders for a significant portion of our workforce. The majority of our RV and Outdoor Retail locations have continued to operate as essential businesses and consequently have remained open to serve our customers through the pandemic, and we ~~have adopted ASC 842 as of January 1, 2019.~~continue to operate our e-commerce business. As of March 31, ~~2019,~~2020, we ~~had $820.0 million, $54.9 million,~~have temporarily closed four of our specialty retail locations as a result of COVID-19. Subsequent to March 31, 2020, we temporarily closed three additional dealerships as a result of COVID-19. We have temporarily reduced salaries and ~~$822.5 million~~hours throughout the Company, including for our executive officers and implemented headcount and other cost reductions since the middle of ~~operating lease assets, current portion~~March 2020 and early April 2020 in an attempt to better align expenses with reduced sales resulting from the impact of ~~operating lease liabilities,~~COVID-19 on our business.

Additionally, we believe that when stay-at-home restrictions around the U.S. begin to ease, the demand for safe travel away from the home will increase. We believe that the RV industry is poised to recover more quickly than certain other sectors of the economy and ~~noncurrent portion~~may benefit from an anticipated slow recovery of ~~operating lease liabilities, respectively,~~the cruise line and air travel industries. We are implementing the appropriate marketing and operational plans to be best prepared to optimize our leadership position through the recovery, regardless of the ultimate timing and slope of the recovery curve.

Although we have recently incurred significant disruptions in certain of our markets due to the outbreak, and expect the impact of the pandemic and the related restrictions on our operations to adversely affect traffic and sales for at least the remainder of 2020, we are unable to accurately quantify the impact that COVID-19 will have on business, results of operations and liquidity due to numerous uncertainties, including the severity of the disease, the duration of the outbreak, the economic impact of the pandemic, actions that may be taken by governmental authorities and other as yet unanticipated consequences. In addition, there could be weakening demand for items that are not basic goods, and our supply chain could be further disrupted as a result of the ~~adoption~~outbreak, such as due to Thor Industries, Inc.’s announced temporary closure of ~~ASC 842.~~its North American production facilities from late March to early May 2020, either of which could have a materially adverse impact on our operating results. Please refer to “Risk Factors” in Item 1A of Part II of this Form 10-Q for updated risk factors related to the COVID-19 outbreak.

Strategic Shift

In 2019, we made a strategic decision to refocus our business around our core RV competencies. See Note 4 — Restructuring and Long-lived Asset Impairment to our unaudited condensed consolidated financial statements included in Part I, Item 1 of this Form 10-Q.

Results of Operations

Three Months Ended March 31, ~~2019~~2020 Compared to Three Months Ended March 31, ~~2018~~2019

The following table sets forth information comparing the components of net income for the three months ended March 31, ~~2019~~2020 and ~~2018:~~2019:


	Three Months Ended
	March 31, 2020			March 31, 2019
			Percent of			Percent of	Favorable/ (Unfavorable)
($ in thousands)	Amount		Revenue	Amount		Revenue	$		%
Revenue:
Good Sam Services and Plans	$	47,208	4.6%	$	46,966	4.4%	$	242	0.5%
RV and Outdoor Retail:
New vehicles		497,317	48.4%		529,577	49.7%		(32,260)	(6.1%)
Used vehicles		206,665	20.1%		180,008	16.9%		26,657	14.8%
Products, service and other		172,623	16.8%		204,876	19.2%		(32,253)	(15.7%)
Finance and insurance, net		92,456	9.0%		91,891	8.6%		565	0.6%
Good Sam Club		11,004	1.1%		11,451	1.1%		(447)	(3.9%)
Subtotal		980,065	95.4%		1,017,803	95.6%		(37,738)	(3.7%)
Total revenue		1,027,273	100.0%		1,064,769	100.0%		(37,496)	(3.5%)

Gross profit (exclusive of depreciation and amortization shown separately below):
Good Sam Services and Plans		25,349	2.5%		26,235	2.5%		(886)	(3.4%)
RV and Outdoor Retail:
New vehicles		70,875	6.9%		66,533	6.2%		4,342	6.5%
Used vehicles		42,872	4.2%		37,162	3.5%		5,710	15.4%
Products, service and other		62,354	6.1%		68,772	6.5%		(6,418)	(9.3%)
Finance and insurance, net		92,456	9.0%		91,891	8.6%		565	0.6%
Good Sam Club		8,757	0.9%		7,734	0.7%		1,023	13.2%
Subtotal		277,314	27.0%		272,092	25.6%		5,222	1.9%
Total gross profit		302,663	29.5%		298,327	28.0%		4,336	1.5%
Operating expenses:
Selling, general and administrative expenses		267,656	26.1%		268,065	25.2%		409	0.2%
Depreciation and amortization		14,078	1.4%		13,594	1.3%		(484)	(3.6%)
Long-lived asset impairment		6,569	0.6%		—	—		(6,569)	(100.0%)
Lease termination		584	0.1%		—	—		(584)	(100.0%)
Loss on disposal of assets		511	0.0%		(214)	(0.0%)		(725)	338.8%
Total operating expenses		289,398	28.2%		281,445	26.4%		(7,953)	(2.8%)
Income from operations		13,265	1.3%		16,882	1.6%		(3,617)	(21.4%)
Other income (expense):
Floor plan interest expense		(8,604)	(0.8%)		(11,610)	(1.1%)		3,006	25.9%
Other interest expense, net		(14,658)	(1.4%)		(17,643)	(1.7%)		2,985	16.9%
Tax Receivable Agreement liability adjustment		—	—		8,477	0.8%		(8,477)	(100.0%)
Total other income (expense)		(23,262)	(2.3%)		(20,776)	(2.0%)		(2,486)	(12.0%)
Loss before income taxes		(9,997)	(1.0%)		(3,894)	(0.4%)		(6,103)	(156.7%)
Income tax expense		(4,132)	(0.4%)		(22,913)	(2.2%)		18,781	82.0%
Net loss		(14,129)	(1.4%)		(26,807)	(2.5%)		12,678	47.3%
Less: net loss attributable to non-controlling interests		5,969	0.6%		7,412	0.7%		(1,443)	(19.5%)
Net loss attributable to Camping World Holdings, Inc.	$	(8,160)	(0.8%)	$	(19,395)	(1.8%)	$	11,235	57.9%

Three months ended

March 31, 2019

March 31, 2018

Percent of

Percent of

Favorable/ (Unfavorable)

($ in thousands)

Amount

Revenue

Amount

Revenue

$

%

Revenue:

Good Sam Services and Plans

$
46,966

4.4%

$
44,825

4.2%

$
2,141

4.8%

RV and Outdoor Retail:

New vehicles

529,577

49.7%

579,510

54.7%

(49,933)

-8.6%

Used vehicles

180,008

16.9%

172,091

16.3%

7,917

4.6%

Products, service and other

204,876

19.2%

164,152

15.5%

40,724

24.8%

Finance and insurance, net

91,891

8.6%

89,100

8.4%

2,791

3.1%

Good Sam Club

11,451

1.1%

8,983

0.8%

2,468

27.5%

Subtotal

1,017,803

95.6%

1,013,836

95.8%

3,967

0.4%

Total revenue

1,064,769

100.0%

1,058,661

100.0%

6,108

0.6%

Gross profit (exclusive of depreciation and amortization shown separately below):

Good Sam Services and Plans

26,235

2.5%

24,365

2.3%

1,870

7.7%

RV and Outdoor Retail:

New vehicles

66,533

6.2%

75,626

7.1%

(9,093)

-12.0%

Used vehicles

37,162

3.5%

37,798

3.6%

(636)

-1.7%

Products, service and other

68,772

6.5%

68,350

6.5%

422

0.6%

Finance and insurance, net

91,891

8.6%

89,100

8.4%

2,791

3.1%

Good Sam Club

7,734

0.7%

6,654

0.6%

1,080

16.2%

Subtotal

272,092

25.6%

277,528

26.2%

(5,436)

-2.0%

Total gross profit

298,327

28.0%

301,893

28.5%

(3,566)

-1.2%

Operating expenses:

Selling, general and administrative expenses

268,065

25.2%

246,313

23.3%

(21,752)

-8.8%

Debt restructure expense

—

0.0%

424

0.0%

424

100.0%

Depreciation and amortization

13,594

1.3%

9,400

0.9%

(4,194)

-44.6%

(Gain) loss on asset sales

(214)

0.0%

85

0.0%

299

-351.8%

Income from operations

16,882

1.6%

45,671

4.3%

(28,789)

-63.0%

Other income (expense):

Floor plan interest expense

(11,610)

-1.1%

(10,743)

-1.0%

(867)

-8.1%

Other interest expense, net

(17,643)

-1.7%

(12,839)

-1.2%

(4,804)

-37.4%

Loss on debt restructure

—

0.0%

(1,676)

-0.2%

1,676

100.0%

Tax Receivable Agreement liability adjustment

8,477

0.8%

—

0.0%

8,477

100.0%

Total other income (expense)

(20,776)

-2.0%

(25,258)

-2.4%

4,482

17.7%

(Loss) income before income taxes

(3,894)

-0.4%

20,413

1.9%

(24,307)

-119.1%

Income tax expense

(22,913)

-2.2%

(6,865)

-0.6%

(16,048)

-233.8%

Net (loss) income

(26,807)

-2.5%

13,548

1.3%

(40,355)

-297.9%

Less: net income attributable to non-controlling interests

7,412

0.7%

(11,727)

-1.1%

19,139

163.2%

Net income attributable to Camping World Holdings, Inc.

$
(19,395)

-1.8%

$
1,821

0.2%

$
(21,216)

-1165.1%

Table of Contents

Supplemental Data


	Three Months Ended March 31,				Increase			Percent
	2020		2019		(decrease)			Change
Unit sales
New vehicles		14,208		15,016		(808)			(5.4%)
Used vehicles		8,682		8,177		505			6.2%
Total		22,890		23,193	$	(303)			(1.3%)

Average selling price
New vehicles	$	35,003	$	35,268	$	(265)		$	(0.8%)
Used vehicles		23,804		22,014		1,790			8.1%

Same store unit sales
New vehicles		12,955		14,490		(1,535)			(10.6%)
Used vehicles		8,010		8,005		5			0.1%
Total		20,965		22,495		(1,530)			(6.8%)

Same store revenue ($ in 000's)
New vehicles	$	456,327	$	515,097	$	(58,770)		$	(11.4%)
Used vehicles		194,606		177,283		17,323			9.8%
Products, service and other		118,792		118,581		211			0.2%
Finance and insurance		85,399		89,742		(4,343)			(4.8%)
Total		855,124		900,703		(45,579)			(5.1%)

Average gross profit per unit
New vehicles	$	4,988	$	4,431	$	558			12.6%
Used vehicles		4,938		4,545		393			8.7%
Finance and insurance, net per vehicle unit		4,039		3,962		77			1.9%
Total vehicle front-end yield(1)		9,008		8,433		575			6.8%

Gross margin
Good Sam Services and Plans		53.7%		55.9%		(216)	bps

New vehicles		14.3%		12.6%		169	bps
Used vehicles		20.7%		20.6%		10	bps
Products, service and other		36.1%		33.6%		255	bps
Finance and insurance, net		100.0%		100.0%		unch.	bps
Good Sam Club		79.6%		67.5%		1,204	bps
Subtotal RV and Outdoor Retail		28.3%		26.7%		156	bps
Total gross margin		29.5%		28.0%		144	bps

Inventories ($ in 000's)
New vehicles	$	1,053,802	$	1,062,448	$	(8,646)			(0.8%)
Used vehicles		151,058		120,418		30,640			25.4%
Products, parts, accessories and misc.		234,555		439,697		(205,142)			(46.7%)
Total RV and Outdoor inventories	$	1,439,415	$	1,622,563	$	(183,148)			(11.3%)

Vehicle inventory per location ($ in 000's)
New vehicle inventory per dealer location	$	6,712	$	7,228	$	(515)		$	(7.1%)
Used vehicle inventory per dealer location		962		819		143			17.5%

Vehicle inventory turnover(2)
New vehicle inventory turnover		2.1		2.2		(0.1)			(3.4%)
Used vehicle inventory turnover		4.6		4.9		(0.2)			(5.0%)

Retail locations
RV dealerships		157		147		10			6.8%
RV service & retail centers		10		12		(2)			(16.7%)
Subtotal		167		159		8			5.0%
Other retail stores		1		67		(66)			(98.5%)
Total		168		226		(58)			(25.7%)

Other data
Active Customers(3)		4,921,246		5,123,032		(201,786)			(3.9%)
Good Sam Club members		2,094,134		2,149,627		(55,493)			(2.6%)
Finance and insurance gross profit as a % of total vehicle revenue		13.1%		12.9%		18	bps		n/a
Same store locations		146		n/a		n/a			n/a

~~Total Revenue~~⁽¹⁾ Front end yield is calculated as gross profit from new vehicles, used vehicles and finance and insurance (net), divided by combined new and used retail unit revenue.

⁽²⁾ Inventory turnover calculated as vehicle costs applicable to revenue divided by the average of beginning and ending vehicle inventory.

⁽³⁾ An Active Customer is a customer who has transacted with us in any of the eight most recently completed fiscal quarters prior to the date of measurement.

Table of Contents

Total revenue ~~increased 0.6%, or $6.1 million, to $1.1~~was $1.0 billion infor the three months ended March 31, ~~2019~~2020, a decrease of $37.5 million, or 3.5%, from $1.1 billion infor the three months ended March 31, ~~2018.~~2019. The ~~increase~~decrease in total revenue was driven by a ~~24.8% increase~~$37.7 million, or 3.7%, decrease in ~~products, service~~RV and ~~other~~Outdoor Retail revenue, ~~to $204.9~~partially offset by a $0.2 million, ~~a 4.6% increase in used vehicles revenue to $180.0 million, a 3.1% increase in finance and insurance revenue to $91.9 million, a 27.5% increase in Good Sam Club revenue to $11.5 million, and a 4.8%~~or 0.5%, increase in Good Sam Services and Plans ~~revenue to $47.0 million, partially offset by an 8.6% decrease in new vehicles revenue to $529.6 million. Aggregate same store sales decreased 11.0% to $847.9~~revenue.

Total gross profit was $302.7 million for the three months ended March 31, ~~2019 as compared to~~2020, an increase of $4.3 million, or 1.5%, from $298.3 million for the three months ended March 31, ~~2018. Aggregate same store sales measures the performance of~~2019. The increase in total gross profit was driven by a $5.2 million, or 1.9%, increase in RV and Outdoor Retail ~~locations during the current reporting period against the performance of the same locations~~gross profit, partially offset by a $0.9 million, or 3.4%, decrease in the corresponding period of the previous year. Same store sales calculations for a given period include only those stores that were open both at the end of the corresponding period and at the beginning of the preceding fiscal year.

~~Table of Contents~~

Good Sam Services and Plans gross profit.

Income from operations was $13.3 million for the three months ended March 31, 2020, a decrease of $3.6 million, or 21.4%, from $16.9 million for the three months ended March 31, 2019. The decrease in income from operations was primarily driven by a $6.6 million increase in long-lived asset impairment, a $0.7 million increase in loss on disposal of assets, a $0.6 million increase in lease termination expense, and a $0.5 million increase in depreciation and amortization, partially offset by a $4.3 million increase in gross profit, and a $0.4 million decrease in selling, general and administrative expenses.

Total other expenses were $23.3 million for the three months ended March 31, 2020, an increase of $2.5 million, or 12.0%, from $20.8 million for the three months ended March 31, 2019. The increase in other expenses was driven by an $8.5 million favorable adjustment in Tax Receivable Agreement Liability in 2019 which did not reoccur in 2020, partially offset by a $3.0 million decrease in floor plan interest expense and a $3.0 million decrease in other interest expense.

As a result of the above factors, loss before income taxes was $10.0 million for the three months ended March 31, 2020 compared to loss before income taxes of $3.9 million for the three months ended March 31, 2019. Income tax expense was $4.1 million for the three months ended March 31, 2020, a decrease of $18.8 million from $22.9 million for the three months ended March 31, 2019. As a result, net loss was $14.1 million for the three months ended March 31, 2020 compared to net loss of $26.8 million for the three months ended March 31, 2019.

Good Sam Services and Plans

Good Sam Services and Plans revenue increased ~~4.8%~~0.5%, or ~~$2.1~~$0.2 million, to $47.2 million in the three months ended March 31, 2020, from $47.0 million in the three months ended March 31, ~~2019, from $44.8 million in the three months ended March 31, 2018.~~2019. The increase was primarily attributable to a ~~$1.7~~$0.5 million increase in our roadside assistance programs primarily resulting from ~~price increases, $0.3~~upsells to higher-priced product offerings, a $0.6 million ~~from additional policies~~increase in ~~force for~~ our vehicle insurance products, and a $0.3 million increase in our extended vehicle warranty programs, partially offset by a $1.1 million decrease in consumer shows revenue, and a $0.1 million ~~of various~~decrease in other ~~increases.~~programs.

Good Sam Services and Plans gross profit ~~increased 7.7%~~decreased 3.4%, or ~~$1.9~~$0.9 million, to $25.3 million in the three months ended March 31, 2020, from $26.2 million in the three months ended March 31, 2019 from $24.4 million in the three months ended March 31, 2018 and gross margin increased to 55.9% from 54.4% in the same respective periods. The increased gross profit was primarily attributable to $1.9 million from price increases and lower claims costs in our roadside assistance programs.

~~New Vehicles~~

Three months ended

March 31, 2019

March 31, 2018

Favorable/

($ in thousands,

Percent of

Percent of

(Unfavorable)

except per vehicle data)

Amount

Revenue

Amount

Revenue

$

%

Revenue

$
529,577

100.0%

$
579,510

100.0%

$
(49,933)

-8.6%

Gross profit

66,533

12.6%

75,626

13.0%

(9,093)

-12.0%

Vehicle units sold

15,016

16,296

(1,280)

-7.9%

Average selling price per vehicle sold

$
35,268

$
35,561

$
(294)

-0.8%

Average gross profit per vehicle sold

$
4,431

$
4,641

$
(210)

-4.5%

Same store sales data:

Same store revenue

$
481,755

$
570,790

$
(89,035)

-15.6%

Same store vehicle units sold

13,497

15,994

(2,497)

-15.6%

Same store average selling price per vehicle

$
35,693

$
35,688

$
6

0.0%

New vehicle revenue decreased 8.6%, or $49.9 million, to $529.6 million in the three months ended March 31, 2019 from $579.5 million in the three months ended March 31, 2018. The decrease was primarily due to a 7.9% reduction in units sold resulting from reduced demand across nearly all product types. On a same store basis, new vehicle revenue decreased 15.6% to $481.8 million, driven by a 15.6% decrease in units sold to 13,497 units in the three months ended March 31, 2018.

~~New vehicle gross profit decreased 12.0%, or $9.1 million, to $66.5 million in the three months ended March 31, 2019 from $75.6 million in the three months ended March 31, 2018~~ and gross margin decreased to ~~12.6%~~53.7% from ~~13.0%~~55.9% in the same respective periods. The decrease in gross profit was primarily attributable to $0.9 million of increased accrual for program costs, a $0.5 million reduction from the consumer shows, and a $0.4 million reduction from the annual directory publication, partially offset by a $0.5 million increase from our vehicle insurance programs, and a $0.4 million increase from our roadside assistance programs.

RV and Outdoor Retail

New Vehicles

New vehicle revenue decreased 6.1%, or $32.3 million, to $497.3 million in the three months ended March 31, 2020 from $529.6 million in the three months ended March 31, 2019. The decrease was primarily due to ~~reduced unit sales~~a 5.4% reduction in vehicles sold and 0.8% reduction in average price per vehicle sold. On a same store basis, new vehicle revenue decreased 11.4% to $456.3 million in the three months ended March 31, 2020 from $515.1 million in the three months ended March 31, 2019. The decrease was primarily driven by a 10.6%

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decrease in same store vehicles sold to 12,955 vehicles and a ~~4.5%~~0.8% decrease in average selling price per vehicle sold to $35,003.

New vehicle gross profit increased 6.5%, or $4.3 million, to $70.9 million in the three months ended March 31, 2020 from $66.5 million in the three months ended March 31, 2019. The increase was primarily due to a 12.6% increase in average gross profit per ~~unit~~vehicle sold, ~~resulting~~partially offset by a 5.4% decrease in vehicles sold. Gross margin increased to 14.3% in the three months ended March 31, 2020 from 12.6% in the three months ended March 31, 2019. The increase was primarily due to a ~~product~~ mix shift towards ~~towables.~~the higher margined towable units.

Used Vehicles

Three months ended

March 31, 2019

March 31, 2018

Favorable/

($ in thousands,

Percent of

Percent of

(Unfavorable)

except per vehicle data)

Amount

Revenue

Amount

Revenue

$

%

Revenue

$
180,008

100.0%

$
172,091

100.0%

$
7,917

4.6%

Gross profit

37,162

20.6%

37,798

22.0%

(636)

-1.7%

Vehicle units sold

8,177

8,251

(74)

-0.9%

Average selling price per vehicle sold

$
22,014

$
20,857

$
1,157

5.5%

Average gross profit per vehicle sold

$
4,545

$
4,581

$
(36)

-0.8%

Same store sales data:

Same store revenue

$
168,679

$
169,459

$
(780)

-0.5%

Same store vehicle units sold

7,615

8,031

(416)

-5.2%

Same store average selling price per vehicle

$
22,151

$
21,101

$
1,050

5.0%

Used vehicle revenue increased ~~4.6%~~14.8%, or ~~$7.9~~$26.7 million, to $206.7 million in the three months ended March 31, 2020 from $180.0 million in the three months ended March 31, ~~2019 from $172.1~~2019. The increase was primarily due to a 6.2% increase in vehicles sold and an 8.1% increase in average selling price per vehicle sold. On a same store basis, used vehicle revenue increased 9.8% to $194.6 million in the three months ended March 31, ~~2018. The increase was primarily due to a 5.5% increase in the average selling price per vehicle unit sold due to product mix. On a same store~~

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~~basis, used vehicle revenue decreased 0.5% to $168.7~~2020 from $177.3 million ~~driven by a 5.2% decrease in units sold to 7,615 compared to vehicle sold of 8,031~~ in the three months ended March 31, ~~2018, partially offset~~2019. The increase was primarily driven by a ~~5.0%~~9.7% increase in ~~the~~ average ~~selling~~same store price per vehicle.

Used vehicle gross profit ~~decreased 1.7%~~increased 15.4%, or ~~$0.6~~$5.7 million, to $42.9 million in the three months ended March 31, 2020 from $37.2 million in the three months ended March 31, ~~2019~~2019. The increase was primarily from ~~$37.8~~a 6.2% increase in vehicles sold and an 8.7% increase in average gross profit per vehicle sold. The increase in average gross profit per vehicle sold was primarily driven by higher selling and purchase prices for used vehicles as a result of strength in the used market. Used vehicle gross margin of 20.7% in the three months ended March 31, 2020 was essentially flat to the 20.6% in the three months ended March 31, 2019.

Products, service and other

Products, service and other revenue decreased 15.7%, or $32.3 million, to $172.6 million in the three months ended March 31, ~~2018. The decrease was primarily~~2020, from a 0.8% decrease in average gross profit per unit and a 0.9% reduction in vehicles sold. Used vehicle gross margin decreased to 20.6% in the three months ended March 31, 2019 from 22.0% in the three months ended March 31, 2018.

~~Products, service and other~~

Three months ended

March 31, 2019

March 31, 2018

Favorable/

Percent of

Percent of

(Unfavorable)

($ in thousands)

Amount

Revenue

Amount

Revenue

$

%


Revenue

$
204,876

100.0%

$
164,152

100.0%

$
40,724

24.8%

Gross profit

68,772

33.6%

68,350

41.6%

422

0.6%

Same store revenue

112,959

124,914

(11,955)

-9.6%

~~Products, service and other revenue increased 24.8%, or $40.7 million, to~~ $204.9 million in the three months ended March 31, ~~2019 from $164.2 million in the three months ended March 31, 2018.~~2019. The ~~increase~~decrease was primarily attributable to ~~an increase in product revenue~~store closures related to the ~~new stores opened in the three months ended March 31,~~ 2019 ~~that were not open in the three months ended March 31, 2018.~~Strategic Shift. On a same store basis, products, service and other revenue ~~decreased 9.6%~~increased 0.2% to ~~$113.0~~$118.8 million for the three months ended March 31, ~~2019~~2020 from ~~$124.9~~$118.6 million in the three months ended March 31 ~~2018 primarily due to a decrease in warranty-related service and service fee installation promotions.~~2019.

Products, service and other gross profit ~~increased 0.6%~~decreased 9.3%, or ~~$0.4~~$6.4 million, to $62.4 million in the three months ended March 31, 2020 from $68.8 million in the three months ended March 31, 2019. The decrease was primarily due to the 2019 ~~from $68.4 million~~Strategic Shift. Products, service and other gross margin increased to 36.1% in the three months ended March 31, ~~2018. The increase was primarily due to increased revenue. Products, service and other gross margin decreased to~~2020 from 33.6% in the three months ended March 31, ~~2019 from 41.6% in the three months ended March 31, 2018~~2019. The increase was primarily due to a mix shift toward higher ~~mix of revenue from~~margin legacy RV ~~and outdoor-related products, which typically carry a lower gross margin than services-related revenue.~~products.

Finance and Insurance, net

Three months ended

March 31, 2019

March 31, 2018

Favorable/

Percent of

Percent of

(Unfavorable)

($ in thousands)

Amount

Revenue

Amount

Revenue

$

%


Revenue

$
91,891

100.0%

$
89,100

100.0%

$
2,791

3.1%

Gross profit

91,891

100.0%

89,100

100.0%

2,791

3.1%

Same store revenue

84,503

87,554

(3,051)

-3.5%

Finance and insurance revenue and gross profit is recorded net, since the Company is acting as an agent in the transaction, and commission is recognized when a finance and insurance product contract payment has been received or financing has been arranged. Finance and insurance, net revenue and gross profit each increased ~~3.1%~~0.6%, or ~~$2.8~~$0.6 million, to $92.5 million in the three months ended March 31, 2020 from $91.9 million in the three months ended March 31, ~~2019 from $89.1 million in~~2019. Finance and insurance, net revenue as a percentage of new and used vehicles financed increased to 13.1% for the three months ended March 31, ~~2018. The increase was primarily due to an increase in our finance and insurance sales penetration rates to~~2020 from 12.9% ~~of total new and used vehicle revenue in~~for the three months ended March 31, ~~2019 from 11.9% in the three months ended March 31, 2018, which overcame the decrease in total new and used units sold.~~2019. On a same store basis, finance and insurance, net revenue and gross profit decreased ~~3.5%~~4.8%, or $4.3 million, to ~~$84.5~~$85.4 million versus the three months ended March 31, 2019, as the unit volume decrease more than offset the increase in average gross profit per finance transaction.

Good Sam Club

Good Sam Club revenue decreased 3.9%, or $0.4 million, to $11.0 million in the three months ended March 31, ~~2019~~2020 from ~~$87.6 million in the comparable period in 2018 primarily due to the decrease in total new and used units sold.~~

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~~Good Sam Club~~

Three months ended

March 31, 2019

March 31, 2018

Favorable/

Percent of

Percent of

(Unfavorable)
($ in thousands)

Amount

Revenue

Amount

Revenue

$

%

Revenue

$
11,451

100.0%

$
8,983

100.0%

$
2,468

27.5%

Gross profit

7,734

67.5%

6,654

74.1%

1,080

16.2%

Memberships

2,149,627

1,835,349

314,278

17.1%

~~Good Sam Club revenue increased 27.5%, or $2.5 million, to~~ $11.5 million in the three months ended March 31, ~~2019~~2019. The decrease primarily resulted from ~~$9.0~~reduced royalty fees from the Good Sam branded credit card related to fewer retail locations.

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Good Sam Club gross profit increased 13.2%, or $1.0 million, to $8.8 million in the three months ended March 31, ~~2018. The increase primarily resulted~~2020 from ~~a 17.1% increase in club memberships.~~

~~Good Sam Club gross profit increased 16.2%, or $1.1 million, to~~ $7.7 million in the three months ended March 31, 2019. The increase was primarily due to reduced marketing expenses from the decreased number of stores as a result of the 2019 ~~from $6.7 million~~Strategic Shift. Gross margin increased to 79.6% in the three months ended March 31, ~~2018. The increase was primarily due to the increase in club memberships and credit card open accounts. Good Sam Club gross margin decreased to~~2020 from 67.5% in the three months ended March 31, 2019 ~~from 74.1% in the three months ended March 31, 2018~~ primarily due to ~~additional~~reduced club marketing expenses.

Selling, general and administrative expenses

Selling, general and administrative expenses ~~increased 8.8%~~decreased 0.2%, or ~~$21.8~~$0.4 million, to $267.7 million in the three months ended March 31, 2020 from $268.1 million in the three months ended March 31, ~~2019 from $246.3~~2019. The $0.4 million ~~in the three months ended March 31, 2018. The increase~~decrease was primarily due to ~~increases~~decreases of ~~$7.4~~$0.9 million of ~~real~~personal property ~~expenses related to new stores, $8.5~~expense, and $0.7 million of ~~variable~~professional fees, partially offset by an increase of $0.7 million in wage-related expenses, $0.4 million of selling expense ~~related to increased revenue, $3.5 million of services expenses, including professional fees,~~ and ~~$2.4~~$0.1 million of other store and corporate overhead expenses. Selling, general and administrative expenses as a percentage of total gross profit ~~increased~~decreased to 88.4% in the three months ended March 31, 2020, from 89.9% in the three months ended March 31, 2019 ~~from 81.6% in~~primarily due to cost reduction programs implemented related to the ~~three months ended March 31, 2018.~~2019 Strategic Shift.

Depreciation and amortization

Depreciation and amortization increased ~~44.6%~~3.6%, or ~~$4.2~~$0.5 million, to $14.1 million in the three months ended March 31, 2020 from $13.6 million in the three months ended March 31, 2019 due to the impact of capital expenditures from ~~$9.4~~2019.

Long-lived asset impairment

As discussed in Note 4 – Restructuring and Long-lived Asset Impairment to our condensed consolidated financial statements included in Part I, Item 1 of this Form 10-Q, we recognized $6.6 million of long-lived asset impairments during the three months ended March 31, 2020, of which $6.5 million related to the 2019 Strategic Shift discussed above.

Lease termination

Lease termination expense of $0.6 million in the three months ended March 31, ~~2018 primarily due~~2020 related to the ~~new RV and outdoor retail store locations.~~2019 Strategic Shift discussed above.

Floor plan interest expense

Floor plan interest expense ~~increased 8.1%~~decreased 25.9%, or ~~$0.9~~$3.0 million, to $8.6 million in the three months ended March 31, 2020 from $11.6 million in the three months ended March 31, ~~2019 from $10.7 million in the three months ended March 31, 2018.~~2019. The ~~increase~~decrease was primarily due to ~~an 88~~a 91 basis point ~~increase~~decrease in the average floor plan borrowing rate, ~~partially offset by a 11.9%~~and an 8.3% decrease in average floor plan borrowings primarily from lower average inventory levels.

Other interest expense, net

Other interest expense ~~increased 37.4%~~decreased 16.9%, or ~~$4.8~~$3.0 million, to $14.7 million in the three months ended March 31, 2020 from $17.6 million in the three months ended March 31, ~~2019 from $12.8~~2019. The decrease was primarily due to a 94 basis point decrease in the average interest rate.

Income tax expense

Income tax expense decreased $18.8 million to $4.1 million in the three months ended March 31, ~~2018. The increase was primarily due~~2020 compared to ~~increased average debt outstanding primarily due to financing the rollout of RV and Outdoor Retail store openings in 2018 and a 61 basis point increase in the average interest rate.~~

~~Income tax expense~~

~~Income tax expense increased 233.8%, or $16.0 million to $22.9 million in~~ the three months ended March 31, ~~2019 from $6.9 million in the three months ended March 31, 2018.~~2019. The ~~increase~~decrease was primarily due to ~~the revaluation of certain deferred tax assets and related changes in valuation allowance pertaining to a~~

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transfer of assets to a wholly owned corporate subsidiary, and partially due to operating losses recorded by its RV and Outdoor Retail segment for which no tax benefit can be recognized, and an increased ownership percentage oflower income incurred at CWGS, LLC for which the Company is subject to U.S., federal and state taxes on its allocable share, partially offset by operating losses recorded by Camping World, Inc. (“CW”) for which no tax benefit can be recognized

Table of ~~income~~Contents

and the transfer of ~~CWGS, LLC.~~assets to CW that was recorded in the prior year as discussed in Note 12 - Income Taxes to our condensed consolidated financial statements included in Part I, Item 1 of this Form 10-Q.

Net ~~income~~loss

Net ~~income~~loss decreased ~~297.9%~~47.3%, or ~~$40.4~~$12.7 million, to a net loss of ~~$26.8~~$14.1 million for the three months ended March 31, ~~2019~~2020 from a net ~~income~~loss of ~~$13.5~~$26.8 million in the three months ended March 31, ~~2018~~2019 primarily due to the items mentioned above.

Segment results

The following tables sets forth a reconciliation of total segment income to consolidated income before income taxes for each of our segments for the periods presented:


	Three Months Ended
	March 31, 2019			March 31, 2018			Favorable/
			Percent of			Percent of	(Unfavorable)

										Three Months Ended
										March 31, 2020			March 31, 2019			Favorable/
												Percent of			Percent of	(Unfavorable)
($ in thousands)	Amount		Revenue	Amount		Revenue	$		%	Amount		Revenue	Amount		Revenue	$		%
Revenue:
Good Sam Services and Plans	$	48,298	4.5%	$	46,178	4.4%	$	2,120	4.6%	$	48,692	4.7%	$	48,298	4.5%	$	394	0.8%
RV and Outdoor Retail		1,027,283	96.5%		1,022,827	96.6%		4,456	0.4%		984,093	95.8%		1,027,283	96.5%		(43,190)	(4.2%)
Elimination of intersegment revenue		(10,812)	-1.0%		(10,344)	-1.0%		(468)	4.5%		(5,512)	(0.5%)		(10,812)	(1.0%)		5,300	49.0%
Total consolidated revenue		1,064,769	100.0%		1,058,661	100.0%		6,108	0.6%		1,027,273	100.0%		1,064,769	100.0%		(37,496)	(3.5%)
Segment income:(1)
Segment income:(1)
Good Sam Services and Plans		22,414	2.1%		21,717	2.1%		697	3.2%		21,340	2.1%		22,414	2.1%		(1,074)	(4.8%)
RV and Outdoor Retail		(375)	0.0%		24,519	2.3%		(24,894)	-101.5%		128	0.0%		(375)	(0.0%)		503	134.1%
Total segment income		22,039	2.1%		46,236	4.4%		(24,197)	-52.3%		21,468	2.1%		22,039	2.1%		(571)	(2.6%)
Corporate & other		(3,173)	-0.3%		(1,484)	-0.1%		(1,689)	-113.8%		(2,729)	(0.3%)		(3,173)	(0.3%)		444	14.0%
Depreciation and amortization		(13,594)	-1.3%		(9,400)	-0.9%		(4,194)	-44.6%		(14,078)	(1.4%)		(13,594)	(1.3%)		(484)	(3.6%)
Other interest expense, net											(14,658)	(1.4%)		(17,643)	(1.7%)		2,985	16.9%
Tax Receivable Agreement liability adjustment		8,477	0.8%		—	0.0%		8,477	100.0%		—	—		8,477	0.8%		(8,477)	(100.0%)
Other interest expense, net		(17,643)	-1.7%		(12,839)	-1.2%		(4,804)	-37.4%
Loss and expense on debt restructure		—	0.0%		(2,100)	-0.2%		2,100	100.0%
Income before income taxes	$	(3,894)	-0.4%	$	20,413	1.9%	$	(24,307)	-119.1%

Same store sales- RV and Outdoor Retail(2)	$	847,896		$	952,717		$	(104,821)	-11.0%
Loss before income taxes										$	(9,997)	(1.0%)	$	(3,894)	(0.4%)	$	(6,103)	(156.7%)

Same store revenue- RV and Outdoor Retail⁽²⁾										$	855,124		$	900,703		$	(45,579)	(5.1%)

(1)

⁽¹⁾

Segment income represents income for each of our reportable segments and is defined as income from operations before depreciation and amortization, plus floor plan interest expense.

(2)

⁽²⁾

Same store ~~sales~~revenue definition not applicable to the Good Sam Services and Plans segment.

Good Sam Services and Plans

Good Sam Services and Plans segment revenue increased ~~4.6%~~0.8%, or ~~$2.1~~$0.4 million, to $48.7 million in the three months ended March 31, 2020, from $48.3 million in the three months ended March 31, ~~2019,~~2019. The increase was primarily attributable to a $0.5 million increase in our roadside assistance programs primarily resulting from ~~$46.2~~upsells to higher-priced product offerings, a $0.6 million increase in our vehicle insurance products and a $0.3 million increase in our extended vehicle warranty programs, partially offset by a $1.0 million decrease in consumer shows revenue.

Good Sam Services and Plans segment income decreased 4.8%, or $1.1 million, to $21.3 million in the three months ended March 31, ~~2018. The increase was primarily attributable to $1.7 million~~2020, from our roadside assistance programs primarily resulting from price increases, $0.3 million from additional policies in force from our vehicle insurance products and $0.1 million of various other increases.

~~Good Sam Services and Plans segment income increased 3.2%, or $0.7 million, to~~ $22.4 million in the three months ended March 31, ~~2019,~~2019. The decrease was primarily attributable to $0.9 million of increased accrual for program costs, a $0.6 million reduction from ~~$21.7~~the consumer shows, a $0.4 million reduction from the annual directory publication, and a $0.2 million increase in selling, general and administrative expenses, partially offset by a $0.5 million increase from our vehicle insurance programs, a $0.4 million increase from our roadside assistance programs and a $0.1 million increase from other services and plans. Good Sam Services and Plans segment margin decreased 258 basis points to 43.8% in the three months ended March 31, ~~2018. The increase was primarily attributable to $1.9 million~~2020 from price increases and lower claims costs from our roadside assistance programs, partially offset by a $1.2 million increase in selling, general and administrative expenses. Good Sam Services and Plans segment income margin decreased 62 basis points to 46.4% in the three months ended March 31, ~~2019 from 47.0% in the three months ended March 31, 2018.~~2019.

RV and Outdoor Retail

RV and Outdoor Retail segment revenue ~~increased 0.4%~~decreased 4.2%, or ~~$4.5~~$43.2 million, to $1.0 billion in the three months ended March 31, ~~2019~~2020 from $1.0 billion in the three months ended March 31, ~~2018.~~2019. The ~~increase~~decrease was

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primarily driven by a ~~$41.2~~$37.2 million, or ~~24.4%~~17.7%, ~~increase~~decrease in products, service and other revenue primarily due to the 2019 Strategic Shift, a ~~$8.0 million,~~

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~~or 4.6%, increase in used vehicle revenue, a $2.7~~$32.4 million, or ~~2.9%, increase~~6.1% decrease in ~~finance and insurance~~new vehicle revenue, and a ~~$2.5~~$0.4 million, or ~~27.5% increase~~3.9%, decrease in Good Sam Club revenue, partially offset by a ~~$49.9~~$26.6 million, or ~~8.6%~~14.7%, ~~decrease~~increase in ~~new~~used vehicle revenue, and a $0.2 million,or 0.2%, increase in finance and insurance revenue.

RV and Outdoor Retail segment income ~~decreased 101.5%~~increased 134.1%, or ~~$24.9~~$0.5 million, to a ~~$0.4~~segment income of $0.1 million ~~segment loss~~ in the three months ended March 31, ~~2019~~2020 from ~~$24.5~~a segment loss of $0.4 million ~~of segment income~~ in the three months ended March 31, ~~2018.~~2019. The ~~decrease~~increase was primarily related to ~~lower~~increased segment gross ~~margins across nearly all types~~profit of $5.2 million primarily due to a mix shift to higher margined vehicles and increased volume of new vehicles sold, reduced floor plan interest expense of $3.0 million primarily due to a lower borrowing rate and ~~used vehicles, $18.9 million of additional~~lower average borrowings, and reduced selling, general and administrative expenses ~~and $0.9~~of $0.2 million, partially offset by $6.6 million of ~~additional floor plan interest.~~long-lived asset impairment, $0.7 million of increased loss on asset disposal, and $0.6 million of lease termination losses. RV and Outdoor Retail segment ~~income~~ margin ~~decreased 243~~increased 5 basis points to ~~0.0% from 2.4% in the comparable prior year period.~~0%.

Corporate and other expenses

Corporate and other expenses ~~increased 113.8%~~decreased 14.0%, or ~~$1.7~~$0.4 million, to $2.7 million in the three months ended March 31, 2020 from $3.2 million in the three months ended March 31, 2019 ~~from $1.5 million in the three months ended March 31, 2018~~ primarily from ~~increased~~reduced professional ~~and legal fees.~~fees.

Non-GAAP Financial Measures

To supplement our condensed consolidated financial statements, which are prepared and presented in accordance with accounting principles generally accepted in the United States (“GAAP”), we use the following non-GAAP financial measures: EBITDA, Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Net Income Attributable to Camping World Holdings, Inc. – Basic, Adjusted Net Income Attributable to Camping World Holdings, Inc. – Diluted, Adjusted Earnings Per Share – Basic, and Adjusted Earnings Per Share – Diluted (collectively the "Non-GAAP Financial Measures"). We believe that these Non-GAAP Financial Measures, when used in conjunction with GAAP financial measures, provide useful information about operating results, enhance the overall understanding of past financial performance and future prospects, and allow for greater transparency with respect to the key metrics we use in our financial and operational decision making. These Non-GAAP Financial Measures are also frequently used by analysts, investors and other interested parties to evaluate companies in the Company’s industry. The presentation of this financial information is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP, and they should not be construed as an inference that the Company’s future results will be unaffected by any items adjusted for in these non-GAAP measures. In evaluating these non-GAAP measures, you should be aware that in the future the Company may incur expenses that are the same as or similar to some of those adjusted in this presentation. The Non-GAAP Financial Measures that we use are not necessarily comparable to similarly titled measures used by other companies due to different methods of calculation.

EBITDA, Adjusted EBITDA, and Adjusted EBITDA Margin

We define “EBITDA” as net income before other interest expense, net (excluding floor plan interest expense), provision for income tax expense and depreciation and amortization. We define “Adjusted EBITDA” as EBITDA further adjusted for the impact of certain non-cash and other items that we do not consider in our evaluation of ongoing operating performance. These items include, among other things, long-lived asset impairment, lease termination loss, ~~and expense~~loss on ~~debt restructure, goodwill impairment, loss (gain) on sale~~disposal of assets, equity-based compensation, Tax Receivable Agreement liability adjustment, ~~Gander Outdoors pre-opening~~restructuring costs related to the 2019 Strategic Shift, and other unusual or one-time items. We define “Adjusted EBITDA Margin” as Adjusted EBITDA as a percentage of total revenue. We caution investors that amounts presented in accordance with our definitions of EBITDA, Adjusted EBITDA, and Adjusted EBITDA Margin may not be comparable to similar measures disclosed by our competitors, because not all companies and analysts calculate EBITDA, Adjusted EBITDA, and Adjusted EBITDA Margin in the same manner. We present EBITDA, Adjusted EBITDA, and Adjusted EBITDA Margin because we consider them to be important supplemental measures of our performance and believe they are frequently used by securities

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analysts, investors and other interested parties in the evaluation of companies in our

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industry. Management believes that investors’ understanding of our performance is enhanced by including these Non-GAAP Financial Measures as a reasonable basis for comparing our ongoing results of operations.

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


	Three Months Ended
	March 31,		March 31,

					Three Months Ended
					March 31,		March 31,
($ in thousands)	2019		2018		2020		2019
EBITDA:
Net (loss) income	$	(26,807)	$	13,548
Net loss					$	(14,129)	$	(26,807)
Other interest expense, net		17,643		12,839		14,658		17,643
Depreciation and amortization		13,594		9,400		14,078		13,594
Income tax expense		22,913		6,865		4,132		22,913
Subtotal EBITDA		27,343		42,652		18,739		27,343
Loss and expense on debt restructure (a)		—		2,100
(Gain) loss on sale of assets (b)		(214)		85
Equity-based compensation (c)		2,716		3,218
Tax Receivable Agreement liability adjustment (d)		(8,477)		—
Gander Outdoors pre-opening costs (e)		—		19,651
Long-lived asset impairment (a)						6,569		—
Lease termination (b)						584		—
Loss (gain) on disposal of assets, net (c)						511		(214)
Equity-based compensation (d)						3,312		2,716
Tax Receivable Agreement liability adjustment (e)						—		(8,477)
Restructuring costs (f)						6,282		—
Adjusted EBITDA	$	21,368	$	67,706	$	35,997	$	21,368


	Three Months Ended
	March 31,		March 31,

					Three Months Ended
					March 31,		March 31,
(as percentage of total revenue)	2019		2018		2020		2019
EBITDA margin:
Net (loss) income margin		(2.5%)		1.3%
Net loss margin						(1.4%)		(2.5%)
Other interest expense, net		1.7%		1.2%		1.4%		1.7%
Depreciation and amortization		1.3%		0.9%		1.4%		1.3%
Income tax expense		2.2%		0.6%		0.4%		2.2%
Subtotal EBITDA margin		2.6%		4.0%		1.8%		2.6%
Loss and expense on debt restructure (a)		—		0.2%
(Gain) loss on sale of assets (b)		(0.0%)		0.0%
Equity-based compensation (c)		0.3%		0.3%
Tax Receivable Agreement liability adjustment (d)		(0.8%)		—
Gander Outdoors pre-opening costs (e)		—		1.9%
Long-lived asset impairment (a)						0.6%		—
Lease termination (b)						0.1%		—
Loss (gain) on disposal of assets, net (c)						0.0%		(0.0%)
Equity-based compensation (d)						0.3%		0.3%
Tax Receivable Agreement liability adjustment (e)						—		(0.8%)
Restructuring costs (f)						0.6%		—
Adjusted EBITDA margin		2.0%		6.4%		3.5%		2.0%

(a)

Represents long-lived asset impairment charges related to the RV and Outdoor Retail segment, which primarily relate to locations affected by the 2019 Strategic Shift. See Note 4 – Restructuring and Long-lived Asset Impairment to our condensed consolidated financial statements included in Part I, Item 1 of this Form 10-Q for additional information

(b)

Represents the loss ~~and expense incurred~~ on ~~debt restructure and financing expense incurred from~~ the ~~Third Amendment~~termination of operating leases relating primarily to the ~~Credit Agreement~~2019 Strategic Shift, net of lease termination fees (See Note 4– Restructuring and Long-lived Asset Impairment to our condensed consolidated financial statements included in ~~2018.~~

Part I, Item 1 of this Form 10-Q for additional information

~~(b)~~

(c)

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

~~(c)~~

(d)

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

~~(d)~~

(e)

Represents an adjustment to eliminate the loss on remeasurement of the Tax Receivable Agreement primarily due to changes in our effective income tax rate and the transfer of certain assets from GSS to ~~CWI.~~CW. See Note 1112 — Income Taxes to our unaudited condensed consolidated financial statements included in Part I, Item 1 of this Form 10-Q.

~~(e)~~

(f)

Represents ~~pre-opening store~~restructuring costs relating to our 2019 Strategic Shift. These restructuring costs include one-time employee termination benefits, incremental inventory reserve charges, and other associated ~~with the Gander Outdoors store openings~~costs. These costs do not include lease termination costs, which are presented separately above. See Note 4 – Restructuring and Long-lived Asset Impairment to our condensed consolidated financial statements included in ~~2018, which is comprised~~Part I, Item 1 of 1) Gander Outdoors-specific corporate and retail overhead, 2) distribution center expenses, and 3) store-level startup expenses. Based on the nature of the acquisition through a bankruptcy auction and the large quantity of retail locations opened in 2018 in a very compressed timeframe, the Company does not deem the pre-opening store coststhis Form 10-Q for the initial rollout of Gander Outdoors locations to be normal, recurring charges. The Company does not intend to adjust for pre-opening store costs other than for the initial rollout of Gander Outdoors.

additional information.

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

We define “Adjusted Net Income Attributable to Camping World Holdings, Inc. – Basic” as net income attributable to Camping World Holdings, Inc. adjusted for the impact of certain non-cash and other items that we do not consider in our evaluation of ongoing operating performance. These items include, among other things, long-lived asset impairment, lease termination costs, loss ~~and expense~~ on ~~debt restructure, goodwill impairment, loss (gain) on sale~~disposal of assets, equity-based compensation, Tax Receivable Agreement liability adjustment, ~~Gander Outdoors pre-opening~~restructuring costs related to the 2019 Strategic Shift, other unusual or one-time items, the income tax expense effect of these adjustments, and the effect of net income attributable to non-controlling interests from these adjustments.

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

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

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The following table reconciles Adjusted Net Income Attributable to Camping World Holdings, Inc. – Basic, Adjusted Net Income Attributable to Camping World Holdings, Inc. – Diluted, Adjusted Earnings Per Share – Basic, and Adjusted Earnings Per Share – Diluted to the most directly comparable GAAP financial performance measure, which is net income attributable to Camping World Holdings, Inc., in the case of the Adjusted Net Income non-GAAP financial measures, and weighted-average shares of Class A common stock outstanding – basic, in the case of the Adjusted Earnings Per Share non-GAAP financial measures:


	Three Months Ended
	March 31,		March 31,
(In thousands except per share amounts)	2020		2019
Numerator:
Net loss attributable to Camping World Holdings, Inc.	$	(8,160)	$	(19,395)
Adjustments related to basic calculation:
Long-lived asset impairment (a):
Gross adjustment		6,569		—
Income tax expense for above adjustment (b)		(13)		—
Lease termination (c):
Gross adjustment		584		—
Income tax benefit for above adjustment (b)		—		—
Loss on disposal of assets and other expense, net (d):
Gross adjustment		511		(214)
Income tax (expense) benefit for above adjustment (b)		(1)		9
Equity-based compensation (e):
Gross adjustment		3,312		2,716
Income tax expense for above adjustment (b)		(302)		(221)
Tax Receivable Agreement liability adjustment (f):
Gross adjustment		—		(8,477)
Income tax benefit for above adjustment (b)		—		2,143
Restructuring costs (g):
Gross adjustment		6,282		—
Income tax expense for above adjustment (b)		(35)		—
Adjustment to net loss attributable to non-controlling interests resulting from the above adjustments (h)		(9,994)		(1,453)
Adjusted net income (loss) attributable to Camping World Holdings, Inc. – basic and diluted	$	(1,247)	$	(24,892)
Denominator:
Weighted-average Class A common shares outstanding – basic		37,534		37,195
Adjusted weighted average Class A common shares outstanding – diluted		37,534		37,195

Adjusted earnings (loss) per share - basic	$	(0.03)	$	(0.67)
Adjusted earnings (loss) per share - diluted	$	(0.03)	$	(0.67)

Anti-dilutive amounts (i):
Numerator:
Reallocation of net loss attributable to non-controlling interests from the anti-dilutive exchange of common units in CWGS, LLC (j)	$	4,025	$	(5,959)
Income tax on reallocation of net loss attributable to non-controlling interests from the anti-dilutive exchange of common units in CWGS, LLC (k)	$	(5,734)	$	(4,563)
Assumed income tax benefit of combining C-corporations with full valuation allowances with the income of other consolidated entities after the anti-dilutive exchange of common units in CWGS, LLC (l)	$	8,143	$	10,567
Denominator:
Anti-dilutive exchange of common units in CWGS, LLC for shares of Class A common stock (m)		51,649		51,673
Anti-dilutive restricted stock units (m)		284		7

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Three Months Ended

March 31,

March 31,
(In thousands except per share amounts)

2019

2018
Numerator:

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

$
(19,395)

$
1,821
Adjustments related to basic calculation:

Loss and expense on debt restructure (a)

—

2,100
Loss (gain) on sale of assets (b)

(214)

85
Equity-based compensation (c)

2,716

3,218
Tax Receivable Agreement liability adjustment (d)

(8,477)

—
Gander Outdoors pre-opening costs (e)

—

19,651
Income tax expense (f)

1,931

(488)
Adjustment to net (loss) income attributable to non-controlling interests resulting from the above adjustments (g)

(1,453)

(14,666)
Adjusted net (loss) income attributable to Camping World Holdings, Inc. – basic

(24,892)

11,721
Adjustments related to diluted calculation:

Reallocation of net income attributable to non-controlling interests from the dilutive effect of stock options and restricted stock units (h)

—

149
Income tax on reallocation of net income attributable to non-controlling interests from the dilutive effect of stock options and restricted stock units (i)

—

(55)
Adjusted net (loss) income attributable to Camping World Holdings, Inc. – diluted

$
(24,892)

$
11,815
Denominator:

Weighted-average Class A common shares outstanding – basic

37,195

36,816
Adjustments related to diluted calculation:

Dilutive options to purchase Class A common stock (j)

—

315
Dilutive restricted stock units (j)

—

189
Adjusted weighted average Class A common shares outstanding – diluted

37,195

37,320

Adjusted (loss) earnings per share - basic

$
(0.67)

$
0.32
Adjusted (loss) earnings per share - diluted

$
(0.67)

$
0.32

Anti-dilutive amounts (k):

Numerator:

Reallocation of net (loss) income attributable to non-controlling interests from the anti-dilutive exchange of common units in CWGS, LLC (h)

$
(5,959)

$
26,244
Income tax on reallocation of net (loss) income attributable to non-controlling interests from the anti-dilutive exchange of common units in CWGS, LLC (i)

$
(4,563)

$
(9,794)
Assumed income tax benefit (expense) of combining C-corporations with full valuation allowances with the income of other consolidated entities after the anti-dilutive exchange of common units in CWGS, LLC (l)

$
10,567

$
5,525
Denominator:

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

51,673

51,830
Anti-dilutive restricted stock units (j)

7

—

(a)

~~(a)~~

Represents long-lived asset impairment charges related to the RV and Outdoor Retail segment,which primarily relate to locations affected by the 2019 Strategic Shift. See Note 4 – Restructuring and Long-lived Asset Impairment to our condensed consolidated financial statements included in Part I, Item 1 of this Form 10-Q for additional information.

(b)

Represents the ~~loss~~current and deferred income tax expense ~~incurred on debt restructure~~or benefit effect of the above adjustments, many of which are related to entities with full valuation allowances for which no tax benefit can be currently recognized. This assumption uses an effective tax rate of 25.0% and ~~financing expense incurred from~~25.3% for the ~~Third Amendment~~adjustments for the three month ended March 31, 2020 and 2019, respectively, which represents the estimated tax rate that would apply had the above adjustments been included in the determination of our non-GAAP metric.

(c)

Represents the termination of operating leases relating primarily to the ~~Credit Agreement~~2019 Strategic Shift, net of lease termination costs (See Note 4 – Restructuring and Long-lived Asset Impairment to our condensed consolidated financial statements included in ~~2018.~~

Part I, Item 1 of this Form 10-Q for additional information.

(d)

~~(b)~~

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

assets, and losses on the disposal or sale of real estate at closed RV and Outdoor Retail locations.

(e)

~~(c)~~

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

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(f)

~~(d)~~

(g)

~~(e)~~

Represents ~~pre-opening store~~restructuring costs relating to our 2019 Strategic Shift. These restructuring costs include one-time employee termination benefits, incremental inventory reserve charges, and other associated with the Gander Outdoors store openings, which is comprised of 1) Gander Outdoors-specific corporate and retail overhead, 2) distribution center expenses, and 3) store-level startup expenses. The Company incurred significantcosts. These costs related to the initial rollout of Gander Outdoors locations, which was substantially complete by December 31, 2018. Based on the nature of the acquisition through a bankruptcy auction and the large quantity of retail locations opened and to be opened in a very compressed timeframe, the Company doesdo not ~~deem the pre-opening store~~include lease termination costs, for the initial rollout of Gander Outdoors locations to be normal, recurring charges. The Company does not intend to adjust for pre-opening store costs other than for the initial rollout of Gander Outdoors.

~~(f)~~

~~Represents the income tax expense effect of the above adjustments, many of~~ which are ~~related~~presented separately above. See Note 4 – Restructuring and Long-lived Asset Impairment to ~~entities with full valuation allowances~~our condensed consolidated financial statements included in Part I, Item 1 of this Form 10-Q for ~~which no tax benefit can be currently recognized. This assumption uses effective tax rate of 25.3% for the adjustments for 2019 and 2018.~~

additional information.

(h)

~~(g)~~

Represents the adjustment to net income attributable to non-controlling interests resulting from the above adjustments that impact the net income of CWGS, LLC. This adjustment uses the non-controlling interest’s weighted average ownership of CWGS, LLC of ~~58.1%~~57.9% and ~~58.5%~~58.1% for the three months ended March 31, 2020 and 2019, ~~and 2018,~~ respectively.

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

(j)

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

(k)

~~(i)~~

Represents the income tax expense effect of the above adjustment for reallocation of net income attributable to non-controlling interests. This assumption uses an effective tax rate of 25.0% and 25.3% for the adjustments for the three months ended March 31, 2020 and 2019, ~~and 2018.~~

respectively.

(l)

~~(j)~~

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

~~(k)~~

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

~~(l)~~

Represents adjustments to reflect the income tax benefit of losses of consolidated C-corporations that under the Company’s current equity structure cannot be used against the income of other consolidated subsidiaries of CWGS, LLC. Subsequent to the exchange of all common units in CWGS, LLC, the Company believes certain actions could be taken such that the C-corporations’ losses could offset income of other consolidated subsidiaries. The adjustment reflects the income tax benefit assuming effective tax rate of 25.0% and 25.3% during the three months ended March 31, 2020 and 2019, ~~and 2018,~~respectively, for the losses experienced by the consolidated C-corporations for which valuation allowances have been recorded. No assumed release of valuation allowance established for previous periods are included in these amounts.

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

Uses and Limitations of Non-GAAP Financial Measures

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

●

as a measurement of operating performance because they assist us in comparing the operating performance of our business on a consistent basis, as they remove the impact of items not directly resulting from our core operations;

●

for planning purposes, including the preparation of our internal annual operating budget and financial projections;

●

to evaluate the performance and effectiveness of our operational strategies; and

●

to evaluate our capacity to fund capital expenditures and expand our business.

By providing these Non-GAAP Financial Measures, together with reconciliations, we believe we are enhancing investors’ understanding of our business and our results of operations, as well as assisting investors in evaluating how well we are executing our strategic initiatives. In addition, our Senior Secured Credit Facilities use EBITDA to measure our compliance with covenants such as the consolidated leverage ratio. The Non-GAAP Financial Measures have limitations as analytical tools, and should not be considered in isolation, or as an alternative to, or a substitute for net income or other financial statement data presented in our consolidated financial statements included elsewhere in this Form 10-Q as indicators of financial performance. Some of the limitations are:

●

such measures do not reflect our cash expenditures, or future requirements for capital expenditures or contractual commitments;

●

such measures do not reflect changes in, or cash requirements for, our working capital needs;

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●

some of such measures do not reflect the interest expense, or the cash requirements necessary to service interest or principal payments on our debt;

●

some of such measures do not reflect our tax expense or the cash requirements to pay our taxes;

●

although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future and such measures do not reflect any cash requirements for such replacements; and

●

other companies in our industry may calculate such measures differently than we do, limiting their usefulness as comparative measures.

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Due to these limitations, the Non-GAAP Financial Measures should not be considered as measures of discretionary cash available to us to invest in the growth of our business. We compensate for these limitations by relying primarily on our GAAP results and using these Non-GAAP Financial Measures only supplementally. As noted in the tables above, certain of the Non-GAAP Financial Measures include adjustments for long-lived asset impairment, lease termination costs, loss ~~and expense~~ on ~~debt restructure, goodwill impairment, loss (gain) on sale~~disposal of assets, equity-based compensation, Tax Receivable Agreement liability, ~~an adjustment~~restructuring costs related to ~~rent on right to use assets, Gander Outdoors pre-opening costs,~~the 2019 Strategic Shift, other unusual or one-time items, and the income tax expense effect described above, as applicable. It is reasonable to expect that certain of these items will occur in future periods. However, we believe these adjustments are appropriate because the amounts recognized can vary significantly from period to period, do not directly relate to the ongoing operations of our business and complicate comparisons of our internal operating results and operating results of other companies over time. Each of the normal recurring adjustments and other adjustments described in this paragraph and in the reconciliation tables above help management with a measure of our core operating performance over time by removing items that are not related to day-to-day operations.

Liquidity and Capital Resources

General

Our primary requirements for liquidity and capital have been working capital, inventory management, acquiring and building new retail locations, the improvement and expansion of existing retail locations, debt service, distributions to holders of equity interests in CWGS, LLC and our Class A common stock, and general corporate needs. These cash requirements have been met through cash provided by operating activities, cash and cash equivalents, proceeds from our IPO, May 2017 public equity offering and October 2017 public equity offering, borrowings under our Senior Secured Credit Facilities (as defined below) or our previous senior secured credit facilities, borrowings under our Floor Plan Facility (as defined below) and borrowings under our Real Estate Facility (as defined below).

As a public company, our additional liquidity needs include public company costs, payment of regular and special cash dividends, any exercise of the redemption right by the Continuing Equity Owners from time to time (should we elect to exchange common units for a cash payment), payments under the Tax Receivable Agreement, and state and federal taxes to the extent not reduced as a result of the Tax Receivable Agreement. The Continuing Equity Owners may exercise such redemption right for as long as their common units remain outstanding. Although the actual timing and amount of any payments that may be made under the Tax Receivable Agreement will vary, we expect that the payments that we will be required to make to the Continuing Equity Owners, Former Profits Unit Holders and Crestview Partners II GP, L.P. will be significant. Any payments made by us to Continuing Equity Owners, Former Profit Unit Holders and Crestview Partners II GP, L.P. under the Tax Receivable Agreement will generally reduce the amount of overall cash flow that might have otherwise been available to us or to CWGS, LLC and, to the extent that we are unable to make payments under the Tax Receivable Agreement for any reason, the unpaid amounts generally will be deferred and will accrue interest until paid by us; provided, however, that nonpayment for a specified period may constitute a material breach of a material obligation under the Tax Receivable Agreement and therefore may accelerate payments due under the Tax Receivable Agreement. For a discussion of the Tax Receivable Agreement, see Note 1112 — Income Taxes to our unaudited condensed consolidated financial statements included in Part I, Item 1 of this Form 10-Q.

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CWGS, LLC intends to make a regular quarterly cash distribution to its common unit holders, including us, of approximately $0.08 per common unit and we intend to use all of the proceeds from such distribution on our common units to pay a regular quarterly cash dividend of approximately $0.08 per share on our Class A common stock, subject to our discretion as the sole managing member of CWGS, LLC and the discretion of our board of directors. During the three months ended March 31, ~~2019,~~2020, we paid one regular quarterly cash dividend of $0.08 per share of our Class A common stock. CWGS, LLC is required to make cash distributions in accordance with the CWGS LLC Agreement in an amount sufficient for us to pay any expenses incurred by us in connection with the regular quarterly cash dividend, along with any of our other operating expenses and other obligations. In addition, we currently intend to pay a special cash dividend of all or a portion of the Excess Tax Distribution (as defined under “Dividend Policy” included in Part II, Item 5 of our Annual Report) to the holders of our Class A common stock from time to time subject to the discretion of our board of directors as described under “Dividend Policy” in our Annual Report. During the three months

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ended March 31, ~~2019,~~2020, we paid one special cash dividend of $0.0732 per share of our Class A common stock. Our dividend policy has certain risks and limitations, particularly with respect to liquidity, and we may not pay dividends according to our policy, or at all.

During the three months ended March 31, 2020, we incurred long-lived asset impairment charges of $6.6 million, including $6.5 million in connection with the 2019 Strategic Shift. We expect that none of the foregoing charges will result in future cash expenditures. Additionally, in connection with the 2019 Strategic Shift, we have incurred or expect to incur costs relating to one-time employee termination benefits of between $1.2 million and $1.5 million, lease termination costs of between $15.0 million and $20.0 million, incremental inventory reserve charges of $42.4 million, and other associated costs of $20.0 million to $25.0 million. We expect that approximately $20.0 million to $30.0 million of these costs will result in future cash expenditures. For a discussion of the 2019 Strategic Shift, see Note 4 — Restructuring and Long-lived Asset Impairment to our unaudited condensed consolidated financial statements included in Part I, Item 1 of this Form 10-Q.

There is significant uncertainty surrounding the impact of the COVID-19 pandemic on our results of operations and cash flows. As a result, we are proactively taking steps to increase cash available on-hand, including, but not limited to, reducing cash expenditures, including wage reductions through a combination of temporary salary reductions, layoffs, and furloughs; negotiating payment deferrals with lessors; reducing marketing and promotional expenses; and delaying strategic capital expenditures. The Company has negotiated lease payment deferrals of approximately $14.0 million from 2020 into 2021.

Notwithstanding our obligations under the Tax Receivable Agreement, we believe that our sources of liquidity and capital, including cash provided by operating activities and potentially incurring additional borrowings under our Floor Plan Facility, and borrowings under our ~~Real Estate~~Revolving Credit Facility ~~and proceeds from real estate sale leaseback transactions in the fourth quarter of 2018,~~ will be sufficient to finance our continued operations, growth strategy, including the anticipated opening of additional RV and outdoor retail locations, regular quarterly cash dividends (as described above) and additional expenses we expect to incur for at least the next twelve months. However, we cannot assure you that our cash provided by operating activities, cash and cash equivalents or cash available under our Revolving Credit Facility or our Floor Plan Facility, including the potential additional borrowings noted above, will be sufficient to meet our future needs. If we are unable to generate sufficient cash flows from operations in the future, including as a result of the impact of the COVID-19 pandemic on our business and if availability under our Revolving Credit Facility or our Floor Plan Facility is not sufficient, we may have to obtain additional financing. If we obtain additional capital by issuing equity, the interests of our existing stockholders will be diluted. If we incur additional indebtedness, that indebtedness may impose significant financial and other covenants that may significantly restrict our operations. We cannot assure you that we could obtain refinancing or additional financing on favorable terms or at all, including the expected additional borrowings noted ~~above.~~above and particularly in light of the economic uncertainty due to the COVID-19 pandemic. See “Risk Factors — Risks Related to our Business — Our ability to operate and expand our business and to respond to changing business and economic conditions will depend on the availability of adequate capital” included in Part I, Item 1A of our Annual Report.

As of March 31, ~~2019~~2020 and December 31, ~~2018,~~2019, we had working capital of ~~$505.1~~$378.4 million and ~~$583.0~~$394.7 million, respectively, including ~~$70.0~~$109.4 million and ~~$138.6~~$147.5 million, respectively, of cash and cash equivalents. Our working capital reflects the cash provided by deferred revenue and gains reported under current liabilities of ~~$81.5~~$82.2 million and ~~$88.1~~$87.1 million as of March 31, ~~2019~~2020 and December 31, ~~2018,~~2019, respectively, which reduces working capital. Deferred revenue primarily consists of cash collected for club memberships in advance of

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services to be provided, which is deferred and recognized as revenue over the life of the membership. We use net proceeds from this deferred membership revenue to lower our long-term borrowings and finance our working capital needs.

Seasonality

We have experienced, and expect to continue to experience, variability in revenue, net income, and cash flows as a result of annual seasonality in our business. Because RVs are used primarily by vacationers and campers, demand for services, protection plans, products, and resources generally declines during the winter season, while sales and profits are generally highest during the spring and summer months. In addition, unusually severe weather conditions in some geographic areas may impact demand.

We generate a disproportionately higher amount of our annual revenue in our second and third fiscal quarters, which include the spring and summer months. We incur additional expenses in the second and third fiscal quarters due to higher purchase volumes, increased staffing in our retail locations and program costs. If, for any reason, we miscalculate the demand for our products or our product mix during the second and third fiscal quarters, our sales in these quarters could decline, resulting in higher labor costs as a percentage of sales, lower margins and excess inventory, which could cause our annual results of operations to suffer and our stock price to decline.

Additionally, 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 seasonality of our business. We prefer to acquire new retail locations in the first and fourth quarters of each year in order to provide time for the location to be ~~re‑modeled~~re-modeled and to ramp up operations ahead of the spring and summer months. The timing of our acquisitions in the first and fourth quarters, coupled with generally lower revenue in these quarters has historically resulted in SG&A expenses as a percentage of gross profit being higher in these quarters. ~~The opening of additional Gander Outdoors locations in 2018 has further impacted this trend.~~

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Cash Flow

The following table shows summary cash flows information for the three months ended March 31, ~~2019~~2020 and ~~2018:~~2019:


	Three Months Ended
	March 31,

					Three Months Ended
					March 31,
(In thousands)	2019		2018		2020		2019
Net cash used in operating activities	$	(74,020)	$	(56,970)	$	(15,189)	$	(74,020)
Net cash used in investing activities		(22,916)		(79,666)		(8,456)		(22,916)
Net cash provided by financing activities		28,364		243,774
Net (decrease) increase in cash and cash equivalents	$	(68,572)	$	107,138
Net cash (used in) provided by financing activities						(14,470)		28,364
Net decrease in cash and cash equivalents					$	(38,115)	$	(68,572)

Operating activities. Our cash flows from operating activities are primarily collections from contracts in transit and customers following the sale of new and used vehicles, as well as from the sale of retail products and services and Good Sam services and plans. Contracts in transit represent amounts due from third-party lenders from whom pre-arranged agreements have been determined, and to whom the retail installment sales contracts have been assigned. Our primary uses of cash from operating activities, are repayments of vehicle floor plan payables, payments to retail product suppliers, personnel-related expenditures, payments related to leased property, advertising, and various services and program costs as well as pre-opening costs for Gander Outdoors (now Gander RV) locations during the three months ended March 31, ~~2018.~~2019.

Net cash used in operating activities was ~~$74.0~~$15.2 million in the three months ended March 31, ~~2019, an increase~~2020, a decrease of ~~$17.1~~$58.8 million from ~~$57.0~~$74.0 million of net cash used in operating activities in the three months ended March 31, ~~2018.~~2019. The ~~increase~~decrease was primarily due to $65.0 million of reduced receivables and contracts in transit, a ~~$67.4~~$12.7 million ~~reduction in the growth of accounts payable and accrued liabilities, a $40.4 million decrease~~increase in net income and ~~$8.4~~$7.4 million of other ~~increases,~~decreases, partially offset by ~~reduced~~$26.3 of increased inventory ~~purchases of $99.1 million.~~ purchases.

Investing activities. Our investment in business activities primarily consists of expanding our operations through organic growth and the acquisition of retail locations. Substantially all of our new retail locations and capital expenditures have been financed using cash provided by operating activities and borrowings under our Senior Secured Credit Facilities.

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The table below summarizes our capital expenditures for the three months ended March 31, ~~2019~~2020 and ~~2018:~~2019:


	Fiscal Year Ended
	March 31,		March 31,

					Three Months Ended
					March 31,
(In thousands)	2019		2018		2020		2019
IT hardware and software	$	1,677	$	2,085	$	2,645	$	1,677
Greenfield and acquired retail locations		8,278		35,906		1,831		8,278
Existing retail locations		1,777		4,522		4,022		1,777
Corporate and other		29		756		170		29
Total capital expenditures	$	11,761	$	43,269	$	8,668	$	11,761

Our capital expenditures consist primarily of investing in acquired and greenfield retail and RV dealership locations, existing retail locations, information technology, hardware, and software. There were no material commitments for capital expenditures as of March 31, ~~2019.~~2020.

Net cash used in investing activities was $8.5 million for the three months ended March 31, 2020. The $8.5 million of cash used in investing activities was comprised of approximately $8.7 million of capital expenditures primarily related to retail locations, partially offset by proceeds of $0.2 million from the sale of property and equipment.

Net cash used in investing activities was $22.9 million for the three months ended March 31, 2019. The $22.9 million of cash used in investing activities was comprised of $21.2 million for the acquisition of RV dealerships, , $11.8 million of capital expenditures primarily for acquired businesses, and $0.6 million for the purchase of real property, partially offset by proceeds of $10.2 million from the sale of real property and $0.5 million of proceeds from the sale of property and equipment. See Note 1011 – Acquisitions to our unaudited condensed consolidated financial statements included in Part 1, Item 1 of this Form 10-Q.

Net cash used in investing activities was $79.7 million for the three months ended March 31, 2018. The $79.7 million of cash used in investing activities included $43.3 million of capital expenditures primarily

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for the build-out of Gander Outdoors locations, $24.4 million for the purchase of real property, and $12.5 million for the acquisition of two RV dealership locations and four Erehwon locations (see Note 10 – Acquisitions to our unaudited condensed consolidated financial statements include in Part 1, Item 1 of this Form 10-Q), partially offset by proceeds of $0.5 million from the sale of property and equipment.

Financing activities. Our financing activities primarily consist of proceeds from the issuance of debt and the repayment of principal and debt issuance costs.

Our net cash used in financing activities was $14.5 million for the three months ended March 31, 2020. The $14.5 million of cash used in financing activities was primarily due to $8.4 million of non-controlling member distributions, $5.8 million of dividends paid on Class A common stock, $3.5 million of payments on our long-term debt, and $0.2 million of payments related to RSU shares withheld for taxes, partially offset by $3.4 million of net borrowings under the Floor Plan Facility.

Our net cash provided by financing activities was $28.4 million for the three months ended March 31, 2019. The $28.4 million of cash used in financing activities was primarily due to $39.0 million of net proceeds under the Floor Plan Facility and $3.9 million of net proceeds under the Revolving Credit Facility, partially offset by ~~$5.5 million of non-controlling interest member distributions,~~ $5.7 million of dividends paid on Class A common stock, $5.5 million of non-controlling interest member distributions, and $3.3 million of payments on long-term debt.

Our net cash provided by financing activities was $243.8 million for the three months ended March 31, 2018. The $243.8 million of cash provided by financing activities was primarily due to $249.2 million of net proceeds from long-term debt, and $24.4 million of proceeds from our Revolving Credit Facility, partially offset by $19.9 million of non-controlling interest member distributions, $5.7 million of dividends paid on Class A common stock, other financing uses of $3.2 million, and $1.0 million of borrowings under the Floor Plan Facility during the three months ended March 31, 2018.

Description of Senior Secured Credit Facilities, Floor Plan Facility and Real Estate Facility

As of March 31, ~~2019~~2020 and December 31, ~~2018,~~2019, we had outstanding debt in the form of our Senior Secured Credit Facilities, our Floor Plan Facility, and our Real Estate Facility. We may from time to time seek to refinance, retire or exchange our outstanding debt. Such refinancings, repayments or exchanges, if any, will depend on prevailing market conditions, our liquidity requirements, contractual restrictions and other factors. The amounts involved may be material. ~~In the past, we have used interest rate swap derivatives to diversify our debt portfolio between fixed and variable rate instruments.~~ For additional information regarding our interest rate risk and interest rate hedging instruments, see “Quantitative and Qualitative Disclosures About Market Risk” in Part I, Item 3 of this Form 10-Q.

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Senior Secured Credit Facilities

As of March 31, ~~2019~~2020 and December 31, ~~2018,~~2019, CWGS Group, LLC (the “Borrower”), an indirect subsidiary of the Company, was party to a credit agreement (as amended from time to time, the “Credit Agreement”) for a senior secured credit facility (the “Senior Secured Credit Facilities”). The Senior Secured Credit Facilities ~~consists~~consist of a term loan facility (the “Term Loan Facility”) and a $35.0 million revolving credit facility (the “Revolving Credit Facility”). The Term Loan Facility requires mandatory principal payments in equal quarterly installments of $3.0 million, which was paid on March 31, 2020. The Revolving Credit Facility matures on November 8, 2021, and the Term Loan Facility matures on November 8, 2023.

The Credit Agreement for our Senior Secured Credit Facilities requires the ~~CWGS Group, LLC (the~~ “Borrower”~~), an indirect subsidiary of the Company,~~ and its subsidiaries to comply on a quarterly basis with a maximum Total Leverage Ratio (as defined in the Credit Agreement), which covenant is in effect only if, as of the end of each calendar quarter, the aggregate amount of borrowings under the revolving credit facility (including swingline loans), letters of credit and unreimbursed letter of credit disbursements outstanding at such time (minus the lesser of (a) $5.0 million and (b) letters of credit outstanding) is greater than 30% of the aggregate amount of the Revolving Lenders’ Revolving Commitments (minus the lesser of (a) $5.0 million and (b) letters of credit outstanding), as defined in the Credit Agreement. As of March 31, ~~2019,~~2020, we were not subject to this covenant as borrowings under the Revolving Credit Facility did not exceed the 30% threshold. At March 31, ~~2019,~~2020, we would not have met this covenant if we had exceeded the 30% threshold. As such, our borrowing capacity under the Revolving Credit Facility at March 31, ~~2019~~2020 was limited to $9.4 million of additional borrowings. We were in compliance with all applicable debt covenants at March 31, ~~2019~~2020 and December 31, ~~2018.~~

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2019.

The following table details the outstanding amounts and available borrowings under our Senior Secured Credit Facilities as of March 31, ~~2019~~2020 and December 31, ~~2018~~2019 (in thousands):


	March 31,		December 31,
	2019		2018

					March 31,		December 31,
					2020		2019
Senior Secured Credit Facilities:
Term Loan Facility:
Principal amount of borrowings	$	1,195,000	$	1,195,000	$	1,195,000	$	1,195,000
Less: cumulative principal payments		(22,905)		(19,907)		(34,895)		(31,898)
Less: unamortized original issue discount		(5,090)		(5,358)		(4,057)		(4,320)
Less: finance costs		(12,710)		(13,390)		(9,986)		(10,667)
		1,154,295		1,156,345
						1,146,062		1,148,115
Less: current portion		(11,911)		(11,991)		(11,991)		(11,991)
Long-term debt, net of current portion	$	1,142,384	$	1,144,354	$	1,134,071	$	1,136,124
Revolving Credit Facility:
Total commitment	$	35,000	$	35,000	$	35,000	$	35,000
Less: outstanding letters of credit		(3,689)		(3,689)		(3,622)		(4,112)
Less: availability reduction due to Total Leverage Ratio		(21,918)		—		(21,965)		(21,622)
Additional borrowing capacity	$	9,393	$	31,311	$	9,413	$	9,266

See our Annual Report and Note 56 – Long-term Debt to our condensed consolidated financial statements included in Part I, Item 1 of this Form 10-Q for a further discussion of the terms of the Senior Secured Credit Facilities.

Floor Plan Facility

As of March 31, ~~2019~~2020 and December 31, ~~2018, one~~2019, FreedomRoads, LLC (“FR”), an indirect subsidiary of ~~our indirect subsidiaries~~the Company, maintained floor plan financing through the Seventh Amended and Restated Credit Agreement (“Floor Plan Facility”) ~~with~~. On October 8, 2019, FR entered into a ~~maturity date of December 12, 2020~~Second Amendment to the Seventh Amended and anRestated Credit Agreement, (the “Amendment’). The applicable borrowing rate margin on LIBOR and base rate loans ~~ranging~~ranges from 2.05% to 2.50% and 0.55% and 1.00%, respectively, based on the consolidated current ratio at FR. ~~The~~At March 31, 2020, the Floor Plan Facility ~~allows~~allowed FR to borrow (a) up to ~~$1.415~~$1.38 billion under a floor plan facility, (b) up to $15.0 million under a letter of credit facility and (c) up to a maximum amount outstanding

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of $57.0 million under the revolving line of credit, which maximum amount outstanding ~~will decrease~~decreases by $3.0 million on the last day of each fiscal ~~quarter, commencing with~~quarter. The maturity date of the ~~fiscal quarter ending~~Floor Plan Facility is March ~~31, 2020.~~15, 2023.

The credit agreement governing the Floor Plan Facility contains certain financial covenants which we were in compliance with at March 31, ~~2019~~2020 and December 31, ~~2018.~~

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2019.

The following table details the outstanding amounts and available borrowings under our Floor Plan Facility as of March 31, ~~2019~~2020 and December 31, ~~2018~~2019 (in thousands):


	March 31,		December 31,
	2019		2018

					March 31,		December 31,
					2020		2019
Floor Plan Facility:
Notes payable — floor plan:
Total commitment	$	1,415,000	$	1,415,000	$	1,379,750	$	1,379,750
Less: borrowings, net		(882,346)		(885,980)		(846,424)		(848,027)
Less: flooring line aggregate interest reduction account		(152,346)		(97,757)		(173,853)		(87,016)
Additional borrowing capacity		380,308		431,263		359,473		444,707
Less: accounts payable for sold inventory		(76,534)		(33,928)		(32,934)		(27,892)
Less: purchase commitments		(37,671)		(22,530)		(10,133)		(8,006)
Unencumbered borrowing capacity	$	266,103	$	374,805	$	316,406	$	408,809


Revolving line of credit	$	60,000	$	60,000	$	57,000	$	60,000
Less borrowings		(42,610)		(38,739)		(40,885)		(40,885)
Additional borrowing capacity	$	17,390	$	21,261	$	16,115	$	19,115


Letters of credit:
Total commitment	$	15,000	$	15,000	$	15,000	$	15,000
Less: outstanding letters of credit		(10,380)		(10,380)		(11,175)		(11,175)
Additional letters of credit capacity	$	4,620	$	4,620	$	3,825	$	3,825

See our Annual Report and Note 3 – Inventories and Floor Plan Payable to our condensed consolidated financial statements included in Part I, Item 1 of this Form 10-Q for a further discussion of the terms of the Floor Plan Facility.

Real Estate Facility

The Real Estate Facility is subject to certain cross default provisions, a debt service coverage ratio, and other customary covenants which we were in compliance with at March 31, ~~2019~~2020 and December 31, ~~2018.~~2019.

The outstanding principal of the Real Estate Facility was ~~$9.5~~$19.2 million and ~~$9.7~~$19.7 million as of March 31, ~~2019~~2020 and December 31, ~~2018.~~2019.

Sale/Leaseback Arrangements

We have in the past and may in the future enter into ~~sale‑leaseback~~sale-leaseback transactions to finance certain property acquisitions and capital expenditures, pursuant to which we sell property and/or leasehold

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improvements to third parties and agree to lease those assets back for a certain period of time. Such sales generate proceeds which vary from period to period.

Deferred Revenue

Deferred revenue consists of our sales for products not yet recognized as revenue at the end of a given period. Our deferred revenue as of March 31, ~~2019~~2020 was ~~$138.9~~$140.1 million.

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Off-Balance Sheet Arrangements

As of March 31, ~~2019,~~2020, we did not have any off-balance sheet arrangements ~~except for operating~~other than short-term leases ~~entered into~~not included in our lease obligation.

Contractual Obligations

There were no material changes in our commitments during the ~~normal~~three months ended March 31, 2020 under contractual obligations from those disclosed in our Annual Report outside the course of normal business.

Critical Accounting Policies and Estimates

We prepare our condensed consolidated financial statements in accordance with GAAP, and in doing so, we have to make estimates, assumptions and judgments affecting the reported amounts of assets, liabilities, revenues and expenses, as well as the related disclosure of contingent assets and liabilities. We base our estimates, assumptions and judgments on historical experience and on various other factors we believe to be reasonable under the circumstances. Different assumptions and judgments would change estimates used in the preparation of our condensed consolidated financial statements, which, in turn, could change our results from those reported. We evaluate our critical accounting estimates, assumptions and judgments on an ongoing basis.

There has been no material change in our critical accounting policies from those previously reported and disclosed in our Annual Report.

Recent Accounting Pronouncements

See Note 1 – Summary of Significant Accounting Policies to our unaudited condensed consolidated financial statements in Item 1, Part I of this Form 10-Q.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

For a discussion of the Company’s quantitative and qualitative disclosures about market risks, see Item 7A. Quantitative and Qualitative Disclosures About Market Risks, in our Annual ~~Report on Form 10-K for the year ended December 31, 2018.~~Report. As of March 31, ~~2019,~~2020, there have been no material changes in this information.

Item 4. Controls and Procedures

Limitations on Effectiveness of Controls and Procedures

In designing and evaluating our disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must

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reflect the fact that there are resource constraints and that management is required to apply judgment in evaluating the benefits of possible controls and procedures relative to their costs.

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer ~~(“CEO”)~~ and Chief Financial Officer, ~~(“CFO”),~~ evaluated, as of the end of the period covered by this Quarterly Report on Form 10-Q, the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as ~~amended) as of March 31, 2019.~~amended (the “Exchange Act”)). Based on ~~this~~that evaluation, our ~~CEO~~Chief Executive Officer and ~~CFO~~Chief Financial Officer concluded that our disclosure controls and procedures were ~~not~~ effective at the reasonable assurance level as of March 31, ~~2019 as a result of the material weaknesses described in our Annual Report on Form 10-K and below.~~2020.

In connection with the preparation of our consolidated financial statements for the year ended December 31, 2018, we identified the following material weaknesses in internal control over financial reporting:

~~the Company identified the necessity to adjust the manner in which reserves related to certain dealership finance and insurance product cancellation provisions are calculated, resulting from a~~

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~~deficiency in the design and operation of the review of such reserves, which we determined to be a material weakness;~~

deficiencies related to areas such as (1) the review of asset activity and valuations, (2) the appropriate assignment of resources for the review of certain accounting analyses and associated journal entries, and (3) the financial statement presentation and disclosure review process that collectively represent a material weakness; and

the previously reported material weaknesses in internal controls related to our management review control process to ensure appropriate accounting for income taxes, including the calculation and realization of deferred tax assets.

~~Management’s Remediation Efforts~~

We have identified and begun to implement several steps, as further described below, designed to remediate the material weaknesses described in this Item 4 and to enhance our overall control environment. We will not consider the material weaknesses remediated until our enhanced controls are operational for a sufficient period of time and tested, enabling management to conclude that the enhanced controls are operating effectively.

Although we have undertaken remediation efforts to enhance our controls for income taxes, we will not consider the material weaknesses to be remediated until the material weakness related to insufficient accounting resources is fully remediated, and until our enhanced controls are operational for a sufficient period of time and tested, enabling management to conclude that the enhanced controls are operating effectively.

~~Our remediation plan includes, but is not limited to, the following measures:~~

Performing an assessment of accounting resource requirements across the Company. Based on the results of that assessment, we plan to undertake such measures as deemed necessary, including hiring additional experienced accounting personnel to enable the proper and timely review of asset activity and valuations and certain dealership finance and insurance product cancellation reserves, the appropriate assignment of resources for review of certain accounting analyses and associated journal entries, and the financial statement presentation and disclosure review process;

~~Regularly monitoring accounting resource sufficiency; and~~

Improving the design of our existing controls to include additional review of the analysis to determine the amount of our income tax liabilities and related deferred income tax balances, and the ability to realize deferred tax assets, including additional review over the computation processes for the determination of the allocation of basis between the Continuing Equity Owners and the Company. The management review of the analysis will employ specialized resources over the basis allocations and the related computations surrounding our income tax liabilities and related deferred income tax balances. To improve the effectiveness of the tax controls, the Company plans to procure additional resources and the reviewer will also perform additional review procedures when a tax-planning strategy is involved in the determination of the amount of valuation allowance, if any, applied against deferred tax assets.

While the foregoing measures are intended to effectively remediate the material weaknesses described in this Item 4, it is possible that additional remediation steps will be necessary. As such, as we continue to evaluate and implement our plan to remediate the material weaknesses, our management may decide to take additional measures to address the material weaknesses or modify the remediation steps described above. Until these material weaknesses are remediated, we plan to continue to perform additional analyses and other procedures to help ensure that our consolidated financial statements are prepared in accordance with GAAP.

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Changes in Internal Control over Financial Reporting

~~We are taking actions~~In response to ~~remediate~~COVID-19 and the ~~material weaknesses relating~~related stay-at-home policy for a significant portion of our administrative workforce, we have modified certain controls to allow them to be performed remotely. These changes did not materially affect our internal ~~controls~~control over financial ~~reporting, as described above. Except as discussed above,~~reporting. Other than these control modifications, there ~~have been~~was no ~~changes~~change in our internal control over financial reporting (as defined in Rules ~~13a-15(e)~~13a-15(f) and ~~15d-15(e)~~15d-15(f) under the ~~Securities~~ Exchange ~~Act~~Act) identified in connection with the evaluation of ~~1934, as amended) that occurred~~our internal control performed during the ~~three months~~fiscal quarter ended March 31, ~~2019~~2020, that ~~have~~has materially affected, or ~~are~~is reasonably likely to materially affect, our internal control over financial reporting.

Part II. Other Information

Item 1. Legal Proceedings

See Note 9 – Commitments and Contingencies to our unaudited condensed consolidated financial statements in Item 1, Part I of this Form 10-Q.

On October 19, 2018, a purported stockholder of the Company filed a putative class action lawsuit, captioned Ronge v. Camping World Holdings, Inc. et al., in the United States District Court for the Northern District of Illinois against us, certain of our officers and directors, and Crestview Partners II GP, L.P. and Crestview Advisors, L.L.C. (the “Ronge Complaint”). On October 25, 2018, a different purported stockholder of the Company filed a putative class action lawsuit, captioned Strougo v. Camping World Holdings, Inc. et al., in the United States District Court for the Northern District of Illinois against us, certain of our officers and directors, and Crestview Partners II GP, L.P. and Crestview Advisors, L.L.C. (the “Strougo Complaint”).

The Ronge and Strougo Complaints were consolidated and lead plaintiffs appointed by the court. On February 27, 2019, lead plaintiffs filed a consolidated complaint against us, certain of our officers and directors, Crestview Partners II GP, L.P. and Crestview Advisors, L.L.C., and the underwriters of the May and October 2017 secondary offerings of our Class A common stock. The consolidated complaint alleges violations of Sections 11 and 12(a)(2) of the Securities Act of 1933, as well as Section 10(b) of the Securities Exchange Act of 1934, as amended, and rule 10b-5 thereunder, based on allegedly materially misleading statements or omissions of material facts necessary to make certain statements not misleading related to the business, operations, and management of the Company. Additionally, it alleges that certain of our officers and directors, Crestview Partners II GP, L.P., and Crestview Advisors, L.L.C. violated Section 15 of the Securities Act of 1933 and Section 20(a) of the Securities Exchange Act of 1934, as amended, by allegedly acting as controlling persons of the Company. The lawsuit brings claims on behalf of a putative class of purchasers of our Class A common stock between March 8, 2017 and August 7, 2018, and seeks compensatory damages, rescission, attorneys’ fees and costs, and any equitable or injunctive relief the court deems just and proper.

On December 12, 2018, a putative class action complaint styled International Union of Operating Engineers Benefit Funds of Eastern Pennsylvania and Delaware v. Camping World Holdings Inc., et al. was filed in the Supreme Court of the State of New York, New York County, on behalf of all purchasers of Camping World Class A common stock issued pursuant and/or traceable to a secondary offering of such securities in October 2017 (“IUOE Complaint”). The IUOE Complaint names as defendants the Company, and certain of its officers and directors, among others, and alleges violations of Sections 11, 12(a), and 15 of the Securities Act of 1933 based on allegedly materially misleading statements or omissions of material facts necessary to make certain statements not misleading and seeks compensatory damages, including prejudgment and post-judgment interest, attorneys’ fees and costs, and any equitable or injunctive relief the court deems just and proper, including rescission. On February 28, 2019. we, along with the other defendants, moved to dismiss this action.

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On March 5, 2019, a shareholder derivative suit captioned Hunnewell v. Camping World Holdings, Inc., et al., was filed in the Court of Chancery of the State of Delaware, alleging breaches of fiduciary duty for alleged failure to implement effective disclosure controls and internal controls over financial reporting and to properly oversee certain acquisitions and for alleged insider trading (the “Hunnewell Complaint”). The Hunnewell Complaint names the Company as nominal defendant, and names certain of its officers and directors, among others, as defendants and seeks restitutionary and/or compensatory damages, disgorgement of all management fees, advisory fees, expenses and other fees paid by us during the period in question, disgorgement of profits pursuant to the alleged insider trading, attorneys’ fees and costs, and any other and further relief the court deems just and proper. On April 29, 2019, the Company, along with the other defendants, moved to stay the action pending the resolution of the putative class action in the United States District Court for the Northern District of Illinois.

On April 17, 2019, a shareholder derivative suit captioned Lincolnshire Police Pension Fund v. Camping World Holdings, Inc., et al., was filed in the Court of Chancery of the State of Delaware, alleging breaches of fiduciary duty for alleged failure to implement effective disclosure controls and internal controls over financial reporting and to properly oversee certain acquisitions and for alleged insider trading and unjust enrichment for compensation received during that time (the “LPPF Complaint”). The LPPF Complaint names us as nominal defendant, and names certain of our officers and directors, among others, as defendants and seeks compensatory damages, extraordinary equitable and/or injunctive relief, restitution and disgorgement, attorneys’ fees and costs, and any other and further relief the court deems just and proper.

We are also engaged in various other legal actions, claims and proceedings arising in the ordinary course of business, including claims related to employment-related matters, breach of contracts, products liabilities, consumer protection and intellectual property matters resulting from our business activities. We do not believe that the ultimate resolution of such matters will have a material adverse effect on our business, financial condition or results of operations. However, litigation is subject to many uncertainties, and the outcome of certain of such individual litigated matters may not be reasonably predictable and any related damages may not be estimable. Certain of these litigation matters could result in an adverse outcome to us, and any such adverse outcome could have a material adverse effect on our business, financial condition and results of operations.

Item 1A. Risk Factors

There have been no material changes to our risk factors as previously disclosed in Item 1A of Part I of our Annual Report on Form 10-K for the year ended December 31, ~~2018~~2019 filed with the Securities and Exchange Commission on ~~March 15, 2019.~~February 28, 2020, other than with respect to the risk factors described below.

The COVID-19 pandemic has had, and we expect will continue to have, certain negative impacts on our business, and such impacts may have a material adverse effect on our results of operations, financial condition and cash flows.

The public health crisis caused by the COVID-19 pandemic and the measures being taken by governments, businesses, including us and our vendors, and the public at large to limit COVID-19's spread have had, and we expect will continue to have, certain negative impacts on our business including, without limitation, the following:

●

As consumers have followed governmentally mandated or voluntary stay-at-home guidelines, we have experienced a decrease in traffic at our RV and Outdoor Retail locations, which has resulted in a decrease in the sales of certain of our products and services at our RV and Outdoor Retail locations. We have implemented preparedness plans to keep our employees and customers healthy and safe, which include social distancing, providing employees with face coverings and/or other protective clothing as required, and implementing additional cleaning and sanitization routines. This negative trend is likely to continue, with the most significant impact expected to occur in the second quarter of fiscal year 2020. If the COVID-19 pandemic intensifies, its negative impacts on our sales could be more prolonged and may become more severe. Therefore, the historical information in this quarterly report does not fully reflect the adverse impacts of COVID-19 on our business. Accordingly, investors are cautioned not to unduly rely on such historical information regarding our business, results of operations, financial condition or liquidity, as that data does not fully reflect the adverse

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impact of COVID-19 and therefore does not purport to be representative of the future results of operations, financial condition, liquidity or other financial or operating results of us.

●

As many national parks and RV parks have temporarily closed in response to the COVID-19 pandemic, consumers may use their RVs less frequently and be less inclined to need or renew certain of our services or purchase products through our e-commerce websites. We have experienced decreases in new memberships and renewals of certain of our services and decreased online traffic.

●

As of March 31, 2020, we have temporarily closed four of our specialty retail locations as a result of COVID-19. Subsequent to March 31, 2020, we have temporarily closed three dealerships as a result of COVID-19. To the extent the COVID-19 pandemic intensifies or governmental orders change, we may be forced to close more locations in the future.

●

Deteriorating economic conditions as a result of the COVID-19 pandemic, such as increased unemployment, decreases in disposable income, declines in consumer confidence, or economic slowdowns or recessions, could cause a further decrease in demand for our products and services.

●

We have made temporary changes to our operating procedures at our RV and Outdoor Retail locations and offices. We are taking measures to protect our customers, employees and facilities, which include, but are not limited to, social distancing, providing employees with face coverings and/or other protective clothing as required, and implementing additional cleaning and sanitization routines. These measures may not be sufficient to prevent the spread of COVID-19 among our employees and, therefore, we may face labor shortages including key positions. Additionally, our employees may not be as efficient while operating under these temporary procedures, which could result in additional labor costs.

●

We have faced, and may continue to face, increasing delays in the delivery of certain products from our vendors as a result of shipping delays due to, among other things, additional safety requirements imposed by governmental authorities and capacity constraints experienced by our transportation contractors.

●

Some of our vendors have experienced, and may experience in the future, temporary facility closures, production slowdowns and disruptions in distribution operations as a result of the impact of the COVID-19 pandemic on their respective businesses, such as Thor Industries, Inc.’s announced temporary closure of its North American production facilities from late March to early May 2020.

●

Disruptions in supply chains may place constraints on our ability to source product, which may increase our product costs or lead to shortages.

●

Our ability to increase our borrowing capacity may be limited as a result of the COVID-19 pandemic and, if the conditions in the credit markets worsen, our ability to refinance credit arrangements as they mature may also be limited. As a result, there is no guarantee that we will be able to access additional capital on commercially reasonable terms or at all.

●

The current uncertain market conditions and their actual or perceived effects on our results of operations and financial condition, along with the current unfavorable economic environment in the United States, may increase the likelihood that one or more of the major independent credit agencies will further downgrade our credit ratings, which could have a negative effect on our borrowing costs.

●

Governmental authorities in the United States may increase or impose new income taxes or indirect taxes, or revise interpretations of existing tax rules and regulations, as a means of financing the costs of stimulus and other measures enacted or taken, or that may be enacted or taken in the future, to protect populations and economies from the impact of the COVID-19 pandemic. Such actions could have an adverse effect on our results of operations and cash flows.

Table of Contents

●

We rely on third-party service providers and business partners, such as cloud data storage and other information technology service providers, suppliers, distributors, contractors, and other external business partners, for certain functions or for services in support of key portions of our operations. These third-party service providers and business partners are subject to risks and uncertainties related to the COVID-19 pandemic, which may interfere with their ability to fulfill their respective commitments and responsibilities to us in a timely manner and in accordance with the agreed-upon terms.

●

The financial impact of the COVID-19 pandemic may cause one or more of our counterparty financial institutions to fail or default on their obligations to us, which could cause us to incur significant losses.

●

Deteriorations in our financial results and financial condition as a result of the COVID-19 pandemic could cause us to default on one or multiple of our credit agreements, including any of the subjective acceleration clauses in such agreements. If this occurs, our obligations under the relevant agreement may be accelerated which would have a material adverse impact on our business, liquidity position and financial position.

●

We may be required to record significant impairment charges with respect to noncurrent assets, including goodwill, other intangible assets, and other long-lived assets whose fair values may be negatively affected by the effects of the COVID-19 pandemic on our operations. Also, we may be required to write off excess or obsolete inventory as a result of the COVID-19 pandemic’s damaging impacts on our business.

●

As a result of the COVID-19 pandemic, including related governmental guidance or directives, we have required most office-based employees to work remotely. We may experience reductions in productivity and disruptions to our business routines and heightened cybersecurity risks while our remote work policy remains in place.

●

Actions we have taken or may take, or decisions we have made or may make, as a consequence of the COVID-19 pandemic may result in legal claims or litigation against us.

The resumption of normal business operations after the disruptions caused by the COVID-19 pandemic may be delayed or constrained by its lingering effects on our consumers, vendors or third-party service providers.

Any of the negative impacts of the COVID-19 pandemic, including those described above, alone or in combination with others, may have a material adverse effect on our results of operations, financial condition and cash flows. Any of these negative impacts, alone or in combination with others, could exacerbate many of the risk factors discussed in “Risk Factors” in Item 1A of Part I of our Annual Report. The full extent to which the COVID-19 pandemic will negatively affect our results of operations, financial condition and cash flows will depend on future developments that are highly uncertain and cannot be predicted, including the scope and duration of the pandemic and actions taken by governmental authorities and other third parties in response to the pandemic.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item 3. Defaults Upon Senior Securities

None.

Table of Contents

Item 4. Mine Safety Disclosures

Not applicable.

~~Table of Contents~~

Item 5. Other Information

None.

Item 6. Exhibits

Exhibits Index


		Incorporated by Reference
Exhibit Number	Exhibit Description	Form	File No.	Exhibit	Filing Date	Filed/ Furnished Herewith
3.1	Amended and Restated Certificate of Incorporation of Camping World Holdings, Inc.	10-Q	001-37908	3.1	11/10/16

3.2	Amended and Restated Bylaws of Camping World Holdings, Inc.	10-Q	001-37908	3.2	11/10/16

4.1	Specimen Stock Certificate evidencing the shares of Class A common stock	S-1/A	333-211977	4.1	9/13/16

10.1	First Amendment to Employment Agreement, by and between the Company and Brent Moody, dated March 25, 2020.	8-K	001-37908	10.1	3/25/20

31.1	Rule 13a-14(a) / 15d-14(a) Certification of Chief Executive Officer					*

31.2	Rule 13a-14(a) / 15d-14(a) Certification of Chief Financial Officer					*

32.1	Section 1350 Certification of Chief Executive Officer					**

32.2	Section 1350 Certification of Chief Financial Officer					**

101.INS	Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.					***

101.SCH	Inline XBRL Taxonomy Extension Schema Document					***

Incorporated by Reference

Exhibit
Number

Exhibit Description

Form

File No.

Exhibit

Filing
Date

Filed/
Furnished
Herewith
3.1

Amended and Restated Certificate of Incorporation of Camping World Holdings, Inc.

10-Q

001-37908

3.1

11/10/16

3.2

Amended and Restated Bylaws of Camping World Holdings, Inc.

10-Q

001-37908

3.2

11/10/16

4.1

Specimen Stock Certificate evidencing the shares of Class A common stock

S-1/A

333‑211977

4.1

9/13/16

10.1

Camping World Holdings, Inc. Non-Employee Director Compensation Policy

*

31.1

Rule 13a-14(a) / 15d-14(a) Certification of Chief Executive Officer

*

31.2

Rule 13a-14(a) / 15d-14(a) Certification of Chief Financial Officer

*

32.1

Section 1350 Certification of Chief Executive Officer

**

32.2

Section 1350 Certification of Chief Financial Officer

**

101.INS

XBRL Instance Document

***

101.SCH

XBRL Taxonomy Extension Schema Document

***

101.CAL

XBRL Taxonomy Extension Calculation Linkbase Document

***

101.DEF

XBRL Extension Definition Linkbase Document

***

101.LAB

XBRL Taxonomy Label Linkbase Document

***

Table of Contents


		Incorporated by Reference
Exhibit Number	Exhibit Description	Form	File No.	Exhibit	Filing Date	Filed/ Furnished Herewith
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document					***
		~~Incorporated by Reference~~
Exhibit Number101.DEF	~~Exhibit Description~~Inline XBRL Extension Definition Linkbase Document	~~Form~~	~~File No.~~	~~Exhibit~~	Filing Date	Filed/ Furnished Herewith***

101.LAB	Inline XBRL Taxonomy Label Linkbase Document					***

101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document					***

104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)					***

* Filed herewith

** Furnished herewith

*** Submitted electronically herewith

SIGNATURE

~~SIGNATURE~~

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

			Camping World Holdings, Inc.

Date: May ~~10, 2019~~8, 2020	By:	/s/ Melvin L. Flanigan
		Melvin L. Flanigan
		Chief Financial Officer and Secretary

		(Authorized Officer and Principal Financial Officer)

5553


		Page
			~~Page~~


PART I. FINANCIAL INFORMATION

Item 1	Financial Statements (unaudited)	53
	Unaudited Condensed Consolidated Balance Sheets – March 31, ~~2019~~2020 and December 31, ~~2018~~2019	53
	Unaudited Condensed Consolidated Statements of Operations – Three ~~Months~~months Ended March 31, ~~2019~~2020 and ~~2018~~2019	64
	Unaudited Condensed Consolidated ~~Statement~~Statements of Stockholders’ Equity – Three ~~Months~~months Ended March 31, ~~2019~~2020 and ~~2018~~2019	75
	Unaudited Condensed Consolidated Statements of Cash Flows – Three ~~Months~~months Ended March 31, ~~2019~~2020 and ~~2018~~2019	86
	Notes to Unaudited Condensed Consolidated Financial Statements	108
Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	3229
Item 3	Quantitative and Qualitative Disclosures About Market Risk	5048
Item 4	Controls and Procedures	5048

PART II. OTHER INFORMATION

Item 1	Legal Proceedings	5249
Item 1A	Risk Factors	5349
Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	51
Item 3	Defaults Upon Senior Securities	51
Item 4	Mine Safety Disclosures	52
Item 5	Other Information	52
Item 6	Exhibits	52

Signatures		53
~~Item 3~~	~~Defaults Upon Senior Securities~~	53
~~Item 4~~	~~Mine Safety Disclosures~~	53
~~Item 5~~	~~Other Information~~	54
~~Item 6~~	~~Exhibits~~	54

~~Signatures~~		55


										Additional		Retained		Non-
	Class A Common Stock			Class B Common Stock			Class C Common Stock			Paid-In		Earnings		Controlling
	Shares	Amounts		Shares	Amounts		Shares	Amounts		Capital		(Deficit)		Interest		Total
Balance at December 31, 2018	37,192		372	50,707		5	—		—		47,531		(3,370)		(11,621)		32,917
Adoption of accounting standard (see Note 1 — Summary of Significant Accounting Policies)	—		—	—		—	—		—		—		3,705		6,332		10,037
Equity-based compensation	—		—	—		—	—		—		2,716		—		—		2,716
Vesting of restricted stock units	1		—	—		—	—		—		—		—		—		—
Redemption of LLC common units for Class A common stock	6		—	—		—	—		—		12		—		—		12
Distributions to holders of LLC common units	—		—	—		—	—		—		—		—		(5,534)		(5,534)
Dividends(1)	—		—	—		—	—		—		—		(5,699)		—		(5,699)
Establishment of liabilities under the Tax Receivable Agreement and related changes to deferred tax assets associated with that liability	—		—	—		—	—		—		(8)		—		—		(8)
Non-controlling interest adjustment	—		—	—		—	—		—		(1,678)		—		1,678		—
Net loss	—		—	—		—	—		—		—		(19,395)		(7,412)		(26,807)
Balance at March 31, 2019	37,199	$	372	50,707	$	5	—	$	—	$	48,573	$	(24,759)	$	(16,557)	$	7,634

Balance at December 31, 2017	36,749		367	50,837		5	—		—		42,520		7,619		21,252		71,763
Adoption of accounting standard (ASC No. 606, Revenue from Contracts with Customers)	—		—	—		—	—		—		—		1,310		2,476		3,786
Equity-based compensation	—		—	—		—	—		—		3,218		—		—		3,218
Exercise of stock options	6		—	—		—	—		—		137		—		—		137
Non-controlling interest adjustment for capital contribution of proceeds from the exercise of stock options	—		—	—		—	—		—		(77)		—		77		—
Vesting of restricted stock units	2		—	—		—	—		—		—		—		—		—
Redemption of LLC common units for Class A common stock	173		2	(130)		—	—		—		1,848		—		(115)		1,735
Distributions to holders of LLC common units	—		—	—		—	—		—		—		—		(19,938)		(19,938)
Dividends(1)	—		—	—		—	—		—		—		(5,662)		—		(5,662)
Establishment of liabilities under the Tax Receivable Agreement and related changes to deferred tax assets associated with that liability	—		—	—		—	—		—		(1,414)		—		—		(1,414)
Non-controlling interest adjustment	—		—	—		—	—		—		(1,592)		—		1,592		—
Net income	—		—	—		—	—		—		—		1,821		11,727		13,548
Balance at March 31, 2018	36,930	$	369	50,707	$	5	—	$	—	$	44,640	$	5,088	$	17,071	$	67,173


	Three Months Ended March 31,
	2019		2018
Operating activities
Net (loss) income	$	(26,807)	$	13,548

Adjustments to reconcile net (loss) income to net cash used in operating activities:
Depreciation and amortization		13,594		9,400
Equity-based compensation		2,716		3,218
Loss on debt restructure		—		1,676
Loss (gain) on sale of assets		(214)		85
Provision for losses on accounts receivable		186		106
Non-cash lease expense		13,495		—
Accretion of original debt issuance discount		267		229
Non-cash interest		1,162		1,274
Deferred income taxes		16,412		2,426
Tax Receivable Agreement liability adjustment		(8,477)		—
Change in assets and liabilities, net of acquisitions:
Receivables and contracts in transit		(65,493)		(63,567)
Inventories		(54,496)		(153,637)
Prepaid expenses and other assets		4,976		5,619
Accounts payable and other accrued expenses		55,392		122,806
Payment pursuant to Tax Receivable Agreement		—		(7)
Accrued rent for cease-use locations		542		(416)
Deferred revenue and gains		(5,805)		(1,986)
Operating lease liability		(13,941)		—
Other, net		(7,529)		2,256
Net cash used in operating activities		(74,020)		(56,970)

Investing activities
Purchases of property and equipment		(11,761)		(43,269)
Purchase of real property		(665)		(24,426)
Proceeds from the sale of real property		10,226		—
Purchases of businesses, net of cash acquired		(21,169)		(12,484)
Proceeds from sale of property and equipment		453		513
Net cash used in investing activities	$	(22,916)	$	(79,666)


	Three Months Ended March 31, 2018
($ in thousands except per share amounts)	As Reported		Adjustment		As Corrected
Revenue - Products, service and other	$	164,308	$	(156)	$	164,152
Revenue - Finance and insurance, net		91,849		(2,749)		89,100
Total revenue		1,061,566		(2,905)		1,058,661
Costs applicable to revenue - Good Sam services and plans(1)		20,423		37		20,460
Costs applicable to revenue - Products, service and other		95,888		(86)		95,802
Costs applicable to revenue - Good Sam Club(1)		2,302		27		2,329
Total costs applicable to revenue		756,790		(22)		756,768
Selling, general and administrative expenses		245,114		1,199		246,313
Total operating expenses		255,023		1,199		256,222
Income from operations		49,753		(4,082)		45,671
Income before income taxes		24,495		(4,082)		20,413
Income tax expense		(7,219)		354		(6,865)
Net income		17,276		(3,728)		13,548
Net income attributable to non-controlling interests		(14,095)		2,368		(11,727)
Net income attributable to Camping World Holdings, Inc.		3,181		(1,360)		1,821
Earnings per share of Class A common stock:
Basic	$	0.09	$	(0.04)	$	0.05
Diluted	$	0.08	$	(0.03)	$	0.05


	Good Sam
	Services and		RV and
	Plans		Outdoor Retail		Consolidated
Balance as of December 31, 2018		50,320		308,797		359,117
Acquisitions (1)		—		11,981		11,981
Transfers of assets between reporting units		(26,491)		26,491		—
Balance as of March 31, 2019	$	23,829	$	347,269	$	371,098


	Operating
	Leases
2019	$	90,408
2020		119,411
2021		119,061
2022		114,092
2023		110,552
Thereafter		868,754
Total lease payments		1,422,278
Less: Imputed interest		(544,857)
Total lease obligations		877,421
Less: Current portion		(54,878)
Noncurrent lease obligations	$	822,543


	December 31,
	2018
Right to use assets	$	5,400
Accumulated depreciation		(540)
	$	4,860


	Third Party		Related Party		Total
2019	$	116,131	$	2,248	$	118,379
2020		111,008		2,248		113,256
2021		106,740		2,248		108,988
2022		102,496		2,145		104,641
2023		99,594		1,930		101,524
Thereafter		811,228		18,951		830,179
Total	$	1,347,197	$	29,770	$	1,376,967


	Fair Value	3/31/2019				12/31/2018
($ in thousands)	Measurement	Carrying Value		Fair Value		Carrying Value		Fair Value
Term Loan Facility	Level 2	$	1,154,295	$	1,056,292	$	1,156,345	$	1,116,338
Floor Plan Facility Revolving Line of Credit	Level 2		42,610		44,107		38,739		40,139
Real Estate Facility	Level 2		9,286		10,599		9,520		10,850


	Three Months Ended March 31,				Estimated
($ in thousands)	2019		2018		Life
Tangible assets (liabilities) acquired (assumed):
Inventory, net	$	9,096	$	6,609
Prepaid expenses and other assets		87		—
Property and equipment, net		105		281
Other assets		—		55
Accrued liabilities		(100)		(148)
Total tangible net assets acquired		9,188		6,797
Intangible assets acquired:
Membership and customer lists		—		116	4-7 years
Total intangible assets acquired		—		116
Goodwill		11,981		5,571
Cash paid for acquisitions, net of cash acquired		21,169		12,484
Inventory purchases financed via floor plan		(8,416)		(4,222)
Cash payment net of floor plan financing	$	12,753	$	8,262


	Three Months Ended March 31, 2019
	Good Sam		RV and
	Services		Outdoor		Intersegment
($ in thousands)	and Plans(1)		Retail(1)		Eliminations		Total
Revenue:
Good Sam services and plans	$	48,298	$	—	$	(1,332)	$	46,966
New vehicles		—		530,749		(1,172)		529,577
Used vehicles		—		180,605		(597)		180,008
Products, service and other		—		210,198		(5,322)		204,876
Finance and insurance, net		—		94,280		(2,389)		91,891
Good Sam Club		—		11,451		—		11,451
Total consolidated revenue	$	48,298	$	1,027,283	$	(10,812)	$	1,064,769