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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
☒
☐
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 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
(State or other jurisdiction of incorporation or organization)
81-1737145
(I.R.S. Employer Identification No.)
250 Parkway Drive, Suite 270
Lincolnshire, IL 60069
(Address of principal executive offices) (Zip Code)
Telephone: (847) 808-3000
(Registrant’s telephone number, including area code)
Title of each class
Class A Common Stock, Par Value $0.01 Per Share
Name of each exchange on which registered
New York Stock Exchange
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Class A Common Stock,
$0.01 par value per share
Trading Symbol(s)
CWH
Name of each exchange on which registered
New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ⌧ No ◻
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act. Yes ◻ No ⌧
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 new 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. (Check one):
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 has filed a report on and attestation to its management’s assessment of the effectiveness of its internal
control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or
issued its audit report. ☒
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ⌧
The aggregate market value of the voting and non-voting stock held by non-affiliates of the Registrant, as of June 30, 2020, the last business day of the
Registrant’s most recently completed second fiscal quarter, was approximately $885,097,196. Solely for purposes of this disclosure, shares of common stock
held by executive officers and directors of the Registrant as of such date have been excluded because such persons may be deemed to be affiliates.
As of February 22, 2021, the registrant had 43,746,433 shares of Class A common stock outstanding, 44,680,397 shares of Class B common stock
outstanding, and one share of Class C common stock outstanding.
Portions of the registrant’s Proxy Statement relating to its 2021 Annual Meeting of Stockholders to be filed with the Securities and Exchange Commission
within 120 days after the end of the fiscal year ended December 31, 2020 are incorporated herein by reference in Part III.
DOCUMENTS INCORPORATED BY REFERENCE
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Camping World Holdings, Inc.
Form 10-K
For the Fiscal Year Ended December 31, 2020
Business
Item 1
Item 1A Risk Factors
Item 1B Unresolved Staff Comments
Item 2
Item 3
Item 4 Mine Safety Disclosures
Properties
Legal Proceedings
INDEX
PART I
PART II
Item 5 Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of
Equity Securities
Selected Financial Data
Item 6
Item 7 Management’s Discussion and Analysis of Financial Condition and Results of Operations
Item 7A Quantitative and Qualitative Disclosures About Market Risk
Item 8
Item 9
Item 9A Controls and Procedures
Item 9B Other Information
Financial Statements and Supplementary Data
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
PART III
Item 10 Directors, Executive Officers and Corporate Governance
Item 11 Executive Compensation
Item 12 Security Ownership of Certain Beneficial Owners and Management and Related Stockholder
Matters
Item 13 Certain Relationships and Related Transactions, and Director Independence
Item 14 Principal Accountant Fees and Services
Item 15 Exhibits and Financial Statement Schedules
Item 16 Form 10-K Summary
Signatures
PART IV
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Summary of Principal Risk Factors
We operate in a rapidly changing environment that involves a number of risks, some of which are beyond our control.
In evaluating our company, you should consider carefully this summary of risks and uncertainties described below
together with the other information included in this Annual Report on Form 10-K (“Form 10-K”), including our
consolidated financial statements and related notes included in Part II, Item 8, “Financial Statements and
Supplementary Data” in this Form 10-K. The occurrence of any of the following risks may materially and adversely
affect our business, financial condition, results of operations and future prospects:
●
The COVID-19 pandemic has had, and could have in the future, certain negative impacts on our business,
and such impacts may have a material adverse effect on our results of operations, financial condition and
cash flows.
● We may not successfully execute or achieve the expected benefits of our 2019 Strategic Shift (as defined
below) and this program may result in further asset impairment charges and adversely affect the Company’s
business.
● Our business is affected by the availability of financing to us and our customers.
●
Fuel shortages, or higher prices for fuel, could have a negative effect on our business.
● Our success depends to a significant extent on the well-being, as well as the continued popularity and
reputation for quality, of our manufacturers, particularly Thor Industries, Inc. and Forest River, Inc.
● Our business model is impacted by general economic conditions in our markets, and ongoing economic and
financial uncertainties could cause a decline in consumer spending that could adversely affect our business,
financial condition and results of operations.
● Changes in consumer preferences for our products or our failure to gauge those preferences could lead to
reduced sales and increased cost of sales and selling, general and administrative expenses.
● Competition in the market for services, protection plans, products and resources targeting the RV lifestyle or
RV enthusiast could reduce our revenue and profitability
● Our expansion into new, unfamiliar markets, businesses, product lines or categories presents increased risks
that may prevent us from being profitable in these new markets, businesses, product lines or categories.
Delays in opening or acquiring new retail locations could have a material adverse effect on our business,
financial condition and results of operations.
● Unforeseen expenses, difficulties, and delays encountered in connection with acquisitions and new store
openings could inhibit our growth and negatively impact our profitability.
●
Failure to maintain the strength and value of our brands could have a material adverse effect on our
business, financial condition and results of operations.
● Our failure to successfully order and manage our inventory to reflect consumer demand in a volatile market
and anticipate changing consumer preferences and buying trends has and may continue to have an adverse
effect on our business, financial condition and results of operations.
● Our same store revenue may fluctuate and may not be a meaningful indicator of future performance.
● Our business is seasonal and this leads to fluctuations in sales and revenues.
● Our ability to operate and expand our business and to respond to changing business and economic
conditions will depend on the availability of adequate capital.
● Our Senior Secured Credit Facilities and our Floor Plan Facility contain restrictive covenants that may impair
our ability to access sufficient capital and operate our business.
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● We primarily rely on five fulfillment and distribution centers for our retail, e-commerce and catalog
businesses, and, if there is a natural disaster or other serious disruption at any such facility, we may be
unable to deliver merchandise effectively to our stores or customers.
● Natural disasters, whether or not caused by climate change, unusual weather conditions, epidemic
outbreaks, terrorist acts or political events could disrupt our business and result in lower sales and otherwise
adversely affect our financial performance.
● We depend on our relationships with third-party providers of services, protection plans, products and
resources and a disruption of these relationships or these providers’ operations could have an adverse effect
on our business and results of operations.
● Because certain of the products that we sell are manufactured abroad, we may face delays, new or increased
tariffs, increased cost or quality control deficiencies in the importation of these products, which could reduce
our net sales and profitability.
● A portion of our net income is from financing, insurance and extended service contracts, which depend on
third-party lenders and insurance companies. We cannot assure you third-party lending institutions will
continue to provide financing for RV purchases.
●
If we are unable to retain senior executives and attract and retain other qualified employees, our business
might be adversely affected.
● We are subject to risks associated with leasing substantial amounts of space.
● Our private brand offerings expose us to various risks.
● We could incur impairment charges for goodwill, intangible assets or other long-lived assets.
● Our business is subject to numerous federal, state and local regulations and litigation risks.
● We are subject to risks associated with our organizational structure.
●
There are risks associated with ownership of our Class A common stock.
As used in this Form 10-K, unless the context otherwise requires, references to:
BASIS OF PRESENTATION
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“we,” “us,” “our,” the “Company,” “Camping World,” “Good Sam” 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.
"Active Customer" refers to 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 December 31, 2020, our most recently completed fiscal quarter.
“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
own common units in CWGS, LLC and who may redeem at each of their options their common units
for, at our election (determined solely by our independent directors within the
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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.
“Former Equity Owners” refers to those Original Equity Owners controlled by Crestview Partners II
GP, L.P. that have exchanged their direct or indirect ownership interests in CWGS, LLC for shares of
our Class A common stock in connection with the consummation of our initial public offering (“IPO”).
“Former Profit Unit Holders” refers collectively to our named executive officers (excluding Marcus
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 common units of CWGS, LLC pursuant to CWGS, LLC’s equity
incentive plan that was in existence prior to our IPO and received common units of CWGS, LLC in
exchange for their profit units in CWGS, LLC.
“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
Lemonis.
“ML Related Parties” refers to ML Acquisition and its permitted transferees of common units.
“ML RV Group” refers to ML RV Group, LLC, a Delaware limited liability company, wholly-owned by
our Chairman and Chief Executive Officer, Marcus Lemonis.
“Original Equity Owners” refers to the direct and certain indirect owners of interests in CWGS, LLC,
collectively, prior to the Reorganization Transactions and Recapitalization (as defined in Note 1 –
Summary of Significant Accounting Policies and Note 18 – Stockholders’ Equity to our consolidated
financial statements included in Part II, Item 8 of this Form 10-K, respectively) conducted in
conjunction with our IPO, including ML Acquisition, funds controlled by Crestview Partners II GP, L.P.
and the Former Profit Unit Holders.
“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.
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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Form 10-K 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-K may be forward-looking statements. Statements regarding our future results of operations
and financial position, business strategy and plans and objectives of management for future operations, including,
among others, statements regarding the timeline for and benefits of our 2019 Strategic Shift; expected new retail
location openings and closures, including greenfield locations and acquired locations; the impact of the COVID-19
pandemic on our business; sufficiency of our sources of liquidity and capital and potential need for additional
financing; our stock repurchase program; future capital expenditures and debt service obligations; refinancing,
retirement or exchange of outstanding debt; expectations regarding industry trends and consumer behavior and
growth; our ability to capture positive industry trends and pursue growth; our plans to increase new products offered
to our customers and grow our businesses to enhance our visibility with respect to revenue and cash flow, and to
increase our overall profitability; volatility in sales and potential impact of miscalculating the demand for our products
or our product mix; expectations regarding increase of certain expenses in connection with our 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 this Form 10-K under Item 1A. Risk Factors and in our
other filings with the Securities and Exchange Commission (“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-K, 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 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-K or to conform these
statements to actual results or revised expectations.
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ITEM 1. BUSINESS
Overview
PART I
Camping World Holdings, Inc. (together with its subsidiaries) is America’s largest retailer of recreational
vehicles (“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 December 31, 2020, we operated a total of 171 retail locations,
with 170 of these selling and/or servicing RVs.
Business Strategy
Key elements of our business strategy are:
Offer a Unique and Comprehensive Assortment of RV Products and Services. We believe our product and service
offerings represent the best and most comprehensive assortment of services, protection plans, products and
resources in the RV industry. Many of our offerings, including our Good Sam services and plans, our private label
RVs, and our private label accessories, are unique to us and have been developed in collaboration with leading
industry suppliers and RV enthusiasts. With more than 50 years of RV industry experience, 170 retail locations selling
and/or servicing RVs, and 5.3 million Active Customers, we believe our size and scale allows us to deliver exceptional
value to our customers.
Operate a National Network of RV Dealerships and Service Centers. As of December 31, 2020, we operated a
national network of 170 RV dealerships and/or service centers. The majority of these RV dealerships and service
centers are conveniently located off major highways and interstates in key RV markets, staffed with knowledgeable
local team members offering expert advice and a comprehensive assortment of RV-related products and services.
Our RV dealerships and service centers are a one-stop-shop for everything RV and give RV consumers peace of
mind that they can find what they need when they need it in their local market or while traveling throughout the
country.
Focus on Customer Service. We believe customer service is a critical component of our business. Our dealerships
and service centers are staffed with knowledgeable local team members offering expert advice and a wide
assortment of products and services. We currently operate call centers in Denver, CO, Bowling Green, KY,
Greenville, NC, and Island Lake, IL. All associates at our call centers have been cross trained, and the call centers
have redundant services and systems in place in the event of a power or connectivity disruption at one of our call
center locations. Our goal is that every call – whether to one of our call centers or to a store – will be answered
promptly by a live person. Our call center specialists are extensively trained to assist customers with complex orders
and provide a level of service that leads to exceptional customer service and long-term customer relationships. In
2020, our call centers handled more than 2.6 million calls and responded to over 495,000 emails and social media
communications.
Leverage Our Resources and Synergies. Our unique and comprehensive assortment of RV products and services,
our national network of RV dealerships and service centers, our network of customer service and contact centers, and
our online and e-commerce platforms all work together to service our customers and make RVing fun and easy.
When a new customer transacts with us across any of our business areas, the new customer enters our database
and we leverage customized customer relationship management (“CRM”) tools
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and analytics to actively and intelligently engage, service and promote other offerings and the RV lifestyle. We believe
our size and scale allows us to deliver exceptional value to our customers.
Stewards of the RV Lifestyle. We 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. Good Sam programs such as
extended vehicle warranty programs, roadside assistance plans, vehicle and home insurance programs, and Good
Sam TravelAssist travel protection plans help to ensure our customers’ health and safety while traveling, and our
Good Sam Club, co-branded credit card, extended vehicle warranty programs and vehicle protection plans provide
great value to keep our customers’ RVs in top shape while providing a host of discounts and services all designed to
enhance the overall customer RV experience. By providing unique programs that promote the health, safety and
protection of the RV community, the Company drives an unparalleled opportunity to build a large, loyal, and growing
community of RV enthusiasts to whom we can provide our basket of products and services for years to come.
Background, Restructuring and Recent Developments
Founded in 1966, our Good Sam and Camping World brands have been serving RV owners and outdoor
enthusiasts for more than 50 years. Good Sam combined with Camping World in 1997, when the Good Sam Club had
approximately 911,000 members and Camping World had 26 retail locations. In 2011, Camping World Good Sam
combined with FreedomRoads, a successful RV dealership business founded in 2003, to form the largest provider of
products and services for RVs in North America. From 2011 to 2020, we continued to expand our footprint of RV
dealerships through new store openings and acquisitions.
In May 2017, we acquired certain assets of Gander Mountain Company (“Gander Mountain”) and its
Overton’s, Inc. (“Overton’s”) marine and watersports business through a bankruptcy auction. Prior to the bankruptcy,
Gander Mountain operated 160 retail locations and an e-commerce business that serviced the hunting, camping,
fishing, shooting sports, and outdoor markets. Following the acquisition, we rebranded the Gander Mountain business
as Gander Outdoors and began opening the rebranded Gander Outdoors stores in December 2017. In 2017 and
2018, we also acquired several other specialty retail businesses.
In 2019, we made a strategic decision to refocus our business around our core RV competencies. In August
of 2019, we divested 13 specialty store locations under the Uncle Dan’s and Rock Creek nameplates. On September
3, 2019, our Board of Directors approved a plan to strategically shift our business away from locations where we did
not have the ability or where it was not feasible to sell and/or service RVs (the “2019 Strategic Shift”). As of December
31, 2020, the Company has completed the store closures and divestitures relating to the 2019 Strategic Shift. For
more information on the impact to our 2020 and 2019 financial results, please see Note 5 – Restructuring and Long-
lived Asset Impairment to our consolidated financial statements included in Part II, Item 8 of this Form 10-K.
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Segments and Offerings
We operate two reportable segments: (i) Good Sam Services and Plans and (ii) RV and Outdoor Retail. See
Note 22 — Segment Information to our consolidated financial statements included in Part II, Item 8 of this Form 10-K
for further information regarding our reportable segments.
(1) Components of revenue are presented after intersegment eliminations.
(2) Gross profit is presented exclusive of depreciation and amortization which is presented separately in operating expenses.
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Our broad product offerings allow us to target our customers’ needs with products and services focused
towards recurring revenue, our installed base, and first-time buyers. Our recurring revenues are also marketed to
customers outside of purchasers of our new and used RVs and are often annual or multi-year plans, so these
recurring revenues do not necessarily correlate to sales of new and used RVs.
Good Sam Services and Plans
Our Good Sam Services and Plans segment consists of programs, plans and services that are geared
towards protecting, insuring and promoting the RV lifestyle, and include services such as extended vehicle service
contracts, vehicle roadside assistance, property and casualty insurance, travel protection, travel planning and
directories, and consumer shows and publications. Because our Good Sam protection plans and programs are often
purchased to cover a multiple-year period and are renewable in nature, this area of our business tends to generate
high-margin, recurring revenue that is driven both by vehicle purchases and the installed base of RV owners in the
United States. Founded in 1966 to help fellow RV travelers on the road, the Good Sam brand has been supporting
and assisting RVers for more than 50 years.
Our Good Sam Services and Plans segment offerings include:
● Good Sam extended vehicle service contracts. We offer mechanical breakdown insurance
underwritten and insured by a third party to members of the Good Sam Club. The contracts cover the
cost of parts, labor and repairs to motorized and towable RVs as well as autos, pick-up trucks and sport
utility vehicles. The contracts ensure the members will have continuous protection during the life of the
contracts. The third party assumes full underwriting risk associated with the contracts and we are
compensated on a commission basis. As of December 31, 2020, we had approximately 75,000 contracts
in force underwritten by the third party.
● Good Sam roadside assistance plans. We offer roadside assistance plans for services such as towing,
jump starting, tire changing, mobile mechanics and others. We contract with a third party
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to handle dispatch calls through its network of tow providers and we pay a fee per incident or call. As of
December 31, 2020, we had approximately 679,000 contracts in force under our emergency roadside
assistance plan.
● Good Sam property and casualty insurance programs. We offer property and casualty insurance for
RVs and other types of vehicles as well as home insurance underwritten by various insurance providers.
We do not share the underwriting risk of the insurance programs and we receive a marketing fee based
on the amount of premium paid to the insurance providers. For the year ended December 31, 2020, we
sold, through third-party insurance providers, insurance policies with an aggregate net written premium of
$283 million for which we earn a marketing fee.
● Good Sam TravelAssist travel protection. We offer travel protection plans designed to assist travelers
with medical emergency situations. The plans provide 24/7 coverage for emergency medical evacuation,
return-home services, emergency medical monitoring, as well as other travel assistance services. We
contract with a third party to offer travel protection plans through Good Sam TravelAssist, where the third
party primarily assumes the underwriting risk through third-party underwriters. As of December 31, 2020,
we had approximately 245,000 contracts in force primarily underwritten by the third party’s underwriter.
● Good Sam consumer shows. We offer RV and outdoor related consumer shows designed to promote
and sell RV and outdoor lifestyle and related products and services. During 2020, as a consequence of
COVID-19, we reduced the number of in-person consumer shows that we promoted and operated to 24
consumer shows in 20 cities across 15 states that attracted more than 210,000 visitors. In comparison,
during 2019, we promoted and operated 37 consumer shows in 29 cities across 18 states that attracted
more than 285,000 visitors. These shows provide a strategic opportunity to expose first-time buyers and
existing RV and outdoor sports enthusiasts to our products and services.
● Other activities. We produce certain monthly and annual RV focused consumer magazines, and travel
and planning directories, and operate the Coast to Coast Club which provides access to and savings at
private membership campgrounds.
RV and Outdoor Retail
Our RV and Outdoor Retail segment consists of all aspects of our RV dealership operations, which includes
selling new and used RVs, assisting with the financing of new and used RVs, selling protection and insurance related
services and plans for RVs, servicing and repairing new and used RVs, installing RV parts and accessories, and
selling RV and outdoor related products, parts and accessories. Within our RV and Outdoor Retail business, we also
operate the Good Sam Club, which we believe is the largest membership-based RV organization in the world, with
approximately 2.1 million members as of December 31, 2020. Membership benefits include a variety of discounts,
exclusive benefits, specialty publications and other membership benefits, all of which we believe enhance the RV
experience, drive customer engagement and
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loyalty, and provide cross-selling opportunities for our other products and services. A map depicting our national
network of 170 RV dealerships and service centers as of December 31, 2020 is provided below:
Source: Statistical Surveys, Inc. (15 largest RV markets)
RV and Outdoor Retail segment offerings include:
● New and Used Vehicles. A wide selection of new and used RVs across a range of price points, classes
and floor plans. The table below contains a breakdown of our new RV unit sales and average selling
price by RV class for 2020. Sales of new vehicles represented 51.8%, 48.5% and
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52.4% of total revenue for 2020, 2019 and 2018, respectively. Sales of used vehicles represented 18.1%,
17.5% and 15.3% of total revenue for 2020, 2019, and 2018, respectively.
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Vehicle financing. Through arrangements with third-party lenders we are able to provide financing for
most of the new and used RVs we sell through our retail locations. Generally, our financing transactions
are structured through long-term retail installment sales contracts with terms of up to 20 years, which we
enter into with our customers on behalf of our third-party lenders. The retail installment sales contracts
are then assigned on a non-recourse basis, with the third-party lender assuming underwriting and credit
risk. In 2020, we arranged financing transactions for approximately 72.9% of our total number of new and
used units sold for which we earn a commission from the third-party lender.
Protection Plans. We offer and sell a variety of protection plans and services to the purchasers of our
RVs as part of the delivery process, as well as gap, wheel, tire and fabric protection plans. These
products are primarily underwritten and administered by independent third parties, and we are primarily
compensated on a commission basis.
Repair and Maintenance. We offer RV repair and maintenance services at the majority of our retail
locations. With approximately 2,200 RV service bays across our national footprint, we are equipped to
offer comprehensive repair and maintenance services for most RV components.
RV parts, accessories and installation services. We offer a wide range of RV parts, equipment,
supplies and accessories, including towing and hitching products, satellite and GPS systems, electrical
and lighting products, appliances and furniture, and other products. Our full-service repair facilities
enable us to install all parts and accessories that we sell in our retail locations. We believe our ability to
both sell and install parts and accessories affords us a competitive advantage over online and big box
retailers, that do not have service centers designed to accommodate RVs, and over RV dealerships that
do not offer a comprehensive selection of parts and accessories.
Collision repair and restoration. We offer collision repair services, including fiberglass front and rear
cap replacement, windshield replacement, interior remodel solutions, and paint and body work, at many
of our retail locations, and 35% of our retail locations are equipped with full body paint booths. We
perform collision repair services for a number of insurance carriers.
• Outdoor products and accessories. We offer a variety of outdoor products and accessories that are
specifically curated for the RV community, including equipment, gear and supplies for
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camping, hunting, fishing, skiing, snowboarding, bicycling, skateboarding, marine and watersports and
other outdoor activities.
• Good Sam Club. The Good Sam Club is a membership organization that offers savings on a variety of
products and services, including products purchased at any of our retail and online stores, discounts on
nightly rates at affiliated Good Sam RV parks and other benefits related to the RV lifestyle. We believe
the Good Sam Club is the largest membership-based RV enthusiast organization in the world. As of
December 31, 2020, there were approximately 2.1 million members in our Good Sam Club.
•
Co-branded credit cards. We contract with Visa and Comenity Capital Bank to offer a Good Sam
Rewards Visa® branded credit card, as well as Good Sam private label credit card. Cardholders receive
enhanced rewards points, which are referred to as Good Sam Rewards, for money spent at our retail
locations, on our e-commerce platforms, at gas stations and at private campgrounds across the U.S. and
Canada. As of December 31, 2020, we had approximately 199,000 issued and open Good Sam co-
branded credit card accounts.
Vehicle Sourcing and Dealer Agreements
We acquire new RVs for retail sale directly from the original equipment manufacturer. Our strategy is to
partner with financially sound manufacturers that make high quality products, have adequate manufacturing capacity
and distribution, and maintain an appropriate product mix. We have strategic relationships with leading RV
manufacturers, including Thor Industries, Inc. and Forest River, Inc. As of December 31, 2020, Thor Industries and
Forest River accounted for approximately 69.3% and 27.9%, respectively, of our new RV inventory. In certain
instances, our manufacturing partners produce private label products exclusively available at our RV dealerships and
through our e-commerce platforms.
Our supply arrangements with manufacturers are typically governed by dealer agreements, which are
customary in the RV industry, made on a location-by-location basis, and each retail location typically enters into
multiple dealer agreements with multiple manufacturers. Dealer agreements generally give us the right to sell certain
RV makes and models within an exclusive designated area. The terms of these dealer agreements typically require
us to, among other things, meet all the requirements and conditions of the manufacturer’s applicable programs,
maintain certain minimum inventory requirements and meet certain retail sales objectives, perform services and
repairs for all owners of the manufacturer’s RVs (regardless from whom the RV was purchased) that are still under
warranty, and stock certain of the manufacturer’s parts and accessories needed to service and repair the
manufacturer’s RVs, actively advertise and promote the manufacturer’s RVs, and indemnify the manufacturer under
certain circumstances.
We generally acquire used RVs from customers, primarily through trade-ins, as well as through auctions and
other sources, and we generally recondition used RVs acquired for retail sale in our parts and service departments.
Used RVs that we do not sell at our RV-centric retail locations generally are sold at wholesale prices through
auctions.
We finance the purchase of substantially all of our new RV inventory from manufacturers through our Floor
Plan Facility. Used vehicles may also be financed from time to time through our Floor Plan Facility. For more
information on our Floor Plan Facility, see “Management's Discussion and Analysis of Financial Condition and Results
of Operations—Liquidity and Capital Resources—Description of Senior Secured Credit Facilities and Floor Plan
Facility” included in Part II, Item 7 of this Form 10-K and Note 4 — Inventories, net and Notes Payable — Floor Plan,
net to our audited consolidated financial statements included in Part II, Item 8 of this Form 10-K.
Marketing and Advertising
The lifestyle element of the RV industry and the multi-year nature of many of our products and services
provides the opportunity to build long-term relationships with our customers. Our marketing strategies are focused on
developing awareness around our brands, products and services, and driving traffic to our stores and websites, and
we utilize a combination of direct mail, email, printed catalogs and flyers, digital, social and
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traditional media, as well as online inventory listings to accomplish this. As part of our marketing efforts, we maintain
a proprietary database of individuals and customer purchasing data that we utilize for direct mail, email and
telemarketing campaigns. As of December 31, 2020, this database contained over 30 million unique contacts. In
addition, we are involved in various sponsored sporting event activities. We are the sponsor of the NASCAR Camping
World Truck Series, Major League Baseball Spring Training, and National Hot Rod Association (“NHRA”) Camping
World Drag Racing Series plus the naming rights sponsor of Camping World Stadium in Orlando, Florida. We also
have official partner status for our brands for both Major League Baseball and NASCAR. In September 2020,
Camping World and Gander RV introduced our first-ever virtual show, the Ultimate RV Show, which was a virtual
omni-channel event that showcased informative videos, promotions, and concerts by popular artists. There were 1.3
million viewers that attended the five-day online event. The Ultimate RV Show will continue to be utilized in the future
as an additional means of connecting with consumers and digitizing the purchase experience.
Trademarks and Other Intellectual Property
We own a variety of registered trademarks and service marks related to our brands and our services,
protection plans, products and resources, including Good Sam, Camping World, Gander Outdoors, Gander RV, and
Overton’s. We also own the copyrights to certain articles in our publications and numerous domain names, including
www.goodsamclub.com,
www.ganderrv.com,
www.overtons.com, www.the-house.com, www.rv.com, among others. We believe that our trademarks and other
intellectual property have significant value and are important to our marketing efforts. We do not know of any material
pending claims of infringement or other challenges to our right to use our intellectual property in the United States or
elsewhere. For additional information regarding our intellectual property, see Note 7 – Goodwill and Intangible Assets
to our audited consolidated financial statements included in Part II, Item 8 of this Form 10-K.
www.ganderoutdoors.com,
www.campingworld.com,
Human Capital Resources
Our Talent
As of December 31, 2020, we had 10,907 full-time and 1,040 part-time or seasonal employees. None of our
employees are represented by a labor union or are party to a collective bargaining agreement, and we have had no
labor-related work stoppages. We believe that our employee relations are generally good.
Development
In November 2020, we launched an entity-wide online training platform with a curriculum that is tailored to
each associate’s job function. This program includes interactive courses such as COVID-19 safety, communication,
management, critical thinking, software skills, and workplace harassment and discrimination. Our learning and
development team continues to create proprietary content for this training library.
Our service technicians are critical to providing the high-quality installation and repair services that our
customers expect. In 2019, we provided training to 159 technicians and, despite the challenges faced with social
distancing limitations as a result of COVID-19 safety precautions, we were able to train 101 new technicians on our
level 1 course in 2020.
Diversity, Equity, and Inclusion
We strive to make diversity, equity, and inclusion (“DE&I”) a top priority in all areas of our Company. These
areas include but are not limited to our board of directors, senior management, field operations, and the creation of
campaigns, products and services. We believe that our Company and our brand should reflect the
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increasingly diverse audience of outdoor enthusiasts and our culture should promote respect and dignity of all
humans.
Community Engagement
Since 2013, we have operated the Project Good Samaritan initiative, which encourages our associates to
perform eight hours of volunteer work per quarter for a cause that is meaningful to that associate, such as local soup
kitchens, food pantries, home building, meal distribution, recycling programs, homeless shelters, veteran programs,
and nursing homes. Associates receive paid time off for these volunteer hours. In 2019, 3,364 associates volunteered
51,680 hours in their communities under the program. In 2020, 840 associates volunteered 6,268 hours during
January and February before the program was suspended as a safety precaution as a result of the COVID-19
pandemic. We plan to reactivate the program when it is safe to do so.
Health and Safety
We maintain a safety program to provide a safe and healthful workplace for our associates. We strive to
comply with all health and safety standards that pertain to our operations. We have created and implemented
processes to identify, reduce or eliminate physical hazards from the work environment, improve safety communication
and train employees on safe work practices.
In response to the COVID-19 pandemic, we have implemented new health and safety measures at all of our
locations. We also issued COVID-19 awareness training to our associates to educate associates on how the virus is
transmitted, how to monitor for symptoms of the virus, and how to protect themselves and others from increased
spread of the virus. For further discussion, see “Management’s Discussion and Analysis of Financial Condition and
Results of Operations — COVID-19” in Item 7 of Part II of this Form 10-K.
Competition
We face competition in all areas of our business. We believe that the principal competitive factors in the RV
industry are breadth and depth of products and services, quality, pricing, availability, convenience, and customer
service. Our competitors vary in size and breadth of their product offerings.
We compete directly or indirectly with the following types of companies:
●
other RV dealers selling new and used RVs;
● major national insurance and warranty companies, providers of roadside assistance and providers of
extended vehicle service contracts;
● multi-channel retailers and mass merchandisers, warehouse clubs, discount stores, department stores
and other retailers, such as Wal-Mart, Target and Amazon;
●
●
●
●
other specialty retailers that compete with us across a significant portion of our merchandising categories
through retail, catalog or e-commerce businesses, such as Bass Pro Shops (including Cabela’s),
Sportsman’s Warehouse and REI;
distributors of assembled RV furniture;
online retailers; and
independent, local specialty stores.
Additional competitors may enter the businesses in which we currently operate. Moreover, some of our mass
merchandising competitors do not currently compete in many of the product categories we offer but may choose to
offer a broader array of competing products in the future.
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COVID-19
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. For further discussion, see “Management’s Discussion
and Analysis of Financial Condition and Results of Operations — COVID-19” in Item 7 of Part II of this Form 10-K.
Seasonality
Historically, our business has been seasonal. Since recreational vehicles are primarily used by vacationers
and campers during times of warmer weather, demand for our products and services tends to be highest in the spring
and summer months and lowest in the winter months. As a result, our revenue and profitability has historically been
higher in the second and third quarters than in the first and fourth quarters. On average over the last three years
ended December 31, 2020, we generated 29.9% and 28.9% of our annual revenue in the second and third quarters,
respectively, and 20.8% and 20.4% in the first and fourth quarters, respectively. For further discussion, see
“Management’s Discussion and Analysis of Financial Condition and Results of Operations — Seasonality” in Item 7 of
Part II of this Form 10-K.
Laws and Regulations
See “Risk Factors — Risks Related to Our Business — Our business is subject to numerous federal, state
and local regulations,” “— Changes in government policies and firearms legislation could adversely affect our results,”
“— Our failure to comply with certain environmental regulations could adversely affect our business, financial
condition and results of operations,” and “—Climate change legislation or regulations restricting emission of
“greenhouse gases” could result in increased operating costs and reduced demand for RVs we sell” in Item 1A of Part
I of this Form 10-K. Although we incur costs to comply with applicable laws and regulations in the ordinary course of
our business, we do not presently anticipate that such costs will have a material effect on our capital expenditures,
earnings and competitive position.
Environmental, Health and Safety Regulations
Our operations involve the use, handling, storage and contracting for recycling and/or disposal of materials
such as motor oil and filters, transmission fluids, antifreeze, refrigerants, paints, thinners, batteries, cleaning products,
lubricants, degreasing agents, tires and propane. Consequently, our business is subject to a complex variety of
federal, state and local requirements that regulate the environment and public health and safety. For a discussion of
the impact of COVID-19 on our business, see “Management’s Discussion and Analysis of Financial Condition and
Results of Operations — COVID-19” in Item 7 of Part II of this Form 10-K. We do not have any material known
environmental commitments or contingencies.
Additional Information
We were incorporated in the State of Delaware in 2016. Our principal executive offices are located at 250
Parkway Drive, Suite 270, Lincolnshire, IL 60069 and our telephone number is (847) 808-3000. We make available
our public filings, including annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-
K, and any amendments to those reports with the SEC free of charge through our website at www.campingworld.com
in the “Investor Relations” section under “Financial Info” as soon as reasonably practicable after we electronically file
such material with, or furnish such material to, the SEC. The information contained in, or accessible through, our
website does not constitute a part of this Form 10-K.
We intend to use our official
the handle
@CampingWorld, as a distribution channel of material information about the Company and for complying with our
disclosure obligations under Regulation FD. The information we post through these social media channels may be
deemed material. Accordingly, investors should subscribe to these accounts, in addition to following our press
releases, SEC filings and public conference calls and webcasts. These social media channels may be updated from
time to time. The information we post through these channels is not a part of this Annual Report on Form 10-K.
and Instagram accounts,
Facebook,
each at
Twitter,
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ITEM 1A. RISK FACTORS
RISK FACTORS
Investing in our common stock involves a high degree of risk. You should consider carefully the risks and
uncertainties described below, together with the other information included in this Form 10-K. The occurrence of any
of the following risks may materially and adversely affect our business, financial condition, results of operations and
future prospects. In these circumstances, the market price of our Class A common stock could decline. Other events
that we do not currently anticipate or that we currently deem immaterial may also affect our business, prospects,
financial condition and results of operations.
Risks Related to the COVID-19 Pandemic
The COVID-19 pandemic has had, and could have in the future, certain negative impacts on our business,
and such impacts may have a material adverse effect on our results of operations, financial condition and
cash flows.
The public health crisis caused by the COVID-19 pandemic and the measures being taken by governments,
businesses, including us and our vendors, and the public at large to limit COVID-19's spread have had, and could
again have in the future, certain negative impacts on our business including, without limitation, the following:
● We have faced, and may continue to face, delays in the delivery of certain products from our vendors as
a result of shipping delays due to, among other things, additional safety requirements imposed by
governmental authorities and capacity constraints experienced by our transportation contractors.
● Some of our vendors have experienced, and may experience in the future, temporary facility closures,
production slowdowns and disruption to operations as a result of the impact of the COVID-19 pandemic
on their respective businesses, such as Thor Industries, Inc.’s temporary closure of its North American
production facilities from late March to early May 2020.
● Disruptions in supply chains may place constraints on our ability to source products, which may increase
our product costs or lead to shortages.
● When governmentally mandated or voluntary stay-at-home guidelines have been put in place, we have
experienced a decrease in traffic at our retail locations, which resulted in a decrease in the sales of
certain of our products and services at our retail locations. If stay-at-home or shelter-in-place orders are
reinstated, we may again experience negative impacts on our sales that could be more prolonged and
more severe than what we have experienced to date. As stay-at-home restrictions began to ease across
certain areas of the country, we experienced significant acceleration in our in-store traffic, lead
generation, and revenue trends in May continuing throughout the remainder of 2020 and early indications
appear to show favorable trends continuing into 2021. The industry has seen an influx of new first-time
participants because RVs allow people to travel in a safe and socially distant manner during the COVID-
19 crisis. These trends may not continue in the future, in particular if the cruise line, air travel and hotel
industries begin to recover. Accordingly, investors are cautioned not to unduly rely on the historical
information in this Form 10-K regarding our business, results of operations, financial condition or liquidity.
● National parks and RV parks temporarily closed and may in the future close again in response to the
COVID-19 pandemic, which could cause consumers to use their RVs less frequently and be less inclined
to need or renew certain of our services or purchase products through our e-commerce websites.
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● As of December 31, 2020, we temporarily closed two dealerships as a result of COVID-19 and branding
changes. We anticipate re-opening these the locations in 2021. To the extent the COVID-19 pandemic
intensifies or governmental orders change, we may be forced to temporarily close more locations in the
future.
● Deteriorating economic conditions as a result of the COVID-19 pandemic, such as increased
unemployment, decreases in disposable income, declines in consumer confidence, or economic
slowdowns or recessions, could cause a decrease in demand for our products and services.
● We have made temporary changes to our operating procedures at our retail locations and offices. We are
taking measures to protect our customers, employees and facilities, which include, but are not limited to,
social distancing, providing employees with face coverings and/or other protective clothing as required,
and implementing additional cleaning and sanitization routines. These measures may not be sufficient to
prevent the spread of COVID-19 among our employees and, therefore, we may face labor shortages
including key positions. Additionally, our employees may not be as efficient while operating under these
temporary procedures, which could result in additional labor costs.
● Our ability to increase our borrowing capacity may be limited as a result of the COVID-19 pandemic and,
if the conditions in the credit markets worsen, our ability to refinance credit arrangements as they mature
may also be limited. As a result, there is no guarantee that we will be able to access additional capital on
commercially reasonable terms or at all.
●
The current uncertain market conditions and their actual or perceived effects on our results of operations
and financial condition, along with the current unfavorable economic environment in the United States,
may increase the likelihood that one or more of the major independent credit agencies will further
downgrade our credit ratings, which could have a negative effect on our borrowing costs.
● Governmental authorities in the United States may increase or impose new income taxes or indirect
taxes, or revise interpretations of existing tax rules and regulations, as a means of financing the costs of
stimulus and other measures enacted or taken, or that may be enacted or taken in the future, to protect
populations and economies from the impact of the COVID-19 pandemic. Such actions could have an
adverse effect on our results of operations and cash flows.
● We rely on third-party service providers and business partners, such as cloud data storage and other
information technology service providers, suppliers, distributors, contractors, and other external business
partners, for certain functions or for services in support of key portions of our operations. These third-
party service providers and business partners are subject to risks and uncertainties related to the
COVID-19 pandemic, which may interfere with their ability to fulfill their respective commitments and
responsibilities to us in a timely manner and in accordance with the agreed-upon terms.
●
The financial impact of the COVID-19 pandemic may cause one or more of our counterparty financial
institutions to fail or default on their obligations to us, which could cause us to incur significant losses.
● Deteriorations in our financial results and financial condition as a result of the COVID-19 pandemic could
cause us to default on one or multiple of our credit agreements, including any of the subjective
acceleration clauses in such agreements. If this occurs, our obligations under the relevant agreement
may be accelerated which would have a material adverse impact on our business, liquidity position and
financial position.
● We may be required to record significant impairment charges with respect to noncurrent assets, including
goodwill, other intangible assets, and other long-lived assets whose fair values may be negatively
affected by the effects of the COVID-19 pandemic on our operations. Also, we may be
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required to write off excess or obsolete inventory as a result of the COVID-19 pandemic’s damaging
impacts on our business.
● As a result of the COVID-19 pandemic, including related governmental guidance or directives, we have
required most office-based employees to work remotely. We may experience reductions in productivity
and disruptions to our business routines and heightened cybersecurity risks while our remote work policy
remains in place.
● Actions we have taken or may take, or decisions we have made or may make, as a consequence of the
COVID-19 pandemic may result in legal claims or litigation against us.
The resumption of normal business operations after the disruptions caused by the COVID-19 pandemic may
be delayed or constrained by its lingering effects on our consumers, vendors or third-party service providers.
Risks Related to Our Business
We may not successfully execute or achieve the expected benefits of our 2019 Strategic Shift and this
program may result in further asset impairment charges and adversely affect the Company's business.
In the third fiscal quarter of 2019, we announced the 2019 Strategic Shift. Implementation of the program
may be costly and disruptive to our business. We may not be able to realize the benefits initially anticipated and the
expected costs may be greater than expected. A variety of factors could cause the Company not to realize some or all
of the expected benefits or incur greater costs, including, among others, delays in the anticipated timing of activities
related to the 2019 Strategic Shift, unexpected costs associated with executing the 2019 Strategic Shift, or the
Company's ability to achieve the benefits contemplated by the program. Further, any cost savings that the Company
realizes may be offset, in whole or in part, by a reduction in revenues or through increases in other expenses. In
addition, the Company may need to incur further impairment charges to its long-lived assets, including its operating
lease assets, as a result of the 2019 Strategic Shift.
Our business is affected by the availability of financing to us and our customers.
Our business is affected by the availability of financing to us and our customers. Generally, RV dealers,
including us, finance their purchases of inventory with financing provided by lending institutions. As of December 31,
2020, we had up to $1.38 billion in maximum borrowing capacity under our Seventh Amended and Restated Credit
Agreement for floor plan financing (see Note 4 ─ Inventories, net and Notes Payable ─ Floor Plan, net to our
consolidated financial statements included in Part II, Item 8 of this Form 10-K). A decrease in the availability of this
type of wholesale financing or an increase in the cost of such wholesale financing could prevent us from carrying
adequate levels of inventory, which may limit product offerings and could lead to reduced sales and revenues.
Furthermore, many of our customers finance their RV purchases. Consumer credit market conditions
continue to influence demand, especially for RVs, and may continue to do so. There continue to be fewer lenders,
more stringent underwriting and loan approval criteria, and greater down payment requirements than in the past. If
credit conditions or the credit worthiness of our customers worsen, and adversely affect the ability of consumers to
finance potential purchases at acceptable terms and interest rates, it could result in a decrease in the sales of our
products and have a material adverse effect on our business, financial condition and results of operations.
Fuel shortages, or high prices for fuel, could have a negative effect on our business.
Gasoline or diesel fuel is required for the operation of RVs. There can be no assurance that the supply of
these petroleum products will continue uninterrupted, that rationing will not be imposed or that the price of or tax on
these petroleum products will not significantly increase in the future. Shortages of gasoline and diesel fuel have had a
material adverse effect on the RV industry as a whole in the past and any such shortages or substantial increases in
the price of fuel could have a material adverse effect on our business, financial condition or results of operations.
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Our success depends to a significant extent on the well-being, as well as the continued popularity and
reputation for quality, of our manufacturers, particularly Thor Industries, Inc. and Forest River, Inc.
Thor Industries, Inc. and Forest River, Inc. supplied approximately 69.3% and 27.9%, respectively, of our
new RV inventory as of December 31, 2020. We depend on our manufacturers to provide us with products that
compare favorably with competing products in terms of quality, performance, safety and advanced features. Any
adverse change in the production efficiency, product development efforts, technological advancement, marketplace
acceptance, reputation, marketing capabilities or financial condition of our manufacturers, particularly Thor
Industries, Inc. and Forest River, Inc., could have a substantial adverse impact on our business. Any difficulties
encountered by any of these manufacturers, resulting from economic, financial, or other factors, could adversely
affect the quality and amount of products that they are able to supply to us, and the services and support they provide
to us.
The interruption or discontinuance of the operations of Thor Industries, Inc. and Forest River, Inc. or other
manufacturers could cause us to experience shortfalls, disruptions, or delays with respect to needed inventory.
Although we believe that adequate alternate sources would be available that could replace any manufacturer as a
product source, those alternate sources may not be available at the time of any interruption, and alternative products
may not be available at comparable quality and prices.
Our supply arrangements with manufacturers are typically governed by dealer agreements, which are
customary in the RV industry. Our dealer agreements with manufacturers are generally made on a location-by-
location basis, and each retail location typically enters into multiple dealer agreements with multiple manufacturers.
These dealer agreements may contain affirmative obligations that we must comply with. Our dealer agreements also
generally provide for a one-year term, which is typically renewed annually. For more information on our dealer
arrangements, see “Item 1. Business ─ Vehicle Sourcing and Dealer Arrangements” under Part I of this Form 10-K.
In addition, certain of our dealer agreements contain stocking level requirements and certain of our dealer
agreements contain contractual provisions concerning minimum advertised product pricing for current model year
units. Wholesale pricing is generally established on a model year basis and is subject to change at the manufacturer’s
sole discretion. In certain cases, manufacturers have, and may continue to establish a suggested retail price, below
which we cannot advertise that manufacturer’s RVs. Any change, non-renewal, unfavorable renegotiation or
termination of these arrangements for any reason could adversely affect product availability and cost and our financial
performance.
Our business model is impacted by general economic conditions in our markets, and ongoing economic and
financial uncertainties could cause a decline in consumer spending that could adversely affect our business,
financial condition and results of operations.
As a business that relies on consumer discretionary spending, we have in the past and may in the future be
adversely affected if our customers reduce, delay or forego their purchases of our services, protection plans, products
and resources as a result of:
●
●
●
●
●
●
job losses, lower income levels or other population and employment trends;
bankruptcies;
higher consumer debt and interest rates;
reduced access to credit;
higher energy and fuel costs;
relative or perceived cost, availability and comfort of RV use versus other modes of travel, such as air
travel and rail;
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●
●
●
●
●
falling home prices;
lower consumer confidence or discretional consumer spending;
uncertainty or changes in tax policies and tax rates;
uncertainty due to national or international security concerns; or
other general economic conditions, including inflation, deflation and recessions.
We also rely on our retail locations to attract and retain customers and to build our customer database. If we
close retail locations, are unable to open or acquire new retail locations due to general economic conditions or
otherwise, or experience declines in customer transactions in our existing retail locations due to general economic
conditions or otherwise, our ability to maintain and grow our customer database and our Active Customers will be
limited, which could have a material adverse effect on our business, financial condition and results of operation.
Decreases in Active Customers, average spend per customer, or retention and renewal rates for our Good
Sam services and plans would negatively affect our financial performance, and a prolonged period of depressed
consumer spending could have a material adverse effect on our business. In prior years, promotional activities and
decreased demand for consumer products affected our profitability and margins, and this negative impact could return
or worsen in future periods. In addition, adverse economic conditions may result in an increase in our operating
expenses due to, among other things, higher costs of labor, energy, equipment and facilities, as well as higher tariffs.
Due to fluctuations in the U.S. economy, our sales, operating and financial results for a particular period are difficult to
predict, making it difficult to forecast results for future periods. Additionally, we are subject to economic fluctuations in
local markets that may not reflect the economic conditions of the U.S. economy. Any of the foregoing factors could
have a material adverse effect on our business, financial condition and results of operations.
In addition, the success of our recurring Good Sam services and plans depends, in part, on our customers’
use of certain RV websites and/or the purchase of services, protection plans, products and resources through
participating merchants, as well as the health of the RV industry generally.
In addition, we have faced, and may continue to face, increased competition from other businesses with
similar product and service offerings during recent periods. For example, our competitors have listed RVs at or below
cost and we have had little visibility into our competitors or manufacturers’ inventories. As a result, we have
responded and may need to further respond by establishing pricing, marketing and other programs or by seeking out
additional strategic alliances or acquisitions that may be less favorable to us than we could otherwise establish or
obtain in more favorable economic environments. Such programs have adversely impacted our gross margin,
operating margin and selling, general and administrative expenses. In addition, declines in the national economy
could cause merchants who participate in our programs to go out of business. It is likely that, should the number of
merchants entering bankruptcy rise, the number of uncollectible accounts would also rise. These factors could have a
material adverse effect on our business, financial condition and results of operations.
Changes in consumer preferences for our products or our failure to gauge those preferences could lead to
reduced sales and increased cost of sales and selling, general and administrative expenses.
We cannot be certain that historical consumer preferences for RVs in general, and any related products, will
remain unchanged. RVs are generally used for recreational purposes, and demand for our products may be adversely
affected by competition from other activities that occupy consumers’ leisure time and by changes in consumer
lifestyle, usage pattern, or taste. Similarly, an overall decrease in consumer leisure time may reduce consumers’
willingness to purchase our products. As described above, during the COVID-19 pandemic, we have seen significant
acceleration in our in-store traffic, lead generation, and revenue trends in May continuing throughout the remainder of
2020 and early indications appear to show favorable trends continuing into 2021. The industry has seen an influx of
new first-time participants because RVs allow people to travel in a safe and socially distant manner during the
COVID-19 crisis. These trends may not continue in the future, in
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particular if the cruise line, air travel and hotel industries begin to recover. Over the past several years, we have seen
a shift in our overall sales mix towards new travel trailer vehicles, which has led to declines in our average selling
price of a new vehicle unit. From 2015 to 2020, new vehicle travel trailer units as a percent of total new vehicles
increased from 62% to 74% of total new vehicle unit sales and the average selling price of a new vehicle unit has
declined from $39,853 to $36,277. The increased popularity of new travel trailer vehicles and the lower price points of
these units compared to other new vehicle classes, such as motorhomes and fifth wheels, could continue to lower our
average selling price of a new vehicle unit and impact our ability to grow same store revenue.
Competition in the market for services, protection plans, products and resources targeting the RV lifestyle or
RV enthusiast could reduce our revenues and profitability.
The markets for services, protection plans, products and resources targeting RV, outdoor and active sports
enthusiasts are highly fragmented and competitive. Major competitive factors that drive the RV, outdoor and active
sports markets are price, product and service features, technology, performance, reliability, quality, availability,
variety, delivery and customer service. We compete directly or indirectly with the following types of companies:
●
other RV dealers selling new and used RVs;
● major national insurance and warranty companies, providers of roadside assistance and providers of
extended vehicle service contracts;
● multi-channel retailers and mass merchandisers, warehouse clubs, discount stores, department stores
and other retailers, such as Wal-Mart, Target and Amazon;
●
●
●
●
other specialty retailers that compete with us across a significant portion of our merchandising categories
through retail, catalog or e-commerce businesses, such as Bass Pro Shops (including Cabela's),
Sportsman's Warehouse and REI;
distributors of assembled RV furniture;
online retailers; and
independent, local specialty stores.
Additional competitors may enter the businesses in which we currently operate. Moreover, some of our mass
merchandising competitors do not currently compete in many of the product categories we offer, but may choose to
offer a broader array of competing products in the future. Particularly in the larger outdoor goods and services market
outside the RV market, our competitors may have a larger number of stores and greater market presence, name
recognition and financial, distribution and marketing resources than us. Moreover, some of our competitors may build
new stores in or near our existing locations. In addition, an increase in the number of aggregator and price
comparison sites for insurance products may negatively impact our sales of these products. If any of our competitors
successfully provides a broader, more efficient or attractive combination of services, protection plans, products and
resources to our target customers, our business results could be materially adversely affected. Our inability to
compete effectively with existing or potential competitors could have a material adverse effect on our business,
financial condition and results of operations.
Our expansion into new, unfamiliar markets, businesses, products lines or categories presents increased
risks that may prevent us from being profitable in these new markets, businesses, product lines or
categories. Delays in opening or acquiring new retail locations could have a material adverse effect on our
business, financial condition and results of operations.
In the past, we have acquired new retail locations in new markets and new businesses, product lines or
product categories. As a result of this and any future expansion, we may have less familiarity with local consumer
preferences and less business, product or category knowledge with respect to new businesses,
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product lines or categories, and could encounter difficulties in attracting customers due to a reduced level of
consumer familiarity with our brands or reduced product or category knowledge. Other factors that may impact our
ability to open or acquire new retail locations in new markets and to operate them profitably or acquire new
businesses, product lines or categories, many of which are beyond our control, include:
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our ability to identify suitable acquisition opportunities or new locations, including our ability to gather and
assess demographic and marketing data to determine consumer demand for our products in the
locations we select or accurately assess profitability;
our ability to negotiate favorable lease agreements;
our ability to secure product lines;
delays in the entitlement process, the availability of construction materials and labor for new retail
locations and significant construction delays or cost overruns;
our ability to secure required third-party or governmental permits and approvals;
our ability to hire and train skilled store operating personnel, especially management personnel;
our ability to provide a satisfactory mix of merchandise that is responsive to the needs of our customers
living in the geographic areas where new retail locations are built or acquired;
our ability to supply new retail locations with inventory in a timely manner;
our competitors building or leasing retail locations near our retail locations or in locations we have
identified as targets;
●
regional economic and other factors in the geographic areas where we expand; and
Our expansion into new markets, businesses, products or categories such as a purchase of an RV furniture
distributor, may not be supported adequately by our current resources, personnel and systems, and may also create
new distribution and merchandising challenges, including additional strain on our distribution centers, an increase in
information to be processed by our management information systems and diversion of management attention from
existing operations. To the extent that we are not able to meet these additional challenges, our sales could decrease,
and our operating expenses could increase, which could have a material adverse effect on our business, financial
condition and results of operations.
Finally, the size, timing, and integration of any future new retail location openings or acquisitions or the
acquisition of new businesses, product lines or categories may cause substantial fluctuations in our results of
operations from quarter to quarter. Consequently, our results of operations for any quarter may not be indicative of
the results that may be achieved for any subsequent quarter or for a full fiscal year. These fluctuations could
adversely affect the market price of our common stock.
As a result of the above factors, we cannot assure you that we will be successful in operating our retail
locations in new markets or acquiring new businesses, product lines or categories on a profitable basis, and our
failure to do so could have a material adverse effect on our business, financial condition and results of operations.
Unforeseen expenses, difficulties, and delays encountered in connection with acquisitions could inhibit our
growth and negatively impact our profitability
Our ability to continue to grow through the acquisition of additional retail locations will depend upon various
factors, including the following:
●
the availability of suitable acquisition candidates at attractive purchase prices;
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the ability to compete effectively for available acquisition opportunities;
the availability of cash on hand, borrowed funds or Class A common stock with a sufficient market price
to finance the acquisitions;
the ability to obtain any requisite third-party or governmental approvals; and
the absence of one or more third parties attempting to impose unsatisfactory restrictions on us in
connection with their approval of acquisitions.
As a part of our strategy, we occasionally engage in discussions with various dealerships and other outdoor
lifestyle businesses regarding their potential acquisition by us. In connection with these discussions, we and each
potential acquisition candidate exchange confidential operational and financial information, conduct due diligence
inquiries, and consider the structure, terms, and conditions of the potential acquisition. Potential acquisition
discussions frequently take place over a long period of time and involve difficult business integration and other issues,
including in some cases, management succession and related matters. As a result of these and other factors, a
number of potential acquisitions that from time to time appear likely to occur do not result in binding legal agreements
and are not consummated. In addition, we may have disagreements with potential acquisition targets, which could
lead to litigation. Any of these factors or outcomes could result in a material adverse effect on our business, financial
condition and results of operations.
Failure to maintain the strength and value of our brands could have a material adverse effect on our
business, financial condition and results of operations.
Our success depends on the value and strength of our key brands, including Good Sam, Camping World,
Gander Outdoors, and Gander RV. These brands are integral to our business as well as to the implementation of our
strategies for expanding our business. Maintaining, enhancing, promoting and positioning our brands, particularly in
new markets where we have limited brand recognition, will depend largely on the success of our marketing and
merchandising efforts and our ability to provide high quality services, protection plans, products and resources and a
consistent, high quality customer experience. Our brands could be adversely affected if we fail to achieve these
objectives, if we fail to comply with local laws and regulations, if we are subject to publicized litigation or if our public
image or reputation were to be tarnished by negative publicity. Some of these risks may be beyond our ability to
control, such as the effects of negative publicity regarding our manufacturers, suppliers or third-party providers of
services or negative publicity related to members of management. Any of these events could result in decreases in
revenues. Further, maintaining, enhancing, promoting and positioning our brands’ image may require us to make
substantial investments, which could adversely affect our cash flow, and which may ultimately be unsuccessful.
These factors could have a material adverse effect on our business, financial condition and results of operations.
Our failure to successfully order and manage our inventory to reflect consumer demand in a volatile market
and anticipate changing consumer preferences and buying trends has and may continue to have an adverse
effect on our business, financial condition and results of operations.
Our success depends upon our ability to successfully manage our inventory and to anticipate and respond to
merchandise trends and consumer demands in a timely manner. Our products appeal to consumers who are, or could
become, RV owners and/or outdoor and active sports enthusiasts across North America. The preferences of these
consumers cannot be predicted with certainty and are subject to change. Further, the retail consumer industry, by its
nature, is volatile and sensitive to numerous economic factors, including consumer preferences, competition, market
conditions, general economic conditions and other factors outside of our control. We typically order merchandise well
in advance of the following selling season making it difficult for us to respond rapidly to new or changing product
trends, increases or decreases in consumer demand or changes in prices. If we misjudge either the market for our
merchandise or our consumers’ purchasing habits in the future, our revenues may decline significantly, and we may
not have sufficient quantities of merchandise to satisfy consumer demand or sales orders, or we may be required to
discount excess inventory, either of which could have a material adverse effect on our business, financial condition
and results of operations. For example, in the normal course of business, we periodically will implement discounting
to reduce our excess RV inventory. In addition, we have exited certain non-RV retail categories because we felt those
categories did not
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have sufficient demand or sales margins to justify our inventory levels. These activities have negatively impacted our
gross margin, operating margin and selling, general and administrative expenses.
Our same store revenue may fluctuate and may not be a meaningful indicator of future performance.
Our same store revenue may vary from quarter to quarter. In addition to the above risk factors a number of
additional factors have historically affected, and will continue to affect, our same store revenue results, including:
●
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●
changes or anticipated changes to regulations related to some of the products we sell or to the localities
in which we operate;
our ability to provide quality customer service that will increase our conversion of shoppers into paying
customers;
atypical weather patterns;
changes in our product mix;
changes in sales of Good Sam services and plans and retention and renewal rates for our annually
renewing Good Sam services and plans; and
●
changes in pricing and average unit sales.
An unanticipated decline in revenues or same store revenue may cause the price of our Class A common
stock to fluctuate significantly.
Our business is seasonal and this leads to fluctuations in sales and revenues.
We have experienced, and expect to continue to experience, variability in revenue, net income and cash
flows as a result of annual seasonality in our business. The RV outdoor and active sports specialty retail industries
are cyclical and because RVs are used primarily by vacationers and campers, demand for services, protection plans,
products and resources generally declines during the winter season, while sales and profits are generally highest
during the spring and summer months. In addition, unusually severe weather conditions in some geographic areas
may impact demand.
On average, over the three years ended December 31, 2020, we have generated 29.9% and 28.9% of our
annual revenue in the second and third fiscal quarters, respectively, which include the spring and summer months.
We have historically incurred additional expenses in the second and third fiscal quarters due to higher purchase
volumes, increased staffing in our retail locations and program costs. If, for any reason, we miscalculate the demand
for our products or our product mix during the second and third fiscal quarters, our sales in these quarters could
decline, resulting in higher labor costs as a percentage of sales, lower margins and excess inventory, which could
have a material adverse effect on our business, financial condition and results of operations.
Additionally, SG&A expenses as a percentage of gross profit tend to be higher in the first and fourth quarters
due to the timing of acquisitions and the seasonality of our business. We prefer to acquire new retail locations in the
first and fourth quarters of each year in order to provide time for the location to be re-modeled and to ramp up
operations ahead of the spring and summer months.
Due to our seasonality, the possible adverse impact from other risks associated with our business, including
atypical weather, consumer spending levels and general business conditions, is potentially greater if any such risks
occur during our peak sales seasons.
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Our ability to operate and expand our business and to respond to changing business and economic
conditions will depend on the availability of adequate capital.
The operation of our business, the rate of our expansion and our ability to respond to changing business and
economic conditions depend on the availability of adequate capital, which in turn depends on cash flow generated by
our business and, if necessary, the availability of equity or debt capital. We also require sufficient cash flow to meet
our obligations under our existing debt agreements. (See “Management's Discussion and Analysis of Financial
Condition and Results of Operations — Liquidity and Capital Resources — Description of Senior Secured Credit
Facilities and Floor Plan Facility” in Item 7 of Part II of this Form 10-K). We cannot assure you that our cash flow from
operations or cash available under our financing agreements, including our $35.0 million revolving credit facility (the
“Revolving Credit Facility”) or our floor plan financing through the Seventh Amended and Restated Credit Agreement,
as amended (“Floor Plan Facility”), will be sufficient to meet our needs. If we are unable to generate sufficient cash
flows from operations in the future, and if availability under our Revolving Credit Facility or our Floor Plan Facility is
not sufficient, or if additional borrowings under our Real Estate Facility are unavailable, we may have to obtain
additional financing. If we obtain additional capital by issuing equity, the interests of our existing stockholders will be
diluted. If we incur additional indebtedness, that indebtedness may contain significant financial and other covenants
that may significantly restrict our operations.
In addition, the United Kingdom’s Financial Conduct Authority, which regulates the London Inter-bank Offered
Rate (“LIBOR”), has announced that it intends to stop encouraging or requiring banks to submit LIBOR rates after
2021 and in some cases, by mid-2023, and it is unclear if LIBOR will cease to exist or if new methods of calculating
LIBOR will evolve. We currently have the option to determine our interest rate using a formula that includes either the
LIBOR rate or an alternate base rate. When LIBOR ceases to exist or the methods of calculating LIBOR change from
their current form, we may no longer have the ability to elect the LIBOR rate under our Floor Plan Facility, Revolving
Credit Facility or our term loan facility (the “Term Loan Facility” and together with the Revolving Credit Facility (the
“Senior Secured Credit Facilities”) or our current or future indebtedness may be adversely affected. This could impact
our interest costs and our ability to borrow additional funds.
Our Senior Secured Credit Facilities and our Floor Plan Facility contain restrictive covenants that may impair
our ability to access sufficient capital and operate our business.
Our Senior Secured Credit Facilities and our Floor Plan Facility contain various provisions that limit our ability
to, among other things:
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incur additional indebtedness;
incur certain liens;
consolidate or merge;
alter the business conducted by us and our subsidiaries;
● make investments, loans, advances, guarantees and acquisitions;
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sell assets, including capital stock of our subsidiaries;
pay dividends on capital stock or redeem, repurchase or retire capital stock or certain other
indebtedness;
engage in transactions with affiliates; and
enter into agreements restricting our subsidiaries’ ability to pay dividends.
In addition, the restrictive covenants in our Senior Secured Credit Facilities and our Floor Plan Facility require
us to maintain specified financial ratios and provide for acceleration of the indebtedness thereunder in
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the case of certain events of default, which could have a material adverse effect on our business, financial condition
and results of operations. See “Management's Discussion and Analysis of Financial Condition and Results of
Operations — Liquidity and Capital Resources — Description of Senior Secured Credit Facilities and Floor Plan
Facility” in Item 7 of Part II of this Form 10-K and Note 9 — Long-Term Debt to our consolidated financial statements
included in Item 8 of Part II of this Form 10-K. Our ability to comply with those financial ratios may be affected by
events beyond our control, and our failure to comply with these ratios could result in an event of default. In an event of
default, we may not have sufficient funds available, or we may not have access to sufficient capital from other
sources, to repay any accelerated debt and our lenders could foreclose on liens which cover substantially all of our
assets.
We primarily rely on five fulfillment and distribution centers for our retail, e-commerce and catalog
businesses, and, if there is a natural disaster or other serious disruption at any such facility, we may be
unable to deliver merchandise effectively to our stores or customers.
We handle almost all of our e-commerce and catalog orders and distribution to our retail stores through five
fulfillment and distribution facilities (see “Item 2. Properties” under Part I of this Form 10-K). Any natural disaster or
other serious disruption at any such facility due to fire, tornado, earthquake, flood or any other cause could damage
our on-site inventory or impair our ability to use such distribution and fulfillment center. While we maintain business
interruption insurance, as well as general property insurance, the amount of insurance coverage may not be sufficient
to cover our losses in such an event. Any of these occurrences could impair our ability to adequately stock our stores
or fulfill customer orders and harm our results of operations.
Natural disasters, whether or not caused by climate change, unusual weather conditions, epidemic
outbreaks, terrorist acts and political events could disrupt business and result in lower sales and otherwise
adversely affect our financial performance.
The occurrence of one or more natural disasters, such as tornadoes, hurricanes, fires, floods, hail storms and
earthquakes, unusual weather conditions, epidemic outbreaks such as Ebola, Zika virus, novel coronavirus or
measles, terrorist attacks or disruptive political events in certain regions where our stores are located could adversely
affect our business and result in lower sales. Severe weather, such as heavy snowfall or extreme temperatures, may
discourage or restrict customers in a particular region from traveling to our stores or utilizing our products, thereby
reducing our sales and profitability. Natural disasters including tornadoes, hurricanes, floods, hailstorms and
earthquakes may damage our stores or other operations, which may materially adversely affect our consolidated
financial results. The public health crisis caused by the COVID-19 pandemic and the measures being taken by
governments, businesses, including us and our vendors, and the public at large to limit COVID-19's spread have had,
and could again have in the future, certain negative impacts on our business including product shortages and reduced
customer demand for our products. In addition to business interruption, our retailing business is subject to substantial
risk of property loss due to the concentration of property at our retail locations. To the extent these events also impact
one or more of our key suppliers or result in the closure of one or more of our distribution centers or our corporate
headquarters, we may be unable to maintain inventory balances, maintain delivery schedules or provide other support
functions to our stores. Our insurance coverage may also be insufficient to cover all losses related to such events.
Any of these events could have a material adverse effect on our business, financial condition and results of
operations.
We depend on our relationships with third-party providers of services, protection plans, products and
resources and a disruption of these relationships or of these providers’ operations could have an adverse
effect on our business and results of operations.
Our business depends in part on developing and maintaining productive relationships with third-party
providers of services, protection plans, products and resources that we market to our customers. During the year
ended December 31, 2020, we sourced our products from over 2,000 domestic and international vendors.
Additionally, we rely on certain third-party providers to support our services, protection plans, products and resources,
including insurance carriers for our property and casualty insurance and extended service contracts, banks and
captive financing companies for vehicle financing and refinancing, Comenity Capital Bank as the issuer of our co-
branded credit card and a tow provider network for our roadside assistance programs. We cannot accurately predict
when, or the extent to which, we will experience any disruption in the supply of
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products from our vendors or services from our third-party providers. Any such disruption could negatively impact our
ability to market and sell our services, protection plans, products and resources, which could have a material adverse
effect on our business, financial condition and results of operations. In addition, Comenity Capital Bank could decline
to renew our services agreement or become insolvent and unable to perform our contract, and we may be unable to
timely find a replacement bank to provide these services.
We depend on merchandise purchased from our vendors to obtain products for our retail locations. We have
no contractual arrangements providing for continued supply from our key vendors, and our vendors may discontinue
selling to us at any time. Changes in commercial practices of our key vendors or manufacturers, such as changes in
vendor support and incentives or changes in credit or payment terms, could also negatively impact our results. If we
lose one or more key vendors or are unable to promptly replace a vendor that is unwilling or unable to satisfy our
requirements with a vendor providing equally appealing products at comparable prices, we may not be able to offer
products that are important to our merchandise assortment.
We also are subject to risks, such as the price and availability of raw materials, labor disputes, union
organizing activity, strikes, inclement weather, natural disasters, war and terrorism and adverse general economic
and political conditions that might limit our vendors’ ability to provide us with quality merchandise on a timely and
cost-efficient basis. We may not be able to develop relationships with new vendors, and products from alternative
sources, if any, may be of a lesser quality and more expensive than those we currently purchase. Additionally, our
sale of firearms generally, may have an adverse effect on our relationships with one or more of our third-party
providers, or key suppliers or vendors, and could negatively impact our results. Any delay or failure in offering quality
products and services to our customers could have a material adverse effect on our business, financial condition and
results of operations.
We offer emergency roadside assistance to our customers at a fixed price per year and we pay our tow
provider network based on usage. If the amount of emergency roadside claims substantially exceeds our estimates or
if our tow provider is unable to adequately respond to calls, it could have a material adverse effect on our business,
financial condition or results of operations.
With respect to the insurance programs that we offer, we are dependent on the insurance carriers that
underwrite the insurance to obtain appropriate regulatory approvals and maintain compliance with insurance
regulations. If such carriers are out of compliance, we may be required to use an alternative carrier or products or
cease marketing certain products in certain states, which could have a material adverse effect on our business,
financial condition and results of operations. If we are required to use an alternative carrier or change our products, it
may materially increase the time required to bring an insurance related product to market. Any disruption in our
service offerings could harm our reputation and result in customer dissatisfaction.
Additionally, we provide financing to qualified customers through a number of third-party financing providers.
If one or more of these third-party providers ceases to provide financing to our customers, provides financing to fewer
customers or no longer provides financing on competitive terms, or if we were unable to replace the current third-party
providers upon the occurrence of one or more of the foregoing events, it could have a material adverse effect on our
business, financial condition and results of operations.
Because certain of the products that we sell are manufactured abroad, we may face delays, new or increased
tariffs, increased cost or quality control deficiencies in the importation of these products, which could
reduce our net sales and profitability.
A portion of the products that we purchase for resale, including those purchased from domestic suppliers, is
manufactured abroad in China and other countries. In addition, we believe most of our private label merchandise is
manufactured abroad. Trade tensions between the United States and China, and other countries escalated in recent
years. U.S. tariff impositions against Chinese exports have generally been followed by retaliatory Chinese tariffs on
U.S. exports to China. We may not be able to mitigate the impacts of any future tariffs, and our business, results of
operations and financial position would be materially adversely affected. As a result, our foreign imports, in particular
imports from China, subject us to the risks of changes in, or the imposition of new import tariffs, duties or quotas, new
restrictions on imports, loss of “most favored nation” status with the United States for a particular foreign country,
antidumping or countervailing duty orders, retaliatory actions in response to illegal trade practices, work stoppages,
delays in shipment, freight expense
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increases, product cost increases due to foreign currency fluctuations or revaluations and economic uncertainties. If
any of these or other factors were to cause a disruption of trade from the countries in which the suppliers of our
vendors are located or impose additional costs in connection with the purchase of our products, we may be unable to
obtain sufficient quantities of products to satisfy our requirements and our results of operations could be adversely
affected.
To the extent that any foreign manufacturers which supply products to us directly or indirectly utilize quality
control standards, labor practices or other practices that vary from those legally mandated or commonly accepted in
the United States, we could be hurt by any resulting negative publicity or, in some cases, face potential liability.
A portion of our net income is from financing, insurance and extended service contracts, which depend on
third-party lenders and insurance companies. We cannot assure you third-party lending institutions will
continue to provide financing for RV purchases.
A portion of our net income comes from the fees we receive from lending institutions and insurance
companies for arranging financing and insurance coverage for our customers unless customers prepay the financing
within a specified period (generally within six months of making the loan), in which case we are required to rebate (or
“chargeback”) all or a portion of the commissions paid to us by the lending institution. Our revenues from financing
fees and vehicle service contract fees are recorded net of a reserve for estimated future chargebacks based on
historical operating results. Lending institutions may change the criteria or terms they use to make loan decisions,
which could reduce the number of customers for whom we can arrange financing, or may elect to not continue to
provide these products with respect to RVs. Our customers may also use the internet or other electronic methods to
find financing alternatives. If any of these events occur, we could lose a significant portion of our income and profit.
Furthermore, new and used vehicles may be sold and financed through retail installment sales contracts
entered into between us and third-party purchasers. Prior to entering into a retail installment sales contract with a
third-party purchaser, we typically have a commitment from a third-party lender for the assignment of such retail
installment sales contract, subject to final review, approval and verification of the retail installment sales contract,
related documentation and the information contained therein. Retail installment sales contracts are typically assigned
by us to third-party lenders simultaneously with the execution of the retail installment sales contracts. Contracts in
transit represent amounts due from third-party lenders from whom pre-arranged assignment agreements have been
determined, and to whom the retail installment sales contracts have been assigned. We recognize revenue from the
sale of new and used vehicles upon completion of the sale to the customer. Conditions to completing a sale include
having an agreement with the customer, including pricing, whereby the sales price must be reasonably expected to
be collected and having control transferred to the customer. Funding from the third-party lender is provided upon
receipt, final review, approval and verification of the retail installment sales contract, related documentation and the
information contained therein. 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. Contracts in transit are included in current
assets in our consolidated financial statements included in Item 8 of Part II of this Form 10-K and totaled $48.2 million
and $44.9 million as of December 31, 2020 and December 31, 2019, respectively. Any defaults on these retail
installment sales contracts could have a material adverse effect on our business, financial condition and results of
operations.
If we are unable to retain senior executives and attract and retain other qualified employees, our business
might be adversely affected.
Our success depends in part on our ability to attract, hire, train and retain qualified managerial, sales and
marketing personnel. Competition for these types of personnel is high. We may be unsuccessful in attracting and
retaining the personnel we require to conduct our operations successfully and, in such an event, our business could
be materially and adversely affected. Our success also depends to a significant extent on the continued service and
performance of our senior management team, including our Chairman and Chief Executive Officer, Marcus Lemonis.
The loss of any member of our senior management team could impair our ability to execute our business plan and
could therefore have a material adverse effect on our business, results of operations and financial condition.
Additionally, certain members of our management team, including
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Mr. Lemonis, currently pursue and may continue to pursue other business ventures, which could divert their attention
from executing on our business plan and objectives. We do not currently maintain key-man life insurance policies on
any member of our senior management team or other key employees.
We are subject to risks associated with leasing substantial amounts of space.
We lease substantially all of the real properties where we have retail operations as well as certain corporate
offices and distribution centers. Our leases generally provide for fixed monthly rentals with escalation clauses and
range from five to twenty years. The profitability of our business is in part dependent on renewing leases for stores in
desirable locations and, if necessary, identifying and closing underperforming stores or relocating these stores to
alternative locations in a cost-effective manner. Typically, a large portion of a store’s operating expense is the cost
associated with leasing the location.
Additionally, over time our current store locations may not continue to be desirable because of changes in
demographics within the surrounding area or a decline in shopping traffic, including traffic generated by other nearby
stores. Although we have the right to terminate some of our leases under specified conditions by making certain
payments, we may not be able to terminate a particular lease if or when we would like to do so. If we decide to close
stores, we are generally required to either continue to pay rent and operating expenses for the balance of the lease
term or, for certain locations, pay exercise rights to terminate, which in either case could be expensive. Even if we are
able to assign or sublease vacated locations where our lease cannot be terminated, we may remain liable on the
lease obligations if the assignee or sublessee does not perform.
If we are unable to service our lease expenses or are unable to, on favorable terms, negotiate renewals of
leases at desirable locations or identify and close underperforming locations, we may be forced to seek alternative
sites in our target markets, which may be difficult and have a material adverse effect on our business, financial
condition and results of operations.
Our private brand offerings expose us to various risks.
We expect to continue to grow our exclusive private brand offerings through a combination of brands that we
own and brands that we license from third parties. We have invested in our development and procurement resources
and marketing efforts relating to these private brand offerings. Although we believe that our private brand products
offer value to our customers at each price point and provide us with higher gross margins than comparable third-party
branded products we sell, the expansion of our private brand offerings also subjects us to certain specific risks in
addition to those discussed elsewhere in this section, such as:
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potential mandatory or voluntary product recalls;
our ability to successfully protect our proprietary rights (including defending against counterfeit, knock offs,
grey-market, infringing or otherwise unauthorized goods);
our ability to successfully navigate and avoid claims related to the proprietary rights of third parties;
our ability to successfully administer and comply with obligations under license agreements that we have with
the licensors of brands, including, in some instances, certain minimum sales requirements that, if not met,
could cause us to lose the licensing rights or pay damages; and
other risks generally encountered by entities that source, sell and market exclusive branded offerings for
retail.
An increase in sales of our private brands may also adversely affect sales of our vendors’ products, which
may, in turn, adversely affect our relationship with our vendors. Our failure to adequately address some or all of these
risks could have a material adverse effect on our business, results of operations and financial condition.
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We could incur asset impairment charges for goodwill, intangible assets or other long-lived assets.
We have a significant amount of goodwill, intangible assets and other long-lived assets. At least annually, we
review goodwill for impairment. Long-lived assets, operating lease assets, identifiable intangible assets and goodwill
are also reviewed for impairment whenever events or changes in circumstances indicate the carrying amount of an
asset may not be recoverable from future cash flows. These events or circumstances could include a significant
change in the business climate, legal factors, operating performance indicators, competition, sale or disposition of a
significant portion of the business or other factors. If the carrying value of a long-lived asset is considered impaired,
an impairment charge is recorded for the amount by which the carrying value of the long-lived asset exceeds its fair
value. Our determination of future cash flows, future recoverability and fair value of our long-lived assets as well as
the reporting unit fair value used in our goodwill analysis include significant estimates and assumptions. Changes in
those estimates or assumptions or lower than anticipated future financial performance may result in the identification
of an impaired asset and a non-cash impairment charge, which could be material. See Note 5 — Restructuring and
Long-lived Asset Impairment to our consolidated financial statements included in Item 8 of Part II of this Form 10-K for
a discussion of impairment charges for the year ended December 31, 2020. We may in the future identify additional
impairment charges and any such charges could adversely affect our business, financial condition and results of
operations.
Risks related to Regulation and Litigation
Our business is subject to numerous federal, state and local regulations.
Our operations are subject to varying degrees of federal, state and local regulation, including our RV sales,
firearms sales, RV financing, outbound telemarketing, direct mail, roadside assistance programs, insurance activities,
and the sale of extended service contracts. New regulatory efforts may be proposed from time to time that have a
material adverse effect on our ability to operate our businesses or our results of operations. For example, in the past
a principal source of leads for our direct response marketing efforts was new vehicle registrations provided by motor
vehicle departments in various states. Currently, all states restrict access to motor vehicle registration information.
We are subject to a number of laws and regulations relating to consumer protection, information security,
data protection and privacy. Many of these laws and regulations are still evolving and could be interpreted in ways
that could harm our business or limit the services we are able to offer. In the area of information security and data
protection, the laws in several states in the United States and most countries require companies to implement specific
information security controls and legal protections to protect certain types of personally identifiable information.
Likewise, most states in the United States and most countries have laws in place requiring companies to notify users
if there is a security breach that compromises certain categories of their personally identifiable information. Any failure
on our part to comply with these laws may subject us to significant liabilities. For example, the California Consumer
Privacy Act (“CCPA”) establishes a new privacy framework that expands the definition of personal information,
establishes new data privacy rights for consumers residing in the State of California, imposes special rules on the
collection of consumer data from minors, creates new notice obligations and new limits on the sale of personal
information, and creates a new and potentially severe statutory damages framework for (i) violations of the CCPA and
(ii) businesses that fail to implement reasonable security procedures and practices to prevent data breaches.
Additionally, a new ballot initiative, the California Privacy Rights Act (“CPRA”), recently passed in California. The
CPRA will impose additional data protection obligations on companies doing business in California, including
additional consumer rights processes, limitations on data uses, new audit requirements for higher risk data, and opt
outs for certain uses of sensitive data. It will also create a new California data protection agency authorized to issue
substantive regulations and could result in increased privacy and information security enforcement. The majority of
the provisions will go into effect on January 1, 2023, and additional compliance investment and potential business
process changes may be required.
We are also subject to federal and numerous state consumer protection and unfair trade practice laws and
regulations relating to the sale, transportation and marketing of motor vehicles, including so-called “lemon laws.”
Federal, state and local laws and regulations also impose upon vehicle operators various restrictions on the length
and width of motor vehicles that may be operated in certain jurisdictions or on certain roadways.
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Certain jurisdictions also prohibit the sale of vehicles exceeding length restrictions. Federal and state authorities also
have various environmental control standards relating to air, water, noise pollution and hazardous waste generation
and disposal which affect our business and operations.
Areas of our business also affected by laws and regulations include, but are not limited to, labor (including
federal and state minimum wage increases), advertising, consumer protection, real estate, promotions, quality of
services, intellectual property, tax, import and export, anti-corruption, anti-competition, environmental, health and
safety. Compliance with these laws and others may be onerous and costly, at times, and may be inconsistent from
jurisdiction to jurisdiction which further complicates compliance efforts.
Furthermore, our property and casualty insurance programs, and our extended service contracts that we offer
through third-party insurance carriers are subject to various federal and state laws and regulations governing the
business of insurance, including, without limitation, laws and regulations governing the administration, underwriting,
marketing, solicitation, liability obligations or sale of insurance programs. Any failure by us or our third-party insurance
providers to comply with current licensing and approval requirements could result in such regulators denying their
initial or renewal applications for such licenses, modifying the terms of licenses or revoking licenses that they
currently possess, which could severely inhibit our ability to market these products. Additionally, certain state laws
and regulations govern the form and content of certain disclosures that must be made in connection with the sale,
advertising or offer of any insurance program to a consumer. If we fail to comply with these regulations, we may be
ordered to pay fines or penalties by regulators or to discontinue certain products.
We offer extended service contracts that may be purchased as a supplement to the original purchaser’s
warranty. These products are subject to complex federal and state laws and regulations. There can be no assurance
that regulatory authorities in the jurisdictions in which these products are offered will not seek to regulate or restrict
these products. Failure to comply with applicable laws and regulations, including with respect to the transfer of
administration and liability obligations associated with these extended service contracts to a third party upon purchase
by the customer, could result in fines or other penalties including orders by state regulators to discontinue sales of the
warranty products in one or more jurisdictions. Such a result could materially and adversely affect our business,
results of operations and financial condition.
State dealer laws generally provide that a manufacturer may not terminate or refuse to renew a dealer
agreement unless it has first provided the dealer with written notice setting forth good cause and stating the grounds
for termination or non-renewal. If such dealer laws are repealed in the states in which we operate, manufacturers may
be able to terminate our dealer agreements without providing advance notice, an opportunity to cure or a showing of
good cause. Without the protection of state dealer laws, it may also be more difficult for our dealerships to renew their
dealer agreements upon expiration.
In addition, in connection with the sale of firearms in our stores, we must comply with a number of federal and
state laws and regulations related to the sale of firearms and ammunition, including the federal Brady Handgun
Violence Prevention Act. If we fail to comply with Bureau of Alcohol, Tobacco, Firearms and Explosives (the “ATF”)
rules and regulations, the ATF may limit our growth or business activities, levy fines against us or, ultimately, revoke
our license to do business.
Several states currently have laws in effect that are similar to, and in certain cases, more restrictive than,
these federal laws. Compliance with all of these regulations is costly and time-consuming. Inadvertent violation of any
of these regulations could cause us to incur fines and penalties and may also lead to restrictions on our ability to
manufacture and sell our products and services and to import or export the products we sell.
We have instituted various and comprehensive policies and procedures to address compliance. However,
there can be no assurance that employees, contractors, vendors or our agents will not violate such laws and
regulations or our policies and procedures. For more information on the various regulations applicable to our
business, see “Item I. Business—Laws and Regulations” under Part I of this Form 10-K.
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Changes in government policies and firearms legislation could adversely affect our financial results.
The sale, purchase, ownership and use of firearms are subject to numerous and varied federal, state and
local governmental regulations. Federal laws governing firearms include the National Firearms Act, the Federal
Firearms Act, the Arms Export Control Act and the Gun Control Act of 1968. These laws generally govern the
manufacture, import, export, sale and possession of firearms and ammunition.
Currently, some members of the federal legislature and several state legislatures are considering additional
legislation relating to the regulation of firearms and ammunition. These proposed bills are extremely varied. If
enacted, such legislation could effectively ban or severely limit the sale of affected firearms or ammunition. In
addition, if such restrictions are enacted and are incongruent, we could find it difficult, expensive or even practically
impossible to comply with them, which could impede the sale of firearms. We cannot assure you that the regulation of
our business activities will not become more restrictive in the future and that any such restriction will not have a
material adverse effect on our business. For more information on the government policies and firearms legislation
applicable to our business, see “Item I. Business— Laws and Regulations” under Part I of this Form 10-K.
Our failure to comply with certain environmental regulations could adversely affect our business, financial
condition and results of operations.
Our operations involve the use, handling, storage and contracting for recycling and/or disposal of materials
such as motor oil and filters, transmission fluids, antifreeze, refrigerants, paints, thinners, batteries, cleaning products,
lubricants, degreasing agents, tires and propane. Consequently, our business is subject to a complex variety of
federal, state and local requirements that regulate the environment, public health and safety, and we may incur
significant costs to comply with such requirements. Our failure to comply with these regulations could cause us to
become subject to fines and penalties or otherwise have an adverse impact on our business. In addition, we have
indemnified certain of our landlords for any hazardous waste which may be found on or about property we lease. If
any such hazardous waste were to be found on property that we occupy, a significant claim giving rise to our
indemnity obligation could have a negative effect on our business, financial condition and results of operations.
Climate change legislation or regulations restricting emission of “greenhouse gases” could result in
increased operating costs and reduced demand for the RVs we sell.
The United States Environmental Protection Agency has adopted rules under existing provisions of the
federal Clean Air Act that require a reduction in emissions of greenhouse gases from motor vehicles. The adoption of
any laws or regulations requiring significant increases in fuel economy requirements or new federal or state
restrictions on vehicles and automotive fuels in the United States could adversely affect demand for those vehicles
and could have a material adverse effect on our business, financial condition and results of operations.
A failure in our e-commerce operations, security breaches and cybersecurity risks could disrupt our
business and lead to reduced sales and growth prospects and reputational damage.
Consumers are increasingly embracing shopping online and through mobile commerce applications. As a
result, a growing portion of total consumer expenditures with retailers is occurring online and through mobile
commerce applications and a declining portion of total consumer expenditures is occurring at brick and mortar retail
locations. Our e-commerce business is an important element of our brands and relationship with our customers, and
we expect it to continue to grow. In addition to changing consumer preferences and shifting traffic patterns and buying
trends in e-commerce, we are vulnerable to additional risks and uncertainties associated with e-commerce sales,
including rapid changes in technology, website downtime and other technical failures, security breaches, cyber-
attacks, consumer privacy concerns, changes in state tax regimes and government regulation of internet activities.
Our failure to successfully respond to these risks and uncertainties could reduce our e-commerce sales, increase our
costs, diminish our growth prospects and damage our brands, which could negatively impact our results of operations
and stock price.
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In addition, there is no guarantee that we will be able to expand our e-commerce business. Our competitors
may have e-commerce businesses that are substantially larger and more developed than ours, which places us at a
competitive disadvantage. Although we continually update our websites, we may not be successful in implementing
improved website features and there is no guarantee that such improvements will expand our e-commerce business.
If we are unable to expand our e-commerce business, our growth plans will suffer, and the price of our common stock
could decline.
We may be unable to enforce our intellectual property rights and we may be accused of infringing the
intellectual property rights of third parties which could have a material adverse effect on our business,
financial condition and results of operations.
We own a variety of registered trademarks and service marks for the names of our clubs, magazines and
other publications. We also own the copyrights to certain articles in our publications. We believe that our trademark
and copyrights have significant value and are important to our marketing efforts. If we are unable to continue to
protect the trademarks and service marks for our proprietary brands, if such marks become generic or if third parties
adopt marks similar to our marks, our ability to differentiate our products and services may be diminished. In the event
that our trademarks or service marks are successfully challenged by third parties, we could lose brand recognition
and be forced to devote additional resources to advertising and marketing new brands for our products.
From time to time, we may be compelled to protect our intellectual property, which may involve litigation.
Such litigation may be time-consuming, expensive and distract our management from running the day-to-day
operations of our business, and could result in the impairment or loss of the involved intellectual property. There is no
guarantee that the steps we take to protect our intellectual property, including litigation when necessary, will be
successful. The loss or reduction of any of our significant intellectual property rights could diminish our ability to
distinguish our products from competitors’ products and retain our market share for our proprietary products. Our
inability to effectively protect our proprietary intellectual property rights could have a material adverse effect on our
business, results of operations and financial condition.
Other parties also may claim that we infringe their proprietary rights. Such claims, whether or not meritorious,
may result in the expenditure of significant financial and managerial resources, injunctions against us or the payment
of damages. These claims could have a material adverse effect on our business, financial condition and results of
operations.
If we are unable to maintain or upgrade our information technology systems or if we are unable to convert to
alternate systems in an efficient and timely manner, our operations may be disrupted or become less
efficient.
We depend on a variety of information technology systems for the efficient functioning of our business. We
rely on certain hardware, telecommunications and software vendors to maintain and periodically upgrade many of
these systems so that we can continue to support our business. Various components of our information technology
systems, including hardware, networks, and software, are licensed to us by third-party vendors. We rely extensively
on our information technology systems to process transactions, summarize results and manage our business.
Additionally, because we accept debit and credit cards for payment, we are subject to the Payment Card Industry
Data Security Standard (the “PCI Standard”), issued by the Payment Card Industry Security Standards Council. Costs
and potential problems and interruptions associated with the implementation of new or upgraded systems and
technology such as those necessary to maintain compliance with the PCI Standard or with maintenance or adequate
support of existing systems could also disrupt or reduce the efficiency of our operations. Any material interruptions or
failures in our payment-related systems could have a material adverse effect on our business, financial condition and
results of operations.
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Any disruptions to our information technology systems or breaches of our network security could interrupt
our operations, compromise our reputation, expose us to litigation, government enforcement actions and
costly response measures and could have a material adverse effect on our business, financial condition and
results of operations.
We rely on the integrity, security and successful functioning of our information technology systems and
network infrastructure across our operations. We use information technology systems to support product sales, our
Good Sam services and plans, manage procurement and our supply chain, track inventory information at our retail
locations, communicate customer information and aggregate daily sales, margin and promotional information. We
also use information systems to report and audit our operational results.
We also have access to, collect, or maintain private or confidential information regarding our customers,
associates and suppliers, as well as our business. For example, we have over 30 million unique contacts in our
database as of December 31, 2020. This customer database includes information about our approximately 2.1 million
club members and our 5.3 million Active Customers as of December 31, 2020. In addition, the protection of our
customer, club member, associate, supplier and company data is critical to us. The regulatory environment
surrounding information security and privacy is increasingly demanding, with the frequent imposition of new and
constantly changing requirements across our business. In addition, customers have a high expectation that we will
adequately protect their personal information from cyber-attack or other security breaches. A significant breach of
club member, customer, employee, supplier, or company data could attract a substantial amount of negative media
attention, damage our club member, customer and supplier relationships and our reputation, and result in lost sales,
fines and/or lawsuits.
Our information technology, communication systems and electronic data may be vulnerable to damage or
interruption from earthquakes, acts of war or terrorist attacks, floods, fires, tornadoes, hurricanes, power loss and
outages, computer and telecommunications failures, computer viruses, loss of data, unauthorized data breaches,
usage errors by our associates or our contractors or other attempts to harm our systems, including cyber-security
attacks, hacking by third parties, computer viruses or other breaches of cardholder data. Some of our systems are not
fully redundant, and our disaster recovery planning cannot account for all eventualities. Any errors or vulnerabilities in
our systems, or damage to or failure of our systems, could result in interruptions in our services and non-compliance
with certain regulations or expose us to risk of litigation and liability, which could have a material adverse effect on our
business, financial condition and results of operations.
We maintain insurance to cover costs in the event of a breach, interruption of service, or other cyber-security
event. Our insurance coverage may be insufficient to cover all losses.
We may be subject to product liability claims if people or property are harmed by the products we sell.
Some of the products we sell may expose us to product liability claims relating to personal injury, death, or
environmental or property damage, and may require product recalls or other actions. Although we maintain liability
insurance, we cannot be certain that our coverage will be adequate for liabilities actually incurred or that insurance
will continue to be available to us on economically reasonable terms, or at all. In addition, some of our agreements
with our vendors and sellers do not indemnify us from product liability. In addition, even if a product liability claim is
not successful or is not fully pursued, the negative publicity surrounding a product recall or any assertion that our
products caused property damage or personal injury could damage our brand identity and our reputation with existing
and potential consumers and have a material adverse effect on our business, financial condition and results of
operations.
Any increase in the frequency and size of these claims, as compared to our experience in prior years, may
cause the premium that we are required to pay for insurance to increase significantly and may negatively impact
future insurance costs. It may also increase the amounts we pay in punitive damages, not all of which are covered by
our insurance.
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We have been named in litigation, which has resulted in substantial costs and may result in reputational
harm and divert management’s attention and resources.
We face legal risks in our business, including claims from disputes with our employees and our former
employees and claims associated with general commercial disputes, product liability and other matters. Risks
associated with legal liability often are difficult to assess or quantify and their existence and magnitude can remain
unknown for significant periods of time.
We have been named in the past, are currently named and may be named in the future as defendants of
class action lawsuits. For example, we were named as a defendant in a class action lawsuit by Camp Coast to Coast
club members, which alleged certain violations of California’s Unfair Competition Law at Business and Professions
Code and other laws, relating to our sale of trip points and certain advertising and marketing materials.
We are currently subject to securities class action litigation and may be subject to similar or other litigation in
the future. Recently, we were also named as a defendant in a putative class action lawsuit filed by two former
employees, in the State of California and a former employee in the State of Washington, which alleged various wage
and hour claims under the California and Washington Labor Codes. We have reached the terms of a preliminary
settlement. For information regarding these lawsuits, refer to Note 13, Commitments and Contingencies – Litigation of
our consolidated financial statements included in Part II, Item 8 of this Form 10-K.
The results of the securities class action lawsuits, shareholder derivative lawsuits, and any other future legal
proceedings cannot be predicted with certainty. Regardless of their subject matter or merits, such legal proceedings
have resulted in and are likely to continue to result in significant cost to us, which may not be covered by insurance,
may divert the attention of management or may otherwise have an adverse effect on our business, financial condition
and results of operations. Negative publicity from litigation, whether or not resulting in a substantial cost, could
materially damage our reputation and could have a material adverse effect on our business, financial condition,
results of operations, and the price of our Class A common stock. In addition, such legal proceedings may make it
more difficult to finance our operations.
Risks Relating to Our Organizational Structure
Marcus Lemonis, through his beneficial ownership of our shares directly or indirectly held by ML Acquisition
and ML RV Group, has substantial control over us, including over decisions that require the approval of
stockholders, and his interests, along with the interests of our other Continuing Equity Owners, in our
business may conflict with yours.
As discussed in Note 18 ─ Stockholders’ Equity to our consolidated financial statements included in Item 8 of
Part II of this Form 10-K, we entered into a voting agreement in connection with our IPO with ML Acquisition
Company, LLC, a Delaware limited liability company, which is indirectly owned by each of Stephen Adams and our
Chairman and Chief Executive Officer, Marcus Lemonis (“ML Acquisition”), ML RV Group, LLC, a Delaware limited
liability company, wholly owned by our Chairman and Chief Executive Officer, Marcus Lemonis (“ML RV Group”),
CVRV Acquisition LLC and CVRV Acquisition II LLC (the “Voting Agreement”). Subject to the Voting Agreement,
Marcus Lemonis, through his beneficial ownership of our shares directly or indirectly held by ML Acquisition and ML
RV Group, may approve or disapprove substantially all transactions and other matters requiring approval by our
stockholders, such as a merger, consolidation, dissolution or sale of all or substantially all of our assets, the issuance
or redemption of certain additional equity interests, and the election of directors including transactions that may not be
in the best interests of holders of our Class A common stock or, conversely, prevent the consummation of
transactions that may be in the best interests of holders of our Class A common stock.
In addition, pursuant to the Voting Agreement, Crestview Advisors, L.L.C., a registered investment adviser to
private equity funds, including funds affiliated with Crestview Partners II GP, L.P. (“Crestview”) currently has the right
to designate one of our directors (the “Crestview Director”). Each of ML Acquisition and ML RV Group has agreed to
vote, or cause to vote, all of their outstanding shares of our Class A common stock, Class B common stock and Class
C common stock at any annual or special meeting of stockholders in
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which directors are elected, so as to cause the election of the Crestview Director. In addition, the ML Related Parties
also currently have the right to designate four of our directors (the “ML Acquisition Directors”). Moreover, ML RV
Group has the right to designate one director for as long as it holds our one share of Class C common stock (the “ML
RV Director”). As described in the Voting Agreement, these designation rights are subject to change based on the
relevant parties’ ownership of Class A common stock. Funds controlled by Crestview Partners II GP, L.P. have
agreed to vote, or cause to vote, all of their outstanding shares of our Class A common stock and Class B common
stock at any annual or special meeting of stockholders in which directors are elected, so as to cause the election of
the ML Acquisition Directors and the ML RV Director. Additionally, pursuant to the Voting Agreement, we are required
to take commercially reasonable action to cause (i) the Board of Directors to be comprised at least of nine directors;
(ii) the individuals designated in accordance with the terms of the Voting Agreement to be included in the slate of
nominees to be elected to the board of directors at the next annual or special meeting of stockholders of the
Company at which directors are to be elected and at each annual meeting of stockholders of the Company thereafter
at which a director’s term expires; (iii) the individuals designated in accordance with the terms of the Voting
Agreement to fill the applicable vacancies on the board of directors; and (iv) a ML Acquisition Director or the ML RV
Director to be the chairperson of the board of directors (as defined in our amended and restated bylaws). The Voting
Agreement allows for the board of directors to reject the nomination, appointment or election of a particular director if
such nomination, appointment or election would constitute a breach of the board of directors’ fiduciary duties to the
Company’s stockholders or does not otherwise comply with any requirements of our amended and restated certificate
of incorporation or our amended and restated bylaws or the charter for, or related guidelines of, the board of directors’
nominating and corporate governance committee.
The Voting Agreement further provides that, for so long as the ML Related Parties, directly or indirectly,
beneficially own, in the aggregate, 22.5% or more of our Class A common stock (assuming that all outstanding
common units in CWGS, LLC are redeemed for newly-issued shares of our Class A common stock on a one-for-one
basis), the approval of the ML Related Parties will be required for certain corporate actions. These actions include:
(1) a change of control; (2) acquisitions or dispositions of assets above $100 million; (3) the issuance of securities of
Camping World Holdings, Inc. or any of its subsidiaries (other than under equity incentive plans that have received
the prior approval of our board of directors); (4) material amendments to our certificate of incorporation or bylaws; and
(5) any change in the size of the board of directors. The Voting Agreement also provides that, for so long as the ML
Related Parties, directly or indirectly, beneficially own, in the aggregate, 28% or more of our Class A common stock
(assuming that all outstanding common units of CWGS, LLC are redeemed for newly-issued shares of our Class A
common stock, on a one-for-one basis), the approval of the ML Related Parties, as applicable, will be required for the
hiring and termination of our Chief Executive Officer; provided, however, that the approval of the ML Related Parties
is only required at such time as Marcus Lemonis no longer serves as our Chief Executive Officer. These rights may
prevent the consummation of transactions that may be in the best interests of holders of our Class A common stock.
Our amended and restated certificate of incorporation provides that the doctrine of “corporate opportunity”
does not apply with respect to any director or stockholder who is not employed by us or our affiliates.
The doctrine of corporate opportunity generally provides that a corporate fiduciary may not develop an
opportunity using corporate resources, acquire an interest adverse to that of the corporation or acquire property that
is reasonably incident to the present or prospective business of the corporation or in which the corporation has a
present or expectancy interest, unless that opportunity is first presented to the corporation and the corporation
chooses not to pursue that opportunity. The doctrine of corporate opportunity is intended to preclude officers or
directors or other fiduciaries from personally benefiting from opportunities that belong to the corporation. Our
amended and restated certificate of incorporation provides that the doctrine of “corporate opportunity” does not apply
with respect to any director or stockholder who is not employed by us or our affiliates. Any director or stockholder who
is not employed by us or our affiliates therefore has no duty to communicate or present corporate opportunities to us,
and has the right to either hold any corporate opportunity for their (and their affiliates’) own account and benefit or to
recommend, assign or otherwise transfer such corporate opportunity to persons other than us, including to any
director or stockholder who is not employed by us or our affiliates.
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As a result, certain of our stockholders, directors and their respective affiliates are not prohibited from
operating or investing in competing businesses. We therefore may find ourselves in competition with certain of our
stockholders, directors or their respective affiliates, and we may not have knowledge of, or be able to pursue,
transactions that could potentially be beneficial to us. Accordingly, we may lose a corporate opportunity or suffer
competitive harm, which could negatively impact our business or prospects.
We are a “controlled company” within the meaning of the NYSE listing requirements and, as a result, qualify
for, and rely on, exemptions from certain corporate governance requirements. Our stockholders do not have
the same protections afforded to stockholders of companies that are subject to such corporate governance
requirements.
Pursuant to the terms of the Voting Agreement, Marcus Lemonis, through his beneficial ownership of our
shares directly or indirectly held by ML Acquisition and ML RV Group, and certain funds controlled by Crestview
Partners II GP, L.P., in the aggregate, have more than 50% of the voting power for the election of directors, and, as a
result, we are considered a “controlled company” for the purposes of the New York Stock Exchange (the “NYSE”)
listing requirements. As such, we qualify for, and rely on, exemptions from certain corporate governance
requirements, including the requirements to have a majority of independent directors on our board of directors, an
entirely independent nominating and corporate governance committee, an entirely independent compensation
committee or to perform an annual performance evaluation of the nominating and corporate governance and
compensation committees.
The corporate governance requirements and specifically the independence standards are intended to ensure
that directors who are considered independent are free of any conflicting interest that could influence their actions as
directors. We have utilized, and intend to continue to utilize, certain exemptions afforded to a “controlled company.”
As a result, we are not subject to certain corporate governance requirements, including that a majority of our board of
directors consists of “independent directors,” as defined under the rules of the NYSE. In addition, we are not required
to have a nominating and corporate governance committee or compensation committee that is composed entirely of
independent directors with a written charter addressing the committee’s purpose and responsibilities or to conduct
annual performance evaluations of the nominating and corporate governance and compensation committees and
currently we do not have an entirely independent nominating and corporate governance committee. Accordingly, our
stockholders do not have the same protections afforded to stockholders of companies that are subject to all of the
corporate governance requirements of the NYSE.
Our principal asset is our interest in CWGS, LLC, and accordingly, we depend on distributions from
CWGS, LLC to pay dividends, taxes and expenses, including payments under the Tax Receivable Agreement.
CWGS, LLC’s ability to make such distributions may be subject to various limitations and restrictions.
We are a holding company and had no material assets as of December 31, 2020, other than our ownership
of 42,226,389 common units, representing a 47.4% economic interest in the business of CWGS, LLC, and cash of
$37.4 million. We have no independent means of generating revenue or cash flow, and our ability to pay dividends in
the future, if any, will be dependent upon the financial results and cash flows of CWGS, LLC and its subsidiaries and
distributions we receive from CWGS, LLC. There can be no assurance that our subsidiaries will generate sufficient
cash flow to dividend or distribute funds to us or that applicable state law and contractual restrictions, including
negative covenants in our debt instruments, will permit such dividends or distributions.
CWGS, LLC is treated as a partnership for U.S. federal income tax purposes and, as such, is not subject to
any entity-level U.S. federal income tax. Instead, taxable income is allocated to holders of its common units, including
us. As a result, we incur income taxes on our allocable share of any net taxable income of CWGS, LLC. Under the
terms of the CWGS LLC Agreement, CWGS, LLC is obligated to make tax distributions to holders of its common
units, including us, except to the extent such distributions would render CWGS, LLC insolvent or are otherwise
prohibited by law or our Senior Secured Credit Facilities, our Floor Plan Facility or any of our future debt agreements.
In addition to tax expenses, we will also incur expenses related to our operations, our interests in CWGS, LLC and
related party agreements, including payment obligations under the Tax Receivable Agreement, and expenses and
costs of being a public company, all of which could be
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significant. We intend, as its managing member, to cause CWGS, LLC to make distributions in an amount sufficient to
allow us to pay our taxes and operating expenses, including any ordinary course payments due under the Tax
Receivable Agreement. However, CWGS, LLC’s ability to make such distributions may be subject to various
limitations and restrictions including, but not limited to, restrictions on distributions that would either violate any
contract or agreement to which CWGS, LLC is then a party, including debt agreements, or any applicable law, or that
would have the effect of rendering CWGS, LLC insolvent. If CWGS, LLC does not have sufficient funds to pay tax
distributions or other liabilities to fund our operations, we may have to borrow funds, which could materially adversely
affect our liquidity and financial condition and subject us to various restrictions imposed by any such lenders. To the
extent that we are unable to make payments under the Tax Receivable Agreement for any reason, such payments
will be deferred and will accrue interest until paid; provided, however, that nonpayment for a specified period may
constitute a material breach of a material obligation under the Tax Receivable Agreement and therefore may
accelerate payments due under the Tax Receivable Agreement. If CWGS, LLC does not have sufficient funds to
make distributions, our ability to declare and pay cash dividends may also be restricted or impaired. See “— Risks
Relating to Ownership of Our Class A Common Stock.”
Our Tax Receivable Agreement with the Continuing Equity Owners and Crestview Partners II GP, L.P.
requires us to make cash payments to them in respect of certain tax benefits to which we may become
entitled, and the amounts that we may be required to pay could be significant.
In connection with our IPO, we entered into a Tax Receivable Agreement with CWGS, LLC, each of the
Continuing Equity Owners and Crestview Partners II GP, L.P. which confers certain benefits upon the Continuing
Equity Owners and Crestview Partners II GP, L.P. that do not benefit the holders of our Class A common stock to the
same extent as it benefits such Continuing Equity Owners and Crestview Partners II GP, L.P. Pursuant to the Tax
Receivable Agreement, we are required to make cash payments to the Continuing Equity Owners and Crestview
Partners II GP, L.P. equal to 85% of the tax benefits, if any, that we actually realize, or in some circumstances are
deemed to realize as a result of (i) increases in tax basis resulting 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 corporate reorganization transactions and any future redemptions that are funded by Camping World
Holdings, Inc. or exchanges of common units and (ii) certain other tax benefits attributable to payments under the Tax
Receivable Agreement. The amount of the cash payments that we may be required to make under the Tax
Receivable Agreement could be significant. Payments under the Tax Receivable Agreement will be based on the tax
reporting positions that we determine, which tax reporting positions are subject to challenge by taxing authorities. Any
payments made by us to the Continuing Equity Owners and Crestview Partners II GP, L.P. under the Tax Receivable
Agreement will generally reduce the amount of overall cash flow that might have otherwise been available to us. To
the extent that we are unable to make timely payments under the Tax Receivable Agreement for any reason, the
unpaid amounts will be deferred and will accrue interest until paid by us. Nonpayment for a specified period may
constitute a material breach of a material obligation under the Tax Receivable Agreement and therefore may
accelerate payments due under the Tax Receivable Agreement. Furthermore, our future obligation to make payments
under the Tax Receivable Agreement could make us a less attractive target for an acquisition, particularly in the case
of an acquirer that cannot use some or all of the tax benefits that may be deemed realized under the Tax Receivable
Agreement. The payments under the Tax Receivable Agreement are also not conditioned upon the Continuing Equity
Owners or Crestview Partners II GP, L.P. maintaining a continued ownership interest in CWGS, LLC.
Additional liabilities under the Tax Receivable Agreement may be required to be recorded when CWGS, LLC
units are exchanged in the future. Such amounts of cash payments that the Company may be required to make under
the Tax Receivable Agreement for such future exchanges could be significant. The amount of liabilities to be recorded
in the future for such exchanges is dependent on a variety of factors including future stock prices, tax rates in effect,
and the Company’s ability to utilize the tax benefits created as a result of the futures of CWGS, LLC units. The
significance of these factors and related uncertainty associated with the related liabilities makes estimation of future
potential amounts under the Tax Receivable Agreement impractical to determine.
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The amounts that we may be required to pay to the Continuing Equity Owners and Crestview
Partners II GP, L.P. under the Tax Receivable Agreement may be accelerated in certain circumstances and
may also significantly exceed the actual tax benefits that we ultimately realize.
The Tax Receivable Agreement provides that if certain mergers, asset sales, other forms of business
combination, or other changes of control were to occur, if we materially breach any of our material obligations under
the Tax Receivable Agreement or if, at any time, we elect an early termination of the Tax Receivable Agreement, then
the Tax Receivable Agreement will terminate and our obligations, or our successor’s obligations, to make payments
under the Tax Receivable Agreement would accelerate and become immediately due and payable. The amount due
and payable in those circumstances is determined based on certain assumptions, including an assumption that we
would have sufficient taxable income to fully utilize all potential future tax benefits that are subject to the Tax
Receivable Agreement. We may need to incur debt to finance payments under the Tax Receivable Agreement to the
extent our cash resources are insufficient to meet our obligations under the Tax Receivable Agreement as a result of
timing discrepancies or otherwise.
As a result of the foregoing, (i) we could be required to make cash payments to the Continuing Equity
Owners and Crestview Partners II GP, L.P. that are greater than the specified percentage of the actual benefits we
ultimately realize in respect of the tax benefits that are subject to the Tax Receivable Agreement and (ii) we would be
required to make an immediate cash payment equal to the present value of the anticipated future tax benefits that are
the subject of the Tax Receivable Agreement, which payment may be made significantly in advance of the actual
realization, if any, of such future tax benefits. In these situations, our obligations under the Tax Receivable Agreement
could have a substantial negative impact on our liquidity and could have the effect of delaying, deferring or preventing
certain mergers, asset sales, other forms of business combination, or other changes of control. There can be no
assurance that we will be able to finance our obligations under the Tax Receivable Agreement.
We will not be reimbursed for any payments made to the Continuing Equity Owners and Crestview
Partners II GP, L.P. under the Tax Receivable Agreement in the event that any tax benefits are disallowed.
We will not be reimbursed for any cash payments previously made to the Continuing Equity Owners and
Crestview Partners II GP, L.P. pursuant to the Tax Receivable Agreement if any tax benefits initially claimed by us are
subsequently challenged by a taxing authority and are ultimately disallowed. Instead, any excess cash payments
made by us to a Continuing Equity Owner or Crestview Partners II GP, L.P. will be netted against any future cash
payments that we might otherwise be required to make under the terms of the Tax Receivable Agreement. However,
a challenge to any tax benefits initially claimed by us may not arise for a number of years following the initial time of
such payment or, even if challenged early, such excess cash payment may be greater than the amount of future cash
payments that we might otherwise be required to make under the terms of the Tax Receivable Agreement and, as a
result, there might not be future cash payments from which to net against. The applicable U.S. federal income tax
rules are complex and factual in nature, and there can be no assurance that the IRS or a court will not disagree with
our tax reporting positions. As a result, it is possible that we could make cash payments under the Tax Receivable
Agreement that are substantially greater than our actual cash tax savings.
Our organizational structure may cause us to be subject to IRS audit, which may result in the assessment of
interest and penalties.
We consolidate CWGS, LLC, which, as a limited liability company, is not subject to U.S. federal income
taxes. Rather, the partnership’s taxable income flows through to the owners, who are responsible for paying the
applicable income taxes on the income allocated to them. For tax years beginning on or after January 1, 2018, the
Company is subject to partnership audit rules enacted as part of the Bipartisan Budget Act of 2015 (the “Centralized
Partnership Audit Regime”). Under the Centralized Partnership Audit Regime, any IRS audit of CWGS, LLC would be
conducted at the CWGS, LLC level, and if the IRS determines an adjustment is necessary, the default rule is that
CWGS, LLC would pay an “imputed underpayment” including interest and penalties, if applicable. CWGS, LLC may
instead elect to make a “push-out” election, in which case the partners for the year that is under audit would be
required to take into account the adjustments on their own personal income tax returns.
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Our operating agreement stipulates that CWGS, LLC is indemnified by members for any payment made to
relevant taxing authorities under the Centralized Partnership Audit Regime. It is intended that any payment
CWGS, LLC makes on behalf of its current members will be reflected as a distribution, rather than tax expense, at the
time that such distribution is declared.
Risks Relating to Ownership of Our Class A Common Stock
The Continuing Equity Owners (through common units) own interests in CWGS, LLC, and the Continuing
Equity Owners have the right to redeem their interests in CWGS, LLC pursuant to the terms of the CWGS LLC
Agreement for newly-issued shares of Class A common stock or cash.
At December 31, 2020, we had an aggregate of 206,916,992 shares of Class A common stock authorized but
unissued, including 46,816,787 shares of Class A common stock issuable, at our election, upon redemption of
CWGS, LLC common units held by the Continuing Equity Owners. In connection with our IPO, CWGS, LLC entered
into the CWGS LLC Agreement, and subject to certain restrictions set forth therein, the Continuing Equity Owners are
entitled to have their common units redeemed from time to time at each of their options for, at our election
(determined solely by our independent directors (within the meaning of the rules of the NYSE) who are disinterested),
newly-issued shares of our Class A common stock on a one-for-one basis or a cash payment equal to a volume
weighted average market price of one share of Class A common stock for each common unit redeemed, in each case
in accordance with the terms of the CWGS LLC Agreement; provided that, at our election (determined solely by our
independent directors (within the meaning of the rules of the NYSE) who are disinterested), we may effect a direct
exchange of such Class A common stock or such cash, as applicable, for such common units. The Continuing Equity
Owners may exercise such redemption right for as long as their common units remain outstanding. In connection with
our IPO, we also entered into a Registration Rights Agreement pursuant to which the shares of Class A common
stock issued upon such redemption and the shares of Class A common stock issued to the Former Equity Owners in
connection with the corporate reorganization transactions entered into in connection therewith will be eligible for
resale, subject to certain limitations set forth therein. The market price of shares of our Class A common stock could
decline as a result of these redemptions or sales, or as a result of the perception that they could occur.
You may be diluted by future issuances of additional Class A common stock or common units in connection
with our incentive plans, acquisitions or otherwise; future sales of such shares in the public market, or the
expectations that such sales may occur, could lower our stock price.
Our amended and restated certificate of incorporation authorizes us to issue shares of our Class A common
stock and options, rights, warrants and appreciation rights relating to our Class A common stock for the consideration
and on the terms and conditions established by our board of directors in its sole discretion, whether in connection with
acquisitions or otherwise.
We have reserved shares for issuance under our 2016 Incentive Award Plan (the “2016 Plan”) in an amount
equal to 12,984,318 shares of Class A common stock as of December 31, 2020, including shares of Class A common
stock issuable pursuant to 470,377 stock options and 3,391,740 restricted stock units that were granted to certain of
our directors and certain of our employees. Any Class A common stock that we issue, including under our 2016 Plan
or other equity incentive plans that we may adopt in the future, would dilute the percentage ownership of holders of
our Class A common stock.
In the future, we may also issue additional securities if we need to raise capital, including, but not limited to,
in connection with acquisitions, which could constitute a material portion of our then-outstanding shares of Class A
common stock.
Our ability to pay regular and special dividends on our Class A common stock is subject to the discretion of
our board of directors and may be limited by our structure and statutory restrictions.
Beginning in the third quarter of 2020, CWGS, LLC increased its regular quarterly cash distribution to its
common unit holders from approximately $0.08 per common unit to $0.09 per common unit. CWGS, LLC intends to
continue to make such quarterly cash distributions. We have used in the past, and intend to continue
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to use, all of the proceeds from such distributions on our common units to declare cash dividends on our Class A
common stock.
CWGS, LLC is required to make cash distributions in accordance with the CWGS LLC Agreement in an
amount sufficient for us to pay any expenses incurred by us in connection with the regular quarterly cash dividend,
along with any of our other operating expenses and other obligations. In addition, we have paid, and currently intend
to pay, a special cash dividend of all or a portion of the Excess Tax Distribution to the holders of our Class A common
stock from time to time, subject to the discretion of our board of directors. However, the payment of future dividends
on our Class A common stock will be subject to our discretion as the sole managing member of CWGS, LLC, the
discretion of our board of directors and will depend on, among other things, our results of operations, financial
condition, level of indebtedness, capital requirements, contractual restrictions, restrictions in our debt agreements and
in any preferred stock, business prospects and other factors that our board of directors may deem relevant.
Additionally, our ability to distribute any Excess Tax Distribution will also be subject to no early termination or
amendment of the Tax Receivable Agreement, as well as the amount of tax distributions actually paid to us and our
actual tax liability. As a consequence of these limitations and restrictions, we may not be able to make, or may have
to reduce or eliminate, the payment of dividends on our Class A common stock. Additionally, any change in the level
of our dividends or the suspension of the payment thereof could adversely affect the market price of our Class A
common stock. For additional information on our payments of dividends, see "Item 5. Market for Registrant’s
Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities—Dividend Policy" under
Part II of this Form 10-K.
Delaware law and certain provisions in our amended and restated certificate of incorporation may prevent
efforts by our stockholders to change the direction or management of our company.
We are a Delaware corporation, and the anti-takeover provisions of Delaware law impose various
impediments to the ability of a third party to acquire control of us, even if a change of control would be beneficial to
our existing stockholders. In addition, our amended and restated certificate of incorporation and our amended and
restated bylaws contain provisions that may make the acquisition of our Company more difficult without the approval
of our board of directors, including, but not limited to, the following:
●
●
our Board of Directors is classified into three classes, each of which serves for a staggered three-year
term;
a majority of our stockholders or a majority of our board of directors may call special meetings of our
stockholders, and at such time as the ML Related Parties, directly or indirectly, beneficially own in the
aggregate, less than 27.5% of all of the outstanding common units of CWGS, LLC, only the chairperson
of our board of directors or a majority of our board of directors may call special meetings of our
stockholders;
● we have authorized undesignated preferred stock, the terms of which may be established and shares of
which may be issued without stockholder approval;
●
●
any action required or permitted to be taken by our stockholders at an annual meeting or special meeting
of stockholders may be taken without a meeting, without prior notice and without a vote, if a written
consent is signed by the holders of our outstanding shares of common stock representing not less than
the minimum number of votes that would be necessary to authorize such action at a meeting at which all
outstanding shares of common stock entitled to vote thereon, and at such time as the ML Related
Parties, directly or indirectly, beneficially own in the aggregate, less than 27.5% of all of the outstanding
common units of CWGS, LLC, any action required or permitted to be taken by our stockholders at an
annual meeting or special meeting of stockholders may not be taken by written consent in lieu of a
meeting;
our amended and restated certificate of incorporation may be amended or repealed by the affirmative
vote of a majority of the votes which all our stockholders would be eligible to cast in an election of
directors and our amended and restated bylaws may be amended or repealed by a majority vote of our
board of directors or by the affirmative vote of a majority of the votes which all
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our stockholders would be eligible to cast in an election of directors, and at such time as the ML Related
Parties, directly or indirectly, beneficially own in the aggregate, less than 27.5% of all of the outstanding
common units of CWGS, LLC, our amended and restated certificate of incorporation and our amended
and restated bylaws may be amended or repealed by the affirmative vote of the holders of at least
662/3% of the votes which all our stockholders would be entitled to cast in any annual election of directors
and our amended and restated bylaws may also be amended or repealed by a majority vote of our board
of directors;
● we require advance notice and duration of ownership requirements for stockholder proposals; and
● we have opted out of Section 203 of the Delaware General Corporation Law of the State of Delaware
(the “DGCL”), however, our amended and restated certificate of incorporation contains provisions that
are similar to Section 203 of the DGCL (except with respect to ML Acquisition and Crestview and any of
their respective affiliates and any of their respective direct or indirect transferees of Class B common
stock).
These provisions could discourage, delay or prevent a transaction involving a change in control of our
company. These provisions could also discourage proxy contests and make it more difficult for you and other
stockholders to elect directors of your choosing and cause us to take other corporate actions you desire, including
actions that you may deem advantageous, or negatively affect the trading price of our Class A common stock. In
addition, because our board of directors is responsible for appointing the members of our management team, these
provisions could in turn affect any attempt by our stockholders to replace current members of our management team.
Please see “— Risks Relating to Our Organizational Structure — Marcus Lemonis, through his beneficial
ownership of our shares directly or indirectly held by ML Acquisition and ML RV Group, has substantial control over
us, including over decisions that require the approval of stockholders, and his interests, along with the interests of our
other Continuing Equity Owners, in our business may conflict with yours.”
Our amended and restated certificate of incorporation provides, subject to certain exceptions, that the Court
of Chancery of the State of Delaware will be the sole and exclusive forum for certain stockholder litigation
matters, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or
our directors, officers, employees or stockholders.
Our amended and restated certificate of incorporation provides, subject to limited exceptions, that the Court
of Chancery of the State of Delaware will, to the fullest extent permitted by law, be the sole and exclusive forum for
(i) any derivative action or proceeding brought on our behalf; (ii) any action asserting a claim of breach of a fiduciary
duty owed by any of our directors, officers or other employees to us or our stockholders; (iii) any action asserting a
claim against us, any director or our officers or employees arising pursuant to any provision of the DGCL, our
amended and restated certificate of incorporation or our amended and restated bylaws; or (iv) any action asserting a
claim against us, any director or our officers or employees that is governed by the internal affairs doctrine. Any person
or entity purchasing or otherwise acquiring any interest in shares of our capital stock are deemed to have notice of
and to have consented to the provisions of our amended and restated certificate of incorporation described above.
This choice of forum provision may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable
for disputes with us or any of our directors, officers, other employees or stockholders which may discourage lawsuits
with respect to such claims. Alternatively, if a court were to find the choice of forum provision in our amended and
restated certificate of incorporation to be inapplicable or unenforceable in an action, we may incur additional costs
associated with resolving such action in other jurisdictions, which could materially adversely affect our business,
financial condition and results of operations.
We may issue shares of preferred stock in the future, which could make it difficult for another company to
acquire us or could otherwise adversely affect holders of our Class A common stock, which could depress
the price of our Class A common stock.
Our amended and restated certificate of incorporation authorizes us to issue one or more series of preferred
stock. Our board of directors will have the authority to determine the preferences, limitations and
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relative rights of the shares of preferred stock and to fix the number of shares constituting any series and the
designation of such series, without any further vote or action by our stockholders. Our preferred stock could be issued
with voting, liquidation, dividend and other rights superior to the rights of our Class A common stock. The potential
issuance of preferred stock may delay or prevent a change in control of us, discouraging bids for our Class A
common stock at a premium to the market price, and materially and adversely affect the market price and the voting
and other rights of the holders of our Class A common stock.
Material weaknesses in our internal control over financial reporting could have a significant adverse effect on
our business and the price of our common stock.
In connection with the preparation of our financial statements and the audit of our financial results for 2018,
we had identified material weaknesses in our internal controls relating to insufficient technical resources to properly
design and operate internal controls over financial reporting. Although the material weaknesses have been
remediated as of December 31, 2019, there can be no assurance that we will not identify additional material
weaknesses in the future.
In future periods, if additional material weaknesses in our internal control over financial reporting are
identified, we may be required to restate our financial statements and could be subject to regulatory scrutiny, a loss of
public and investor confidence, and to litigation from investors and stockholders, which could have a material adverse
effect on our business and the price of our Class A common stock.
In addition, if we do not maintain adequate financial and management personnel, processes and controls, we
may not be able to manage our business effectively or accurately report our financial performance on a timely basis,
which could cause a decline in our common stock price and adversely affect our results of operations and financial
condition. Failure to comply with the Sarbanes-Oxley Act could potentially subject us to sanctions or investigations by
the SEC, the NYSE or other regulatory authorities, which would require additional financial and management
resources.
General Risk Factors
Unanticipated changes in effective tax rates or adverse outcomes resulting from examination of our income
or other tax returns could adversely affect our operating results and financial condition.
We are subject to income taxes in the United States, and our tax liabilities will be subject to the allocation of
expenses in differing jurisdictions. Our future effective tax rates could be subject to volatility or adversely affected by a
number of factors, including:
●
●
●
●
●
changes in the valuation of our deferred tax assets and liabilities;
expected timing and amount of the release of any tax valuation allowances;
tax effects of equity-based compensation;
costs related to intercompany restructurings; or
changes in tax laws, regulations or interpretations thereof.
In addition, we may be subject to audits of our income, sales and other transaction taxes by
U.S. federal and state authorities. Outcomes from these audits could have an adverse effect on our
operating results and financial condition.
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Our Class A common stock price may be volatile or may decline regardless of our operating
performance.
Volatility in the market price of our Class A common stock may prevent you from being able to
sell your shares at or above the price you paid for such shares. Many factors, which are outside our
control, may cause the market price of our Class A common stock to fluctuate significantly, including
those described elsewhere in this “Risk Factors” section and this Form 10-K, as well as the following:
●
●
●
●
●
●
●
our operating and financial performance and prospects;
our quarterly or annual earnings or those of other companies in our industry compared to market
expectations;
conditions that impact demand for our services;
future announcements concerning our business or our competitors’ businesses;
the public’s reaction to our press releases, other public announcements and filings with the SEC;
the size of our public float;
coverage by or changes in financial estimates by securities analysts or failure to meet their expectations;
● market and industry perception of our success, or lack thereof, in pursuing our growth strategy;
●
●
●
●
●
●
●
●
strategic actions by us or our competitors, such as acquisitions or restructurings;
changes in laws or regulations which adversely affect our industry or us;
changes in accounting standards, policies, guidance, interpretations or principles;
changes in senior management or key personnel;
issuances, exchanges or sales, or expected issuances, exchanges or sales of our capital stock;
changes in our dividend policy;
adverse resolution of new or pending litigation against us; and
changes in general market, economic and political conditions in the United States and global economies
or financial markets, including those resulting from natural disasters, terrorist attacks, acts of war and
responses to such events.
If securities analysts do not publish research or reports about our company, or if they issue
unfavorable commentary about us or our industry or downgrade our Class A common stock,
the price of our Class A common stock could decline.
The trading market for our Class A common stock depends in part on the research and reports that third-
party securities analysts publish about our company and our industry. If one or more analysts cease coverage of our
company, we could lose visibility in the market. In addition, one or more of these analysts could downgrade our
Class A common stock or issue other negative commentary about our company or our industry. As a result of one or
more of these factors, the trading price of our Class A common stock could decline.
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ITEM 1B. UNRESOLVED STAFF COMMENTS
None.
ITEM 2. PROPERTIES
We typically lease the real properties where we have operations. Our real property leases generally provide
for fixed monthly rentals with annual escalation clauses. The table below sets forth certain information concerning our
offices and distribution centers as of December 31, 2020, and the lease expiration dates include all stated option
periods.
Square Feet
Acres
Lease
Expiration(1)
Owned
Office Facilities:
Lincolnshire, Illinois (Corporate headquarters and RV
and Outdoor Retail headquarters)
Englewood, Colorado (Good Sam Services and Plans
operations, customer contact and service center and
information system functions)
Bowling Green, Kentucky (RV and Outdoor Retail
administrative and information systems functions)
Oxnard, California (Good Sam Services and Plans
publishing and administrative)
Lakeville, Minnesota (RV and Outdoor Retail
administrative and information systems functions)
St. Paul, Minnesota (RV and Outdoor Retail
administrative and information systems functions)
Chicago, Illinois (Administrative and information systems
functions)
Elkhart, Indiana (RV furniture distributor corporate
headquarters)
Retail Distribution Centers:
Bakersfield, California
Franklin, Kentucky (2)
Lebanon, Indiana
St. Paul, Minnesota (Owasso) (3)
St. Paul, Minnesota (Willow Lake) (3)
St. Paul, Minnesota (Shoreview) (3)
Elkhart, Indiana (Leininger) (4)
Elkhart, Indiana (Protecta) (4)
Elkhart, Indiana (Chelsea) (4)
29,495
59,704
33,947
10,254
11,961
19,364
15,976
11,333
169,123
250,000
707,952
100,548
54,325
59,800
123,500
31,900
115,991
2024
2054
2054
2024
2047
2027
2039
2029
2053
2035
2040
2027
2027
2027
2025
2023
2029
13.1
33.0
32.3
8.1
5.9
8.0
7.7
2.4
11.4
(1) Assumes exercise of applicable lease renewal options.
(2) Closed for a portion of the first half of 2020 and repurposed for online order fulfillment.
(3) These separate properties in St. Paul, Minnesota function together as the distribution center for the specialty retail products within the
RV and Outdoor Retail segment.
(4) These separate properties in Elkhart, Indiana function together as the distribution center for the RV furniture products within the RV
and Outdoor Retail segment.
As of December 31, 2020, we had 171 retail locations in 38 states of which we lease 154 locations. These
locations generally range in size from approximately 20,000 to 80,000 square feet and are typically situated on
approximately 8 to 50 acres. The leases for our retail locations typically have terms of 15 to 20 years,
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with multiple renewal terms of five years each. These leases are typically “triple net leases” that require us to pay real
estate taxes, insurance and maintenance costs.
ITEM 3. LEGAL PROCEEDINGS
For information regarding legal proceedings, refer to Note 13 – Commitments and Contingencies – Litigation
of our Consolidated Financial Statements included in Part II, Item 8 of this Form 10-K.
We are also engaged in various other legal actions, claims and proceedings arising in the ordinary course of
business, including claims related to employment-related matters, breach of contracts, products liabilities, consumer
protection and intellectual property matters resulting from our business activities. We do not believe that the ultimate
resolution of such matters will have a material adverse effect on our business, financial condition or results of
operations. However, litigation is subject to many uncertainties, and the outcome of certain of such individual litigated
matters may not be reasonably predictable and any related damages may not be estimable. Certain of these litigation
matters could result in an adverse outcome to us, and any such adverse outcome could have a material adverse
effect on our business, financial condition and results of operations.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
Information About Our Executive Officers and Directors
The following table provides information regarding the Company’s executive officers and directors (ages are
as of February 26, 2021):
Name
Marcus A. Lemonis
Brent L. Moody
Karin L. Bell
Tamara R. Ward
Stephen Adams
Andris A. Baltins
Brian P. Cassidy
Mary J. George
Michael W. Malone
K. Dillon Schickli
Age
47
59
61
53
83
75
47
70
62
67
Position(s)
Chairman and Chief Executive Officer
President and Director
Chief Financial Officer
Chief Operating Officer
Director
Director
Director
Director
Director
Director
Set forth below is a description of the background of each of the Company’s executive officers and directors.
Marcus A. Lemonis has served as Camping World Holdings, Inc.’s Chairman and Chief Executive Officer and
on the board of directors of Camping World Holdings, Inc. since March, 2016, as the President and Chief Executive
Officer and on the board of directors of CWGS, LLC since February 2011, as the Chief Executive Officer and on the
board of directors of Good Sam Enterprises, LLC since January 2011, as President and Chief Executive Officer and
on the board of directors of Camping World, Inc. since September 2006 and as the President and Chief Executive
Officer and on the board of directors of FreedomRoads, LLC since May 1, 2003. Mr. Lemonis received a B.A. from
Marquette University. Mr. Lemonis’ extensive experience in retail, RV and automotive, business operations and
entrepreneurial ventures makes him well qualified to serve on our board of directors.
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Brent L. Moody has served as President of Camping World Holdings, Inc. and President of CWGS
Enterprises, LLC since September 2018, and on the board of directors of Camping World Holdings, Inc. since May,
2018. Mr. Moody previously served as Camping World Holdings, Inc.’s Chief Operating and Legal Officer from March,
2016 to September, 2018, as the Chief Operating and Legal Officer of CWGS, LLC and its subsidiaries since
January, 2016, as the Executive Vice President and Chief Administrative and Legal Officer of CWGS, LLC from
February 2011 to December 31, 2015, as the Executive Vice President and Chief Administrative and Legal Officer of
Good Sam Enterprises, LLC from January 2011 to December 2015, as the Executive Vice President and Chief
Administrative and Legal Officer of FreedomRoads, LLC and Camping World, Inc. from 2010 until December 2015, as
Executive Vice President/General Counsel and Business Development of Camping World, Inc. and FreedomRoads,
LLC from 2006 to 2010, as Senior Vice President/General Counsel and Business Development of Camping World,
Inc. and Good Sam Enterprises, LLC from 2004 to 2006 and as Vice President and General Counsel of Camping
World, Inc. from 2002 to 2004. From 1998 to 2002, Mr. Moody was a shareholder of the law firm of Greenberg
Traurig, P.A. From 1996 to 1998, Mr. Moody served as vice president and assistant general counsel for Blockbuster,
Inc. Mr. Moody received a J.D. from Nova Southeastern University, Shepard Broad Law Center and a B.S. from
Western Kentucky University. Mr. Moody’s extensive legal experience, his experience in various areas of complex
business transactions and mergers and acquisitions, and his extensive knowledge of the Company’s operations make
him well qualified to serve on our board of directors.
an indirect
LLC (“FreedomRoads”),
Karin L. Bell has served as the Camping World Holdings, Inc. Chief Financial Officer since July 2020. Ms.
Bell’s career with the Company started in May 2003 as the Chief Accounting Officer and Secretary/Treasurer for
FreedomRoads,
became
FreedomRoad’s Chief Financial Officer and Secretary/Treasurer in December 2018. Prior to her current role, Ms. Bell
served as the Company’s Chief Accounting Officer from September 2019 to June 2020. Ms. Bell was one of the first
employees of FreedomRoads along with the Company’s CEO and Chairman, Marcus Lemonis. Prior to joining
FreedomRoads, Ms. Bell was the Senior Vice President and Treasurer of First Security Holding LP, a niche market
commercial mortgage conduit lender that also provided investor reporting services for the structured finance industry,
from 1992 to 1998. Ms. Bell has also held positions with Laventhol & Horwath and Altschuler, Melvoin & Glasser, both
public accounting firms, from 1982 through 1992. Ms. Bell received a B.S. in Accountancy from the University of
Illinois in Champaign-Urbana in 1982.
the Company,
subsidiary of
and Ms.
Bell
Tamara R. Ward has served as Camping World Holdings, Inc.’s Chief Operating Officer since December
2019. Ms. Ward previously served as Executive Vice President, Corporate Development from November 2017 to
December 2019. Prior to that, Ms. Ward served as the Company’s Chief Marketing Officer from May 2011 to October
2017; Senior Vice President, Sales and Marketing from 2007 to 2010; and Vice President, Marketing from 2003 to
2006. Ms. Ward joined the Company in 1989 as a marketing analyst. Her various leadership positions throughout
her tenure encompass multiple aspects of the organization and provide strong knowledge of the business. Ms. Ward
received a B.S. degree in Marketing from Western Kentucky University. Ms. Ward is a member of the Board of
Directors of Junior Achievement of South Central Kentucky and a member of the Women’s Fund of South Central
Kentucky.
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Stephen Adams has served on the board of directors of Camping World Holdings, Inc. since March, 2016, as
the chairman of the board of directors of CWGS, LLC since February 2011, as the chairman of the board of directors
of Good Sam Enterprises, LLC since December 1988, as the chairman of the board of directors of Camping World,
Inc. since April 1997 and as the chairman of the board of directors of FreedomRoads Holding Company, LLC since
February 3, 2005. In addition, Mr. Adams is the chairman of the board of directors and the controlling shareholder of
Adams Outdoor Advertising, Inc., which operates an outdoor media advertising business. From November 2011 until
April 2012, Mr. Adams inadvertently failed to timely file ownership reports on Forms 4 and 5 and as of the end of
calendar year 2011, as of May 15, 2012 and as of the end of calendar year 2012, Mr. Adams mistakenly failed to
timely file Schedule 13G amendments with respect to an entity in which he unknowingly accumulated an interest in
excess of 5%. As a result, the Securities and Exchange Commission entered an order on September 10, 2014,
pursuant to which Mr. Adams agreed to cease and desist from committing or causing any violations of the
requirements of Section 13(d) and 16(a) of the Exchange Act and certain of the rules promulgated thereunder and
paid a civil money penalty to the SEC without admitting or denying the findings therein. In August 2009, Affinity Bank,
a California depositary institution in which Mr. Adams indirectly owned a controlling interest, was closed by the
California Department of Financial Institutions and the Federal Deposit Insurance Corporation was appointed as the
receiver. Mr. Adams received an M.B.A. from the Stanford Graduate School of Business and a B.S. from Yale
University. Mr. Adams’ long association with the Company as a chairman of the board of directors of several of its
subsidiaries since he acquired Good Sam Enterprises, LLC in 1988 and his current or former ownership of a variety of
businesses with significant assets and operations during his over 40 year business career, during which time he has
had substantial experience in providing management oversight and strategic direction, make him well qualified to
serve on our board of directors.
Andris A. Baltins has served on the board of directors of Camping World Holdings, Inc. since March, 2016, on
the board of directors of CWGS, LLC since February 2011 and on the board of directors of Good Sam Enterprises,
LLC since February 2006. He has been a member of the law firm of Kaplan, Strangis and Kaplan, P.A. since 1979.
Mr. Baltins serves as a director of various private and nonprofit corporations, including Adams Outdoor Advertising,
Inc., which is controlled by Mr. Adams. Mr. Baltins previously served as a director of Polaris Industries, Inc. from 1995
until 2011. Mr. Baltins received a J.D. from the University of Minnesota Law School and a B.A. from Yale University.
Mr. Baltins’ over 40-year legal career as an advisor to numerous public and private companies and his experience in
the areas of complex business transactions, mergers and acquisitions and corporate law make him well qualified to
serve on our board of directors.
Brian P. Cassidy has served on the board of directors of Camping World Holdings, Inc. since March 2016
and on the board of directors of CWGS, LLC since March 2011. Mr. Cassidy is a Partner at Crestview, which he
joined in 2004, and currently serves as head of Crestview’s media and communications strategy. Mr. Cassidy has
served as a director of WideOpenWest, Inc., a public company, since December 2015, and has served as a director
of various private companies, including Hornblower Holdings since April 2018, Congruex LLC since November 2017,
and Industrial Media since October 2012. Mr. Cassidy previously served as a director of Cumulus Media, Inc., a
public company, from May 2014 until March 2017, and served as a director of various private companies, including
NEP Group, Inc. from December 2012 to October 2018 and Interoute Communications Holdings from April 2015 to
May 2018. He was also involved with Crestview’s investments in Charter Communications, Inc. and Insight
Communications, Inc. Prior to joining Crestview, Mr. Cassidy worked in private equity at Boston Ventures, where he
invested in companies in the media and communications, entertainment and business services industries. Previously,
he worked as the acting chief financial officer of one of Boston Ventures’ portfolio companies. Prior to that time, Mr.
Cassidy was an investment banking analyst at Alex, Brown & Sons, where he completed a range of financing and
mergers and acquisitions assignments for companies in the consumer and business services sectors. Mr. Cassidy
received an M.B.A. from the Stanford Graduate School of Business and an A.B. in Physics from Harvard College. Mr.
Cassidy’s private equity investment and company oversight experience and background with respect to acquisitions,
debt financings and equity financings make him well qualified to serve on our board of directors.
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Mary J. George has served on the board of directors of Camping World Holdings, Inc. since January 2017.
Ms. George has also served as executive chairman of Ju-Ju-Be, a retailer of premium diaper bags and other baby
products since January 2018. Ms. George has been a founding partner of Morningstar Capital Investments, LLC, an
investment firm, since 2001. Ms. George served as chief executive officer and a director at Easton Hockey Holdings
Inc., a private manufacturer of ice hockey equipment, from August 2014 to December 2016. From 2002 to 2015, Ms.
George held various positions, including co-chairman (2002 to 2009) and vice chairman (2009 to 2015), at Bell
Automotive Products, Inc., a private manufacturer of automotive accessories. From 1994 to 2004, Ms. George held
various positions, including chief operating officer (1995 to 1998), chief executive officer (1998 to 2000), and
chairman (2000 to 2004), at Bell Sports Inc., a formerly public helmet manufacturer. Ms. George also currently serves
or previously served as a director of various public and private companies, including Image Entertainment, Inc., a
formerly public independent distributor of home entertainment programming, from 2010 to 2012, Oakley, Inc., a public
sports equipment and lifestyle accessories manufacturer, from 2004 to 2007, BRG Sports Inc. since 2013, 3 Day
Blinds Inc. from 2007 to 2015, and Oreck Corporation from 2008 to 2012. Ms. George’s experience in sales,
marketing and general management in the consumer products industry, as well as success in the development of
internationally renowned branded products, provides our board of directors with greater insight in the areas of product
branding and strategic growth in the consumer products industry, and make her well-qualified to serve on our board of
directors.
Michael W. Malone has served on the board of directors of Camping World Holdings, Inc. since May 2019.
Mr. Malone was Vice President, Finance and Chief Financial Officer of Polaris Industries Inc. ("Polaris"), a
manufacturer of power sports vehicles, from January 1997 to July 2015 and retired from Polaris in March 2016. From
January 1997 to January 2010, Mr. Malone also served as Corporate Secretary. Mr. Malone was Vice President and
Treasurer of Polaris from December 1994 to January 1997 and was Chief Financial Officer and Treasurer of a
predecessor company of Polaris from January 1993 to December 1994. Mr. Malone joined Polaris in 1984 after four
years with Arthur Andersen LLP. Mr. Malone has served on the board and on the Audit (chair), Finance and
Nominating and Governance Committees of Armstrong Flooring, Inc., a public company, since October 2016 as well
as the boards of various non-profit organizations. Mr. Malone previously served on the board of Stevens Equipment
Supply LLC, a private company, from May 2011 until October 2020. Mr. Malone received a B.A. in accounting and
business administration from St. John's University (Collegeville, Minnesota). Mr. Malone's experiences as the former
Chief Financial Officer of a public company, his public company board experience, and his in-depth knowledge of the
outdoor lifestyle industry make him well qualified to serve on our board of directors.
K. Dillon Schickli has served on the board of directors of Camping World Holdings, Inc. since March 2016
and on the board of directors of CWGS, LLC since August 2011. Mr. Schickli previously served on the board of
directors of CWGS, LLC from 1990 until 1995 and was chief operating officer of Affinity Group, Inc., the predecessor
of Good Sam Enterprises, LLC, from 1993 until 1995. Previously, Mr. Schickli was a co-investor with Crestview in DS
Waters Group, Inc. (“DS Waters”) and served as vice chairman of its board of directors until it was sold to Cott
Corporation in December 2014. Prior to that time, Mr. Schickli was the chief executive officer of DS Waters from June
2010 until February 2013 and subsequently led the buyout of the business by Crestview. Mr. Schickli also previously
led the buyout of DS Waters from Danone Group & Suntory Ltd. in November 2005 and was also a co investor in DS
Waters with Kelso & Company. Mr. Schickli served as co-chief executive officer and chief financial officer of DS
Waters from November 2005 until June 2010, when he became the sole chief executive officer. Mr. Schickli started
his business career in the capital planning and acquisitions group of the Pepsi Cola Company after he received his
M.B.A. from the University of Chicago. Mr. Schickli received a B.A. from Carleton College in 1975. Mr. Schickli’s long
association with, and knowledge of, the Company, extensive experience serving as a director of other businesses,
operating experience as a chief executive officer and his experience as a private equity investor with respect to
acquisitions, debt financings, equity and financings make him well qualified to serve on our board of directors.
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PART II
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER
PURCHASES OF EQUITY SECURITIES
Market Information
Our Class A common stock is traded on the New York Stock Exchange under the symbol “CWH.” There is no
public trading market for our Class B common stock and Class C common stock.
Holders of Record
As of February 12, 2021, there were 5 and 41,329 stockholders of record and beneficial holders, respectively,
of our Class A common stock. As of February 15, 2021, there were two and one stockholders of record of our Class B
common stock and Class C common stock, respectively.
Dividend Policy
CWGS, LLC has made a regular quarterly cash distribution to its common unit holders of approximately
$0.08 per common unit between the three months ended December 31, 2016 and the three months ended June 30,
2020. On July 20, 2020, our Board of Directors approved the increase of the quarterly dividend to $0.09 per share of
Class A common stock from $0.08 per share. Accordingly, during the three months ended September 30, 2020 and
December 31, 2020, we paid regular quarterly cash dividends of $0.09 per share of our Class A common stock.
CWGS, LLC intends to continue to make such quarterly cash distributions, to the extent permitted by law. We have
used in the past, and intend to continue to use, to the extent permitted by law, all of the proceeds from such
distribution on our common units to pay a regular quarterly cash dividend of approximately $0.09 per share on our
Class A common stock, subject to our discretion as the sole managing member of CWGS, LLC and the discretion of
our board of directors. CWGS, LLC is required to make cash distributions in accordance with the CWGS LLC
Agreement in an amount sufficient for us to pay any expenses incurred by us in connection with the regular quarterly
cash dividend, along with any of our other operating expenses and other obligations. Holders of our Class B common
stock and Class C common stock are not entitled to participate in any dividends declared by our board of directors.
We believe that our cash and cash equivalents and cash provided by operating activities will be sufficient for CWGS,
LLC to make this regular quarterly cash distribution for at least the next twelve months.
In addition, the CWGS LLC Agreement requires tax distributions to be made by CWGS, LLC to its members,
including us. In general, tax distributions are made on a quarterly basis, to each member of CWGS, LLC, including us,
based on such member's allocable share of the taxable income of CWGS, LLC (which, in our case, will be determined
without regard to any Basis Adjustments described in our Tax Receivable Agreement) and an assumed tax rate
based on the highest combined federal, state, and local tax rate that may potentially apply to any one of CWGS,
LLC's members (46.70% in 2020, 2019 and 2018), regardless of the actual final tax liability of any such member.
Based on the current applicable effective tax rates, we expect that (i) the assumed tax rate that will be used for
purposes of determining tax distributions from CWGS, LLC will exceed our actual combined federal, state and local
tax rate (assuming no changes in corporate tax rates) and (ii) the annual amount of tax distributions paid to us will
exceed the sum of (A) our actual annual tax liability and (B) the annual amount payable by us under the Tax
Receivable Agreement (assuming no early termination of the Tax Receivable Agreement) (such excess in clauses (A)
and (B), collectively referred to herein as the "Excess Tax Distribution"). We currently intend to pay a special cash
dividend of all or a portion of the Excess Tax Distribution to the holders of our Class A common stock from time to
time subject to the discretion of our board of directors.
Our ability to pay cash dividends on our Class A common stock depends on, among other things, our results
of operations, financial condition, level of indebtedness, capital requirements, contractual restrictions, restrictions in
our debt agreements and in any preferred stock, restrictions under applicable law, the extent to which such
distributions would render CWGS, LLC insolvent, our business prospects and other factors that our
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board of directors may deem relevant. Additionally, our ability to distribute any Excess Tax Distribution will also be
contingent on no early termination or amendment of the Tax Receivable Agreement, as well as the amount of tax
distributions actually paid to us and our actual tax liability. Furthermore, because we are a holding company, our
ability to pay cash dividends on our Class A common stock depends on our receipt of cash distributions from CWGS,
LLC and, through CWGS, LLC, cash distributions and dividends from its operating subsidiaries, which may further
restrict our ability to pay dividends as a result of the laws of their jurisdiction of organization, agreements of our
subsidiaries or covenants under any existing and future outstanding indebtedness we or our subsidiaries incur. In
particular, our ability to pay any cash dividends on our Class A common stock is limited by restrictions on the ability of
CWGS, LLC and our other subsidiaries and us to pay dividends or make distributions to us under the terms of our
Senior Secured Credit Facilities and Floor Plan Facility. We do not currently believe that the restrictions contained in
our existing indebtedness will impair the ability of CWGS, LLC to make the distributions or pay the dividends as
described above. Our dividend policy has certain risks and limitations, particularly with respect to liquidity, and we
may not pay future dividends according to our policy, or at all. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations—Liquidity and Capital Resources" and "Risk Factors—Risks Relating
to Ownership of Our Class A Common Stock—Our ability to pay regular and special dividends on our Class A
common stock is subject to the discretion of our board of directors and may be limited by our structure and statutory
restrictions” in this Form 10-K.
Issuer Purchases of Equity Securities
The following table presents information related to our repurchases of Class A common stock for the periods
indicated:
Period
October 1, 2020 to October 31, 2020
November 1, 2020 to November 30, 2020
December 1, 2020 to December 31, 2020
Total
Total Number of
Shares
Purchased
Average Price
Paid per Share
—
811,223
—
811,223
$—
26.53
—
$26.53
Total Number of
Shares
Purchased as
Part of Publicly
Announced
Programs(1)
—
811,223
—
811,223
Approximate
Dollar Value of
Shares that May
Yet Be Purchased
Under the
Programs
$100,000,000
78,478,000
78,478,000
$78,478,000
(1) On October 30, 2020, our Board of Directors authorized a stock repurchase program for the repurchase of up to $100.0 million of the
Company’s Class A common stock, expiring on October 31, 2022. This program does not obligate the Company to acquire any
particular amount of Class A common stock and the program may be extended, modified, suspended or discontinued at any time at
the Board’s discretion.
The table above excludes shares net settled by the Company in connection with tax withholdings associated with the
vesting of restricted stock units as these shares were not issued and outstanding.
Stock Performance Graph
The following graph and table illustrate the total return from October 7, 2016, the date our shares began
trading on the NYSE, through December 31, 2020, for (i) our Class A common stock, (ii) the Standard and Poor’s
(“S&P”) 500 Index, and (iii) the S&P 500 Retailing Index. The comparisons reflected in the graph and table are not
intended to forecast the future performance of our stock and may not be indicative of future
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performance. The graph and table assume that $100 was invested on October 7, 2016 in each of our Class A
common stock, the S&P 500 Index, and S&P 500 Retailing Index and that any dividends were reinvested.
Camping World Holdings, Inc.
Class A common stock
S&P 500 Index
S&P 500 Retailing Index
October 7, December 31, December 31, December 31, December 31, December 31,
2016
2016
2017
2018
2019
2020
$ 100.00 $
$ 100.00 $
$ 100.00 $
145.27
104.45
98.91
$
$
$
203.35
127.26
128.98
$
$
$
53.65
121.68
146.34
$
$
$
72.63
159.99
185.38
$
$
$
137.63
189.43
271.42
Recent Sales of Unregistered Securities
None.
ITEM 6. SELECTED FINANCIAL DATA
The following tables present the selected historical consolidated financial and other data for Camping World
Holdings, Inc. The selected consolidated balance sheets data as of December 31, 2020 and 2019 and the selected
consolidated statements of operations and statements of cash flows data for each of the years in the three-year
period ended December 31, 2020 are derived from our audited consolidated financial statements contained in Part II,
Item 8 of this Form 10-K. The selected consolidated balance sheets data as of December 31, 2018, 2017 and 2016,
and the selected consolidated statements of operations and statements of cash flows data for the year ended
December 31, 2017 and 2016 have been derived from our audited consolidated financial statements not included
herein.
During the year ended December 31, 2019, we had a change to our reportable segments as described in
Note 22 — Segment Information in Part II, Item 8 of this Form 10-K. Accordingly, certain components of revenue and
gross profit for the years ended December 31, 2018, 2017 and 2016 have been reclassified to conform to our current
segment reporting structure.
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Our financial statements for the year ended December 31, 2017 reflect the provisional impact of the U.S. Tax
Cuts and Jobs Act of 2017 that significantly revised the U.S. corporate income tax by, among other things, lowering
the statutory corporate tax rate from 35% to 21% and eliminating certain deductions.
Our financial statements for the year ended December 31, 2018 reflect the adoption of Accounting Standards
Codification (“ASC”) No. 606, Revenue from Contracts with Customers as described in Note 2 — Revenue in Part II,
Item 8 of this Form 10-K, which also removed the guidance for capitalization of direct response advertising that is now
expensed as incurred.
Our financial statements for the year ended December 31, 2019 reflect the adoption of ASC No. 842, Leases
as described in Note 1 — Summary of Significant Accounting Policies — Recently Adopted Accounting
Pronouncements in Part II, Item 8 of this Form 10-K. Additionally, our financial statements for the year ended
December 31, 2019 reflect long-lived asset impairments and restructuring charges as described in Note 5 —
Restructuring and Long-lived Asset Impairment in Part II, Item 8 of this Form 10-K.
Subsequent to the IPO and the related reorganization transactions, Camping World Holdings, Inc. has been a
holding company whose principal asset is its equity interest in CWGS, LLC. As the sole managing member of CWGS,
LLC, Camping World Holdings, Inc. operates and controls all of the business and affairs of CWGS, LLC, and, through
CWGS, LLC, conducts its business. As a result, the Company consolidates CWGS, LLC’s financial results and
reports a non-controlling interest related to the common units not owned by Camping World Holdings, Inc. Such
consolidation has been reflected for all periods presented. Our selected historical consolidated financial and other
data does not reflect what our financial position, results of operations and cash flows would have been had we been a
separate, stand-alone public company during those periods.
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Our selected historical consolidated financial and other data may not be indicative of our future results of
operations or future cash flows. You should read the information set forth below in conjunction with our historical
consolidated financial statements and the notes to those statements, “Item 1A. – Risk Factors,” and “Item 7. –
Management’s Discussion and Analysis of Financial Condition and Results of Operations” included elsewhere in this
Form 10-K.
($ in thousands)
Consolidated Statements of Operations Data:
Revenue:
Good Sam Services and Plans
RV and Outdoor Retail
New vehicles
Used vehicles
Products, service and other
Finance and insurance, net
Good Sam Club
Subtotal
Total revenue
Gross profit:
Good Sam Services and Plans
RV and Outdoor Retail
New vehicles
Used vehicles
Products, service and other
Finance and insurance, net
Good Sam Club
Subtotal
Total gross profit
Operating expenses:
Selling, general and administrative
Debt restructure expense
Depreciation and amortization
Goodwill impairment
Long-lived asset impairment
Lease termination
Loss (gain) on disposal of assets
Total operating expenses
Operating income
Other income (expense):
Floor plan interest expense
Other interest expense, net
Loss on debt restructure
Tax Receivable Agreement liability adjustment
Total other income (expense)
Income (loss) before income taxes
Income tax expense
Net income (loss)
Less: net (income) loss attributable to non-controlling interests
Net income (loss) attributable to Camping World Holdings, Inc.
Earnings per share of Class A common stock (1):
Basic
Diluted
Cash dividends declared per share of Class A common stock
Consolidated Statements of Cash Flows Data:
Net cash provided by (used in) operating activities
Net cash used in investing activities
Net cash (used in) provided by financing activities
Selected Other Data:
EBITDA (2)
Adjusted EBITDA (2)
Net income (loss) margin
Adjusted EBITDA Margin (2)
Selected Other Operating Data:
Active Customers (3)
Dealership locations (4)
December 31,
2020
December 31,
2019
Fiscal Year Ended
December 31,
2018
December 31,
2017
December 31,
2016
$
180,977
$
179,538
$
172,660
$
161,888
$
152,778
2,823,311
984,853
948,890
464,261
44,299
5,265,614
5,446,591
2,370,321
857,628
1,034,577
401,302
48,653
4,712,481
4,892,019
2,512,854
732,017
949,383
383,711
41,392
4,619,357
4,792,017
2,435,928
668,860
652,819
326,609
33,726
4,117,942
4,279,830
1,862,195
703,326
540,019
225,994
31,995
3,363,529
3,516,307
108,039
101,484
96,619
88,269
82,611
502,774
233,824
358,174
464,261
35,407
1,594,440
1,702,479
1,156,071
—
51,981
—
12,353
4,547
1,332
1,226,284
476,195
(19,689)
(54,689)
—
141
(74,237)
401,958
(57,743)
344,215
(221,870)
122,345
3.11
3.09
1.47
747,669
(125,935)
(603,183)
508,628
564,989
6.3%
10.4%
$
$
$
$
296,051
178,988
271,658
401,302
37,915
1,185,914
1,287,398
1,141,643
—
59,932
—
66,270
(686)
11,492
1,278,651
8,747
(40,108)
(69,363)
—
10,005
(99,466)
(90,719)
(29,582)
(120,301)
59,710
(60,591)
(1.62)
(1.62)
0.61
251,934
(104,537)
(138,433)
38,576
166,015
(2.5)%
3.4%
$
$
$
$
324,119
163,617
364,120
383,711
30,746
1,266,313
1,362,932
1,069,359
380
49,322
40,046
—
—
2,810
1,161,917
201,015
(38,315)
(63,329)
(1,676)
(1,324)
(104,644)
96,371
(30,790)
65,581
(55,183)
10,398
0.28
0.28
0.61
136,292
(292,689)
70,791
209,022
312,502
1.4%
6.5%
$
$
$
$
349,699
162,767
288,047
326,609
25,523
1,152,645
1,240,914
853,160
387
31,545
—
—
(133)
884,959
355,955
(27,690)
(42,959)
(462)
100,758
29,647
385,602
(154,910)
230,692
(200,839)
29,853
1.12
1.12
0.74
(16,315)
(468,455)
594,737
460,106
394,187
5.4%
9.2%
$
$
$
$
$
$
$
$
265,332
146,073
250,833
225,994
22,890
911,122
993,733
691,884
1,218
24,695
—
—
—
(564)
717,233
276,500
(18,854)
(48,318)
(5,052)
—
(72,224)
204,276
(5,800)
198,476
(9,591)
188,885
0.08
0.07
0.08
215,775
(115,787)
(77,817)
277,289
286,467
5.6%
8.1%
5,314,104
160
5,118,413
154
5,051,439
141
3,637,195
124
3,344,959
105
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Table of Contents
($ in thousands)
Consolidated Balance Sheets Data (at period end):
Cash and cash equivalents
Total assets
Total debt (5)
Total noncurrent liabilities
Total stockholders' equity (deficit)
December 31,
2020
December 31,
2019
Fiscal Year Ended
December 31,
2018
December 31,
December 31,
2017
2016
$
$
$
166,072
3,256,431
1,185,716
2,230,141
(9,231)
147,521
3,376,240
1,208,521
2,239,522
(159,236)
138,557
2,806,687
1,204,604
1,468,652
32,917
$
$
224,163
2,567,026
916,902
1,164,129
71,763
114,196
1,456,061
626,753
740,921
(161,007)
(1) Basic and diluted earnings per Class A common stock is applicable only for periods after the Company’s IPO. Prior to the IPO, the
CWGS, LLC membership structure included membership units, preferred units, and profits units. During the period of September 30,
2014 to October 6, 2016, there were 70,000 preferred units outstanding that received a total preferred return of $2.1 million per
quarter in addition to their proportionate share of distributions made to all members of CWGS, LLC. The Company analyzed the
calculation of earnings per unit for periods prior to the IPO using the two-class method and determined that it resulted in values that
would not be meaningful to the users of these consolidated financial statements. Therefore, earnings per share information has not
been presented for periods prior to the IPO on October 6, 2016. The basic and diluted earnings per share period for the year ended
December 31, 2016 represents only the period of October 6, 2016 to December 31, 2016. See Note 21 — Earnings Per Share to our
audited consolidated financial statements included in Part II, Item 8 of this Form 10-K for additional information.
(2) EBITDA, Adjusted EBITDA, and Adjusted EBITDA Margin are supplemental measures of our performance that are not required by, or
presented in accordance with, GAAP. EBITDA, Adjusted EBITDA, and Adjusted EBITDA Margin are not measurements of our
financial performance under GAAP and should not be considered as an alternative to net income, net income margin, or any other
performance measure derived in accordance with GAAP, or as an alternative to cash flows from operating activities as a measure of
our liquidity. See “Non-GAAP Financial Measures” in Part II, Item 7 of this Form 10-K for additional information and a reconciliation to
the most directly comparable GAAP financial measure.
(3) We define an “Active Customer” as a unique customer who has transacted with us in any of the eight most recently completed fiscal
quarters prior to the date of measurement.
(4) Dealership location acquisitions have contributed to the growth in revenues. See Note 15 — Acquisitions to our audited consolidated
financial statements included in Part II, Item 8 of this Form 10-K for additional information.
(5) Total debt consists of borrowings under our Senior Secured Credit Facilities, finance leases, the Company’s prior credit facilities, the
revolving line of credit under our Floor Plan Facility, and the Real Estate Facility with CIBC Bank USA, as applicable, net of
unamortized original issue discount and capitalized finance costs as of December 31, 2020, 2019, 2018, 2017 and 2016 of $3.2
million and $7.9 million, $4.3 million and $10.9 million, $5.4 million and $13.6 million, $6.0 million and $14.2 million, and $6.3 million
and $11.9 million, respectively (as discussed under “Management’s Discussion and Analysis of Financial Condition and Results of
Operations — Liquidity and Capital Resources” in Part II, Item 7 of this Form 10-K). See our consolidated financial statements
included in Part II, Item 8 of this Form 10-K, which include all liabilities, including amounts outstanding under our Floor Plan Facility.
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ITEM 7. 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 Consolidated Financial Statements and related notes included in Part II, Item 8 of this Form 10-K.
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 this Form 10-K, the “Cautionary Note Regarding Forward-Looking Statements” and in other parts of this
Form 10-K. 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-K, 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 December 31, 2020, our most recently completed fiscal quarter.
In this Item 7, we discuss the results of operations for the years ended December 31, 2020 and 2019 and
comparisons of the year ended December 31, 2020 to the year ended December 31, 2019. Discussions of the results
of operations for the year ended December 31, 2018 and comparisons of the year ended December 31, 2019 to the
year ended December 31, 2018 can be found in “Management’s Discussion and Analysis of Financial Condition and
Results of Operations” in Part II, Item 7 of 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.
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 December 31, 2020, we operated a total of 171 retail locations, with 170 of these
selling and/or servicing RVs. See Note 1 ─ Summary of Significant Accounting Policies ─ Description of the Business
to our consolidated financial statements included in Part II, Item 8 of this Form 10-K.
With the COVID-19 crisis (see “COVID-19” below) 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 March 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. The Company had 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. 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 significant improvements 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, lead generation, and revenue trends in May continuing throughout the remainder of 2020 and early
indications appear to show favorable trends continuing into 2021.
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On September 15, 2020 we announced a number of initiatives heading into 2021, including plans to launch a
peer-to-peer RV rental service, and a mobile RV technician marketplace, as well as plans to acquire RV dealerships.
These initiatives continue to keep RVs as the focal point while expanding our value proposition to the customer and,
in particular, to our 2.1 million active Good Sam members.
Segments
We operate two reportable segments: (i) Good Sam Services and Plans, and (ii) RV and Outdoor Retail. We
identify our reporting segments based on the organizational units used by management to monitor performance and
make operating decisions. The Company previously had three reportable segments: (i) Consumer Services and
Plans; (ii) Dealership, and (iii) Retail. In the first quarter of 2019, we realigned the structure of our internal organization
in a manner that caused the composition of our reportable segments to change. Our reportable segment financial
information has been recast to reflect the updated reportable segment structure for all periods presented. See Note 1
— Summary of Significant Accounting Policies — Description of the Business and Note 22 — Segment Information to
our consolidated financial statements included in Part II, Item 8 of this Form 10-K for further information regarding our
reportable segments.
For the years ended December 31, 2020, 2019, and 2018, we generated 3.3%, 3.7%, and 3.6% of our total
revenue and 6.4%, 7.9%, and 7.1% of our total gross profit from our Good Sam Services and Plans segment,
respectively. For the years ended December 31, 2020, 2019, and 2018, we generated 96.7%, 96.3%, and 96.4% of
our total revenue and 93.6%, 92.1%, and 92.9% of our total gross profit from our RV and Outdoor Retail segment,
respectively.
COVID-19
As discussed in Note 1 ─ Summary of Significant Accounting Policies ─ COVID-19 to our consolidated
financial statements included in Part II, Item 8 of this Form 10-K, 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 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 December 31, 2020, we have temporarily closed two of our dealerships as a
result of COVID-19 and branding changes. These two dealerships are expected to reopen in 2021. 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 continuing throughout the remainder of 2020 and early indications appear to show favorable trends
continuing into 2021. We believe that the demand will remain elevated as consumers continue to view RVs as an
opportunity to work and school remotely.
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We have been implementing marketing and operational plans to optimize our leadership position through the
pandemic, 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. As a consequence of COVID-19, we held fewer consumer shows and events during
2020 than in 2019 and we debuted our first virtual show in 2020.
If stay-at-home and shelter-in-place restrictions are put back into place or as other modes of transportation
and vacation options recover from the impact of COVID-19, the increased demand for our products may not be
sustained. We are unable to accurately quantify the future impact that COVID-19 may 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 and the effectiveness and availability of vaccines, 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. were to again close
its North American production facilities as it did from late March to early May 2020. Any of these events could have a
materially adverse impact on our operating results.
Key Performance Indicators
We evaluate the results of our overall business based on a variety of factors, including the number of Active
Customers and Good Sam members, revenue and same store revenue, vehicle units, and same store vehicle units,
gross profit and gross profit per vehicle sold, gross margin, finance and insurance per vehicle (“PV”), vehicle inventory
turnover, and Adjusted EBITDA and Adjusted EBITDA margin. Sales of new vehicles generally result in a lower gross
profit margin than other areas of our business, including used vehicles, repair service and installation work, RV
equipment and accessories, outdoor equipment and accessories and finance and insurance products.
Same store revenue. Same store revenue measures the performance of a retail location during the current
reporting period against the performance of the same retail location in the corresponding period of the previous year.
Our same store revenue calculations for a given period include only those stores that were open both at the end of
the corresponding period and at the beginning of the preceding fiscal year. As of December 31, 2020, 2019, and
2018, we had a base of 142, 132, and 118 same stores, respectively. For the years ended December 31, 2020, 2019
and 2018 our aggregate same store revenue was $4.5 billion, $3.7 billion, and $3.9 billion, respectively. With same
store revenue driven by the number of transactions and the average transaction price, changes in our mix of new
vehicle sales has and will likely continue to negatively impact our new vehicle same store revenue. Over the past
several years, we have seen a shift in our overall mix of new RV sales towards travel trailer vehicles, which tend to
carry lower average selling prices than other classes of new RV vehicles. From 2015 to 2020, new vehicle travel
trailer units have increased from 62% to 74% of total new vehicle unit sales and the average selling price of a new
vehicle unit has declined from $39,853 to $36,277. The increased popularity of new travel trailer vehicles and the
lower price points of these units compared to other new vehicle classes such as motorhomes and fifth wheels could
continue to lower our average selling price of a new vehicle unit and impact our same store revenue.
Gross Profit and Gross Margins. Gross profit is our total revenue less our total costs applicable to revenue.
Our total costs applicable to revenue primarily consists of the cost of goods and cost of sales, exclusive of
depreciation and amortization. Gross margin is gross profit as a percentage of revenue.
Our gross profit is variable in nature and generally follows changes in our revenue. While gross margins for
our RV and Outdoor Retail segment are lower than gross margins for our Good Sam Services and Plans, this
segment generates significant gross profit and is our primary means of acquiring new customers, to whom we then
cross sell our higher margin products and services with recurring revenue. We believe the overall growth of our RV
and Outdoor Retail segments will allow us to continue to drive growth in gross profit due to our ability to cross sell our
Good Sam Services and Plans to our increasing Active Customer base. Gross margin in our RV and Outdoor Retail
segment was negatively impacted in 2018 and 2017 by the opening of Gander Outdoors locations and in 2019 by the
2019 Strategic Shift.
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Adjusted EBITDA and Adjusted EBITDA Margin. Adjusted EBITDA and Adjusted EBITDA Margin are some
of the primary metrics management uses to evaluate the financial performance of our business. Adjusted EBITDA
and Adjusted EBITDA Margin are also frequently used by analysts, investors, and other interested parties to evaluate
companies in our industry. Adjusted EBITDA and Adjusted EBITDA Margin are non-GAAP metrics. We use Adjusted
EBITDA and Adjusted EBITDA Margin to supplement GAAP measures of performance as follows:
• as a measurement of operating performance to assist us in comparing the operating performance of our
business on a consistent basis, and remove the impact of items not directly resulting from our core
operations;
•
•
for planning purposes, including the preparation of our internal annual operating budget and financial
projections; and
to evaluate the performance and effectiveness of our operational strategies.
For the definitions of Adjusted EBITDA and Adjusted EBITDA Margin, a reconciliation of Adjusted EBITDA to
net income, a reconciliation of Adjusted EBITDA Margin to net income margin, and a further discussion of how we
utilize these non-GAAP financial measures and their limitations, see “Non-GAAP Financial Measures” below.
Industry Trends
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. 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 but then there was a
six to eight week shutdown by RV manufacturers last spring which resulted in an 18.7% decrease in wholesale
shipments for the first half of 2020. Wholesale shipments of RVs for the second half of 2020 increased 34.2% over
the comparable period in 2019. For the year ended December 31, 2020 total RV shipments increased 6.0% versus
the comparable period in 2019, with the travel trailer group showing the largest increase.
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.
Longer term, however, we believe the increase in the number of light-weight towable RV models offered by
the manufacturers, the increase in the number of pickup trucks and sport utility vehicles in operation, the ease of
towing, the affordability of many of the light-weight RVs, the savings RVs offer on a variety of vacation costs, an
increase in the pool of potential RV customers due to an aging baby boomer and millennial demographic, and the
increased RV ownership among younger consumers are positive long-term secular trends driving the growth of the
RV industry and the installed base of RV owners.
In addition, we believe the growth in the number of U.S. camping households bodes well for the long-term
growth of the RV industry. The 2020 North American Camping Report estimated that the total number of camping
households in the U.S. has increased by more than 9.7 million over the past six years to 82 million. Campers are
increasing the amount of time they camp each year, with the number of campers who camp three times or more each
year increasing by 82% since 2014. Over the past six years, an increasing number of campers have said that they
use an RV as their primary camping accommodation. From 2014 to 2019, the number of campers using an RV to
camp increased from 21% to an estimated 27%.
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Finally, the camping and RV industry are expected to benefit from Baby Boomers reaching retirement age
and Generation X and Millennial consumers reaching their prime camping age, which is generally considered
between the ages of 30 and 50. According to U. S. Census Bureau data in the 2019 American Community Survey 1-
Year Estimates, the population for the ages of 20 and 34 were estimated at 67 million individuals and the population
between the ages of 50 and 69 were estimated at 80 million individuals in the United States.
Strategic Shift
In 2019, we made a strategic decision to refocus our business around our core RV competencies. In
connection with the 2019 Strategic Shift, we recorded restructuring charges of $27.7 million in the third quarter of
2019 and $19.5 million in the fourth quarter of 2019. In total, we expect to incur costs relating to one-time employee
termination benefits of $1.2 million, all of which has been incurred through December 31, 2020, lease termination
costs of between $18.0 million and $32.0 million, incremental inventory reserve charges of $42.4 million all of which
has been incurred through December 31, 2020, and other associated costs of between $28.0 million and $35.0
million. Through December 31, 2019, we incurred $21.2 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 $6.8 million to $13.8 million represents similar costs that may be
incurred in the year ending December 31, 2021 for locations that continue in a wind-down period, primarily comprised
of lease costs accounted for under ASC No. 842, Leases (“ASC 842”) prior to lease termination. We intend 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 we are 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. See Note 5 — Restructuring and Long-lived Asset Impairment to our
consolidated financial statements included in Part II, Item 8 of this Form 10-K.
The following table details the costs incurred associated with the 2019 Strategic Shift (in thousands):
Restructuring costs:
One-time termination benefits(1)
Lease termination costs(2)
Incremental inventory reserve charges(3)
Other associated costs(4)
Total restructuring costs
Year Ended
December 31, 2020
December 31, 2019
$
$
231
4,432
543
16,835
22,041
$
$
1,008
55
41,894
4,321
47,278
(1)
(2)
These costs incurred in 2020 were primarily included in costs applicable to revenues – products, service and other in the
consolidated statements of operations. These costs incurred in 2019 were primarily included in selling, general and administrative
expenses in the consolidated statements of operations.
These costs were included in lease termination charges in the 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 consolidated statements of operations.
(4) Other associated costs primarily represent labor, lease, and other operating expenses incurred during the post-close wind-down
period for the locations related to the 2019 Strategic Shift. For the year ended December 31, 2020, costs of approximately $0.4
million were included in costs applicable to revenue – products, service and other, and $16.4 million were included in selling, general,
and administrative expenses in the consolidated statements of operations.
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Results of Operations
Year Ended December 31, 2020 Compared to the Year Ended December 31, 2019
The following tables set forth information comparing the components of net income for the years ended
December 31, 2020 and 2019.
($ in thousands)
Revenue:
Good Sam Services and Plans
RV and Outdoor Retail:
New vehicles
Used vehicles
Products, service and other
Finance and insurance, net
Good Sam Club
Subtotal
Total revenue
Gross profit (exclusive of depreciation and amortization
shown separately below):
Good Sam Services and Plans
RV and Outdoor Retail:
New vehicles
Used vehicles
Products, service and other
Finance and insurance, net
Good Sam Club
Subtotal
Total gross profit
Operating expenses:
Selling, general and administrative expenses
Depreciation and amortization
Long-lived asset impairment
Lease termination
Loss on disposal of assets
Total operating expenses
Income from operations
Other income (expense):
Floor plan interest expense
Other interest expense, net
Tax Receivable Agreement liability adjustment
Total other income (expense)
Income (loss) before income taxes
Income tax expense
Net income (loss)
Less: net (income) loss attributable to non-controlling
interests
Net income (loss) attributable to Camping World
Holdings, Inc.
nm- not meaningful
December 31, 2020
December 31, 2019
Year Ended
Amount
Percent of
Revenue
Amount
Percent of
Revenue
Favorable/ (Unfavorable)
$
%
$
180,977
3.3% $
179,538
3.7% $
1,439
0.8%
2,823,311
984,853
948,890
464,261
44,299
5,265,614
5,446,591
51.8%
18.1%
17.4%
8.5%
0.8%
96.7%
100.0%
2,370,321
857,628
1,034,577
401,302
48,653
4,712,481
4,892,019
48.5%
17.5%
21.1%
8.2%
1.0%
96.3%
100.0%
452,990
127,225
(85,687)
62,959
(4,354)
553,133
554,572
19.1%
14.8%
(8.3)%
15.7%
(8.9)%
11.7%
11.3%
108,039
2.0%
101,484
2.1%
6,555
6.5%
502,774
233,824
358,174
464,261
35,407
1,594,440
1,702,479
1,156,071
51,981
12,353
4,547
1,332
1,226,284
476,195
(19,689)
(54,689)
141
(74,237)
401,958
(57,743)
344,215
9.2%
4.3%
6.6%
8.5%
0.7%
29.3%
31.3%
21.2%
1.0%
0.2%
0.1%
0.0%
22.5%
8.7%
(0.4)%
(1.0)%
0.0%
(1.4)%
7.4%
(1.1)%
6.3%
296,051
178,988
271,658
401,302
37,915
1,185,914
1,287,398
1,141,643
59,932
66,270
(686)
11,492
1,278,651
8,747
(40,108)
(69,363)
10,005
(99,466)
(90,719)
(29,582)
(120,301)
6.1%
3.7%
5.6%
8.2%
0.8%
24.2%
26.3%
23.3%
1.2%
1.4%
(0.0)%
0.2%
26.1%
0.2%
(0.8)%
(1.4)%
0.2%
(2.0)%
(1.9)%
(0.6)%
(2.5)%
206,723
54,836
86,516
62,959
(2,508)
408,526
415,081
(14,428)
7,951
53,917
(5,233)
10,160
(52,367)
467,448
20,419
14,674
(9,864)
25,229
492,677
(28,161)
464,516
(221,870)
(4.1)%
59,710
1.2%
(281,580)
$
122,345
2.2% $
(60,591)
(1.2)% $ 182,936
69.8%
30.6%
31.8%
15.7%
(6.6)%
34.4%
32.2%
(1.3)%
13.3%
81.4%
nm
88.4%
(4.1)%
5344.1%
50.9%
21.2%
(98.6)%
25.4%
nm
(95.2)%
nm
nm
nm
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Table of Contents
Supplemental Data
Unit sales
New vehicles
Used vehicles
Total
Average selling price
New vehicles
Used vehicles
Same store unit sales
New vehicles
Used vehicles
Total
Same store revenue ($ in 000's)
New vehicles
Used vehicles
Products, service and other
Finance and insurance, net
Total
Average gross profit per unit
New vehicles
Used vehicles
Finance and insurance, net per vehicle unit
Total vehicle front-end yield(1)
Gross margin
Good Sam Services and Plans
New vehicles
Used vehicles
Products, service and other
Finance and insurance, net
Good Sam Club
Subtotal RV and Outdoor Retail
Total gross margin
Inventories ($ in 000's)
New vehicles
Used vehicles
Products, parts, accessories and misc.
Total RV and Outdoor Retail inventories
Vehicle inventory per location ($ in 000's)
New vehicle inventory per dealer location
Used vehicle inventory per dealer location
Vehicle inventory turnover(2)
New vehicle inventory turnover
Used vehicle inventory turnover
Retail locations
RV dealerships
RV service & retail centers
Subtotal
Other retail stores
Total
Other data
Year Ended December 31,
2020
2019
Increase
(decrease)
Percent
Change
$
$
$
$
$
$
$
$
77,827
37,760
115,587
66,111
36,213
102,324
11,716
1,547
13,263
36,277
26,082
$
$
35,854
23,683
$
$
423
2,399
70,313
34,351
104,664
2,567,103
911,315
594,060
426,229
4,498,708
6,460
6,192
4,017
10,389
59.7%
17.8%
23.7%
37.7%
100.0%
79.9%
30.3%
31.3%
691,114
178,336
266,786
1,136,236
4,319
1,115
3.1
5.2
160
10
170
1
171
$
$
$
$
$
$
61,390
34,477
95,867
2,223,696
828,312
523,328
379,785
3,955,122
4,478
4,943
3,922
8,564
56.5%
12.5%
20.9%
26.3%
100.0%
77.9%
25.2%
26.3%
966,134
165,927
225,888
1,357,949
6,274
1,077
2.1
4.8
154
11
165
10
175
$
$
$
$
$
$
8,923
(126)
8,797
343,406
83,004
70,732
46,444
543,586
1,982
1,249
95
1,825
317 bps
532 bps
287 bps
1,149 bps
unch. bps
200 bps
511 bps
494 bps
(275,020)
12,409
40,898
(221,713)
(1,954)
37
1.0
0.4
6
(1)
5
(9)
(4)
17.7%
4.3%
13.0%
1.2%
10.1%
14.5%
(0.4)%
9.2%
15.4%
10.0%
13.5%
12.2%
13.7%
44.3%
25.3%
2.4%
21.3%
(28.5)%
7.5%
18.1%
(16.3)%
(31.1)%
3.4%
44.9%
9.0%
3.9%
(9.1)%
3.0%
(90.0)%
(2.3)%
3.8%
(1.7)%
n/a
n/a
Active Customers(3)
Good Sam Club members
Finance and insurance gross profit as a % of total vehicle revenue
Same store locations
5,314,104
2,088,064
12.2%
142
5,118,413
2,124,724
12.4%
n/a
195,691
(36,660)
(24) bps
n/a
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(1) Front end yield is calculated as gross profit from new vehicles, used vehicles and finance and insurance (net), divided by combined new
and used retail unit revenue.
(2) Inventory turnover calculated as vehicle costs applicable to revenue divided by the average of beginning and ending vehicle inventory.
(3) An Active Customer is a customer who has transacted with us in any of the eight most recently completed fiscal quarters prior to the
date of measurement.
Total revenue was $5.4 billion for 2020, an increase of $554.6 million, or 11.3%, from $4.9 billion for 2019.
The increase in total revenue was driven by a $553.1 million, or 11.7%, increase in RV and Outdoor Retail revenue,
and a $1.4 million, or 0.8%, increase in Good Sam Services and Plans revenue.
Total gross profit was $1.7 billion for 2020, an increase of $415.1 million, or 32.2%, from $1.3 billion for 2019.
The increase in total gross profit was driven by a $408.5 million, or 34.4%, increase in RV and Outdoor Retail gross
profit, and a $6.6 million, or 6.5%, increase in Good Sam Services and Plans gross profit.
Income from operations was $476.2 million for 2020, an increase of $467.4 million from $8.7 million for 2019.
The increase in income from operations was primarily driven by a $415.1 million increase in gross profit, a $53.9
million decrease in long-lived asset impairment, a decrease of approximately $10.1 million in loss on disposal of
assets, and a decrease of approximately $7.9 million in depreciation and amortization, partially offset by an increase
of $14.4 million in selling, general and administrative expenses, and a $5.2 million increase in lease termination
expense.
Total other expenses were $74.2 million for 2020, a decrease of $25.2 million, or 25.4% from $99.5 billion for
2019. The decrease in other expenses was driven by a $20.4 million decrease in floor plan interest expense, and a
$14.7 million decrease in other interest expense, partially offset by a $9.9 million favorable adjustment in Tax
Receivable Agreement Liability in 2019, which did not reoccur in 2020.
As a result of the above factors, income before income taxes was $402.0 million for 2020 compared to loss
before income taxes of $90.7 million for 2019. Income tax expense was $57.7 million for 2020, an increase of $28.2
million from $29.6 million for 2019. As a result, net income was $344.2 million for 2020 compared to net loss of
$120.3 million for 2019.
Good Sam Services and Plans
Good Sam Services and Plans revenue was $181.0 million for 2020, an increase of $1.4 million, or 0.8%,
from $179.5 million for 2019. The $1.4 million increase was primarily attributable to $2.4 million from increased
contracts in force from our roadside assistance programs, $1.8 million from increased contracts in force for our
extended vehicle warranty programs, $1.6 million from increased contracts in force for our vehicle insurance products,
and $1.1 million from increased RV financing loan volume, partially offset by a $2.4 million decrease from 13 fewer
consumer shows, and decreases in advertising revenue of $1.4 million from the magazine group and $1.7 million for
the annual directory.
Good Sam Services and Plans gross profit was $108.0 million for 2020, an increase of $6.6 million, or 6.5%,
from $101.5 million for 2019. The increase in gross profit was primarily attributable to $4.2 million from increased
policies in force and reduced marketing expenses for our extended vehicle programs, $3.2 million of increased
policies in force and reduced program expenses in our roadside assistance programs, and $1.2 million from
increased loan volume for our RV financing, partially offset by $1.1 million of reduced gross profit from reduced
consumer shows, $0.8 million from the annual directory and $0.1 million from other services and plans.
RV and Outdoor Retail:
New Vehicles
New vehicle revenue was $2.8 billion for 2020, an increase of $453.0 million, or 19.1%, from $2.4 billion for
2019. The increase was primarily due to a 17.7% increase in vehicle units sold and a 1.2% increase in
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average selling price per vehicle, driven by increases in nearly all product types. On a same store basis, new vehicle
revenue increased 15.4% to $2.6 billion in 2020 from $2.2 billion in 2019.
New vehicle gross profit increased 69.8%, or $206.7 million, to $502.8 million for 2020 from $296.1 million for
2019. The increase was primarily due to a 44.3% increase in average gross profit per vehicle sold and by a 17.7%
increase in vehicle units sold. Gross margin increased 532 basis points to 17.8% in 2020 from 12.5% in 2019. The
increase was primarily due to higher towable and motorized gross margins resulting from lower supply from
manufacturers and outsized demand from consumers turning to RVing as a vacation alternative.
Used Vehicles
Used vehicle revenue increased 14.8%, or $127.2 million, to $984.9 million for 2020 from $857.6 million for
2019. The increase was primarily due to a 10.1% increase in average selling price per vehicle sold, and a 4.3%
increase in vehicle units sold, driven mostly by towable units where a dip in trade-in rates through a portion of the
year compressed inventory levels while product demand remained high. On a same store basis, used vehicle revenue
increased 10.0% to $911.3 million in 2020 from $828.3 million in 2019.
Used vehicle gross profit increased 30.6%, or $54.8 million, to $223.8 million in 2020 from $179.0 million in
2019. The increase was primarily from a 25.3% increase in average gross profit per vehicle sold and a 4.3% increase
in vehicle units sold. Used vehicle gross margin increased 287 basis points to 23.7% in 2020 from 20.9% in 2019.
The increase was driven by nearly all types of towable units as a result of strength in the used market.
Products, Service and Other
Products, service and other revenue decreased 8.3%, or $85.7 million, to $948.9 million in 2020 from $1.0
billion in 2019. The decrease was driven by store closures related to the 2019 Strategic Shift, partially offset by
improvements in same store sales. On a same store basis, products, service and other revenue increased 13.5% to
$594.1 million for 2020 from $523.3 million in 2019.
Products, service and other gross profit increased 31.8%, or $86.5 million, to $358.2 million in 2020 from
$271.7 million in 2019. The increase was driven by the 2019 Strategic Shift inventory liquidation charge of $27.3
million in 2019 and improved margin at the remaining locations. Product, service and other gross margin increased to
37.7% in 2020 from 26.3% in 2019. The increase was primarily due to a sales mix shift towards higher margin legacy
RV products and the 2019 Strategic Shift inventory liquidation charge of $27.3 million in 2019.
Finance and Insurance, net
Finance and insurance, net revenue increased 15.7%, or $63.0 million to $464.3 million in 2020 from $401.3
million for 2019, primarily due to increased volume of vehicles sold. Finance and insurance, net as a percentage of
new and used vehicle revenue decreased to 12.2% for 2020 from 12.4% for 2019. On a same store basis, finance
and insurance, net revenue increased 12.2%, or $46.4 million, to $426.2 million in 2020 versus $379.8 million in 2019.
Good Sam Club
Good Sam Club revenue decreased 8.9%, or $4.4 million, to $44.3 million in 2020 from $48.7 million in 2019.
The decrease resulted from a reduced number of members and reduced royalty fees from the credit card related to
fewer retail locations that resulted from store closures related to the 2019 Strategic Shift.
Good Sam Club gross profit decreased 6.6%, or $2.5 million, to $35.4 million in 2020 from $37.9 million in
2019. The decrease was primarily due to a reduced number of members from the decreased number of stores as a
result of the store closures related to the 2019 Strategic Shift. Gross margin increased to 79.9% in 2020 from 77.9%
in 2019 primarily due to reduced club marketing expenses.
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Selling, general and administrative
Selling, general and administrative expenses increased 1.3%, or $14.4 million, to $1.2 billion in 2020 from
$1.1 billion for 2019. The $14.4 million increase was primarily due to a $46.7 million increase in wage-related
expenses attributable in large part to variable pay on increased gross profit, partially offset by an $18.1 million
decrease in advertising as the Company shifted towards a more digitally-driven marketing approach, $8.1 million
decrease in personal and real property expense primarily due to closed stores as a result of the 2019 Strategic Shift,
and a $6.1 million decrease in other store and corporate overhead expenses. Selling, general and administrative
expenses as a percentage of total gross profit decreased to 67.9% in 2020 from 88.7% in 2019.
Depreciation and amortization
Depreciation and amortization decreased 13.3%, or $8.0 million, to $52.0 million in 2020 from $59.9 million
for 2019 due to reduction in capital expenditures in 2020 and the asset impairment related to the 2019 Strategic Shift
in 2019.
Long-lived asset impairment
As discussed in Note 5 – Restructuring and Long-lived Asset Impairment to our consolidated financial
statements included in Part II, Item 8 of this Form 10-K, we recognized $12.4 million of long-lived asset impairments
in 2020, of which $12.3 million related to the 2019 Strategic Shift discussed above, and $66.3 million of long-lived
asset impairments during 2019, of which $57.4 million was related to the 2019 Strategic Shift.
Lease termination
Lease termination expense increased $5.2 million to $4.5 million in 2020 from a lease termination benefit of
$0.7 million in 2019, related primarily to lease terminations in connection with the 2019 Strategic Shift discussed
above.
Floor plan interest expense
Floor plan interest expense decreased 50.9%, or $20.4 million, to $19.7 million for 2020 from $40.1 million in
2019. The decrease was primarily due to a 169 basis point decrease in the average floor plan borrowing rate, and a
22.3% decrease in average floor plan borrowings driven by lower average inventory levels.
Other interest expense, net
Other interest expense decreased 21.2%, or $14.7 million, to $54.7 million in 2020 from $69.4 million for
2019. The decrease was primarily due to a 113 basis point decrease in the average interest rate.
Tax Receivable Agreement liability adjustment
The Tax Receivable Agreement liability adjustment for 2020 and 2019 was a benefit of $0.1 million and $10.0
million, respectively, which represented an adjustment for lower enacted state income tax rates in both periods.
Income tax expense
Income tax expense increased 95.2%, or $28.2 million, to $57.7 million in 2020 compared to $29.6 million for
2019. The increase was primarily due to higher income generated 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.
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Net income (loss)
Net income increased $464.5 million to a net income of $344.2 million in 2020 from a net loss of $120.3
million in 2019 primarily due to the items mentioned above.
Segment results
The following table sets forth a reconciliation of total segment income to consolidated income from operations
before income taxes for the period presented:
($ in thousands)
Revenue:
Good Sam Services and Plans
RV and Outdoor Retail
Elimination of intersegment revenue
Total consolidated revenue
Segment income (loss):(1)
Good Sam Services and Plans
RV and Outdoor Retail
Total segment income
Corporate & other
Depreciation and amortization
Other interest expense, net
Tax Receivable Agreement liability adjustment
Income (loss) before income taxes
Fiscal Year Ended
December 31, 2020
December 31, 2019
Percent of
Amount
Revenue Amount
Percent of
Revenue
Favorable/
(Unfavorable)
$
%
$
182,758
5,285,427
(21,594)
5,446,591
3.4%
97.0%
(0.4)%
100.0%
$
181,526
4,731,636
(21,143)
4,892,019
88,288
429,950
518,238
(9,751)
(51,981)
(54,689)
141
401,958
$
1.6%
7.9%
9.5%
(0.2)%
(1.0)%
(1.0)%
0.0%
7.4%
$
83,635
(42,609)
41,026
(12,455)
(59,932)
(69,363)
10,005
(90,719)
$
3.7%
96.7%
(0.4)%
100.0%
1.7%
(0.9)%
0.8%
(0.3)%
(1.2)%
(1.4)%
0.2%
(1.9)% $
1,232
553,791
(451)
554,572
4,653
472,559
477,212
2,704
7,951
14,674
(9,864)
492,677
0.7%
11.7%
(2.1)%
11.3%
5.6%
nm
1163.2%
21.7%
13.3%
21.2%
98.6%
nm
Same store revenue- RV and Outdoor Retail(2)
$ 4,498,708
$ 3,955,122
$
543,586
13.7%
nm – not meaningful
(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 was $182.8 million for 2020, an increase of $1.2 million, or
0.7%, from $181.5 million for 2019. The $1.2 million increase was primarily attributable to $2.4 million from increased
contracts in force from our roadside assistance programs, $1.8 million from increased contracts in force for our
extended vehicle warranty programs, $1.6 million from increased contracts in force for our vehicle insurance products,
and $1.1 million from increased RV financing loan volume, partially offset by a $2.5 million decrease from 13 fewer
consumer shows, and decreases in advertising revenue, including a $1.5 million decrease from the magazine group
and a $1.7 million decrease for the annual directory.
Good Sam Services and Plans segment income was $88.3 million for 2020, an increase of $4.7 million, or
5.6%, from $83.6 million for 2019. The increase was primarily attributable to a gross profit increase of $6.6 million,
which was comprised of $4.2 million from increased policies in force and reduced marketing expenses for our
extended vehicle warranty programs, $3.2 million from increased policies in force and reduced program expenses in
our roadside assistance programs, and $1.2 million from increased loan volume for our RV financing, partially offset
by $1.1 million of reduced gross profit from reduced consumer shows, $0.8 million from the annual directory and $0.1
million from other services and plans; and reduced loss on asset disposals of $0.6 million, partially offset by increased
selling, general and administrative expenses of $2.5 million. Segment income margin net of intersegment revenue
elimination increased 220 basis points to 48.8% primarily due to increased policies in force and reduced marketing
costs for our extended vehicle warranty programs, and increased policies in force reduced program costs in our
roadside assistance programs.
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RV and Outdoor Retail segment
RV and Outdoor Retail segment revenue was $5.3 billion for 2020, an increase of $553.8 million, or 11.7%,
from $4.7 billion for 2019. The increase was primarily due to a 17.7% increase in new vehicle units sold and a 4.4%
increase in average selling price per vehicle, driven by increases in nearly all product types, led by single and double
axle travel trailers.
RV and Outdoor Retail segment income was $430.0 million for 2020, an increase of $472.6 million, from
segment loss of $42.6 million for 2019. The increase was primarily due to a $408.5 million increase in gross profit
primarily from higher towable and motorized gross margins resulting from lower supply from manufacturers and
outsized demand from consumers turning to RVing as a vacation alternative and increased strength of the used
vehicle market, a $53.9 million reduction in long-lived asset impairment, a $20.4 million decrease in floor plan interest
expense, and a $9.5 million reduction in loss on disposal of assets, partially offset by an increase of approximately
$14.5 million in selling, general and administrative expenses resulting from commissions on increased revenue
partially offset by a reduction resulting from the 2019 Strategic Shift, and a $5.2 million increase in lease termination
expense. Segment income margin net of intersegment revenue elimination increased to 8.2% from a segment loss
margin of 0.90% in 2019 primarily due to the impact of the 2019 Strategic Shift.
Corporate and other expenses
Corporate and other expenses were $9.8 million for 2020, a decrease of $2.7 million, or 21.7%, from $12.5
million for 2019. The decrease was primarily due to reduced professional fees.
Tax Receivable Agreement liability adjustment
The Tax Receivable Agreement liability adjustment for 2020 and 2019 was a benefit of $0.1 million and $10.0
million, respectively, which represented an adjustment for lower enacted state income tax rates in both periods.
Non-GAAP Financial Measures
To supplement our consolidated financial statements, which are prepared and presented in accordance with
accounting principles generally accepted in the United States (“GAAP”), we use the following non-GAAP financial
measures: EBITDA, Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Net Income Attributable to Camping World
Holdings, Inc. – Basic, Adjusted Net Income Attributable to Camping World Holdings, Inc. – Diluted, Adjusted
Earnings Per Share – Basic, and Adjusted Earnings Per Share – Diluted (collectively the "Non-GAAP Financial
Measures"). We believe that these Non-GAAP Financial Measures, when used in conjunction with GAAP financial
measures, provide useful information about operating results, enhance the overall understanding of past financial
performance and future prospects, and allow for greater transparency with respect to the key metrics we use in our
financial and operational decision making. These Non-GAAP Financial Measures are also frequently used by
analysts, investors and other interested parties to evaluate companies in the Company’s industry. The presentation of
this financial information is not intended to be considered in isolation or as a substitute for, or superior to, the financial
information prepared and presented in accordance with GAAP, and they should not be construed as an inference that
the Company’s future results will be unaffected by any items adjusted for in these non-GAAP Financial Measures. In
evaluating these non-GAAP Financial Measures, you should be aware that in the future the Company may incur
expenses that are the same as or similar to some of those adjusted in this presentation. The Non-GAAP Financial
Measures that we use are not necessarily comparable to similarly titled measures used by other companies due to
different methods of calculation.
EBITDA, Adjusted EBITDA, and Adjusted EBITDA Margin
We define “EBITDA” as net income before other interest expense, net (excluding floor plan interest expense),
provision for income tax expense and depreciation and amortization. We define “Adjusted EBITDA” as EBITDA
further adjusted for the impact of certain noncash and other items that we do not consider in our evaluation of ongoing
operating performance. These items include, among other things, long-lived asset
69
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impairment, lease termination costs, loss and expense on debt restructure, goodwill impairment, gains and losses on
disposal of assets and other expense, net, monitoring fees, equity-based compensation, Tax Receivable Agreement
liability adjustment, transaction expenses related to acquisitions, Gander Outdoors pre-opening costs, restructuring
costs related to the 2019 Strategic Shift, and other unusual or one-time items. We define “Adjusted EBITDA Margin”
as Adjusted EBITDA as a percentage of total revenue. We caution investors that amounts presented in accordance
with our definitions of EBITDA, Adjusted EBITDA, and Adjusted EBITDA Margin may not be comparable to similar
measures disclosed by our competitors, because not all companies and analysts calculate EBITDA, Adjusted
EBITDA, and Adjusted EBITDA Margin in the same manner. We present EBITDA, Adjusted EBITDA, and Adjusted
EBITDA Margin because we consider them to be important supplemental measures of our performance and believe
they are frequently used by securities analysts, investors and other interested parties in the evaluation of companies
in our industry. Management believes that investors’ understanding of our performance is enhanced by including
these Non GAAP Financial Measures as a reasonable basis for comparing our ongoing results of operations.
The following table reconciles EBITDA, Adjusted EBITDA, and Adjusted EBITDA Margin to the most directly
comparable GAAP financial performance measures, which are net (loss) income, and net (loss) income margin,
respectively:
($ in thousands)
EBITDA:
Net income (loss)
Other interest expense, net
Depreciation and amortization
Income tax expense
Subtotal EBITDA
Loss and expense on debt restructure (a)
Goodwill impairment (b)
Long-lived asset impairment (c)
Lease termination (d)
Loss (gain) on disposal of assets, net (e)
Monitoring fee (f)
Equity-based compensation (g)
Tax Receivable Agreement liability adjustment (h)
Acquisitions - transaction expense (i)
Gander Outdoors pre-opening costs (j)
Restructuring costs (k)
Adjusted EBITDA
(as percentage of total revenue)
EBITDA margin:
Net income (loss) margin
Other interest expense, net
Depreciation and amortization
Income tax expense
Subtotal EBITDA margin
Loss and expense on debt restructure (a)
Goodwill impairment (b)
Long-lived asset impairment (c)
Lease termination (d)
Loss (gain) on disposal of assets, net (e)
Monitoring fee (f)
Equity-based compensation (g)
Tax Receivable Agreement liability adjustment (h)
Acquisitions - transaction expense (i)
Gander Outdoors pre-opening costs (j)
Restructuring costs (k)
Adjusted EBITDA margin
December 31,
2020
December 31,
2019
Fiscal Year Ended
December 31,
2018
December 31,
2017
December 31,
2016
$ 344,215
54,689
51,981
57,743
508,628
—
—
12,353
4,547
1,332
—
20,661
(141)
—
—
17,609
$ 564,989
$ (120,301)
69,363
59,932
29,582
38,576
—
—
66,270
(686)
11,492
—
13,145
(10,005)
—
—
47,223
$ 166,015
$
65,581
63,329
49,322
30,790
209,022
2,056
40,046
—
—
2,810
—
14,088
1,324
—
43,156
—
$ 312,502
$ 230,692
42,959
31,545
154,910
460,106
849
—
—
—
(133)
—
5,109
(100,758)
2,662
26,352
—
$ 394,187
$ 198,476
48,318
24,695
5,800
277,289
6,270
—
—
—
(564)
1,875
1,597
—
—
—
—
$ 286,467
December 31,
2020
December 31,
2019
Fiscal Year Ended
December 31,
2018
December 31,
2017
December 31,
2016
(2.5)%
1.4%
1.2%
0.6%
0.8%
—
—
1.4%
(0.0)%
0.2%
—
0.3%
(0.2)%
—
—
1.0%
3.4%
1.4%
1.3%
1.0%
0.6%
4.4%
0.0%
0.8%
—
—
0.1%
—
0.3%
—
—
0.9%
—
6.5%
5.4%
1.0%
0.7%
3.6%
10.8%
0.0%
—
—
—
(0.0)%
—
0.1%
(2.4)%
0.1%
0.6%
—
9.2%
5.6%
1.4%
0.7%
0.2%
7.9%
0.2%
—
—
—
(0.0)%
0.1%
0.0%
—
—
—
—
8.1%
6.3%
1.0%
1.0%
1.1%
9.3%
—
—
0.2%
0.1%
0.0%
—
0.4%
(0.0)%
—
—
0.3%
10.4%
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Table of Contents
(a) Represents the loss and expense incurred on debt restructure and financing expense incurred from the Third Amendment to the
Credit Agreement in 2018, the First and Second Amendment to the Senior Credit Facilities in 2017, the write-off of a portion of the
original issue discount, capitalized finance costs from the Previous Term Loan Facilities, and rating agency fees and legal expenses
related to the Previous Term Loan Facilities in 2016.
(b) Represents a goodwill impairment charge of $40.0 million related to the RV and Outdoor Retail segment in the fourth quarter of 2018.
See Note 7 - Goodwill and Intangible Assets to our audited consolidated financial statements in Part II, Item 8 of this Form 10-K for
additional information.
(c) Represents long-lived asset impairment charges related to the RV and Outdoor Retail segment, which primarily relate to locations
affected by the 2019 Strategic Shift. See Note 5 – Restructuring and Long-lived Asset Impairment to our consolidated financial
statements included in Part II, Item 8 of this Form 10-K for additional information.
(d) Represents the loss (gain) on the termination of operating leases relating primarily to the 2019 Strategic Shift, net of lease
termination fees. See Note 5 – Restructuring and Long-lived Asset Impairment to our consolidated financial statements included in
Part II, Item 8 of this Form 10-K for additional information.
(e) Represents an adjustment to eliminate (i) losses on the disposal or sale of real estate at closed retail locations in 2020 and 2019 and
(ii) the gains and losses on disposal and sales of various assets.
(f)
Represents monitoring fees paid pursuant to a monitoring agreement to Crestview and Stephen Adams. The monitoring agreement
was terminated on October 6, 2016 in connection with our IPO.
(g) Represents non-cash equity-based compensation expense relating to employees, directors, and consultants of the Company.
(h) Represents an adjustment to eliminate the gains on remeasurement of the Tax Receivable Agreement primarily due to changes in
our effective income tax rate and the transfer of certain assets from GSS Enterprises LLC (“GSS”) to Camping World, Inc. (“CW”).
(i)
(j)
Represent transaction expenses, primarily legal costs, associated with acquisitions into new or complementary markets, including the
Gander Mountain acquisition. This amount excludes transaction expenses related to the acquisition of RV dealerships, consumer
shows, and other RV and Outdoor Retail segment business acquisitions which are considered recurring in nature.
Represents pre-opening store costs associated with the Gander Outdoors store openings, which is comprised of 1) Gander
Outdoors-specific corporate and retail overhead, 2) distribution center expenses, and 3) store-level startup expenses. As discussed
in Note 15 - Acquisitions to our consolidated financial statements included in Part II, Item 8 of this Form 10-K, the Company incurred
significant costs related to the initial rollout of Gander Outdoors locations. Based on the nature of the acquisition through a
bankruptcy auction and the large quantity of retail locations opened and to be opened in a very compressed timeframe, the Company
does not deem the pre-opening store costs for the initial rollout of Gander Outdoors locations to be normal, recurring charges. The
Company does not intend to adjust for pre-opening store costs other than for the initial rollout of Gander Outdoors.
(k) Represents restructuring costs relating to our 2019 Strategic Shift. These restructuring costs include one-time employee termination
benefits relating to retail store or distribution center closures/divestitures, incremental inventory reserve charges, and other
associated costs. These costs exclude lease termination costs, which are presented separately (see (d) above). See Note 5 –
Restructuring and Long-lived Asset Impairment to our consolidated financial statements included in Part II, Item 8 of this Form 10-K
for additional information.
Adjusted Net Income Attributable to Camping World Holdings, Inc. and Adjusted Earnings Per Share
We define “Adjusted Net Income Attributable to Camping World Holdings, Inc. – Basic” as net income
attributable to Camping World Holdings, Inc. adjusted for the impact of certain non-cash and other items that we do
not consider in our evaluation of ongoing operating performance. These items include, among other things, long-lived
asset impairment, lease termination costs, loss and expense on debt restructure, goodwill impairment, gains and
losses on disposal of assets and other expense, net, equity-based compensation, Tax Receivable Agreement liability
adjustment, transaction expenses related to acquisitions, Gander Outdoors pre-opening costs, restructuring costs
related to the 2019 Strategic Shift, other unusual or one-time items, the income tax expense effect of these
adjustments, and the effect of net income attributable to non-controlling interests from these adjustments.
We define “Adjusted Net Income Attributable to Camping World Holdings, Inc. – Diluted” as Adjusted Net
Income Attributable to Camping World Holdings, Inc. – Basic adjusted for the reallocation of net income attributable to
non-controlling interests from stock options and restricted stock units, if dilutive, or the assumed exchange, if dilutive,
of all outstanding common units in CWGS, LLC for shares of newly-issued Class A common stock of Camping World
Holdings, Inc.
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We define “Adjusted Earnings Per Share – Basic” as Adjusted Net Income Attributable to Camping World
Holdings, Inc. - Basic divided by the weighted-average shares of Class A common stock outstanding. We define
“Adjusted Earnings Per Share – Diluted” as Adjusted Net Income Attributable to Camping World Holdings, Inc. –
Diluted divided by the weighted-average shares of Class A common stock outstanding, assuming (i) the exchange of
all outstanding common units in CWGS, LLC for newly-issued shares of Class A common stock of Camping World
Holdings, Inc., if dilutive, and (ii) the dilutive effect of stock options and restricted stock units, if any. We present
Adjusted Net Income Attributable to Camping World Holdings, Inc. – Basic, Adjusted Net Income Attributable to
Camping World Holdings, Inc. – Diluted, Adjusted Earnings Per Share – Basic, and Adjusted Earnings Per Share –
Diluted because we consider them to be important supplemental measures of our performance and we believe that
investors’ understanding of our performance is enhanced by including these Non GAAP financial measures as a
reasonable basis for comparing our ongoing results of operations.
Consistent with the GAAP basic and diluted earnings per share of Class A common stock, Adjusted Earnings
Per Share – Basic and Adjusted Earnings Per Share – Diluted cannot be presented for periods prior to the
Company’s IPO on October 6, 2016. Prior to the IPO, the CWGS, LLC membership structure included membership
units, preferred units, and profits units. During the period of September 30, 2014 to October 6, 2016, there were
70,000 preferred units outstanding that received a total preferred return of $2.1 million per quarter in addition to their
proportionate share of distributions made to all members of CWGS, LLC. The Company analyzed the calculation of
earnings per unit for periods prior to the IPO using the two-class method and determined that it resulted in values that
would not be meaningful to the users of these consolidated financial statements. Therefore, earnings per share
information has not been presented for periods prior to the IPO on October 6, 2016. The Adjusted Earnings Per Share
– Basic and Adjusted Earnings Per Share – Diluted for the year ended December 31, 2016 represents only the period
of October 6, 2016 to December 31, 2016.
The following table reconciles Adjusted Net Income Attributable to Camping World Holdings, Inc. – Basic,
Adjusted Net Income Attributable to Camping World Holdings, Inc. – Diluted, Adjusted Earnings Per Share – Basic,
and Adjusted Earnings Per Share – Diluted to the most directly comparable GAAP financial performance measure,
which is net income attributable to Camping World Holdings, Inc., in the case of the Adjusted Net Income non-GAAP
financial measures, and weighted-average shares of Class A common stock outstanding – basic, in the case of the
Adjusted Earnings Per Share non-GAAP financial measures:
(In thousands except per share amounts)
Numerator:
Net income (loss) attributable to Camping World Holdings,
Inc.
Adjustments related to basic calculation:
Loss and expense on debt restructure (a):
Gross adjustment
Income tax expense for above adjustment (b)
Goodwill impairment (c):
Gross adjustment
Income tax (expense) benefit for above adjustment (b)
Long-lived asset impairment (d):
Gross adjustment
Income tax expense for above adjustment (b)
Lease termination (e):
Gross adjustment
Income tax expense for above adjustment (b)
(Gain) loss on disposal of assets and other expense, net
(f):
Gross adjustment
Income tax (expense) benefit for above adjustment (b)
Equity-based compensation (g):
Gross adjustment
Income tax expense for above adjustment (b)
Tax Receivable Agreement liability adjustment (h):
Gross adjustment
Income tax benefit for above adjustment (b)
December 31,
2020
December 31,
2019
Fiscal Year Ended
December 31,
2018
December 31,
2017
December 31,
2016
$ 122,345
$
(60,591) $
10,398
$
29,853
$
1,522
—
—
—
—
12,353
(13)
4,547
(36)
1,332
(1)
20,661
(2,023)
—
—
—
—
66,270
(220)
(686)
32
11,492
(750)
13,145
(1,138)
2,056
(217)
40,046
—
—
—
—
—
2,810
(17)
14,088
(1,201)
849
(129)
6,270
(542)
—
—
—
—
—
—
(133)
(3)
5,109
(526)
—
—
—
(339)
33
1,537
(124)
—
(141)
35
(10,005)
2,525
1,324
(338)
(100,758)
38,783
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(In thousands except per share amounts)
Acquisitions - transaction expense (i):
Gross adjustment
Income tax expense for above adjustment (b)
Gander Outdoors pre-opening costs (j):
Gross adjustment
Income tax (expense) benefit for above adjustment (b)
Restructuring costs (k):
Gross adjustment
Income tax expense for above adjustment (b)
Revaluation of deferred tax assets from tax reform (l)
Adjustment to net (income) loss attributable to non-
controlling interests resulting from the above adjustments
(m)
Adjusted net income (loss) attributable to Camping
World Holdings, Inc. – basic
Adjustments related to diluted calculation:
Reallocation of net income attributable to non-controlling
interests from the dilutive effect of stock options and
restricted stock units (n)
Income tax on reallocation of net income attributable to
non-controlling interests from the dilutive effect of stock
options and restricted stock units (o)
Reallocation of net income attributable to non-controlling
interests from the dilutive exchange of common units in
CWGS, LLC (n)
Income tax on reallocation of net income attributable to
non-controlling interests from the dilutive exchange of
common units in CWGS, LLC (o)
Adjusted net income (loss) attributable to Camping
World Holdings, Inc. – basic and diluted
Denominator:
Weighted-average Class A common shares outstanding –
basic
Adjustments related to diluted calculation:
Dilutive exchange of common units in CWGS, LLC for
shares of Class A common stock (p)
Dilutive options to purchase Class A common stock (p)
Dilutive restricted stock units (p)
Adjusted weighted average Class A common shares
outstanding – diluted
December 31,
2020
December 31,
2019
Fiscal Year Ended
December 31,
2018
December 31,
2017
December 31,
2016
—
—
—
—
—
—
—
—
17,609
(84)
—
47,223
—
—
—
—
2,662
(38)
43,156
—
—
—
—
26,352
—
—
—
78,222
—
—
—
—
(31,537)
(79,748)
(59,542)
(22,019)
(5,789)
145,047
(12,451)
52,563
58,224
2,568
1,994
(26)
221
648
(494)
(3)
(78)
(256)
—
—
—
—
—
—
—
—
—
15,380
—
(7,822)
$ 146,547
$
(12,480) $
52,706
$
58,616
$
10,126
39,383
37,310
36,985
26,622
18,766
—
79
547
—
—
40
—
78
83
—
200
112
64,836
—
26
40,009
37,350
37,146
26,934
83,628
Adjusted earnings (loss) per share - basic
Adjusted earnings (loss) per share - diluted
$
$
3.68
3.66
$
$
(0.33) $
(0.33) $
1.42
1.42
$
$
2.19
2.18
$
$
0.14
0.12
Anti-dilutive amounts (q):
Numerator:
Reallocation of net income attributable to non-controlling
interests from the anti-dilutive exchange of common units
in CWGS, LLC (n)
Income tax on reallocation of net income attributable to
non-controlling interests from the anti-dilutive exchange of
common units in CWGS, LLC (o)
Assumed income tax benefit of combining C-corporations
with full valuation allowances with the income of other
consolidated entities after the anti-dilutive exchange of
common units in CWGS, LLC (r)
Denominator:
Anti-dilutive exchange of common units in CWGS, LLC for
shares of Class A common stock (p)
$ 251,412
$
20,064
$ 114,503
$ 222,210
$
$
(64,964) $
(25,076) $
(42,865) $
(85,233) $
$
6,430
$
35,326
$
25,284
$
— $
49,916
51,670
51,732
59,995
—
—
—
—
(a) Represents the loss and expense incurred on debt restructure and financing expense incurred from the Third Amendment to the
Credit Agreement in 2018, the First and Second Amendment to the Senior Credit Facilities in 2017, the write-off of a portion of the
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original issue discount, capitalized finance costs from the Previous Term Loan Facilities, and rating agency fees and legal expenses
related to the Previous Term Loan Facilities in 2016.
(b) Represents the current and deferred income tax expense or benefit effect of the above adjustments, many of which are related to
entities with full valuation allowances for which no tax benefit can be currently recognized. This assumption uses effective tax rates
between 25.0% and 25.5% for the adjustments for 2020, 2019 and 2018 and 38.5% for the adjustments in 2017 and 2016, which
represents the estimated tax rate that would apply had the above adjustments been included in the determination of our non-GAAP
metric.
(c)
Represents a goodwill impairment charge of $40.0 million related to the RV and Outdoor Retail segment in the fourth quarter of
2018. See Note 7 - Goodwill and Intangible Assets to our audited consolidated financial statements in Part II, Item 8 of this Form 10-
K for additional information.
(d) Represents long-lived asset impairment charges related to the RV and Outdoor Retail segment, which primarily relate to locations
affected by the 2019 Strategic Shift. See Note 5 – Restructuring and Long-lived Asset Impairment to our consolidated financial
statements included in Part II, Item 8 of this Form 10-K for additional information.
(e) Represents the loss (gain) on the termination of operating leases relating primarily to the 2019 Strategic Shift, net of lease
termination costs. See Note 5 – Restructuring and Long-lived Asset Impairment to our consolidated financial statements included in
Part II, Item 8 of this Form 10-K for additional information.
(f)
Represents an adjustment to eliminate (i) losses on the disposal or sale of real estate at closed retail locations in 2020 and 2019 and
(ii) the gains and losses on disposal and sales of various assets.
(g) Represents non-cash equity-based compensation expense relating to employees, directors, and consultants of the Company.
(h) Represents an adjustment to eliminate the gains on remeasurement of the Tax Receivable Agreement primarily due to changes in
our effective income tax rate and the transfer of certain assets from GSS to CW. See Note 11 – Income Taxes to our consolidated
financial statements included in Part II, Item 8 of this Form 10-K for additional information.
(i)
(j)
(k)
Represents transaction expenses, primarily legal costs, associated with acquisitions into new or complementary markets, including
the Gander Mountain acquisition. This amount excludes transaction expenses related to the acquisition of RV dealerships, and other
RV and Outdoor Retail segment business acquisitions.
Represents pre-opening store costs associated with the Gander Outdoors store openings, which is comprised of 1) Gander
Outdoors-specific corporate and retail overhead, 2) distribution center expenses, and 3) store-level startup expenses. The Company
incurred significant costs related to the initial rollout of Gander Outdoors locations. Based on the nature of the acquisition through a
bankruptcy auction and the large quantity of retail locations opened and to be opened in a very compressed timeframe, the Company
does not deem the pre-opening store costs for the initial rollout of Gander Outdoors locations to be normal, recurring charges. The
Company does not intend to adjust for pre-opening store costs other than for the initial rollout of Gander Outdoors.
Represents restructuring costs relating to our 2019 Strategic Shift. These restructuring costs include one-time employee termination
benefits relating to retail store or distribution center closures/divestitures, incremental inventory reserve charges, and other
associated costs. These costs exclude lease termination costs, which are presented separately (see (e) above). See Note 5 –
Restructuring and Long-lived Asset Impairment to our consolidated financial statements included in Part II, Item 8 of this Form 10-K
for additional information.
(l)
This amount relates to the remeasurement of federal net deferred tax assets resulting from the permanent reduction in the U.S.
statutory corporate tax rate to 21% from 35% under the U.S. Tax Cuts and Jobs Act of 2017 (the “2017 Tax Act”).
(m) Represents the adjustment to net (income) loss attributable to non-controlling interests resulting from the above adjustments that
impact the net income of CWGS, LLC. This adjustment uses the non-controlling interest’s weighted average ownership of CWGS,
LLC of 55.9%, 58.1%, 58.3% and 69.3% for the years ended December 31, 2020, 2019, 2018 and 2017, respectively, and 77.6% for
the post-IPO period of 2016.
(n) Represents the reallocation of net income attributable to non-controlling interests from the impact of the assumed change in
ownership of CWGS, LLC from stock options, restricted stock units, and/or common units of CWGS, LLC.
(o) Represents the income tax expense effect of the above adjustment for reallocation of net income attributable to non-controlling
interests. This assumption uses effective tax rates between 25.0% and 25.5% for the adjustments for 2020, 2019 and 2018 and
38.5% for the adjustments in 2017 and 2016, which represents the estimated tax rate that would apply had the above adjustments
been included in the determination of our non-GAAP metric.
(p) Represents the impact to the denominator for stock options, restricted stock units, and/or common units of CWGS, LLC.
(q)
(r)
The below amounts have not been considered in our adjusted earnings per share – diluted amounts as the effect of these items are
anti-dilutive.
Represents adjustments to reflect the income tax benefit of losses of consolidated C-corporations that under the Company’s current
equity structure cannot be used against the income of other consolidated subsidiaries of CWGS, LLC. Subsequent to the exchange
of all common units in CWGS, LLC, the Company believes certain actions could be taken such that the C-corporations’ losses could
offset income of other consolidated subsidiaries. The adjustment reflects the income tax benefit assuming effective tax rates between
25.0% and 25.5% for the adjustments for 2020, 2019 and 2018 for the losses experienced by the consolidated C-corporations for
which valuation allowances have been recorded. No assumed release of valuation allowance established for previous periods are
included in these amounts. Prior to 2018, the Company did not consider the losses of these C-corporations with valuation allowances
to be significant and the Company did not retroactively adjust 2017 or 2016 for these amounts, which were $4.4 million for the year
ended December 31, 2017 and $2.4 million for the post-IPO period of 2016.
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Uses and Limitations of Non-GAAP Financial Measures
Management and our board of directors use the Non-GAAP Financial Measures:
●
●
●
●
as a measurement of operating performance because they assist us in comparing the operating
performance of our business on a consistent basis, as they remove the impact of items not directly
resulting from our core operations;
for planning purposes, including the preparation of our internal annual operating budget and financial
projections;
to evaluate the performance and effectiveness of our operational strategies; and
to evaluate our capacity to fund capital expenditures and expand our business.
By providing these Non-GAAP Financial Measures, together with reconciliations, we believe we are
enhancing investors’ understanding of our business and our results of operations, as well as assisting investors in
evaluating how well we are executing our strategic initiatives. In addition, our Senior Secured Credit Facilities use
EBITDA to measure our compliance with covenants such as the consolidated leverage ratio. The Non-GAAP
Financial Measures have limitations as analytical tools, and should not be considered in isolation, or as an alternative
to, or a substitute for net income or other financial statement data presented in our consolidated financial statements
included elsewhere in this Form 10-K as indicators of financial performance. Some of the limitations are:
●
●
●
●
●
●
such measures do not reflect our cash expenditures, or future requirements for capital expenditures or
contractual commitments;
such measures do not reflect changes in, or cash requirements for, our working capital needs;
some of such measures do not reflect the interest expense, or the cash requirements necessary to
service interest or principal payments on our debt;
some of such measures do not reflect our tax expense or the cash requirements to pay our taxes;
although depreciation and amortization are non-cash charges, the assets being depreciated and
amortized will often have to be replaced in the future and such measures do not reflect any cash
requirements for such replacements; and
other companies in our industry may calculate such measures differently than we do, limiting their
usefulness as comparative measures.
Due to these limitations, the Non-GAAP Financial Measures should not be considered as measures of
discretionary cash available to us to invest in the growth of our business. We compensate for these limitations by
relying primarily on our GAAP results and using these Non GAAP Financial Measures only supplementally. As noted
in the tables above, certain of the Non-GAAP Financial Measures include adjustments for long-lived asset
impairment, lease termination costs, loss and expense on debt restructure, goodwill impairment, gains and losses on
disposal of assets and other expense, net, equity-based compensation, Tax Receivable Agreement liability,
transaction expenses related to acquisitions, Gander Outdoors pre-opening costs, restructuring costs relating to the
2019 Strategic Shift, other unusual or one-time items, and the income tax expense effect described above, as
applicable. It is reasonable to expect that certain of these items will occur in future periods. However, we believe
these adjustments are appropriate because the amounts recognized can vary significantly from period to period, do
not directly relate to the ongoing operations of our business and complicate comparisons of our internal operating
results and operating results of other companies over time. In addition, these certain Non-GAAP Financial Measures
adjust for other items that we do not expect to regularly record in periods after the IPO, including monitoring fees.
Each of the normal recurring adjustments and other adjustments described in this paragraph and in the reconciliation
tables above help management with a
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measure of our core operating performance over time by removing items that are not related to day to day operations.
Liquidity and Capital Resources
General
Our primary requirements for liquidity and capital have been working capital, inventory management,
acquiring and building new retail locations, the improvement and expansion of existing retail locations, debt service,
distributions to holders of equity interests in CWGS, LLC and our Class A common stock, and general corporate
needs. These cash requirements have historically been met through cash provided by operating activities, cash and
cash equivalents, proceeds from registered offerings of our Class A common stock, borrowings under our Senior
Secured Credit Facilities (as defined below), borrowings under our Floor Plan Facility (as defined below) and
borrowings under our Real Estate Facility (as defined below).
As a public company, our additional liquidity needs include public company costs, payment of regular and
special cash dividends, any exercise of the redemption right by the Continuing Equity Owners from time to time
(should we elect to exchange common units for a cash payment), our stock repurchase program as described below,
payments under the Tax Receivable Agreement, and state and federal taxes to the extent not reduced as a result of
the Tax Receivable Agreement. The Continuing Equity Owners may exercise such redemption right for as long as
their common units remain outstanding. Although the actual timing and amount of any payments that may be made
under the Tax Receivable Agreement will vary, we expect that the payments that we will be required to make to the
Continuing Equity Owners, Former Profits Unit Holders, and Crestview Partners II GP, L.P. will be significant. Any
payments made by us to Continuing Equity Owners, Former Profits Unit Holders, and Crestview Partners II GP, L.P.
under the Tax Receivable Agreement will generally reduce the amount of overall cash flow that might have otherwise
been available to us or to CWGS, LLC and, to the extent that we are unable to make payments under the Tax
Receivable Agreement for any reason, the unpaid amounts generally will be deferred and will accrue interest until
paid by us; provided, however, that nonpayment for a specified period may constitute a material breach of a material
obligation under the Tax Receivable Agreement and therefore may accelerate payments due under the Tax
Receivable Agreement. For a discussion of the Tax Receivable Agreement, see Note 11 — Income Taxes to our
audited consolidated financial statements included in Part II, Item 8 of this Form 10-K.
On October 30, 2020, our board of directors authorized a stock repurchase program for the repurchase of up
to $100.0 million of our Class A common stock, expiring on October 31, 2022. Repurchases under the program are
subject to any applicable limitations on the availability of funds to be distributed to the Company by CWGS, LLC to
fund repurchase and may be made in the open market, in privately negotiated transactions or otherwise, with the
amount and timing of repurchases to be determined at our discretion, depending on market conditions and corporate
needs. Open market repurchases will be structured to occur in accordance with applicable federal securities laws,
including within the pricing and volume requirements of Rule 10b-18 under the Securities Exchange Act of 1934, as
amended. We may also, from time to time, enter into Rule 10b5-1 plans to facilitate repurchases of our shares under
this authorization. This program does not obligate us to acquire any particular amount of Class A common stock and
the program may be extended, modified, suspended or discontinued at any time at the Board’s discretion. We expect
to fund the repurchases using cash on hand. During the year ended December 31, 2020, we repurchased 811,223
shares of our Class A common stock for $21.5 million, including broker commissions. As of December 31, 2020,
$78.5 million is available under the stock repurchase program to repurchase additional shares of our Class A
common stock.
CWGS, LLC intends to make a regular quarterly cash distribution to its common unit holders, including us,
and we intend to use all of the proceeds from such distribution on our common units to pay a regular quarterly cash
dividend on our Class A common stock, subject to our discretion as the sole managing member of CWGS, LLC and
the discretion of our board of directors. During each of the three month periods during the year ended December 31,
2019 and the three months ended March 31, 2020, and June 30, 2020, we paid a regular quarterly cash dividend of
$0.08 per share of our Class A common stock. On July 20, 2020, our board of directors approved the increase of the
quarterly dividend to $0.09 per share of Class A common stock from $0.08 per share. Accordingly, during each of the
three months ended September 30, 2020 and December 31, 2020, we paid a regular quarterly cash dividend of $0.09
per share of our Class A common stock. CWGS, LLC
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is required to make cash distributions in accordance with the CWGS LLC Agreement in an amount sufficient for us to
pay any expenses incurred by us in connection with the regular quarterly cash dividend, along with any of our other
operating expenses and other obligations.
In addition, we currently intend to pay a special cash dividend of all or a portion of the Excess Tax
Distribution (as defined under “Dividend Policy” included in Part II, Item 5 of this Form 10-K) to the holders of our
Class A common stock from time to time subject to the discretion of our board of directors as described under
“Dividend Policy” included in Part II, Item 5 of this Form 10-K. During each of the three month periods during the year
ended December 31, 2019 and the three months ended March 31, 2020 and June 30, 2020, we paid a special cash
dividend of $0.0732 per share of our Class A common stock. Additionally, on July 20, 2020, our board of directors
increased the quarterly special cash dividend to $0.08 per share of Class A common stock from $0.0732 per share.
Accordingly, during the three months ended September 30, 2020, we paid a special dividend of $0.08 per share of
our Class A common stock. Moreover, on September 17, 2020, our board of directors increased the quarterly special
cash dividend to $0.14 per share of Class A common stock from $0.08 per share beginning with the three months
ended December 31, 2020. Additionally, on November 18, 2020, our board of directors approved a $0.77 per share of
Class A common stock one-time special cash dividend. These special dividends are typically funded by the
accumulated tax distributions received by CWH from CWGS, LLC that are in excess of the corporate income taxes
payable by CWH and current payment obligations under the TRA liability. In December 2020, CWGS, LLC paid an
additional $0.20 per common unit distribution to partially fund the $0.77 per share of Class A common stock one-time
special cash dividend discussed above. Our dividend policy has certain risks and limitations particularly with respect
to liquidity, and we may not pay future dividends according to our policy, or at all. See “Dividend Policy” included in
Part II, Item 5 of this Form 10-K and “Risk Factors ─ Risks Relating to Ownership of Our Class A Common Stock ─
“Our ability to pay regular and special dividends on our Class A common stock is subject to the discretion of our board
of directors and may be limited by our structure and statutory restrictions” included in Part I, Item 1A of this Form 10-
K.
We have currently identified over 20 markets that would be attractive for both acquisition and greenfield
opportunities in 2021. This expansion could require in excess of $150.0 million for a combination of business
acquisitions and capital expenditures relating to land, buildings, and improvements. Factors that could impact the
quantity of locations or the cost to acquire or open those locations include, but are not limited to, our ability to locate
potential acquisition targets or greenfield locations in a geographic area and at a cost that meet our success criteria;
continued strong cash flow generation from our operations to fund these acquisitions and new locations; and
availability of financing on our Floor Plan Facility.
During the year ended December 31, 2020, we incurred long-lived asset impairment charges of $12.4 million,
including $12.3 million primarily in connection with the 2019 Strategic Shift. We expect that none of the foregoing
charges will result in future cash expenditures. Additionally, in connection with the 2019 Strategic Shift, we have
incurred or expect to incur costs relating to one-time employee termination benefits as outlined in Note 5 ─
Restructuring and Long-Lived Asset Impairment to our consolidated financial statements included in Part II, Item 8 of
this Form 10-K.
There is significant uncertainty surrounding the impact of the COVID-19 pandemic on our results of
operations and cash flows. As a result, we initially took proactive steps to increase cash available on-hand, including,
but not limited to, reducing cash expenditures, including wage reductions through a combination of temporary salary
reductions, layoffs, and furloughs; negotiating payment deferrals with lessors, reducing marketing and promotional
expenses; and delaying strategic capital expenditures. We had negotiated lease payment deferrals with numerous
landlords amounting to approximately $14.0 million from 2020 into 2021. As demand for our products accelerated and
our cash position improved, we repaid these deferred lease payment amounts in full prior to June 30, 2020 and most
of the temporary salary reductions ended in May 2020. Additionally, as a result of our improved cash position, we
made voluntary principal payments in June 2020 of $9.6 million on our Term Loan Facility and $20.0 million on our
Revolving Credit Facility. We are continually monitoring the COVID-19 pandemic and its potential impacts on our
business. If stay-at-home and shelter-in-place restrictions are put back into place, we may choose to re-implement
cost reduction measures.
We believe that our sources of liquidity and capital including cash provided by operating activities, additional
borrowings under our Floor Plan Facility, and borrowings under our Revolving Credit Facility will be
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sufficient to finance our continued operations, growth strategy, including the opening of any additional retail locations,
regular and special quarterly cash dividends (as described above), required payments for our obligations under the
Tax Receivable Agreement, and additional expenses we expect to incur for at least the next twelve months. However,
we cannot assure you that our cash provided by operating activities, cash and cash equivalents or cash available
under our Revolving Credit Facility or our Floor Plan Facility, including the potential additional borrowings noted
above, will be sufficient to meet our future needs. If we are unable to generate sufficient cash flows from operations in
the future, including as a result of the impact of the COVID-19 pandemic on our business and if availability under our
Revolving Credit Facility or our Floor Plan Facility is not sufficient, we may have to obtain additional financing. If we
obtain additional capital by issuing equity, the interests of our existing stockholders will be diluted. If we incur
additional indebtedness, that indebtedness may impose significant financial and other covenants that may
significantly restrict our operations. We cannot assure you that we could obtain refinancing or additional financing on
favorable terms or at all, including the expected additional borrowings noted above and particularly in light of the
economic uncertainty due to the COVID-19 pandemic. See “Risk Factors — Risks Related to our Business — Our
ability to operate and expand our business and to respond to changing business and economic conditions will depend
on the availability of adequate capital” included in Part I, Item 1A of this Form 10-K.
As of December 31, 2020, we had working capital of $458.7 million, including $166.1 million of cash and cash
equivalents. Our working capital reflects the cash provided by deferred revenue reported under current liabilities of
$88.2 million as of December 31, 2020, which reduces working capital. Deferred revenue primarily consists of cash
collected for club memberships in advance of services to be provided, which is deferred and recognized as revenue
over the life of the membership, and deferred revenue for the annual guide. We use net proceeds from this deferred
membership revenue to lower our long-term borrowings and finance our working capital needs. Our Floor Plan Facility
includes a flooring line aggregate interest reduction (“FLAIR”) offset account that allows us to transfer cash as an
offset to the payable under the Floor Plan Facility. The FLAIR offset account at December 31, 2020 was $133.6
million, $124.4 million of which could have been withdrawn while remaining in compliance with the financial covenants
of the Floor Plan Facility.
Seasonality
We have experienced, and expect to continue to experience, variability in revenue, net income, and cash
flows as a result of annual seasonality in our business. Because RVs are used primarily by vacationers and campers,
demand for services, protection plans, products, and resources generally declines during the winter season, while
sales and profits are generally highest during the spring and summer months. In addition, unusually severe weather
conditions in some geographic areas may impact demand.
We generate a disproportionately higher amount of our annual revenue in our second and third fiscal
quarters, respectively, which include the spring and summer months. We incur additional expenses in the second and
third fiscal quarters due to higher purchase volumes, increased staffing in our retail locations and program costs. If,
for any reason, we miscalculate the demand for our products or our product mix during the second and third fiscal
quarters, our sales in these quarters could decline, resulting in higher labor costs as a percentage of sales, lower
margins and excess inventory, which could cause our annual results of operations to suffer and our stock price to
decline.
Additionally, SG&A expenses as a percentage of gross profit tend to be higher in the first and fourth quarters
due to the timing of acquisitions and the seasonality of our business. We prefer to acquire new retail locations in the
first and fourth quarters of each year in order to provide time for the location to be re-modeled and to ramp up
operations ahead of the spring and summer months. The timing of our acquisitions in the first and fourth quarters,
coupled with generally lower revenue in these quarters has historically resulted in SG&A expenses as a percentage of
gross profit being higher in these quarters.
Due to our seasonality, the possible adverse impact from other risks associated with our business, including
atypical weather, consumer spending levels and general business conditions, is potentially greater if any such risks
occur during our peak sales seasons. See “Risk Factors — Risks Related to our Business — Our business is
seasonal and this leads to fluctuations in sales and revenues” included in Part I, Item 1A of this Form 10-K.
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Cash Flow
The following table shows summary cash flows information for the years ended December 31, 2020 and
2019, respectively:
Fiscal Year Ended
(In thousands)
Net cash provided by operating activities
Net cash used in investing activities
Net cash used in financing activities
Net increase in cash and cash equivalents
$
December 31,
2020
747,669
(125,935)
(603,183)
18,551
$
$
December 31,
2019
251,934
(104,537)
(138,433)
8,964
$
Operating activities. Our cash flows from operating activities are primarily collections from contracts in transit
and customers following the sale of new and used vehicles, as well as from the sale of retail parts, service and other.
Contracts in transit represent amounts due from third-party lenders from whom pre-arranged agreements have been
determined, and to whom the retail installment sales contracts have been assigned. Our primary uses of cash from
operating activities are repayments of vehicle floor plan payables, payments to retail product suppliers, personnel-
related expenditures, payments related to leased property, advertising, and various consumer services program
costs.
Net cash provided by operating activities was $747.7 million for the year ended December 31, 2020, an
increase of $495.7 million from $251.9 million of net cash provided in operating activities in the year ended December
31, 2019. The increase was primarily due to a $464.5 million increase in net income, $55.2 million of increased
accounts payable and other accrued expenses, a $29.2 million accrual for FICA deferral related to The Coronavirus
Aid, Relief, and Economic Security Act (the “CARES Act”), and $0.7 million of other increases, partially offset by a
$53.9 million reduction in long-lived asset impairment.
Investing activities. Our investment in business activities primarily consists of expanding our operations
through organic growth and the acquisition of retail locations. Substantially all of our new retail location acquisitions
and capital expenditures have been financed using cash provided by operating activities and borrowings under our
Senior Secured Credit Facilities, as applicable.
Our capital expenditures consist primarily of investing in acquired and greenfield retail and RV dealership
locations, existing retail locations, information technology, hardware and software. There were no material
commitments for capital expenditures as of December 31, 2020. Additionally, during 2020, we entered into the non-
cash activity for new finance leases for $6.5 million for IT hardware and $25.4 million for real estate. The table below
summarizes our capital expenditures for the years ended December 31, 2020 and 2019, respectively:
(In thousands)
IT hardware and software
Greenfield and acquired retail locations
Existing retail locations
Corporate and other
Total capital expenditures
Fiscal Year Ended
December 31, December 31,
2020
4,437
9,865
13,700
3,843
31,845
$
$
2019
11,668
28,445
14,455
2,221
56,789
$
$
Net cash used in investing activities was $125.9 million for the year ended December 31, 2020. The $125.9
million of cash used in investing activities was comprised of $53.1 million for the purchase of real property, $47.6
million for the purchase of RV and Outdoor Retail businesses, $31.8 million of capital expenditures primarily related to
retail locations, $2.5 million for investment in businesses, and $0.2 million for the purchase of intangible assets,
partially offset by $7.5 million from the sale of real property, and proceeds of $1.8 million from the sale of property and
equipment.
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Net cash used in investing activities was $104.5 million for year ended December 31, 2019. The
$104.5 million of cash used in investing activities included capital expenditures of $56.8 million, acquisition of retail
locations of $48.4 million, and purchases of real property of $31.6 million, partially offset by proceeds from the sale
and leaseback of real property and the sale of property and equipment of $28.2 million and $4.1 million, respectively.
Financing activities. Our financing activities primarily consist of proceeds from the issuance of debt and the
repayment of principal and debt issuance costs.
Our net cash used in financing activities was $603.2 million for the year ended December 31, 2020. The
$603.2 million of cash used in financing activities was primarily due to $324.5 million of payments under the Floor
Plan Facility, $137.0 million of distributions to CWGS, LLC common unit holders, $61.0 million of dividends paid on
Class A common stock, $39.1 million of payments on long-term debt, $21.5 million for repurchases of Class A
common stock to treasury stock, $20.0 million of payments on credit facilities, and $4.7 million of payments related to
RSU shares withheld for taxes, partially offset by proceeds from exercise of stock options of $4.6 million.
Our net cash used in financing activities was $138.4 million for the year ended December 31, 2019. The
$138.4 million of cash used in financing activities was primarily due to distributions to CWGS, LLC common unit
holders of $70.2 million, net payments under the Floor Plan Facility of $44.0 million, dividends paid on Class A
common stock of $22.9 million, and net payment of debt of $13.7 million, partially offset by proceeds from long-term
debt of $11.7 million, and other financing sources of $0.7 million.
Description of Senior Secured Credit Facilities, Floor Plan Facility and Real Estate Facility
As of December 31, 2020 and 2019, we had outstanding debt in the form of our Senior Secured Credit
Facilities (as defined below), our Floor Plan Facility (as defined below), and our Real Estate Facility (as defined
below). We may from time to time seek to refinance, retire or exchange our outstanding debt. Such refinancings,
repayments or exchanges, if any, will depend on prevailing market conditions, our liquidity requirements, contractual
restrictions and other factors. The amounts involved may be material. For additional information regarding our interest
rate risk and interest rate hedging instruments, see “Quantitative and Qualitative Disclosures About Market Risk” in
Part II, Item 7A of this Form 10-K.
Senior Secured Credit Facilities
As of December 31, 2020 and 2019, CWGS Group, LLC (the “Borrower”), an indirect subsidiary of the
Company, was party to a credit agreement (as amended from time to time, the “Credit Agreement”) for a senior
secured credit facility (the “Senior Secured Credit Facilities”). The Senior Secured Credit Facilities 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 Term Loan Facility requires mandatory principal payments in equal quarterly installments of $3.0
million. The Revolving Credit Facility matures on November 8, 2021, and the Term Loan Facility matures on
November 8, 2023. As of December 31, 2020, the average interest rate on the Term Loan Facility was 3.5%.
The Credit Agreement for our Senior Secured Credit Facilities 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 December 31, 2020, we were not subject
to this covenant as borrowings under the Revolving Credit Facility did not exceed the 30% threshold. To the extent
that we are unable to comply with the maximum Total Leverage Ratio in the future, we would be unable to borrow
under the Revolving Credit Facility and may need to seek alternative sources of financing in order to operate and
finance our business as we deem appropriate. The Company’s borrowing capacity under the Revolving Credit Facility
at December 31, 2020 was limited to $29.1 million of borrowings. We were in compliance with all applicable debt
covenants at December
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31, 2020 and 2019. On June 30, 2020, the Borrower made a $9.6 million voluntary principal payment on the Term
Loan Facility. Additionally, the Borrower is required to prepay the term loan borrowings in an aggregate amount up to
50% of excess cash flow, as defined in the Credit Agreement, for such fiscal year depending on the Total Leverage
Ratio. As of December 31, 2020, we were not required to make an additional excess cash flow payment.
See Note 9 — Long-Term Debt to our consolidated financial statements included in Part II, Item 8 of this
Form 10-K for a further discussion of the terms of the Senior Secured Credit Facilities.
Floor Plan Facility
As of December 31, 2020 and 2019, FreedomRoads, LLC (“FR”), an indirect subsidiary of the Company,
maintained floor plan financing through the Seventh Amended and Restated Credit Agreement (as amended, the
“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. At December 31, 2020, the Floor Plan Facility 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 $48.0
million under the revolving line of credit, which maximum amount outstanding 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 reduction
(“Current Ratio Reduction Period”) of the minimum Consolidated Current Ratio (as defined in the Floor Plan Facility)
at any time during 2020 and the first seven days of 2021. FR did not exercise 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. From May 12, 2020 through July
31, 2020, FR was not allowed to draw further Revolving Credit Loans (as defined in the Floor Plan Facility). On June
29, 2020, FR made a voluntary $20.0 million principal payment on the revolving line of credit. The borrowings under
the floor plan credit agreement bear interest at one-month LIBOR plus 2.05% as of December 31, 2020 and at one-
month LIBOR plus 2.15% for the years ended December 31, 2019 and December 31, 2018. LIBOR was 0.15%,
1.71% and 2.35% as of December 31, 2020, 2019, and 2018, respectively.
The credit agreement governing the Floor Plan Facility contains certain financial covenants, which we were in
compliance with at December 31, 2020 and 2019.
See Note 4 – Inventories, net and Notes Payable — Floor Plan, net to our consolidated financial statements
included in Part II, Item 8 of this Form 10-K for a further discussion of the terms of the Floor Plan Facility.
Real Estate Facility
As of December 31, 2020 and 2019, Camping World Property, Inc. (the ‘‘Real Estate Borrower’’), an indirect
wholly-owned subsidiary of CWGS, LLC, and CIBC Bank USA (“Lender”), was party to a loan and security agreement
for a real estate credit facility with an aggregate maximum principal amount of $21.5 million (“Real Estate Facility”).
The Real Estate Facility is subject to certain cross default provisions, a debt service coverage ratio, and other
customary covenants which we were in compliance with at December 31, 2020 and 2019.
The outstanding principal of the Real Estate Facility was $4.5 million and $19.7 million as of December 31,
2020 and 2019, respectively. As of December 31, 2020, the interest rate on the Real Estate Facility was 3.00% with a
commitment fee of 0.50% of the aggregate unused principal amount of the Real Estate Facility. As of December 31,
2020, the Company had zero additional capacity under the Real Estate Facility.
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In August 2020, we 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, we were required to pay down $10.3 million of
the Real Estate Facility, which we paid in August 2020. Additionally, in September 2020, the Company sold an owned
property relating to the other former distribution center in Greenville, North Carolina to a third party. By selling this
property, the Company was required to pay down $3.4 million of the Real Estate Facility in September 2020.
See Note 9 — Long-Term Debt to our consolidated financial statements included in Part II, Item 8 of this
Form 10-K for a further discussion of the terms of the Real Estate Facility.
Sale/Leaseback Arrangements
We have in the past and may in the future enter into sale-leaseback transactions to finance certain property
acquisitions and capital expenditures, pursuant to which we sell property and/or leasehold improvements to third
parties and agree to lease those assets back for a certain period of time. Such sales generate proceeds which vary
from period to period.
Deferred Revenue
Deferred revenue consists of sales for products and services not yet recognized as revenue at the end of a
given period. Our deferred revenue as of December 31, 2020 was $149.7 million. Deferred revenue is expected to be
recognized as revenue as set forth in the following table (in thousands):
2021
2022
2023
2024
2025
Thereafter
Total
Contractual Obligations
$
$
88,213
29,472
15,797
7,707
4,083
4,460
149,732
The following table sets forth our contractual obligations and commercial commitments as of December 31,
2020 (in thousands):
Long-term debt (1)
Interest on long-term debt (2)
Finance lease obligations (3)
Floor plan notes payable, net (4)
Floor plan revolving line of credit
Interest on revolving line of credit
Operating lease obligations
Purchase obligations (5)
Tax Receivable Agreement liability (6)
Service agreements (7)
Marketing sponsorships (8)
Total
2021
$ 12,174
40,481
3,977
522,455
—
534
121,420
39,121
8,089
5,004
11,646
$ 764,901
2022
$ 12,176
40,050
4,011
—
—
534
118,658
—
9,113
—
14,533
$ 199,075
2023
$ 1,121,697
34,632
2,777
—
20,885
133
116,345
—
9,316
—
5,617
$ 1,311,402
2024
2025
Thereafter
Total
$
— $
—
2,494
—
—
—
111,418
—
9,537
—
4,500
$ 127,949
— $
—
2,376
—
—
—
103,721
—
9,788
—
—
$ 115,885
— $ 1,146,047
115,163
—
49,411
33,776
522,455
—
20,885
—
1,201
—
1,337,400
765,838
39,121
—
145,934
100,091
5,004
—
—
36,296
$ 3,418,917
$ 899,705
(1) Amounts exclude finance lease obligations.
(2) We estimated interest payments through the maturity of our Senior Secured Credit Facilities by applying the interest rate in effect as
of December 31, 2020. See Note 9 — Long-Term Debt to our audited consolidated financial statements included in Part II, Item 8 of
this Form 10-K for additional information.
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(3) Amounts represent undiscounted cash flows for property and equipment finance leases. See Note 10 — Lease Obligations to our
audited consolidated financial statements included in Part II, Item 8 of this Form 10-K for additional information.
(4) Floor plan notes payable, net are revolving financing arrangements and the Floor Plan Facility matures on March 15, 2023. Payments
are generally made as required pursuant to the Floor Plan Facility discussed above under “— Description of Senior Secured Credit
Facilities and Floor Plan Facility — Floor Plan Facility.”
(5) Amounts primarily represent purchase commitments relating to the procurement of RV inventories that have been approved by the
Floor Plan Facility. See Note 4 — Inventories, net and Notes Payable — Floorplan to our audited consolidated financial statements
included in Part II, Item 8 of this Form 10-K for additional information.
(6) Amounts represent the estimated payments under the Tax Receivable Agreement. See Note 11 — Income Taxes to our audited
consolidated financial statements included in Part II, Item 8 of this Form 10-K for additional information.
(7) Service agreements are multi-year agreements for services at agreed upon amounts for each year. See Note 13 — Commitments and
Contingencies to our audited consolidated financial statements included in Part II, Item 8 of this Form 10-K for additional information.
(8) Marketing sponsorship agreements are multi-year sponsorship agreements at agreed upon amounts each year per the agreements.
See Note 13 — Commitments and Contingencies to our audited consolidated financial statements included in Part II, Item 8 of this
Form 10-K for additional information.
Off-Balance Sheet Arrangements
As of December 31, 2020, we did not have any off-balance sheet arrangements other than short-term leases
not included in our lease obligation. We do not have transactions with unconsolidated entities, such as entities often
referred to as structured finance or special purpose entities, whereby we have financial guarantees, subordinated
retained interests, derivative instruments, or other contingent arrangements that expose us to material continuing
risks, contingent liabilities, or any other obligation under a variable interest in an unconsolidated entity that provides
financing, liquidity, market risk, or credit risk support to us.
Recent Accounting Pronouncements
See discussion of recently adopted and recently issued accounting pronouncements in Note 1 — Summary
of Significant Accounting Policies to our consolidated financial statements in Part II, Item 8 of this Form 10-K.
Critical Accounting Policies and Estimates
We prepare our consolidated financial statements in conformity with GAAP. The preparation of these
financial statements requires us 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 could differ from those estimates.
Critical accounting policies are those that management believes are both most important to the portrayal of our
financial condition and operating results, and require management’s most difficult, subjective or complex judgments,
often as a result of the need to make estimates about the effect of matters that are inherently uncertain. We base our
estimates on historical experience, outside advice from parties believed to be experts in such matters, and on various
other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for
making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources.
Judgments and uncertainties affecting the application of those policies may result in materially different amounts
being reported under different conditions or using different assumptions. Our significant accounting policies can be
found in Note 1 — Summary of Significant Accounting Policies to our consolidated financial statements included in
Part II, Item 8 of this Form 10-K. We consider the following policies to be the most critical in understanding the
judgments that are involved in preparing our consolidated financial statements.
Revenue Recognition
Revenues are recognized by the Company when control of the promised goods or services is transferred to
its customers in an amount that reflects the consideration the Company expects to be entitled to in exchange for
those goods or services. Sales and other taxes collected from the customer concurrent with revenue-producing
activities are excluded from revenue. Incidental items that are immaterial in the context of the contract are recognized
as expense. The Company’s contracts with customers may include multiple
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performance obligations. For such arrangements, the Company allocates revenue to each performance obligation
based on its relative stand-alone selling price. The Company generally determines stand-alone selling prices based
on the prices charged to customers or using the adjusted market assessment approach. The Company presents
disaggregated revenue on its consolidated statements of operations.
Good Sam Services and Plans revenue consists of revenue from publications, consumer shows, and
marketing fees from various consumer services and plans. Roadside Assistance (“RA”) revenues are deferred and
recognized over the contractual life of the membership. RA claim expenses are recognized when incurred. Marketing
fees for finance, insurance, extended service and other similar products are recognized as variable consideration, net
of estimated cancellations, if applicable, when a product is sold or financing has been arranged. These marketing
fees are recorded net as we are acting as an agent in the transaction. The related estimate for cancellations on the
marketing fees for multi-year finance and insurance products utilize actuarial analysis to estimate the exposure.
Promotional expenses consist primarily of direct mail advertising expenses and renewal expenses and are expensed
at the time related materials are mailed. Newsstand sales of publications and related expenses are recorded as
variable consideration at the time of delivery, net of estimated returns. Subscription sales of publications are reflected
in income over the lives of the subscriptions. The related selling expenses are expensed as incurred. Advertising
revenues and related expenses are recorded at the time of delivery. Revenue and related expenses for consumer
shows are recognized when the show occurs.
RV and Outdoor Retail revenue consists of sales of new and used RVs, sales of RV products, parts and
service and other products, distribution of RV furniture, and commissions on the related finance and insurance
contracts. Revenue from the sale of recreational vehicles is recognized upon completion of the sale to the customer.
Conditions to completing a sale include having an agreement with the customer, including pricing, whereby the sales
price must be reasonably expected to be collected and having control transferred to the customer.
RV and Outdoor Retail revenue from parts, service and other products sales is recognized over time as work
is completed and when parts are delivered to our customers. For these service and parts revenues recorded over
time, the Company utilizes a method that considers total costs incurred to date and the applicable margin in relation
to total expected efforts to complete our performance obligation in order to determine the appropriate amount of
revenue to recognize over time.
Finance and insurance revenue is recorded net, since the Company is acting as an agent in the transaction,
and is recognized when a finance and insurance product contract payment has been received or financing has been
arranged. The proceeds the Company receives for arranging financing contracts, and selling insurance and service
contracts, are subject to chargebacks if the customer terminates the respective contract earlier than a stated period.
In the case of insurance and service contracts, the stated period typically extends from one to five years with the
refundable commission balance declining over the contract term. These proceeds are recorded as variable
consideration, net of estimated chargebacks. Chargebacks are estimated based on ultimate future cancellation rates
by product type and year sold using a combination of actuarial methods and leveraging our historical experience from
the past eight years, adjusted for new consumer trends. The chargeback liabilities included in the estimate of variable
consideration totaled $58.9 million and $48.3 million as of December 31, 2020 and December 31, 2019, respectively.
Good Sam Club revenue consists of revenue club membership fees and royalty fees from co-branded credit
cards. Membership revenue is generated from annual, multiyear and lifetime memberships. The revenue and
expenses associated with these memberships are deferred and amortized over the membership period. Unearned
revenue and profit are subject to revisions as the membership progresses to completion. Revisions to membership
period estimates would change the amount of income and expense amortized in future accounting periods. For
lifetime memberships, an 18-year period is used, which is the actuarially determined estimated fulfillment period.
Royalty revenue is earned under the terms of an arrangement with a third-party credit card provider based on a
percentage of the Company’s co-branded credit card portfolio retail spending with such third-party credit card provider
and for acquiring new cardholders.
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Contracts in Transit
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 our 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. Contracts in transit are included in current assets in our consolidated financial statements and totaled
$48.2 million and $44.9 million as of December 31, 2020, and December 31, 2019, respectively.
Inventories, net
Dealership inventories consist primarily of new and used vehicles held for sale valued using the specific-
identification method and valued at the lower of cost or net realizable value. Cost includes purchase costs,
reconditioning costs, dealer-installed accessories, and freight. For vehicles accepted in trades, the cost is the fair
value of such used vehicles at the time of the trade-in. Dealership parts and accessories are valued at the lower of
cost or net realizable value. Retail parts, accessories and other inventories primarily consist of retail travel and leisure
specialty merchandise and are stated at lower of cost or net realizable value. RV furniture for distribution are stated at
lower of cost or net realizable value.
In assessing lower of cost or net realizable value for inventory, we typically consider (i) the aging of the
inventory item, (ii) historical sales experience of the inventory item, and (iii) current market conditions and trends for
the inventory item. We also review and consider the following metrics related to sales of inventory items (both on a
recent and longer-term historical basis): (i) days of supply in our inventory, and (ii) average selling price if sold at less
than original cost. We then determine the appropriate level of reserve required to reduce our inventory to the lower of
cost or market and record the resulting adjustment in the period in which we determine a loss has occurred. If future
demand or market conditions for our products are less favorable than forecasted or if unforeseen circumstances
negatively impact the utility of inventory, we may be required to record additional write-downs, which would negatively
affect the results of operations in the period when the write-downs are recorded.
Goodwill and Other Intangible Assets
Goodwill is reviewed at least annually for impairment, and more often when impairment indicators are
present. We have the option to first assess qualitative factors to determine whether it is more likely than not that the
fair value of a reporting unit is less than its net book value. The qualitative analysis used contains inherent
uncertainties, including significant estimates and assumptions related to growth rates, projected earnings and cost of
capital. We are subject to financial risk to the extent that our assets and goodwill become impaired due to
deterioration of the underlying businesses. The risk of an asset impairment loss may increase to the extent the
underlying businesses’ earnings or projected earnings decline. During the fourth quarter of 2020, we performed our
annual impairment assessment of the carrying value of our goodwill. The fair value of our reporting units significantly
exceeded the carrying value of its net assets. As a result, we were not required to record an impairment of goodwill
relating to our reporting units. See Note 7 — Goodwill and Intangible Assets to our consolidated financial statements
included in Part II, Item 8 of this Form 10-K. Finite-lived intangibles are recorded at cost, net of accumulated
amortization and, if applicable, impairment charges. Finite-lived intangible assets consist of membership and
customer lists with weighted average useful lives of approximately 5.3 years, trademarks and trade names with
weighted average useful lives of approximately 15.0 years, supplier lists with weighted-average useful lives of 5.0
years, and websites with weighted-average useful lives of approximately 8.3 years. The weighted-average useful life
of all our finite-lived intangible assists is approximately 12.8 years.
Long-Lived Assets
Long lived assets are included in property and equipment, which also includes capitalized software costs to
be held and used. For our major software systems, such as our accounting and membership systems, our capitalized
costs may include some internal or external costs to configure, install and test the software during the application
development stage. We do not capitalize preliminary project costs, nor do we capitalize training, data conversion
costs, maintenance or post development stage costs. Our long-lived assets are reviewed for impairment whenever
events or changes in circumstances indicate that the carrying amount of an
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asset may not be recoverable. Our long-lived asset groups exist predominantly at the individual location level and the
associated impairment analysis involves the comparison of an asset group’s estimated future undiscounted cash
flows over its remaining useful life to its respective carrying value, which primarily includes furniture, equipment,
leasehold improvements, and operating lease assets. For long-lived asset groups identified with carrying values not
recoverable by future undiscounted cash flows, impairment charges are recognized to the extent the sum of the
discounted future cash flows from the use of the asset group is less than the carrying value. The impairment charge is
allocated to the individual long-lived assets within an asset group; however, an individual long-lived asset is not
impaired below its individual fair value, if readily determinable. The measurement of any impairment loss includes
estimation of the fair value of the asset group’s respective operating lease assets, which includes estimates of market
rental rates based on comparable lease transactions.
Income Taxes
We apply the provisions of ASC No. 740, “Income Taxes” (“ASC 740”). Under ASC 740, deferred tax assets
and liabilities are determined based on differences between the financial reporting and tax bases of assets and
liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are
expected to reverse. We record a valuation allowance to reduce our deferred tax assets to the amount that is more
likely than not to be realized. In evaluating our ability to recover our deferred tax assets, we consider all available
positive and negative evidence, including our operating results, ongoing tax planning and forecasts of future taxable
income on a jurisdiction-by-jurisdiction basis. In accordance with ASC 740, we recognize, in our consolidated financial
statements, the impact of our tax positions that are more likely than not to be sustained upon examination based on
the technical merits of the positions. The Company recognizes interest and penalties for uncertain tax positions in
income tax expense.
We are subject to federal and state income taxes. Tax laws, regulations, and administrative practices in
various jurisdictions may be subject to significant change, with or without notice, due to economic, political, and other
conditions, and significant judgment is required in evaluating and estimating our provision and accruals for these
taxes. In addition, a number of jurisdictions in which we are subject to tax have pursued or are actively pursuing
changes to their tax laws applicable to corporate taxpayers, such as the 2017 Tax Act. The 2017 Tax Act was signed
into law on December 22, 2017. The 2017 Tax Act significantly revised the U.S. corporate income tax by, among
other things, lowering the statutory corporate tax rate from 35% to 21% and eliminating certain deductions. For the
year ended December 31, 2020, there were no significant impacts on estimated values of the Tax Receivable
Agreement liability and the Company’s deferred tax assets as a result of any recent tax law changes.
We are subject to U.S. federal, state and local income taxes with respect to our allocable share of any
taxable income of CWGS, LLC and are taxed at the prevailing corporate tax rates. CWGS, LLC is currently treated as
a partnership for U.S. federal and most applicable state and local income tax purposes and, as such is generally not
subject to any U.S. federal entity-level income taxes with the exception of certain subsidiaries, which are
Subchapter C corporations. Taxable income or loss of a partnership is passed through to and included in the taxable
income of its owners for U.S. federal income tax purposes. However, CWGS, LLC may be liable for various other
state and local taxes. Pursuant to the CWGS LLC Agreement, CWGS, LLC will generally make pro rata tax
distributions to holders of common units in an amount sufficient to fund all or part of their tax obligations with respect
to the taxable income of CWGS, LLC that is allocated to them.
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Tax Receivable Agreement Liability
As described in Note 11 — Income Taxes to the consolidated financial statements included in Part II, Item 8
of this Form 10-K, we are a party to the Tax Receivable Agreement under which we are contractually committed to
pay the Continuing Equity Owners 85% of the amount of any tax benefits that we actually realize, or in some cases
are deemed to realize, as a result of certain transactions (the “TRA Payments”). Amounts payable under the Tax
Receivable Agreement are contingent upon, among other things, (i) generation of future taxable income over the term
of the Tax Receivable Agreement and (ii) future changes in tax laws. If we do not generate sufficient taxable income
in the aggregate over the term of the Tax Receivable Agreement to utilize the tax benefits, then we would not be
required to make the related TRA Payments. Therefore, we would only recognize a liability for TRA Payments if we
determine if it is probable that we will generate sufficient future taxable income over the term of the Tax Receivable
Agreement to utilize the related tax benefits. Estimating future taxable income is inherently uncertain and requires
judgment. In projecting future taxable income, we consider our historical results and incorporate certain assumptions,
including projected retail location openings, revenue growth, and operating margins, among others. As of December
31, 2020, our Tax Receivable Agreement liability was recorded at $145.9 million after decreasing the liability by $0.1
million in the year ended December 31, 2020 to reflect our future tax benefit primarily as a result of the reduction in
enacted state income tax rates. During the year ended December 31, 2020, the Tax Receivable Agreement liability
was further adjusted to reflect new transactions, net of cash payments made. We concluded it is probable that we
would have sufficient future taxable income to utilize the related tax benefits of the liability recorded. If we determine
in the future that we will not be able to fully utilize all or part of the related tax benefits, we would derecognize the
portion of the liability related the benefits not expected to be utilized.
Additionally, we estimate the amount of TRA Payments expected to be paid within the next 12 months and
classify this amount as current on our Consolidated Balance Sheets. This determination is based on our estimate of
taxable income for the next fiscal year. To the extent our estimate differs from actual results, we may be required
reclassify portions of our liabilities under the Tax Receivable Agreement between current and non-current.
ITEM 7a. QUANTITATIVE AND QUALITATIVE DISCLOSURES OF MARKET RISK
We are exposed to market risk from changes in inflation and interest rates. All of these market risks arise in
the normal course of business, as we do not engage in speculative trading activities. The following analysis provides
quantitative information regarding these risks.
Impact of Inflation
We believe that inflation over the last three fiscal years has not had a significant impact on our operations;
however, we cannot assure you there will be no such effect in the future. Our leases require us to pay taxes,
maintenance, repairs, insurance and utilities, all of which are generally subject to inflationary increases. Additionally,
the cost of remodeling acquired retail locations and constructing new retail locations is subject to inflationary increase
in the costs of labor and material, which results in higher rent expense on new retail locations. Finally, we finance
substantially all of our inventory through various revolving floor plan arrangements with interest rates that vary based
on various benchmarks. Such rates have historically increased during periods of increasing inflation.
Interest Rate Risk
Our operating results are subject to risk from interest rate fluctuations on our Senior Secured Credit Facilities,
our Floor Plan Facility and our Real Estate Facility, which carry variable interest rates. Interest rate risk is the
exposure to loss resulting from changes in the level of interest rates and the spread between different interest rates.
Our Senior Secured Credit Facilities includes the Term Loan Facility and the Revolving Credit Facility with advances
tied to a borrowing base and which bear interest at variable rates. Additionally, under our Floor Plan Facilities we
have the ability to draw on revolving floor plan arrangements, which bear interest at variable rates. Because our
Senior Secured Credit Facilities, Floor Plan Facility and Real Estate Facility bear interest at variable rates, we are
exposed to market risks relating to changes in interest rates. Interest rate risk is highly sensitive due to many factors,
including U.S. monetary and tax policies, U.S. and international
87
Table of Contents
economic factors and other factors beyond our control. As of December 31, 2020, we had no outstanding borrowings
under our Revolving Credit Facility aside from letters of credit in the aggregate amount of $5.9 million outstanding
under the Revolving Credit Facility; $1.1 billion of variable rate debt outstanding under our Term Loan Facility, net of
$3.2 million of unamortized original issue discount and $7.9 million of finance costs; $522.5 million in outstanding
borrowings under our Floor Plan Facility, and $20.9 million under the Floor Plan Facility revolving line of credit; and
$4.5 million in borrowings under our Real Estate Facility, net of $13,000 of unamortized finance costs. Based on
December 31, 2020 debt levels, an increase or decrease of 1% in the effective interest rate would cause an increase
or decrease in interest expense under our Term Loan Facility of $12.1 million or $0, respectively, over the next 12
months, an increase or decrease of 1% in the effective rate would cause an increase or decrease in interest under
our Floor Plan Facility of approximately $5.4 million over the next 12 months, and an increase or decrease of 1% in
the effective rate would cause an increase or decrease in interest under our Real Estate Facility of approximately
$45,000 over the next 12 months. We do not use derivative financial instruments for speculative or trading purposes,
but this does not preclude our adoption of specific hedging strategies in the future.
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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Camping World Holdings, Inc. and Subsidiaries
Consolidated Financial Statements
Years Ended December 31, 2020, 2019, and 2018
Contents
Report of Independent Registered Public Accounting Firm – Deloitte & Touche LLP
Consolidated Financial Statements
Consolidated Balance Sheets
Consolidated Statements of Operations
Consolidated Statements of Stockholders’ Deficit
Consolidated Statements of Cash Flows
Notes to Consolidated Financial Statements
90
93
94
95
97
99
89
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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Stockholders and the Board of Directors of Camping World Holdings, Inc. and subsidiaries
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Camping World Holdings, Inc. and subsidiaries
(the "Company") as of December 31, 2020 and 2019, the related consolidated statements of operations, stockholders'
deficit, and cash flows, for each of the three years in the period ended December 31, 2020, and the related notes and
the schedules listed in the Index at Item 15(a)(2) (collectively referred to as the "financial statements"). In our opinion,
the financial statements present fairly, in all material respects, the financial position of the Company as of December
31, 2020 and 2019, and the results of its operations and its cash flows for each of the three years in the period ended
December 31, 2020, in conformity with accounting principles generally accepted in the United States of America.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United
States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2020, based on criteria
established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations
of the Treadway Commission and our report dated February 26, 2021, expressed an unqualified opinion on the
Company's internal control over financial reporting.
Change in Accounting Principle
As discussed in Note 1 to the financial statements, the Company changed its method of accounting for leasing
transactions in 2019 due to the adoption of Accounting Standards Codification Topic 842, Leases, using the modified
retrospective approach.
Basis for Opinion
These financial statements are the responsibility of the Company's management. Our responsibility is to express an
opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with
the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal
securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial statements are free of material
misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of
material misstatement of the financial statements, whether due to error or fraud, and performing procedures that
respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and
disclosures in the financial statements. Our audits also included evaluating the accounting principles used and
significant estimates made by management, as well as evaluating the overall presentation of the financial statements.
We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matters
The critical audit matters communicated below are matters arising from the current-period audit of the financial
statements that were communicated or required to be communicated to the audit committee and that (1) relate to
accounts or disclosures that are material to the financial statements and (2) involved our especially challenging,
subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion
on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below,
providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.
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Table of Contents
Finance and Insurance, Net — Revenue Recognition — Refer to Note 1 to the consolidated financial
statements
Critical Audit Matter Description
The Company acts as an agent in selling certain insurance and service contracts with multi-year terms to customers
on behalf of third-party insurance providers. The proceeds the Company receives for selling these contracts are
subject to chargebacks of such proceeds if the customer terminates the respective contract earlier than a stated
period. These customer proceeds are recorded as variable consideration, net of estimated chargebacks. Estimated
chargebacks depend on ultimate future cancellation rates, determined by management by product type and year sold
using a combination of actuarial methods and leveraging the Company’s historical experience from the past eight
years, adjusted for new consumer trends. As of December 31, 2020, the Company recorded $58.9 million in
chargeback liabilities related to these dealership insurance and service contracts.
Given the judgment involved in estimating the ultimate future cancellation rates used to estimate the chargeback
liabilities, auditing this assumption required a high degree of auditor judgment, including the use of our actuarial
specialists, in performing audit procedures to evaluate the reasonableness of management’s estimate.
How the Critical Audit Matter Was Addressed in the Audit
Our audit procedures related to the ultimate future cancellation rates included the following, among others:
● We tested the effectiveness of controls over management's review of the ultimate future cancellation rates
used to estimate the chargeback liabilities.
● We read standard insurance policies for each policy type, including agreements and amendments between
insurance providers and the Company to understand the arrangements in effect.
● With the assistance of our actuarial specialists, we developed a range of the ultimate liability estimates based
on independent estimated ultimate future cancellation rates utilizing current economic factors and comparing
such range to the liability estimate determined by management.
● We evaluated the reasonableness of the ultimate future cancellation rates used by comparing the recorded
liability amounts, determined based on estimated ultimate future cancellation rates, and related refund
amounts, reflective of actual chargebacks paid to insurance providers, over historical and current periods.
Long-Lived Asset Impairment — Refer to Notes 1 and 5 to the consolidated financial statements
Critical Audit Matter Description
The Company performs an analysis of the carrying value of long-lived assets for impairment whenever events or
changes in circumstances indicate that the carrying value of the long-lived assets may not be recoverable. The
Company’s long-lived asset groups are comprised of property and equipment, net, and operating lease right-of-use
assets (“ROU assets”) that exist predominantly at the individual location level (a ”location”). For locations identified
with carrying values not recoverable by future undiscounted cash flows, impairment charges are measured based on
the excess of carrying value over the location’s fair value, subject to certain limitations. Fair value is determined, as
applicable, as the sum of the discounted projected future cash flows from the use of the location’s assets. The
resulting impairment is allocated to the individual long-lived assets within the asset group up to the individual asset’s
fair value, if readily determinable. As a result, the measurement of any impairment loss includes estimation of the fair
value of the location’s ROU assets, which requires management to consider estimates of market rental rates based
on comparable lease transactions. As of December 31, 2020, the Company had $367.9 million in property and
equipment, net and $769.5 million in ROU assets. During the year ended December 31, 2020, the Company
recognized $12.4 million of long-lived asset impairments.
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We identified the impairment of the carrying value of long-lived assets as a critical audit matter. For locations with
indicators of impairment, a high degree of auditor judgment and an increased extent of effort was required when
performing audit procedures to evaluate the reasonableness of management’s estimates of projected future cash
flows and market rental rates, including the use of valuation specialists in evaluating management’s estimates of
market rental rates and in identifying comparable market rental rate assumptions based on the specific geographic
areas and characteristics of the respective locations.
How the Critical Audit Matter Was Addressed in the Audit
Our audit procedures related to the evaluation of projected future cash flows and the market rental rate assumptions
for locations with impairment indicators included the following, among others:
● We tested the effectiveness of controls over management’s review of the analysis of carrying value of long-
lived assets for impairment, including assumptions of projected future cash flows and current market rental
rates for applicable locations.
● We evaluated the reasonableness of management’s projected future cash flows and market rental rate
assumptions by performing the following procedures for selected locations:
● We compared the minimum future cash flows required to recover the carrying value of the location to
historical chain-wide average cash flows for comparable locations under similar economic
circumstances and relevant location characteristics.
● We evaluated the consistency of projected future cash flows with other relevant information obtained
in our audit, such as internal budgets and forecasts.
● With the assistance of our valuation specialists:
◾ We compared the lease datapoints (e.g., lease start date, square footage, rent per square
foot) used in the Company’s estimate to an independent industry database where such
information was publicly available.
◾ We identified additional comparable lease datapoints of similar square footage to the
location in the related geographic market, and calculated a range of rent per square foot and
average rent per square foot for similar lease types.
◾ We evaluated the reasonableness of the market rental rate assumption by comparing to the
respective market data, considering the level of similarity of the location with the age, size
and proximity of the comparable lease datapoints.
◾ Where available, we compared the rent per square foot for sublease offers and current
negotiations with potential tenants to the market rental rate assumption for the related
locations to determine if the market rental rate assumption is reasonably supported by the
current offers on the actual property.
/s/ Deloitte & Touche LLP
Los Angeles, California
February 26, 2021
We have served as the Company's auditor since 2018.
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Table of Contents
Camping World Holdings, Inc. and Subsidiaries
Consolidated Balance Sheets
(In Thousands Except Share and Per Share Amounts)
Assets
Current assets:
Cash and cash equivalents
Contracts in transit
Accounts receivable, less allowance for doubtful accounts of $3,393 and $3,537 in 2020 and
2019, respectively
Inventories
Prepaid expenses and other assets
Total current assets
Property and equipment, net
Operating lease assets
Deferred tax assets, net
Intangible assets, net
Goodwill
Other assets
Total assets
Liabilities and stockholders' deficit
Current liabilities:
Accounts payable
Accrued liabilities
Deferred revenues
Current portion of operating lease liabilities
Current portion of Tax Receivable Agreement liability
Current portion of long-term debt
Notes payable – floor plan, net
Other current liabilities
Total current liabilities
Operating lease liabilities, net of current portion
Tax Receivable Agreement liability, net of current portion
Revolving line of credit
Long-term debt, net of current portion
Deferred revenues
Other long-term liabilities
Total liabilities
Commitments and contingencies
Stockholders' deficit:
Preferred stock, par value $0.01 per share – 20,000,000 shares authorized; none issued and
outstanding as of December 31, 2020 and December 31, 2019
Class A common stock, par value $0.01 per share – 250,000,000 shares authorized; 43,083,008
issued and 42,226,389 outstanding as of December 31, 2020 and 37,701,584 issued and
37,488,989 outstanding as of December 31, 2019
Class B common stock, par value $0.0001 per share – 75,000,000 shares authorized;
69,066,445 issued as of December 31, 2020 and December 31, 2019; and 45,999,132 and
50,706,629 outstanding as of December 31, 2020 and December 31, 2019
Class C common stock, par value $0.0001 per share – one share authorized, issued and
outstanding as of December 31, 2020 and December 31, 2019
Additional paid-in capital
Treasury stock, at cost; 572,447 and 0 shares as of December 31, 2020 and December 31, 2019
Retained deficit
Total stockholders' equity (deficit) attributable to Camping World Holdings, Inc.
Non-controlling interests
Total stockholders' deficit
Total liabilities and stockholders' deficit
See accompanying Notes to Consolidated Financial Statements
93
December 31,
2020
December 31,
2019
$
166,072
48,175
$
147,521
44,947
$
$
83,422
1,136,345
60,211
1,494,225
367,898
769,487
165,708
30,122
413,123
15,868
3,256,431
148,462
137,688
88,213
62,405
8,089
14,414
522,455
53,795
1,035,521
804,555
137,845
20,885
1,150,417
61,519
54,920
3,265,662
—
428
5
81,847
1,358,539
57,827
1,690,681
314,374
807,537
129,710
29,707
386,941
17,290
3,376,240
106,959
130,316
87,093
58,613
6,563
14,085
848,027
44,298
1,295,954
843,312
108,228
40,885
1,153,551
58,079
35,467
3,535,476
—
375
5
—
63,342
(15,187)
(21,814)
26,774
(36,005)
(9,231)
3,256,431
$
—
50,152
—
(83,134)
(32,602)
(126,634)
(159,236)
3,376,240
$
$
$
Table of Contents
Camping World Holdings, Inc. and Subsidiaries
Consolidated Statements of Operations
(In Thousands Except Per Share Amounts)
Year Ended December 31,
2019
2020
2018
Revenue:
Good Sam Services and Plans
RV and Outdoor Retail
New vehicles
Used vehicles
Products, service and other
Finance and insurance, net
Good Sam Club
Subtotal
Total revenue
Costs applicable to revenue (exclusive of depreciation and amortization shown
separately below):
Good Sam Services and Plans
RV and Outdoor Retail
New vehicles
Used vehicles
Products, service and other
Good Sam Club
Subtotal
Total costs applicable to revenue
Operating expenses:
Selling, general, and administrative
Debt restructure expense
Depreciation and amortization
Goodwill impairment
Long-lived asset impairment
Lease termination
Loss on disposal of assets
Total operating expenses
Income from operations
Other income (expense):
Floor plan interest expense
Other interest expense, net
Loss on debt restructure
Tax Receivable Agreement liability adjustment
Total other expense
Income (loss) before income taxes
Income tax expense
Net income (loss)
Less: net (income) loss attributable to non-controlling interests
Net income (loss) attributable to Camping World Holdings, Inc.
Earnings (loss) per share of Class A common stock:
Basic
Diluted
Weighted average shares of Class A common stock outstanding:
Basic
Diluted
See accompanying Notes to Consolidated Financial Statements
94
$
180,977
$
179,538
$
172,660
2,823,311
984,853
948,890
464,261
44,299
5,265,614
5,446,591
2,370,321
857,628
1,034,577
401,302
48,653
4,712,481
4,892,019
2,512,854
732,017
949,383
383,711
41,392
4,619,357
4,792,017
72,938
78,054
76,041
2,320,537
751,029
590,716
8,892
3,671,174
3,744,112
1,156,071
—
51,981
—
12,353
4,547
1,332
1,226,284
476,195
(19,689)
(54,689)
—
141
(74,237)
401,958
(57,743)
344,215
(221,870)
122,345
3.11
3.09
39,383
40,009
2,074,270
678,640
762,919
10,738
3,526,567
3,604,621
1,141,643
—
59,932
—
66,270
(686)
11,492
1,278,651
8,747
(40,108)
(69,363)
—
10,005
(99,466)
(90,719)
(29,582)
(120,301)
59,710
(60,591)
(1.62)
(1.62)
37,310
37,350
$
$
$
$
$
$
2,188,735
568,400
585,263
10,646
3,353,044
3,429,085
1,069,359
380
49,322
40,046
—
—
2,810
1,161,917
201,015
(38,315)
(63,329)
(1,676)
(1,324)
(104,644)
96,371
(30,790)
65,581
(55,183)
10,398
0.28
0.28
36,985
88,878
$
Table of Contents
Camping World Holdings, Inc. and Subsidiaries
Consolidated Statements of Stockholders’ Deficit
(In Thousands)
Additional
Non-
Class A
Common Stock
Class B
Common Stock
Class C
Common Stock
Paid-In
Shares Amounts Shares Amounts Shares Amounts Capital
Treasury Stock
Shares Amounts
Retained
Deficit
Controlling
Interest
Total
Balance at January 1, 2018
36,749 $
367
50,837 $
Adoption of ASC 606 accounting standard
(see Note 2 — Revenue)
Equity-based compensation
Exercise of stock options
Non-controlling interest adjustment for
capital contribution of proceeds from the
exercise of stock options
Vesting of restricted stock units
Repurchases of Class A common stock for
withholding taxes on vested RSUs
Disgorgement of short-swing profits by
Section 16 officer
Redemption of LLC common units for Class
A common stock
Distributions to holders of LLC common
units
Dividends(1)
Establishment of liabilities under the Tax
Receivable Agreement and related changes
to deferred tax assets associated with that
liability
Non-controlling interest adjustment
Net income
Balance at December 31, 2018
Adoption of ASC 842 accounting standard
(see Note 1 — Summary of Significant
Accounting Policies)
Equity-based compensation
Vesting of restricted stock units
Repurchases of Class A common stock for
withholding taxes on vested RSUs
Redemption of LLC common units for Class
A common stock
Distributions to holders of LLC common
units
Dividends(1)
Establishment of liabilities under the Tax
Receivable Agreement and related changes
to deferred tax assets associated with that
liability
Non-controlling interest adjustment
Net loss
Balance at December 31, 2019
—
—
7
—
298
(77)
—
215
—
—
—
—
—
—
3
(1)
—
3
—
—
—
—
—
—
—
—
—
(130)
—
—
—
—
—
37,192
—
—
—
372
—
—
—
50,707
—
—
417
(126)
6
—
—
—
—
4
(1)
—
—
—
—
—
—
—
—
—
—
—
—
—
37,489
—
—
—
375
—
—
—
50,707
5
—
—
—
—
—
—
—
—
—
—
—
—
—
5
—
—
—
—
—
—
—
—
—
—
5
— $
— $
42,520
— $
— $
7,619 $
21,252 $
71,763
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
14,088
149
(86)
881
(1,364)
557
4,536
—
—
(1,576)
(12,174)
—
47,531
—
13,145
736
(1,477)
(478)
—
—
(8)
(9,297)
—
50,152
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
95
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
1,310
—
—
—
—
—
—
—
2,476
—
—
86
(884)
—
—
(153)
3,786
14,088
149
—
—
(1,365)
557
4,386
—
(22,697)
(101,755)
—
(101,755)
(22,697)
—
—
10,398
(3,370)
3,705
—
—
—
—
—
12,174
55,183
(11,621)
6,332
—
(740)
—
—
(1,576)
—
65,581
32,917
10,037
13,145
—
(1,478)
(478)
—
(22,878)
(70,192)
—
(70,192)
(22,878)
—
—
(60,591)
(83,134)
—
9,297
(59,710)
(126,634)
(8)
—
(120,301)
(159,236)
Table of Contents
Additional
Non-
Class A
Common Stock
Class B
Common Stock
Class C
Common Stock
Paid-In
Shares Amounts Shares Amounts Shares Amounts Capital
Treasury Stock
Shares Amounts
Retained
Deficit
Controlling
Interest
Equity-based compensation
Exercise of stock options
Non-controlling interest adjustment for
capital contribution of proceeds from the
exercise of stock options
Vesting of restricted stock units
Repurchases of Class A common stock for
withholding taxes on vested RSUs
Repurchases of Class A common stock to
treasury stock
Redemption of LLC common units for Class
A common stock
Distributions to holders of LLC common
units
Dividends(1)
Establishment of liabilities under the Tax
Receivable Agreement and related changes
to deferred tax assets associated with that
liability
Non-controlling interest adjustment
Net income
Balance at December 31, 2020
—
191
—
338
(71)
—
—
2
—
3
—
—
—
—
—
—
—
—
4,852
48
(4,708)
—
—
—
—
—
—
—
—
—
42,799 $
—
—
—
428
—
—
—
45,999 $
—
—
—
—
—
—
—
—
—
—
—
—
5
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
20,661
4,022
—
23
—
611
(2,602)
(6,398)
—
323
—
8,556
(1,910)
(107)
(2,832)
11,616
(811)
(21,522)
25,565
—
—
—
—
—
—
—
—
— $
—
—
—
— $
(28,385)
(9,379)
—
63,342
—
—
—
(572) $
—
—
—
—
—
—
(15,187) $
—
—
—
—
—
—
—
—
—
Total
20,661
4,635
2,602
(2,161)
—
—
—
(4,742)
(11,616)
(21,522)
7,529
33,142
—
(61,025)
(136,974)
—
(136,974)
(61,025)
—
—
122,345
(21,814) $
—
9,379
221,870
(36,005) $
(28,385)
—
344,215
(9,231)
(1)
The Company declared dividends per share of Class A common stock of $1.48, $0.61, and $0.61 per share in 2020, 2019, and 2018,
respectively.
See accompanying Notes to Consolidated Financial Statements
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Camping World Holdings, Inc. and Subsidiaries
Consolidated Statements of Cash Flows
(In Thousands)
Operating activities
Net income (loss)
Adjustments to reconcile net income (loss) to net cash provided
by operating activities:
Depreciation and amortization
Equity-based compensation
Loss on debt restructure
Loss (gain) on lease termination
Goodwill impairment
Long-lived asset impairment
Loss on disposal of assets
Provision for losses on accounts receivable
Non-cash lease expense
Accretion of original debt issuance discount
Non-cash interest
Deferred income taxes
Tax Receivable Agreement liability adjustment
Change in assets and liabilities, net of acquisitions:
Receivables and contracts in transit
Inventories
Prepaid expenses and other assets
Accounts payable and other accrued expenses
Payment pursuant to Tax Receivable Agreement
Accrued rent for cease-use locations
Deferred revenue
Operating lease liabilities
CARES Act deferral of payroll taxes
Other, net
Net cash provided by operating activities
Investing activities
Purchases of property and equipment
Purchase of real property
Proceeds from the sale of real property
Purchases of businesses, net of cash acquired
Purchase of equity securities
Proceeds from sale of property and equipment
Purchases of intangible assets
Net cash used in investing activities
97
Year Ended December 31,
2019
2020
2018
$
344,215
$ (120,301) $
65,581
51,981
20,661
—
4,547
—
12,353
1,332
1,068
57,536
1,079
4,306
6,606
(141)
(2,777)
239,334
(3,016)
39,846
(6,563)
—
4,560
(68,951)
29,231
10,462
747,669
59,932
13,145
—
(686)
—
66,270
11,492
(20)
54,921
1,038
4,585
14,897
(10,005)
12,217
216,111
(7,951)
(15,350)
(9,425)
—
708
(54,403)
—
14,759
251,934
49,322
14,088
1,676
—
40,046
—
2,810
2,444
—
1,034
5,068
11,364
1,324
(16,550)
(99,610)
(8,290)
49,172
(8,914)
(488)
12,448
—
—
13,767
136,292
(31,845)
(53,078)
7,484
(47,571)
(2,500)
1,751
(176)
(133,557)
(120,802)
56,932
(99,240)
—
3,978
—
$ (125,935) $ (104,537) $ (292,689)
(56,789)
(31,567)
28,169
(48,418)
—
4,068
—
Table of Contents
Camping World Holdings, Inc. and Subsidiaries
Consolidated Statements of Cash Flows (continued)
(In Thousands)
Financing activities
Proceeds from long-term debt
Payments on long-term debt
Net payments on notes payable – floor plan, net
Borrowings on revolving line of credit
Payments on revolving line of credit
Payment of debt issuance costs
Dividends on Class A common stock
Proceeds from exercise of stock options
RSU shares withheld for tax
Repurchases of Class A common stock to treasury stock
Disgorgement of short-swing profits by Section 16 officer
Distributions to holders of LLC common units
Net cash (used in) provided by financing activities
Year Ended December 31,
2019
2020
2018
—
(39,070)
(324,485)
—
(20,000)
—
(61,025)
4,635
(4,742)
(21,522)
—
(136,974)
(603,183)
11,663
(13,658)
(43,989)
14,029
(11,883)
(47)
(22,878)
—
(1,478)
—
—
(70,192)
(138,433)
329,775
(83,825)
(85,446)
45,164
(6,425)
(3,345)
(22,697)
153
(1,365)
—
557
(101,755)
70,791
Increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of the period
Cash and cash equivalents at end of the period
18,551
147,521
166,072
$
8,964
138,557
147,521
(85,606)
224,163
138,557
$
$
See accompanying Notes to Consolidated Financial Statements
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Camping World Holdings, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
December 31, 2020
1. Summary of Significant Accounting Policies
Principles of Consolidation and Basis of Presentation
The consolidated financial statements include the accounts of Camping World Holdings, Inc. (“CWH”) and its
subsidiaries (collectively, the “Company”), and are presented in accordance with accounting principles generally
accepted in the United States (“GAAP”). All intercompany accounts and transactions of the Company and its
subsidiaries have been eliminated in consolidation.
CWH was formed on March 8, 2016 as a Delaware corporation for the purpose of facilitating an initial public
offering (the “IPO”) and other related transactions in order to carry on the business of CWGS Enterprises, LLC
(“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 18 — Stockholders’ Equity). Despite its position as sole managing member of
CWGS, LLC, CWH has a minority economic interest in CWGS, LLC. As of December 31, 2020, 2019, and 2018,
CWH owned 47.4%, 42.0% and 41.9%, respectively, of CWGS, LLC. Accordingly, the Company consolidates the
financial results of CWGS, LLC and reports a non-controlling interest in its consolidated financial statements.
The Company does not have any components of other comprehensive income recorded within its
consolidated financial statements and, therefore, does not separately present a statement of comprehensive income
in its 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, although new waves of infection may lead to an
increase in such restrictions or closures.
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, lead generation, and revenue trends in
May continuing throughout the remainder of 2020 and early indications appear to show favorable trends continuing
into 2021.
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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 vehicle (“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 retail locations have continued to operate as
essential businesses and the Company has continued to operate its e-commerce business. As a consequence of
COVID-19, the Company had held fewer consumer shows and events during 2020 than in 2019. 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 two 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 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; business to business distribution of RV
furniture, 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 5 – 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.
The table below summarizes the Company’s retail store openings, closings, divestitures, conversions and
number of locations from December 31, 2019 to December 31, 2020:
Number of store locations as of December 31, 2019
Opened
Closed / divested
Temporarily closed(1)
Converted
Number of store locations as of December 31, 2020
RV
Dealerships
RV Service &
Retail Centers
Other
Retail Stores
Total
154
9
(3)
(2)
2
160
11
—
—
—
(1)
10
10
—
(8)
—
(1)
1
175
9
(11)
(2)
—
171
(1) These locations are temporarily closed in response to the COVID-19 pandemic.
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Use of Estimates
The preparation of these 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
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.
Cash and Cash Equivalents
The Company considers all short-term, highly liquid investments purchased with an original maturity date of
three months or less to be cash equivalents. The carrying amount approximates fair value because of the short-term
maturity of these instruments. Outstanding checks that are in excess of the cash balances at certain banks are
included in accrued liabilities in the consolidated balance sheets, and changes in the amounts are reflected in
operating cash flows in the accompanying consolidated statement of cash flows.
Contracts in Transit, Accounts Receivable and Current Expected Credit Losses
Contracts in transit consist of amounts due from non-affiliated financing institutions on retail finance contracts
from vehicle sales for the portion of the vehicle sales price financed by the Company’s customers. These retail
installment sales contracts are typically funded within ten days of the initial approval of the retail installment sales
contract by the third-party lender.
Accounts receivable are stated at realizable value, net of an allowance for doubtful accounts, which includes
a reserve for expected credit losses. Accounts receivable balances due in excess of one year was $8.2 million at
December 31, 2020 and $8.6 million at December 31, 2019, which are included in other assets in the 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 risk characteristics include customer size and historical loss
patterns. Management has evaluated the expected credit losses related to contracts in transit and determined that no
allowance for doubtful accounts was required at December 31, 2020. No 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 $3.4 million as of December
31, 2020 and $3.5 million as of December 31, 2019 for uncollectible accounts were required.
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The following table details the changes in the allowance for doubtful accounts (in thousands):
Allowance for doubtful accounts:
Balance, beginning of period
Charged to bad debt expense
Deductions (1)
Balance, end of period
Year Ended
December 31,
2020
December 31,
2019
$
$
3,537
1,068
(1,212)
3,393
$
$
4,481
(20)
(924)
3,537
(1)
These amounts primarily relate to the write off of uncollectable accounts after collection efforts have been exhausted.
Concentration of Credit Risk
The Company’s most significant industry concentration of credit risk is with financial institutions from which
the Company has recorded receivables and contracts in transit. These financial institutions provide financing to the
Company’s customers for the purchase of a vehicle in the normal course of business. These receivables are short-
term in nature and are from various financial institutions located throughout the United States.
The Company has cash deposited in various financial institutions that is in excess of the insurance limits
provided by the Federal Deposit Insurance Corporation. The amount in excess of FDIC limits at December 31, 2020
and 2019 was approximately $188.1 million and $149.9 million, respectively.
The Company is potentially subject to concentrations of credit risk in accounts receivable. Concentrations of
credit risk with respect to accounts receivable are limited due to the large number of customers and their geographic
dispersion.
Inventories, net
New and used RV inventories consist primarily of new and used recreational vehicles held for sale valued
using the specific-identification method and valued at the lower of cost or net realizable value. Cost includes purchase
costs, reconditioning costs, dealer-installed accessories, and freight. For vehicles accepted in trades, the cost is the
fair value of such used vehicles at the time of the trade-in. Products, parts, accessories, and other inventories
primarily consist of retail travel and leisure specialty merchandise and are stated at lower of cost or net realizable
value. The cost of RV and Outdoor Retail inventories primarily consists of the direct cost of the merchandise including
freight. A portion of the products, parts, accessories and other inventory includes capitalized labor relating to
assembly.
Property and Equipment, net
Property and equipment is recorded at historical cost, net of accumulated depreciation and amortization, and,
if applicable, impairment charges. Depreciation of property and equipment is provided using the straight-line method
over the following estimated useful lives of the assets:
Building and improvements
Leasehold improvements
Furniture, fixtures and equipment
Software
Years
40
3 - 40
3-12
3-5
Leasehold improvements are amortized over the useful lives of the assets or the remaining term of the
respective lease, whichever is shorter.
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Leases
After the adoption of Accounting Standards Codification (“ASC”) 842, Leases (“ASC 842”) on January 1,
2019 the Company recognizes a right-of-use (“ROU”) asset and a lease liability on the balance sheet for operating
leases (with the exception of short-term leases based on the practical expedient elected by the Company) at the
commencement date, in addition to finance leases that were previously also required to be recognized on the balance
sheet, and recognizes expenses on the income statement in a similar manner to the previous guidance in ASC 840,
Leases (“ASC 840”) (see Note 10 — Lease Obligations).
Goodwill and Other Intangible Assets
Goodwill is reviewed at least annually for impairment, and more often when impairment indicators are present
(see Note 7 – Goodwill and Intangible Assets). Finite-lived intangibles are recorded at cost, net of accumulated
amortization and, if applicable, impairment charges.
Long-Lived Assets
Long lived assets are included in property and equipment, which also includes capitalized software costs to
be held and used. For the Company’s major software systems, such as its accounting and membership systems, its
capitalized costs may include some internal or external costs to configure, install and test the software during the
application development stage. The Company does not capitalize preliminary project costs, nor does it capitalize
training, data conversion costs, maintenance or post development stage costs. The Company’s long-lived assets are
reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset
may not be recoverable. The Company’s long-lived asset groups exist predominantly at the individual location level
and the associated impairment analysis involves the comparison of an asset group’s estimated future undiscounted
cash flows over its remaining useful life to its respective carrying value, which primarily includes furniture, equipment,
leasehold improvements, and operating lease assets. For long-lived asset groups identified with carrying values not
recoverable by future undiscounted cash flows, impairment charges are recognized to the extent the sum of the
discounted future cash flows from the use of the asset group is less than the carrying value. The impairment charge is
allocated to the individual long-lived assets within an asset group; however, an individual long-lived asset is not
impaired below its individual fair value, if readily determinable. The measurement of any impairment loss includes
estimation of the fair value of the asset group’s respective operating lease assets, which includes estimates of market
rental rates based on comparable lease transactions.
Long-Term Debt
The fair value of the Company’s long-term debt is estimated based on the quoted market prices for the same
or similar issues or on the current rates offered for debt of the same or similar remaining maturities.
Revenue Recognition
Revenues are recognized by the Company when control of the promised goods or services is transferred to
its customers in an amount that reflects the consideration the Company expects to be entitled to in exchange for
those goods or services. Sales and other taxes collected from the customer concurrent with revenue-producing
activities are excluded from revenue. Incidental items that are immaterial in the context of the contract are recognized
as expense. The Company’s contracts with customers may include multiple performance obligations. For such
arrangements, the Company allocates revenue to each performance obligation based on its relative stand-alone
selling price. The Company generally determines stand-alone selling prices based on the prices charged to
customers or using the adjusted market assessment approach. The Company presents disaggregated revenue on its
consolidated statements of operations.
Good Sam Services and Plans revenue consists of revenue from publications, consumer shows, and
marketing fees from various consumer services and plans. Roadside Assistance (“RA”) revenues are deferred and
recognized over the contractual life of the membership. RA claim expenses are recognized when incurred. Marketing
fees for finance, insurance, extended service and other similar products are recognized as variable consideration, net
of estimated cancellations, if applicable, when a product contract payment has been received
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or financing has been arranged. These marketing fees are recorded net as the Company acts as an agent in the
transaction. The related estimate for cancellations on the marketing fees for multi-year finance and insurance
products utilize actuarial analysis to estimate the exposure. Promotional expenses consist primarily of direct mail
advertising expenses and renewal expenses and are expensed at the time related materials are mailed. Newsstand
sales of publications and related expenses are recorded as variable consideration at the time of delivery, net of
estimated returns. Subscription sales of publications are reflected in income over the lives of the subscriptions. The
related selling expenses are expensed as incurred. Advertising revenues and related expenses are recorded at the
time of delivery. Revenue and related expenses for consumer shows are recognized when the show occurs.
RV vehicle revenue consists of sales of new and used recreational vehicles, sales of RV parts and services,
and commissions on the related finance and insurance contracts. Revenue from the sale of recreational vehicles is
recognized upon completion of the sale to the customer. Conditions to completing a sale include having an
agreement with the customer, including pricing, whereby the sales price must be reasonably expected to be collected
and having control transferred to the customer.
Revenue from RV-related parts, service and other products sales is recognized over time as work is
completed, and when parts or other products are delivered to the Company’s customers. For service and parts
revenues recorded over time, the Company utilizes a method that considers total costs incurred to date and the
applicable margin in relation to total expected efforts to complete our performance obligation in order to determine the
appropriate amount of revenue to recognize over time.
Finance and insurance revenue is recorded net, since the Company is acting as an agent in the transaction,
and is recognized when a finance and insurance product contract payment has been received or financing has been
arranged. The proceeds the Company receives for arranging financing contracts, selling extended service contracts,
and selling other products, are subject to chargebacks if the customer terminates the respective contract earlier than
a stated period. In the case of insurance and service contracts, the stated period typically extends from one to five
years with the refundable commission balance declining over the contract term. These proceeds are recorded as
variable consideration, net of estimated chargebacks. Chargebacks are estimated based on ultimate future
cancellation rates by product type and year sold using a combination of actuarial methods and leveraging the
Company’s historical experience from the past eight years, adjusted for new consumer trends. The chargeback
liabilities included in the estimate of variable consideration totaled $58.9 million and $48.3 million as of December 31,
2020 and December 31, 2019, respectively.
The remaining RV and Outdoor retail revenue consists of sales of products, service and other products,
including RV accessories and supplies, RV furniture, camping, hunting, fishing, skiing, snowboarding, bicycling,
skateboarding, marine and watersport equipment and supplies. Revenue from products, service and other is
recognized over time as work is completed, and when parts or other products are delivered to the Company’s
customers. For service and parts revenues recorded over time, the Company utilizes a method that considers total
costs incurred to date and the applicable margin in relation to total expected efforts to complete our performance
obligation in order to determine the appropriate amount of revenue to recognize over time. E-commerce sales are
recognized when the product is shipped and recorded as variable consideration, net of anticipated merchandise
returns which reduce revenue and cost of sales in the period that the related sales are recorded.
Good Sam Club revenue consists of revenue from club membership fees and royalty fees from co-branded
credit cards. Membership revenue is generated from annual, multiyear and lifetime memberships. The revenue and
expenses associated with these memberships are deferred and amortized over the membership period. Unearned
revenue and profit are subject to revisions as the membership progresses to completion. Revisions to membership
period estimates would change the amount of income and expense amortized in future accounting periods. For
lifetime memberships, an 18-year period is used, which is the actuarially determined estimated fulfillment period.
Royalty revenue is earned under the terms of an arrangement with a third-party credit card provider based on a
percentage of the Company’s co-branded credit card portfolio retail spending with such third-party credit card provider
and for acquiring new cardholders.
The Company does not adjust the promised amount of consideration for the effects of a significant financing
component if the Company expects, at contract inception, that the period of time between payment
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and transfer of the promised goods or services will be one year or less. The Company expenses sales commissions
when incurred in cases where the amortization period of those otherwise capitalized sales commissions would have
been one year or less. The Company does not disclose the value of unsatisfied performance obligations for revenue
streams for (i) contracts with an original expected length of one year or less and (ii) contracts for which the Company
recognizes revenue at the amount to which it has the right to invoice for services performed. The Company accounts
for shipping and handling as activities to fulfill the promise to transfer the good to the customer and does not evaluate
whether shipping and handling is a separate performance obligation.
Parts and Service Internal Profit
The Company’s parts and service departments recondition the majority of used vehicles acquired by the
Company’s used vehicle departments and perform minor preparatory work on new vehicles acquired by the
Company’s new vehicle departments. The parts and service departments charge the new and used vehicle
departments as if they were third parties in order to account for total activity performed by that department. The
revenue and costs applicable to revenue associated with the internal work performed by the Company’s parts and
service departments are eliminated in consolidation. The Company maintains a reserve for internal work order profits
on vehicles that remain in inventories.
Advertising Expense
Advertising expenses are expensed as incurred. Advertising expenses for the years ended December 31,
2020, 2019 and 2018 were $96.3 million, $117.8 million and $112.4 million, respectively.
Vendor Allowances
As a component of the Company’s consolidated procurement program, the Company frequently enters into
contracts with vendors that provide for payments of rebates or other allowances. These vendor payments are
reflected in the carrying value of the inventory when earned or as progress is made toward earning the rebate or
allowance and as a component of cost of sales as the inventory is sold. Certain of these vendor contracts provide for
rebates and other allowances that are contingent upon the Company meeting specified performance measures such
as a cumulative level of purchases over a specified period of time. Such contingent rebates and other allowances are
given accounting recognition at the point at which achievement of the specified performance measures are deemed to
be probable and reasonably estimable.
Shipping and Handling Fees and Costs
The Company reports shipping and handling costs billed to customers as a component of revenues, and
related costs are reported as a component of costs applicable to revenues. For the years ended December 31, 2020,
2019, and 2018, $8.2 million, $6.2 million, and $4.9 million of shipping and handling fees, respectively, were included
in the RV and Outdoor Retail segment as revenue.
Income Taxes
The Company recognizes deferred tax assets and liabilities based on the asset and liability method, which
requires an adjustment to the deferred tax asset or liability to reflect income tax rates currently in effect. When income
tax rates increase or decrease, a corresponding adjustment to income tax expense is recorded by applying the rate
change to the cumulative temporary differences. The Company recognizes the tax benefit from an uncertain tax
position in accordance with accounting guidance on accounting for uncertainty in income taxes. The Company
classifies interest and penalties relating to income taxes as income tax expense. See Note 11 — Income Taxes for
additional information.
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Recently Adopted Accounting Pronouncements
In June 2016, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update
(“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 does not expect that the adoption
of the provisions of this ASU will have a material impact on its consolidated financial statements.
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2. Revenue
Contract Assets
As of December 31, 2020 and 2019, a contract asset of $8.1 million and $6.1 million, respectively, relating to
RV service revenues was included in accounts receivable in the accompanying consolidated balance sheet. As of
December 31, 2020 and 2019, the Company had capitalized costs to acquire a contract consisting of $7.1 million and
$6.6 million, respectively, from the deferral of sales commissions expenses relating to multi-year consumer services
and plans and the recording of such expenses over the same period as the recognition of the related revenues.
Deferred Revenues
The Company records deferred revenues when cash payments are received or due in advance of the
Company’s performance, net of estimated refunds that are presented separately as a component of accrued
liabilities. For the year ended December 31, 2020, $87.1 million of revenues recognized were included in the deferred
revenue balance at the beginning of the period.
As of December 31, 2020, the Company has unsatisfied performance obligations primarily relating to multi-
year plans for its roadside assistance, Good Sam Club memberships, Coast to Coast memberships, the annual
campground guide, and magazine publication revenue streams. The total unsatisfied performance obligation for these
revenue streams at December 31, 2020 and the periods during which the Company expects to recognize the
amounts as revenue are presented as follows (in thousands):
2021
2022
2023
2024
2025
Thereafter
Total
As of
December 31, 2020
88,213
$
29,472
15,797
7,707
4,083
4,460
149,732
$
The Company’s payment terms vary by the type and location of its customer and the products or services
offered. The term between invoicing and when payment is due is not significant. For certain products or services and
customer types, the Company requires payment before the products or services are delivered to the customer.
3. Receivables
Receivables consisted of the following at December 31, (in thousands):
Good Sam Services and Plans
RV and Outdoor Retail
New and used vehicles
Parts, service and other
Trade accounts receivable
Due from manufacturers
Other
Corporate
Allowance for doubtful accounts
107
2020
$ 11,837
2019
$ 20,195
6,836
26,437
16,289
17,778
7,611
27
86,815
(3,393)
$ 83,422
2,295
23,199
15,715
17,642
5,782
556
85,384
(3,537)
$ 81,847
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4. Inventories, net and Notes Payable — Floor Plan, net
Inventories consisted of the following at December 31, (in thousands):
Good Sam services and plans
New RVs
Used RVs
Products, parts, accessories and other
December 31,
2020
December 31,
2019
$
$
109
691,114
178,336
266,786
590
966,134
165,927
225,888
$
1,136,345
$
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 December 31, 2020 and at
one-month LIBOR plus 2.15% for the years ended December 31, 2019 and December 31, 2018. LIBOR was 0.15%,
1.71% and 2.35% as of December 31, 2020, 2019, and 2018, respectively. 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 December 31, 2020 and 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 December 31, 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 $48.0 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 reduction
(“Current Ratio Reduction Period”) of the minimum consolidated current ratio at any time during 2020 and the first
seven days of 2021. FR did not exercise 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 was 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 December 31, 2020 and December 31, 2019, FR had $133.6 million
and $87.0 million, respectively, in the FLAIR offset account. The Third Amendment raised the maximum FLAIR
percentage of outstanding floor plan borrowings from 20% to 30% for the period of May 12, 2020 through August 31,
2020 before returning to 20%.
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 December 31, 2020 that would trigger a subjective acceleration clause. Additionally, the credit agreement
governing the Floor Plan Facility contains certain financial covenants. FR was in compliance with all debt covenants
at December 31, 2020 and December 31, 2019. On June 29, 2020, FR made a voluntary $20.0 million principal
payment on the revolving line of credit.
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The following table details the outstanding amounts and available borrowings under the Floor Plan Facility as
of December 31, 2020 and December 31, 2019 (in thousands):
Floor Plan Facility:
Notes payable — floor plan:
Total commitment
Less: borrowings, net
Less: flooring line aggregate interest reduction
account
Additional borrowing capacity
Less: accounts payable for sold inventory
Less: purchase commitments
Unencumbered borrowing capacity
Revolving line of credit
Less: borrowings
Additional borrowing capacity
Letters of credit:
Total commitment
Less: outstanding letters of credit
Additional letters of credit capacity
December 31,
2020
December 31,
2019
$
1,379,750
(522,455)
$
1,379,750
(848,027)
(133,639)
723,656
(28,980)
(39,121)
655,555
48,000
(20,885)
27,115
15,000
(11,732)
3,268
$
$
$
$
$
$
$
$
$
$
(87,016)
444,707
(27,892)
(8,006)
408,809
60,000
(40,885)
19,115
15,000
(11,175)
3,825
5. 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 Outdoor Lifestyle Locations, three
distribution centers, and 20 specialty retail locations through December 31, 2020. One of the aforementioned closed
distribution centers was reopened during the three months ended June 2020 and repurposed for online order
fulfillment. As of December 31, 2020, the Company has completed the store closures and divestitures relating to the
2019 Strategic Shift. 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 $89.6 million to $110.6 million. The breakdown of the estimated restructuring costs are as follows:
●
●
one-time employee termination benefits relating to retail
closures/divestitures of $1.2 million, all of which has been incurred through December 31, 2020;
store or
distribution center
lease termination costs of $18.0 million to $32.0 million, of which $11.9 million has been incurred
through December 31, 2020;
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●
●
incremental inventory reserve charges of $42.4 million, all of which has been incurred through
December 31, 2020; and
other associated costs of $28.0 million to $35.0 million, of which $21.2 million has been incurred
through December 31, 2020.
Through December 31, 2020, the Company has incurred $21.2 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 $6.8 million to $13.8 million represents
similar costs that may be incurred in the year ending December 31, 2021 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, 2021 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 associated with the 2019 Strategic Shift (in thousands):
Restructuring costs:
One-time termination benefits(1)
Lease termination costs(2)
Incremental inventory reserve charges(3)
Other associated costs(4)
Total restructuring costs
Year Ended
December 31, 2020
December 31, 2019
$
$
231
4,432
543
16,835
22,041
$
$
1,008
55
41,894
4,321
47,278
(1)
(2)
(3)
These costs incurred in 2020 were primarily included in costs applicable to revenues – products, service and other in the consolidated
statements of operations. These costs incurred in 2019 were primarily included in selling, general and administrative expenses in the
consolidated statements of operations.
These costs were included in lease termination charges in the consolidated statements of operations. This reflects termination fees
paid, net of any gain from derecognition of the related operating lease assets and liabilities.
These costs were included in costs applicable to revenue – products, service and other in the consolidated statements of operations.
(4) Other associated costs primarily represent labor, lease, and other operating expenses incurred during the post-close wind-down
period for the locations related to the 2019 Strategic Shift. For the years ended December 31, 2020 and 2019, costs of approximately
$0.4 million and $0.6 million, respectively, were included in costs applicable to revenue – products, service and other, and $16.4
million and $3.7 million, respectively, were included in selling, general, and administrative expenses in the consolidated statements of
operations.
The following table details changes in the restructuring accrual associated with the 2019 Strategic Shift (in
thousands):
Balance at June 30, 2019
Charged to expense
Paid or otherwise settled
Balance at December 31, 2019
Charged to expense
Paid or otherwise settled
Balance at December 31, 2020
One-time
Lease
Termination Termination Associated
Benefits Costs (1)
— $
— $
Costs
Other
$
— $
1,008
(286)
722
231
(953)
1,350
(1,350)
—
10,532
(10,532)
$
— $
— $
4,321
(4,036)
285
16,835
(16,346)
774
$
110
Total
—
6,679
(5,672)
1,007
27,598
(27,831)
774
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(1)
Lease termination costs excludes the $1.3 million and the $6.1 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 year ended December 31, 2020, respectively.
The Company evaluated the requirements of ASC No. 205-20, Presentation of Financial Statements –
Discontinued Operations relative to the 2019 Strategic Shift and determined that discontinued operations treatment is
not applicable. Accordingly, the results of operations of the locations impacted by the 2019 Strategic Shift are
reported as part of continuing operations in the accompanying consolidated financial statements.
Long-lived Asset Impairment
During the year ended December 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 certain locations
within the RV and Outdoor Retail segment had long-lived assets that were impaired. The long-lived asset impairment
charge, subject to limitations described below, was calculated as the amount that the carrying value of the locations
exceeded the estimated fair value. The calculated long-lived asset impairment charge was allocated to each of the
categories of long-lived assets at each location pro rata based on the long-lived assets’ carrying values, except that
individual assets cannot be impaired below their individual fair values when that fair value can be determined without
undue cost and effort. For most of these locations, the operating lease right-of-use assets and furniture and
equipment were written down to their individual fair values and the remaining impairment charge was allocated to the
remaining long-lived assets up to the fair value estimated on these assets based on liquidation value estimates.
During the year ended December 31, 2020, the Company identified indicators of impairment at previously
closed stores in certain markets. After performing the long-lived asset impairment test using updated assumptions for
these locations, the Company determined that 19 locations within the RV and Outdoor Retail segment had long-lived
assets that were impaired. 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, $1.5 million related to buildings,
and $5.9 million operating lease right-of-use assets. Of the $12.4 million long-lived asset impairment charge during
the year ended December 31, 2020, $12.3 million related to the 2019 Strategic Shift discussed above.
For the year ended December 31, 2019, the Company recorded the following long-lived asset impairment
charges: $20.8 million related to leasehold improvements, $28.6 million related to furniture and equipment, and $16.9
million operating lease right-of-use assets. Of the $66.3 million long-lived asset impairment charge during the year
ended December 31, 2019, $57.4 million was related to the 2019 Strategic Shift discussed above.
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6. Property and Equipment, net
Property and equipment consisted of the following at December 31, (in thousands):
Land
Buildings and improvements
Leasehold improvements (1)
Furniture and equipment
Software
Software systems development and construction in progress
Less: accumulated depreciation and amortization
Property and equipment, net
(1) At December 31, 2020 inclusive of right-to-use assets
December 31, December 31,
2020
47,780
99,739
210,396
180,191
73,256
11,560
622,922
(255,024)
367,898
$
$
2019
36,069
64,860
174,417
181,539
67,086
8,632
532,603
(218,229)
314,374
$
$
Depreciation expense for the years ended December 31, 2020, 2019, and 2018 was $47.4 million,
$54.7 million and $44.8 million, respectively.
7. Goodwill and Intangible Assets
Goodwill
The following is a summary of changes in the Company’s goodwill by business line for the years ended
December 31, 2020 and 2019 (in thousands):
Balance as of January 1, 2019 (excluding impairment charges)
Accumulated impairment charges
Balance as of January 1, 2019
Acquisitions (1)
Transfers of assets between reporting units
Divestitures (2)
Balance as of December 31, 2019
Acquisitions (1)(3)
Balance as of December 31, 2020
Good Sam
Services and
Plans
$
$
97,204
(46,884)
50,320
—
(26,491)
—
23,829
—
23,829
RV and
$
$
Outdoor Retail Consolidated
600,954
(241,837)
359,117
28,224
—
(400)
386,941
26,182
413,123
503,750
(194,953)
308,797
28,224
26,491
(400)
363,112
26,182
389,294
$
$
(1) Represents measurement period adjustments relating to prior period acquisitions (see Note 15 — Acquisitions).
(2) Goodwill was allocated to 13 specialty retail locations within the RV and Outdoor Retail segment based on relative fair value. These
13 specialty retail locations were divested in 2019.
(3) Represents current period acquisitions (see Note 15 — 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 a
quantitative impairment test by calculating the fair value of the reporting unit and comparing the fair value with the
carrying amount of the reporting unit. If the carrying amount of a reporting unit exceeds its fair value, then the
Company records an impairment of goodwill equal to the amount that the carrying amount of a reporting unit exceeds
its fair value.
As of January 1, 2019, the Company transferred certain assets related to the Good Sam Club and co-
branded credit card from GSS Enterprises, LLC (“GSS”) within the Good Sam Services and Plans segment to
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CWI, Inc. (“CWI”) within the RV and Outdoor Retail segment. This resulted in a transfer of $26.5 million of goodwill
from the Good Sam Services and Plans segment to the RV and Outdoor Retail segment based on relative fair value
as of January 1, 2019 of the portion of the reporting unit transferred.
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, no goodwill
impairment was recorded.
In the fourth quarter of 2020 and 2019, the Company performed its annual goodwill impairment test of the RV
and Outdoor Retail, the Good Sam Show, and GSS Enterprise reporting units. The RV and Outdoor Retail reporting
unit is comprised of the entire RV and Outdoor Retail segment. The Good Sam Show and GSS Enterprise reporting
units are comprised of a portion of the Good Sam Services and Plans Segment. These annual goodwill impairment
tests resulted in the determination that the estimated fair value of these reporting units exceeded their carrying value.
Therefore, no impairment charge was recorded during the years ended December 31, 2020 and 2019. The Company
estimated the fair value of these reporting units using a combination of the guideline public company method under
the market approach and the discounted cash flow analysis method under the income approach.
In the fourth quarter of 2018, the Company performed its annual goodwill impairment test, which resulted in
the determination that the carrying value of the former Retail reporting unit, which was comprised of the entire Retail
segment as previously reported, exceeded its estimated fair value by an amount that exceeded the reporting unit’s
goodwill balance. The excess of the carrying value over the estimated fair value of this reporting unit was primarily
due to a decline in segment income leading to lower expected future cash flows for this reporting unit. The Company
recorded an impairment charge of $40.0 million in the fourth quarter of 2018 related to this reporting unit. The former
Retail reporting unit goodwill was reduced to zero.
Additionally in the fourth quarter of 2018, the Company performed its annual goodwill impairment test of the
Dealership reporting unit, which was comprised of the entire former Dealership segment as previously reported and
the Good Sam Show and GSS Enterprise reporting units, which was comprised a portion of the Good Sam Services
and Plans segment as previously reported. The Company did not record any impairment of goodwill for the
Dealership, Good Sam Show and GSS Enterprise reporting units during the year ended December 31, 2018.
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Intangible Assets
Finite-lived intangible assets and related accumulated amortization consisted of
the following at
December 31, (in thousands):
Good Sam Services and Plans:
Membership and customer lists
RV and Outdoor Retail:
Customer lists and domain names
Supplier lists
Trademarks and trade names
Websites
Good Sam Services and Plans:
Membership and customer lists
RV and Outdoor Retail:
Customer lists and domain names
Trademarks and trade names
Websites
Cost or
December 31, 2020
Accumulated
Fair Value Amortization
Net
$
9,140
$
(8,568) $
572
3,476
1,696
29,564
6,140
$ 50,016
(1,930)
(85)
(6,681)
(2,630)
1,546
1,611
22,883
3,510
(19,894) $ 30,122
$
Cost or
December 31, 2019
Accumulated
Fair Value Amortization
Net
$
9,140
$
(7,972) $
1,168
2,065
28,955
5,990
$ 46,150
(1,768)
(4,862)
(1,841)
297
24,093
4,149
(16,443) $ 29,707
$
As of December 31, 2020, the approximate weighted average useful lives of our Good Sam Services and
Plans finite-lived intangible assets for membership and customer lists are 5.4 years. The approximate weighted
average useful lives of our RV and Outdoor Retail finite-lived intangible assets are as follows: customer lists and
domain names – 5.3 years, suppliers lists – 5.0 years, trademarks and trade names – 15.0 years, and websites – 8.3
years. The weighted-average useful life of all our finite-lived intangible assets is approximately 12.8 years.
Amortization expense of finite-lived intangibles for the years ended December 31, 2020, 2019, and 2018 was
$4.6 million, $5.2 million and $4.5 million, respectively. The aggregate future five-year amortization of finite-lived
intangibles at December 31, 2020, was as follows (in thousands):
2021
2022
2023
2024
2025
Thereafter
$
3,686
3,491
3,184
3,143
2,908
13,710
$ 30,122
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8. Accrued Liabilities
Accrued liabilities consisted of the following at December 31, (in thousands):
Compensation and benefits(1)
Other accruals
$
2020
43,787
93,901
$ 137,688
$
2019
31,743
98,573
$ 130,316
(1) At December 31, 2020, this amount includes a deferral of payroll taxes under the CARES act of $14.6 million.
9. Long-Term Debt
The following reflects outstanding long-term debt as of December 31 (in thousands):
Term Loan Facility (1)
Finance Lease Liabilities (2)
Real Estate Facility (3)
Subtotal
Less: current portion
Total
December 31,
2020
$ 1,130,356
29,982
4,493
1,164,831
(14,414)
$ 1,150,417
December 31,
2019
$ 1,148,115
—
19,521
1,167,636
(14,085)
$ 1,153,551
(1) Net of $3.2 million and $4.3 million of original issue discount at December 31, 2020 and 2019, respectively, and $7.9 million and
$10.7 million of finance costs at December 31, 2020 and 2019, respectively.
(2) Consists of three 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 10 – Lease Obligations).
(3) Net of $0.2 million of finance costs at December 31, 2019. Finance costs at December 31, 2020 were not significant.
The aggregate future maturities of long-term debt at December 31, 2020, were as follows (in thousands):
Long-term debt instruments
2021
2022
2023
Subtotal
Finance Leases(1)
Total
$
$
12,174
12,176
1,121,697
1,146,047
29,982
1,176,029
(1) Current portion of finance leases was $2.2 million at December 31, 2020. See Note 10 - Lease Obligation.
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Senior Secured Credit Facilities
As of December 31, 2020 and 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 up 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. As of December 31, 2020, the Company is not required
to make an additional excess cash flow payment.
As of December 31, 2020, the average interest rate on the Term Loan Facility was 3.50%. The following table
details the outstanding amounts and available borrowings under the Senior Secured Credit Facilities as of (in
thousands):
Senior Secured Credit Facilities:
Term Loan Facility:
Principal amount of borrowings
Less: cumulative principal payments
Less: unamortized original issue discount
Less: finance costs
Less: current portion
Long-term debt, net of current portion
Revolving Credit Facility:
Total commitment
Less: outstanding letters of credit
Less: availability reduction due to Total Leverage Ratio
Additional borrowing capacity
December 31,
2020
December 31,
2019
$
$
$
$
1,195,000
(53,459)
(3,241)
(7,944)
1,130,356
(11,891)
1,118,465
35,000
(5,930)
—
29,070
$
$
$
$
1,195,000
(31,898)
(4,320)
(10,667)
1,148,115
(11,991)
1,136,124
35,000
(4,112)
(21,622)
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 December 31, 2020, that would trigger a subjective
acceleration clause.
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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 December 31, 2020, the Company was not subject to this covenant as borrowings
under the Revolving Credit Facility did not exceed the 30% threshold. The Company was in compliance with all
applicable debt covenants at December 31, 2020 and 2019.
Real Estate Facility
As of December 31, 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 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 December 31, 2020, a principal balance of $4.5 million was outstanding under the Real Estate Facility,
and the interest rate was 3.00% with a commitment fee of 0.50% of the aggregate unused principal amount of the
Real Estate Facility. As of December 31, 2020 and December 31, 2019, the Company had no 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, which was paid in August 2020. Additionally, in September 2020, the
Company sold an owned property relating to the other former distribution center in Greenville, North Carolina to a
third party. By selling this property, the Company was required to pay down $3.4 million of the Real Estate Facility in
September 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 December 31, 2020 that would trigger a subjective acceleration clause. Additionally, the Real Estate
Facility is subject to certain cross default provisions, a debt service coverage ratio, and other customary covenants.
The Company was in compliance with all debt covenants at December 31, 2020 and 2019.
Finance Lease Liabilities
The Company’s finance lease liabilities consist of three 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 10 — Lease Obligations).
10. Lease Obligations
The Company leases property and equipment throughout the United States primarily under finance and
operating leases. For leases with initial lease terms at commencement that are greater than 12 months, the Company
records the related asset and obligation at the present value of lease payments over the term. Many of the
Company’s leases include rental escalation clauses, renewal options and/or termination options that are factored into
the determination of lease payments when appropriate. The Company aggregates non-
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lease components with the related lease components when evaluating the accounting treatment for property,
equipment, and billboard leases.
Many of the Company’s lease agreements include fixed rental payments. Certain of its lease agreements
include fixed rental payments that are adjusted periodically for changes in the Consumer Price Index (“CPI”).
Payments based on a change in an index or a rate, rather than a specified index or rate, are not considered in the
determination of lease payments for purposes of measuring the related lease liability. While lease liabilities are not
remeasured as a result of changes to the CPI, changes to the CPI are typically treated as variable lease payments
and recognized in the period in which the obligation for those payments are incurred. Common area maintenance,
property tax, and insurance associated with triple net leases, as well as payments based on revenue generated at
certain leased locations, are included in variable lease costs, but are not included in the measurement of the lease
liability.
Most of the Company’s real estate leases include one or more options to renew, with renewal terms that can
extend the lease term from one to five years or more. The exercise of lease renewal options is at the Company’s sole
discretion. If it is reasonably certain that the Company will exercise such options, the periods covered by such options
are included in the lease term and are recognized as part of the operating lease assets and operating lease liabilities.
The depreciable life of assets and leasehold improvements are limited to the shorter of the lease term or useful life if
there is a transfer of title or purchase option reasonably certain of exercise.
The Company cannot readily determine the rate implicit in its leases. Therefore, the Company must estimate
its incremental borrowing rate to discount the lease payments based on information available at lease
commencement. The Company estimates its incremental borrowing rate using a yield curve based on the credit rating
of its collateralized debt and maturities that are commensurate with the lease term at the applicable commencement
or remeasurement date.
The Company leases most of the properties for its retail locations through 254 operating leases. The
Company also leases billboards and certain of its equipment primarily through operating leases. The related operating
lease assets for these operating leases are included in operating lease assets. The Company has three properties
classified as finance leases.
The following presents components of lease assets and lease liabilities, and the associated financial
statement line items ($ in thousands):
Lease Assets and Liabilities
Operating lease assets
Finance lease assets
Total lease assets, net
Financial Statement Line Items
Operating lease assets
Property and equipment, net
Operating lease liabilities - current
Finance lease liabilities - current
Operating lease liabilities - non-current Operating lease liabilities, net of current portion
Finance lease liabilities - non-current
Total lease liabilities
Current portion of operating lease liabilities
Current portion of long-term debt
Long-term debt, net of current portion
Year Ended December 31,
2020
769,487
29,756
799,243
62,405
2,240
804,555
27,742
896,942
$
$
$
$
2019
807,537
—
807,537
58,613
—
843,312
—
901,925
$
$
$
$
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The following presents certain information related to the costs for leases (in thousands):
Operating lease cost
Finance lease cost:
Amortization of finance lease assets
Interest on finance lease liabilities
Short-term lease cost
Variable lease cost
Sublease income
Net lease costs
Year Ended December 31,
2019
2020
$
121,238
$
122,431
2,701
1,248
1,699
23,385
(1,876)
148,395
$
—
—
3,177
23,763
(1,380)
147,991
$
The following presents supplemental cash flow information related to leases (in thousands):
Cash paid for amounts included in the measurement of lease
liabilities:
Operating cash flows for operating leases
Operating cash flows for finance leases
Financing cash flows for finance leases
Lease assets obtained in exchange for lease liabilities:
New, remeasured, and terminated operating leases
New finance leases
The following presents other information related to leases:
Year Ended December 31,
2019
2020
$
$
121,708
1,061
2,355
25,296
31,895
$
$
122,073
—
—
98,282
—
Weighted average remaining lease term:
Operating leases
Financing leases
Weighted average discount rate:
Operating leases
Financing leases
December 31, 2020
12.4 years
16.0 years
7.1 %
6.0 %
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The following reconciles the undiscounted cash flows for each of the first five years and total of the remaining
years to the lease liabilities on the balance sheet as of December 31, 2020 (in thousands):
2021
2022
2023
2024
2025
Thereafter
Total lease payments
Less: Imputed interest
Total lease obligations
Less: current portion
Noncurrent lease obligations
Operating
Leases
Finance
Leases
120,376 $
117,783
115,532
110,853
103,471
765,838
1,333,853
(466,893)
866,960
(62,405)
804,555
$
3,977
4,011
2,777
2,494
2,376
33,776
49,411
(19,429)
29,982
(2,240)
27,742
$
$
11. Income Taxes
The components of the Company’s income tax expense from operations for the year ended December 31,
consisted of (in thousands):
Current:
Federal
State
Deferred:
Federal
State
Income tax expense
2020
2019
2018
$ 38,843
12,294
$ 10,605
4,080
$ 13,828
5,598
5,016
1,590
$ 57,743
9,140
5,757
$ 29,582
11,970
(606)
$ 30,790
A reconciliation of income tax expense from operations to the federal statutory rate for the year ended
December 31, is as follows (in thousands):
Income taxes computed at federal statutory rate(1)
State income taxes – net of federal benefit(1)
Other differences:
Federal alternative minimum tax and state and local taxes on
pass-through entities
Income taxes computed at the effective federal and state
statutory rate for pass-through entities not subject to tax for the
Company (2)
Tax benefit from of transfer assets(3)
Increase in valuation allowance due to transfer of assets(3)
Increase in valuation allowance
Impact of other state tax rate changes
Goodwill impairment
Other
Income tax expense
2020
$ 84,411
3,741
2019
2018
$ (19,051) $ 20,238
4,313
(4,728)
2,965
937
1,076
(53,147)
—
—
19,058
(915)
—
1,630
$ 57,743
(22,089)
(14,170)
26,350
59,552
1,653
—
1,128
$ 29,582
(41,367)
—
—
43,175
(2,020)
6,158
(783)
$ 30,790
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(1)
(2)
(3)
Federal and state income tax for 2019 and 2018 include the tax effect of $2.5 million of income tax benefit and $0.3 million of income
tax expense, respectively, relating to the revaluation in the Tax Receivable Agreement liability. The amount related to 2020 was
insignificant.
The related income is taxable to the non-controlling interest.
These amounts represent the net income tax expense of $12.2 million (composed of an increase in the valuation allowance against
the Company’s overall deferred tax assets of $26.4 million, offset by the income tax benefit associated with the transferred assets of
$14.2 million) related to the transfer of certain assets, including the Good Sam Club and co-branded credit cards as discussed below.
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of
assets and liabilities for financial reporting purposes and the amounts used for income tax purposes and operating
loss and tax credit carryforwards. Significant items comprising the net deferred tax assets at December 31, were (in
thousands):
Deferred tax liabilities
Accelerated depreciation
Prepaid expenses
Intangible assets
Operating lease assets
Lease incentives
Deferred tax assets
Investment impairment
Inventory-related
Gift cards
Deferred revenues
Accrual for employee benefits and severance
Stock option expense
Investment in partnership ("Outside Basis Deferred Tax Asset")(1)
Tax Receivable Agreement liability
Net operating loss carryforward
Intangible assets
Goodwill
Deferred depreciation
Operating lease liabilities
Other reserves
Valuation allowance
Net deferred tax assets
2020
2019
$
(5) $
(1,690)
(2,865)
(67,400)
(63)
(72,023)
22,169
5,494
1,788
6,996
2,485
469
241,805
36,486
124,117
1,456
1,433
1,283
79,639
8,057
533,677
(295,946)
165,708
$
$
(3)
(1,676)
(3,704)
(71,221)
(5,226)
(81,830)
21,601
5,029
1,385
6,859
1,555
(10)
203,663
28,715
114,617
2,086
2,396
1,002
82,785
6,309
477,992
(266,452)
129,710
(1)
This amount is the deferred tax asset the Company recognizes for its book to tax basis difference in its investment in CWGS, LLC.
At December 31, 2020, certain subsidiaries of CWH had federal and state net operating loss carryforwards of
approximately $462.7 million and $422.0 million, respectively, which will be able to offset future taxable income. If not
used, $55.5 million of federal and $422.0 million of state net operating losses will expire between 2021 and 2040, and
$407.2 million will be carried forward indefinitely.
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, an LLC, to its indirect wholly-owned subsidiary, CWI, a
corporation. As a result of this transfer, the Company recorded $12.2 million of net income tax expense 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 CWI, 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 $7.5 million.
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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 year ended December 31, 2020,
there were no material impacts to the Company’s 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 $29.2 million as of
December 31, 2020, of which $14.6 million was included in other current liabilities and $14.6 million was included in
other long-term liabilities in the consolidated balance sheets.
At December 31, 2020, the Company determined that all of its deferred tax assets (except those of Camping
World Inc. (“CW”) and the Outside Basis Deferred Tax Asset discussed below) are more likely than not to be realized.
The valuation allowance for CW increased by $19.7 million in the year ended December 31, 2020, compared to an
increase of $79.7 million in the year ended December 31, 2019, primarily as a result of increased operating losses
incurred during 2020. Since it was determined that CW would not have sufficient taxable income in the current or
carryforward periods under the tax law to realize the future tax benefits of its deferred tax assets, it continues to
maintain a full valuation allowance. 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 partial valuation allowance for the Outside Basis Deferred Tax Asset increased by $9.8 million in the
year ended December 31, 2020, compared to an increase of $6.2 million in the year ended December 31, 2019. The
increase in the year ended December 31, 2020 was primarily the result of increased ownership, net of a reduction in
enacted state income tax rates. The Company and its subsidiaries file U.S. federal income tax returns and tax returns
in various states. The Company is not under any material audits in any jurisdiction. With few exceptions, the
Company is no longer subject to U.S. federal, state, and local income tax examinations by tax authorities for years
before 2017.
As of December 31, 2020 and 2019, the Company recorded $2.7 million and $0.3 million, respectively,
related to uncertain tax positions. The Company does not expect the total amount of unrecognized tax benefits to
significantly change in the next 12 months.
The Company is party to a tax receivable agreement (the “Tax Receivable Agreement”) that provides for the
payment by the Company to the Continuing Equity Owners and Crestview Partners II GP, L.P. of 85% of the amount
of tax benefits, if any, the Company actually realizes, or in some circumstances is deemed to realize, as a result of (i)
increases in the tax basis from the purchase of common units from Crestview Partners II GP, L.P. in exchange for
Class A common stock in connection with the consummation of the IPO and the related transactions and any future
redemptions that are funded by the Company and any future redemptions or exchanges of common units by
Continuing Equity Owners as described above and (ii) certain other tax benefits attributable to payments made under
the Tax Receivable Agreement. The above payments are predicated on CWGS, LLC making an election under
Section 754 of the Internal Revenue Code effective for each tax year in which a redemption or exchange (including a
deemed exchange) of common units for cash or stock occur. These tax benefit payments are not conditioned upon
one or more of the Continuing Equity Owners or Crestview Partners II GP, L.P. maintaining a continued ownership
interest in CWGS, LLC. In general, the Continuing Equity Owners’ or Crestview Partners II GP, L.P.’s rights under the
Tax Receivable Agreement are assignable, including to transferees of its common units in CWGS, LLC (other than
the Company as transferee pursuant to a redemption or exchange of common units in CWGS, LLC). The Company
expects to benefit from the remaining 15% of the tax benefits, if any, which may be realized. During the twelve
months ended December 31, 2020 and 2019, 4,852,497 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 December 31, 2020, and December 31, 2019, the amount of Tax
Receivable Agreement payments due under the Tax Receivable Agreement was $145.9 million and $114.8
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million, respectively, of which $8.1 million and $6.6 million, respectively, were included in current portion of the Tax
Receivable Agreement liability in the consolidated balance sheets.
From January 1, 2021 to February 17, 2021, Crestview Partners II GP, L.P. has redeemed 1.3 million
common units in CWGS, LLC for 1.3 million shares of the Company’s Class A common stock as a result of
transactions pursuant to a trading plan. The estimated increase in deferred tax assets, the non-current portion of the
Tax Receivable Agreement liability, and additional paid-in capital resulting from these redemptions is $13.3 million,
$11.3 million, and $2.0 million, respectively. Payments pursuant to the Tax Receivable Agreement relating to these
redemptions would begin during the year ended December 31, 2022.
For tax years beginning on or after January 1, 2018, CWGS, LLC is subject to partnership audit rules enacted
as part of the Bipartisan Budget Act of 2015 (the “Centralized Partnership Audit Regime”). Under the Centralized
Partnership Audit Regime, any IRS audit of CWGS, LLC would be conducted at the CWGS, LLC level, and if the IRS
determines an adjustment, the default rule is that CWGS, LLC would pay an “imputed underpayment” including
interest and penalties, if applicable. CWGS, LLC may instead elect to make a “push-out” election, in which case the
partners for the year that is under audit would be required to take into account the adjustments on their own personal
income tax returns. If CWGS, LLC does not elect to make a “push-out” election, CWGS, LLC has agreements in place
requiring former partners to indemnify CWGS, LLC for their share of the imputed underpayment. The partnership
agreement does not stipulate how CWGS, LLC will address imputed underpayments. If CWGS, LLC receives an
imputed underpayment, a determination will be made based on the relevant facts and circumstances that exist at that
time. Any payments that CWGS, LLC ultimately makes on behalf of its current partners will be reflected as a
distribution, rather than tax expense, at the time such distribution is declared.
12. Fair Value Measurements
Accounting guidance for fair value measurements establishes a three-tier fair value hierarchy, which
prioritizes the inputs used in measuring fair value. These tiers include Level 1, defined as observable inputs such as
quoted prices in active markets; Level 2, defined as inputs other than quoted prices in active markets that are either
directly or indirectly observable; and Level 3, defined as unobservable inputs in which little or no market data exists,
therefore requiring an entity to develop its own assumptions.
There have been no transfers of assets or liabilities between the fair value measurement levels and there
were no material re-measurements to fair value during 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.
($ in thousands)
Term Loan Facility
Floor Plan Facility Revolving Line of
Credit
Real Estate Facility
Fair Value
December 31, 2020
December 31, 2019
Measurement Carrying Value
Level 2
$ 1,130,356
Fair Value
$ 1,132,979
Carrying Value
$ 1,148,115
Fair Value
$ 1,104,947
Level 2
Level 2
20,885
4,493
20,791
4,600
40,885
19,521
41,299
21,030
13. Commitments and Contingencies
Sponsorship and Other Agreements
The Company enters into sponsorship agreements from time to time. Current sponsorship agreements run
through 2024. The agreements consist of annual fees payable in aggregate of $11.6 million in 2021, $14.5 million in
2022, $5.6 million in 2023, and $4.5 million in 2024, which are recognized to expense over the expected benefit
period.
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The Company entered into a subscription agreement for a customer relationship management software
application in 2014. The subscription agreement was amended on October 28, 2016 and again October 18, 2017.
The amended subscription agreement for future software services consists of annual fees payable as follows: $4.5
million in 2019, $4.8 million in 2020, and $5.0 million in 2021. Expense is recognized ratably over the term of the
agreement.
Self-Insurance Program
Self-insurance reserves represent amounts established as a result of insurance programs under which the
Company self-insures portions of the business risks. The Company carries substantial premium-paid, traditional risk
transfer insurance for various business risks. The Company self-insures and establishes reserves for the retention on
workers’ compensation insurance, general liability, automobile liability, professional errors and omission liability, and
employee health claims. The self-insured claims liability was approximately $19.6 million and $18.4 million at
December 31, 2020 and 2019, respectively. The determination of such claims and expenses and the appropriateness
of the related liability are continually reviewed and updated. The self-insurance accruals are calculated by actuaries
and are based on claims filed and include estimates for claims incurred but not yet reported. Projections of future
losses, including incurred but not reported losses, are inherently uncertain because of the random nature of insurance
claims and could be substantially affected if occurrences and claims differ significantly from these assumptions and
historical trends. In addition, the Company has obtained letters of credit as required by insurance carriers. As of
December 31, 2020 and 2019, these letters of credit were approximately $17.7 million and $15.3 million, respectively.
This includes $11.7 million and $11.2 million as of December 31, 2020 and 2019, respectively, issued under the Floor
Plan Facility (see Note 4 — Inventories, net and Notes Payable — Floor Plan, net), and the balance issued under the
Company’s Senior Secured Credit Facilities (see Note 9 — Long-Term Debt).
Litigation
On October 19, 2018, a purported stockholder of the Company filed a putative class action lawsuit, captioned
Ronge v. Camping World Holdings, Inc. et al., in the United States District Court for the Northern District of Illinois
against the Company, certain of its officers and directors, and Crestview Partners II GP, L.P. and Crestview Advisors,
L.L.C. (the “Ronge Complaint”). On October 25, 2018, a different purported stockholder of the Company filed a
putative class action lawsuit, captioned Strougo v. Camping World Holdings, Inc. et al., in the United States District
Court for the Northern District of Illinois against the Company, certain of its officers and directors, and Crestview
Partners II GP, L.P. and Crestview Advisors, L.L.C. (the “Strougo Complaint”).
The Ronge and Strougo Complaints were consolidated and lead plaintiffs (the “Ronge Lead Plaintiffs”)
appointed by the court. On February 27, 2019, the Ronge lead plaintiffs filed a consolidated complaint against the
Company, certain of its officers, directors, Crestview Partners II GP, L.P. and Crestview Advisors, L.L.C., and the
underwriters of the May and October 2017 secondary offerings of the Company’s Class A common stock (the
“Consolidated Complaint”). The Consolidated Complaint alleged 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 alleged 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. 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, 2020, 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 was paid directly by the Company’s insurance
carriers.
On December 12, 2018, a putative class action complaint styled International Union of Operating Engineers
Benefit Funds of Eastern Pennsylvania and Delaware v. Camping World Holdings Inc., et al. was filed in the Supreme
Court of the State of New York, New York County, on behalf of all purchasers of Camping World Class A common
stock issued pursuant and/or traceable to a secondary offering of such securities in
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October 2017 (“IUOE Complaint”). The IUOE Complaint named as defendants the Company, and certain of its
officers and directors, among others, and alleged 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. 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 Court entered an order of final dismissal on September 8, 2020.
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 named as defendants the Company, certain of its officers and directors, and the
underwriters of the offering, and alleged 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 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 Court entered an order of final dismissal on August 18, 2020.
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”).
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 in the Ronge
action. Following the Ronge court’s approval of settlement and entry of a final judgment and order dismissing the
Ronge action with prejudice, on August 31, 2020, the parties filed a stipulation and proposed order designating the
LPPF Complaint as the operative complaint in the consolidated action, and setting forth a schedule for defendants to
respond to that Complaint, which the Court granted. On October 30, 2020, the Company, along with the other
defendants, moved to dismiss this action. On December 30, 2020, the Court granted the parties’ stipulated schedule
for Plaintiffs to file an amended complaint. On January 7, 2021, Plaintiffs filed their Amended Complaint, alleging
substantially same claims and seeking the same relief. Defendants’ response to the Amended Complaint is due to be
filed on or before March 8, 2021.
On August 6, 2019, two 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 the Company’s 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
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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. On
September 25, 2019, the Court granted the parties’ joint motion to consolidate the action and stay the action pending
resolution of defendants’ motion to dismiss in the Ronge action. Following the Ronge court’s approval of settlement
and entry of a final judgment and order dismissing the Ronge action with prejudice, the case remains stayed while the
parties confer regarding the schedule for further proceedings in the action.
On May 28, 2020, Kamela Woodings (“Woodings”), in her representative capacity under the Private Attorney
General Action (“PAGA”) filed a lawsuit styled Woodings v. FreedomRoads, LLC in Los Angeles County Superior
Court against FreedomRoads, LLC in which she alleged that she and the putative class members often performed off-
the-clock work for which they were not adequately compensated, and alleged the following causes of action: Violation
of California Labor Code Sections 2698, et seq, (Private Attorney General Act of 2004), which includes allegations of
(1) Failure to Pay Minimum Wage, (2) Failure to Pay Overtime, (3) Failure to Provide Meal Periods, (4) Failure to
Provide Rest Breaks, (5) Failure to Timely Wage Upon Termination, (6) Failure to Timely Pay Wages During
Employment, (7) Failure to Provide Complete And Accurate Wage Statements, and (8) Failure to Keep Accurate
Business Records (the “PAGA Complaint”). The PAGA Complaint seeks civil penalties and attorneys’ fees and costs
pursuant to California Labor Code Section 2699.
On June 25, 2020, Woodings filed a class action complaint styled Woodings v. FreedomRoads, LLC in Los
Angeles County Superior Court against FreedomRoads, LLC in which Woodings alleged that she and the putative
class members, all of FreedomRoads, LLC’s non-exempt California employees, were not appropriately compensated
for all wages earned in the form of commission, and that she and the putative class members often performed off-the-
clock work for which they were not adequately compensated. Woodings also alleged the following causes of action:
(1) Violation of California Labor Code §§ 1194, 1197, and 1197.1 (unpaid minimum wages); (2) Violation of California
Labor Code §§ 1198 (unpaid overtime); (3) Violation of California Labor Code § 226.7 (unpaid meal period
premiums); (4) Violation of California Labor Code § 226.7 (unpaid rest period premiums); (5) Violation of California
Labor Code §§ 201 and 202 (final wages not timely paid); (6) Violation of California Labor Code § 226(a) (non-
compliant wage statements); (7) Fraud; (8) Negligent Misrepresentation; (9) Breach of Contract; (10) Accounting; and
(11) Violation of California Business and Professions Code §§ 17200, et seq., with the following sub-claims of (a)
Failure to Pay Overtime, (b) Failure to Provide Meal Periods, (c) Failure to Provide Rest Periods, (d) Failure to Pay
Minimum Wages, (e) Failure to Timely Wage Upon Termination, (f) Failure to Timely Pay Wages During Employment,
(g) Failure to Keep Complete and Accurate Payroll Records, and (h) Failure to Pay Commissions seeking certification
as a class action, monetary damages including general unpaid wages, unpaid wages at overtime wage rates,
premium wages for meal and rest breaks not provided, general and special damages, actual, consequential and
incidental losses and damages, statutory wage penalties, punitive damages, pre-judgment interest, attorneys’ fees
and costs, liquidated damages, and non-monetary damages including an accounting of FreedomRoads, LLC’s
revenues, costs and profits in connection with each sale of goods made by the putative class members and the
appointment of a receiver to receive, manage and distribute any funds disgorged from FreedomRoads, LLC as may
be determined to have been wrongly acquired by FreedomRoads, LLC, and any other and further relief the court
deems just and proper (“Class Action”).
On August 6, 2020, the Class Action was removed to the U.S. District Court for the Central District of
California. On August 27, 2020, Woodings amended the Class Action to add a second plaintiff, Jodi Dormaier,
representing a Washington subclass of all non-exempt FreedomRoads, LLC employees, in an amended lawsuit
styled Kamela Woodings and Jodi Dormaier v. FreedomRoads, LLC (the “Amended Class Action”). The Amended
Class Action alleged the following additional causes of action: Violation of Wash. Rev. Code §§ 49.46.090 and
49.46.090 (failure to pay minimum wage); Violation of Wash. Rev. Code § 49.46.130 (failure to pay overtime);
Violation of Wash. Rev. Code §§ 49.12.020 (failure to provide meal breaks); Violation of Wash. Rev. Code §§
49.12.020 (failure to provide rest breaks); Violation of Wash. Rev. Code §§ 49.48.010 (payment of wages upon
termination); and Violation of Wash. Rev. Code §§ 49.52.050 (willful exemplary damages) seeking class certification,
damages and restitution for all unpaid wages and other injuries to Woodings,
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Dormeir, and the putative class, pre-judgment interest, declaratory judgment establishing a violation of California
Labor Code, California Business and Professional Code §§ 17200, et seq., Revised Code of Washington and other
laws of the States of California and Washington, and public policy, compensatory damages including lost wages,
earnings, liquidated damages, and other employee benefits together with interest, restitution, recovery of all money,
actual damages and all other sums of money owed to Woodings, Dormaier, and the putative class members, together
with interest, an accounting of FreedomRoads, LLC’s revenues, costs, and profits in connection with each sale of
goods and services made by Woodings, Dormaier, and the putative class, and reasonable attorneys’ fees and costs,
and any other and further relief the court deems just and proper.
On January 18, 2021, the parties entered into a preliminary agreement to settle the Amended Class Action
and the PAGA Complaint subject to the terms of a long-form settlement agreement to be executed by the parties and
approval by the courts. As of December 31, 2020, the Company had a reserve totaling $4.0 million for estimated
losses related to this matter.
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.
Employment Agreements
The Company has employment agreements with certain officers. The agreements include, among other
things, an annual bonus based on adjusted earnings before interest, taxes, depreciation and amortization, and up to
one year’s severance pay beyond termination date.
14. Related Party Transactions
Transactions with Directors, Equity Holders and Executive Officers
FR leases various retail locations from managers and officers. During 2020, 2019 and 2018, the related party
lease expense for these locations was $2.0 million, $2.2 million and $1.9 million, respectively.
In January 2012, FR 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 was $29,000 per month that
was amended 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
Cumulus Media Inc. (“Cumulus Media”) has provided radio advertising for the Company through Cumulus
Media’s subsidiary, Westwood One, Inc. Crestview Partners II GP, L.P., an affiliate of CVRV, was the beneficial
owner of Cumulus Media’s Class A common stock until approximately June 6, 2018, according to Crestview Partners
II GP, L.P.’s most recently filed Schedule 13D amendment with respect to the company. For the year ended
December 31, 2018, the Company incurred Cumulus Media expenses of $0.3 million for the aforementioned
advertising services. Cumulus Media was not a related party in the years ended December 31, 2019 and 2020.
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 incurred expenses from
Precise Graphix of $0.3 million, $1.4 million and $5.6 million for the years ended December 31,
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2020, 2019 and 2018, respectively. The Company purchased point of purchase and visual merchandise displays from
JD Custom Design (“JD Custom”) for use in Camping World’s retail store operations. Mr. Lemonis is a holder of 52%
of the combined voting power in JD Custom and the Company paid JD Custom $0, $0 and $0.4 million for the years
ended December 31, 2020, 2019 and 2018, respectively.
The Company does business with certain companies in which Stephen Adams, a member of the Company’s
board of directors, has a direct or indirect material interest. The Company from time to time purchases advertising
services from Adams Radio of Fort Wayne LLC (“Adams Radio”), in which Mr. Adams has an indirect 90% interest.
The Company paid Adams Radio $0 million, $0.2 million, and $0.2 million for the years ended December 31, 2020,
2019 and 2018, respectively.
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, $0.2 million, $0.3 million and $0.3 million for the years ended December
31, 2020, 2019 and 2018, respectively, for legal services.
15. Acquisitions
In 2020 and 2019, subsidiaries of the Company acquired the assets or stock of multiple RV dealerships that
constituted businesses under accounting rules. The Company used a combination of cash and floor plan financing to
complete the acquisitions. The Company considers acquisitions of independent dealerships to be a fast and capital
efficient alternative to opening new retail locations to expand its business and grow its customer base. Additionally, in
October 2020, the RV and Outdoor Retail segment acquired the assets of an RV furniture distributor. The Company
expects to benefit from synergies from this RV furniture distributor acquisition with its private label RV offerings,
installation services, and retail offerings. 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.
In 2019, the RV and Outdoor Retail segment acquired the assets of various RV dealerships comprised of five
locations for an aggregate purchase price of approximately $48.4 million. The purchases were partially funded
through $13.9 million of borrowings under the Floor Plan Facility revolving line of credit.
In 2020, the RV and Outdoor Retail segment acquired the assets of various RV dealerships comprised of
nine locations for an aggregate purchase price of approximately $37.9 million plus real property of $53.1 million. The
purchases were partially funded through $10.3 million of borrowings under the Floor Plan Facility revolving line of
credit. Three of these acquired locations will open in 2021. Additionally, in October 2020, the RV and Outdoor Retail
segment acquired the assets of an RV furniture distributor for $9.7 million in cash.
For the years ended December 31, 2020 and 2019, the Company purchased real property of $53.1 million
and $31.6 million, respectively, of which $34.1 million and $2.9 million, respectively, was from parties related to the
sellers of the businesses.
The estimated fair values of the assets acquired and liabilities assumed for the acquisitions of dealerships
and the RV furniture distributor consist of the following:
($ in thousands)
Tangible assets (liabilities) acquired (assumed):
Accounts receivable, net
Inventories, net
Prepaid expenses and other assets
Property and equipment, net
Operating lease assets
Finance lease asset
Accounts payable
128
Year Ended December 31,
2020
2019
$
$
3,094
17,211
643
1,077
1,859
2,373
(1,628)
—
19,856
95
359
—
—
(2)
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($ in thousands)
Accrued liabilities
Operating lease liabilities
Finance lease liabilities
Total tangible net assets acquired
Intangible assets acquired:
Trademarks and trade names
Supplier and customer relationships
Total intangible assets acquired
Goodwill
Purchase price
Cash and cash equivalents acquired
Cash paid for acquisitions, net of cash acquired
Inventory purchases financed via floor plan
Cash payment net of floor plan financing
Year Ended December 31,
2020
(2,839)
(1,859)
(2,373)
17,558
725
3,107
3,832
26,182
47,572
—
47,572
(10,350)
37,222
$
2019
(114)
—
20,194
—
—
—
28,224
48,418
—
48,418
(13,854)
34,564
$
The fair values above are preliminary relating to the year ended December 31, 2020 as they are subject to
measurement period adjustments for up to one year from the date of acquisition as new information is obtained about
facts and circumstances that existed as of the acquisition date relating to the valuation of the acquired assets,
primarily the acquired inventories. 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 years ended December 31, 2020 and
2019, acquired goodwill of $26.2 million and $28.2 million is expected to be deductible for tax purposes. Included in
the years ended December 31, 2020 and 2019 consolidated financial results were $10.1 million and $44.6 million of
revenue, respectively, and $0.5 million of pre-tax loss and $0.3 million of pre-tax income, respectively, of the acquired
dealerships from the applicable acquisition dates. Pro forma information on these acquisitions has not been included,
because the Company has deemed them to not be individually or cumulatively material.
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16. Statements of Cash Flows
Supplemental disclosures of cash flow information for the following periods (in thousands):
Cash paid during the period for:
Interest
Income taxes
Non-cash investing activities:
Year Ended
December 31,
December 31,
December 31,
2020
2019
2018
$ 72,458
52,938
$ 105,776
5,900
$ 94,591
17,683
Derecognized property and equipment for leases that qualified as
operating leases after completion of construction
Leasehold improvements paid by lessor
Vehicles transferred to property and equipment from inventory
Derecognition of non-tenant improvements
Capital expenditures in accounts payable and accrued liabilities
Non-cash financing activities:
Par value of Class A common stock issued in exchange for common
units in CWGS, LLC
Par value of Class A common stock issued for vested restricted stock
units
Par value of Class A common stock repurchased for withholding taxes on
vested RSUs
—
37
70
—
3,738
48
3
—
—
21,749
827
—
3,158
(4,628)
27,022
919
8,134
8,441
—
4
(1)
3
3
(1)
17. Benefit Plan
The Freedom Roads 401(k) Defined Contribution Plan (“FreedomRewards 401(k) Plan”) is qualified under
Sections 401(a) and 401(k) of the Internal Revenue Service Code of 1986, as amended. Effective January 1, 2012,
the GSE 401(k) Plan was merged with the FreedomRewards 401(k) Plan. Effective January 1, 2007, Camping World
elected to begin participating in the FreedomRewards 401(k) Plan. All employees over age 18, including the executive
officers, are eligible to participate in the Freedom Rewards 401(k) Plan. Any favorable vesting was grandfathered for
any affected participants pursuant to FreedomRewards 401(k) Plan Amendment No. 3 signed December 15, 2011,
and effective January 1, 2012. Non-highly compensated employees may defer up to 75% of their eligible
compensation up to the Internal Revenue Service limits. Highly compensated employees may defer up to 15% of their
eligible compensation up to the Internal Revenue Service limits. There were no contributions to the FreedomRewards
401(k) Plan in 2020, 2019 or 2018.
18. Stockholders’ Equity
CWGS, LLC Ownership
CWH is the sole managing member of CWGS, LLC and, although CWH has a minority economic interest in
CWGS, LLC of 47.4%, 42.0%, and 41.9% as of December 31, 2020, 2019, and 2018, respectively, CWH has the sole
voting power in, and controls the management of, CWGS, LLC. The remaining 52.6%, 58.0%, and 58.1% of CWGS,
LLC as of December 31, 2020, 2019, and 2018, respectively, was held by the “Continuing Equity Owners,” whom the
Company defines as collectively, ML Acquisition Company, a Delaware limited liability company, indirectly owned by
each of Stephen Adams and the Company’s Chairman and Chief Executive Officer, Marcus Lemonis ("ML
Acquisition”), funds controlled by Crestview Partners II GP, L.P. and, collectively, the Company’s named executive
officers (excluding Marcus Lemonis), Andris A. Baltins and K. Dillon Schickli, who are members of the Company’s
board of directors, and certain other current and former non-executive employees and former directors, in each case,
who held profit units in CWGS, LLC pursuant to CWGS, LLC’s equity incentive plan that was in existence prior to the
Company’s IPO and who received common units of CWGS, LLC in exchange for their profit units in connection with
the reorganization transactions at the time of the IPO (collectively, the “Former Profit Unit Holders”) and each of their
permitted transferees that own common units in CWGS, LLC and who may redeem at each of their options their
common units for, at the
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Company’s election (determined solely by the Company’s independent directors (within the meaning of the rules of
the New York Stock Exchange) who are disinterested), cash or newly issued shares of the Company’s Class A
common stock. 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 CWGS LLC Agreement, CWGS,
LLC has made cash distributions to all common unit holders of CWGS, LLC in an amount sufficient for 1) CWH to pay
its regular quarterly cash dividend to holders of its Class A common stock and 2) the common unit holders of CWGS,
LLC to pay their income tax obligation on their allocated portion of CWGS, LLC income at the highest tax rate for all
common unit holders of CWGS, LLC. The payment of these cash distributions by CWGS, LLC to Continuing Equity
Owners are recorded as distributions to holders of CWGS, LLC common units in the accompanying Consolidated
Statements of Stockholders’ Deficit and Consolidated Statements of Cash Flows. The payment of these cash
distributions by CWGS, LLC to CWH are within the consolidated group and, therefore, are not included in the
distributions to holders of CWGS LLC common units in the accompanying Consolidated Statements of Stockholders’
Deficit and Consolidated Statements of Cash Flows.
Common Stock Economic and Voting Rights
Each share of the Company’s Class A common stock and Class B common stock entitles its holders to one
vote per share on all matters presented to the Company’s stockholders generally; provided that, for as long as ML
Acquisition Company, LLC, a Delaware limited liability company, indirectly owned by each of Stephen Adams and the
Company’s Chairman and Chief Executive Officer, Marcus Lemonis, and its permitted transferees of common units
(collectively, the “ML Related Parties”), directly or indirectly, beneficially own in the aggregate 27.5% or more of all of
the outstanding common units of CWGS, LLC, the shares of Class B common stock held by the ML Related Parties
will entitle the ML Related Parties to the number of votes necessary such that the ML Related Parties, in the
aggregate, cast 47% of the total votes eligible to be cast by all of the Company’s stockholders on all matters
presented to a vote of the Company’s stockholders generally. Additionally, the one share of Class C common stock
entitles its holder to the number of votes necessary such that the holder casts 5% of the total votes eligible to be cast
by all of the Company’s stockholders on all matters presented to a vote of the Company’s stockholders generally. The
one share of Class C common stock is owned by ML RV Group, LLC, a Delaware limited liability company, wholly-
owned by the Company’s Chairman and Chief Executive Officer, Marcus Lemonis.
Holders of the Company’s Class B and Class C common stock are not entitled to receive dividends and will
not be entitled to receive any distributions upon the liquidation, dissolution or winding up of the Company. Shares of
Class B common stock may only be issued to the extent necessary to maintain the one-to-one ratio between the
number of common units of CWGS, LLC held by funds controlled by Crestview Partners II GP, L.P. and the ML
Related Parties (the “Class B Common Owners”) and the number of shares of Class B common stock held by the
Class B Common Owners. Shares of Class B common stock are transferable only together with an equal number of
common units of CWGS, LLC. Only permitted transferees of common units held by the Class B Common Owners will
be permitted transferees of Class B common stock. Shares of Class B common stock will be canceled on a one-for-
one basis upon the redemption or exchange any of the outstanding common units of CWGS, LLC held by the Class B
Common Owners. Upon the occurrence of certain change in control events, the Class C common stock would no
longer have any voting rights, such share of the Company’s Class C common stock will be cancelled for no
consideration and will be retired, and the Company will not reissue such share of Class C common stock.
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).
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Short-Swing Profit Disgorgement
In May 2018, the Company received an aggregate of $557,000 from short-swing profit disgorgement remitted
by ML Acquisition Company, LLC, of which Marcus A. Lemonis, Chairman and Chief Executive Officer of the
Company, is the sole director, which is included as an increase to additional paid-in capital in the consolidated
statement of stockholders’ equity and as a financing activity in the consolidated statement of cash flows.
Stock Repurchase Program
On October 30, 2020, the Company’s Board of Directors authorized a stock repurchase program for the
repurchase of up to $100.0 million of the Company’s Class A common stock, expiring on October 31, 2022.
Repurchases under the program are subject to any applicable limitations on the availability of funds to be distributed
to the Company by CWGS, LLC to fund repurchases and may be made in the open market, in privately negotiated
transactions or otherwise, with the amount and timing of repurchases to be determined at the Company’s discretion,
depending on market conditions and corporate needs. Open market repurchases will be structured to occur in
accordance with applicable federal securities laws, including within the pricing and volume requirements of Rule 10b-
18 under the Securities Exchange Act of 1934, as amended. The Company may also, from time to time, enter into
Rule 10b5-1 plans to facilitate repurchases of its shares under this authorization. This program does not obligate the
Company to acquire any particular amount of Class A common stock and the program may be extended, modified,
suspended or discontinued at any time at the Board’s discretion. The Company expects to fund the repurchases
using cash on hand.
During the year ended December 31, 2020, the Company repurchased 811,223 shares of Class A common
stock under this program for approximately $21.5 million, including commissions paid, at a weighted average price
per share of $26.53, which is recorded as treasury stock on the consolidated balance sheets. Class A common stock
held as treasury stock is not considered outstanding. During the year ended December 31, 2020, the Company
reissued 238,776 shares of Class A common stock from treasury stock to settle the exercises of stock options and
vesting of restricted stock units. As of December 31, 2020, the remaining approved amount for repurchases of Class
A common stock under the share repurchase program was approximately $78.5 million.
19. Non-Controlling Interests
As described in Note 18 — 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 December 31, 2020 and 2019, CWGS, LLC had negative net assets, which resulted in negative non-
controlling interest amounts on the 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
consolidated balance sheet is equal to the non-controlling interest’s ownership share of the underlying CWGS, LLC
net assets (see the consolidated statement of stockholders’ deficit).
As of December 31, 2020 and December 31, 2019, there were 89,043,176 and 89,158,273 common units of
CWGS, LLC interests outstanding, respectively, of which CWH owned 42,226,389 and 37,488,989 common units of
CWGS, LLC, respectively, representing 47.4% and 42.0% ownership interest in CWGS, LLC., respectively, and the
Continuing Equity Owners owned 46,816,787 and 51,669,284 common units of CWGS, LLC, respectively,
representing 52.6% and 58.0% ownership interests in CWGS, LLC, respectively.
During the year ended December 31, 2020, the funds controlled by Crestview Partners II GP, L.P. redeemed
4.7 million common units of CWGS, LLC in exchange for 4.7 million shares of the Company’s Class A common stock,
which also resulted in the cancellation of 4.7 million shares of the Company’s Class B
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common stock that was previously held by the funds controlled by Crestview Partners II GP, L.P. During the year
ended December 31, 2018, the ML Related Parties redeemed 0.1 million common units of CWGS, LLC in exchange
for 0.1 million shares of the Company’s Class A common stock, which also resulted in the cancellation of 0.1 million
shares of the Company’s Class B common stock that was previously held by the ML Related Parties.
The following table summarizes the effects of changes in ownership in CWGS, LLC on the Company’s equity:
($ in thousands)
Net income (loss) attributable to Camping World Holdings, Inc.
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
(Decrease) increase in additional paid-in capital as a result of the vesting
of restricted stock units
Decrease in additional paid-in capital as a result of repurchases of Class A
common stock for withholding taxes on vested RSUs
Increase in additional paid-in capital as a result of repurchases of Class A
common stock for treasury stock
Increase (decrease) in additional paid-in capital as a result of the
redemption of common units of CWGS, LLC
Change from net income (loss) attributable to Camping World Holdings,
Inc. and transfers to non-controlling interests
Year Ended December 31,
2019
$ 122,345 $ (60,591) $ 10,398
2020
2018
(2,602)
(6,398)
—
736
(86)
881
(1,910)
(1,477)
(1,364)
11,616
—
—
25,565
(478)
4,536
$ 148,616 $ (61,810) $ 14,365
20. 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:
($ in thousands)
Equity-based compensation expense:
Year Ended December 31,
2019
2020
2018
Costs applicable to revenue
Selling, general, and administrative
Total equity-based compensation expense
Total income tax benefit recognized related to equity-based compensation
$
903
19,758
$ 20,661
2,176
$
$
847
12,298
$ 13,145
1,275
$
$
820
13,268
$ 14,088
1,350
$
2016 Incentive Award Plan
In October 2016, the Company adopted the 2016 Incentive Award Plan (the “2016 Plan”) under which the
Company may grant up to 14,693,518 stock options, restricted stock units, and other types of equity-based awards to
employees, consultants or non-employee directors of the Company. The Company does not intend to use cash to
settle any of its equity-based awards. Upon the exercise of a stock option award, the vesting of
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a restricted stock unit or the award of common stock or restricted stock, shares of Class A common stock are issued
from authorized but unissued shares or from shares held in treasury. Stock options and restricted stock units granted
to employees generally vest in equal annual installments over a three to five-year period and are canceled upon
termination of employment. Stock options are granted with an exercise price equal to the fair market value of the
Company’s Class A common stock on the date of grant. Stock option grants expire after ten years unless canceled
earlier due to termination of employment. Restricted stock units granted to non-employee directors vest in equal
annual installments over a one-year or three-year period subject to voluntary deferral elections made prior to the
grant.
The Company did not grant any stock options during the years ended December 31, 2020, 2019, or 2018. A
summary of stock option activity for the year ended December 31, 2020 is as follows:
Stock Options Weighted Average
(in thousands) Exercise Price
Intrinsic Value
(in thousands)
Contractual Life
(years)
Outstanding at December 31, 2019
Exercised
Forfeited
Outstanding at December 31, 2020
Options exercisable at December 31, 2020
745
$
(213) $
(62) $
470
$
$
470
21.86
21.73
22.00
21.90
21.90
$
$
1,950
1,950
5.7
5.7
At December 31, 2020, all stock options were fully vested. There were no exercises of stock options during
the year ended December 31, 2019. The intrinsic value of stock options exercised was $2.3 million and $0.1 million
for the years ended December 31, 2020 and 2018, respectively. The actual tax benefit for the tax deductions from the
exercise of stock options was $0.3 million and not significant for the years ended December 31, 2020 and 2018,
respectively.
A summary of restricted stock unit activity for the year ended December 31, 2020 is as follows:
Outstanding at December 31, 2019
Granted
Vested
Forfeited
Outstanding at December 31, 2020
Restricted
Stock Units
(in thousands)
Weighted Average
Grant Date
Fair Value
$
1,806
2,520
$
(661) $
(273) $
3,392
$
19.68
32.54
20.83
24.40
28.87
The weighted-average grant date fair value of restricted stock units granted during the years ended
December 31, 2020, 2019 and 2018 was $32.54, $11.17, and $25.73, respectively. At December 31, 2020, the
intrinsic value of unvested restricted stock units was $88.4 million. At December 31, 2020, total unrecognized
compensation cost related to unvested restricted stock units was $87.5 million and is expected to be recognized over
a weighted-average period of 3.9 years.
The fair value of restricted stock units that vested during the years ended December 31, 2020, 2019, and
2018 was $16.7 million, $11.8 million, and $5.6 million, respectively. The actual tax benefit for the tax deductions from
the vesting of restricted stock units was $2.1 million, $0.7 million, and $0.7 million for the years ended December 31,
2020, 2019, and 2018, respectively. The restricted stock units that vested were typically net share settled such that
the Company withheld shares with value equivalent to the employees’ minimum statutory obligation for the applicable
income and other employment taxes, and remitted the cash to the appropriate taxing authorities. The total shares
withheld were based on the value of the restricted stock units on their respective vesting dates as determined by the
Company’s closing stock price. Total payments for the employees’ tax obligations to taxing authorities are reflected as
a financing activity within the Consolidated Statements of Cash Flows. These net share settlements had the effect of
share repurchases by the Company as they reduced the number of shares that would have otherwise been issued as
a result of the vesting and did not represent an expense to the Company.
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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 (“RSU”) on January 21, 2019 (the “First Award”), and (b) 60,000 RSUs on November 12, 2019 (the “Second
Award”) pursuant to the Company’s 2016 Incentive Award Plan. The consulting agreement provided, among other
things, that (i) the remaining unvested 41,667 RSUs held by Mr. Flanigan pursuant to the First Award would vest on
January 1, 2021, provided that the consulting agreement had not been terminated prior to December 31, 2020, and
(ii) 20,000 unvested RSUs held by Mr. Flanigan pursuant to the Second Award that were scheduled to vest on
November 15, 2020 would vest on such date, provided that the Consulting Agreement had not been terminated prior
to such date. This modification resulted in an incremental equity-based compensation charge of $1.3 million relating
to the modified RSUs, which was recorded between June 2020 and December 31, 2020.
21. Earnings Per Share
Basic and Diluted Earnings Per Share
Basic earnings per share of Class A common stock is computed by dividing net income (loss) 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 (loss)
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:
(In thousands except per share amounts)
Numerator:
Net income (loss)
Less: net (income) loss attributable to non-controlling interests
Net income (loss) attributable to Camping World Holdings, Inc. — basic and diluted
Add: reallocation of net income attributable to non-controlling interests from the
assumed dilutive effect of stock options and RSUs
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
Year Ended December 31,
2019
2020
2018
$ 344,215
(221,870)
122,345
$ (120,301)
59,710
(60,591)
$ 65,581
(55,183)
10,398
1,304
(71)
—
—
—
14,240
Net income (loss) attributable to Camping World Holdings, Inc. — diluted
$ 123,649
$
(60,662)
$ 24,638
Denominator:
Weighted-average shares of Class A common stock outstanding — basic and diluted
Dilutive options to purchase Class A common stock
Dilutive restricted stock units
Dilutive common units of CWGS, LLC that are convertible into Class A common stock
Weighted-average shares of Class A common stock outstanding — diluted
39,383
79
547
—
40,009
37,310
—
40
—
37,350
36,985
78
83
51,732
88,878
Earnings (loss) per share of Class A common stock — basic
Earnings (loss) per share of Class A common stock — diluted
$
$
3.11
3.09
$
$
(1.62)
(1.62)
$
$
0.28
0.28
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
Restricted stock units
Common units of CWGS, LLC that are convertible into Class A common stock
361
1,349
49,916
795
1,179
51,670
681
1,037
—
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.
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22. Segment Information
The Company has the following two reportable segments: (i) Good Sam Services and Plans, and (ii) RV and
Outdoor Retail (see Note 1 – Summary of Significant Accounting Policies – Description of the Business for a
discussion of the primary revenue generating activities of each segment).
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, total assets, and capital expenditures are as follows:
($ in thousands)
Revenue:
Good Sam services and plans
New vehicles
Used vehicles
Products, service and other
Finance and insurance, net
Good Sam Club
Total consolidated revenue
($ in thousands)
Revenue:
Good Sam services and plans
New vehicles
Used vehicles
Products, service and other
Finance and insurance, net
Good Sam Club
Total consolidated revenue
($ in thousands)
Revenue:
Good Sam services and plans
New vehicles
Used vehicles
Products, service and other
Finance and insurance, net
Good Sam Club
Total consolidated revenue
Year Ended December 31, 2020
Good Sam
Services
and Plans
RV and
Outdoor
Retail
Intersegment
Eliminations
Total
$
$
$
$
$
$
— $
2,829,296
987,389
950,247
474,196
44,299
5,285,427
$
(1,781) $
(5,985)
(2,536)
(1,357)
(9,935)
—
(21,594) $
180,977
2,823,311
984,853
948,890
464,261
44,299
5,446,591
Year Ended December 31, 2019
RV and
Outdoor
Retail
Intersegment
Eliminations
Total
— $
2,375,477
860,032
1,036,439
411,035
48,653
4,731,636
$
(1,988) $
(5,156)
(2,404)
(1,862)
(9,733)
—
(21,143) $
179,538
2,370,321
857,628
1,034,577
401,302
48,653
4,892,019
Year Ended December 31, 2018
RV and
Outdoor
Retail
Intersegment
Eliminations
Total
— $
2,517,978
734,108
951,814
394,214
41,392
4,639,506
$
(1,981) $
(5,124)
(2,091)
(2,431)
(10,503)
—
(22,130) $
172,660
2,512,854
732,017
949,383
383,711
41,392
4,792,017
$
$
$
$
$
$
182,758
—
—
—
—
—
182,758
Good Sam
Services
and Plans
181,526
—
—
—
—
—
181,526
Good Sam
Services
and Plans
174,641
—
—
—
—
—
174,641
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($ in thousands)
Segment income (loss):(1)
Good Sam Services and Plans
RV and Outdoor Retail
Total segment income
Corporate & other
Depreciation and amortization
Other interest expense, net
Tax Receivable Agreement liability adjustment
Loss and expense on debt restructure
Income (loss) before income taxes
Year Ended December 31,
2019
2018
2020
$
88,288 $
429,950
518,238
(9,751)
(51,981)
(54,689)
141
—
83,635 $
(42,609)
41,026
(12,455)
(59,932)
(69,363)
10,005
—
$ 401,958 $ (90,719) $
81,138
138,085
219,223
(6,821)
(49,322)
(63,329)
(1,324)
(2,056)
96,371
(1) Segment income is defined as income from operations before depreciation and amortization plus floor plan interest expense. The
Company has recast certain prior period amounts to conform to the two segments presented in 2019.
($ in thousands)
Depreciation and amortization:
Good Sam Services and Plans
RV and Outdoor Retail
Subtotal
Corporate & other
Total depreciation and amortization
($ in thousands)
Other interest expense, net:
Good Sam Services and Plans
RV and Outdoor Retail
Subtotal
Corporate & other
Total other interest expense, net
($ in thousands)
Assets:
Good Sam Services and Plans
RV and Outdoor Retail
Subtotal
Corporate & other
Total assets
Year Ended December 31,
2019
2020
2018
$
3,474
48,507
51,981
—
$ 51,981
$
4,304
55,628
59,932
—
$ 59,932
$
3,328
45,406
48,734
588
$ 49,322
Year Ended December 31,
2019
2020
2018
$
5
8,081
8,086
46,603
$ 54,689
$
(1) $
8,941
8,940
60,423
$ 69,363
4
8,073
8,077
55,252
$ 63,329
2020
As of December 31,
2019
2018
$
140,825
2,881,637
3,022,462
233,969
$ 3,256,431
$
138,360
3,047,652
3,186,012
190,228
$ 3,376,240
$
146,012
2,467,519
2,613,531
193,156
$ 2,806,687
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($ in thousands)
Capital expenditures:
Good Sam Services and Plans
RV and Outdoor Retail
Subtotal
Corporate and other
Total capital expenditures
Year Ended December 31,
2019
2018
2020
$
2,553 $
2,952 $
2,477
251,882
254,359
—
$ 84,923 $ 88,356 $ 254,359
85,405
88,357
(1)
82,243
84,796
127
23. Quarterly Financial Information (Unaudited)
The three months ended December 31, 2020, June 30, 2020 and March 31, 2020 reflect long-lived asset
impairments of $6.6 million, $4.4 million, and $1.4 million, respectively, and the three months ended December 31,
2020, September 30, 2020, June 30, 2020 and March 31, 2020 reflect restructuring charges of $6.3 million, $4.6
million, $3.7 million and $3.0 million, respectively, relating to the 2019 Strategic Shift as described in Note 5 —
Restructuring and Long-lived Asset Impairment. The three months ended December 31, 2019 and September 30,
2019, reflect long-lived asset impairments of approximately $16.3 million and $50.0 million, respectively, and
restructuring charges of $19.5 million and $27.7 million, respectively, relating to the 2019 Strategic Shift as described
in Note 5 — Restructuring and Long-lived Asset Impairment.
December 31,
2020
1,133,820
$
September 30,
2020
1,678,753
$
June 30,
2020
$ 1,606,745
March 31,
2020
$ 1,027,273
December 31,
2019
$
964,931
September 30,
2019
1,387,972
$
June 30,
2019
$ 1,474,347
March 31,
2019
1,064,769
$
Three Months Ended
66,497
40,338
193,093
154,784
203,340
163,222
13,265
(14,129)
(66,132)
(80,854)
(32,307)
(65,263)
90,304
52,623
16,882
(26,807)
14,378
58,050
58,077
(8,160)
(28,521)
(30,692)
18,017
(19,395)
$
$
0.34
0.34
1.46
1.44
1.54
1.54
(0.22)
(0.22)
$
$
(0.76)
(0.89)
(0.82)
(0.82)
0.48
0.46
(0.52)
(0.52)
($ in thousands)
Revenue
Income (loss) from
operations
Net income (loss)
Net income (loss)
attributable to
Camping World
Holdings, Inc.
Earnings (loss) per
share of Class A
common stock:
Basic
Diluted
(1)
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Schedule I: Condensed Financial Information of Registrant
Camping World Holdings, Inc.
Condensed Balance Sheets
(Parent Company Only)
(In Thousands Except Share Amounts)
Assets
Current assets:
Cash and cash equivalents
Prepaid income taxes and other
Total current assets
Deferred tax asset
Investment in subsidiaries
Total assets
Liabilities and stockholders' equity
Current liabilities:
Current portion of liabilities under Tax Receivable Agreement
Total current liabilities
Liabilities under Tax Receivable Agreement, net of current portion
Total liabilities
Commitments and contingencies
Stockholders' equity (deficit):
Preferred stock, par value $0.01 per share – 20,000,000 shares authorized; none issued and
outstanding as of December 31, 2020 and December 31, 2019
Class A common stock, par value $0.01 per share – 250,000,000 shares authorized; 43,083,008
issued and 42,226,389 outstanding as of December 31, 2020 and 37,701,584 issued and
37,488,989 outstanding as of December 31, 2019
Class B common stock, par value $0.0001 per share – 75,000,000 shares authorized; 69,066,445
issued as of December 31, 2020 and December 31, 2019; and 45,999,132 and 50,706,629
outstanding as of December 31, 2020 and December 31, 2019
Class C common stock, par value $0.0001 per share – one share authorized, issued and
outstanding as of December 31, 2020 and December 31, 2019
Additional paid-in capital
Treasury stock, at cost; 572,447 and 0 shares as of December 31, 2020 and December 31, 2019
Retained deficit
Total stockholders' equity (deficit)
Total liabilities and stockholders' equity
See accompanying Notes to Condensed Financial Information
139
December 31, December 31,
2020
2019
$
$
$
$
$
$
$
37,355
4,073
41,428
163,759
(32,479)
172,708
8,089
8,089
137,845
145,934
—
—
428
5
44,991
1,388
46,379
127,689
(91,879)
82,189
6,563
6,563
108,228
114,791
—
—
375
5
—
63,342
(15,187)
(21,814)
26,774
172,708
$
—
50,152
—
(83,134)
(32,602)
82,189
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Schedule I: Condensed Financial Information of Registrant (continued)
Camping World Holdings, Inc.
Condensed Statements of Operations
(Parent Company Only)
(In Thousands)
Revenue:
Intercompany revenue
Total revenue
Operating expenses:
Selling, general, and administrative
Total operating expenses
Loss from operations
Other interest expense, net
Tax Receivable Agreement liability adjustment
Equity in net income (loss) of subsidiaries
Income (loss) before income taxes
Income tax expense
Net income (loss)
See accompanying Notes to Condensed Financial Information
140
Year Ended December 31,
2019
2020
2018
$
9,660
9,660
$
11,642
11,642
$
7,066
7,066
9,660
9,660
—
103
141
173,618
173,862
(51,517)
122,345
$
$
11,642
11,642
—
—
10,005
(43,317)
(33,312)
(27,279)
(60,591)
$
7,066
7,066
—
(15)
(1,324)
39,266
37,927
(27,529)
10,398
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Schedule I: Condensed Financial Information of Registrant (continued)
Camping World Holdings, Inc.
Condensed Statements of Cash Flows
(Parent Company Only)
(In Thousands)
For the Year Ended December 31,
2019
2020
2018
Operating activities
Net income (loss)
$
122,345
$ (60,591)
$
10,398
Adjustments to reconcile net income (loss) to net cash used in
operating activities:
Equity in net (loss) income of subsidiaries
Deferred tax expense
Tax Receivable Agreement liability adjustment
Change in assets and liabilities, net of acquisitions:
Intercompany receivables
Prepaid income taxes and other assets
Accounts payable and other accrued liabilities
Payment pursuant to Tax Receivable Agreement
Net cash used in operating activities
Investing activities
Purchases of LLC Interest from CWGS, LLC
Return of LLC Interest to CWGS, LLC for funding of treasury stock
purchases
Distributions received from CWGS, LLC
Net cash provided by investing activities
Financing activities
Dividends paid to Class A common stockholders
Proceeds from exercise of stock options
Repurchases of Class A common stock to treasury
Disgorgement of short-swing profits by Section 16 officer
Net cash used in financing activities
(173,618)
6,534
(141)
—
(2,685)
—
(6,563)
(54,128)
43,317
14,981
(10,005)
2,518
7,671
—
(9,425)
(11,534)
(39,266)
10,908
1,324
(2,518)
1,464
(44)
(8,914)
(26,648)
(4,635)
—
(271)
21,522
107,517
124,404
(61,025)
4,635
(21,522)
—
(77,912)
—
47,866
47,866
(22,878)
—
—
—
(22,878)
—
65,940
65,669
(22,697)
153
—
557
(21,987)
(Decrease) increase in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of the year
(7,636)
44,991
37,355
13,454
31,537
44,991
$
17,034
14,503
31,537
$
$
See accompanying Notes to Condensed Financial Information
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Schedule I: Condensed Financial Information of Registrant (continued)
Camping World Holdings, Inc.
Notes to Condensed Financial Information
(Parent Company Only)
December 31, 2020
1. Organization
Camping World Holdings, Inc. (the “Parent Company”) was formed on March 8, 2016 as a Delaware
corporation and is a holding company with no direct operations. The Parent Company's assets consist primarily of
cash and cash equivalents, its equity interest in CWGS Enterprises, LLC ("CWGS, LLC”), and certain deferred tax
assets.
The Parent Company's cash inflows are primarily from cash dividends or distributions and other transfers
from CWGS, LLC. The amounts available to the Parent Company to fulfill cash commitments and pay cash dividends
on its common stock are subject to certain restrictions in CWGS, LLC’s Senior Secured Credit Facilities. See Note 9
to the consolidated financial statements.
2. Basis of Presentation
These condensed parent company financial statements should be read in conjunction with the consolidated
financial statements of Camping World Holdings, Inc. and the accompanying notes thereto, included in this Form 10-
K. For purposes of this condensed financial information, the Parent Company's interest in CWGS, LLC is recorded
based upon its proportionate share of CWGS, LLC's net assets (similar to presenting them on the equity method).
The Parent Company is the sole managing member of CWGS, LLC, and pursuant to the Amended and
Restated LLC Agreement of CWGS, LLC (the “LLC Agreement”), receives compensation in the form of
reimbursements for all costs associated with being a public company. Intercompany revenue consists of these
reimbursement payments and is recognized when the corresponding expense to which it relates is recognized.
Certain intercompany balances presented in these condensed Parent Company financial statements are
eliminated in the consolidated financial statements. For the years ended December 31, 2020, 2019, and 2018, the full
amounts of intercompany revenue and equity in net income of subsidiaries in the accompanying Parent Company
Statements of Operations were eliminated in consolidation. No intercompany receivable was owed to the Parent
Company by CWGS, LLC at December 31, 2020 and 2019. Related party amounts that were not eliminated in the
consolidated financial statements include the Parent Company's liabilities under the tax receivable agreement, which
totaled $145.9 million and $114.8 million as of December 31, 2020 and 2019, respectively.
3. Commitments and Contingencies
The Parent Company is party to a tax receivable agreement with certain holders of common units in CWGS,
LLC (the "Continuing Equity Owners") that provides for the payment by the Parent Company to the Continuing Equity
Owners of 85% of the amount of any tax benefits that the Parent Company actually realizes, or in some cases are
deemed to realize, as a result of certain transactions. See Note 11 to the consolidated financial statements for more
information regarding the Parent Company's tax receivable agreement. As described in Note 11 to the consolidated
financial statements, amounts payable under the tax receivable agreement are contingent upon, among other things,
(i) generation of future taxable income of Camping World Holdings, Inc. over the term of the tax receivable agreement
and (ii) future changes in tax laws. As of December 31, 2020 and 2019, liabilities under the tax receivable agreement
totaled $145.9 million and $114.8 million, respectively.
See Note 13 to the consolidated financial statements for information regarding pending and threatened
litigation. Pursuant to the LLC Agreement, the Parent Company receives reimbursements for all costs associated with
being a public company, which includes costs of litigation.
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4. Stock Repurchase Program
During the year ended December 31, 2020, the Parent Company repurchased 811,223 shares of Class A
common stock under this program for approximately $21.5 million, including commissions paid, at a weighted average
price per share of $26.53, which is recorded as treasury stock on the Parent Company’s balance sheet. This $21.5
million was concurrently funded by CWGS, LLC in exchange for the return of 811,223 common units in CWGS, LLC,
which reduced the Parent Company’s ownership interest in CWGS, LLC. Class A common stock held as treasury
stock is not considered outstanding. During the year ended December 31, 2020, the Parent Company reissued
238,776 shares of Class A common stock from treasury stock to settle the exercises of stock options and vesting of
restricted stock units. See Note 18 to the consolidated financial statements for a further discussion of the stock
repurchase program.
5. Statements of Cash Flows
Supplemental disclosures of cash flow information are as follows (in thousands):
Cash paid during the period for:
Interest
Income taxes
Non-cash financing activities:
Year Ended
December 31,
2020
Year Ended
December 31,
2019
Year Ended
December 31,
2018
$
— $
— $
47,668
4,235
15
14,421
Par value of Class A common stock issued in exchange for common
units in CWGS, LLC
Par value of Class A common stock issued for vested restricted
stock units
Par value of Class A common stock repurchased for withholding
taxes on vested RSUs
48
3
—
—
4
(1)
3
3
(1)
143
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Schedule II: Valuation and Qualifying Accounts
(In Thousands)
Accounts receivable allowance (3):
Year ended December 31, 2020
Year ended December 31, 2019
Year ended December 31, 2018 (4)
Balance at Additions Charged Charges Balance
Beginning Charged to
Utilized at End
of Period Expense (1) Accounts (2) (Write-offs) of Period
to Other
$
3,717
4,729
8,659
1,068
$
(20) $
2,444
(142) $
$
278
(5,278)
(1,250) $ 3,393
3,717
(1,270)
4,729
(1,096)
(1) Additions to allowance for doubtful accounts are charged to expense.
(2) Additions to cancellations/returns allowances are credited against revenue.
(3) Accounts receivable allowance includes the allowance for doubtful accounts and the allowance for cancellations /returns.
(4) As a result of the adoption of ASC 606 on January 1, 2018, certain of the Company’s revenue streams are recorded as variable
consideration and would no longer be considered to have an allowance for cancellations/returns (see Note 2 — Revenue in Part II,
Item 8 of this Form 10-K). This resulted in a charge to other accounts of $5.5 million for the year ended December 31, 2018.
(In Thousands)
Noncurrent other assets allowance:
Year ended December 31, 2020
Year ended December 31, 2019
Year ended December 31, 2018 (2)
Balance at Additions Charged Charges Balance
Beginning Charged to
Utilized at End
of Period Expense Accounts (1) (Write-offs) of Period
to Other
$
2,753
—
7,187
$
— $
2,753
—
— $
—
(7,187)
(2,753) $
—
—
—
2,753
—
(1) Additions to cancellations /returns allowances are credited against revenue.
(2) As a result of the adoption of ASC 606 on January 1, 2018, certain of the Company’s revenue streams are recorded as variable
consideration and would no longer be considered to have an allowance for cancellations/returns (see Note 2 — Revenue in Part II,
Item 8 of this Form 10-K). This resulted in a charge to other accounts of $7.2 million for the year ended December 31, 2018.
(In Thousands)
Valuation allowance for deferred tax
assets:
Year ended December 31, 2020
Year ended December 31, 2019
Year ended December 31, 2018
Tax
Valuation
Allowance
Charged to
Beginning Income Tax Income Tax
Tax
Valuation
Allowance
Credited to
Balance at
of Period Provision Provision
Charged
to Other
Accounts
(1)
Balance
at End
of Period
$
$ 266,452
180,983
132,468
19,058
85,903
43,175
$
— $
(434)
—
10,436
—
5,340
$ 295,946
266,452
180,983
(1) Amounts charged to additional paid-in capital relating to the outside basis in the investment in CWGS, LLC.
144
Table of Contents
ITEM 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
None.
ITEM 9A. Controls and Procedures
Limitations on Effectiveness of Controls and Procedures
In designing and evaluating our disclosure controls and procedures, management recognizes that any
controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of
achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the
fact that there are resource constraints and that management is required to apply judgment in evaluating the benefits
of possible controls and procedures relative to their costs.
Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our chief executive officer and chief financial officer, has evaluated
the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the
Securities Exchange Act of 1934, as amended, or the "Exchange Act,") as of the end of the period covered by this
Annual Report on Form 10-K. Based on this evaluation, our chief executive officer and chief financial officer
concluded that our disclosure controls and procedures were effective at the reasonable assurance level as of
December 31, 2020.
Management’s Annual Report on Internal Control over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial
reporting, as defined in Rule 13a-15(f) under the Exchange Act. Management conducted an assessment of the
effectiveness of our internal control over financial reporting based on the criteria set forth in Internal Control –
Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013
framework).
Our management has excluded from its assessment of internal control over financial reporting at December
31, 2020 the internal control over financial reporting of several of our recently acquired businesses in 2020,
comprised of nine dealerships and an RV furniture distributor (the “Excluded Acquisitions”). The Excluded
Acquisitions constituted $35.7 million and $17.5 million of total assets and net assets, respectively, as of December
31, 2020, and $10.1 million and $0.5 million of revenues and net loss, respectively, for the year then ended.
Based on our assessment, our management concluded that our internal control over financial reporting was
effective as of December 31, 2020.
Our internal control over financial reporting as of December 31, 2020, has been audited by Deloitte & Touche
LLP, the independent registered public accounting firm who has also audited our consolidated financial statements,
as stated in their report which is included on page 147.
Changes in Internal Control over Financial Reporting
During the quarter ended December 31, 2020, we completed the process of incorporating the internal
controls for the businesses we acquired in 2019, comprised of three dealerships (the “2019 Excluded Acquisitions”),
into our internal control over financial reporting and extending our Section 404 compliance program under the
Sarbanes-Oxley Act of 2002 and the applicable rules and regulations under such Act to include the 2019 Excluded
Acquisitions.
145
Table of Contents
Except as otherwise described above, there was no change in our internal control over financial reporting (as
defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) identified in connection with the evaluation of our
internal control performed during the fiscal quarter ended December 31, 2020, that has materially affected, or is
reasonably likely to materially affect, our internal control over financial reporting.
146
Table of Contents
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Stockholders and the Board of Directors of Camping World Holdings, Inc. and subsidiaries
Opinion on Internal Control over Financial Reporting
We have audited the internal control over financial reporting of Camping World Holdings, Inc. and subsidiaries (the
“Company”) as of December 31, 2020, based on criteria established in Internal Control — Integrated Framework
(2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion,
the Company maintained, in all material respects, effective internal control over financial reporting as of December
31, 2020, based on criteria established in Internal Control — Integrated Framework (2013) issued by COSO.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United
States) (PCAOB), the consolidated financial statements as of and for the year ended December 31, 2020, of the
Company and our report dated February 26, 2021, expressed an unqualified opinion on those financial statements.
As described in Management's Annual Report on Internal Control over Financial Reporting, management excluded
from its assessment the internal control over financial reporting at the Company's recently acquired businesses in
2020, comprised of nine dealerships and an RV furniture distributor (the "Excluded Acquisitions"), and whose
financial statements constitute $35.7 million and $17.5 million of total assets and net assets, respectively, as of
December 31, 2020, and $10.1 million and $0.5 million of revenues and net loss, respectively, for the year then
ended. Accordingly, our audit did not include the internal control over financial reporting at the Excluded Acquisitions.
Basis for Opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting and for
its assessment of the effectiveness of internal control over financial reporting, included in the accompanying
Management's Annual Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion
on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm
registered with the PCAOB and are required to be independent with respect to the Company in accordance with the
U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and
the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was
maintained in all material respects. Our audit included obtaining an understanding of internal control over financial
reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating
effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered
necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements for external purposes in
accordance with generally accepted accounting principles. A company’s internal control over financial reporting
includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail,
accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable
assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance
with generally accepted accounting principles, and that receipts and expenditures of the company are being made
only in accordance with authorizations of management and directors of the company; and (3) provide reasonable
assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s
assets that could have a material effect on the financial statements.
147
Table of Contents
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.
Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become
inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may
deteriorate.
/s/ Deloitte & Touche LLP
Los Angeles, California
February 26, 2021
ITEM 9B. Other Information
Not applicable
148
Table of Contents
ITEM 10. Directors, Executive Officers and Corporate Governance
PART III
We have adopted a written code of business conduct and ethics, which applies to all of our directors, officers
and employees, including our principal executive officer and our principal financial and accounting officer. Our Code
of Business Conduct and Ethics is available on our website www.campingworld.com in the “Investor Relations”
section under “Governance.” In addition, we intend to post on our website all disclosures that are required by law or
New York Stock Exchange listing rules concerning any amendments to, or waivers from, any provision of our Code of
Business Conduct and Ethics. The information contained on our website is not incorporated by reference into this
Form 10-K.
The information concerning our executive officers and directors in response to this item is contained above in
part under the caption “Information About Our Executive Officers and Directors” at the end of Part I of this Form 10-K.
Other Information required by this item will be included under the captions “Proposal 1: Election of Directors”,
“Corporate Governance”, “Committees of the Board”, and, if applicable, “Delinquent Section 16(a) Reports” in our
Proxy Statement for our 2021 Annual Meeting of Shareholders and, upon filing, is incorporated herein by reference.
ITEM 11. Executive Compensation
The information required by this item will be included under the captions “Executive Compensation”, ”Director
Compensation”,
and “Compensation Committee Interlocks and Insider
Participation” in our Proxy Statement for our 2021 Annual Meeting of Shareholders and, upon filing, is incorporated
herein by reference.
“Compensation Committee Report”,
ITEM 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
The following table provides information about our compensation plans under which our Class A common
stock is authorized for issuance, as of December 31, 2020:
Plan Category
Equity compensation plans approved by security
holders (1)
Equity compensation plans not approved by security
holders
Total
Number of
securities to be
issued upon
exercise of
outstanding
options, warrants
and rights
Weighted-average
exercise price of
outstanding
options, warrants
and rights
Number of
securities
remaining available
for future issuances
under equity
compensation plans
3,862,117
$21.90
9,122,201
—
3,862,117
—
$21.90
—
9,122,201
(1)
Includes awards granted and available to be granted under our 2016 Incentive Award Plan.
Other information required by this item with respect to security ownership of certain beneficial owners and
management will be included under the caption “Security Ownership of Certain Beneficial Owners and
149
Table of Contents
Management” and “Equity Compensation Plan Information” in our Proxy Statement for our 2021 Annual Meeting of
Shareholders and, upon filing, is incorporated herein by reference.
ITEM 13. Certain Relationships and Related Transactions, and Director Independence
The information required by this item will be included under the captions “Certain Relationships and Related
Person Transactions” and “Corporate Governance—Director Independence” in our Proxy Statement for our 2021
Annual Meeting of Shareholders and, upon filing, is incorporated herein by reference.
ITEM 14. Principal Accountant Fees and Services
The information required by this item will be included under the caption “Independent Registered Public
Accounting Firm Fees and Other Matters” in our Proxy Statement for our 2021 Annual Meeting of Shareholders and,
upon filing, is incorporated herein by reference.
150
Table of Contents
ITEM 15. Exhibits, Financial Statements and Schedules
(a)(1) Financial Statements.
PART IV
See the table of contents under “Item 8. Financial Statements and Supplementary Data” in Part II of this
Form 10-K above for the list of financial statements filed as part of this report.
(a)(2) Financial Statement Schedules.
Schedule I: Condensed Financial Information of Registrant
Schedule II: Valuation and Qualifying Accounts
139
144
All other schedules have been omitted because they are not required or because the required information is
given in the Consolidated Financial Statements or Notes thereto set forth above under “Item 8. Financial Statements
and Supplementary Data” in Part II of this Form 10-K, beginning on page 89.
(a)(3) Exhibits.
INDEX TO EXHIBITS
Incorporated by Reference
Exhibit
Number
3.1
3.2
4.1
4.2
10.1
10.2
10.3
10.4
10.5
Exhibit Description
Amended and Restated Certificate of
Incorporation of Camping World Holdings,
Inc.
Amended and Restated Bylaws of
Camping World Holdings, Inc.
Specimen Stock Certificate evidencing the
shares of Class A common stock
Description of Capital Stock
Tax Receivable Agreement, dated October
6, 2016
Voting Agreement, dated October 6, 2016
Amended and Restated LLC Agreement of
CWGS Enterprises, LLC, dated October 6,
2016
Registration Rights Agreement, dated
October 6, 2016
Seventh Amended and Restated Credit
Agreement, dated December 12, 2017,
among FreedomRoads, LLC, as the
company and a borrower, certain
subsidiaries of FreedomRoads, LLC, as
subsidiary borrowers, Bank of America,
N.A., as administrative agent and letter of
credit issuer, and the other lenders party
thereto.
Form
10-Q
File No.
001-37908
Exhibit
3.1
Filing Date
11/10/16
Filed/
Furnished
Herewith
10-Q
001-37908
3.2
11/10/16
S-1/A
333-211977
4.1
9/13/16
001-37908
4.2
2/28/20
001-37908
10.1
3/13/17
001-37908
001-37908
10.2
10.3
3/13/17
3/13/17
001-37908
10.4
3/13/17
001-37908
10.1
12/22/17
10-K
10-K
10-K
10-K
10-K
8-K
151
Table of Contents
Exhibit
Number
10.6
10.7
10.8
#10.9
#10.10
#10.11
#10.12
#10.13
#10.14
#10.15
#10.16
#10.17
#10.18
#10.19
Exhibit Description
First Amendment to Seventh Amended
and Restated Credit Agreement dated
December 4, 2018 by and among
FreedomRoads, LLC, as borrower, the
lenders party thereto and Bank of America,
N.A. as administrative agent
Second Amendment to Seventh Amended
and Restated Credit Agreement dated
October 8, 2019 by and among
FreedomRoads, LLC as borrower, the
lenders party thereto, and Bank of
America, N.A. as administrative agent
Third Amendment to Seventh Amended
and Restated Credit Agreement dated May
12, 2020 by and among FreedomRoads,
LLC as borrower, the lenders party thereto,
and Bank of America, N.A. as
administrative agent
Employment Agreement, dated June 10,
2016, by and between CWGS Enterprises,
LLC, Camping World Holdings, Inc. and
Marcus A. Lemonis
Employment Agreement, dated January 1,
2010, by and between FreedomRoads,
LLC, CWI, Inc. and Brent Moody
First Amendment to Employment
Agreement, dated January 1, 2011, by and
between FreedomRoads, LLC, CWI, Inc.
and Brent Moody
Employment Agreement, dated June 10,
2016, by and between CWGS Enterprises,
LLC, Camping World Holdings, Inc. and
Brent Moody
First Amendment to Employment
Agreement, by and between the Company
and Brent Moody, dated March 25, 2020.
Camping World Holdings, Inc. 2016
Incentive Award Plan
Camping World Holdings, Inc. 2016 Senior
Executive Bonus Plan
Camping World Holdings, Inc. Non-
Employee Director Compensation Policy
Camping World Holdings, Inc. Director
Stock Ownership Policy
Camping World Holdings, Inc. Executive
Stock Ownership Policy
Form of Employee Stock Option
Agreement
Incorporated by Reference
Form
8-K
File No.
001-37908
Exhibit
10.1
Filing Date
12/4/2018
Filed/
Furnished
Herewith
8-K
001-37908
10.1
10/10/2019
8-K
001-37908
10.1
5/18/2020
S-1/A
333-211977
10.12
9/20/16
S-1/A
333-211977
10.18
9/20/16
S-1/A
333-211977
10.19
9/20/16
S-1/A
333-211977
10.20
9/20/16
8-K
S-8
10-K
10-Q
10-K
10-K
001-37908
10.1
3/25/2020
333-214040
4.4
10/11/16
001-37908
10.19
3/13/17
001-37908
10.1
5/10/19
001-37908
10.21
3/13/17
001-37908
10.22
3/13/17
S-1/A
333-211977
10.28
9/20/16
152
Table of Contents
Exhibit
Number
#10.20
#10.21
#10.22
10.23
10.24
10.25
10.26
10.27
10.28
Exhibit Description
Form of Employee Restricted Stock Unit
Agreement
Form of Director Restricted Stock Unit
Agreement
Form of Indemnification Agreement
Credit Agreement, dated November 8,
2016, by and among CWGS Enterprises,
LLC, as holdings, CWGS Group, LLC, as
borrower, certain of CWGS Enterprises,
LLC's existing and future domestic
subsidiaries as subsidiary guarantors, the
lenders party thereto and Goldman Sachs
Bank USA, as administrative agent
First Amendment to Credit Agreement,
dated March 17, 2017, by and among
CWGS Enterprises, LLC, as holdings,
CWGS Group, LLC, as borrower, certain of
CWGS Enterprises, LLC's existing and
future domestic subsidiaries as subsidiary
guarantors, the lenders party thereto and
Goldman Sachs Bank USA, as
administrative agent
Second Amendment to Credit Agreement,
dated October 6, 2017, by and among
CWGS Enterprises, LLC, as holdings,
CWGS Group, LLC, as borrower, the
lenders party thereto and Goldman Sachs
Bank USA, as administrative agent
Third Amendment to Credit Agreement
dated March 28, 2018, by and among
CWGS Enterprises, LLC, as holdings,
GWGS Group, LLC, as borrower, the
lenders party thereto and Goldman Sachs
Bank USA, as administrative agent
Fourth Amendment to Credit Agreement,
dated September 27, 2018, by and among
CWGS Enterprises, LLC, as holdings,
CWGS Group, LLC, as borrower, the
lenders party thereto and Goldman Sachs
Bank US, as administrative agent
Loan and Security Agreement, dated as of
November 2, 2018 between Camping
World Property, Inc., a Delaware
corporation, as borrower, the other loan
parties party thereto and CIBC Bank USA,
as lender
Filed/
Furnished
Herewith
Incorporated by Reference
Form
10-Q
File No.
001-37908
Exhibit
10.2
Filing Date
8/10/17
10-Q
001-37908
10.3
8/10/17
S-1/A
10-Q
333-211977
10.31
9/26/16
001-37908
10.3
11/10/16
8-K
001-37908
10.1
3/17/17
8-K
001-37908
10.1
10/10/17
8-K
001-37908
10.1
3/29/18
8-K
001-37908
10.1
9/28/18
10-Q
001-37908
10.2
11/7/18
#10.29
Employment Agreement, by and between
Camping World Holdings, Inc. and Melvin
Flanigan, dated January 1, 2019
10-K
001-37908
10.34
3/15/19
153
Table of Contents
Exhibit
Number
#10.30
#10.31
#10.32
21.1
23.1
24.1
31.1
31.2
32.1
32.2
101.INS
101.SCH
101.CAL
101.DEF
101.LAB
101.PRE
104
Exhibit Description
Amendment to Employment Agreement
dated November 8, 2019 by and between
Camping World Holdings, Inc. and Melvin
Flanigan
Employment Agreement, by and between
Camping World Holdings, Inc. and Tamara
Ward dated December 19, 2019
Employment Agreement with Karin L. Bell,
dated July 1, 2020
List of Subsidiaries of Camping World
Holdings, Inc.
Consent of Independent Registered Public
Accounting Firm
Power of Attorney
Rule 13a-14(a) / 15d-14(a) Certification of
Chief Executive Officer
Rule 13a-14(a) / 15d-14(a) Certification of
Chief Financial Officer
Section 1350 Certification of Chief
Executive Officer
Section 1350 Certification of Chief
Financial Officer
Inline XBRL Instance Document – the
Instance Document does not appear in the
interactive data file because its XBRL tags
are embedded within the Inline XBRL
document
Inline XBRL Taxonomy Extension Schema
Document
Inline XBRL Taxonomy Extension
Calculation Linkbase Document
Inline XBRL Extension Definition Linkbase
Document
Inline XBRL Taxonomy Label Linkbase
Document
Inline XBRL Taxonomy Extension
Presentation Linkbase Document
Cover Page Interactive Data File
(formatted as Inline XBRL and contained in
Exhibit 101)
*
Filed herewith
** Furnished herewith
Incorporated by Reference
Form
10-Q
File No.
001-37908
Exhibit
10.2
Filing Date
11/12/19
Filed/
Furnished
Herewith
8-K
001-37908
10.1
12/19/19
10-Q
001-37908
10.2
8/6/20
*
*
*
*
*
**
**
***
***
***
***
***
***
***
154
Table of Contents
*** Submitted electronically herewith
#
Indicates management contract or compensatory plan
ITEM 16. Form 10-K Summary
None
155
Table of Contents
Signatures
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant
has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Ch 5
Camping World Holdings, Inc.
Date: February 26, 2021
By:
/s/ MARCUS A. LEMONIS
Marcus A. Lemonis
Chairman and Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this report has been
signed below by the following persons on behalf of the registrant and in the capacities set forth opposite to their
names and on the dates indicated.
Signature
Title
Date
/s/ MARCUS A. LEMONIS
Marcus A. Lemonis
Chairman, Chief Executive Officer and Director (Principal
Executive Officer)
February 26, 2021
/s/ KARIN L. BELL
Karin L. Bell
Chief Financial Officer (Principal Financial Officer and
Principal Accounting Officer)
February 26, 2021
*
Stephen Adams
*
Andris A. Baltins
*
Brian P. Cassidy
*
Mary J. George
*
Michael W. Malone
*
Brent L. Moody
*
K. Dillon Schickli
Director
Director
Director
Director
Director
President, Camping World Holdings, Inc. and Director
Director
*By: /s/ MARCUS A. LEMONIS
Marcus A. Lemonis
Attorney-in-fact
February 26, 2021
156
Legal Name
Active Sports, Inc.
Affinity Brokerage, LLC
Affinity Group Holding, LLC
Affinity Guest Services, LLC
Affinity Road and Travel Club, LLC
AGI Intermediate Holdco, LLC
AGI Productions, LLC
Allure RV, LLC
American RV Centers, LLC
Americas Road and Travel Club, Inc.
Arizona RV Centers, LLC
Atlantic RV Centers, LLC
B&B RV, Inc.
Blaine Jensen RV Centers, LLC
Bodily RV II, Inc.
Bodily RV, Inc.
Burnside Brokers, LLC
Burnside Finance, LLC
Burnside RV Centers, LLC
Camp Coast to Coast, LLC
Camping Time RV Centers, LLC
Camping World Card Services, Inc.
Camping World Insurance Services of Kentucky, Inc.
Camping World Insurance Services of Nevada, Inc.
Camping World Insurance Services of Texas, Inc.
Camping World Leasing Company, LLC
Camping World Property, Inc.
Camping World RV Sales, LLC
Camping World, Inc.
Coast Marketing Group, LLC
Cullum & Maxey Camping Center, Inc.
CWFR Capital Corp.
CWGS Enterprises, LLC
CWGS Group, LLC
CWGS Ventures, LLC
CWH BR, LLC
CWI, Inc.
CWRV Birch Run Brokers, LLC
CWRV Birch Run Finance, LLC
CWRV Brokers, LLC
CWRV Finance, LLC
CWRV Brokers Belleville, LLC
CWRV Finance Belleville, LLC
CWRV Quincy Brokers, LLC
CWRV Quincy Finance, LLC
Dusty’s Camper World, LLC
Ehlert Publishing Group, LLC
State of Incorporation
Exhibit 21.1
Minnesota
Delaware
Delaware
Delaware
Texas
Delaware
Delaware
Delaware
Minnesota
Texas
Minnesota
Minnesota
California
Minnesota
Idaho
Idaho
Minnesota
Minnesota
Minnesota
Delaware
Minnesota
Ohio
Kentucky
Nevada
Texas
Minnesota
Delaware
Minnesota
Kentucky
Delaware
Tennessee
Delaware
Delaware
Delaware
Delaware
Delaware
Kentucky
Minnesota
Minnesota
Minnesota
Minnesota
Minnesota
Minnesota
Minnesota
Minnesota
Minnesota
Delaware
Legal Name
Emerald Coast RV Center, LLC
F2 Creative, LLC
Foley RV Center, LLC
FreedomCare Insurance Services, LLC
FreedomRoads Finance Company, LLC
FreedomRoads Holding Company, LLC
FreedomRoads Intermediate Holdco, LLC
FreedomRoads Operations Company, LLC
FreedomRoads Property Company, LLC
FreedomRoads RV, Inc.
FreedomRoads, LLC
FRHP Lincolnshire, LLC
FRI, LLC
Gander Outdoors, LLC
Gary’s RV Centers, LLC
Golf Card International, LLC
Golf Card Resort Service, LLC
Good Sam Enterprises, LLC
Good Sam Outdoors, LLC
GSS Enterprises, LLC
Hart City RV Center, LLC
Holiday Kamper Company of Columbia, LLC
ITM Holding Company #2, LLC
ITM Holding Company, LLC
K&C RV Centers, LLC
Meyer’s RV Centers, LLC
Northwest RV Centers, LLC
Olinger RV Centers, LLC
Outdoor Buys, Inc.
Power Sports Media, LLC
RV World, LLC
RV’S.com, LLC
Shipp’s RV Centers, LLC
Sirpilla RV Centers, LLC
Southwest RV Centers, LLC
Stier’s RV Centers, LLC
Stout’s RV Center, LLC
TL Enterprises, LLC
Tom Johnson Camping Center Charlotte, Inc.
Tom Johnson Camping Center, Inc.
Uncle Dan’s, Ltd
VBI, LLC
Venture Out RV Center, Inc.
Wheeler RV Las Vegas, LLC
W82, LLC
State of Incorporation
Minnesota
Minnesota
Minnesota
Minnesota
Minnesota
Minnesota
Minnesota
Minnesota
Minnesota
Delaware
Minnesota
Minnesota
Minnesota
Minnesota
Minnesota
Delaware
Delaware
Delaware
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CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Exhibit 23.1
We consent to the incorporation by reference in Registration Statement No. 333-214040 on Form S-8 of
our reports dated February 26, 2021, relating to the financial statements of Camping World Holdings,
Inc. (the “Company”) and the effectiveness of the Company's internal control over financial reporting
appearing in this Annual Report on Form 10-K for the year ended December 31, 2020.
/s/ Deloitte & Touche LLP
Los Angeles, California
February 26, 2021
POWER OF ATTORNEY
Exhibit 24.1
KNOW ALL MEN BY THESE PRESENTS, that CAMPING WORLD HOLDINGS, INC., a Delaware corporation (the
“Company”), and each of the undersigned directors of the Company, hereby constitutes and appoints Marcus A.
Lemonis and Karin L. Bell, and each of them (with full power to each of them to act alone), his or her true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution, for him or her and on his or her behalf in
his or her name, place and stead, in any and all capacities to sign, execute, affix his or her seal thereto and file, or
cause such actions to be taken with regards to, the Company’s Annual Report on Form 10-K for the year ended
December 31, 2020 under the Securities Exchange Act of 1934, as amended, including any amendment or
amendments thereto, with all exhibits and any all documents required to be filed with respect thereto with any
regulatory authority.
There is hereby granted to said attorneys-in-fact and agents, and each of them, full power and authority to do and
perform each and every act and thing, requisite and necessary to be done in respect of the foregoing as fully as he or
she might or could do if personally present, thereby ratifying and confirming all that said attorneys-in-fact and agents,
or their substitute or substitutes may lawfully do or cause to be done by virtue hereof.
This Power of Attorney may be executed in any number of counterparts, each of which shall be an original, but all of
which taken together shall constitute one and the same instrument and any of the undersigned directors may execute
this Power of Attorney by signing any such counterpart.
Signature
Title
Date
/s/ Stephen Adams
Stephen Adams
/s/ Andris A. Baltins
Andris A. Baltins
/s/ Brian P. Cassidy
Brian P. Cassidy
/s/ Mary J. George
Mary J. George
/s/ Michael W. Malone
Michael W. Malone
Director
Director
Director
Director
Director
February 23, 2021
February 23, 2021
February 23, 2021
February 23, 2021
February 23, 2021
/s/ Brent L. Moody
Brent L. Moody
President, Camping World Holdings and
Director
February 23, 2021
/s/ K. Dillon Schickli
K. Dillon Schickli
Director
February 23, 2021
Exhibit 31.1
I, Marcus A. Lemonis, certify that:
1. I have reviewed this Annual Report on Form 10-K of Camping World Holdings, Inc.;
CERTIFICATIONS
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly
present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and
for, the periods presented in this report;
4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls
and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial
reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to
be designed under our supervision, to ensure that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in
which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial
reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external purposes in accordance with
generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this
report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the
period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred
during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual
report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control
over financial reporting; and
5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control
over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or
persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over
financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process,
summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant
role in the registrant's internal control over financial reporting.
Date: February 26, 2021
By:
/s/ Marcus A. Lemonis
Marcus A. Lemonis
Chairman and Chief Executive Officer
(Principal Executive Officer)
Exhibit 31.2
I, Karin L. Bell, certify that:
1. I have reviewed this Annual Report on Form 10-K of Camping World Holdings, Inc.;
CERTIFICATIONS
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly
present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and
for, the periods presented in this report;
4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls
and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial
reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to
be designed under our supervision, to ensure that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in
which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial
reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external purposes in accordance with
generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this
report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the
period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred
during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual
report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control
over financial reporting; and
5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control
over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or
persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over
financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process,
summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant
role in the registrant's internal control over financial reporting.
Date: February 26, 2021
By: /s/ Karin L. Bell
Karin L. Bell
Chief Financial Officer
(Principal Financial Officer)
Exhibit 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Annual Report on Form 10-K of Camping World Holdings, Inc. (the “Company”)
for the period ended December 31, 2020, as filed with the U.S. Securities and Exchange Commission on the
date hereof (the “Report”), I, Marcus A. Lemonis, Chairman and Chief Executive Officer of the Company,
hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002, that, to my knowledge:
(1) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange
Act of 1934, as amended; and
(2) the information contained in the Report fairly presents, in all material respects, the financial
condition and results of operations of the Company.
Date: February 26, 2021
By:
/s/ Marcus A. Lemonis
Marcus A. Lemonis
Chairman and Chief Executive Officer
(Principal Executive Officer)
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
Exhibit 32.2
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Annual Report on Form 10-K of Camping World Holdings, Inc. (the “Company”) for the
period ended December 31, 2020, as filed with the U.S. Securities and Exchange Commission on the date hereof (the
“Report”), I, Karin L. Bell, Chief Financial Officer of the Company, hereby certify, pursuant to 18 U.S.C. Section 1350,
as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:
(1) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of
1934, as amended; and
(2) the information contained in the Report fairly presents, in all material respects, the financial condition and
results of operations of the Company.
Date: February 26, 2021
By:
/s/ Karin L. Bell
Karin L. Bell
Chief Financial Officer
(Principal Financial Officer)