# Camping World Holdings, Inc.: Form 10-Q for the period ended Mar 31, 2020

- Company: [Camping World Holdings, Inc.](/companies/cwh.md) (CIK 1669779)
- Form: 10-Q
- Filed: 2020-05-08
- Accepted by EDGAR: May 8, 2020, 16:04 ET
- Period: 2020-03-31
- Accession: 0001558370-20-005995
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/1669779/000155837020005995/cwh-20200508x10q.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/1669779/000155837020005995/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2020-03-31.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Revenue | 3 months, 2020-01-01 to 2020-03-31 | $1.03bn | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Cost of revenue | 3 months, 2020-01-01 to 2020-03-31 | $724.6m | us-gaap:CostOfRevenue |
| Selling, general and administrative | 3 months, 2020-01-01 to 2020-03-31 | $267.7m | us-gaap:SellingGeneralAndAdministrativeExpense |
| Operating income | 3 months, 2020-01-01 to 2020-03-31 | $13.3m | us-gaap:OperatingIncomeLoss |
| Income tax | 3 months, 2020-01-01 to 2020-03-31 | $4.1m | us-gaap:IncomeTaxExpenseBenefit |
| Net income | 3 months, 2020-01-01 to 2020-03-31 | −$8.2m | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months, 2020-01-01 to 2020-03-31 | −$0.22 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months, 2020-01-01 to 2020-03-31 | −$0.22 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months, 2020-01-01 to 2020-03-31 | 37,534,000 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 3 months, 2020-01-01 to 2020-03-31 | −$15.2m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Dividends paid | 3 months, 2020-01-01 to 2020-03-31 | $5.8m | us-gaap:PaymentsOfDividends |
| Cash and equivalents | at 2020-03-31 | $109.4m | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Current assets | at 2020-03-31 | $1.73bn | us-gaap:AssetsCurrent |
| Total assets | at 2020-03-31 | $3.40bn | us-gaap:Assets |
| Current liabilities | at 2020-03-31 | $1.35bn | us-gaap:LiabilitiesCurrent |
| Total liabilities | at 2020-03-31 | $3.59bn | us-gaap:Liabilities |
| Shareholders' equity | at 2020-03-31 | −$45.1m | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 82,458 characters.

### MANAGEMENT’S DISCUSSION AND ANALYSIS OF

### FINANCIAL CONDITION AND RESULTS OF OPERATIONS

*The following discussion and analysis of our financial condition and results of operations should be read together with our financial statements and related notes included in Part I, Item 1 of this Form 10-Q, as well as our Annual Report. This discussion contains forward-looking statements based upon current plans, expectations and beliefs involving risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of various important factors, including those set forth under “Risk Factors” included in Part I, Item 1A of our Annual Report, Part II, Item 1A of this Form 10-Q, the “Cautionary Note Regarding Forward-Looking Statements” in this Form 10-Q and in other parts of this Form 10-Q. Except to the extent that differences among reportable segments are material to an understanding of our business taken as a whole, we present the discussion in Management’s Discussion and Analysis of Financial Condition and Results of Operations on a consolidated basis.*

*For purposes of this Form 10-Q, we define an "Active Customer" as a customer who has transacted with us in any of the eight most recently completed fiscal quarters prior to the date of measurement. Unless otherwise indicated, the date of measurement is March 31, 2020, our most recently completed fiscal quarter. Additionally, references herein to the approximately 11 million U.S. households that own a recreational vehicle ("RV") are based on data from the RV Industry Association.*

### Overview

Camping World Holdings, Inc. (together with its subsidiaries) is America’s largest retailer of recreational RVs and related products and services. Our vision is to build a long-term legacy business that makes RVing fun and easy, and our Camping World and Good Sam brands have been serving RV consumers since 1966. We strive to build long-term value for our customers, employees, and shareholders by combining a unique and comprehensive assortment of RV products and services with a national network of RV dealerships, service centers and customer support centers along with the industry’s most extensive online presence and a highly-trained and knowledgeable team of associates serving our customers, the RV lifestyle, and the communities in which we operate. We also believe that our Good Sam organization and family of programs and services uniquely enables us to connect with our customers as stewards of the RV lifestyle. On March 31, 2020, we operated a total of 168 retail locations, with 167 of these selling and/or servicing RVs. See Note 1 – Summary of Significant Accounting Policies to our unaudited condensed consolidated financial statements included in Part I, Item 1 of this Form 10-Q.

After several years of strong growth, the overall RV industry experienced decelerating demand for new vehicles in 2018 and 2019. Along with the decelerating demand trends, wholesale shipments of new RV vehicles declined 16.0% in 2019 according to the RV Industry Association’s survey of manufacturers. In late 2019, the demand for new RVs across the overall RV industry began increasing again, and through the three months ended March 31, 2020, wholesale shipments of new RV vehicles increased 0.4% over the first three months of 2019, according to the most recent survey of manufacturers. In an effort to sell through existing RV units and lower new RV inventory levels, we believe many dealers have lowered the pricing of new RV units to levels at or below cost in some instances. The result has been increased competition across the industry from lower RV pricing. In an effort to remain competitive and maintain our market share, we have pursued pricing, marketing and other programs that have adversely impacted our gross margin, selling, general and administrative expenses and operating margin. We expect these trends to continue through at least the end of the calendar year ending December 31, 2020 and may be exacerbated as a result of the COVID-19 pandemic described below.

### Segments

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

### COVID-19

As discussed in Note 1 — Summary of Significant Accounting Policies — COVID-19 to our unaudited condensed consolidated financial statements included in Part I, Item 1 of this Form 10-Q, COVID-19 has impacted our business, in particular our revenue, due to decreased retail and online traffic. We have implemented preparedness plans to keep our employees and customers healthy and safe, which include social distancing, providing employees with face coverings and/or other protective clothing as required, implementing additional cleaning and sanitization routines, and work-from-home orders for a significant portion of our workforce. The majority of our RV and Outdoor Retail locations have continued to operate as essential businesses and consequently have remained open to serve our customers through the pandemic, and we continue to operate our e-commerce business. As of March 31, 2020, we have temporarily closed four of our specialty retail locations as a result of COVID-19. Subsequent to March 31, 2020, we temporarily closed three additional dealerships as a result of COVID-19. We have temporarily reduced salaries and hours throughout the Company, including for our executive officers and implemented headcount and other cost reductions since the middle of March 2020 and early April 2020 in an attempt to better align expenses with reduced sales resulting from the impact of COVID-19 on our business.

Additionally, we believe that when stay-at-home restrictions around the U.S. begin to ease, the demand for safe travel away from the home will increase. We believe that the RV industry is poised to recover more quickly than certain other sectors of the economy and may benefit from an anticipated slow recovery of the cruise line and air travel industries. We are implementing the appropriate marketing and operational plans to be best prepared to optimize our leadership position through the recovery, regardless of the ultimate timing and slope of the recovery curve.

Although we have recently incurred significant disruptions in certain of our markets due to the outbreak, and expect the impact of the pandemic and the related restrictions on our operations to adversely affect traffic and sales for at least the remainder of 2020, we are unable to accurately quantify the impact that COVID-19 will have on business, results of operations and liquidity due to numerous uncertainties, including the severity of the disease, the duration of the outbreak, 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 further disrupted as a result of the outbreak, such as due to Thor Industries, Inc.’s announced temporary closure of its North American production facilities from late March to early May 2020, either of which could have a materially adverse impact on our operating results. Please refer to “Risk Factors” in Item 1A of Part II of this Form 10-Q for updated risk factors related to the COVID-19 outbreak.

### Strategic Shift

In 2019, we made a strategic decision to refocus our business around our core RV competencies. See Note 4 — Restructuring and Long-lived Asset Impairment to our unaudited condensed consolidated financial statements included in Part I, Item 1 of this Form 10-Q.

### Results of Operations

### Three Months Ended March 31, 2020 Compared to Three Months Ended March 31, 2019

The following table sets forth information comparing the components of net income for the three months ended March 31, 2020 and 2019:

*($ in thousands)*

| ​ ​ ​ ​ Revenue: | ​ ​ ​ ​ ​ | ​ ​ Three Months Ended March 31, 2020 ​ ​ Amount ​ ​ | ​ ​ ​ | ​ Percent of Revenue ​ | ​ ​ ​ ​ | ​ ​ March 31, 2019 ​ ​ Amount ​ ​ | ​ ​ ​ | ​ Percent of Revenue ​ | ​ ​ ​ ​ ​ | ​ ​ ​ ​ ​ Favorable/ (Unfavorable) $% ​ ​ | ​ ​ ​ | ​ ​ ​ |
| --- | --- | --- | --- | ---: | --- | --- | --- | ---: | --- | --- | --- | ---: |
| Good Sam Services and Plans | ​ | $47,208 | ​ | 4.6% | ​ | $46,966 | ​ | 4.4% | ​ | $242 | ​ | 0.5% |
| RV and Outdoor Retail: | ​ | ​ ​ | ​ | ​ | ​ | ​ ​ | ​ | ​ | ​ | ​ ​ | ​ | ​ |
| New vehicles | ​ | ​ 497,317 | ​ | 48.4% | ​ | ​ 529,577 | ​ | 49.7% | ​ | ​ (32,260) | ​ | (6.1%) |
| Used vehicles | ​ | ​ 206,665 | ​ | 20.1% | ​ | ​ 180,008 | ​ | 16.9% | ​ | ​ 26,657 | ​ | 14.8% |
| Products, service and other | ​ | ​ 172,623 | ​ | 16.8% | ​ | ​ 204,876 | ​ | 19.2% | ​ | ​ (32,253) | ​ | (15.7%) |
| Finance and insurance, net | ​ | ​ 92,456 | ​ | 9.0% | ​ | ​ 91,891 | ​ | 8.6% | ​ | ​ 565 | ​ | 0.6% |
| Good Sam Club | ​ | ​ 11,004 | ​ | 1.1% | ​ | ​ 11,451 | ​ | 1.1% | ​ | ​ (447) | ​ | (3.9%) |
| Subtotal | ​ | ​ 980,065 | ​ | 95.4% | ​ | ​ 1,017,803 | ​ | 95.6% | ​ | ​ (37,738) | ​ | (3.7%) |
| Total revenue | ​ | ​ 1,027,273 | ​ | 100.0% | ​ | ​ 1,064,769 | ​ | 100.0% | ​ | ​ (37,496) | ​ | (3.5%) |
| ​ | ​ | ​ ​ | ​ | ​ | ​ | ​ ​ | ​ | ​ | ​ | ​ ​ | ​ | ​ |
| Gross profit (exclusive of depreciation and amortization shown separately below): | ​ | ​ ​ | ​ | ​ | ​ | ​ ​ | ​ | ​ | ​ | ​ ​ | ​ | ​ |
| Good Sam Services and Plans | ​ | ​ 25,349 | ​ | 2.5% | ​ | ​ 26,235 | ​ | 2.5% | ​ | ​ (886) | ​ | (3.4%) |
| RV and Outdoor Retail: | ​ | ​ ​ | ​ | ​ | ​ | ​ ​ | ​ | ​ | ​ | ​ ​ | ​ | ​ |
| New vehicles | ​ | ​ 70,875 | ​ | 6.9% | ​ | ​ 66,533 | ​ | 6.2% | ​ | ​ 4,342 | ​ | 6.5% |
| Used vehicles | ​ | ​ 42,872 | ​ | 4.2% | ​ | ​ 37,162 | ​ | 3.5% | ​ | ​ 5,710 | ​ | 15.4% |
| Products, service and other | ​ | ​ 62,354 | ​ | 6.1% | ​ | ​ 68,772 | ​ | 6.5% | ​ | ​ (6,418) | ​ | (9.3%) |
| Finance and insurance, net | ​ | ​ 92,456 | ​ | 9.0% | ​ | ​ 91,891 | ​ | 8.6% | ​ | ​ 565 | ​ | 0.6% |
| Good Sam Club | ​ | ​ 8,757 | ​ | 0.9% | ​ | ​ 7,734 | ​ | 0.7% | ​ | ​ 1,023 | ​ | 13.2% |
| Subtotal | ​ | ​ 277,314 | ​ | 27.0% | ​ | ​ 272,092 | ​ | 25.6% | ​ | ​ 5,222 | ​ | 1.9% |
| Total gross profit | ​ | ​ 302,663 | ​ | 29.5% | ​ | ​ 298,327 | ​ | 28.0% | ​ | ​ 4,336 | ​ | 1.5% |
| Operating expenses: | ​ | ​ ​ | ​ | ​ | ​ | ​ ​ | ​ | ​ | ​ | ​ ​ | ​ | ​ |
| Selling, general and administrative expenses | ​ | ​ 267,656 | ​ | 26.1% | ​ | ​ 268,065 | ​ | 25.2% | ​ | ​ 409 | ​ | 0.2% |
| Depreciation and amortization | ​ | ​ 14,078 | ​ | 1.4% | ​ | ​ 13,594 | ​ | 1.3% | ​ | ​ (484) | ​ | (3.6%) |
| Long-lived asset impairment | ​ | ​ 6,569 | ​ | 0.6% | ​ | ​ — | ​ | — | ​ | ​ (6,569) | ​ | (100.0%) |
| Lease termination | ​ | ​ 584 | ​ | 0.1% | ​ | ​ — | ​ | — | ​ | ​ (584) | ​ | (100.0%) |
| Loss on disposal of assets | ​ | ​ 511 | ​ | 0.0% | ​ | ​ (214) | ​ | (0.0%) | ​ | ​ (725) | ​ | 338.8% |
| Total operating expenses | ​ | ​ 289,398 | ​ | 28.2% | ​ | ​ 281,445 | ​ | 26.4% | ​ | ​ (7,953) | ​ | (2.8%) |
| Income from operations | ​ | ​ 13,265 | ​ | 1.3% | ​ | ​ 16,882 | ​ | 1.6% | ​ | ​ (3,617) | ​ | (21.4%) |
| Other income (expense): | ​ | ​ ​ | ​ | ​ | ​ | ​ ​ | ​ | ​ | ​ | ​ ​ | ​ | ​ |
| Floor plan interest expense | ​ | ​ (8,604) | ​ | (0.8%) | ​ | ​ (11,610) | ​ | (1.1%) | ​ | ​ 3,006 | ​ | 25.9% |
| Other interest expense, net | ​ | ​ (14,658) | ​ | (1.4%) | ​ | ​ (17,643) | ​ | (1.7%) | ​ | ​ 2,985 | ​ | 16.9% |
| Tax Receivable Agreement liability adjustment | ​ | ​ — | ​ | — | ​ | ​ 8,477 | ​ | 0.8% | ​ | ​ (8,477) | ​ | (100.0%) |
| Total other income (expense) | ​ | ​ (23,262) | ​ | (2.3%) | ​ | ​ (20,776) | ​ | (2.0%) | ​ | ​ (2,486) | ​ | (12.0%) |
| Loss before income taxes | ​ | ​ (9,997) | ​ | (1.0%) | ​ | ​ (3,894) | ​ | (0.4%) | ​ | ​ (6,103) | ​ | (156.7%) |
| Income tax expense | ​ | ​ (4,132) | ​ | (0.4%) | ​ | ​ (22,913) | ​ | (2.2%) | ​ | ​ 18,781 | ​ | 82.0% |
| Net loss | ​ | ​ (14,129) | ​ | (1.4%) | ​ | ​ (26,807) | ​ | (2.5%) | ​ | ​ 12,678 | ​ | 47.3% |
| Less: net loss attributable to non-controlling interests | ​ | ​ 5,969 | ​ | 0.6% | ​ | ​ 7,412 | ​ | 0.7% | ​ | ​ (1,443) | ​ | (19.5%) |
| Net loss attributable to Camping World Holdings, Inc. | ​ | $(8,160) | ​ | (0.8%) | ​ | $(19,395) | ​ | (1.8%) | ​ | $11,235 | ​ | 57.9% |

### Supplemental Data

| ​ ​ ​ Unit sales | ​ ​ ​ | ​ ​ Three Months Ended March 31, 2020 ​ ​ | ​ | ​ ​ 2019 ​ ​ | ​ ​ | ​ ​ Increase (decrease) ​ ​ | ​ ​ ​ ​ | ​ ​ | ​ ​ Percent Change ​ ​ |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| New vehicles | ​ | ​ 14,208 | ​ | ​ 15,016 | ​ | ​ (808) | ​ | ​ | ​ (5.4%) |
| Used vehicles | ​ | ​ 8,682 | ​ | ​ 8,177 | ​ | ​ 505 | ​ | ​ | ​ 6.2% |
| Total | ​ | ​ 22,890 | ​ | ​ 23,193 | ​ | $(303) | ​ | ​ | ​ (1.3%) |
| ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ | ​ ​ |
| Average selling price | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ | ​ ​ |
| New vehicles | ​ | $35,003 | ​ | $35,268 | ​ | $(265) | ​ | ​ | $(0.8%) |
| Used vehicles | ​ | ​ 23,804 | ​ | ​ 22,014 | ​ | ​ 1,790 | ​ | ​ | ​ 8.1% |
| ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ | ​ ​ |
| Same store unit sales | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ | ​ ​ |
| New vehicles | ​ | ​ 12,955 | ​ | ​ 14,490 | ​ | ​ (1,535) | ​ | ​ | ​ (10.6%) |
| Used vehicles | ​ | ​ 8,010 | ​ | ​ 8,005 | ​ | ​ 5 | ​ | ​ | ​ 0.1% |
| Total | ​ | ​ 20,965 | ​ | ​ 22,495 | ​ | ​ (1,530) | ​ | ​ | ​ (6.8%) |
| ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ | ​ ​ |
| Same store revenue ($ in 000's) | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ | ​ ​ |
| New vehicles | ​ | $456,327 | ​ | $515,097 | ​ | $(58,770) | ​ | ​ | $(11.4%) |
| Used vehicles | ​ | ​ 194,606 | ​ | ​ 177,283 | ​ | ​ 17,323 | ​ | ​ | ​ 9.8% |
| Products, service and other | ​ | ​ 118,792 | ​ | ​ 118,581 | ​ | ​ 211 | ​ | ​ | ​ 0.2% |
| Finance and insurance | ​ | ​ 85,399 | ​ | ​ 89,742 | ​ | ​ (4,343) | ​ | ​ | ​ (4.8%) |
| Total | ​ | ​ 855,124 | ​ | ​ 900,703 | ​ | ​ (45,579) | ​ | ​ | ​ (5.1%) |
| ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ | ​ ​ |
| Average gross profit per unit | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ | ​ ​ |
| New vehicles | ​ | $4,988 | ​ | $4,431 | ​ | $558 | ​ | ​ | ​ 12.6% |
| Used vehicles | ​ | ​ 4,938 | ​ | ​ 4,545 | ​ | ​ 393 | ​ | ​ | ​ 8.7% |
| Finance and insurance, net per vehicle unit | ​ | ​ 4,039 | ​ | ​ 3,962 | ​ | ​ 77 | ​ | ​ | ​ 1.9% |
| Total vehicle front-end yield(1) | ​ | ​ 9,008 | ​ | ​ 8,433 | ​ | ​ 575 | ​ | ​ | ​ 6.8% |
| ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ | ​ ​ |
| Gross margin | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ | ​ ​ |
| Good Sam Services and Plans | ​ | ​ 53.7% | ​ | ​ 55.9% | ​ | ​ (216) | bps | ​ | ​ ​ |
| ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ | ​ ​ |
| New vehicles | ​ | ​ 14.3% | ​ | ​ 12.6% | ​ | ​ 169 | bps | ​ | ​ ​ |
| Used vehicles | ​ | ​ 20.7% | ​ | ​ 20.6% | ​ | ​ 10 | bps | ​ | ​ ​ |
| Products, service and other | ​ | ​ 36.1% | ​ | ​ 33.6% | ​ | ​ 255 | bps | ​ | ​ ​ |
| Finance and insurance, net | ​ | ​ 100.0% | ​ | ​ 100.0% | ​ | ​ unch. | bps | ​ | ​ ​ |
| Good Sam Club | ​ | ​ 79.6% | ​ | ​ 67.5% | ​ | ​ 1,204 | bps | ​ | ​ ​ |
| Subtotal RV and Outdoor Retail | ​ | ​ 28.3% | ​ | ​ 26.7% | ​ | ​ 156 | bps | ​ | ​ ​ |
| Total gross margin | ​ | ​ 29.5% | ​ | ​ 28.0% | ​ | ​ 144 | bps | ​ | ​ ​ |
| ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ | ​ ​ |
| Inventories ($ in 000's) | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ | ​ ​ |
| New vehicles | ​ | $1,053,802 | ​ | $1,062,448 | ​ | $(8,646) | ​ | ​ | ​ (0.8%) |
| Used vehicles | ​ | ​ 151,058 | ​ | ​ 120,418 | ​ | ​ 30,640 | ​ | ​ | ​ 25.4% |
| Products, parts, accessories and misc. | ​ | ​ 234,555 | ​ | ​ 439,697 | ​ | ​ (205,142) | ​ | ​ | ​ (46.7%) |
| Total RV and Outdoor inventories | ​ | $1,439,415 | ​ | $1,622,563 | ​ | $(183,148) | ​ | ​ | ​ (11.3%) |
| ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ | ​ ​ |
| Vehicle inventory per location ($ in 000's) | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ | ​ ​ |
| New vehicle inventory per dealer location | ​ | $6,712 | ​ | $7,228 | ​ | $(515) | ​ | ​ | $(7.1%) |
| Used vehicle inventory per dealer location | ​ | ​ 962 | ​ | ​ 819 | ​ | ​ 143 | ​ | ​ | ​ 17.5% |
| ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ | ​ ​ |
| Vehicle inventory turnover(2) | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ | ​ ​ |
| New vehicle inventory turnover | ​ | ​ 2.1 | ​ | ​ 2.2 | ​ | ​ (0.1) | ​ | ​ | ​ (3.4%) |
| Used vehicle inventory turnover | ​ | ​ 4.6 | ​ | ​ 4.9 | ​ | ​ (0.2) | ​ | ​ | ​ (5.0%) |
| ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ | ​ ​ |
| Retail locations | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ | ​ ​ |
| RV dealerships | ​ | ​ 157 | ​ | ​ 147 | ​ | ​ 10 | ​ | ​ | ​ 6.8% |
| RV service & retail centers | ​ | ​ 10 | ​ | ​ 12 | ​ | ​ (2) | ​ | ​ | ​ (16.7%) |
| Subtotal | ​ | ​ 167 | ​ | ​ 159 | ​ | ​ 8 | ​ | ​ | ​ 5.0% |
| Other retail stores | ​ | ​ 1 | ​ | ​ 67 | ​ | ​ (66) | ​ | ​ | ​ (98.5%) |
| Total | ​ | ​ 168 | ​ | ​ 226 | ​ | ​ (58) | ​ | ​ | ​ (25.7%) |
| ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ | ​ ​ |
| Other data | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ ​ | ​ | ​ | ​ ​ |
| Active Customers(3) | ​ | ​ 4,921,246 | ​ | ​ 5,123,032 | ​ | ​ (201,786) | ​ | ​ | ​ (3.9%) |
| Good Sam Club members | ​ | ​ 2,094,134 | ​ | ​ 2,149,627 | ​ | ​ (55,493) | ​ | ​ | ​ (2.6%) |
| Finance and insurance gross profit as a % of total vehicle revenue | ​ | ​ 13.1% | ​ | ​ 12.9% | ​ | ​ 18 | bps | ​ | ​ n/a |
| Same store locations | ​ | ​ 146 | ​ | ​ n/a | ​ | ​ n/a | ​ | ​ | ​ n/a |

(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 $1.0 billion for the three months ended March 31, 2020, a decrease of $37.5 million, or 3.5%, from $1.1 billion for the three months ended March 31, 2019. The decrease in total revenue was driven by a $37.7 million, or 3.7%, decrease in RV and Outdoor Retail revenue, partially offset by a $0.2 million, or 0.5%, increase in Good Sam Services and Plans revenue.

Total gross profit was $302.7 million for the three months ended March 31, 2020, an increase of $4.3 million, or 1.5%, from $298.3 million for the three months ended March 31, 2019. The increase in total gross profit was driven by a $5.2 million, or 1.9%, increase in RV and Outdoor Retail gross profit, partially offset by a $0.9 million, or 3.4%, decrease in Good Sam Services and Plans gross profit.

Income from operations was $13.3 million for the three months ended March 31, 2020, a decrease of $3.6 million, or 21.4%, from $16.9 million for the three months ended March 31, 2019. The decrease in income from operations was primarily driven by a $6.6 million increase in long-lived asset impairment, a $0.7 million increase in loss on disposal of assets, a $0.6 million increase in lease termination expense, and a $0.5 million increase in depreciation and amortization, partially offset by a $4.3 million increase in gross profit, and a $0.4 million decrease in selling, general and administrative expenses.

Total other expenses were $23.3 million for the three months ended March 31, 2020, an increase of $2.5 million, or 12.0%, from $20.8 million for the three months ended March 31, 2019. The increase in other expenses was driven by an $8.5 million favorable adjustment in Tax Receivable Agreement Liability in 2019 which did not reoccur in 2020, partially offset by a $3.0 million decrease in floor plan interest expense and a $3.0 million decrease in other interest expense.

As a result of the above factors, loss before income taxes was $10.0 million for the three months ended March 31, 2020 compared to loss before income taxes of $3.9 million for the three months ended March 31, 2019. Income tax expense was $4.1 million for the three months ended March 31, 2020, a decrease of $18.8 million from $22.9 million for the three months ended March 31, 2019. As a result, net loss was $14.1 million for the three months ended March 31, 2020 compared to net loss of $26.8 million for the three months ended March 31, 2019.

#### Good Sam Services and Plans

Good Sam Services and Plans revenue increased 0.5%, or $0.2 million, to $47.2 million in the three months ended March 31, 2020, from $47.0 million in the three months ended March 31, 2019. The increase was primarily attributable to a $0.5 million increase in our roadside assistance programs primarily resulting from upsells to higher-priced product offerings, a $0.6 million increase in our vehicle insurance products, and a $0.3 million increase in our extended vehicle warranty programs, partially offset by a $1.1 million decrease in consumer shows revenue, and a $0.1 million decrease in other programs.

Good Sam Services and Plans gross profit decreased 3.4%, or $0.9 million, to $25.3 million in the three months ended March 31, 2020, from $26.2 million in the three months ended March 31, 2019 and gross margin decreased to 53.7% from 55.9% in the same respective periods. The decrease in gross profit was primarily attributable to $0.9 million of increased accrual for program costs, a $0.5 million reduction from the consumer shows, and a $0.4 million reduction from the annual directory publication, partially offset by a $0.5 million increase from our vehicle insurance programs, and a $0.4 million increase from our roadside assistance programs.

#### RV and Outdoor Retail

New Vehicles

New vehicle revenue decreased 6.1%, or $32.3 million, to $497.3 million in the three months ended March 31, 2020 from $529.6 million in the three months ended March 31, 2019. The decrease was primarily due to a 5.4% reduction in vehicles sold and 0.8% reduction in average price per vehicle sold. On a same store basis, new vehicle revenue decreased 11.4% to $456.3 million in the three months ended March 31, 2020 from $515.1 million in the three months ended March 31, 2019. The decrease was primarily driven by a 10.6% decrease in same store vehicles sold to 12,955 vehicles and a 0.8% decrease in average selling price per vehicle sold to $35,003.

New vehicle gross profit increased 6.5%, or $4.3 million, to $70.9 million in the three months ended March 31, 2020 from $66.5 million in the three months ended March 31, 2019. The increase was primarily due to a 12.6% increase in average gross profit per vehicle sold, partially offset by a 5.4% decrease in vehicles sold. Gross margin increased to 14.3% in the three months ended March 31, 2020 from 12.6% in the three months ended March 31, 2019. The increase was primarily due to a mix shift towards the higher margined towable units.

Used Vehicles

Used vehicle revenue increased 14.8%, or $26.7 million, to $206.7 million in the three months ended March 31, 2020 from $180.0 million in the three months ended March 31, 2019. The increase was primarily due to a 6.2% increase in vehicles sold and an 8.1% increase in average selling price per vehicle sold. On a same store basis, used vehicle revenue increased 9.8% to $194.6 million in the three months ended March 31, 2020 from $177.3 million in the three months ended March 31, 2019. The increase was primarily driven by a 9.7% increase in average same store price per vehicle.

Used vehicle gross profit increased 15.4%, or $5.7 million, to $42.9 million in the three months ended March 31, 2020 from $37.2 million in the three months ended March 31, 2019. The increase was primarily from a 6.2% increase in vehicles sold and an 8.7% increase in average gross profit per vehicle sold. The increase in average gross profit per vehicle sold was primarily driven by higher selling and purchase prices for used vehicles as a result of strength in the used market. Used vehicle gross margin of 20.7% in the three months ended March 31, 2020 was essentially flat to the 20.6% in the three months ended March 31, 2019.

Products, service and other

Products, service and other revenue decreased 15.7%, or $32.3 million, to $172.6 million in the three months ended March 31, 2020, from $204.9 million in the three months ended March 31, 2019. The decrease was primarily attributable to store closures related to the 2019 Strategic Shift. On a same store basis, products, service and other revenue increased 0.2% to $118.8 million for the three months ended March 31, 2020 from $118.6 million in the three months ended March 31 2019.

Products, service and other gross profit decreased 9.3%, or $6.4 million, to $62.4 million in the three months ended March 31, 2020 from $68.8 million in the three months ended March 31, 2019. The decrease was primarily due to the 2019 Strategic Shift. Products, service and other gross margin increased to 36.1% in the three months ended March 31, 2020 from 33.6% in the three months ended March 31, 2019. The increase was primarily due to a mix shift toward higher margin legacy RV products.

Finance and Insurance, net

Finance and insurance revenue and gross profit is recorded net, since the Company is acting as an agent in the transaction, and commission is recognized when a finance and insurance product contract payment has been received or financing has been arranged. Finance and insurance, net revenue and gross profit each increased 0.6%, or $0.6 million, to $92.5 million in the three months ended March 31, 2020 from $91.9 million in the three months ended March 31, 2019. Finance and insurance, net revenue as a percentage of new and used vehicles financed increased to 13.1% for the three months ended March 31, 2020 from 12.9% for the three months ended March 31, 2019. On a same store basis, finance and insurance, net revenue and gross profit decreased 4.8%, or $4.3 million, to $85.4 million versus the three months ended March 31, 2019, as the unit volume decrease more than offset the increase in average gross profit per finance transaction.

Good Sam Club

Good Sam Club revenue decreased 3.9%, or $0.4 million, to $11.0 million in the three months ended March 31, 2020 from $11.5 million in the three months ended March 31, 2019. The decrease primarily resulted from reduced royalty fees from the Good Sam branded credit card related to fewer retail locations.

Good Sam Club gross profit increased 13.2%, or $1.0 million, to $8.8 million in the three months ended March 31, 2020 from $7.7 million in the three months ended March 31, 2019. The increase was primarily due to reduced marketing expenses from the decreased number of stores as a result of the 2019 Strategic Shift. Gross margin increased to 79.6% in the three months ended March 31, 2020 from 67.5% in the three months ended March 31, 2019 primarily due to reduced club marketing expenses.

Selling, general and administrative expenses

Selling, general and administrative expenses decreased 0.2%, or $0.4 million, to $267.7 million in the three months ended March 31, 2020 from $268.1 million in the three months ended March 31, 2019. The $0.4 million decrease was primarily due to decreases of $0.9 million of personal property expense, and $0.7 million of professional fees, partially offset by an increase of $0.7 million in wage-related expenses, $0.4 million of selling expense and $0.1 million of other store and corporate overhead expenses. Selling, general and administrative expenses as a percentage of total gross profit decreased to 88.4% in the three months ended March 31, 2020, from 89.9% in the three months ended March 31, 2019 primarily due to cost reduction programs implemented related to the 2019 Strategic Shift.

Depreciation and amortization

Depreciation and amortization increased 3.6%, or $0.5 million, to $14.1 million in the three months ended March 31, 2020 from $13.6 million in the three months ended March 31, 2019 due to the impact of capital expenditures from 2019.

Long-lived asset impairment

As discussed in Note 4 – Restructuring and Long-lived Asset Impairment to our condensed consolidated financial statements included in Part I, Item 1 of this Form 10-Q, we recognized $6.6 million of long-lived asset impairments during the three months ended March 31, 2020, of which $6.5 million related to the 2019 Strategic Shift discussed above.

Lease termination

Lease termination expense of $0.6 million in the three months ended March 31, 2020 related to the 2019 Strategic Shift discussed above.

Floor plan interest expense

Floor plan interest expense decreased 25.9%, or $3.0 million, to $8.6 million in the three months ended March 31, 2020 from $11.6 million in the three months ended March 31, 2019. The decrease was primarily due to a 91 basis point decrease in the average floor plan borrowing rate, and an 8.3% decrease in average floor plan borrowings primarily from lower average inventory levels.

Other interest expense, net

Other interest expense decreased 16.9%, or $3.0 million, to $14.7 million in the three months ended March 31, 2020 from $17.6 million in the three months ended March 31, 2019. The decrease was primarily due to a 94 basis point decrease in the average interest rate.

Income tax expense

Income tax expense decreased $18.8 million to $4.1 million in the three months ended March 31, 2020 compared to the three months ended March 31, 2019. The decrease was primarily due to lower income incurred at CWGS, LLC for which the Company is subject to U.S. federal and state taxes on its allocable share, partially offset by operating losses recorded by Camping World, Inc. (“CW”) for which no tax benefit can be recognized and the transfer of assets to CW that was recorded in the prior year as discussed in Note 12 - Income Taxes to our condensed consolidated financial statements included in Part I, Item 1 of this Form 10-Q.

Net loss

Net loss decreased 47.3%, or $12.7 million, to a net loss of $14.1 million for the three months ended March 31, 2020 from a net loss of $26.8 million in the three months ended March 31, 2019 primarily due to the items mentioned above.

Segment results

The following tables sets forth a reconciliation of total segment income to consolidated income before income taxes for each of our segments for the periods presented:

*($ in thousands)*

| ​ ​ ​ ​ Revenue: | ​ ​ ​ ​ ​ | ​ ​ Three Months Ended March 31, 2020 ​ Amount ​ ​ | ​ ​ ​ | ​ Percent of Revenue ​ | ​ ​ ​ ​ | ​ ​ March 31, 2019 ​ Amount ​ ​ | ​ ​ ​ | ​ Percent of Revenue ​ | ​ ​ ​ ​ ​ | ​ ​ ​ Favorable/ (Unfavorable) $% ​ ​ | ​ ​ | ​ ​ |
| --- | --- | --- | --- | ---: | --- | --- | --- | ---: | --- | --- | --- | ---: |
| Good Sam Services and Plans | ​ | $48,692 | ​ | 4.7% | ​ | $48,298 | ​ | 4.5% | ​ | $394 | ​ | 0.8% |
| RV and Outdoor Retail | ​ | ​ 984,093 | ​ | 95.8% | ​ | ​ 1,027,283 | ​ | 96.5% | ​ | ​ (43,190) | ​ | (4.2%) |
| Elimination of intersegment revenue | ​ | ​ (5,512) | ​ | (0.5%) | ​ | ​ (10,812) | ​ | (1.0%) | ​ | ​ 5,300 | ​ | 49.0% |
| Total consolidated revenue | ​ | ​ 1,027,273 | ​ | 100.0% | ​ | ​ 1,064,769 | ​ | 100.0% | ​ | ​ (37,496) | ​ | (3.5%) |
| Segment income:(1) | ​ | ​ ​ | ​ | ​ | ​ | ​ ​ | ​ | ​ | ​ | ​ ​ | ​ | ​ |
| Good Sam Services and Plans | ​ | ​ 21,340 | ​ | 2.1% | ​ | ​ 22,414 | ​ | 2.1% | ​ | ​ (1,074) | ​ | (4.8%) |
| RV and Outdoor Retail | ​ | ​ 128 | ​ | 0.0% | ​ | ​ (375) | ​ | (0.0%) | ​ | ​ 503 | ​ | 134.1% |
| Total segment income | ​ | ​ 21,468 | ​ | 2.1% | ​ | ​ 22,039 | ​ | 2.1% | ​ | ​ (571) | ​ | (2.6%) |
| Corporate & other | ​ | ​ (2,729) | ​ | (0.3%) | ​ | ​ (3,173) | ​ | (0.3%) | ​ | ​ 444 | ​ | 14.0% |
| Depreciation and amortization | ​ | ​ (14,078) | ​ | (1.4%) | ​ | ​ (13,594) | ​ | (1.3%) | ​ | ​ (484) | ​ | (3.6%) |
| Other interest expense, net | ​ | ​ (14,658) | ​ | (1.4%) | ​ | ​ (17,643) | ​ | (1.7%) | ​ | ​ 2,985 | ​ | 16.9% |
| Tax Receivable Agreement liability adjustment | ​ | ​ — | ​ | — | ​ | ​ 8,477 | ​ | 0.8% | ​ | ​ (8,477) | ​ | (100.0%) |
| Loss before income taxes | ​ | $(9,997) | ​ | (1.0%) | ​ | $(3,894) | ​ | (0.4%) | ​ | $(6,103) | ​ | (156.7%) |
| ​ | ​ | ​ ​ | ​ | ​ | ​ | ​ ​ | ​ | ​ | ​ | ​ ​ | ​ | ​ |
| Same store revenue- RV and Outdoor Retail(2) | ​ | $855,124 | ​ | ​ | ​ | $900,703 | ​ | ​ | ​ | $(45,579) | ​ | (5.1%) |

(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 increased 0.8%, or $0.4 million, to $48.7 million in the three months ended March 31, 2020, from $48.3 million in the three months ended March 31, 2019. The increase was primarily attributable to a $0.5 million increase in our roadside assistance programs primarily resulting from upsells to higher-priced product offerings, a $0.6 million increase in our vehicle insurance products and a $0.3 million increase in our extended vehicle warranty programs, partially offset by a $1.0 million decrease in consumer shows revenue.

Good Sam Services and Plans segment income decreased 4.8%, or $1.1 million, to $21.3 million in the three months ended March 31, 2020, from $22.4 million in the three months ended March 31, 2019. The decrease was primarily attributable to $0.9 million of increased accrual for program costs, a $0.6 million reduction from the consumer shows, a $0.4 million reduction from the annual directory publication, and a $0.2 million increase in selling, general and administrative expenses, partially offset by a $0.5 million increase from our vehicle insurance programs, a $0.4 million increase from our roadside assistance programs and a $0.1 million increase from other services and plans. Good Sam Services and Plans segment margin decreased 258 basis points to 43.8% in the three months ended March 31, 2020 from 46.4% in the three months ended March 31, 2019.

RV and Outdoor Retail

RV and Outdoor Retail segment revenue decreased 4.2%, or $43.2 million, to $1.0 billion in the three months ended March 31, 2020 from $1.0 billion in the three months ended March 31, 2019. The decrease was primarily driven by a $37.2 million, or 17.7%, decrease in products, service and other revenue primarily due to the 2019 Strategic Shift, a $32.4 million, or 6.1% decrease in new vehicle revenue, and a $0.4 million, or 3.9%, decrease in Good Sam Club revenue, partially offset by a $26.6 million, or 14.7%, increase in used vehicle revenue, and a $0.2 million, or 0.2%, increase in finance and insurance revenue.

RV and Outdoor Retail segment income increased 134.1%, or $0.5 million, to a segment income of $0.1 million in the three months ended March 31, 2020 from a segment loss of $0.4 million in the three months ended March 31, 2019. The increase was primarily related to increased segment gross profit of $5.2 million primarily due to a mix shift to higher margined vehicles and increased volume of new vehicles sold, reduced floor plan interest expense of $3.0 million primarily due to a lower borrowing rate and lower average borrowings, and reduced selling, general and administrative expenses of $0.2 million, partially offset by $6.6 million of long-lived asset impairment, $0.7 million of increased loss on asset disposal, and $0.6 million of lease termination losses. RV and Outdoor Retail segment margin increased 5 basis points to 0%.

Corporate and other expenses

Corporate and other expenses decreased 14.0%, or $0.4 million, to $2.7 million in the three months ended March 31, 2020 from $3.2 million in the three months ended March 31, 2019 primarily from reduced professional fees.

### Non-GAAP Financial Measures

To supplement our condensed 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 measures. In evaluating these non-GAAP 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 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 loss, loss on disposal of assets, 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, 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: | ​ ​ ​ ​ | ​ ​ Three Months Ended March 31, 2020 ​ ​ | ​ ​ ​ | ​ ​ March 31, 2019 ​ ​ |
| --- | --- | --- | --- | --- |
| Net loss | ​ | $(14,129) | ​ | $(26,807) |
| Other interest expense, net | ​ | ​ 14,658 | ​ | ​ 17,643 |
| Depreciation and amortization | ​ | ​ 14,078 | ​ | ​ 13,594 |
| Income tax expense | ​ | ​ 4,132 | ​ | ​ 22,913 |
| Subtotal EBITDA | ​ | ​ 18,739 | ​ | ​ 27,343 |
| Long-lived asset impairment (a) | ​ | ​ 6,569 | ​ | ​ — |
| Lease termination (b) | ​ | ​ 584 | ​ | ​ — |
| Loss (gain) on disposal of assets, net (c) | ​ | ​ 511 | ​ | ​ (214) |
| Equity-based compensation (d) | ​ | ​ 3,312 | ​ | ​ 2,716 |
| Tax Receivable Agreement liability adjustment (e) | ​ | ​ — | ​ | ​ (8,477) |
| Restructuring costs (f) | ​ | ​ 6,282 | ​ | ​ — |
| Adjusted EBITDA | ​ | $35,997 | ​ | $21,368 |
| ​ | ​ | ​ ​ | ​ | ​ ​ |

| ​ ​ ​ (as percentage of total revenue) EBITDA margin: | ​ ​ ​ ​ | ​ Three Months Ended March 31, 2020 ​ | ​ ​ | ​ ​ ​ | ​ March 31, 2019 ​ | ​ ​ |
| --- | --- | --- | ---: | --- | --- | ---: |
| Net loss margin | ​ | ​ | (1.4%) | ​ | ​ | (2.5%) |
| Other interest expense, net | ​ | ​ | 1.4% | ​ | ​ | 1.7% |
| Depreciation and amortization | ​ | ​ | 1.4% | ​ | ​ | 1.3% |
| Income tax expense | ​ | ​ | 0.4% | ​ | ​ | 2.2% |
| Subtotal EBITDA margin | ​ | ​ | 1.8% | ​ | ​ | 2.6% |
| Long-lived asset impairment (a) | ​ | ​ | 0.6% | ​ | ​ | — |
| Lease termination (b) | ​ | ​ | 0.1% | ​ | ​ | — |
| Loss (gain) on disposal of assets, net (c) | ​ | ​ | 0.0% | ​ | ​ | (0.0%) |
| Equity-based compensation (d) | ​ | ​ | 0.3% | ​ | ​ | 0.3% |
| Tax Receivable Agreement liability adjustment (e) | ​ | ​ | — | ​ | ​ | (0.8%) |
| Restructuring costs (f) | ​ | ​ | 0.6% | ​ | ​ | — |
| Adjusted EBITDA margin | ​ | ​ | 3.5% | ​ | ​ | 2.0% |

(a) 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 4 – Restructuring and Long-lived Asset Impairment to our condensed consolidated financial statements included in Part I, Item 1 of this Form 10-Q for additional information

(b) Represents the loss on the termination of operating leases relating primarily to the 2019 Strategic Shift, net of lease termination fees (See Note 4– Restructuring and Long-lived Asset Impairment to our condensed consolidated financial statements included in Part I, Item 1 of this Form 10-Q for additional information

(c) Represents an adjustment to eliminate the losses and gains on disposal and sales of various assets.

(d) Represents non-cash equity-based compensation expense relating to employees and directors of the Company.

(e) Represents an adjustment to eliminate the loss 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 12 — Income Taxes to our unaudited condensed consolidated financial statements included in Part I, Item 1 of this Form 10-Q.

(f) Represents restructuring costs relating to our 2019 Strategic Shift. These restructuring costs include one-time employee termination benefits, incremental inventory reserve charges, and other associated costs. These costs do not include lease termination costs, which are presented separately above. See Note 4 – Restructuring and Long-lived Asset Impairment to our condensed consolidated financial statements included in Part I, Item 1 of this Form 10-Q 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 on disposal of assets, equity-based compensation, Tax Receivable Agreement liability adjustment, 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.

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.

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: | ​ ​ ​ ​ | ​ ​ Three Months Ended March 31, 2020 ​ ​ | ​ ​ ​ | ​ ​ March 31, 2019 ​ ​ |
| --- | --- | --- | --- | --- |
| Net loss attributable to Camping World Holdings, Inc. | ​ | $(8,160) | ​ | $(19,395) |
| Adjustments related to basic calculation: | ​ | ​ ​ | ​ | ​ ​ |
| Long-lived asset impairment (a): | ​ | ​ ​ | ​ | ​ ​ |
| Gross adjustment | ​ | ​ 6,569 | ​ | ​ — |
| Income tax expense for above adjustment (b) | ​ | ​ (13) | ​ | ​ — |
| Lease termination (c): | ​ | ​ ​ | ​ | ​ ​ |
| Gross adjustment | ​ | ​ 584 | ​ | ​ — |
| Income tax benefit for above adjustment (b) | ​ | ​ — | ​ | ​ — |
| Loss on disposal of assets and other expense, net (d): | ​ | ​ ​ | ​ | ​ ​ |
| Gross adjustment | ​ | ​ 511 | ​ | ​ (214) |
| Income tax (expense) benefit for above adjustment (b) | ​ | ​ (1) | ​ | ​ 9 |
| Equity-based compensation (e): | ​ | ​ ​ | ​ | ​ ​ |
| Gross adjustment | ​ | ​ 3,312 | ​ | ​ 2,716 |
| Income tax expense for above adjustment (b) | ​ | ​ (302) | ​ | ​ (221) |
| Tax Receivable Agreement liability adjustment (f): | ​ | ​ ​ | ​ | ​ ​ |
| Gross adjustment | ​ | ​ — | ​ | ​ (8,477) |
| Income tax benefit for above adjustment (b) | ​ | ​ — | ​ | ​ 2,143 |
| Restructuring costs (g): | ​ | ​ ​ | ​ | ​ ​ |
| Gross adjustment | ​ | ​ 6,282 | ​ | ​ — |
| Income tax expense for above adjustment (b) | ​ | ​ (35) | ​ | ​ — |
| Adjustment to net loss attributable to non-controlling interests resulting from the above adjustments (h) | ​ | ​ (9,994) | ​ | ​ (1,453) |
| Adjusted net income (loss) attributable to Camping World Holdings, Inc. – basic and diluted | ​ | $(1,247) | ​ | $(24,892) |
| **Denominator:** | ​ | ​ ​ | ​ | ​ ​ |
| Weighted-average Class A common shares outstanding – basic | ​ | ​ 37,534 | ​ | ​ 37,195 |
| Adjusted weighted average Class A common shares outstanding – diluted | ​ | ​ 37,534 | ​ | ​ 37,195 |
| ​ | ​ | ​ ​ | ​ | ​ ​ |
| Adjusted earnings (loss) per share - basic | ​ | $(0.03) | ​ | $(0.67) |
| Adjusted earnings (loss) per share - diluted | ​ | $(0.03) | ​ | $(0.67) |
| ​ | ​ | ​ ​ | ​ | ​ ​ |
| **Anti-dilutive amounts (i):** | ​ | ​ ​ | ​ | ​ ​ |
| **Numerator:** | ​ | ​ ​ | ​ | ​ ​ |
| Reallocation of net loss attributable to non-controlling interests from the anti-dilutive exchange of common units in CWGS, LLC (j) | ​ | $4,025 | ​ | $(5,959) |
| Income tax on reallocation of net loss attributable to non-controlling interests from the anti-dilutive exchange of common units in CWGS, LLC (k) | ​ | $(5,734) | ​ | $(4,563) |
| 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 (l) | ​ | $8,143 | ​ | $10,567 |
| **Denominator:** | ​ | ​ ​ | ​ | ​ ​ |
| Anti-dilutive exchange of common units in CWGS, LLC for shares of Class A common stock (m) | ​ | ​ 51,649 | ​ | ​ 51,673 |
| Anti-dilutive restricted stock units (m) | ​ | ​ 284 | ​ | ​ 7 |

(a) 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 4 – Restructuring and Long-lived Asset Impairment to our condensed consolidated financial statements included in Part I, Item 1 of this Form 10-Q for additional information.

(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 25.0% and 25.3% for the adjustments for the three month ended March 31, 2020 and 2019, respectively, 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 the termination of operating leases relating primarily to the 2019 Strategic Shift, net of lease termination costs (See Note 4 – Restructuring and Long-lived Asset Impairment to our condensed consolidated financial statements included in Part I, Item 1 of this Form 10-Q for additional information.

(d) Represents an adjustment to eliminate the gains and losses on sales of various assets, and losses on the disposal or sale of real estate at closed RV and Outdoor Retail locations.

(e) Represents non-cash equity-based compensation expense relating to employees and directors of the Company.

(f) Represents an adjustment to eliminate the loss 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 12 — Income Taxes to our unaudited condensed consolidated financial statements included in Part I, Item 1 of this Form 10-Q.

(g) Represents restructuring costs relating to our 2019 Strategic Shift. These restructuring costs include one-time employee termination benefits, incremental inventory reserve charges, and other associated costs. These costs do not include lease termination costs, which are presented separately above. See Note 4 – Restructuring and Long-lived Asset Impairment to our condensed consolidated financial statements included in Part I, Item 1 of this Form 10-Q for additional information.

(h) Represents the adjustment to net income 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 57.9% and 58.1% for the three months ended March 31, 2020 and 2019, respectively.

(i) The below amounts have not been considered in our adjusted earnings per share – diluted amounts as the effect of these items are anti-dilutive.

(j) 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.

(k) 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 25.0% and 25.3% for the adjustments for the three months ended March 31, 2020 and 2019, respectively.

(l) 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 rate of 25.0% and 25.3% during the three months ended March 31, 2020 and 2019, respectively, 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.

(m) Represents the impact to the denominator for stock options, restricted stock units, and/or common units of CWGS, LLC.

#### 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-Q 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 on disposal of assets, 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.

### 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 been met through cash provided by operating activities, cash and cash equivalents, proceeds from our IPO, May 2017 public equity offering and October 2017 public equity offering, borrowings under our Senior Secured Credit Facilities (as defined below) or our previous senior secured credit facilities, 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), 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 Profit 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 12 — Income Taxes to our unaudited condensed consolidated financial statements included in Part I, Item 1 of this Form 10-Q.

CWGS, LLC intends to make a regular quarterly cash distribution to its common unit holders, including us, of approximately $0.08 per common unit and we intend to use all of the proceeds from such distribution on our common units to pay a regular quarterly cash dividend of approximately $0.08 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. During the three months ended March 31, 2020, we paid one regular quarterly cash dividend of $0.08 per share of 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 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 our Annual Report) 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” in our Annual Report. During the three months ended March 31, 2020, we paid one special cash dividend of $0.0732 per share of our Class A common stock. Our dividend policy has certain risks and limitations, particularly with respect to liquidity, and we may not pay dividends according to our policy, or at all.

During the three months ended March 31, 2020, we incurred long-lived asset impairment charges of $6.6 million, including $6.5 million 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 of between $1.2 million and $1.5 million, lease termination costs of between $15.0 million and $20.0 million, incremental inventory reserve charges of $42.4 million, and other associated costs of $20.0 million to $25.0 million. We expect that approximately $20.0 million to $30.0 million of these costs will result in future cash expenditures. For a discussion of the 2019 Strategic Shift, see Note 4 — Restructuring and Long-lived Asset Impairment to our unaudited condensed consolidated financial statements included in Part I, Item 1 of this Form 10-Q.

There is significant uncertainty surrounding the impact of the COVID-19 pandemic on our results of operations and cash flows. As a result, we are proactively taking 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. The Company has negotiated lease payment deferrals of approximately $14.0 million from 2020 into 2021.

Notwithstanding our obligations under the Tax Receivable Agreement, we believe that our sources of liquidity and capital, including cash provided by operating activities and potentially incurring additional borrowings under our Floor Plan Facility, and borrowings under our Revolving Credit Facility will be sufficient to finance our continued operations, growth strategy, including the anticipated opening of additional RV and outdoor retail locations, regular quarterly cash dividends (as described above) 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 our Annual Report.

As of March 31, 2020 and December 31, 2019, we had working capital of $378.4 million and $394.7 million, respectively, including $109.4 million and $147.5 million, respectively, of cash and cash equivalents. Our working capital reflects the cash provided by deferred revenue and gains reported under current liabilities of $82.2 million and $87.1 million as of March 31, 2020 and December 31, 2019, respectively, 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. We use net proceeds from this deferred membership revenue to lower our long-term borrowings and finance our working capital needs.

### 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, 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.

### Cash Flow

The following table shows summary cash flows information for the three months ended March 31, 2020 and 2019:

*(In thousands)*

| ​ ​ ​ | ​ ​ ​ | ​ ​ Three Months Ended March 31, 2020 | ​ | ​ ​ 2019 |
| --- | --- | ---: | --- | ---: |
| Net cash used in operating activities | ​ | $(15,189) | **​** | $(74,020) |
| Net cash used in investing activities | ​ | ​ (8,456) | **​** | ​ (22,916) |
| Net cash (used in) provided by financing activities | ​ | ​ (14,470) | **​** | ​ 28,364 |
| Net decrease in cash and cash equivalents | ​ | $(38,115) | **​** | $(68,572) |

*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 products and services and Good Sam services and plans. 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 services and program costs as well as pre-opening costs for Gander Outdoors (now Gander RV) locations during the three months ended March 31, 2019.

Net cash used in operating activities was $15.2 million in the three months ended March 31, 2020, a decrease of $58.8 million from $74.0 million of net cash used in operating activities in the three months ended March 31, 2019. The decrease was primarily due to $65.0 million of reduced receivables and contracts in transit, a $12.7 million increase in net income and $7.4 million of other decreases, partially offset by $26.3 of increased inventory purchases.

*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 locations and capital expenditures have been financed using cash provided by operating activities and borrowings under our Senior Secured Credit Facilities.

The table below summarizes our capital expenditures for the three months ended March 31, 2020 and 2019:

*(In thousands)*

| ​ ​ ​ | ​ ​ ​ | ​ ​ Three Months Ended March 31, 2020 | ​ | ​ ​ 2019 |
| --- | --- | --- | --- | --- |
| IT hardware and software | ​ | $2,645 | **​** | $1,677 |
| Greenfield and acquired retail locations | ​ | ​ 1,831 | ​ | ​ 8,278 |
| Existing retail locations | ​ | ​ 4,022 | ​ | ​ 1,777 |
| Corporate and other | ​ | ​ 170 | ​ | ​ 29 |
| Total capital expenditures | ​ | $8,668 | ​ | $11,761 |
| ​ | ​ | ​ ​ | ​ | ​ ​ |

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 March 31, 2020.

Net cash used in investing activities was $8.5 million for the three months ended March 31, 2020. The $8.5 million of cash used in investing activities was comprised of approximately $8.7 million of capital expenditures primarily related to retail locations, partially offset by proceeds of $0.2 million from the sale of property and equipment.

Net cash used in investing activities was $22.9 million for the three months ended March 31, 2019. The $22.9 million of cash used in investing activities was comprised of $21.2 million for the acquisition of RV dealerships, $11.8 million of capital expenditures primarily for acquired businesses, and $0.6 million for the purchase of real property, partially offset by proceeds of $10.2 million from the sale of real property and $0.5 million of proceeds from the sale of property and equipment. See Note 11 – Acquisitions to our unaudited condensed consolidated financial statements included in Part 1, Item 1 of this Form 10-Q.

*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 $14.5 million for the three months ended March 31, 2020. The $14.5 million of cash used in financing activities was primarily due to $8.4 million of non-controlling member distributions, $5.8 million of dividends paid on Class A common stock, $3.5 million of payments on our long-term debt, and $0.2 million of payments related to RSU shares withheld for taxes, partially offset by $3.4 million of net borrowings under the Floor Plan Facility.

Our net cash provided by financing activities was $28.4 million for the three months ended March 31, 2019. The $28.4 million of cash used in financing activities was primarily due to $39.0 million of net proceeds under the Floor Plan Facility and $3.9 million of net proceeds under the Revolving Credit Facility, partially offset by $5.7 million of dividends paid on Class A common stock, $5.5 million of non-controlling interest member distributions, and $3.3 million of payments on long-term debt.

### Description of Senior Secured Credit Facilities, Floor Plan Facility and Real Estate Facility

As of March 31, 2020 and December 31, 2019, we had outstanding debt in the form of our Senior Secured Credit Facilities, our Floor Plan Facility, and our Real Estate Facility. 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 I, Item 3 of this Form 10-Q.

#### Senior Secured Credit Facilities

As of March 31, 2020 and December 31, 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 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, which was paid on March 31, 2020. The Revolving Credit Facility matures on November 8, 2021, and the Term Loan Facility matures on November 8, 2023.

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 March 31, 2020, we were not subject to this covenant as borrowings under the Revolving Credit Facility did not exceed the 30% threshold. At March 31, 2020, we would not have met this covenant if we had exceeded the 30% threshold. As such, our borrowing capacity under the Revolving Credit Facility at March 31, 2020 was limited to $9.4 million of additional borrowings. We were in compliance with all applicable debt covenants at March 31, 2020 and December 31, 2019.

The following table details the outstanding amounts and available borrowings under our Senior Secured Credit Facilities as of March 31, 2020 and December 31, 2019 (in thousands):

| ​ ​ ​ Senior Secured Credit Facilities: Term Loan Facility: | ​ ​ ​ ​ | ​ ​ March 31, 2020 ​ ​ ​ ​ | ​ ​ ​ ​ | ​ ​ December 31, 2019 ​ ​ ​ ​ |
| --- | --- | --- | --- | --- |
| Principal amount of borrowings | ​ | $1,195,000 | ​ | $1,195,000 |
| Less: cumulative principal payments | ​ | ​ (34,895) | ​ | ​ (31,898) |
| Less: unamortized original issue discount | ​ | ​ (4,057) | ​ | ​ (4,320) |
| Less: finance costs | ​ | ​ (9,986) | ​ | ​ (10,667) |
| ​ | ​ | ​ 1,146,062 | ​ | ​ 1,148,115 |
| Less: current portion | ​ | ​ (11,991) | ​ | ​ (11,991) |
| Long-term debt, net of current portion | ​ | $1,134,071 | ​ | $1,136,124 |
| Revolving Credit Facility: | ​ | ​ ​ | ​ | ​ ​ |
| Total commitment | ​ | $35,000 | ​ | $35,000 |
| Less: outstanding letters of credit | ​ | ​ (3,622) | ​ | ​ (4,112) |
| Less: availability reduction due to Total Leverage Ratio | ​ | ​ (21,965) | ​ | ​ (21,622) |
| Additional borrowing capacity | ​ | $9,413 | ​ | $9,266 |

See our Annual Report and Note 6 – Long-term Debt to our condensed consolidated financial statements included in Part I, Item 1 of this Form 10-Q for a further discussion of the terms of the Senior Secured Credit Facilities.

#### Floor Plan Facility

As of March 31, 2020 and December 31, 2019, FreedomRoads, LLC (“FR”), an indirect subsidiary of the Company, 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 “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 March 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 $57.0 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.

The credit agreement governing the Floor Plan Facility contains certain financial covenants which we were in compliance with at March 31, 2020 and December 31, 2019.

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

| ​ ​ ​ Floor Plan Facility: Notes payable — floor plan: | ​ ​ ​ ​ | ​ ​ March 31, 2020 ​ ​ ​ ​ | ​ ​ ​ ​ | ​ ​ December 31, 2019 ​ ​ ​ ​ |
| --- | --- | --- | --- | --- |
| Total commitment | ​ | $1,379,750 | ​ | $1,379,750 |
| Less: borrowings, net | ​ | ​ (846,424) | ​ | ​ (848,027) |
| Less: flooring line aggregate interest reduction account | ​ | ​ (173,853) | ​ | ​ (87,016) |
| Additional borrowing capacity | ​ | ​ 359,473 | ​ | ​ 444,707 |
| Less: accounts payable for sold inventory | ​ | ​ (32,934) | ​ | ​ (27,892) |
| Less: purchase commitments | ​ | ​ (10,133) | ​ | ​ (8,006) |
| Unencumbered borrowing capacity | ​ | $316,406 | ​ | $408,809 |
| ​ | ​ | ​ ​ | ​ | ​ ​ |
| Revolving line of credit | ​ | $57,000 | ​ | $60,000 |
| Less borrowings | ​ | ​ (40,885) | ​ | ​ (40,885) |
| Additional borrowing capacity | ​ | $16,115 | ​ | $19,115 |
| ​ | ​ | ​ ​ | ​ | ​ ​ |
| Letters of credit: | ​ | ​ ​ | ​ | ​ ​ |
| Total commitment | ​ | $15,000 | ​ | $15,000 |
| Less: outstanding letters of credit | ​ | ​ (11,175) | ​ | ​ (11,175) |
| Additional letters of credit capacity | ​ | $3,825 | ​ | $3,825 |

See our Annual Report and Note 3 – Inventories and Floor Plan Payable to our condensed consolidated financial statements included in Part I, Item 1 of this Form 10-Q for a further discussion of the terms of the Floor Plan Facility.

#### Real Estate Facility

As of March 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”), 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 March 31, 2020 and December 31, 2019.

The outstanding principal of the Real Estate Facility was $19.2 million and $19.7 million as of March 31, 2020 and December 31, 2019.

See our Annual Report and Note 6 – Long-term Debt to our condensed consolidated financial statements included in Part I, Item 1 of this Form 10-Q 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 our sales for products not yet recognized as revenue at the end of a given period. Our deferred revenue as of March 31, 2020 was $140.1 million.

### Off-Balance Sheet Arrangements

As of March 31, 2020, we did not have any off-balance sheet arrangements other than short-term leases not included in our lease obligation.

### Contractual Obligations

There were no material changes in our commitments during the three months ended March 31, 2020 under contractual obligations from those disclosed in our Annual Report outside the course of normal business.

### Critical Accounting Policies and Estimates

We prepare our condensed consolidated financial statements in accordance with GAAP, and in doing so, we have to make estimates, assumptions and judgments affecting the reported amounts of assets, liabilities, revenues and expenses, as well as the related disclosure of contingent assets and liabilities. We base our estimates, assumptions and judgments on historical experience and on various other factors we believe to be reasonable under the circumstances. Different assumptions and judgments would change estimates used in the preparation of our condensed consolidated financial statements, which, in turn, could change our results from those reported. We evaluate our critical accounting estimates, assumptions and judgments on an ongoing basis.

There has been no material change in our critical accounting policies from those previously reported and disclosed in our Annual Report.

### Recent Accounting Pronouncements

See Note 1 – Summary of Significant Accounting Policies to our unaudited condensed consolidated financial statements in Item 1, Part I of this Form 10-Q.

## Market risk

As filed, 269 characters.

For a discussion of the Company’s quantitative and qualitative disclosures about market risks, see Item 7A. Quantitative and Qualitative Disclosures About Market Risks, in our Annual Report. As of March 31, 2020, there have been no material changes in this information.

## Controls and procedures

As filed, 1,960 characters.

#### 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, evaluated, as of the end of the period covered by this Quarterly Report on Form 10-Q, 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 (the “Exchange Act”)). Based on that 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 March 31, 2020.

#### Changes in Internal Control over Financial Reporting

In response to COVID-19 and the related stay-at-home policy for a significant portion of our administrative workforce, we have modified certain controls to allow them to be performed remotely. These changes did not materially affect our internal control over financial reporting. Other than these control modifications, 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 March 31, 2020, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

## Risk factors

As filed, 9,183 characters.

There have been no material changes to our risk factors as previously disclosed in Item 1A of Part I of our Annual Report on Form 10-K for the year ended December 31, 2019 filed with the Securities and Exchange Commission on February 28, 2020, other than with respect to the risk factors described below.

***The COVID-19 pandemic has had, and we expect will continue to have, 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 we expect will continue to have, certain negative impacts on our business including, without limitation, the following:

- As consumers have followed governmentally mandated or voluntary stay-at-home guidelines, we have experienced a decrease in traffic at our RV and Outdoor Retail locations, which has resulted in a decrease in the sales of certain of our products and services at our RV and Outdoor Retail locations. We have implemented preparedness plans to keep our employees and customers healthy and safe, which include social distancing, providing employees with face coverings and/or other protective clothing as required, and implementing additional cleaning and sanitization routines. This negative trend is likely to continue, with the most significant impact expected to occur in the second quarter of fiscal year 2020. If the COVID-19 pandemic intensifies, its negative impacts on our sales could be more prolonged and may become more severe. Therefore, the historical information in this quarterly report does not fully reflect the adverse impacts of COVID-19 on our business. Accordingly, investors are cautioned not to unduly rely on such historical information regarding our business, results of operations, financial condition or liquidity, as that data does not fully reflect the adverse

impact of COVID-19 and therefore does not purport to be representative of the future results of operations, financial condition, liquidity or other financial or operating results of us.

- As many national parks and RV parks have temporarily closed in response to the COVID-19 pandemic, consumers may 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. We have experienced decreases in new memberships and renewals of certain of our services and decreased online traffic.
- As of March 31, 2020, we have temporarily closed four of our specialty retail locations as a result of COVID-19. Subsequent to March 31, 2020, we have temporarily closed three dealerships as a result of COVID-19. To the extent the COVID-19 pandemic intensifies or governmental orders change, we may be forced to 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 further decrease in demand for our products and services.
- We have made temporary changes to our operating procedures at our RV and Outdoor 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.
- We have faced, and may continue to face, increasing 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 disruptions in distribution operations as a result of the impact of the COVID-19 pandemic on their respective businesses, such as Thor Industries, Inc.’s announced 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 product, which may increase our product costs or lead to shortages.
- 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 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.

Any of the negative impacts of the COVID-19 pandemic, including those described above, alone or in combination with others, may have a material adverse effect on our results of operations, financial condition and cash flows. Any of these negative impacts, alone or in combination with others, could exacerbate many of the risk factors discussed in “Risk Factors” in Item 1A of Part I of our Annual Report. The full extent to which the COVID-19 pandemic will negatively affect our results of operations, financial condition and cash flows will depend on future developments that are highly uncertain and cannot be predicted, including the scope and duration of the pandemic and actions taken by governmental authorities and other third parties in response to the pandemic.

Filed May 8, 2020.
Source: SEC EDGAR, the filing index for accession 0001558370-20-005995. Last ingested by Listed: Nov 2, 2026, 16:52 ET. No prices; not investment advice.