Camping World Holdings, Inc. Reports Record First Quarter Revenue and Second Strongest First Quarter Earnings Since Inception
Camping World Holdings (NYSE: CWH) reported a record Q1 2022 revenue of $1.7 billion, up 6.7% year-over-year, alongside a gross profit of $560.2 million and a gross margin of 33.7%. However, net income fell to $107.3 million, a 27.2% decline due to accelerated amortization and increased compensation expenses. Diluted EPS decreased to $1.02 from $1.40, impacted by tax benefits in the prior year. The company repurchased 2.6 million shares for $79.8 million and announced a quarterly dividend of $0.625 per share, emphasizing its adaptability in a changing economic landscape.
- Record revenue of $1.7 billion, up 6.7% year-over-year.
- Gross profit increased by 7.6% to $560.2 million.
- Gross margin improved to 33.7%, up 29 basis points.
- Strategic growth leading to $1.8 billion in vehicle inventories with 14 new locations.
- Quarterly dividend maintained at $0.625 per share.
- Net income decreased by 27.2% to $107.3 million due to amortization and compensation costs.
- Diluted EPS dropped to $1.02 from $1.40 due to prior year's tax benefits.
- Adjusted EBITDA fell by $7.2 million, or 3.8%.
First Quarter Operating Highlights
-
Revenue was a record
, an increase of$1.7 billion , or$104.6 million 6.7% . -
Gross profit was
, an increase of$560.2 million , or$39.7 million 7.6% , and gross margin was33.7% , an increase of 29 basis points. -
Net income of
included$107.3 million of pre-tax accelerated intangible asset amortization related to brand transitions and an increase of$8.8 million in pre-tax equity-based compensation expense in 2022 due in part to certain management separations. Additionally,$5.6 million of deferred income tax benefits in 2021 contributed to the net income decrease of$19.0 million , or$40.1 million 27.2% . -
Diluted earnings per share of Class A common stock was
in 2022 versus$1.02 in 2021, in large part due to the accelerated amortization, equity-based compensation, and 2021 income tax benefits described above. Adjusted earnings per share - diluted (1) of Class A common stock was$1.40 in 2022 versus$1.15 in 2021.$1.40 -
Adjusted EBITDA(1) was
, a decrease of$182.1 million , or$7.2 million 3.8% . -
New and used vehicle inventories were
, an increase of$1.8 billion . This increase was driven by strategic growth of our used vehicle business, an additional 14 locations, and the easing of new vehicle supply chain constraints in our core categories experienced in much of the prior year.$ 938.3 million -
On
March 29, 2022 , the Company paid our regular quarterly dividend of per share of Class A common stock, or$0.62 5 per share on an annualized basis.$2.50
________________________ |
(1) Adjusted earnings per share – diluted and adjusted EBITDA are non-GAAP measures. For a reconciliation of these non-GAAP measures to the most directly comparable GAAP measures, see the “Non-GAAP Financial Measures” section later in this press release. |
Stock Repurchase Program
During the three months ended
Earnings Conference Call and Webcast Information
A conference call to discuss the Company’s first quarter 2022 financial results is scheduled for
Presentation
This press release presents historical results for the periods presented for the Company and its subsidiaries, which are presented in accordance with accounting principles generally accepted in
About
For more information, please visit http://www.CampingWorld.com.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements contained in this press release that do not relate to matters of historical fact should be considered forward-looking statements, including, without limitation, statements about macroeconomic trends and our business plans and goals, including statements regarding the strength of our business, our long-term plan, potential stock repurchases, future dividend payments and our future financial results. These forward-looking statements are based on management’s current expectations.
These statements are neither promises nor guarantees, but involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements, including, but not limited to, the following: the COVID-19 pandemic, which has had, and could have in the future, certain negative impacts on our business; risks related to the cybersecurity incident announced in
These and other important factors discussed under the caption “Risk Factors” in our Annual Report on Form 10-K filed for the year ended
In addition, this press release references projected annualized dividend payments. Future declarations of quarterly dividends are subject to the determination and discretion of the Company’s Board of Directors based on its consideration of various factors, including the Company’s results of operations, financial condition, level of indebtedness, anticipated capital requirements, contractual restrictions, restrictions in its debt agreements, restrictions under applicable law, receipt of excess tax distributions from
We intend to use our official Facebook, Twitter, and Instagram accounts, each at 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,
|
|||||||
Consolidated Statements of Operations (unaudited) |
|||||||
(In Thousands Except Per Share Amounts) |
|||||||
|
Three Months Ended |
||||||
|
|
||||||
|
|
2022 |
|
|
|
2021 |
|
Revenue: |
|
|
|
||||
Good Sam Services and Plans |
$ |
44,559 |
|
|
$ |
40,871 |
|
RV and Outdoor Retail |
|
|
|
||||
New vehicles |
|
834,959 |
|
|
|
821,976 |
|
Used vehicles |
|
403,032 |
|
|
|
294,257 |
|
Products, service and other |
|
214,973 |
|
|
|
251,270 |
|
Finance and insurance, net |
|
153,378 |
|
|
|
138,254 |
|
|
|
11,495 |
|
|
|
11,153 |
|
Subtotal |
|
1,617,837 |
|
|
|
1,516,910 |
|
Total revenue |
|
1,662,396 |
|
|
|
1,557,781 |
|
Costs applicable to revenue (exclusive of depreciation and amortization shown separately below): |
|
|
|
||||
Good Sam Services and Plans |
|
16,703 |
|
|
|
14,424 |
|
RV and Outdoor Retail |
|
|
|
||||
New vehicles |
|
644,370 |
|
|
|
643,680 |
|
Used vehicles |
|
302,825 |
|
|
|
223,193 |
|
Products, service and other |
|
136,160 |
|
|
|
154,146 |
|
|
|
2,136 |
|
|
|
1,844 |
|
Subtotal |
|
1,085,491 |
|
|
|
1,022,863 |
|
Total costs applicable to revenue |
|
1,102,194 |
|
|
|
1,037,287 |
|
|
|
|
|
||||
Gross profit: |
|
|
|
||||
Good Sam Services and Plans |
|
27,856 |
|
|
|
26,447 |
|
RV and Outdoor Retail |
|
|
|
||||
New vehicles |
|
190,589 |
|
|
|
178,296 |
|
Used vehicles |
|
100,207 |
|
|
|
71,064 |
|
Products, service and other |
|
78,813 |
|
|
|
97,124 |
|
Finance and insurance, net |
|
153,378 |
|
|
|
138,254 |
|
|
|
9,359 |
|
|
|
9,309 |
|
Subtotal |
|
532,346 |
|
|
|
494,047 |
|
Total gross profit |
|
560,202 |
|
|
|
520,494 |
|
|
|
|
|
||||
Operating expenses: |
|
|
|
||||
Selling, general, and administrative |
|
385,315 |
|
|
|
337,034 |
|
Depreciation and amortization |
|
25,535 |
|
|
|
12,701 |
|
Long-lived asset impairment |
|
— |
|
|
|
546 |
|
Lease termination |
|
178 |
|
|
|
1,756 |
|
Loss (gain) on sale or disposal of assets |
|
49 |
|
|
|
(99 |
) |
Total operating expenses |
|
411,077 |
|
|
|
351,938 |
|
Income from operations |
|
149,125 |
|
|
|
168,556 |
|
Other expense: |
|
|
|
||||
Floor plan interest expense |
|
(6,266 |
) |
|
|
(3,390 |
) |
Other interest expense, net |
|
(14,301 |
) |
|
|
(12,223 |
) |
Tax Receivable Agreement liability adjustment |
|
— |
|
|
|
(3,520 |
) |
Other (expense) income, net |
|
(223 |
) |
|
|
45 |
|
Total other expense |
|
(20,790 |
) |
|
|
(19,088 |
) |
Income before income taxes |
|
128,335 |
|
|
|
149,468 |
|
Income tax expense |
|
(21,036 |
) |
|
|
(2,043 |
) |
Net income |
|
107,299 |
|
|
|
147,425 |
|
Less: net income attributable to non-controlling interests |
|
(62,569 |
) |
|
|
(85,103 |
) |
Net income attributable to |
$ |
44,730 |
|
|
$ |
62,322 |
|
|
|
|
|
||||
Earnings per share of Class A common stock: |
|
|
|
||||
Basic |
$ |
1.03 |
|
|
$ |
1.43 |
|
Diluted |
$ |
1.02 |
|
|
$ |
1.40 |
|
Weighted average shares of Class A common stock outstanding: |
|
|
|
||||
Basic |
|
43,553 |
|
|
|
43,584 |
|
Diluted |
|
44,215 |
|
|
|
90,238 |
|
|
||||||||||||||||
Supplemental Data |
||||||||||||||||
|
|
Three Months Ended |
|
Increase |
|
|
Percent |
|||||||||
|
|
|
2022 |
|
|
|
2021 |
|
|
(decrease) |
|
|
Change |
|||
Unit sales |
|
|
|
|
|
|
|
|
|
|||||||
New vehicles |
|
|
19,020 |
|
|
|
21,433 |
|
|
|
(2,413 |
) |
|
|
(11.3 |
%) |
Used vehicles |
|
|
10,976 |
|
|
|
10,319 |
|
|
|
657 |
|
|
|
6.4 |
% |
Total |
|
|
29,996 |
|
|
|
31,752 |
|
|
|
(1,756 |
) |
|
|
(5.5 |
%) |
|
|
|
|
|
|
|
|
|
|
|||||||
Average selling price |
|
|
|
|
|
|
|
|
|
|||||||
New vehicles |
|
$ |
43,899 |
|
|
$ |
38,351 |
|
|
$ |
5,548 |
|
|
|
14.5 |
% |
Used vehicles |
|
$ |
36,719 |
|
|
$ |
28,516 |
|
|
$ |
8,203 |
|
|
|
28.8 |
% |
|
|
|
|
|
|
|
|
|
|
|||||||
Same store unit sales(1) |
|
|
|
|
|
|
|
|
|
|||||||
New vehicles |
|
|
17,623 |
|
|
|
21,143 |
|
|
|
(3,520 |
) |
|
|
(16.6 |
%) |
Used vehicles |
|
|
10,249 |
|
|
|
10,233 |
|
|
|
16 |
|
|
|
0.2 |
% |
Total |
|
|
27,872 |
|
|
|
31,376 |
|
|
|
(3,504 |
) |
|
|
(11.2 |
%) |
|
|
|
|
|
|
|
|
|
|
|||||||
Same store revenue(1) ($ in 000's) |
|
|
|
|
|
|
|
|
|
|||||||
New vehicles |
|
$ |
777,362 |
|
|
$ |
812,450 |
|
|
$ |
(35,088 |
) |
|
|
(4.3 |
%) |
Used vehicles |
|
|
380,149 |
|
|
|
292,458 |
|
|
|
87,691 |
|
|
|
30.0 |
% |
Products, service and other |
|
|
146,523 |
|
|
|
181,790 |
|
|
|
(35,267 |
) |
|
|
(19.4 |
%) |
Finance and insurance, net |
|
|
143,258 |
|
|
|
136,713 |
|
|
|
6,545 |
|
|
|
4.8 |
% |
Total |
|
$ |
1,447,292 |
|
|
$ |
1,423,411 |
|
|
$ |
23,881 |
|
|
|
1.7 |
% |
|
|
|
|
|
|
|
|
|
|
|||||||
Average gross profit per unit |
|
|
|
|
|
|
|
|
|
|||||||
New vehicles |
|
$ |
10,020 |
|
|
$ |
8,319 |
|
|
$ |
1,702 |
|
|
|
20.5 |
% |
Used vehicles |
|
$ |
9,130 |
|
|
|
6,887 |
|
|
$ |
2,243 |
|
|
|
32.6 |
% |
Finance and insurance, net per vehicle unit |
|
$ |
5,113 |
|
|
|
4,354 |
|
|
$ |
759 |
|
|
|
17.4 |
% |
Total vehicle front-end yield(2) |
|
$ |
14,808 |
|
|
|
12,208 |
|
|
$ |
2,600 |
|
|
|
21.3 |
% |
|
|
|
|
|
|
|
|
|
|
|||||||
Gross margin |
|
|
|
|
|
|
|
|
|
|||||||
Good Sam Services and Plans |
|
|
62.5 |
% |
|
|
64.7 |
% |
|
|
(219 |
) |
bps |
|
|
|
New vehicles |
|
|
22.8 |
% |
|
|
21.7 |
% |
|
|
114 |
|
bps |
|
|
|
Used vehicles |
|
|
24.9 |
% |
|
|
24.2 |
% |
|
|
71 |
|
bps |
|
|
|
Products, service and other |
|
|
36.7 |
% |
|
|
38.7 |
% |
|
|
(199 |
) |
bps |
|
|
|
Finance and insurance, net |
|
|
100.0 |
% |
|
|
100.0 |
% |
|
unch. |
bps |
|
|
|||
|
|
|
81.4 |
% |
|
|
83.5 |
% |
|
|
(205 |
) |
bps |
|
|
|
Subtotal RV and Outdoor Retail |
|
|
32.9 |
% |
|
|
32.6 |
% |
|
|
34 |
|
bps |
|
|
|
Total gross margin |
|
|
33.7 |
% |
|
|
33.4 |
% |
|
|
29 |
|
bps |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Inventories ($ in 000's) |
|
|
|
|
|
|
|
|
|
|||||||
New vehicles |
|
$ |
1,420,136 |
|
|
$ |
715,085 |
|
|
$ |
705,051 |
|
|
|
98.6 |
% |
Used vehicles |
|
|
423,409 |
|
|
|
190,176 |
|
|
|
233,233 |
|
|
|
122.6 |
% |
Products, parts, accessories and misc. |
|
|
308,855 |
|
|
|
284,203 |
|
|
|
24,652 |
|
|
|
8.7 |
% |
Total RV and Outdoor Retail inventories |
|
$ |
2,152,400 |
|
|
$ |
1,189,464 |
|
|
$ |
962,936 |
|
|
|
81.0 |
% |
|
|
|
|
|
|
|
|
|
|
|||||||
Vehicle inventory per location ($ in 000's) |
|
|
|
|
|
|
|
|
|
|||||||
New vehicle inventory per dealer location |
|
$ |
7,934 |
|
|
$ |
4,334 |
|
|
$ |
3,600 |
|
|
|
83.1 |
% |
Used vehicle inventory per dealer location |
|
$ |
2,365 |
|
|
|
1,153 |
|
|
$ |
1,213 |
|
|
|
105.2 |
% |
|
|
|
|
|
|
|
|
|
|
|||||||
Vehicle inventory turnover(3) |
|
|
|
|
|
|
|
|
|
|||||||
New vehicle inventory turnover |
|
|
2.5 |
|
|
|
3.8 |
|
|
|
(1.3 |
) |
|
|
(33.6 |
%) |
Used vehicle inventory turnover |
|
|
3.4 |
|
|
|
5.2 |
|
|
|
(1.8 |
) |
|
|
(35.3 |
%) |
|
|
|
|
|
|
|
|
|
|
|||||||
Retail locations |
|
|
|
|
|
|
|
|
|
|||||||
RV dealerships |
|
|
179 |
|
|
|
165 |
|
|
|
14 |
|
|
|
8.5 |
% |
RV service & retail centers |
|
|
10 |
|
|
|
10 |
|
|
|
— |
|
|
|
0.0 |
% |
Subtotal |
|
|
189 |
|
|
|
175 |
|
|
|
14 |
|
|
|
8.0 |
% |
Other retail stores |
|
|
1 |
|
|
|
1 |
|
|
|
— |
|
|
|
0.0 |
% |
Total |
|
|
190 |
|
|
|
176 |
|
|
|
14 |
|
|
|
8.0 |
% |
|
|
|
|
|
|
|
|
|
|
|||||||
Other data |
|
|
|
|
|
|
|
|
|
|||||||
Active Customers(4) |
|
|
5,464,510 |
|
|
|
5,488,280 |
|
|
|
(23,770 |
) |
|
|
(0.4 |
%) |
|
|
|
2,101,399 |
|
|
|
2,120,143 |
|
|
|
(18,744 |
) |
|
|
(0.9 |
%) |
Service bays (5) |
|
|
2,538 |
|
|
|
2,463 |
|
|
|
75 |
|
|
|
3.0 |
% |
Finance and insurance gross profit as a % of total vehicle revenue |
|
|
12.4 |
% |
|
|
12.4 |
% |
|
|
0 |
|
bps |
|
n/a |
|
Same store locations |
|
|
170 |
|
|
|
n/a |
|
|
|
n/a |
|
|
|
n/a |
|
(1) Our same store revenue and units 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. |
(2) Front end yield is calculated as gross profit from new vehicles, used vehicles and finance and insurance (net), divided by combined new and used vehicle revenue. |
(3) Inventory turnover calculated as vehicle costs applicable to revenue over the last twelve months divided by the average quarterly ending vehicle inventory over the last twelve months. |
(4) 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. |
(5) A service bay is a fully constructed bay dedicated to service, installation, and collision offerings. |
|
||||||||
Consolidated Balance Sheets (unaudited) |
||||||||
($ in Thousands Except Per Share Amounts) |
||||||||
|
|
|
|
|
||||
|
|
|
2022 |
|
|
|
2021 |
|
Assets |
|
|
|
|
||||
Current assets: |
|
|
|
|
||||
Cash and cash equivalents |
|
$ |
139,480 |
|
|
$ |
267,332 |
|
Contracts in transit |
|
|
135,513 |
|
|
|
57,741 |
|
Accounts receivable, net |
|
|
116,593 |
|
|
|
101,644 |
|
Inventories |
|
|
2,152,400 |
|
|
|
1,792,865 |
|
Prepaid expenses and other assets |
|
|
57,763 |
|
|
|
64,295 |
|
Total current assets |
|
|
2,601,749 |
|
|
|
2,283,877 |
|
Property and equipment, net |
|
|
636,500 |
|
|
|
599,324 |
|
Operating lease assets |
|
|
748,893 |
|
|
|
750,876 |
|
Deferred tax assets, net |
|
|
185,616 |
|
|
|
199,321 |
|
Intangible assets, net |
|
|
21,450 |
|
|
|
30,970 |
|
|
|
|
506,954 |
|
|
|
483,634 |
|
Other assets |
|
|
26,373 |
|
|
|
24,927 |
|
Total assets |
|
$ |
4,727,535 |
|
|
$ |
4,372,929 |
|
Liabilities and stockholders' equity |
|
|
|
|
||||
Current liabilities: |
|
|
|
|
||||
Accounts payable |
|
$ |
221,990 |
|
|
$ |
136,757 |
|
Accrued liabilities |
|
|
224,995 |
|
|
|
189,595 |
|
Deferred revenues |
|
|
92,747 |
|
|
|
95,467 |
|
Current portion of operating lease liabilities |
|
|
63,490 |
|
|
|
62,217 |
|
Current portion of finance lease liabilities |
|
|
10,393 |
|
|
|
4,964 |
|
Current portion of Tax Receivable Agreement liability |
|
|
11,322 |
|
|
|
11,322 |
|
Current portion of long-term debt |
|
|
15,825 |
|
|
|
15,822 |
|
Notes payable – floor plan, net |
|
|
1,237,208 |
|
|
|
1,011,345 |
|
Other current liabilities |
|
|
78,369 |
|
|
|
70,834 |
|
Total current liabilities |
|
|
1,956,339 |
|
|
|
1,598,323 |
|
Operating lease liabilities, net of current portion |
|
|
770,778 |
|
|
|
774,889 |
|
Finance lease liabilities, net of current portion |
|
|
72,192 |
|
|
|
74,752 |
|
Tax Receivable Agreement liability, net of current portion |
|
|
171,476 |
|
|
|
171,073 |
|
Revolving line of credit |
|
|
20,885 |
|
|
|
20,885 |
|
Long-term debt, net of current portion |
|
|
1,374,592 |
|
|
|
1,377,751 |
|
Deferred revenues |
|
|
69,902 |
|
|
|
69,024 |
|
Other long-term liabilities |
|
|
81,201 |
|
|
|
52,338 |
|
Total liabilities |
|
|
4,517,365 |
|
|
|
4,139,035 |
|
Commitments and contingencies |
|
|
|
|
||||
Stockholders' equity: |
|
|
|
|
||||
Preferred stock, par value |
|
|
— |
|
|
|
— |
|
Class A common stock, par value |
|
|
476 |
|
|
|
475 |
|
Class B common stock, par value |
|
|
4 |
|
|
|
4 |
|
Class C common stock, par value |
|
|
— |
|
|
|
— |
|
Additional paid-in capital |
|
|
126,071 |
|
|
|
98,113 |
|
|
|
|
(206,098 |
) |
|
|
(130,006 |
) |
Retained earnings |
|
|
207,774 |
|
|
|
189,471 |
|
Total stockholders' equity attributable to |
|
|
128,227 |
|
|
|
158,057 |
|
Non-controlling interests |
|
|
81,943 |
|
|
|
75,837 |
|
Total stockholders' equity |
|
|
210,170 |
|
|
|
233,894 |
|
Total liabilities and stockholders' equity |
|
$ |
4,727,535 |
|
|
$ |
4,372,929 |
|
Earnings Per Share
Basic earnings per share of Class A common stock is computed by dividing net income attributable to
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 (unaudited):
|
|
Three Months Ended |
||||||
(In thousands except per share amounts) |
|
|
2022 |
|
|
|
2021 |
|
Numerator: |
|
|
|
|
||||
Net income |
|
$ |
107,299 |
|
|
$ |
147,425 |
|
Less: net income attributable to non-controlling interests |
|
|
(62,569 |
) |
|
|
(85,103 |
) |
Net income attributable to |
|
$ |
44,730 |
|
|
$ |
62,322 |
|
Add: reallocation of net income attributable to non-controlling interests from the assumed dilutive effect of stock options and RSUs |
|
|
332 |
|
|
|
— |
|
Add: reallocation of net income attributable to non-controlling interests from the assumed exchange of common units of |
|
|
— |
|
|
|
63,980 |
|
Net income attributable to |
|
$ |
45,062 |
|
|
$ |
126,302 |
|
Denominator: |
|
|
|
|
||||
Weighted-average shares of Class A common stock outstanding — basic |
|
|
43,553 |
|
|
|
43,584 |
|
Dilutive options to purchase Class A common stock |
|
|
88 |
|
|
|
165 |
|
Dilutive restricted stock units |
|
|
574 |
|
|
|
955 |
|
Dilutive common units of |
|
|
— |
|
|
|
45,534 |
|
Weighted-average shares of Class A common stock outstanding — diluted |
|
|
44,215 |
|
|
|
90,238 |
|
|
|
|
|
|
||||
Earnings per share of Class A common stock — basic |
|
$ |
1.03 |
|
|
$ |
1.43 |
|
Earnings per share of Class A common stock — diluted |
|
$ |
1.02 |
|
|
$ |
1.40 |
|
|
|
|
|
|
||||
Weighted-average anti-dilutive securities excluded from the computation of diluted earnings per share of Class A common stock: |
|
|
|
|
||||
Restricted stock units |
|
|
1,632 |
|
|
|
1 |
|
Common units of |
|
|
42,045 |
|
|
|
— |
|
Non-GAAP Financial Measures
To supplement our condensed consolidated financial statements, which are prepared and presented in accordance with accounting principles generally accepted in
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, loss and expense on debt restructure, long-lived asset impairment, lease termination costs, gains and losses on sale or disposal of assets, net, equity-based compensation, Tax Receivable Agreement liability adjustment, 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, Adjusted EBITDA Margin, and TTM Adjusted EBITDA to the most directly comparable GAAP financial performance measures, which are net income, net income, net income margin, and net income, respectively (unaudited):
|
|
|
|
|
|||
|
|
Three Months Ended |
|||||
($ in thousands) |
|
2022 |
|
2021 |
|||
EBITDA and Adjusted EBITDA: |
|
|
|
|
|||
Net income |
|
$ |
107,299 |
|
$ |
147,425 |
|
Other interest expense, net |
|
|
14,301 |
|
|
12,223 |
|
Depreciation and amortization |
|
|
25,535 |
|
|
12,701 |
|
Income tax expense |
|
|
21,036 |
|
|
2,043 |
|
Subtotal EBITDA |
|
|
168,171 |
|
|
174,392 |
|
Long-lived asset impairment (a) |
|
|
— |
|
|
546 |
|
Lease termination (b) |
|
|
178 |
|
|
1,756 |
|
Loss (gain) on sale or disposal of assets, net (c) |
|
|
49 |
|
|
(99 |
) |
Equity-based compensation (d) |
|
|
11,674 |
|
|
6,109 |
|
Tax Receivable Agreement liability adjustment (e) |
|
|
— |
|
|
3,520 |
|
Restructuring costs (f) |
|
|
2,023 |
|
|
3,067 |
|
Adjusted EBITDA |
|
$ |
182,095 |
|
$ |
189,291 |
|
|
|
|
|
|
|
|
Three Months Ended |
||
(as percentage of total revenue) |
|
2022 |
|
2021 |
Adjusted EBITDA margin: |
|
|
|
|
Net income margin |
|
|
|
|
Other interest expense, net |
|
|
|
|
Depreciation and amortization |
|
|
|
|
Income tax expense |
|
|
|
|
Subtotal EBITDA margin |
|
|
|
|
Long-lived asset impairment (a) |
|
— |
|
|
Lease termination (b) |
|
|
|
|
Loss (gain) on sale or disposal of assets, net (c) |
|
|
|
( |
Equity-based compensation (d) |
|
|
|
|
Tax Receivable Agreement liability adjustment (e) |
|
— |
|
|
Restructuring costs (f) |
|
|
|
|
Adjusted EBITDA margin |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
|
Three Months Ended |
|
TTM Ended |
|||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||
($ in thousands) |
2022 |
|
|
2021 |
|
|
2021 |
|
2021 |
|
|
2022 |
|
|||
Adjusted EBITDA: |
|
|
|
|
|
|
|
|
|
|||||||
Net income |
$ |
107,299 |
|
$ |
59,266 |
|
|
$ |
189,308 |
|
$ |
246,076 |
|
$ |
601,949 |
|
Other interest expense, net |
|
14,301 |
|
|
11,650 |
|
|
|
11,250 |
|
|
11,789 |
|
|
48,990 |
|
Depreciation and amortization |
|
25,535 |
|
|
17,121 |
|
|
|
23,552 |
|
|
13,044 |
|
|
79,252 |
|
Income tax expense |
|
21,036 |
|
|
8,865 |
|
|
|
38,869 |
|
|
42,347 |
|
|
111,117 |
|
Subtotal EBITDA |
|
168,171 |
|
|
96,902 |
|
|
|
262,979 |
|
|
313,256 |
|
|
841,308 |
|
Long-lived asset impairment (a) |
|
— |
|
|
1,646 |
|
|
|
316 |
|
|
536 |
|
|
2,498 |
|
Lease termination (b) |
|
178 |
|
|
126 |
|
|
|
329 |
|
|
— |
|
|
633 |
|
Loss (gain) on sale or disposal of assets, net (c) |
|
49 |
|
|
(583 |
) |
|
|
96 |
|
|
10 |
|
|
(428 |
) |
Equity-based compensation (d) |
|
11,674 |
|
|
28,867 |
|
|
|
6,913 |
|
|
6,047 |
|
|
53,501 |
|
Tax Receivable Agreement liability adjustment (e) |
|
— |
|
|
(707 |
) |
|
|
— |
|
|
— |
|
|
(707 |
) |
Restructuring costs (f) |
|
2,023 |
|
|
2,262 |
|
|
|
17,362 |
|
|
3,010 |
|
|
24,657 |
|
Loss and expense on debt restructure (g) |
|
— |
|
|
3,023 |
|
|
|
24 |
|
|
10,421 |
|
|
13,468 |
|
Adjusted EBITDA |
$ |
182,095 |
|
$ |
131,536 |
|
|
$ |
288,019 |
|
$ |
333,280 |
|
$ |
934,930 |
|
(a) |
Represents long-lived asset impairment charges related to the RV and Outdoor Retail segment, which relate to locations affected by the 2019 Strategic Shift. |
|
(b) |
Represents the loss on the termination of operating leases, relating primarily to the 2019 Strategic Shift, resulting from lease termination fees and the derecognition of the operating lease assets and liabilities. |
|
(c) |
Represents an adjustment to eliminate the losses and gains on disposals and sales of various assets. |
|
(d) |
Represents non-cash equity-based compensation expense relating to employees, directors, and consultants of the Company. |
|
(e) |
Represents an adjustment to eliminate the loss (gain) on remeasurement of the Tax Receivable Agreement primarily due to changes in our blended statutory income tax rate. |
|
(f) |
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 above (see (b) above). |
|
(g) |
Represents the loss and expense incurred on debt restructure and financing expense, which is comprised of |
Adjusted Net Income Attributable to
We define “Adjusted Net Income Attributable to
We define “Adjusted Net Income Attributable to
We define “Adjusted Earnings Per Share – Basic” as Adjusted Net Income Attributable to
The following table reconciles Adjusted Net Income Attributable to
|
|
|
|
|
|
||||
|
|
Three Months Ended |
|
||||||
(In thousands except per share amounts) |
|
|
2022 |
|
|
|
2021 |
|
|
Numerator: |
|
|
|
|
|
||||
Net income attributable to |
|
$ |
44,730 |
|
|
$ |
62,322 |
|
|
Adjustments related to basic calculation: |
|
|
|
|
|
||||
Long-lived asset impairment (a): |
|
|
|
|
|
||||
Gross adjustment |
|
|
— |
|
|
|
546 |
|
|
Income tax expense for above adjustment (b) |
|
|
— |
|
|
|
— |
|
|
Lease termination (c): |
|
|
|
|
|
||||
Gross adjustment |
|
|
178 |
|
|
|
1,756 |
|
|
Income tax expense for above adjustment (b) |
|
|
— |
|
|
|
(39 |
) |
|
Loss (gain) on sale or disposal of assets (d): |
|
|
|
|
|
||||
Gross adjustment |
|
|
49 |
|
|
|
(99 |
) |
|
Income tax expense for above adjustment (b) |
|
|
— |
|
|
|
(1 |
) |
|
Equity-based compensation (e): |
|
|
|
|
|
||||
Gross adjustment |
|
|
11,674 |
|
|
|
6,109 |
|
|
Income tax expense for above adjustment (b) |
|
|
(1,337 |
) |
|
|
(654 |
) |
|
Tax Receivable Agreement liability adjustment (f): |
|
|
|
|
|
||||
Gross adjustment |
|
|
— |
|
|
|
3,520 |
|
|
Income tax expense for above adjustment (b) |
|
|
— |
|
|
|
(898 |
) |
|
Restructuring costs (g) |
|
|
|
|
|
||||
Gross adjustment |
|
|
2,023 |
|
|
|
3,067 |
|
|
Income tax expense for above adjustment (b) |
|
|
— |
|
|
|
(13 |
) |
|
Adjustment to net income attributable to non-controlling interests resulting from the above adjustments (h) |
|
|
(6,827 |
) |
|
|
(5,809 |
) |
|
Adjusted net income attributable to |
|
|
50,490 |
|
|
|
69,807 |
|
|
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 (i) |
|
|
533 |
|
|
|
— |
|
|
Income tax on reallocation of net income attributable to non-controlling interests from the dilutive effect of stock options and restricted stock units (j) |
|
|
(158 |
) |
|
|
— |
|
|
Reallocation of net income attributable to non-controlling interests from the dilutive exchange of common units in |
|
|
— |
|
|
|
90,912 |
|
|
Income tax on reallocation of net income attributable to non-controlling interests from the dilutive exchange of common units in |
|
|
— |
|
|
|
(21,852 |
) |
|
Assumed income tax expense of combining C-corporations with full or partial valuation allowances with the income of other consolidated entities after the dilutive exchange of common units in |
|
|
— |
|
|
|
(12,919 |
) |
|
Adjusted net income attributable to |
|
$ |
50,865 |
|
|
$ |
125,948 |
|
|
Denominator: |
|
|
|
|
|
||||
Weighted-average Class A common shares outstanding – basic |
|
|
43,553 |
|
|
|
43,584 |
|
|
Adjustments related to diluted calculation: |
|
|
|
|
|
||||
Dilutive exchange of common units in |
|
|
— |
|
|
|
45,534 |
|
|
Dilutive options to purchase Class A common stock (l) |
|
|
88 |
|
|
|
165 |
|
|
Dilutive restricted stock units (l) |
|
|
574 |
|
|
|
955 |
|
|
Adjusted weighted average Class A common shares outstanding – diluted |
|
|
44,215 |
|
|
|
90,238 |
|
|
|
|
|
|
|
|
||||
Adjusted earnings per share - basic |
|
$ |
1.16 |
|
|
$ |
1.60 |
|
|
Adjusted earnings per share - diluted |
|
$ |
1.15 |
|
|
$ |
1.40 |
|
|
|
|
|
|
|
|
||||
Anti-dilutive amounts (m): |
|
|
|
|
|
||||
Numerator: |
|
|
|
|
|
||||
Reallocation of net income attributable to non-controlling interests from the anti-dilutive exchange of common units in |
|
$ |
68,863 |
|
|
$ |
— |
|
|
Income tax on reallocation of net income attributable to non-controlling interests from the anti-dilutive exchange of common units in |
|
$ |
(20,392 |
) |
|
$ |
— |
|
|
Assumed income tax benefit of combining C-corporations with full or partial valuation allowances with the income of other consolidated entities after the anti-dilutive exchange of common units in |
|
$ |
6,348 |
|
|
$ |
— |
|
|
Denominator: |
|
|
|
|
|
||||
Anti-dilutive exchange of common units in |
|
|
42,045 |
|
|
|
— |
|
|
|
|
|
|
|
|
||||
Reconciliation of per share amounts: |
|
|
|
|
|
||||
Earnings per share of Class A common stock - basic |
|
$ |
1.03 |
|
|
$ |
1.43 |
|
|
Non-GAAP Adjustments (n) |
|
|
0.13 |
|
|
|
0.17 |
|
|
Adjusted earnings per share - basic |
|
$ |
1.16 |
|
|
$ |
1.60 |
|
|
|
|
|
|
|
|
||||
Earnings per share of Class A common stock - diluted |
|
$ |
1.02 |
|
|
$ |
1.40 |
|
|
Non-GAAP Adjustments (n) |
|
|
0.13 |
|
|
|
0.17 |
|
|
Dilutive exchange of common units in |
|
|
— |
|
|
|
(0.17 |
) |
|
Adjusted earnings per share - diluted |
|
$ |
1.15 |
|
|
$ |
1.40 |
|
|
(a) | Represents long-lived asset impairment charges related to the RV and Outdoor Retail segment, which relate to locations affected by the 2019 Strategic Shift. |
|
(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 an effective tax rate of |
|
(c) | Represents the loss on termination of operating leases, relating primarily to the 2019 Strategic Shift, resulting from the lease termination fees and the derecognition of the operating lease assets and liabilities. |
|
(d) | Represents an adjustment to eliminate the gains and losses on disposals and sales of various assets. |
|
(e) | Represents non-cash equity-based compensation expense relating to employees, directors, and consultants of the Company. |
|
(f) | Represents an adjustment to eliminate the loss on remeasurement of the Tax Receivable Agreement primarily due to changes in our blended statutory income tax rate. |
|
(g) | Represents restructuring costs relating to our 2019 Strategic Shift. These restructuring costs include other associated costs. These costs exclude lease termination costs, which are presented separately above (see (c) above). |
|
(h) |
Represents the adjustment to net income attributable to non-controlling interests resulting from the above adjustments that impact the net income of |
|
(i) |
Represents the reallocation of net income attributable to non-controlling interests from the impact of the assumed change in ownership of |
|
(j) |
Represents the income tax expense effect of the above adjustment for reallocation of net income attributable to non-controlling interests. This assumption uses an effective tax rate of |
|
(k) |
Typically 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 |
|
(l) |
Represents the impact to the denominator for stock options, restricted stock units, and/or common units of |
|
(m) | The below amounts have not been considered in our adjusted earnings per share – diluted amounts as the effect of these items are anti-dilutive. |
|
(n) | Represents the per share impact of the Non-GAAP adjustments to net income detailed above (see (a) through (h) above). |
|
(o) |
Represents the per share impact of stock options, restricted stock units, and/or common units of |
Our “Up-C” corporate structure may make it difficult to compare our results with those of companies with a more traditional corporate structure. There can be a significant fluctuation in the numerator and denominator for the calculation of our adjusted earnings per share – diluted depending on if the common units in
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 Adjusted EBITDA, as calculated for our subsidiary
- 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 loss and expense on debt restructure, long-lived asset impairment, lease termination costs, gains and losses on sale or disposal of assets, net, equity-based compensation, Tax Receivable Agreement liability, restructuring costs related 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. Each of the normal recurring adjustments and other adjustments described in this paragraph and in the reconciliation tables above help management with a measure of our core operating performance over time by removing items that are not related to day-to-day operations.
View source version on businesswire.com: https://www.businesswire.com/news/home/20220503005828/en/
Investors:
InvestorRelations@campingworld.com
(866) 895-5330
PR-CWGS@CampingWorld.com
Source:
FAQ
What were Camping World Holdings' Q1 2022 financial results?
How did the diluted EPS change for Camping World in Q1 2022?
What was the gross margin for Camping World in Q1 2022?
How much did Camping World repurchase in stocks during Q1 2022?