Camping World Holdings, Inc. Reports Second Quarter 2023 Results, Record Used Vehicle Unit Sales, Aggressive RV Dealership Acquisition Pace Continues

Camping World Holdings, Inc. (NYSE: CWH) (the “Company” or “CWH”), America’s Recreation Dealer, today reported results for the second quarter ended June 30, 2023.

Marcus Lemonis, Chairman and Chief Executive Officer of Camping World Holdings, Inc. stated, “We sold the most used units in our Company’s history, with record setting used vehicle gross profit. We’ve opened, acquired, or signed letters of intent on 30 dealership locations year-to-date. The unprecedented influx of acquisition opportunities has continued and the pipeline is robust. We plan to capitalize on it as we invest ahead of anticipated revenue growth in 2024 and beyond.”

Second Quarter-over-Quarter Operating Highlights

• Revenue was $1.9 billion for the second quarter, a decrease of $267.9 million, or 12.4%.
• Used vehicle revenue was a record $623.0 million for the second quarter, an increase of $67.0 million, or 12.1%, and used vehicle unit sales were a record 17,774 units, an increase of 2,219 units, or 14.3%.
• New vehicle revenue was $800.9 million for the second quarter, a decline of $276.3 million, or 25.7%, and new vehicle unit sales were 18,897 units, a decrease of 4,507 units, or 19.3%.
• Products, service and other revenue was $247.8 million for the second quarter, a decline of $30.2 million, or 10.9%. The decrease was driven by declines in our direct to manufacturer RV furniture revenues due to manufacturer shutdowns, our Active Sports Restructuring, and discounting to reduce inventory levels.
• Same store used vehicle unit sales increased 8.8% for the second quarter, and same store new vehicle unit sales decreased 23.7%.
• Gross profit was $571.1 million, a decrease of $145.7 million, or 20.3%. Total gross margin was 30.0%, a decrease of 301 basis points. The decrease in gross profit was driven largely by the decrease in new vehicle revenue and related finance and insurance revenue. The decrease in gross margin was primarily the result of lower average selling prices of new vehicles, which was partially offset by the increased sales mix of higher margin used vehicles.
• Floor plan interest expense was $20.7 million, an increase of $11.9 million, or 136.7%, primarily as a result of the rise in interest rates. Other interest expense, net was $33.5 million, an increase of $18.6 million, or 124.4%, primarily as a result of the rise in interest rates and a higher average principal balance.
• Net income was $64.7 million, a decrease of $133.3 million, or 67.3%, driven primarily by the pretax $101.6 million decrease in new vehicle gross profit, the $28.5 million decrease in finance and insurance gross profit on fewer vehicles sold, the $18.6 million increase in other interest expense, net, and the $11.9 million increase in floor plan interest, which was partially offset from the $20.2 million decrease in selling, general, and administrative expenses and lower income tax expense from these net reductions of pretax income.
• Diluted earnings per share of Class A common stock was $0.64 in 2023 versus diluted earnings per share of Class A common stock of $2.01 in 2022. Adjusted earnings per share - diluted⁽¹⁾ of Class A common stock was $0.73 in 2023 versus adjusted earnings per share – diluted⁽¹⁾ of Class A common stock of $2.16 in 2022.
• Adjusted EBITDA⁽¹⁾ was $139.3 million, a decrease of $138.4 million, or 49.8%, driven primarily by the $101.6 million decrease in new vehicle gross profit, the $28.5 million decrease in finance and insurance gross profit on fewer vehicles sold, and the $11.9 million increase in floor plan interest, which was partially offset from the $20.2 million decrease in selling, general, and administrative expenses⁽²⁾.

Earnings Conference Call and Webcast Information

A conference call to discuss the Company’s second quarter 2023 financial results is scheduled for August 2, 2023, at 7:30 am Central Time. Investors and analysts can participate on the conference call by dialing 1-877-407-9039 (international callers please dial 1-201-689-8470) and using conference ID# 13739824. Interested parties can also listen to a live webcast or replay of the conference call by logging on to the Investor Relations section on the Company’s website at http://investor.campingworld.com. The replay of the conference call webcast will be available on the investor relations website for approximately 90 days.

Presentation

This press release presents historical results for the periods presented for the Company and its subsidiaries, which are presented in accordance with accounting principles generally accepted in the United States (“GAAP”), unless noted as a non-GAAP financial measure. The Company’s initial public offering (“IPO”) and related reorganization transactions (“Reorganization Transactions”) that occurred on October 6, 2016 resulted in the Company as the sole managing member of CWGS Enterprises, LLC (“CWGS, LLC”), with sole voting power in and control of the management of CWGS, LLC. The Company’s position as sole managing member of CWGS, LLC includes periods where the Company has held a minority economic interest in CWGS, LLC. As of June 30, 2023, the Company owned 52.6% of CWGS, LLC. Accordingly, the Company consolidates the financial results of CWGS, LLC and reports a non-controlling interest in its consolidated financial statements.

About Camping World Holdings, Inc.

Camping World Holdings, Inc., headquartered in Lincolnshire, IL, (together with its subsidiaries) is America’s largest retailer of RVs and related products and services. Our vision is to build a long-term legacy business that makes RVing fun and easy, and our Camping World and Good Sam brands have been serving RV consumers since 1966. We strive to build long-term value for our customers, employees, and shareholders by combining a unique and comprehensive assortment of RV products and services with a national network of RV dealerships, service centers and customer support centers along with the industry’s most extensive online presence and a highly trained and knowledgeable team of associates serving our customers, the RV lifestyle, and the communities in which we operate. We also believe that our Good Sam organization and family of programs and services uniquely enable us to connect with our customers as stewards of the RV enthusiast community and the RV lifestyle. With RV sales and service locations in 43 states, Camping World has grown to become the prime destination for everything RV. For more information, visit www.CampingWorld.com.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements contained in this press release that do not relate to matters of historical fact should be considered forward-looking statements, including, without limitation, statements about macroeconomic and industry trends, dividend payments and capital allocation, our business plans and goals, the Company’s acquisition pipeline and plans, and future financial results, including long term revenue growth. These forward-looking statements are based on management’s current expectations.

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

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

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

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