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CWH Camping World

Filed: 6 Aug 20, 4:32pm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2020

or

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____________ to _______________

Commission file number: 001-37908

CAMPING WORLD HOLDINGS, INC.

(Exact name of registrant as specified in its charter)

Delaware

81-1737145

(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification No.)

250 Parkway Drive, Suite 270

Lincolnshire, IL 60069

(Address of registrant’s principal executive offices) (Zip Code)

Telephone: (847) 808-3000

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if 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  

As of August 3, 2020, the registrant had 37,887,171 shares of Class A common stock, 50,706,629 shares of Class B common stock and 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, 2019 filed with the Securities and Exchange Commission (“SEC”) on 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 initial public offering (“IPO”) of our stock and the related reorganization transactions (each as discussed 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 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.
“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.

1

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; 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; 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; our sources of liquidity and capital and any potential need for additional financing or refinancing, retirement or exchange of outstanding debt; future capital expenditures and debt service obligations; expectations regarding industry trends and consumer behavior and growth; our ability to capture positive industry trends and pursue growth; expectations regarding our 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. We have based these forward-looking statements largely on our current expectations and projections about future events and trends that we believe may affect our financial condition, results of operations, business strategy, short-term and long-term business operations and objectives, and financial needs. These forward-looking statements are subject to a number of risks, uncertainties, and assumptions, including the important factors described in “Risk Factors” in Item 1A of 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 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 forward-looking statements as predictions of future events. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee that the future effects, results, performance, or achievements reflected in the forward-looking statements will be achieved or 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 or revised expectations.

2

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)

June 30, 

December 31, 

  

2020

    

2019

Assets

Current assets:

Cash and cash equivalents

$

227,902

$

147,521

Contracts in transit

171,437

44,947

Accounts receivable, less allowance for doubtful accounts of $3,457 and $3,537 in 2020 and 2019, respectively

84,493

81,847

Inventories

1,052,222

1,358,539

Prepaid expenses and other assets

55,974

57,827

Total current assets

1,592,028

1,690,681

Property and equipment, net

325,053

314,374

Operating lease assets

789,539

807,537

Deferred tax assets, net

126,097

129,710

Intangible assets, net

28,101

29,707

Goodwill

387,049

386,941

Other assets

16,684

17,290

Total assets

$

3,264,551

$

3,376,240

Liabilities and stockholders' deficit

Current liabilities:

Accounts payable

$

232,989

$

106,959

Accrued liabilities

184,751

130,316

Deferred revenues

84,286

87,093

Current portion of operating lease liabilities

60,315

58,613

Current portion of Tax Receivable Agreement liability

6,909

6,563

Current portion of long-term debt

15,828

14,085

Notes payable – floor plan, net

470,871

848,027

Other current liabilities

61,391

44,298

Total current liabilities

1,117,340

1,295,954

Operating lease liabilities, net of current portion

823,929

843,312

Tax Receivable Agreement liability, net of current portion

101,702

108,228

Revolving line of credit

20,885

40,885

Long-term debt, net of current portion

1,165,227

1,153,551

Deferred revenues

61,928

58,079

Other long-term liabilities

43,479

35,467

Total liabilities

3,334,490

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 June 30, 2020 and December 31, 2019

Class A common stock, par value $0.01 per share – 250,000,000 shares authorized; 38,018,386 issued and 37,773,109 outstanding as of June 30, 2020 and 37,701,584 issued and 37,488,989 outstanding as of December 31, 2019

378

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 June 30, 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 June 30, 2020 and December 31, 2019

Additional paid-in capital

52,747

50,152

Retained deficit

(44,754)

(83,134)

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

8,376

(32,602)

Non-controlling interests

(78,315)

(126,634)

Total stockholders' deficit

(69,939)

(159,236)

Total liabilities and stockholders' deficit

$

3,264,551

$

3,376,240

See accompanying Notes to Unaudited Condensed Consolidated Financial Statements

3

Camping World Holdings, Inc. and Subsidiaries

Unaudited Condensed Consolidated Statements of Operations

(In Thousands Except Per Share Amounts)

Three Months Ended

Six Months Ended

June 30, 

June 30, 

2020

    

2019

    

2020

    

2019

Revenue:

Good Sam Services and Plans

$

44,519

$

44,694

$

91,727

$

91,660

RV and Outdoor Retail

New vehicles

898,175

778,870

1,395,492

1,308,447

Used vehicles

274,910

245,749

481,575

425,757

Products, service and other

231,172

264,426

403,795

469,302

Finance and insurance, net

147,318

128,225

239,774

220,116

Good Sam Club

10,651

12,383

21,655

23,834

Subtotal

1,562,226

1,429,653

2,542,291

2,447,456

Total revenue

1,606,745

1,474,347

2,634,018

2,539,116

Costs applicable to revenue (exclusive of depreciation and amortization shown separately below):

Good Sam Services and Plans

15,234

18,746

37,093

39,477

RV and Outdoor Retail

New vehicles

752,570

681,399

1,179,012

1,144,443

Used vehicles

208,829

192,681

372,622

335,527

Products, service and other

139,341

168,607

249,610

304,711

Good Sam Club

2,133

2,924

4,380

6,641

Subtotal

1,102,873

1,045,611

1,805,624

1,791,322

Total costs applicable to revenue

1,118,107

1,064,357

1,842,717

1,830,799

Operating expenses:

Selling, general, and administrative

271,591

303,366

539,247

571,431

Depreciation and amortization

12,567

13,946

26,645

27,540

Long-lived asset impairment

6,569

Lease termination

868

1,452

Loss on disposal of assets

272

2,374

783

2,160

Total operating expenses

285,298

319,686

574,696

601,131

Income from operations

203,340

90,304

216,605

107,186

Other income (expense):

Floor plan interest expense

(5,098)

(11,269)

(13,702)

(22,879)

Other interest expense, net

(14,547)

(18,211)

(29,205)

(35,854)

Tax Receivable Agreement liability adjustment

8,477

Total other expense

(19,645)

(29,480)

(42,907)

(50,256)

Income before income taxes

183,695

60,824

173,698

56,930

Income tax expense

(20,473)

(8,201)

(24,605)

(31,114)

Net income

163,222

52,623

149,093

25,816

Less: net income attributable to non-controlling interests

(105,145)

(34,606)

(99,176)

(27,194)

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

$

58,077

$

18,017

$

49,917

$

(1,378)

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

Basic

$

1.54

$

0.48

$

1.33

$

(0.04)

Diluted

$

1.54

$

0.46

$

1.32

$

(0.04)

Weighted average shares of Class A common stock outstanding:

Basic

37,635

37,239

37,585

37,217

Diluted

89,689

88,925

89,578

37,217

See accompanying Notes to Unaudited Condensed Consolidated Financial Statements

4

Camping World Holdings, Inc. and Subsidiaries

Unaudited Condensed Consolidated 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, 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)

Equity-based compensation

4,182

4,182

Exercise of stock options

7

159

159

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

(105)

105

Vesting of restricted stock units

153

2

(10)

8

Repurchases of Class A common stock for withholding taxes on vested RSUs

(17)

(347)

(347)

Redemption of LLC common units for Class A common stock

90

1

58

245

304

Distributions to holders of LLC common units

(47,015)

(47,015)

Dividends(1)

(5,785)

(5,785)

Establishment of liabilities under the Tax Receivable Agreement and related changes to deferred tax assets associated with that liability

(241)

(241)

Non-controlling interest adjustment

(2,545)

2,545

Net income

58,077

105,145

163,222

Balance at June 30, 2020

37,773

$

378

50,707

$

5

$

$

52,747

$

(44,754)

$

(78,315)

$

(69,939)

(1)The Company declared dividends per share of Class A common stock of $0.15 for each the three months ended March 31 and June 30, 2020.

5

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

Equity-based compensation

3,863

3,863

Vesting of restricted stock units

96

1

143

(144)

Repurchases of Class A common stock for withholding taxes on vested RSUs

(22)

(273)

(273)

Distributions to holders of LLC common units

(32,523)

(32,523)

Dividends(2)

(5,711)

(5,711)

Non-controlling interest adjustment

(1,702)

1,702

Net income

18,017

34,606

52,623

Balance at June 30, 2019

37,273

$

373

50,707

$

5

$

$

50,604

$

(12,453)

$

(12,916)

$

25,613

(2)The Company declared dividends per share of Class A common stock of $0.15 for each of the three months ended March 31 and June 30, 2019.

See accompanying Notes to Unaudited Condensed Consolidated Financial Statements

6

Camping World Holdings, Inc. and Subsidiaries

Unaudited Condensed Consolidated Statements of Cash Flows

(In Thousands)

Six Months Ended June 30, 

    

2020

    

2019

Operating activities

Net income

$

149,093

$

25,816

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization

26,645

27,540

Equity-based compensation

7,494

6,579

Loss on lease termination

1,452

Long-lived asset impairment

6,569

Loss on disposal of assets

783

2,160

Provision for losses on accounts receivable

531

379

Non-cash lease expense

28,638

27,182

Accretion of original debt issuance discount

531

532

Non-cash interest

2,104

2,348

Deferred income taxes

4,068

16,615

Tax Receivable Agreement liability adjustment

(8,477)

Change in assets and liabilities, net of acquisitions:

Receivables and contracts in transit

(129,725)

(79,823)

Inventories

306,428

25,752

Prepaid expenses and other assets

1,214

7,082

Accounts payable and other accrued expenses

139,913

80,744

Payment pursuant to Tax Receivable Agreement

(6,563)

(9,425)

Accrued rent for cease-use locations

542

Deferred revenue

1,042

1,088

Operating lease liabilities

(34,379)

(27,174)

Other, net

10,075

719

Net cash provided by operating activities

515,913

100,179

Investing activities

Purchases of property and equipment

(13,660)

(27,848)

Purchase of real property

(25,093)

Proceeds from the sale of real property

10,117

Purchases of businesses, net of cash acquired

(38,608)

Proceeds from sale of property and equipment

491

910

Purchase of intangible assets

(150)

Net cash used in investing activities

$

(13,319)

$

(80,522)

7

Camping World Holdings, Inc. and Subsidiaries

Unaudited Condensed Consolidated Statements of Cash Flows

(In Thousands)

Six Months Ended June 30, 

    

2020

    

2019

Financing activities

Proceeds from long-term debt

$

$

11,662

Payments on long-term debt

(18,359)

(3,409)

Net payments on notes payable – floor plan, net

(316,492)

(29,426)

Borrowings on revolving line of credit

14,029

Payments on revolving line of credit

(20,000)

Payments of principal on finance lease obligations

(23)

Payment of debt issuance costs

(47)

Dividends on Class A common stock

(11,537)

(11,410)

Proceeds from exercise of stock options

159

RSU shares withheld for tax

(559)

(273)

Members' distributions

(55,425)

(38,057)

Net cash used in financing activities

(422,213)

(56,954)

Increase (decrease) in cash and cash equivalents

80,381

(37,297)

Cash and cash equivalents at beginning of the period

147,521

138,557

Cash and cash equivalents at end of the period

$

227,902

$

101,260

See accompanying Notes to Unaudited Condensed Consolidated Financial Statements

8

Camping World Holdings, Inc. and Subsidiaries

Notes to Unaudited Condensed Consolidated Financial Statements

June 30, 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. and its subsidiaries, 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 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 and six months ended June 30, 2020 are unaudited. The condensed consolidated balance sheet as of December 31, 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, 2019 (the “Annual Report”) filed with the SEC on February 28, 2020. Operating results for 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 IPO and other related transactions in order to carry on the business of CWGS, 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 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 (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 June 30, 2020 and December 31, 2019, CWH owned 42.3% 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 declared a pandemic by the World Health Organization in March 2020. 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. Many affected areas have begun the process of easing restrictions and reopening certain businesses often under new operating guidelines.

In conjunction with the stay-at-home and shelter-in-place restrictions enacted in many areas, the Company saw significant sequential declines in its overall customer traffic levels and its overall revenues from the mid-March to mid-to-late April 2020 timeframe. In the latter part of April, the Company began to see a significant improvement in its online web traffic levels and number of electronic leads, and in early May, the Company began to see improvements in its overall revenue levels. As the stay-at-home restrictions began to ease across certain areas of the country, the Company experienced significant acceleration in its in-store and online traffic and revenue trends in May and June 2020.

9

In order to offset the initially expected adverse impact of COVID-19 and better align expenses with reduced sales in the middle of March 2020 and early April 2020, the Company temporarily reduced salaries and hours throughout the business, including for its executive officers, and implemented headcount and other cost reductions. Most of these temporary salary reductions ended in May 2020 as the adverse impacts of the pandemic began to decline and the Company increased hours for certain employees and reinstated many positions from the initial headcount reductions as the demand for the Company’s products increased. The Company also negotiated lease payment deferrals with numerous landlords amounting to approximately $14.0 million from 2020 into 2021. As demand for all products accelerated and the Company’s cash position improved, the Company repaid these rent deferrals in full prior to June 30, 2020. The Company has also taken steps to add new private label lines, expand its relationships with smaller recreational (“RV”) manufacturers, and acquire used inventory from distressed sellers to help manage risks in its supply chain.

Throughout the pandemic, the majority of the Company’s RV and Outdoor Retail locations have continued to operate as essential businesses and the Company has continued to operate its e-commerce business. Since March 2020, the Company has implemented preparedness plans to keep its employees and customers 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 the Company’s workforce.

Description of the Business

Camping World Holdings, Inc, together with its subsidiaries, is America’s largest retailer of RVs and related products and services. As noted above, CWGS, LLC is a holding company and operates through its subsidiaries. The Company has the following 2 reportable segments: (i) Good Sam Services and Plans and (ii) RV and Outdoor Retail. See Note 18 – Segments Information to the condensed consolidated financial statements for further information about the Company’s segments. Within the Good Sam Services and Plans segment, the Company primarily derives revenue from the sale of the following offerings: emergency roadside assistance plans; property and casualty insurance programs; travel assist programs; extended vehicle service contracts; vehicle financing and 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; 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 under the Camping World and Gander RV & Outdoors brands, and markets its products and services primarily to RV and outdoor enthusiasts.

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, closure or divestiture of 34 non-RV retail stores and 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 164 as of June 30, 2020 from 227 as of June 30, 2019. A summary of the retail store openings, closings, divestitures, conversions and number of locations from June 30, 2019 to June 30, 2020, are in the table below:

RV

RV Service &

Other

Dealerships

Retail Centers

Retail Stores

Total

Number of store locations as of June 30, 2019

151

14

62

227

Opened

6

6

Closed / divested

(7)

(2)

(55)

(64)

Temporarily closed(1)

(3)

(2)

(5)

Converted

5

(2)

(3)

Number of store locations as of June 30, 2020

152

10

2

164

(1)These locations are temporarily closed in response to the COVID-19 pandemic.

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Use of Estimates

The preparation of these 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 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 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 estimated tax liabilities, product return reserves, and other liabilities.

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. Due to increased demand, the Company saw a substantial increase in contracts in transit volume during the three months ended June 30, 2020. The increase in contract volume, coupled with the transition to working from home and additional employment verification procedures performed by lenders, have led to a backlog in contract funding. The Company has not observed any material changes in collectability trends during the period on these contracts.

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 $8.4 million at June 30, 2020 and $8.6 million at December 31, 2019 which are 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 an allowance for doubtful accounts of $0.2 million was required at June 30, 2020. NaN allowance for doubtful accounts related to contracts in transit was required at 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 June 30, 2020 and December 31, 2019.

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

Six Months Ended

June 30, 

June 30, 

    

2020

    

2019

Allowance for doubtful accounts:

Balance, beginning of period

$

3,537

$

4,398

Charged to bad debt expense

531

379

Deductions (1)

(611)

(131)

Balance, end of period

$

3,457

$

4,646

11

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

Recently Adopted 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 adopted ASU 2016-13 on January 1, 2020 and the adoption did not materially impact its condensed consolidated financial 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 Company adopted ASU 2018-15 on January 1, 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 this ASU will have on its consolidated financial statements.

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2. Revenue

Contract Assets

As of June 30, 2020 and December 31, 2019, a contract asset of $5.4 million and $6.1 million, respectively, relating to RV service revenues was included in accounts receivable in the accompanying condensed consolidated balance sheets.

Deferred Revenues

As of June 30, 2020, the Company has unsatisfied performance obligations primarily 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 June 30, 2020 for the periods during which the Company expects to recognize the amounts as revenue are presented as follows (in thousands):

    

As of

    

June 30, 2020

2020

    

$

55,135

2021

47,149

2022

20,793

2023

10,538

2024

5,516

Thereafter

7,083

Total

$

146,214

3. Inventories and Floor Plan Payable

Inventories consisted of the following (in thousands):

June 30, 

December 31, 

    

2020

    

2019

Good Sam services and plans

$

14

$

590

New RVs

711,164

966,134

Used RVs

126,687

165,927

Products, parts, accessories and other

214,357

225,888

$

1,052,222

$

1,358,539

New RV inventory, included in the RV and Outdoor Retail segment, is primarily financed by a floor plan credit agreement with a syndication of banks. The borrowings under the floor plan credit agreement 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 LIBOR plus 2.05% as of June 30, 2020 and 2.15% as of December 31, 2019. LIBOR was 0.17% at June 30, 2020 and 1.71% as of December 31, 2019. The floor plan borrowings are tied to specific vehicles and principal is due upon the sale of the related vehicle or upon reaching certain aging criteria.

As of June 30, 2020 and December 31, 2019, FR maintained floor plan financing through the Seventh Amended and Restated Credit Agreement (“Floor Plan Facility”). On October 8, 2019, FR entered into a Second Amendment to the Seventh Amended and Restated Credit Agreement (the “Second Amendment”). The applicable borrowing rate margin on LIBOR and base rate loans 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 at June 30, 2020 allowed FR to borrow (a) up to $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 $54.0 million under the revolving line of credit, which maximum amount outstanding further decreases by $3.0 million on the last day of each fiscal quarter. The maturity date of the Floor Plan Facility is March 15, 2023.

On May 12, 2020, FR entered into a Third Amendment to the Seventh Amended and Restated Credit Agreement (“Third Amendment”) that provides FR with a one-time option to request a temporary four-month

13

reduction (“Current Ratio Reduction Period”) of the minimum consolidated current ratio at any time during 2020 and the first seven days of 2021. FR has not yet exercised that option. During the Current Ratio Reduction Period, the applicable borrowing rate margin on LIBOR and base rate loans ranges from 2.05% to 3.00% and 0.55% and 1.50%, respectively, based on the Consolidated Current Ratio at FR. Effective May 12, 2020 through July 31, 2020, FR is not allowed to draw further Revolving Credit Loans (as defined in the Floor Plan Facility).

The Floor Plan Facility includes a 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 FLAIR offset account, the Company experiences a reduction in floor plan interest expense in its consolidated statements of operations. As of June 30, 2020 and December 31, 2019, FR had $216.9 million and $87.0 million, respectively, in the FLAIR offset account. The Third Amendment raised the Applicable FLAIR Maximum Percentage (as defined in the Floor Plan Facility) from 20% to 30% for the period of May 12, 2020 through August 31, 2020.

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 June 30, 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 June 30, 2020 and December 31, 2019. On June 29, 2020, FR made a voluntary $20.0 million principal payment on the revolving line of credit.

The following table details the outstanding amounts and available borrowings under the Floor Plan Facility as of June 30, 2020 and December 31, 2019 (in thousands):

June 30, 

December 31, 

    

2020

    

2019

Floor Plan Facility

Notes payable - floor plan:

Total commitment

$

1,379,750

$

1,379,750

Less: borrowings, net

(470,871)

(848,027)

Less: flooring line aggregate interest reduction account

(216,850)

(87,016)

Additional borrowing capacity

692,029

444,707

Less: accounts payable for sold inventory

(88,556)

(27,892)

Less: purchase commitments

(31,993)

(8,006)

Unencumbered borrowing capacity

$

571,480

$

408,809

Revolving line of credit:

$

54,000

$

60,000

Less: borrowings

(20,885)

(40,885)

Less: temporary limitation on borrowing through July 31, 2020

(33,115)

Additional borrowing capacity

$

$

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 has closed or divested 39

14

Outdoor Lifestyle Locations, 3 distribution centers, and 19 specialty retail locations through June 30, 2020. NaN of the aforementioned closed distribution centers was reopened during the three months ended June 2020 and repurposed for online order fulfillment. 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 certain 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.

The Company currently estimates the total restructuring costs associated with the 2019 Strategic Shift to be in the range of $78.6 million to $88.6 million. The breakdown of the estimated restructuring costs are as follows:

one-time employee termination benefits of $1.2 million, all of which has been incurred through June 30, 2020;
lease termination costs of $15.0 million to $20.0 million, of which $7.0 million has been incurred through June 30, 2020;
incremental inventory reserve charges of $42.4 million, all of which has been incurred through June 30, 2020; and
other associated costs of $20.0 million to $25.0 million, of which $14.4 million has been incurred through June 30, 2020.

Through June 30, 2020, the Company has incurred $14.4 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 $5.6 million to $10.6 million represents similar costs that may be incurred during the last six months of 2020 for locations that continue in a wind-down period, primarily comprised of lease costs accounted for under ASC 842, Leases 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.

The following table details the costs incurred during the three and six months ended June 30, 2020 associated with the 2019 Strategic Shift (in thousands):

Three Months Ended

Six Months Ended

June 30, 2020

    

June 30, 2020

Restructuring costs:

One-time termination benefits(1)

$

51

$

231

Lease termination costs(2)

656

1,245

Incremental inventory reserve charges(3)

57

543

Other associated costs(4)

4,483

10,099

Total restructuring costs

$

5,247

$

12,118

(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.

15

(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 and six months ended June 30, 2020, costs of approximately $0.1 million and $0.4 million were included in costs applicable to revenue – products, service and other and $4.4 million and $9.7 million were included in selling, general, and administrative expenses, respectively, 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

231

5,690

10,099

16,020

Paid or otherwise settled

(879)

(5,690)

(9,103)

(15,672)

Balance at June 30, 2020

$

74

$

$

1,281

$

1,355

(1)Lease termination costs exclude the $1.3 million and the $4.4 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 six months ended June 30, 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 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 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.

For the three months ended June 30, 2020, the Company experienced no indicators of impairment of long-lived assets and recorded 0 long-lived asset impairment charges. During the six months ended June 30, 2020, the Company recorded the following long-lived asset impairment charges: $2.4 million related to leasehold improvements, $2.6 million related to furniture and equipment, and $1.6 million operating lease right-of-use assets. Of the $6.6 million long-lived asset impairment charge during the six months ended June 30, 2020, $6.5 million related to the 2019 Strategic Shift discussed above.

16

5. Goodwill and Intangible Assets

Goodwill

The following is a summary of changes in the Company’s goodwill by segment for the six months ended June 30, 2020 (in thousands):

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)

108

108

Balance as of June 30, 2020

$

23,829

$

363,220

$

387,049

(1)Represents measurement period adjustments relating to prior period acquisitions (see Note 11 — 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.

During the three months ended March 31, 2020, the Company 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 decline in the market price of the Company’s Class A common stock and the 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 reporting unit was substantially above its respective carrying amount, therefore, 0 goodwill impairment was recorded. For the three months ended June 30, 2020, the Company determined that there were no triggering events for an interim goodwill impairment test of its reporting units.

Intangible Assets

Finite-lived intangible assets and related accumulated amortization consisted of the following at June 30, 2020 and December 31, 2019 (in thousands):

June 30, 2020

Cost or

Accumulated

   

Fair Value

    

Amortization

    

Net

Good Sam Services and Plans:

Membership and customer lists

$

9,140

$

(8,325)

$

815

RV and Outdoor Retail:

Customer lists and domain names

2,065

(1,815)

250

Trademarks and trade names

28,955

(5,823)

23,132

Websites

6,140

(2,236)

3,904

$

46,300

$

(18,199)

$

28,101

17

December 31, 2019

Cost or

Accumulated

    

Fair Value

    

Amortization

    

Net

Good Sam Services and Plans:

Membership and customer lists

$

9,140

$

(7,972)

$

1,168

RV and Outdoor Retail:

Customer lists and domain names

2,065

(1,768)

297

Trademarks and trade names

28,955

(4,862)

24,093

Websites

5,990

(1,841)

4,149

$

46,150

$

(16,443)

$

29,707

   

6. Long-Term Debt

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

June 30, 

December 31, 

    

2020

    

2019

Term Loan Facility (1)

$

1,134,391

$

1,148,115

Finance Lease Liabilities

28,192

Real Estate Facility (2)

18,472

19,521

Subtotal

1,181,055

1,167,636

Less: current portion

(15,828)

(14,085)

Total

$

1,165,227

$

1,153,551

(1)Net of $3.8 million and $4.3 million of original issue discount at June 30, 2020 and December 31, 2019, respectively, and $9.3 million and $10.7 million of finance costs at June 30, 2020 and December 31, 2019, respectively.
(2)Net of $0.2 million and $0.2 million of finance costs at June 30, 2020 and December 31, 2019, respectively.

Senior Secured Credit Facilities

As of June 30, 2020 and December 31, 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 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 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. On June 30, 2020, the Borrower made a $9.6 million voluntary principal payment on the Term Loan Facility.

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As of June 30, 2020, the average interest rate on the Term Loan Facility was 4.12%. The following table details the outstanding amounts and available borrowings under the Senior Secured Credit Facilities as of (in thousands):

June 30, 

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

(47,513)

(31,898)

Less: unamortized original issue discount

(3,790)

(4,320)

Less: finance costs

(9,306)

(10,667)

1,134,391

1,148,115

Less: current portion

(11,991)

(11,991)

Long-term debt, net of current portion

$

1,122,400

$

1,136,124

Revolving Credit Facility:

Total commitment

$

35,000

$

35,000

Less: outstanding letters of credit

(5,622)

(4,112)

Less: availability reduction due to Total Leverage Ratio

(21,622)

Additional borrowing capacity

$

29,378

$

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 June 30, 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 June 30, 2020, the Company was not subject to this covenant as borrowings under the Revolving Credit Facility did not exceed the 30% threshold. At June 30, 2020, the Company would have met this covenant if the Company had exceeded the 30% threshold. The Company was in compliance with all applicable debt covenants at June 30, 2020 and December 31, 2019.

Finance Lease Liabilities

The Company’s finance lease liabilities consist of 2 real estate parcels with long-term leases and IT equipment contracts, which contain lease components that extend through the majority of the useful life of the asset. Certain IT equipment contracts also contain purchase options at the end of the term, which are likely to be exercised (see Note 7 — Lease Obligations).

Real Estate Facility

As of June 30, 2020 and December 31, 2019, Camping World Property, Inc. (the ‘‘Real Estate Borrower’’), an indirect wholly-owned subsidiary of CWGS, LLC, and CIBC Bank USA (“Lender”), were party to a loan and security agreement for a real estate credit facility with an aggregate maximum principal 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

19

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 June 30, 2020, a principal balance of $18.7 million was outstanding under the Real Estate Facility, and the average interest rate was 4.09% with a commitment fee of 0.50% of the aggregate unused principal amount of the Real Estate Facility. As of June 30, 2020, the Company had 0 available capacity under the Real Estate Facility.

In August 2020, the Company entered into an agreement to lease an owned property for a former distribution center in Greenville, North Carolina to a third party. By entering into this lease, the Company was required to pay down $10.3 million of the Real Estate Facility in August 2020.

Management has determined that the credit agreement governing the Real Estate Facility includes subjective acceleration clauses which could impact debt classification. Management has determined that no events have occurred at June 30, 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 June 30, 2020 and December 31, 2019.

7. Lease Obligations

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

Three Months Ended June 30, 

Six Months Ended June 30, 

2020

    

2019

    

2020

    

2019

Operating lease cost

$

30,017

$

30,616

$

61,017

$

60,818

Finance lease cost:

Amortization of finance lease assets

1,048

1,048

Interest on finance lease liabilities

407

407

Short-term lease cost

390

873

879

1,586

Variable lease cost

6,028

550

11,056

1,102

Sublease income

(455)

(211)

(867)

(516)

Net lease costs

$

37,435

$

31,828

$

73,540

$

62,990

The following presents components of lease assets and lease liabilities, and the associated financial statement line items ($ in thousands):

    

June 30, 

    

December 31, 

Lease Assets and Liabilities

Financial Statement Line Items

2020

2019

Operating lease assets

Operating lease assets

$

789,539

$

807,537

Finance lease assets

Property and equipment, net

29,036

Total lease assets, net

$

818,575

$

807,537

Operating lease liabilities - current

Current portion of operating lease liabilities

$

60,315

$

58,613

Finance lease liabilities - current

Current portion of long-term debt

1,991

Operating lease liabilities - non-current

Operating lease liabilities, net of current portion

823,929

843,312

Finance lease liabilities - non-current

Long-term debt, net of current portion

26,201

Total lease liabilities

$

912,436

$

901,925

20

The following presents supplemental cash flow information related to leases ($ in thousands):

Six Months Ended June 30, 

2020

    

2019

Cash paid for amounts included in the measurement of lease liabilities:

Operating cash flows for leases

$

61,248

$

60,605

Operating cash flows for finance leases

267

Financing cash flows for finance leases

1,725

Lease assets obtained in exchange for lease liabilities:

New, remeasured, and terminated operating leases

$

12,140

$

43,027

New finance leases

29,522

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 0 transfers of assets or liabilities between the fair value measurement levels and there were 0 material re-measurements to fair value during 2020 and 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 Facility, the 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

June 30, 2020

December 31, 2019

($ in thousands)

    

Measurement

    

Carrying Value

    

Fair Value

    

Carrying Value

    

Fair Value

Term Loan Facility

Level 2

$

1,134,391

$

1,044,213

$

1,148,115

$

1,104,947

Floor Plan Facility Revolving Line of Credit

Level 2

20,885

20,702

40,885

41,299

Real Estate Facility

Level 2

18,472

17,842

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

21

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 (the “Consolidated Complaint”). 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 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 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. On August 5, 2020, the Court granted final approval of the class action settlement and the case was dismissed with prejudice. The settlement is expected to be paid directly by the Company’s applicable insurance policies.

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-judgement interest, attorneys’ fees and costs, and any equitable or injunctive relief the court deems just and proper, including rescission. On February 28, 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. On July 13, 2020, the parties entered into a confidential settlement agreement resolving the named plaintiff’s claims. The putative class’s claims were duplicative of certain claims in the Ronge case described above, and thus were included in the settlement agreement that the Ronge court approved at the Settlement Hearing on August 5, 2020. The Company expects to file a joint stipulation of dismissal with the named plaintiff in the Supreme Court of the State of New York in light of the settlement agreement in the Ronge case.

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 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 Geis plaintiff became a plaintiff in Ronge, and the Geis putative class’s claims were duplicative of certain claims in the Ronge case described above, and thus were included in the settlement agreement that the Ronge court approved on August 5, 2020. The Company expects to file a joint stipulation of dismissal of the Geis complaint in light of the settlement agreement in the Ronge case.

22

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 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 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.

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.

No assurance can be made that these or 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.

From time to time, the Company is involved in other litigation arising in the normal course of business operations.

23

10. Statement of Cash Flows

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

Six Months Ended

June 30, 

June 30, 

    

2020

    

2019

Cash paid during the period for:

Interest

$

35,059

$

55,250

Income taxes

783

1,620

Non-cash investing activities:

Leasehold improvements paid by lessor

24

10,353

Vehicles transferred to property and equipment from inventory

161

383

Capital expenditures in accounts payable and accrued liabilities

1,372

5,141

Non-cash financing activities:

Par value of Class A common stock issued in exchange for common units in CWGS, LLC

1

Par value of Class A common stock issued for vested restricted stock units

2

1

11. Acquisitions

During the six months ended June 30, 2020, the Company did not acquire any businesses. During the six months ended June 30, 2019, subsidiaries of the Company acquired the assets of 3 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 RV and Outdoor Retail locations to expand its business and grow its customer base. 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 six months ended June 30, 2019, the RV and Outdoor Retail segment acquired the assets of RV dealerships for an aggregate purchase price of approximately $38.6 million. The purchases were partially funded through $8.4 million of borrowings under the Floor Plan Facility. For the six months ended June 30, 2019, the Company purchased real property of $0.7 million from parties related to the sellers of the 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:

Six Months Ended June 30, 

($ in thousands)

    

2020

    

2019

Tangible assets (liabilities) acquired (assumed):

Inventories, net

$

(108)

$

13,895

Prepaid expenses and other assets

96

Property and equipment, net

158

Accounts payable

(62)

Other liabilities

(38)

Total tangible net assets acquired

(108)

14,049

Goodwill

108

24,559

Purchase price

38,608

Cash paid for acquisitions, net of cash acquired

38,608

Inventory purchases financed via floor plan

(8,416)

Cash payment net of floor plan financing

$

$

30,192

For the six months ended June 30, 2020, the fair values above represent measurement period adjustments for valuation of acquired inventories relating to dealership acquisitions during the year ended

24

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 six months ended June 30, 2020 and 2019, acquired goodwill of $0 million and $24.6 million, respectively, is expected to be deductible for tax purposes. Included in the six months ended June 30, 2019 consolidated financial results were $18.3 million of revenue and $1.0 million of pre-tax loss 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.

12. Income Taxes

CWH is organized as a Subchapter C corporation and, as of June 30, 2020, is a 42.3% owner of CWGS, LLC (see Note 14 — Stockholders’ Equity and Note 15 — Non-Controlling Interests). CWGS, LLC is organized as a limited liability company and treated as a partnership for federal tax 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 Enterprises LLC (“GSS”), to its indirect wholly-owned subsidiary, CW, a corporation. As a result of this transfer, the Company recorded an estimated $14.4 million of net income tax expense during the six months ended June 30, 2019 due to the revaluation of certain deferred tax assets and related changes in valuation allowance. 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 Tax Receivable Agreement liability was reduced by an additional $1.1 million during the six months ended June 30, 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 an estimated $8.5 million of other income in the condensed consolidated statement of operations for the six months ended June 30, 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 income tax and payroll 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, including temporary changes to income and non-income-based tax laws. For the three and six months ended June 30, 2020, there were no material tax impacts to the Company’s condensed consolidated financial statements as it relates to COVID-19 measures other than the deferral of non-income-based payroll taxes under the CARES Act of $9.2 million as of June 30, 2020, which were included in other long-term liabilities in the condensed consolidated balance sheets. The Company will continue to monitor additional guidance issued by the U.S. Treasury Department, the Internal Revenue Service and others.

For the six months ended June 30, 2020 and 2019, the Company’s effective income tax rate was 14.2% and 54.7%, respectively. The decrease is primarily a result of higher 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 CW for which no tax benefit can be recognized and absent the transfer of certain assets between subsidiaries in the prior period, which had resulted in the $14.4 million of net income tax expense described above. The Company's effective income tax rate for the six months ended June 30, 2020 was 14.2%, which differed from the federal statutory rate of 21.0% primarily due to 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 deferred tax assets may not be realized. At June 30, 2020 and December 31, 2019, the Company determined that all of its

25

deferred tax assets (except those of CW and the 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 CW, since it was determined that it is more likely than not, based on available objective evidence, that 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 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 Outside Basis Deferred Tax Asset if the investment in CWGS, LLC was divested.

The Company is party to 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. During the six months ended June 30, 2020 and 2019, 110,000 and 5,725 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 June 30, 2020 and December 31, 2019, the amount of Tax Receivable Agreement payments due under the Tax Receivable Agreement was $108.6 million and $114.8 million, respectively, of which $6.9 million and $6.6 million, respectively, was included in the current portion of the Tax Receivable Agreement liability in the condensed consolidated balance sheets.

13. Related Party Transactions

Transactions with Directors, Equity Holders and Executive Officers

FreedomRoads leases various RV and Outdoor Retail locations from managers and officers. During the three months ended June 30, 2020 and 2019, the related party lease expense for these locations was $0.5 million and $0.5 million, respectively. During the six months ended June 30, 2020 and 2019, the related party lease expense for these locations was $1.0 million and $1.0 million, respectively.

In January 2012, FreedomRoads entered into a lease (the “Original Lease”) for the offices in Lincolnshire, Illinois, which was amended as of March 2013 (the “First Amendment”). The Original Lease base rent of $29,000 per month was increased to $31,500 per month in March 2013 by virtue of the First Amendment and is subject to annual increases. As of November 1, 2019, by way of the Second Amendment to the Office Lease, (together with the Original Lease and the First Amendment, collectively, the “Office Lease”), the Company began leasing additional space for an additional monthly base rent of $5,200. The Company’s Chairman and Chief Executive Officer has personally guaranteed the Office Lease.

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. Mr. Lemonis has a 67% economic interest in Precise Graphix. The Company paid Precise Graphix $0.1 million and $0.6 million for the three months ended June 30, 2020 and 2019, respectively, and $0.3 million and $0.8 million for the six months ended June 30, 2020 and 2019, 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 for both the three months ended June 30, 2020 and 2019, and $0 and $0.2 million for the six months ended June 30, 2020 and 2019, respectively.

26

The Company paid Kaplan, Strangis and Kaplan, P.A., of which Andris A. Baltins is a member, and a member of the Company’s board of directors, $0.1 million and $0.1 million during the six months ended June 30, 2020 and 2019, respectively, for legal services.

14. Stockholders’ Equity

CWH has authorized preferred stock and 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 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 0 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).

15. Non-Controlling Interests

As described in Note 14 — 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 when CWGS, LLC has positive or negative net assets, respectively. At June 30, 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 June 30, 2020 and December 31, 2019, there were 89,332,393 and 89,158,273 common units of CWGS, LLC outstanding, respectively, of which CWH owned 37,773,109 and 37,488,989 common units of CWGS, LLC, respectively, representing 42.3% and 42.0% ownership interests in CWGS, LLC, respectively, and the Continuing Equity Owners owned 51,559,284 and 51,669,284 common units of CWGS, LLC, respectively, representing 57.7% and 58.0% ownership interests in CWGS, LLC, respectively.

27

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

Three Months Ended

Six Months Ended

June 30, 

June 30, 

($ in thousands)

   

2020

   

2019

   

2020

   

2019

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

$

58,077

$

18,017

$

49,917

$

(1,378)

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

(105)

(105)

(Decrease) increase in additional paid-in capital as a result of the vesting of restricted stock units

(10)

143

72

143

Decrease in additional paid-in capital as a result of repurchases of Class A common stock for withholding taxes on vested RSUs

(347)

(273)

(559)

(273)

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

58

62

12

Change from net income (loss) attributable to Camping World Holdings, Inc. and transfers to non-controlling interests

$

57,673

$

17,887

$

49,387

$

(1,496)

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

Six Months Ended

June 30, 

June 30, 

June 30, 

June 30, 

($ in thousands)

 

2020

    

2019

    

2020

    

2019

Equity-based compensation expense:

Costs applicable to revenue

$

191

$

208

$

347

$

415

Selling, general, and administrative

3,991

3,655

7,147

6,164

Total equity-based compensation expense

$

4,182

$

3,863

$

7,494

$

6,579

The following table summarizes stock option activity for the six months ended June 30, 2020:

Stock Options

    

(in thousands)

Outstanding at December 31, 2019

745

Exercised

(7)

Forfeited

(40)

Outstanding at June 30, 2020

698

Options exercisable at June 30, 2020

516

The following table summarizes restricted stock unit activity for the six months ended June 30, 2020:

Restricted

Stock Units

    

(in thousands)

Outstanding at December 31, 2019

1,806

Granted

60

Vested

(199)

Forfeited

(153)

Outstanding at June 30, 2020

1,514

In June 2020, the Company entered into a consulting agreement with Melvin Flanigan that became effective after his resignation as the Company’s Chief Financial Officer and Secretary on June 30, 2020. Prior to Mr. Flanigan’s resignation from his employment with the Company, he was previously granted awards of (a) 62,500 restricted stock units (“RSUs”) on January 21, 2019 (the “First Award”), and (b) 60,000 RSUs on

28

November 12, 2019 (the “Second Award”) pursuant to the Company’s 2016 Incentive Award Plan. The consulting agreement provides, among other things, that: (i) the remaining unvested 41,667 RSUs held by Mr. Flanigan pursuant to the First Award will vest on January 1, 2021, provided that the consulting agreement has not been terminated prior to December 31, 2020, and (ii) 20,000 unvested RSUs held by Mr. Flanigan pursuant to the Second Award that are scheduled to vest on November 15, 2020 will vest on such date, provided that the Consulting Agreement has not been terminated prior to such date. This modification resulted in an incremental equity-based compensation charge of $0.6 million during the three months ended June 30, 2020 and the remaining equity-based compensation of $0.7 million relating to the modified RSUs will be recorded over the remaining service period, net of forfeitures, through December 31, 2020.

In July 2020, the Company granted 2.4 million RSUs to employees with an aggregate grant date fair value of $78.5 million, which will be recognized, net of forfeitures, through August 2025.

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

Six Months Ended

June 30, 

June 30, 

(In thousands except per share amounts)

2020

    

2019

    

2020

    

2019

Numerator:

Net income

$

163,222

$

52,623

$

149,093

$

25,816

Less: net income attributable to non-controlling interests

(105,145)

(34,606)

(99,176)

(27,194)

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

$

58,077

$

18,017

49,917

(1,378)

Add: reallocation of net income attributable to non-controlling interests from the assumed exchange of common units of CWGS, LLC for Class A common stock

79,603

22,565

68,383

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

$

137,680

$

40,582

$

118,300

$

(1,378)

Denominator:

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

37,635

37,239

37,585

37,217

Dilutive restricted stock units

434

17

359

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

51,620

51,669

51,634

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

89,689

88,925

89,578

37,217

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

$

1.54

$

0.48

$

1.33

$

(0.04)

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

$

1.54

$

0.46

$

1.32

$

(0.04)

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

715

804

726

831

Restricted stock units

620

1,351

658

1,427

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

51,671

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.

29

18. Segments Information

The Company has the following 2 reportable segments: (i) Good Sam Services and Plans, and (ii) RV and Outdoor Retail. Within the Good Sam Services and Plans segment, the Company primarily derives revenue from the sale of the following offerings: emergency roadside assistance plans; property and casualty insurance programs; travel assist programs; extended vehicle service contracts; vehicle refinancing and 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; 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; segment income; floor plan interest expense; depreciation and amortization; other interest expense, net; and total assets are as follows:

Three Months Ended June 30, 2020

Three Months Ended June 30, 2019

Good Sam

RV and

Good Sam

RV and

Services

Outdoor

Intersegment

Services and

Outdoor

Intersegment

($ in thousands)

 

and Plans

    

Retail

    

Eliminations

    

Total

    

Plans

    

Retail

    

Eliminations

    

Total

Revenue:

Good Sam services and plans

$

44,692

$

$

(173)

$

44,519

$

44,991

$

$

(297)

$

44,694

New vehicles

900,245

(2,070)

898,175

780,696

(1,826)

778,870

Used vehicles

275,699

(789)

274,910

246,531

(782)

245,749

Products, service and other

231,512

(340)

231,172

271,471

(7,045)

264,426

Finance and insurance, net

150,194

(2,876)

147,318

131,498

(3,273)

128,225

Good Sam Club

10,651

10,651

12,383

12,383

Total consolidated revenue

$

44,692

$

1,568,301

$

(6,248)

$

1,606,745

$

44,991

$

1,442,579

$

(13,223)

$

1,474,347

Six Months Ended June 30, 2020

Six Months Ended June 30, 2019

Good Sam

RV and

Good Sam

RV and

Services

Outdoor

Intersegment

Services and

Outdoor

Intersegment

($ in thousands)

 

and Plans

    

Retail

    

Eliminations

    

Total

    

Plans

    

Retail

    

Eliminations

    

Total

Revenue:

Good Sam services and plans

$

93,384

$

$

(1,657)

$

91,727

$

93,289

$

$

(1,629)

$

91,660

New vehicles

1,398,641

(3,149)

1,395,492

1,311,445

(2,998)

1,308,447

Used vehicles

482,932

(1,357)

481,575

427,136

(1,379)

425,757

Products, service and other

404,524

(729)

403,795

481,669

(12,367)

469,302

Finance and insurance, net

244,642

(4,868)

239,774

225,778

(5,662)

220,116

Good Sam Club

21,655

21,655

23,834

23,834

Total consolidated revenue

$

93,384

$

2,552,394

$

(11,760)

$

2,634,018

$

93,289

$

2,469,862

$

(24,035)

$

2,539,116

Three Months Ended

Six Months Ended

June 30, 

June 30, 

June 30, 

June 30, 

($ in thousands)

2020

   

2019

   

2020

   

2019

Segment income:(1)

Good Sam Services and Plans

$

24,591

$

21,208

$

45,931

$

43,622

RV and Outdoor Retail

188,383

75,687

188,511

75,312

Total segment income

212,974

96,895

234,442

118,934

Corporate & other

(2,165)

(3,914)

(4,894)

(7,087)

Depreciation and amortization

(12,567)

(13,946)

(26,645)

(27,540)

Other interest expense, net

(14,547)

(18,211)

(29,205)

(35,854)

Tax Receivable Agreement liability adjustment

8,477

Segment income before income taxes

$

183,695

$

60,824

$

173,698

$

56,930

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

30

Three Months Ended

Six Months Ended

June 30, 

June 30, 

June 30, 

June 30, 

($ in thousands)

 

2020

    

2019

    

2020

    

2019

Depreciation and amortization:

Good Sam Services and Plans

$

768

$

836

$

1,524

1,688

RV and Outdoor Retail

11,799

13,110

25,121

25,852

Total depreciation and amortization

$

12,567

$

13,946

$

26,645

$

27,540

Three Months Ended

Six Months Ended

June 30, 

June 30, 

June 30, 

June 30, 

($ in thousands)

    

2020

    

2019

    

2020

    

2019

Other interest expense, net:

Good Sam Services and Plans

$

$

(1)

$

$

(1)

RV and Outdoor Retail

2,082

2,265

3,974

4,413

Subtotal

2,082

2,264

3,974

4,412

Corporate & other

12,465

15,947

25,231

31,442

Total other interest expense, net

$

14,547

$

18,211

$

29,205

$

35,854

June 30, 

December 31, 

($ in thousands)

    

2020

    

2019

Assets:

Good Sam Services and Plans

$

143,917

$

138,360

RV and Outdoor Retail

2,914,659

3,047,652

Subtotal

3,058,576

3,186,012

Corporate & other

205,975

190,228

Total assets  

$

3,264,551

$

3,376,240

31

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. 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 June 30, 2020, our most recently completed fiscal quarter.  Additionally, references herein to the approximately 11 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 strive to build long-term value for our customers, employees, and shareholders by combining a unique and comprehensive assortment of RV products and services with a national network of RV dealerships, service centers and customer support centers along with the industry’s most extensive online presence and a highly-trained and knowledgeable team of associates serving our customers, the RV lifestyle, and the communities in which we operate. We also believe that our Good Sam organization and family of programs and services uniquely enables us to connect with our customers as stewards of the RV lifestyle. On June 30, 2020, we operated a total of 164 retail locations, with 162 of these selling and/or servicing RVs. See Note 1 – Summary of Significant Accounting Policies to our condensed consolidated financial statements included in Part I, Item 1 of this Form 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 improving and wholesale shipments of new RVs increased 13.2% in the first two months of 2020 according to the RV Industry Association’s survey of manufacturers.

With the COVID-19 crisis causing many state and local governments to issue “stay-at-home” and “shelter-in-place” restrictions in mid-to-late March, sales and traffic levels across the RV industry declined significantly in April 2020. In response to the COVID-19 pandemic, many RV manufacturers, including Thor Industries, Forest River, Inc., and Winnebago Industries, temporarily suspended production from late March to mid-May. This led to a 44.6% decrease in wholesale shipments of new RVs for the three month period of March, April, and May 2020, according to the RV Industry Association’s survey of manufacturers. In conjunction with the stay-at-home and shelter-in-place restrictions enacted in many areas, the Company saw significant sequential declines in its overall customer traffic levels and its overall revenues from the mid-March to mid-to-late April 2020 timeframe. In the latter part of April, the Company began to see a significant improvement in its online web traffic levels and number of electronic leads, and in early May, the Company began to see improvements in its overall revenue levels. As the stay-at-home restrictions began to ease across certain areas of the country the Company experienced significant acceleration in its in-store and online traffic and revenue

32

trends in May and June 2020. The Company has also taken steps to add new private label lines, expand its relationships with smaller RV manufacturers, and acquire used inventory from distressed sellers to help manage risks in its supply chain.

Segments

The Company has the following two reportable segments: (i) Good Sam Services and Plans, and (ii) RV and Outdoor Retail. See Note 18 — Segment Information to our condensed consolidated financial statements included in Part I, Item 1 of this Form 10-Q.

COVID-19

As discussed in Note 1 — Summary of Significant Accounting Policies — COVID-19 to our condensed consolidated financial statements included in Part I, Item 1 of this Form 10-Q, the COVID-19 pandemic adversely impacted our business from mid-March through much of April 2020, but shifted to a favorable impact beginning primarily in May 2020.

In response to the pandemic, we have implemented preparedness plans to keep our employees and customers 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 continue to operate our e-commerce business. As of June 30, 2020, we have temporarily closed three of our dealerships and two of our specialty retail locations as a result of COVID-19. We temporarily reduced salaries and hours throughout the Company, including for our executive officers and implemented headcount and other cost reductions primarily from the middle of March 2020 through the middle of May 2020, in an attempt to better align expenses with the initially expected reduced sales resulting from the impact of COVID-19 on our business. Most of these temporary salary reductions ended in May 2020 as the adverse impacts of the pandemic began to decline and we increased hours for certain employees and reinstated many positions from the initial headcount reductions as the demand for our products increased.

In conjunction with the stay-at-home and shelter-in-place restrictions enacted in many areas, we saw significant sequential declines in overall customer traffic levels and overall revenues from the mid-March to mid-to-late April 2020 timeframe. In the latter part of April, we began to see a significant improvement in online web traffic levels, and in early May, we began to see improvements in overall revenue levels. As the stay-at-home restrictions began to ease across certain areas of the country, we experienced significant acceleration in our in-store traffic and revenue trends in May and June 2020.  We believe that as stay-at-home restrictions around the U.S. continue to ease, the demand for safe travel modalities and recreational activities away from home will continue to increase, since we believe that the RV industry has benefitted and will continue to benefit from an anticipated slow recovery of the cruise line, air travel and hotel industries.

We have been implementing marketing and operational plans to optimize our leadership position through the recovery, regardless of the ultimate timing and slope of the recovery curve. We have adapted our sales practices to accommodate customers’ safety concerns in this COVID-19 environment, such as offering virtual tours of RVs and providing home delivery options.

If stay-at-home and shelter-in-place restrictions are put back into place or as other modes of transportation recover from the impact of COVID-19, the increased demand for our products may not be sustained. We are unable to accurately quantify the impact that COVID-19 could have on our business, results of operations and liquidity due to numerous uncertainties, including the severity of the disease, the duration of the pandemic, including additional waves of infection, 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 disrupted in the future as a result of the outbreak, such as if Thor Industries, Inc. was to again close its North American production facilities as it did from late March to early May 2020. Either of these events 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.

33

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 condensed consolidated financial statements included in Part I, Item 1 of this Form 10-Q.

Results of Operations

Three Months Ended June 30, 2020 Compared to Three Months Ended June 30, 2019

The following table sets forth information comparing the components of net income for the three months ended June 30, 2020 and 2019:

Three Months Ended

June 30, 2020

June 30, 2019

Percent of

Percent of

Favorable/ (Unfavorable)

($ in thousands)

    

Amount

    

Revenue

    

Amount

    

Revenue

    

$

    

%

Revenue:  

Good Sam Services and Plans

$

44,519

2.8%

$

44,694

3.0%

$

(175)

(0.4%)

RV and Outdoor Retail:

New vehicles

898,175

55.9%

778,870

52.8%

119,305

15.3%

Used vehicles

274,910

17.1%

245,749

16.7%

29,161

11.9%

Products, service and other

231,172

14.4%

264,426

17.9%

(33,254)

(12.6%)

Finance and insurance, net

147,318

9.2%

128,225

8.7%

19,093

14.9%

Good Sam Club

10,651

0.7%

12,383

0.8%

(1,732)

(14.0%)

Subtotal

1,562,226

97.2%

1,429,653

97.0%

132,573

9.3%

Total revenue

1,606,745

100.0%

1,474,347

100.0%

132,398

9.0%

 

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

Good Sam Services and Plans

29,285

1.8%

25,948

1.8%

3,337

12.9%

RV and Outdoor Retail:

New vehicles

145,605

9.1%

97,471

6.6%

48,134

49.4%

Used vehicles

66,081

4.1%

53,068

3.6%

13,013

24.5%

Products, service and other

91,831

5.7%

95,819

6.5%

(3,988)

(4.2%)

Finance and insurance, net

147,318

9.2%

128,225

8.7%

19,093

14.9%

Good Sam Club

8,518

0.5%

9,459

0.6%

(941)

(9.9%)

Subtotal

459,353

28.6%

384,042

26.0%

75,311

19.6%

Total gross profit  

488,638

30.4%

409,990

27.8%

78,648

19.2%

 

Operating expenses:

Selling, general and administrative expenses

271,591

16.9%

303,366

20.6%

31,775

10.5%

Depreciation and amortization  

12,567

0.8%

13,946

0.9%

1,379

9.9%

Lease termination

868

0.1%

(868)

(100.0%)

Loss on disposal of assets

272

0.0%

2,374

0.2%

2,102

88.5%

Total operating expenses

285,298

17.8%

319,686

21.7%

34,388

10.8%

Income from operations

203,340

12.7%

90,304

6.1%

113,036

125.2%

Other income (expense):

Floor plan interest expense

(5,098)

(0.3%)

(11,269)

(0.8%)

6,171

54.8%

Other interest expense, net

(14,547)

(0.9%)

(18,211)

(1.2%)

3,664

20.1%

Total other income (expense)

(19,645)

(1.2%)

(29,480)

(2.0%)

9,835

33.4%

Income before income taxes

183,695

11.4%

60,824

4.1%

122,871

202.0%

Income tax expense

(20,473)

(1.3%)

(8,201)

(0.6%)

(12,272)

(149.6%)

Net income

163,222

10.2%

52,623

3.6%

110,599

210.2%

Less: net income attributable to non-controlling interests

(105,145)

(6.5%)

(34,606)

(2.3%)

(70,539)

(203.8%)

Net income attributable to Camping World Holdings, Inc.

$

58,077

3.6%

$

18,017

1.2%

$

40,060

222.3%

34

Supplemental Data

Three Months Ended June 30, 

Increase

Percent

2020

    

2019

    

(decrease)

    

Change

Unit sales

    

    

    

    

New vehicles

27,168

22,906

4,262

18.6%

Used vehicles

11,618

10,809

809

7.5%

Total

38,786

33,715

5,071

15.0%

Average selling price

New vehicles

$

33,060

$

34,003

$

(943)

(2.8%)

Used vehicles

$

23,662

$

22,736

$

927

4.1%

Same store unit sales

New vehicles

24,628

21,413

3,215

15.0%

Used vehicles

10,610

10,365

245

2.4%

Total

35,238

31,778

3,460

10.9%

Same store revenue ($ in 000's)

New vehicles

$

818,865

$

736,661

$

82,204

11.2%

Used vehicles

255,201

238,822

16,379

6.9%

Products, service and other

151,406

147,713

3,693

2.5%

Finance and insurance

135,844

122,264

13,580

11.1%

Total

$

1,361,316

$

1,245,460

$

115,856

9.3%

Average gross profit per unit

New vehicles

$

5,359

$

4,255

$

1,104

25.9%

Used vehicles

$

5,688

$

4,910

$

778

15.9%

Finance and insurance, net per vehicle unit

$

3,798

$

3,803

$

(5)

(0.1%)

Total vehicle front-end yield(1)

$

9,256

$

8,268

$

988

11.9%

Gross margin

Good Sam Services and Plans

65.8%

58.1%

772

bps

New vehicles

16.2%

12.5%

370

bps

Used vehicles

24.0%

21.6%

244

bps

Products, service and other

39.7%

36.2%

349

bps

Finance and insurance, net

100.0%

100.0%

unch.

bps

Good Sam Club

80.0%

76.4%

359

bps

Subtotal RV and Outdoor Retail

29.4%

26.9%

254

bps

Total gross margin

30.4%

27.8%

260

bps

Inventories ($ in 000's)

New vehicles

$

711,164

$

1,000,977

$

(289,813)

(29.0%)

Used vehicles

126,687

121,744

4,943

4.1%

Products, parts, accessories and misc.

214,357

424,756

(210,399)

(49.5%)

Total RV and Outdoor inventories

$

1,052,208

$

1,547,477

$

(495,269)

(32.0%)

Vehicle inventory per location ($ in 000's)

New vehicle inventory per dealer location

$

4,679

$

6,629

$

(1,950)

(29.4%)

Used vehicle inventory per dealer location

$

833

806

$

27

3.4%

Vehicle inventory turnover(2)

New vehicle inventory turnover

2.3

2.1

0.2

9.6%

Used vehicle inventory turnover

4.7

5.0

(0.3)

(5.2%)

Retail locations

RV dealerships

152

151

1

0.7%

RV service & retail centers

10

14

(4)

(28.6%)

Subtotal

162

165

(3)

(1.8%)

Other retail stores

2

62

(60)

(96.8%)

Total

164

227

(63)

(27.8%)

Other data

Active Customers(3)

5,220,367

5,251,874

(31,507)

(0.6%)

Good Sam Club members

2,067,253

2,177,743

(110,490)

(5.1%)

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

12.6%

12.5%

4

bps

n/a

Same store locations

143

n/a

n/a

n/a

35

(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 units sold.
(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.

Total revenue was $1.6 billion for the three months ended June 30, 2020, an increase of $132.4 million, or 9.0%, from $1.5 billion for the three months ended June 30, 2019. The increase in total revenue was driven by a $132.6 million, or 9.3%, increase in RV and Outdoor Retail revenue, partially offset by a $0.2 million, or 0.4% decrease in Good Sam Services and Plans revenue.

Total gross profit was $488.6 million for the three months ended June 30, 2020, an increase of $78.6 million, or 19.2%, from $410.0 million for the three months ended June 30, 2019. The increase in total gross profit was driven by a $75.3 million, or 19.6%, increase in RV and Outdoor Retail gross profit, and a $3.3 million, or 12.9%, increase in Good Sam Services and Plans gross profit.

Income from operations was $203.3 million for the three months ended June 30, 2020, an increase of $113.0 million, or 125.2%, from $90.3 million for the three months ended June 30, 2019. The increase in income from operations was primarily driven by a $78.6 million increase in gross profit, a $31.8 million decrease in selling, general and administrative expenses, a $2.1 million decrease in loss on disposal of assets, and a $1.4 million decrease in depreciation and amortization, partially offset by a $0.9 million increase in lease termination expense.

Total other expenses were $19.6 million for the three months ended June 30, 2020, a decrease of $9.8 million, or 33.4%, from $29.5 million for the three months ended June 30, 2019. The decrease in other expenses was driven by a $6.2 million decrease in floor plan interest expense and a $3.7 million decrease in other interest expense.

As a result of the above factors, income before income taxes was $183.7 million for the three months ended June 30, 2020 compared to $60.8 million for the three months ended June 30, 2019. Income tax expense was $20.5 million for the three months ended June 30, 2020, an increase of $12.3 million from $8.2 million for the three months ended June 30, 2019. As a result, net income was $163.2 million for the three months ended June 30, 2020 compared to $52.6 million for the three months ended June 30, 2019.

Good Sam Services and Plans

Good Sam Services and Plans revenue decreased 0.4%, or $0.2 million, to $44.5 million in the three months ended June 30, 2020, from $44.7 million in the three months ended June 30, 2019. The decrease was primarily attributable to a $0.5 million decrease in Good Sam TravelAssist revenue, a $0.4 million decrease from reduced magazine ad sales, and a $0.3 million decrease from other services and plans, partially offset by a $0.5 million increase from the vehicle insurance products, and a $0.5 million increase in revenue from RV refinancing.

Good Sam Services and Plans gross profit increased 12.9%, or $3.3 million, to $29.3 million in the three months ended June 30, 2020, from $25.9 million in the three months ended June 30, 2019 and gross margin increased to 65.8% from 58.1% in the same respective periods. The increase in gross profit was primarily attributable to a $1.7 million increase from the roadside assistance programs, a $1.2 million increase from our extended vehicle warranty programs, a $0.5 million increase from RV refinancing, and a $0.2 million increase in other services and plans, partially offset by a $0.3 million reduction from the Good Sam TravelAssist programs.

RV and Outdoor Retail

New Vehicles

New vehicle revenue increased 15.3%, or $119.3 million, to $898.2 million in the three months ended June 30, 2020 from $778.9 million in the three months ended June 30, 2019. The increase was primarily due to a 18.6% increase in vehicle units sold, partially offset by a 2.8% decrease in average selling price per vehicle

36

sold resulting from a shift towards lower priced towable units. On a same store basis, new vehicle revenue increased 11.2% to $818.9 million and new vehicle units increased 15.0% in the three months ended June 30, 2020 compared to the three months ended June 30, 2019.

New vehicle gross profit increased 49.4%, or $48.1 million, to $145.6 million in the three months ended June 30, 2020 from $97.5 million in the three months ended June 30, 2019. The increase was primarily due to a 25.9% increase in average gross profit per vehicle sold and an 18.6% increase in vehicle units sold. New vehicle gross margin increased to 16.2% in the three months ended June 30, 2020 from 12.5% in the three months ended June 30, 2019. The increase was primarily due to a sale mix shift towards higher margined towable units and to higher average motorized gross margins resulting from lower motorized inventory levels that have been better aligned with demand.

Used Vehicles

Used vehicle revenue increased 11.9%, or $29.2 million, to $274.9 million in the three months ended June 30, 2020 from $245.7 million in the three months ended June 30, 2019. The increase was primarily due to a 7.5% increase in vehicle units sold, and a 4.1% increase in average selling price per vehicle. On a same store basis, used vehicle revenue increased 6.9% to $255.2 million and used vehicle units increased 2.4% in the three months ended June 30, 2020 compared to the three months ended June 30, 2019.

Used vehicle gross profit increased 24.5%, or $13.0 million, to $66.1 million in the three months ended June 30, 2020 from $53.1 million in the three months ended June 30, 2019. The increase was primarily from a 7.5% increase in vehicle units sold and a 15.9% increase in average gross profit per vehicle. Used vehicle gross margin increased 244 basis points to 24.0% in the three months ended June 30, 2020 from 21.6% in the three months ended June 30, 2019. The increase was driven by strength in the used vehicle market across nearly all product types.

Products, service and other

Products, service and other revenue decreased 12.6%, or $33.3 million, to $231.2 million in the three months ended June 30, 2020, from $264.4 million in the three months ended June 30, 2019. The decrease was primarily attributable to store closures related to the 2019 Strategic Shift. On a same store basis, products, service and other revenue increased 2.5% to $151.4 million for the three months ended June 30, 2020 from $147.7 million in the three months ended June 30, 2019.

Products, service and other gross profit decreased 4.2%, or $4.0 million, to $91.8 million in the three months ended June 30, 2020 from $95.8 million in the three months ended June 30, 2019. The decrease was primarily due to store closures related to the 2019 Strategic Shift, partially offset by the increase in vehicles sold. Products, service and other gross margin increased to 39.7% in the three months ended June 30, 2020 from 36.2% in the three months ended June 30, 2019. The increase was primarily due to a sales mix shift towards higher margin legacy RV products.

Finance and Insurance, net

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 14.9%, or $19.1 million, to $147.3 million in the three months ended June 30, 2020 from $128.2 million in the three months ended June 30, 2019. Finance and insurance, net revenue as a percentage of new and used vehicles financed increased to 12.6% for the three months ended June 30, 2020 from 12.5% for the three months ended June 30, 2019. On a same store basis, finance and insurance, net revenue and gross profit increased 11.1%, or $13.6 million, to $135.8 million versus the three months ended June 30, 2019.

Good Sam Club

Good Sam Club revenue decreased 14.0%, or $1.7 million, to $10.7 million in the three months ended June 30, 2020 from $12.4 million in the three months ended June 30, 2019. The decrease primarily resulted

37

from reduced membership fees related to fewer retail locations that resulted from store closures related to the 2019 Strategic Shift.

Good Sam Club gross profit decreased 9.9%, or $0.9 million, to $8.5 million in the three months ended June 30, 2020 from $9.5 million in the three months ended June 30, 2019. The decrease was primarily due to reduced membership fee activity from the decreased number of stores as a result of the store closure related to 2019 Strategic Shift. Good Sam Club gross margin increased to 80.0% in the three months ended June 30, 2020 from 76.4% in the three months ended June 30, 2019 primarily due to reduced club marketing expenses.

Selling, general and administrative expenses

Selling, general and administrative expenses decreased 10.5%, or $31.8 million, to $271.6 million in the three months ended June 30, 2020 from $303.4 million in the three months ended June 30, 2019. The $31.8 million decrease was primarily due to decreases of $17.2 million of selling expense, $5.0 million in wage-related expenses, $1.8 million of personal and real property expense, $1.6 million of service and professional fees, and $6.2 million of other store and corporate overhead expenses. Selling, general and administrative expenses as a percentage of total gross profit decreased to 55.6% in the three months ended June 30, 2020, from 74.0% in the three months ended June 30, 2019.

Depreciation and amortization

Depreciation and amortization decreased 9.9%, or $1.4 million, to $12.6 million in the three months ended June 30, 2020 from $13.9 million in the three months ended June 30, 2019 due to a reduction in capital expenditures.

Lease termination

Lease termination expense of $0.9 million in the three months ended June 30, 2020 related primarily to the 2019 Strategic Shift discussed above.

Floor plan interest expense

Floor plan interest expense decreased 54.8%, or $6.2 million, to $5.1 million in the three months ended June 30, 2020 from $11.3 million in the three months ended June 30, 2019. The decrease was primarily due to a 227 basis point decrease in the average floor plan borrowing rate, and a 16.2% decrease in average floor plan borrowings driven by lower average inventory levels.

Other interest expense, net

Other interest expense decreased 20.1%, or $3.7 million, to $14.5 million in the three months ended June 30, 2020 from $18.2 million in the three months ended June 30, 2019. The decrease was primarily due to a 121 basis point decrease in the average interest rate.

Income tax expense

Income tax expense increased $12.3 million to $20.5 million in the three months ended June 30, 2020 compared to the three months ended June 30, 2019. The increase was primarily due to higher 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 and absent the transfer of certain 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

Net income increased 210.2%, or $110.6 million, to a net income of $163.2 million for the three months ended June 30, 2020 from a net income of $52.6 million in the three months ended June 30, 2019 primarily due to the items mentioned above.

38

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

June 30, 2020

June 30, 2019

Favorable/

Percent of

Percent of

(Unfavorable)

($ in thousands)

  

Amount

  

Revenue

  

Amount

  

Revenue

  

$

  

%

Revenue:

Good Sam Services and Plans

$

44,692

2.8%

$

44,991

3.1%

$

(299)

(0.7%)

RV and Outdoor Retail

1,568,301

97.6%

1,442,579

97.8%

125,722

8.7%

Elimination of intersegment revenue

(6,248)

(0.4%)

(13,223)

(0.9%)

6,975

52.7%

Total consolidated revenue

1,606,745

100.0%

1,474,347

100.0%

132,398

9.0%

Segment income:(1)

Good Sam Services and Plans

24,591

1.5%

21,208

1.4%

3,383

16.0%

RV and Outdoor Retail

188,383

11.7%

75,687

5.1%

112,696

148.9%

Total segment income

212,974

13.3%

96,895

6.6%

116,079

119.8%

Corporate & other

(2,165)

(0.1%)

(3,914)

(0.3%)

1,749

44.7%

Depreciation and amortization

(12,567)

(0.8%)

(13,946)

(0.9%)

1,379

9.9%

Other interest expense, net

(14,547)

(0.9%)

(18,211)

(1.2%)

3,664

20.1%

Income before income taxes

$

183,695

11.4%

$

60,824

4.1%

$

122,871

202.0%

Same store revenue- RV and Outdoor Retail(2)

$

1,361,316

$

1,245,460

$

115,856

9.3%

(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)Same store revenue definition not applicable to the Good Sam Services and Plans segment.

Good Sam Services and Plans

Good Sam Services and Plans segment revenue decreased 0.7%, or $0.3 million, to $44.7 million in the three months ended June 30, 2020, from $45.0 million in the three months ended June 30, 2019. The decrease was primarily attributable to a $0.5 million decrease in Good Sam TravelAssist revenue, a $0.5 million decrease from reduced magazine ad sales, and a $0.3 million decrease from other services and plans, partially offset by a $0.5 million increase from the vehicle insurance products, and a $0.5 million increase in revenue from RV refinancing.

Good Sam Services and Plans segment income increased 16.0%, or $3.4 million, to $24.6 million in the three months ended June 30, 2020, from $21.2 million in the three months ended June 30, 2019. The increase was primarily attributable to a $1.7 million increase from the roadside assistance programs, a $1.2 million increase from our vehicle insurance programs, a $0.5 million increase from RV refinancing, and a $0.3 million increase in other services and plans, partially offset by a $0.3 million reduction in the Good Sam TravelAssist programs. Good Sam Services and Plans segment margin increased 779 basis points to 55.2% in the three months ended June 30, 2020 from 47.5% in the three months ended June 30, 2019.

RV and Outdoor Retail

RV and Outdoor Retail segment revenue increased 8.7%, or $125.7 million, to $1.6 billion in the three months ended June 30, 2020 from $1.4 billion in the three months ended June 30, 2019. The increase was primarily driven by a $119.5 million, or 15.3%, increase in new vehicle revenue, a $29.2 million, or 11.8%, increase in used vehicle revenue, and an $18.7 million, or 14.2%, increase in finance and insurance revenue, partially offset by a $40.0 million, or 14.7%, decrease in products, service and other revenue primarily due to the 2019 Strategic Shift, and a $1.7 million, or 14.0%, decrease in Good Sam Club revenue.

39

RV and Outdoor Retail segment income increased 148.9%, or $112.7 million, to a segment income of $188.4 million in the three months ended June 30, 2020 from a segment income of $75.7 million in the three months ended June 30, 2019. The increase was primarily related to increased segment gross profit of $75.3 million primarily due to increased volume of new vehicles sold and increased gross profit per unit sold, reduced selling, general and administrative expenses of $30.0 million, reduced floor plan interest expense of $6.2 million, and $2.1 million of reduced loss on asset disposal, partially offset by $0.9 million of lease termination expense. RV and Outdoor Retail segment margin increased 676 basis points to 12.1% in the three months ended June 30, 2020 from 5.3% in the three months ended June 30, 2019.

Corporate and other expenses

Corporate and other expenses decreased 44.7%, or $1.7 million, to $2.2 million in the three months ended June 30, 2020 from $3.9 million in the three months ended June 30, 2019 primarily from reduced professional fees.

40

Results of Operations

Six Months Ended June 30, 2020 Compared to Six Months Ended June 30, 2019

The following table sets forth information comparing the components of net income for the six months ended June 30, 2020 and 2019:

Six Months Ended

June 30, 2020

June 30, 2019

Percent of

Percent of

Favorable/ (Unfavorable)

($ in thousands)

    

Amount

    

Revenue

    

Amount

    

Revenue

    

$

    

%

Revenue:  

Good Sam Services and Plans

$

91,727

3.5%

$

91,660

3.6%

$

67

0.1%

RV and Outdoor Retail:

New vehicles

1,395,492

53.0%

1,308,447

51.5%

87,045

6.7%

Used vehicles

481,575

18.3%

425,757

16.8%

55,818

13.1%

Products, service and other

403,795

15.3%

469,302

18.5%

(65,507)

(14.0%)

Finance and insurance, net

239,774

9.1%

220,116

8.7%

19,658

8.9%

Good Sam Club

21,655

0.8%

23,834

0.9%

(2,179)

(9.1%)

Subtotal

2,542,291

96.5%

2,447,456

96.4%

94,835

3.9%

Total revenue

2,634,018

100.0%

2,539,116

100.0%

94,902

3.7%

 

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

Good Sam Services and Plans

54,634

2.1%

52,183

2.1%

2,451

4.7%

RV and Outdoor Retail:

New vehicles

216,480

8.2%

164,004

6.5%

52,476

32.0%

Used vehicles

108,953

4.1%

90,230

3.6%

18,723

20.8%

Products, service and other

154,185

5.9%

164,591

6.5%

(10,406)

(6.3%)

Finance and insurance, net

239,774

9.1%

220,116

8.7%

19,658

8.9%

Good Sam Club

17,275

0.7%

17,193

0.7%

82

0.5%

Subtotal

736,667

28.0%

656,134

25.8%

80,533

12.3%

Total gross profit  

791,301

30.0%

708,317

27.9%

82,984

11.7%

 

Operating expenses:

Selling, general and administrative expenses

539,247

20.5%

571,431

22.5%

32,184

5.6%

Depreciation and amortization  

26,645

1.0%

27,540

1.1%

895

3.2%

Long-lived asset impairment

6,569

0.2%

(6,569)

(100.0%)

Lease termination

1,452

0.1%

(1,452)

(100.0%)

Loss on disposal of assets

783

0.0%

2,160

0.1%

1,377

63.8%

Total operating expenses

574,696

21.8%

601,131

23.7%

26,435

4.4%

Income from operations

216,605

8.2%

107,186

4.2%

(109,419)

(102.1%)

Other income (expense):

Floor plan interest expense

(13,702)

(0.5%)

(22,879)

(0.9%)

9,177

40.1%

Other interest expense, net

(29,205)

(1.1%)

(35,854)

(1.4%)

6,649

18.5%

Tax Receivable Agreement liability adjustment

8,477

0.3%

(8,477)

(100.0%)

Total other income (expense)

(42,907)

(1.6%)

(50,256)

(2.0%)

7,349

14.6%

Income before income taxes

173,698

6.6%

56,930

2.2%

116,768

205.1%

Income tax expense

(24,605)

(0.9%)

(31,114)

(1.2%)

6,509

20.9%

Net income

149,093

5.7%

25,816

1.0%

123,277

477.5%

Less: net income attributable to non-controlling interests

(99,176)

(3.8%)

(27,194)

(1.1%)

(71,982)

(264.7%)

Net income attributable to Camping World Holdings, Inc.

$

49,917

1.9%

$

(1,378)

(0.1%)

$

51,295

3,722.4%

41

Supplemental Data

Six Months Ended June 30, 

Increase

Percent

2020

    

2019

    

(decrease)

    

Change

Unit sales

    

    

    

    

New vehicles

41,376

37,922

3,454

9.1%

Used vehicles

20,300

18,986

1,314

6.9%

Total

61,676

56,908

4,768

8.4%

Average selling price

New vehicles

$

33,727

$

34,504

$

(777)

(2.3%)

Used vehicles

$

23,723

$

22,425

$

1,298

5.8%

Same store unit sales

New vehicles

37,382

35,681

1,701