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Camping World Holdings, Inc. Reports Third Quarter 2021 Results And Raises Full Year Guidance

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LINCOLNSHIRE, IL, November 02, 2021--(BUSINESS WIRE)--Camping World Holdings, Inc. (NYSE: CWH) (the "Company"), America’s Recreation Dealer, today reported results for the third quarter ended September 30, 2021.

Third Quarter Operating Highlights(1)

  • Revenue was a third quarter record $1.917 billion, an increase of $237.8 million, or 14.2%.

  • Gross profit was $691.4 million, an increase of $158.2 million, or 29.7%, and gross margin was 36.1%, an increase of 431 basis points.

  • Net income was $189.3 million, an increase of $34.5 million, or 22.3%. Net income margin was 9.9% versus 9.2% for the third quarter of 2020.

  • Diluted earnings per share of Class A common stock was $1.72 and adjusted earnings per share - diluted(2) of Class A common stock was $1.98.

  • Adjusted EBITDA(2) was a $288.0 million, an increase of $71.0 million, or 32.7%, and adjusted EBITDA margin(2) was 15.0% for the third quarter versus 12.9% for the third quarter of 2020.

  • Vehicle inventories were $1.4 billion, an increase of $433.8 million: new vehicle inventories were $723.6 million, an increase of $166.5 million, and used vehicle inventories were $391.5 million, an increase of $267.3 million.

  • On September 30, 2021, we entered into an Eighth Amended and Restated Credit Agreement governing our floor plan facility which allows us to borrow $1.70 billion of floor plan notes payable and, up to $70.0 million under the revolving line of credit, and extended the term to 2026.

2021 Adjusted EBITDA Guidance Update

Marcus Lemonis, Chairman and CEO of Camping World Holdings, Inc. stated, "Our team’s strong performance for the quarter has allowed us to reach a Company-high Trailing Twelve-Month Adjusted EBITDA(2) of $902 million. As a result, we are raising our 2021 fiscal year guidance(3) from Adjusted EBITDA of $840 million to $860 million to a revised Adjusted EBITDA of $915 million to $930 million."

(1)

Unless otherwise indicated, all financial comparisons in this press release compare our financial results for the third quarter ended September 30, 2021 to our financial results from the third quarter ended September 30, 2020.

(2)

Adjusted earnings per share – diluted, adjusted EBITDA, adjusted EBITDA Margin, and Trailing Twelve-Month Adjusted EBITDA are non-GAAP measures. For a reconciliation of these non-GAAP measures to the most directly comparable GAAP measures, see the "Non-GAAP Financial Measures" section later in this press release. A reconciliation for the Company’s Adjusted EBITDA outlook to the corresponding GAAP measure on a forward-looking basis cannot be provided without unreasonable efforts, as we are unable to provide reconciling information with respect to certain items. However, in 2021 the Company expects equity-based compensation of approximately $26-27 million, depreciation and amortization of approximately $62-68 million, other interest expense of approximately $46-48 million, and restructuring charges of approximately $25-27 million, each of which is a reconciling item to Net Income.

(3)

Prior guidance provided on August 3, 2021.

Stock Repurchase Program

On August 3, 2021, the Company’s Board of Directors authorized an increase in the Company’s stock repurchase program originally approved on October 30, 2020 for an additional $125.0 million of the Company’s Class A common stock resulting in a total of $225.0 million authorized for repurchase. The Board of Directors extended the expiration of the repurchase authorization to August 31, 2023.

During the three months ended September 30, 2021, the Company repurchased 1,059,723 shares of Class A common stock under this program for approximately $41.3 million, including commissions paid, at a weighted average price per share of $39.02, which is recorded as treasury stock on the condensed consolidated balance sheets. As of September 30, 2021, the remaining approved amount for repurchases of Class A common stock under the share repurchase program was approximately $116.7 million.

Earnings Conference Call and Webcast Information

A conference call to discuss the Company’s third quarter 2021 financial results is scheduled for November 3, 2021, at 8:30 am Eastern Time. Investors and analysts can participate on the conference call by dialing (866) 548-4713 or (323) 794-2093 and using conference ID# 7568091. 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. Despite its position as sole managing member of CWGS, LLC, the Company had a minority economic interest in CWGS, LLC through March 11, 2021. As of September 30, 2021, the Company owned 51.3% of CWGS, LLC. Accordingly, the Company consolidates the financial results of CWGS, LLC and reports a non-controlling interest in its consolidated financial statements.

About Camping World Holdings, Inc.

Camping World Holdings, Inc., headquartered in Lincolnshire, IL, (together with its subsidiaries) is America’s largest retailer of RVs and related products and services. Our vision is to build a long-term legacy business that makes RVing fun and easy, and our Camping World and Good Sam brands have been serving RV consumers since 1966. We strive to build long-term value for our customers, employees, and shareholders by combining a unique and comprehensive assortment of RV products and services with a national network of RV dealerships, service centers and customer support centers along with the industry’s most extensive online presence and a highly-trained and knowledgeable team of associates serving our customers, the RV lifestyle, and the communities in which we operate. We also believe that our Good Sam organization and family of programs and services uniquely enables us to connect with our customers as stewards of the RV enthusiast community and the RV lifestyle. With over 185 locations in 40 states, Camping World, and sister brand Gander RV & Outdoors, have grown to become prime destinations for everything RV.

For more information, please 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 our business plans and goals, including statements regarding the strength of our business, our long-term plan, potential stock repurchases, and our future financial results. These forward-looking statements are based on management’s current expectations.

These statements are neither promises nor guarantees, but involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements, including, but not limited to, the following: the COVID-19 pandemic, which has had, and could have in the future, certain negative impacts on our business; our ability to execute and achieve the expected benefits of our 2019 Strategic Shift; the availability of financing to us and our customers; fuel shortages or high prices for fuel; the success of our manufacturers; general economic conditions in our markets; changes in consumer preferences; competition in our industry; risks related to acquisitions and expansion into new markets; our failure to maintain the strength and value of our brands; our ability to manage our inventory; fluctuations in our same store sales; the cyclical and seasonal nature of our business; our dependence on the availability of adequate capital and risks related to our debt; our reliance on six fulfillment and distribution centers; natural disasters, including epidemic outbreaks; risks associated with selling goods manufactured abroad; our dependence on our relationships with third party suppliers and lending institutions; our ability to retain senior executives and attract and retain other qualified employees; risks associated with leasing substantial amounts of space; 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, 2020 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.

Camping World Holdings, Inc. and Subsidiaries

Consolidated Statements of Operations (unaudited)

(In Thousands Except Per Share Amounts)

Three Months Ended

Nine Months Ended

September 30,

September 30,

2021

2020

2021

2020

Revenue:

Good Sam Services and Plans

$

46,581

$

45,941

$

134,354

$

137,668

RV and Outdoor Retail

New vehicles

864,303

907,588

2,745,057

2,303,080

Used vehicles

519,550

298,651

1,273,944

780,226

Products, service and other

305,882

276,622

862,706

680,417

Finance and insurance, net

167,779

138,779

483,718

378,553

Good Sam Club

12,479

11,172

36,383

32,827

Subtotal

1,869,993

1,632,812

5,401,808

4,175,103

Total revenue

1,916,574

1,678,753

5,536,162

4,312,771

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

Good Sam Services and Plans

21,637

18,600

53,241

55,693

RV and Outdoor Retail

New vehicles

612,418

730,175

2,014,206

1,909,187

Used vehicles

376,852

223,033

934,874

595,655

Products, service and other

212,444

171,666

556,542

421,276

Good Sam Club

1,847

2,130

5,586

6,510

Subtotal

1,203,561

1,127,004

3,511,208

2,932,628

Total costs applicable to revenue

1,225,198

1,145,604

3,564,449

2,988,321

Operating expenses:

Selling, general, and administrative

424,385

322,990

1,193,668

862,237

Debt restructure expense

24

9,055

Depreciation and amortization

23,552

12,304

49,297

38,949

Long-lived asset impairment

316

4,378

1,398

10,947

Lease termination

329

505

2,085

1,957

(Gain) loss on sale or disposal of assets

96

(121)

7

662

Total operating expenses

448,702

340,056

1,255,510

914,752

Income from operations

242,674

193,093

716,203

409,698

Other expense:

Floor plan interest expense

(3,125)

(3,015)

(9,886)

(16,717)

Other interest expense, net

(11,250)

(12,896)

(35,262)

(42,101)

Loss on debt restructure

(1,390)

Tax Receivable Agreement liability adjustment

(3,520)

Other expense, net

(122)

(77)

Total other expense

(14,497)

(15,911)

(50,135)

(58,818)

Income before income taxes

228,177

177,182

666,068

350,880

Income tax expense

(38,869)

(22,398)

(83,259)

(47,003)

Net income

189,308

154,784

582,809

303,877

Less: net income attributable to non-controlling interests

(109,605)

(96,734)

(331,596)

(195,910)

Net income attributable to Camping World Holdings, Inc.

$

79,703

$

58,050

$

251,213

$

107,967

Earnings per share of Class A common stock:

Basic

$

1.75

$

1.46

$

5.57

$

2.81

Diluted

$

1.72

$

1.44

$

5.49

$

2.77

Weighted average shares of Class A common stock outstanding:

Basic

45,628

39,880

45,072

38,356

Diluted

47,022

40,872

46,433

89,882

Camping World Holdings, Inc.

Supplemental Data

Three Months Ended September 30,

Increase

Percent

2021

2020

(decrease)

Change

Unit sales

New vehicles

18,748

23,177

(4,429)

(19.1)%

Used vehicles

13,631

10,530

3,101

29.4%

Total

32,379

33,707

(1,328)

(3.9)%

Average selling price

New vehicles

$

46,101

$

39,159

$

6,942

17.7%

Used vehicles

$

38,115

$

28,362

$

9,753

34.4%

Same store unit sales(1)

New vehicles

16,302

22,842

(6,540)

(28.6)%

Used vehicles

12,150

10,380

1,770

17.1%

Total

28,452

33,222

(4,770)

(14.4)%

Same store revenue(1) ($ in 000's)

New vehicles

$

758,401

$

894,982

$

(136,581)

(15.3)%

Used vehicles

468,354

294,142

174,212

59.2%

Products, service and other

198,476

207,060

(8,584)

(4.1)%

Finance and insurance, net

148,420

137,087

11,333

8.3%

Total

$

1,573,651

$

1,533,271

$

40,380

2.6%

Average gross profit per unit

New vehicles

$

13,435

$

7,655

$

5,781

75.5%

Used vehicles

$

10,469

$

7,181

$

3,287

45.8%

Finance and insurance, net per vehicle unit

$

5,182

$

4,117

$

1,065

25.9%

Total vehicle front-end yield(2)

$

17,368

$

11,624

$

5,744

49.4%

Gross margin

Good Sam Services and Plans

53.5%

59.5%

(596)

bps

New vehicles

29.1%

19.5%

960

bps

Used vehicles

27.5%

25.3%

215

bps

Products, service and other

30.5%

37.9%

(739)

bps

Finance and insurance, net

100.0%

100.0%

unch.

bps

Good Sam Club

85.2%

80.9%

426

bps

Subtotal RV and Outdoor Retail

35.6%

31.0%

466

bps

Total gross margin

36.1%

31.8%

431

bps

Inventories ($ in 000's)

New vehicles

$

723,593

...